Tuesday, 20 February 2018

TUESDAY, 20 FEBRUARY 2018

TUESDAY, 20 FEBRUARY 2018

The Speaker took the Chair at 2 p.m.

Prayers.

Oral Questions

Questions to Ministers

Tertiary Education—Fees-free Policy

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

Rt Hon JACINDA ARDERN (Prime Minister): Yes.

Hon Paula Bennett: In light of her comments last night to the Otago University convocation that she hopes that her Government is creating a “radically different education system” and one that is ultimately more accessible for all New Zealanders, what are the latest figures on the number of extra students taking up first year tertiary education?

Rt Hon JACINDA ARDERN: Last time that I checked those figures was in preparation for my speech. We don’t have the enrolment figures available yet. So what I provided instead was an indication of the number who are seeking information. Of course, I’d remind the member that our interest is engagement in vocational training, apprenticeships, wānanga, polytechs as well as, of course, those who access university.

Hon Paula Bennett: Does she agree with Universities New Zealand director Chris Whelan that there has been no increase in first-year enrolments this year?

Rt Hon JACINDA ARDERN: I would seek to clarify, off the back of that question, whether or not that was against last year’s figures, because, of course, we know that we have had declining enrolment figures for universities over a number of years and this in part. Our policy, however, is driven more broadly by the goal of this Government to make sure that we have a well-educated, well-trained workforce that is prepared for the future of work in New Zealand.

Hon Paula Bennett: Compared to last year, have the number of first enrolments gone up or down?

Rt Hon JACINDA ARDERN: As I said in my primary answer, the last I checked in, which was a matter of days ago, we didn’t have those new figures yet. But, again, I would reflect that we are facing down a declining enrolment historically amongst a number of institutions—that’s at least my understanding. If the member would like more specifics, then, please, a question on notice would help me provide that for her.

Hon Paula Bennett: What number of new students were estimated to enter into the tertiary education sector, as per the cost-benefit analysis done by the Ministry of Education for the fees-free policy?

Rt Hon JACINDA ARDERN: Again, I’d really love to provide more detail. My recollection—and I’d have it noted this is simply my recollection—is that there was a rough estimate of an uptake increase of, perhaps, from memory, 5 percent, but, again, I point to the fact that, ultimately, our fees-free policy was about making sure that all New Zealanders, particularly those who have never entered into post-secondary education before, have access to education that can ensure that they are work-ready and that they are adaptable in a changing environment.

Hon Paula Bennett: So isn’t her policy just an expensive exercise—up to $2.8 billion—that, as the Secretary for Education told select committee last week, no cost-benefit analysis was done on, and, actually, there’s been no increase of students at all this year?

SPEAKER: The Prime Minister can answer any of those three questions.

Rt Hon JACINDA ARDERN: This side of the House believes education is a public good, and we believe, for instance, that everyone should be able to access secondary education. Anyone who’s worth their weight, looking at the future of what our population and workforce is facing, should acknowledge that if we want to make sure we are a more productive society, a more prepared society, we should educate our workforce. I encourage her to read the excellent Future of Work Commission report. [Interruption]

SPEAKER: Order! Order! Before the member asks her question, I’ve decided not to interrupt that—[Interruption] Mr Joyce, I was not commenting, and to suggest that I was in that way is most inappropriate.

Hon Paula Bennett: Is she satisfied that all of her Ministers have appropriately declared any conflicts of interest with the Cabinet Office in relation to charter schools?

Rt Hon JACINDA ARDERN: Certainly, on every occasion that it’s been raised with me—a specific case—I’ve been assured by Ministers that the meetings that they’ve undertaken have been specific to their portfolio and that they are making sure that any negotiations with charter schools are directed by the Ministry of Education.

Cost of Living—Inflation, Relative Rates

2. KIRITAPU ALLAN (Labour) to the Minister of Finance: What recent reports has he seen on the costs of living?

Hon Dr DAVID CLARK (Acting Minister of Finance): On Thursday, Statistics New Zealand released the latest—

SPEAKER: Order! [Interruption] Order! Order! Is this an on behalf—

Hon Dr DAVID CLARK: On behalf of the Minister of Finance, Mr Speaker—my apologies to the House. On Thursday, Statistics New Zealand released the latest household living-costs price index for the December 2017 quarter. It highlights how low-spending and low-income households faced higher inflation for goods and services they typically purchase than that faced by higher-income and spending households. The figures showed that households with the least spending power in New Zealand faced inflation of 2.4 percent in the year to December, compared to 1.3 percent inflation for households with the greatest spending power. Beneficiary households also faced a cost of living rise of 2.4 percent, while superannuitants faced a 2.1 percent rise, both above the general rate of Consumers Price Index inflation.

Kiritapu Allan: What were the main cost drivers for these groups of households?

Hon Dr DAVID CLARK: On behalf of the Minister of Finance, Statistics New Zealand said price increases over the year for petrol, rent, and insurance contributed to higher inflation for low-spending households, while inflation for big spenders was kept lower due to falling prices of luxury items like new cars. For beneficiaries, higher rents over the year had the greatest impact, while superannuitants experienced the greatest impact from increasing prices for insurance and local authority rates.

Kiritapu Allan: How will the Government’s policies help control these cost of living increases?

Hon Dr DAVID CLARK: On behalf of the Minister of Finance, the Government’s targeted Families Package will mean 384,000 low and middle income families will benefit by an average of $75 a week when fully rolled out. This includes rising accommodation supplement payments to help deal with rent and mortgage payments, and a winter energy payment for superannuitants and those on a main benefit. Meanwhile, our plans to boost the building of affordable homes and State homes will help put a lid on housing cost pressures faced by low and middle income households. We have also committed to raising the minimum wage to $20 an hour in 2021, and policy work is being done on reducing the cost of primary healthcare. This Government is making targeted investments to help those who need support the most in the face of greater cost pressures for households on low and middle incomes rather than those on the highest incomes.

SPEAKER: Before I call the Hon Michael Woodhouse, I’ll just do the quick lesson that “On behalf of” only has to be said the first time. After that, the Minister is still answering on behalf of but doesn’t need to tell us every time.

Housing—Brightline Test and KiwiBuild

3. Hon MICHAEL WOODHOUSE (National) to the Minister of Finance: Does he have confidence in the policy advice he receives?

Hon Dr DAVID CLARK (Acting Minister of Finance): I do have confidence in the advice provided by officials. However, it will not surprise the member that I do not necessarily always agree with that advice.

Hon Michael Woodhouse: According to that advice and based on the projections of KiwiBuild dwellings progressed, what proportion of the earmarked $2 billion KiwiBuild capital fund will be drawn down between now and the end of the 2018-19 fiscal year?

Hon Dr DAVID CLARK: These are decisions that are currently being considered in the Budget process, and I refer the member to Treasury’s comments on this subject in the Half Year Economic and Fiscal Update?

Hon Michael Woodhouse: Is the advice on the fiscal impact of KiwiBuild that he will need significantly more than the $2 billion to fund the up to 12 to 15 Hobsonville-sized developments his Government aspires to, or that he won’t even need the $2 billion earmarked because KiwiBuild is taking so long to get off the ground?

Hon Dr DAVID CLARK: I do refer the member, again, to Treasury’s comments on this subject in the Half Year Economic and Fiscal Update, and I offer to table that if the member hasn’t read it.

Hon Michael Woodhouse: Has he had advice from the Reserve Bank that the prudential risks to banks from residential development is decreasing, and is that because the Reserve Bank actually expects housebuilding to slow in the next couple of years?

Hon Dr DAVID CLARK: I will answer on behalf of the Minister of Finance for those areas that he has responsibility for. We are painfully aware of the constraints on ramping up housebuilding, because we inherited them. The difference is that this Government has the policies and the will to deal with all of these challenges.

Hon Michael Woodhouse: Has he seen the Treasury advice regarding the five-year brightline test for residential housing, stating Treasury is not “confident that the Government’s objectives are being met in the best way and with the least unintended consequences.”, and does he agree with it?

Hon Dr DAVID CLARK: The irony of that member raising it—because it’s the same advice that was provided to that party opposite when they introduced the two-year brightline test.

Rt Hon Winston Peters: Has he received any advice that would enable the Government to turn around the nine years of nothing in 90 days?

Hon Dr DAVID CLARK: I believe that challenge would be too great. This Government has ambitious plans—

SPEAKER: Order! [Interruption] Order! It was a simple question: whether he’d received advice. That’s it.

Hon Michael Woodhouse: Who is supporting the five-year brightline test, given that IRD recommended against it, Treasury don’t support it, no one in the industry has been asked for their opinion, and Labour tried everything they could to avoid talking about new taxes during the election campaign?

Hon Dr DAVID CLARK: The National Government introduced the brightline test in the first place.

Education, Minister—Meetings with Charter Schools

4. Hon NIKKI KAYE (National—Auckland Central) to the Minister of Education: What specific advice, if any, has he received from officials that advises him to not visit partnership schools?

Hon CHRIS HIPKINS (Minister of Education): I discussed the issues with Ministry of Education officials last year when we were planning the process of ending charter schools and removing it from legislation whilst transitioning those individual schools. We agreed that the contract negotiations would be handled by the Ministry of Education, and I made the decision not to visit charter schools while that process was taking place. I’ve been largely successful in doing that, with one exception. I’m not, however, ruling out visiting them in the future.

Hon Nikki Kaye: Has the Hon Kelvin Davis, Willie Jackson, or Peeni Henare been involved in any partnership schools discussions with him?

SPEAKER: Order! There’s a requirement for a question to flow from the primary question. The primary question was very specific and that was advice to him—to the Minister on him visiting partnership schools. That doesn’t involve any other Minister. I will let the member have another crack at getting it within order.

Hon Nikki Kaye: In light of his answer regarding visits with partnership schools, can he confirm that he did have a meeting with a partnership school at Waitangi, and who organised that meeting?

Hon CHRIS HIPKINS: Yes, I did and I’ve been very open about the fact that I had a discussion with sponsors from He Puna Mārama Trust, who run two partnership schools. I had that discussion whilst at Waitangi. I was asked by them whether I would meet with them. I thought in the circumstances, given it was a large public event at which they were going to be present, it would’ve been awkward not to have a discussion with them.

Hon Nikki Kaye: Did the Hon Kelvin Davis organise that meeting?

Hon CHRIS HIPKINS: No.

Hon Nikki Kaye: Why is he engaging in preferential treatment accepting meetings arranged by other Cabinet Ministers while telling everyone else he won’t meet with other schools?

Hon CHRIS HIPKINS: To be clear, when I met with them I made it clear the Ministry of Education would be conducting the negotiations with them. I have had discussions with other existing charter schools in the past, including the Villa Education Trust, including the Rise UP Trust, including those who are running Vanguard Military School. I haven’t had the opportunity to have any form of discussion with this particular organisation in the past. I didn’t see any harm in doing so, but I have made it very clear that the negotiations regarding the transition process for these schools will be conducted by Ministry of Education and not by Ministers.

Cost of Living—Benefits and Families Package

PRIYANCA RADHAKRISHNAN (Labour): Thank you, Mr Speaker. My question is to the Minister for Social Development—[Interruption]

SPEAKER: Order! What we’re going to do now, because I think there were two comments from the Government and one from the Opposition while that question was being asked, is we will give the Opposition one extra supplementary question. But I want to warn members that I expect some leadership from my right. Start again, please.

5. PRIYANCA RADHAKRISHNAN (Labour) to the Minister for Social Development: Will the Families Package address issues raised in the household living-costs price indexes review released by Statistics NZ last week; if so, how?

Hon CARMEL SEPULONI (Minister for Social Development): Absolutely. The Families Package targets the widening inequality and increased cost of living pressures facing low-income New Zealand families, as highlighted in the report. The package includes the Best Start payment, extended paid parental leave, and changes to Working for Families to help with the cost of raising children; a winter energy payment to help superannuitants and many of our poorest families heat homes over winter; and increases to the accommodation supplement and the accommodation benefit—384,000 low to middle income families will be better off when the Families Package is fully implemented.

Priyanca Radhakrishnan: How will low-income families without children benefit from the Families Package?

Hon CARMEL SEPULONI: The gains for families without children are more evenly spread across the income distribution because the winter energy payment drives most of these gains and goes to superannuitants. Around two-thirds of these families earn below approximately $42,000 per annum and are set to receive an average of $13 per week.

Priyanca Radhakrishnan: How will changes to Working for Families help address the issues raised in the latest household living-costs price indexes review?

Hon CARMEL SEPULONI: Changes to Working for Families as part of the Families Package provide targeted social assistance to improve the income of low- and middle-income families and aim to reduce inequality. The Working for Families abatement threshold is being lifted and we are increasing family tax credit rates leaving more money for working families to provide for their children. In 2018-19, 26,000 more families will be eligible for Working for Families as a result of the changes. In 2020-21, 39,000 more families will be eligible. This Government is working to support New Zealand families.

Hon Louise Upston: Has she had discussions with the Minister of Finance to raise benefits in 2018, given the increase in 2016 benefited 190,000 children from low-income families?

Hon CARMEL SEPULONI: Mr Speaker, can she repeat the question? I didn’t hear the question properly.

SPEAKER: OK. Yeah, I think it was a second till the mike picked up the member. Whole thing again.

Hon Louise Upston: Has she had discussions with the Minister of Finance to raise benefits in 2018, given the increase in 2016 benefited 190,000 children from low-income families?

Hon CARMEL SEPULONI: Thank you, Mr Speaker. As part of our confidence and supply agreement, we have committed to a welfare system overhaul, so lots of discussions are taking place in preparation for that. I’m not in a position at this stage to give any solid answers with regards to what that will look like, but can I just say that I’m expecting it to do significantly more to address the issues that beneficiaries and low-income families face in this country.

Hon Louise Upston: Does the Minister believe that benefits should be increased; and, if so, by how much?

Hon CARMEL SEPULONI: I believe that we need to have a Government that takes the challenges that low-income families face in this country seriously. There’s a large piece of work that is set to take place that I’m going to take the lead on, and I’m looking forward to the fact that this Government is going to do more to address the issues that low-income families in this country face than what the previous Government did.

Hon Louise Upston: I raise a point of order, Mr Speaker. I don’t believe the Minister actually answered the question.

SPEAKER: Well, she addressed it.

Biosecurity Management—Brown Marmorated Stink Bug

6. Hon NATHAN GUY (National—Ōtaki) to the Minister of Agriculture: Does he stand by all of his statements?

Hon DAMIEN O’CONNOR (Minister of Agriculture): Yes, in the context in which they were given.

Hon Nathan Guy: How many live stink bugs have been found in ships destined for New Zealand from Japan over the last week?

Hon DAMIEN O’CONNOR: I’ve been unable to be in a position to count them.

Hon Nathan Guy: Is the Minister, therefore, telling the House that he’s had no formal advice from his officials as to how many stink bugs have arrived on vessels from Japan in the last week?

Hon DAMIEN O’CONNOR: No, I do not have a number, but what I can tell that Minister is that, unlike himself, we identified through a rigid, robust system of inspection of the ship—before any vehicles were put off the ship, officials identified—the presence of brown marmorated stink bugs, which are a huge threat to this country. We have upped the level of compliance and scrutiny on those ships, and we’ll stand by that regardless of whether it’s two or 2,000 stink bugs. We cannot afford to let those pests into this country.

Hon Nathan Guy: Are new cars inspected by the Ministry for Primary Industries (MPI) prior to departing Japan, and what confidence does he have that stink bugs haven’t already travelled all over New Zealand?

Hon DAMIEN O’CONNOR: I think it’s been recorded: the fact that stink bugs have come into this country through different means but have been contained and eradicated in transitional facilities. What we are doing is upping the level of scrutiny at the border. In regard to the issue of inspections offshore, there is a changing regime. MPI do not have enough people offshore to inspect every vehicle, but the system demands that those vehicles be inspected and, if they are infested, that they not be loaded.

Barbara Kuriger: How will the Ministry for Primary Industries cope with standing up a stink bug response when they’re swamped dealing with Mycoplasma bovis?

Hon DAMIEN O’CONNOR: Thanks to the inept and underfunded and under-resourced efforts of the previous Government, we now have Mycoplasma bovis in this country. MPI staff are doing their very best. We’ve called on industry to help, and they’ve stepped up significantly in the last two weeks to try and be in a position to eradicate Mycoplasma bovis.

Hon Nathan Guy: You want cash too. You want some cash.

Hon DAMIEN O’CONNOR: And if that member had done his job properly we wouldn’t have it here in the first place.

Barbara Kuriger: What advice has he received on the economic impact on the New Zealand import car industry with the ships being turned around due to the stink bugs?

Hon DAMIEN O’CONNOR: I don’t have an economic report on that. It is unfortunate that some people might have to wait a little longer for their second-hand cars, but this Government stands by a delay in getting a second-hand car rather than allowing in a major problem or pest—

Hon Nathan Guy: It’s the new ones. It’s the new cars too.

Hon DAMIEN O’CONNOR: —which that member allowed in under his regime. Mycoplasma bovis is one too many incursions in this country. We’re not going to open the border to the brown marmorated stink bug.

Rt Hon Winston Peters: Can the Minister give the House an assurance that he has the confidence of the funding and the firepower to get on top of these biosecurity incursions and change the appalling record of the last nine years, when we had over 171?

SPEAKER: Order! According to the precedents that have been given in this House, the member has to take care in his answer that he’s not using that just as an opportunity to attack the Government. It’s up to him to explain his policy, not to go backwards.

Hon DAMIEN O’CONNOR: I’m more than happy to say that at each occasion I’ve been to Cabinet to request funding for biosecurity, a system that has been severely underfunded by the previous Government, my colleagues have looked very positively towards that. We’ve still got to look at requests on how much will be required to hopefully eradicate Mycoplasma bovis. I have confidence in my colleagues to fund this system properly, because that previous Government didn’t.

Earthquake Recovery, Kaikōura—State Highway 63

SPEAKER: Before we ask the question, I have been advised, for reasons that will probably be obvious, that the primary answer to this question will be slightly longer and not quite as tight as one would normally be, but I have accepted that.

7. STUART SMITH (National—Kaikōura) to the Minister of Transport: What assurances can he provide that work planned and started on repairing and upgrading State Highway 63 in the South Island, following the November 2016 Kaikōura earthquake, will be completed without delay?

Hon PHIL TWYFORD (Minister of Transport): I thank the member for his question. Repairing road and rail following the Kaikōura earthquake has been an enormous civil engineering job. It’s a tribute to the small army of people at the Transport Agency, KiwiRail, and all the contractors who’ve worked long and hard on the project. I want to compliment the work done on this job under the past Government. I’m assured that all major works will be completed without delay. The House may be interested to learn also that, today, traffic is being diverted from State Highway 1 north and south of Kaikōura on to State Highways 63, 6, and 70, due to the risk of slips and rock falls caused by Cyclone Gita. Road conditions are challenging, and I encourage people to stay safe and keep up to date with the latest traffic alerts and information, and to avoid travel unless necessary.

Stuart Smith: Why then, in light of that statement, has the work stopped on State Highway 63?

Hon PHIL TWYFORD: I’m advised that work has not stopped on State Highway 63. The main work repairing the highway in the wake of the earthquake has been completed in all but a few minor cases. There is ongoing maintenance work that is required on State Highway 63 because traffic volumes pre-earthquake were about 400 vehicle movements a day. It now averages between 1,200 and 1,500 a day because of the diversion, so it requires a greater level of ongoing maintenance.

Stuart Smith: How much extra funding has he secured for maintaining and upgrading State Highway 63?

Hon PHIL TWYFORD: The sum of $60 million was initially budgeted under the recovery programme. An additional $5 million has been spent from that appropriation—a total of $65 million. Additional minor works and ongoing maintenance while the diversion is taking place will be funded through the national land transport programme.

Stuart Smith: Can he assure the House that his Government policy statement will not prioritise Auckland trolleys over South Island roads?

Hon PHIL TWYFORD: Yes.

Stuart Smith: Has funding for repairs on State Highway 63 been withdrawn, as the Hon Damien O’Connor has claimed in a letter to the Minister, dated 14 February 2018?

Hon PHIL TWYFORD: I am advised that the New Zealand Transport Agency has not, as one local commentator said in the local newspaper, “hit their financial limits.” Funding is available to complete the project. The work will be completed without delay.

Stuart Smith: I seek leave to table a 14 February letter from the Hon Damien O’Connor to the Minister of Transport. [Interruption]

SPEAKER: Who was the member who interjected during that?

Hon Nathan Guy: It was me.

SPEAKER: Stand, withdraw, and apologise.

Hon Nathan Guy: I withdraw and apologise.

SPEAKER: Is there any objection to that letter being tabled? There appears to be none. It will be tabled.

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

Overseas Ownership of New Zealand Property—Comprehensive and Progressive Trans-Pacific Partnership Agreement and Overseas Investment Act Changes

8. PAUL EAGLE (Labour—Rongotai) to the Associate Minister of Finance: What progress has the Government made on protecting the rights of New Zealanders to own existing New Zealand homes?

Hon DAVID PARKER (Associate Minister of Finance): Legislation to ban foreigners from buying existing homes is currently before a select committee. We need to have this legislation in force before the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) comes into effect or we will, as a country, lose for ever the right to control who buys existing New Zealand homes. With confirmation of a slightly delayed signing date for the CPTPP, we’ve been able to provide an additional three months for committee consideration. The ban on foreign buyers is supported by an overwhelming majority of New Zealanders, and I would hope that the next Leader of the Opposition admits that National has been completely—

SPEAKER: Order! I am going to invite the Minister to review that answer, as to what action the Government has taken and what action the Parliament has taken, because it is quite different.

Paul Eagle: Why is the Government banning foreign buyers of existing homes?

Hon DAVID PARKER: This coalition believes that it’s the birthright of New Zealanders to own our homes, which should be traded on a New Zealand market, not an international one. This applies at all levels. Our most expensive homes and farms should be purchased by our most successful New Zealanders, and our more modest homes by other New Zealanders. We want as many New Zealanders as possible to achieve the dream of homeownership, whether they’ve been here for a year or for generations. The past Government was happy, under the prior trade agreement, to sell down the river for ever New Zealand’s right to—

SPEAKER: Order!

Hon DAVID PARKER: I raise a point of order, Mr Speaker. Surely it’s a matter of interest to the New Zealand public as to the contrast between the position under this agreement and the last agreement.

SPEAKER: If the member had been temperate in his language, the comparisons would have been allowed. But the rules of this House are quite clear, and they are that you can’t receive a donkey drop to attack the Opposition in that tone.

Paul Eagle: How is the ban on foreign buyers of existing homes compatible with the CPTPP?

Hon DAVID PARKER: One of the many significant changes this Government has made under the Comprehensive and Progressive Trans-Pacific Partnership, compared to the past Government, is that we have ensured we retain the right to ban foreign buyers of our existing homes. The past Government claimed before the election, and I quote, “A ban would force New Zealand to renegotiate many of our trade agreements … which would harm New Zealand companies and Kiwi jobs.” This coalition Government has shown this to be wrong. This significant change under the CPTPP shows the last Government was either disingenuous or incompetent.

Hon Todd McClay: Can the Minister confirm that he is the very same person who, when previously a Minister, allowed record amounts of New Zealand land to be sold to foreigners?

SPEAKER: Order! Is the member referring to a Government more than a decade ago?

Hon Todd McClay: Well, we’ll hear from the Minister, won’t we?

SPEAKER: I asked the member a very simple question. It should not be beyond him to answer it.

Hon Todd McClay: Supplementary.

SPEAKER: No, the member will answer my question. Was he referring to a previous Government or not?

Hon Todd McClay: I’m referring to this member when he was a Minister previously, yes.

SPEAKER: And he has, as part of this role, no responsibility for that, and that member is absolutely aware of it.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Interesting ruling that you’ve made. Why is it that this Government is able to answer questions about the previous Government freely and often inaccurately, yet we can’t refer to any other Government in our questions?

SPEAKER: I suggest the member has a look at Speaker’s ruling 159/3, and that will explain it to him.

Hon Gerry Brownlee: I’m wondering if you could come back to the House tomorrow, then, and explain how your ruling is consistent with that particular Speaker’s ruling, or are we into some new territory where the Government is free to criticise the past Government but can take no criticism themselves for their involvement in past Governments?

SPEAKER: I think, if the member listened carefully and listened to how I dealt with objections from the Government to my intervention to the Hon David Parker, he will see that, in fact, the Government is not free to act in the way that he has suggested.

Hon Todd McClay: Can the Minister confirm for the House that not a single change has been made to the revised Trans-Pacific Partnership text to enact the provisions that he’s speaking to—and, Mr Speaker, perhaps you’d like to answer this for him as well?

Hon DAVID PARKER: No, I can’t confirm that. In amongst changes are the changes to investor-State dispute settlement (ISDS) rules that rule ISDS clauses—that they can no longer be operated in respect of investment screening decisions.

Health Services—Elective Surgeries and Rural Health Services

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: What specific instructions, if any, has he given as Minister of Health to improve rural health services?

Hon Dr DAVID CLARK: There are measures in the Budget that may concern that that I am not at liberty to discuss currently.

Hon Dr Jonathan Coleman: What specific instructions, if any, has he given to officials to deliver a third medical school specialising in rural medicine?

Hon Dr DAVID CLARK: I don’t think it’s in the public interest to give further information on that matter.

Dr Shane Reti: What specific steps is he taking to fill the ongoing permanent GP vacancy in rural Pātea, as he promised to do on the campaign trail, and will he feel comfortable returning to Pātea to explain to locals why he hasn’t solved their problem in the manner he promised?

Hon Dr DAVID CLARK: This Government has promised to increase the number of GP training places, and it will honour that promise.

Dr Shane Reti: Following that reply, where will the 300 extra training practices come from to accommodate all the extra GP trainees he is promising?

Hon Dr DAVID CLARK: I’ve had many conversations with the leadership in the sector. They worked with us, in fact, when we were in Opposition, because they were so disappointed with that Government’s lack of progress on increasing the number of GP training places.

Hon Dr Jonathan Coleman: What specific instructions has he given to Ministry of Health officials on setting new targets to increase access to elective surgery, decrease emergency department waiting times, and increase access to cancer treatment—what specific instructions?

Hon Dr DAVID CLARK: I’ll speak to the first of those. I’ve been very clear with my officials that we do not want to have an electives target, like the previous Government had, that included increases in Avastin numbers and skin lesion removals previously done in primary care, because we want a transparent regime where New Zealanders actually get increased access to surgery and not just pumped up numbers.

Hon Dr Jonathan Coleman: I raise a point of order, Mr Speaker. I asked what specific instructions.

SPEAKER: I think you got, in respect of one of the issues, quite a specific answer.

Hon Dr Jonathan Coleman: Not a very good one. What specific instructions has he given to district health boards, and what specific plans has he asked them to implement since he became Minister of Health, or are they just doing exactly what they were doing before the general election?

Hon Dr DAVID CLARK: I have written letters to DHBs requesting that they live within the existing annual plan arrangements. I have spoken with DHB chairs to indicate that I expect them to live within financial parameters. I have done those things, which involve a relationship with the sector, in stark contrast to my predecessor.

Job Creation and Unemployment—Employment Strategy and Youth Employment

10. Hon PAUL GOLDSMITH (National) to the Minister of Employment: Does he still stand by all of his statements; if so, how?

Hon WILLIE JACKSON (Minister of Employment): Yes, within the context in which they’ve been made. In terms of the second part, how I do that is by coming to the House every week and listening to the same question every week from that member. [Interruption]

SPEAKER: Order!

Hon Paul Goldsmith: Does he stand by his statement, in correction to the House on Thursday, that the employment strategy he is rolling out is the He Poutama Rangatahi initiative to address youth employment?

Hon WILLIE JACKSON: The member needs to read the Hansard. I came into the House last Thursday and mentioned the roll-out of the employment strategy, and I further clarified this and referred to the roll-out of He Poutama Rangatahi, which is part of a broader strategy to address youth employment.

Hon Paul Goldsmith: So when he wrote, last week, that he would be “coming up with an employment strategy for all New Zealanders”, did he mean he would reach into the drawer and pull out the previous Government’s initiative to help the roughly 5,000 young people in four regions most in need of assistance?

Hon WILLIE JACKSON: No.

Hon Paul Goldsmith: What are the core elements of He Poutama Rangatahi?

Hon WILLIE JACKSON: He Poutama Rangatahi is about going into the regions and trying to get all our different groups together. We want to get employers together, we want to get trusts together, and we want to get people together, and iwi, because the regions have been ignored by the previous National Government, who talked about resourcing the regions and never gave one cent. So it’s about supporting people who were forgotten by the previous National Government.

Hon Paul Goldsmith: How, if at all, has he changed He Poutama Rangatahi from what he inherited?

Hon WILLIE JACKSON: We’ve changed He Poutama Rangatahi because we’ve decided to pull the communities together, and the previous Government forgot about these communities—totally forgot about them. They talked about resourcing them, and did nothing. We’re going to bring employers, iwi, we’re going to bring our “neets”—our young people—together, something this previous Government never did. It just talked about it and did nothing. This is our strategy, not the previous Government’s strategy, and we’re proud of it.

Hon Paul Goldsmith: I’m not sure I’ve got an answer to that. When will he develop and release his employment strategy for the rest of New Zealand?

Hon WILLIE JACKSON: Our employment strategy is for all of New Zealand, and we’re working on that right now, and we’ll be getting groups together and bringing a focus group together—a reference group with key people in the different areas: in the forestry area, in the employment area, in the regions, Māori, Pākehā, Pacific Island people, disabled people, women—all the groups that that member and the previous Government forgot about.

SPEAKER: Question No. 11.

Hon Member: Supplementary?

SPEAKER: No, it’s too late.

Climate Change—Extreme Weather Events

11. GARETH HUGHES (Green) to the Minister for Climate Change: What did he learn from yesterday’s briefing with MetService experts about the relationship between climate change and extreme weather events here and in the wider Pacific?

Hon JAMES SHAW (Minister for Climate Change): The MetService officials that I spoke with last night made it clear to me that where experts were once reluctant to link any single weather event, such as Cyclone Gita, to climate change, we can now say that every single weather event is in some way shaped by climate change. As MetService meteorologists said to me, we seem to be talking about new records all the time now, and due to climate change they can see that continuing to happen.

Gareth Hughes: Does this mean that we can expect the frequency and severity of weather events to increase?

Hon JAMES SHAW: I think the reality for a lot of people who have endured this summer’s droughts and storms would suggest that this is the case. As the MetService explained last night, we’ve been experiencing a maritime heatwave that’s increased the temperature of the Tasman Sea by 6 degrees Celsius above the average. The warmer sea increases the intensity of cyclones like Fehi and Gita. One expert told me at last night’s briefing that the cyclones that we’re seeing these days are of a higher intensity than they used to be. In the case of Cyclone Winston last year, the only reason that it was a category 5 and not a category 6 is that, currently, there is no category 6.

Gareth Hughes: How does that influence the Minister’s thinking on New Zealand’s approach to action on climate change?

Hon JAMES SHAW: What we’re seeing with ex-tropical Cyclone Gita, and the damage that Cyclone Fehi inflicted just a few weeks ago, strengthens my resolve to see New Zealand do everything that we can to play our part in the global effort to stop climate change. That includes implementing measures like the zero carbon legislation, which will help us to achieve our Paris Agreement commitments to limit global warming to 2 degrees and to strive for 1.5 degrees.

Gareth Hughes: How will the Government ensure that communities, councils, and the country are prepared for the effects of a changing climate?

Hon JAMES SHAW: Our actions will be based on strong scientific and practical evidence provided by a number of expert bodies, including the Climate Change Adaptation Technical Working Group started by the previous Government. The working group will report back around the beginning of April on a range of options for New Zealanders to consider in regard to dealing with the impact of climate change. A programme of consultation after that will ensure that together we as a country are making sensible decisions about future investments. In the meantime, I’d recommend that councils, communities, and businesses take a good look at the updated coastal hazards guidance that I released in December, which provides some common-sense guidelines about developments at or near sea level.

Broadcasting, Communications and Digital Media, Minister—Contact with Carol Hirschfield

12. MELISSA LEE (National) to the Minister of Broadcasting, Communications and Digital Media: Does she stand by all of her answers to oral and written questions?

Hon CLARE CURRAN (Minister of Broadcasting, Communications and Digital Media): Yes, in the context that they were given.

Melissa Lee: Does she stand by her answer to written question No. 19129 (2017) in regard to meeting with board members or staff of TVNZ or RNZ since 1 December?

Hon CLARE CURRAN: Yes.

Melissa Lee: How can she stand by that answer when she failed to mention her breakfast meeting with RNZ head of content Carol Hirschfeld on 2 December?

Hon CLARE CURRAN: I have a range of discussions, informal or otherwise, with many people in a range of portfolio areas.

Melissa Lee: If they did have breakfast together, as the Minister’s office has confirmed, and discussed a range of issues about the future of media in New Zealand, why did she not include this extremely relevant meeting in her answer to written question No. 19129 (2017)?

Hon CLARE CURRAN: Unlike the previous Government, this Government consults broadly—[Interruption]

SPEAKER: Order! I think there’s probably quite a lot of interest in this answer. I’m interested in it. I would like to be able to hear it, and there are a number of members, especially on the cross benches, who are interfering with that. Clare Curran—start again, please.

Hon CLARE CURRAN: Unlike the previous Government, this Government consults broadly with a range of stakeholders on a range of matters to ensure that we are out there engaging on the issues and on the policies that we’re proposing—

Melissa Lee: I raise a point of order, Mr Speaker.

SPEAKER: No, no—can the member resume her seat. I think I know what the member was going to say, but I’d like to give the Minister a chance to actually address the question before she finishes.

Hon CLARE CURRAN: Unlike the previous Government, this Government’s members engage widely with stakeholders on a broad range of issues on policy matters and to ensure that we’re getting them right. [Interruption]

SPEAKER: No. I don’t think the member needs a point of order. I’m going to ask the member to repeat that question.

Melissa Lee: Thank you, Mr Speaker. If she did have breakfast together, as the Minister’s office has confirmed, and has discussed a range of issues about the future of New Zealand media, why did she not include this extremely relevant meeting in her answer to written question No. 19129?

SPEAKER: And the Minister will answer that, but because of Nathan Guy’s interjections, a supplementary will be taken from the National Party.

Hon CLARE CURRAN: Because I didn’t perceive it as an official meeting. [Interruption]

SPEAKER: No. That’s the end of the supplementaries.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Mr. Speaker, you have an important role when it comes to the efficiency and the—I suppose you’d say—appropriateness of answers for written questions. Is now a requirement of the Opposition to ask only about what the Minister considers to be official meetings, or is it still the case that a Minister is always a Minister and therefore in a ministerial capacity, turning up in the ministerial limousine etc., etc., can be asked about any meeting that they might attend?

Rt Hon Winston Peters: What we are in danger of doing now, at the request of the Opposition, is to say that every coffee meeting, every time you have breakfast, is an official meeting. Now, some of us do that because we need the food; we work so hard. But we do not make those events official events that we think the staff should be responsible for. And the real point here is her office disclosed the matter, but it wasn’t official. And Mr Brownlee might regard every time he eats as an official matter, but we don’t.

SPEAKER: Order!

Hon Chris Hipkins: Mr Speaker, I draw your attention—I’m sure you’re aware of it, because I think you were involved in it—to a lengthy series of points of order during the last Parliament about the former Prime Minister John Key and the various hats that he wore and what were deemed to be official engagements and what were not deemed to be official engagements. And I think the precedent was very clearly established by the previous Government.

Hon Gerry Brownlee: The point, Mr. Speaker, is that if a Minister—in this case, the Minister of Broadcasting, Communications and Digital Media—has a meeting with someone who is an employee of Radio New Zealand, are we expected to believe that there was no discussion at all about matters that fall within portfolio responsibilities? I think that would be a huge stretch. And if the Rt Hon Winston Peters is making the case that Ministers can avoid public scrutiny by simply declaring a meeting to be unofficial, then I think we are really limiting the general constraints democracy places on a Government.

Hon Nikki Kaye: I just want to highlight the importance of your ruling on this issue, because it relates to another question that I’ve been asking today. We have the situation where the Hon Kelvin Davis has sat in a meeting—

SPEAKER: Order! I think I’d rather deal with this one.

Hon Nikki Kaye: Well, it does cut to the heart of whether he was sitting there as the Associate Minister of Education or in some other capacity.

SPEAKER: Well, I really don’t think this is that complicated for members who have looked at the issue of ministerial responsibility carefully. Clearly, members can be involved as a Minister at a breakfast, which is not a meeting with a specific person, because quite often there is a large group of people at a general breakfast and someone else could be there, and there could be discussion. That is not a meeting with an individual, as far as I’m concerned.

Having said that, I do agree with the basic point that the Hon Gerry Brownlee makes, and that is that people don’t take off their ministerial hats, unless it’s made clear by some other method or for some other reason or they’re there for another clear purpose—sometimes personal, sometimes a constituency—that one has a general expectation that people are acting in a ministerial capacity if they’re meeting with people where they do have some responsibility.

But the point that I would make is that in the end I cannot take responsibility for a Minister’s answer. That is something for them. I don’t want to either judge or be held responsible for the quality of answers. But other members of the House and—certainly from the correspondence that I get—people in the public do make judgments as to the quality of answers.

Bills

State Sector and Crown Entities Reform Bill

First Reading

Debate resumed from 15 February.

Hon CHRIS HIPKINS (Minister of State Services): The bill in question, the State Sector and Crown Entities Reform Bill, provides for greater integrity and accountability in the management of the wider State sector. It strengthens—it will, I hope—the public’s trust and confidence in Crown entities, which are often the face of the Government and often deliver vital public services to New Zealanders every day. It will ensure that Crown entities remain aligned and connected with the State sector, and it will bring more consistency to the regulation of conduct and remuneration of employees at the most senior levels of the wider Public Service. New Zealanders rightly expect Crown entities to act responsibly, in the public interest, and be good trustees of public resources. Crown entities are public organisations operating, for the most part, with public money for the public good.

Part 1 of the bill makes two key changes to the Crown Entities Act. It requires boards of statutory Crown entities to obtain the State Service Commissioner’s written consent to the terms and conditions of employment of a chief executive, and it introduces terms of appointment for up to five years, able to be renewed for future chief executives of statutory Crown entities. Currently, Crown entities must consult with the commissioner of State services when they’re establishing the remuneration of their chief executives. If they cannot reach agreement with the commissioner of State services, they then must consult with their Minister. If they still don’t like the advice they receive from the commissioner and then from the Minister, they can, basically, set the salary at whatever they like, and we have seen examples in recent times of Crown entities acting against the wishes of the State Services Commissioner and against the wishes of their Minister when they have been setting chief executive salaries. They’ve certainly been setting those salaries well out of step with the wider public sector, and they have been setting them well out of step with what the public of New Zealand expect from public entities.

This bill brings the Government, through the State Services Commissioner, a greater ability, greater levers, to deal with that issue. Ministers on both sides of the House, and the commissioner, have repeatedly expressed their concern around the way the law is currently operating, and I’m very pleased to say that this Government’s going to actually do something about it by bringing legislation through the House relatively quickly to deal with the matter.

A more prescriptive regime already applies to some Crown entities. For example, the 20 district health boards and 26 tertiary education institutions are already subject to greater control. This legislation extends out broader to an additional 22 Crown agents, 14 autonomous Crown entities, 10 independent Crown entities, and four Crown entity subsidiaries, which then means that they will also need to seek the agreement of the commissioner in setting the salary for their chief executive. That will allow us to ensure that there is greater consistency in these matters right the way across the Public Service.

The second major change it does is specify a term of employment for a chief executive. Under the current Crown Entities Act, there are no specific references to a term of employment for Crown entity chief executives. This is out of step with the 31 Public Service chief executives and 26 tertiary education institution chief executives, whose legislation provides for five-year terms that are able to be renewed. It also changes the New Zealand Public Health and Disability Act so that this provision will apply to the chief executives of district health boards and other health sector Crown agents, and this brings them into line with the public sector and tertiary education institutions.

Boards: under the current rules boards are often responsible for chief executives that they did not appoint and whose terms and conditions of employment they did not agree to. By moving to a five-year term that is renewable, it will give the boards greater decision-making power and ultimately make the chief executives more accountable to those boards who they report to. It enhances the accountabilities of chief executives, and it’s important to note that this will only apply to appointments or reappointments of a chief executive after the Act comes into force.

The bill makes two key changes to the State Sector Act. It enables the State Services Commissioner to apply a code of conduct to the board members of the entities that are subject to a code of conduct, and it modernises the commissioner’s investigation powers by aligning them with the Inquiries Act 2013. A code of conduct issued by the commissioner cannot override or interfere with any statutory duties of board members or with the statutory independence of the independent Crown entities.

The commissioner’s main powers of investigation beyond core Public Service departments come from the Commissions of Inquiries Act 1908: the power to summons witnesses and receive evidence. The commissioner has other powers in relation to the Public Service departments—for example, to inspect, to investigate, to obtain information, to enter departmental premises, to examine documents, and to question staff. The Prime Minister can direct the commissioner to exercise those powers across any part of the State services. A Minister or the head of any part of the State services can request the commissioner to exercise some of these powers but not the power to enter premises. The commissioner has extensive powers to investigate, but what powers are available in the wider State services depends on who asks the commissioner to act. Therefore, it is becoming a very cumbersome and difficult web in order to navigate.

The Parliament recently passed a new Inquiries Act. This bill brings the commissioner’s power to investigate in line with the Inquiries Act and means that the commissioner’s powers will be consistent, regardless of who is asking for the inquiry to be undertaken. So it will ensure that the commissioner can better do their job to investigate any impropriety within the wider public sector, including Crown entities. We’ve seen an example just recently where the commissioner was asked to undertake an investigation regarding a district health board, for example—their powers derived from those conferred, effectively, by the Minister. What this will do is it will mean that the commissioner has a consistent set of powers that will allow them to ensure that public sector agencies, whether they be Crown entities or core public sector departments, are actually subject to all of the accountability that we would rightly expect them to be subject to.

So the bill makes three changes. That is, it replaces the use of the old Commissions of Inquiries Act 1908, which I’ve just mentioned, with the substantially similar powers in the Inquiries Act of 2013. It provides a uniform trigger to enable the commissioner to use the full suite of investigatory powers in the wider State services. All of the commissioner’s powers will be available irrespective of whether the commissioner is directed or requested to act by the Prime Minister or a Minister or the head of any part of the State services. It enables the commissioner to use the full suite of investigatory powers under the commissioner’s own motion for investigations into matters of integrity and accountability. In other words, it allows the commissioner to adequately do the job that the commissioner has been tasked by the Government and by the Parliament, through the State Sector Act, to do and to do it properly.

Collectively, the package of amendments that this bill proposes provides for a single integrated approach in the State services that is underpinned by integrity, transparency, and accountability, all of which affect the public’s trust and confidence in the Government. I commend the bill to the House.

DEPUTY SPEAKER: Just before I call the next speaker, can I make it clear that the Hon Chris Hipkins is the Minister in charge of the bill and, therefore, that is counted as the first speech, even though the Hon Andrew Little had 20 seconds late one night.

Hon TODD McCLAY (National—Rotorua): Madam Deputy Speaker, thank you very much. In respect of this bill, the National Party—the largest party in this Parliament—will be supporting it to first reading, but we will be paying a lot of attention, come the committee, to make sure that it is a worthwhile and worthy piece of legislation. But, I must say, I am a little surprised to be speaking to this bill so soon in the term of a new Parliament and, indeed, of a brand-new Government. I had a little look at the things that people campaigned on last year, and didn’t see this high up on the list. I’m quite worried that this piece of legislation, being delivered so very, very early during the term of this Parliament, is really an indication of things to come or, more to the point, things not to come, because I’m not sure this is the number one issue that New Zealanders are grappling with. It’s certainly probably not the number one issue that New Zealanders thought of when they cast their vote—just 7 percent of them for New Zealand First, for instance, or less than 7 percent for the Green Party—about five months ago.

But what’s most interesting is that the State Services Commissioner was already working on many of the ideas that are now contained in this piece of legislation. So when the Minister responsible suggests that no other Minister has ever done anything about this, well, gee whiz, there must not be a lot going on over in that office, for his researchers and staff to be digging up such real pearls. Because if we go and have a look back not only at Hansard in this Parliament but, certainly, a lot of press coverage during the course of last year, there was a lot spoken on some of the issues that are contained in this legislation. Indeed, our then Prime Minister was quite vocal about one of the issues, which possibly is covered by this. So a conversation with the State Services Commissioner meant that they started that piece of work, and the Minister knows that the work was started long before he got there.

Having said that, there are some issues that are important to deal with in the goodness of time. I’m glad that such importance has been placed on this by the new Government that they’ve decided to prioritise it, as opposed to many other things that they’ve been speaking of. When it does come to committee, we will be wanting to have a very close look at it and make sure that the detail of what’s in it will actually work.

There is one word of caution though, I suppose, that’s very important. Now the taxpayer absolutely has the right to expect openness and transparency, particularly when it comes to State enterprises and the pay or conditions agreed for their CEOs, but we must also make sure that in the provisions that are put here—the board of an enterprise must get the explicit permission of the State Services Commissioner. Where that cannot be reached, it’s the Minister that must intervene and decide. We must be very, very careful here that, actually, the Minister’s responsibility does not move into the area of the competence of those boards, because, actually, the role of the Minister is very different than that. The Minister gets to direct the boards, make decisions around that, but actually shouldn’t be making the decisions of the boards.

The second thing is that, whilst we want to make sure we get the very best person or people that we can to run a number of these agencies, we need to make sure, actually, that a desire on the part of the Government to show that they are in touch with New Zealanders doesn’t get in the way of the very best people being there. Some of these organisations are very large, most certainly very complex, and, in many cases, the State Service will be in competition with the private sector for finding the best person to deliver for them.

I know we haven’t had mention of it but we need to be careful that the legislation doesn’t become a witch-hunt for a few CEOs, and, particularly, whilst it’s important we consider the pay scales of some of them, if we look at the New Zealand Superannuation Fund, they absolutely—absolutely—must have independence from Government and from Ministers, and, secondly, they must seek the very best people they can to run those organisations to make sure the billions of dollars they are entrusted with on the part of the New Zealand taxpayer are well managed and that there’s a good return there. So we need to be careful, again, that it doesn’t just become a witch-hunt or a political sideshow.

But we will be supporting the first reading and then, based upon submissions and that process, will decide the position of the National Party thereafter. Thank you.

Hon CLARE CURRAN (Associate Minister of State Services (Open Government)): Thank you, Madam Deputy Speaker. In direct reference to the previous speaker, Todd McClay, I’m very pleased to hear that the National Party is supporting this bill to select committee after the first reading. Absolutely, he made an important point around getting the right person and the best person for the job, and surely he would also—and I hope that his party would—agree that getting the best person for the job requires that they act responsibly and that the entities that they represent behave responsibly.

I want to go directly to the trust and confidence aspect of this piece of legislation, which is the crux of why it’s being introduced. I want to refer members to the 2017 Acumen Edelman Trust Barometer, which is part of an international report. It’s the New Zealand version of that report, but it’s the international report that goes to the trust and confidence that citizens have in their society, whether it be business, whether it be Government, whether it be NGOs, and it looks at the changes, positive or negative. The 2017 report disturbingly showed that in New Zealand there was a growing gap in confidence by the majority of the population—a 20-point gap, which was an eight-point increase in that year, in 2017, which is very disturbing and on a par with other comparable countries, but at their very upper level. What that indicates is that the trust and confidence that citizens have in their society—whether it be business, whether it be the public sector, the people that represent them, and the community sector—is not increasing; it’s decreasing. That is very disturbing.

One of the things that this report talked about—this is in reference to the previous speaker, with his comment about getting the best person for the job—is the actions that business, and, by implication, the Public Service, can take that would most damage trust in a better future. Number one on that list is paying executives hundreds of times more than workers. That’s number one. And if you translate that into the public sector, those behaviours of extraordinary pay increases where the ordinary citizen looks at that compared to what they earn and sees a massive growing increase in the people at the top of Public Service entities, and they see that happening and continuing to happen, that is one of the key reasons why trust and confidence are decreasing.

That is why this Government is putting a stake in the ground around trying to improve trust and confidence, being open and accountable about how these practices occur, the basis on which they occur, the rules that underpin them, providing consistency. And that is the critical nature of this piece of legislation—that it’s providing consistency for Crown entities from other parts of the public sector. It could be recommended at select committee that it goes even broader, and perhaps even includes Crown-owned companies in its ambit, and I’m looking forward to seeing what discussions and what submissions are provided at the select committee.

But, ultimately, this piece of legislation is about consistency across the Public Service in terms of providing a comparable process for how pay increases occur at the very top. It’s about fairness, it’s about showing responsible government, and, as my colleague Chris Hipkins referred to, it’s about integrity and transparency and accountability of government. Those things are critical to close that gap, that 20 percent gap that’s grown in the last year of 8 percent, so that citizens are feeling as if action is being taken on the things that they are the most cynical about.

The members on the other side can laugh and chortle all they like, but the visibility of very high increases, whether it’s in the public sector or the private sector—the perception of that is that the 1 percent, the people at the very top, are getting huge increases while the ordinary people are struggling.

There was a report that was produced by the State Services Commissioner, Peter Hughes. The Senior Pay Report, covering State sector bosses’ pay in the year to June 2017, identified three Crown entities as being of particular concern. I think that it, very wisely, had the point of principle that has led to this piece of legislation and that led the Minister of State Services to look into this. It was to look at the closing of the gap between the high-income earners and the low-income earners, and the public sector should be leading by example. That is the hallmark of a responsible Government and of a Government that’s going to be more transparent and accountable, that will show more integrity, and that will build that trust and confidence with the citizens.

It was backed up by the Prime Minister’s comments that Crown entities that did not have to follow the advice of the State Services Commissioner were, effectively, not answerable to anyone. Now, as a citizen of New Zealand, if you see entities that are, essentially, out of control and that are not taking the advice of the head of the public sector, and where the head of the public sector is not able to have more requirement powers—which is what this bill introduces—then the perception is that things are out of control, that there’s no chance of fairness. There’s less chance of fairness in our system and it’s, essentially, a bad look.

That is the essence behind this bill. That’s why it’s responsible. That’s why it needs to be introduced at this time in our term, because it’s a hallmark. If the Opposition doesn’t get that, well, that’s because they just simply don’t understand why trust and confidence are actually important. I think that that is the crux of this issue. The Opposition just doesn’t get why this Government talks about trust and confidence and why it talks about more accountability.

Brett Hudson: Because it doesn’t want to do anything—that’s why it talks about it.

Hon CLARE CURRAN: Ha, ha! So I’m proud to support this bill and to emphasise that this is part of a wider agenda for change across the public sector to build trust and confidence and to provide more consistency of practice. The State Services Commissioner requirement powers that are contained in this piece of legislation are responsible. They reflect best practice. It’s widening those powers, from where they just have to consult when advice is provided, and I commend the bill to the House.

BRETT HUDSON (National): Thank you, Madam Deputy Speaker. It’s a pleasure to rise in support of the State Sector and Crown Entities Reform Bill in this, its first reading. It’s interesting that we should be debating this today, at this point in this term. I would like to acknowledge that this bill, which we will support to first reading, is going to one of the harder-working and more competent select committees, and, to paraphrase the old Toyota ad, of course I would say that.

But it’s quite remarkable for a couple of reasons. The first one is it is not something that the now-governing parties actually campaigned upon in that election that was only a few months ago.

Hon Shane Jones: I raise a point of order, Madam Speaker. Can I direct you to consider the remarks, as the member isolated only one select committee as being competent, and the suggestion that others, where members of the public are taking their submissions, lack competence. Please correct that delinquency.

BRETT HUDSON: Speaking to the point of order—

DEPUTY SPEAKER: I don’t need any further assistance.

BRETT HUDSON: —I did say “harder-working”, not “hardest”.

DEPUTY SPEAKER: I did take it that there was a comparison, and there was some conflict of interest expressed by the member, as he is a member of that hard-working select committee.

BRETT HUDSON: Thank you, Madam Deputy Speaker. At least I acknowledged that conflict of interest. So it was something that wasn’t campaigned upon last year, but even more interesting is that of all of the great visions they claimed and all of the great issues that sit upon New Zealand, this bill, which is something that is, in the context of all of those great ideas—those supposed great ideas—is actually quite a small matter and one that pertains to be of some public interest, but to quite a small number of individuals. It’s quite interesting that it should hit the Order Paper now.

The public can, and will, take from that that this is a Government that, just a few months ago in Opposition, had a whole lot to say about what it wanted to do, but it had done absolutely no preparation to get ready for actually being in Government and doing work. So what we have instead is them working on initiatives that the previous Government had already put in train, because it has been acknowledged, and it is a simple fact of the matter, that the previous Minister of State Services had asked that the processes be reviewed by the State Services Commissioner, including, and particularly, around chief executive pay.

So it’s quite interesting that on 12 February, in the post-Cabinet press conference, the media asked the Prime Minister—and I quote—“Was any of the work on this legislation under way under the last Government? Prime Minister: “Well, I don’t think it was [then] in train, was it?” Hon Chris Hipkins: “I don’t think so. This was something that we picked up fairly early on in [the] broader discussions”. Well, the public’s going to have to wonder if that particular terminological inexactitude was deliberate.

It just actually shows the public that the Government has no substance and no work of its own, and, instead, it is seeking to raise its own reputation in the eyes of the public by claiming the work that the previous Government had undertaken as work of its own. Well, in actual fact, the work the previous Government had undertaken are examples of the only decent things that this new Government has brought to the House. But I do commend this bill to the House.

Hon TRACEY MARTIN (NZ First): Thank you, Madam Deputy Speaker. I rise on behalf of New Zealand First to speak on the State Sector and Crown Entities Reform Bill. I think it’s very interesting, the contribution by the member that just resumed his seat, Brett Hudson. So, if I understand it correctly, what that member is saying is that, over 9 years, the previous Government thought that this was an important issue and asked for a review but did nothing to get legislation into this House. I think that is what the member has just admitted of the previous Government, so I thank him for his honesty in that regard.

I also think that it’s very interesting that the member that resumed his seat earlier shouted out that this bill was all about State control, and yet, if I just heard him correctly, this is all their work. So I’m becoming a little confused between the shouting out that this is all about State control and somehow that it is a negative of this Government, yet the member who just resumed his seat now claims credit by the previous Government for writing the legislation. And I suppose, Mr Hudson, that if you believe that the representatives of taxpayer citizens shouldn’t be able to stop chief executives’ pay from being disgustingly out of proportion with that remuneration of those very taxpayers then one might say that.

I think it’s very interesting that Peter Hughes made this statement on 13 February 2018: “While the board has the right to make these decisions, I do not believe increases of the magnitude given are warranted or justifiable in a public agency, especially where the increase follows previous increases over and above my advice … There are important guiding principles that underpin the role and function of the Public Service which are relevant to chief executives’ remuneration. One of those principles is the spirit of service, a duty to act responsibly in the public interest and to be a good trustee of the public resources, including remuneration. The second principle is around public trust, an expectation that the State sector is accountable, transparent, fair and reasonable.”

The reason why this bill is here today is to acknowledge that on some level, with regard to chief executives’ remuneration, the public has lost a level of trust. The public has become—and we believe quite rightly—cynical that these enormous salaries that are being paid, the large increases that have been made over and above the recommendation of Peter Hughes and those who held his position prior to that, is out of whack and out of step with what their expectation is. There are many hard-working public servants. They are in this House, they are in our offices, they are in our schools and our hospitals, but they have not had the level of increase in remuneration that many of these chief executives have had. Nor have they, however, decided to pull their labour. They have continued because of that sense of public service, and this is what this bill goes to reinstate.

I think Mr Adrian Orr is probably one of the most recent examples of a gentleman who had another role at which he was very well paid but has made a decision to take a significant pay cut, because he wants to give service as the Reserve Bank governor in March of this year. Nobody can deny how successful Mr Orr is; nobody can deny how respected he is in the work that he has done, but here is a public servant who is fulfilling that level of service, and we thank him for it.

I also think it’s very interesting—sometimes I think the world has gone mad—that the Taxpayers’ Union responded to this piece of legislation by saying that the Government’s announcement of new legislation to boost the power of the State Services Commissioner in setting chief executives’ pay in the broader State sector is welcomed today. “Curbing [excesses of] executive pay in the State sector is something we”—the Taxpayers’ Union—“have been calling for for … years. We look forward to seeing the draft legislation later in the week.” I’m not sure how many of us can actually recognise or absorb the fact that the Taxpayers’ Union has just put out a press release, on 12 February, that endorses the work done by this Government.

As I go to close, can I just say the amendments to the State Sector Act 1988 and the Crown Entities Act 2004 will address three other key areas. The Crown entity chief executive terms of appointment—so the term for new appointments of chief executives will be no more than five years, renewable. I believe the Minister quite clearly articulated why that is something we believe needs to take place.

Setting standards of integrity and conduct for Crown entity boards: the commissioner may be able to issue a code of conduct to the board members of all entities within the scope of his mandate, in line with international practice. I was quite shocked to find that this was not in place, as I remember debating the removal of a code of ethics from a particular profession in this country that was to be replaced by a code of conduct, and it was argued by the then National Government that all professional bodies had these things, and yet it appears that those that are among the highest paid at this time did not, and do not have, a code of conduct.

Also, the State Services Commissioner’s powers to carry out investigations will be changed, with more consistency in the way inquiries are conducted across Government.

So, from that perspective, I think that we have traversed most of the key points. I would probably only reiterate one more time that in a recent report it was shown that the average remuneration increase for Public Service bosses for the year to June 2017 was 2 percent, up from 1.3 percent in the previous year. It was 2.7 percent for tertiary education institutions and district health board (DHB) chief executives, and 4.1 percent for Crown entity chief executives, which were 2.8 percent and 3.8 percent above the previous year, respectively. I think if people go and just have a look at that over the general pay increase and what the people who funded these chief executives gained over the same period, it’s quite an interesting distinction about the percentages that we’ve got going on here. And, of course, the more you get paid, the larger that percentage turns out to be in dollar value. As an example, the chief executive remuneration for the year June 2017: MBIE, it was between $800,000 and $809,000; the University of Auckland, between $710,000 and $719,000; the Police Commissioner, between $690,000 and $699,000; Treasury, between $660,000 and $669,000; and Waitematā DHB, between $620,000 and $629,000.

Nobody is saying that these people are not very good at their jobs. Nobody is saying that they do not perform. What this bill is saying is that there is a level of service, and that it is not necessary—we do not accept the argument that good people won’t come unless they are paid in this incredibly inequitable way from the people who are paying them. So New Zealand First will support the bill as it goes through to select committee. Thank you, Madam Deputy Speaker.

KANWALJIT SINGH BAKSHI (National): Thank you, Madam Deputy Speaker. I stand in support of this omnibus bill, which amends the Crown Entities Act 2004 and the State Sector Act 1998 to provide greater integrity and accountability in the management of State services. I would like to acknowledge the chair of the select committee—the hard-working select committee—that will be looking after this bill. I hope that we have detailed deliberations during the select committee process.

I would like to agree also with the previous speaker, Tracey Martin, who mentioned that we have got hard-working State services people who work hard for the betterment of our economy. Treasury has cautioned that these public agencies are large organisations and are competing with the private sector for top-quality candidates. We have to understand that in today’s competitive world, the best people are taken for the best jobs. They want to make sure that we, in the public services sector, can get the best people to take those agencies forward. Sometimes, the best candidates for a position might not be available for a Public Service role due to the competition with the private sector, which is a very important aspect that we have to understand.

This bill will try to help those issues, and I hope that once we go through the select committee process, we will be addressing some of the issues that are being raised. With these words, I support this bill.

JAN LOGIE (Green): Thank you, Madam Deputy Speaker. It’s with pleasure that I rise to speak to the State Sector and Crown Entities Reform Bill at its first reading, which the Green Party will also be supporting. It’s nice to have some unanimity in the House on a piece of legislation. It’s been a while.

This bill, as I think it’s been explained, is seeking to provide greater integrity and accountability in the management of State services through strengthened and more consistent regulation of conduct and remuneration of employees at the most senior level, for a more consistent approach to the State Services Commissioner’s investigatory and inquiry powers.

I think the Minister first indicated that legislation might be coming in December of last year—that was the first time I, at least, picked it up—in response to a degree of public concern and the State Services Commissioner speaking out and naming the State-owned enterprises (SOEs) that were breaching the advice from State services about what appropriate remuneration increases might be for their chief executives (CEs). He singled out three SOEs that had made the decision, against advice and the view of the Minister, to increase their CEs’ remuneration at a significantly higher level.

A previous speaker, and particularly the Hon Clare Curran, talked to this and the importance of this issue in terms of public trust. The pay of those at the top of our public institutions does matter. It really does impact on people’s perceptions of the Public Service and the view of whether those institutions are serving them as the people or whether they are out of touch and having motives of their own.

There has been significant international commentary on this, as an issue, over recent years. Some academics who have been watching this space have commented that they believe that the Brexit decision and potentially the election of Donald Trump were connected to the growth in CEO salaries being out of step with the increase in average people’s incomes, and they have warned us as a country that we need to be watching this.

In New Zealand there has been research done by Helen Roberts through the University of Otago over the last 18 years that has been tracking CEO salaries and average wage increases. She has found that the gap between wages earned by staff and their bosses has been steadily widening, and in fact that between 1997 and 2015, the period of her review, the salaries of those at the top have increased by 7 percent, whereas for your average worker it’s increased by only 3.7 percent. So salaries have increased at twice the rate for those at the top. It’s probably more than that, because the average wage that that is calculating includes the wages at the top. So, indeed, it’s even worse than that.

Some of the salaries of CEs in New Zealand are over 60 times that of the average salary of the people doing the work. Justification has been made for that, and we’ve heard of instances of this very situation. Well, we’re told that it’s important to pay these CEs more, and we have to increase their wages because we’re benchmarking against other CEs, and we need to make sure that we can attract the best people. But, of course, this creates this kind of escalating effect for those salaries at the top, because they’re all benchmarking against themselves and they keep on just escalating. There are formal recruitment salary processes—

DEPUTY SPEAKER: Come to the bill.

JAN LOGIE: Madam Deputy Speaker, this is to the point around the State services advice and trying to actually send a signal to us as a country that we have the intent of bringing in that gap between those at the top and the average workers in New Zealand, because it is out of step.

I do want to say, as well, that we’ve heard arguments that often it’s the performance of the CEs that actually deserves that pay increase. Well, I’m not sure anyone deserves $1 million a year. Personally, I can’t see what you can do to deserve that. But, even with that said, if you didn’t have that view on the world, if you looked at the performance of CEs and tried to see if their salary increases matched an increase in performance in their—

DEPUTY SPEAKER: Can I just ask the member to come to the bill, which is not about in-general salaries. It is about a change to the State Sector Act.

JAN LOGIE: Indeed.

DEPUTY SPEAKER: I’ve given quite a lot of latitude. I understand the philosophy.

JAN LOGIE: Thank you, Madam Deputy Speaker. I guess the point—I was seeing it as relevant because some of the arguments—

DEPUTY SPEAKER: I’m not arguing with the member. I’m asking the member to come to the bill.

JAN LOGIE: Speaking to the bill, because of the arguments that were made in defence of the increase in those CEs’ salaries, against the advice of the State Services Commissioner, performance was used as an argument against the judgment of the concept of the State Services Commissioner and the Minister, that actually we have a public-good consideration. When you look at the evidence, performance and pay do not correlate. In fact, if you look at it, often the worst-performing CEs are those that are the most highly paid. So we do have an interest and a duty, as lawmakers, to ensure that we’ve got mechanisms to just consider that public good and what is going to result in better decision-making in our SOEs, and having a mind and a cap, potentially, on those top salaries. The evidence is that that will produce better results overall.

Another part of this bill is to be able to extend the five-year term that is applied in the State services to CEs in the State-owned enterprises. And this, I think, makes sense, just around the point of having consistency right across our State sector and not having State-owned enterprises (SOEs) out of step. Another part of that, too, was to bring district health boards (DHBs) in line with this, and it makes a change to the Public Health and Disability Act to do that so that they are consistent, as well, with the tertiary education boards and other similar boards.

I did note that the Minister, while introducing the bill, pointed out the reality of many DHB boards who have CEs that they haven’t appointed. They haven’t had a say in what their conditions and remuneration rates are, and yet they are held publicly accountable for their results and the links to their remuneration. So having that five-year term of employment does make sense in terms of democratic accountability.

I share the view of Minister Tracey Martin in noting surprise that the code of conduct, as well, wasn’t previously able to be applied to board members, or that the law was unclear around that. It is good indeed to see that being tidied up, because it is hard to imagine how anyone would assume that board members would be less likely to have issues relating to conduct than employees or contractors.

So this is, overall, a strengthening of legislation to ensure public confidence and the integrity of our State services, and the Greens are pleased to add our voice of support to it.

Dr JIAN YANG (National): Thank you, Madam Deputy Speaker. This bill attempts to provide for greater integrity and accountability in the management of our State services sector. It attempts to clarify and also to streamline the roles of the State Services Commissioner. At the moment, most Public Service agencies are already consulting with the commissioner and also have regard to the commissioner’s recommendations, and this bill attempts to make it a cross-agency practice—a more standard practice. So for that reason, we will support this bill to the first reading.

While we support the bill, we need also to be careful, in approaching these issues, to make sure that the bill itself won’t be used to target some specific CEOs, like a witch hunt about a few CEOs. Also, we need to understand that public agencies often are large organisations. They often compete with the private sector, and so on the one hand we need to make sure that we are able to get the very best candidates; on the other hand, we need to respect the taxpayers’ expectation—that is, taxpayers’ right to expect transparency around issues like salaries. So how to balance these various factors is something we need to be very careful of.

To proceed to the Governance and Administration Committee—which is a very capable select committee—is the best way to go forward, so I support the bill. Thank you.

DEPUTY SPEAKER: The next speaker has a split call, and I will ring the bell at one minute. I call Kiri Allan.

KIRITAPU ALLAN (Labour): Thank you, Madam Deputy Speaker. It is indeed a delight to speak in respect of the State Sector and Crown Entities Reform Bill. Reflecting on the general intent and purpose of these reforms, you’ve kind of got to feel a bit sorry for the State Services Commissioner. Poor old Peter Hughes, he’s out there flogging the horse and doing the best that he can do to put up recommendations that are pragmatic, that make sense, for the good governance of our Crown entities. He puts up these amendments, he goes through, he does all of the due diligence—you know, he has a statutory function—what is it?—to promote the spirit of service to the community. So he goes about, he does all this hard work, he puts up his recommendations on what the pay rise and thresholds should be to these boards—and they ignore him.

Dame Rebstock, she got a pretty clear direction: “OK, you know, the CEO, he’s done a good job. Let’s put his wage up by 1 percent. It’s already a hefty thwack anyway, it’s up there in the $800,000 mark, but, all right, he’s doing a good job. We’ve got to stay competitive, etc., etc. All right.” So all the advice came back—we’ll give him a 1 percent rise. Well, the board, they took that into consideration. You know, they had to consult, they got some advice, but in the end the poor old State Services Commissioner doesn’t have any teeth.

So what this legislation does—it’s a pragmatic approach to enable those with the statutory duties and responsibilities to ensure that our Crown functions and our State services are indeed promoting the spirit of our services to the community, that our State Services Commissioner can ensure that our State services are promoting the interests of New Zealand, that we are being transparent, that there is integrity, and that trust and integrity are being imbued into our State services.

I mean, several of my colleagues made comments prior about comments the State Services Commissioner had made, and I was reflecting on some of them as well. He was talking about the upward trajectory of chief executives’ salaries in the State sector, and, in particular, some of the Crown entities. It’s not sustainable and it’s time for change, and this was a direct response, at that point, to the New Zealand Superannuation Fund’s then chief executive receiving a pay increase of about $140k—which was a 36 percent pay rise, if I recall correctly.

I must applaud the Hon Chris Hipkins, the Minister of State Services. In a very swift amount of time, he has managed to turn around some prudent and decent legislation that addresses the concerns that the State Services Commissioner had raised. Indeed, the former Government and the former Minister of Finance—he too observed that there was a gross inconsistency. It goes back to that point around the teeth that the State Services Commissioner has when it comes to making these recommendations.

Part 1 of the bill makes these two key changes, as has been highlighted by the Minister, requiring the boards of statutory Crown entities to obtain the State Services Commissioner’s written consent to the terms and the conditions of employment of a chief executive, and that that term for appointment is limited for up to five years, with the right to be able to be renewed. Again, I guess the pragmatic rationale that sits below all of that is that you’ve got a board that might not necessarily have appointed that chief executive, who, currently, can be in there for as long as they might like to be. So these amendments here put some suitable time constraints and, again, increase, I guess, the transparency and accountability of those chief executives back upwards to their board and, again, to the State Services Commissioner. So, on these grounds, I’m pleased to commend this bill to the select committee.

STUART SMITH (National—Kaikōura): Thank you, Madam Deputy Speaker. It is a pleasure to speak on the State Sector and Crown Entities Reform Bill, and I am looking forward to going through this in the Governance and Administration Committee, which is a hard-working and very competent select committee—not to say that the others aren’t, of course.

I want to take this from a personal perspective as an employer, as a company director, as a former chairman of a board, and from my experiences around remuneration of key staff, particularly chief executives. I think, while the bill—and the main part that we’re talking about here is amending section 117 of the Crown Entities Act to require the board to consult or seek written consent from the State Services Commissioner before finalising and agreeing the terms and conditions of employment of a chief executive. It is an international market that we work in, like it or not, and the role and the relationship between the board—particularly the chair of the board and the chief executive—is really important. While it would be quite good to limit pay significantly, with that comes some risks, and the risks are quite squarely on the board.

I think why the boards often go over the top is a lack of their own confidence in their own ability, perhaps, or, particularly when it’s an existing chief executive and they’re renewing their contract, it’s just something that they need to test the market a little more on, I suspect.

But that may be the market. We have had the example, given by the Hon Tracey Martin, of Adrian Orr, who is soon to take up the role of Governor of the Reserve Bank at a significant pay cut. We would be at great risk if we were going to rely on the altruism of candidates for chief executive roles, if we want good performance. There is no doubt that top performers do make a significant difference to any entity that they head up.

The point put out by the Hon Clare Curran—not Clare Curran, sorry; it was a Green MP—which was really a wild diatribe on the Karl Marx writings, is not, I suspect, what we actually should be talking about. We need to talk about people getting remunerated for what they deserve for that job, and I think this is a very good bill, actually, but it’s on the work that we started—while you would’ve thought it would’ve come from Karl Marx, from one of the previous speakers. So it is with that that I commend the bill to the House.

DEPUTY SPEAKER: I’ll just remind the member sitting in the front seat that you can’t actually move seats to take part in the contretemps across the House, to take advantage of an extra position.

PAUL EAGLE (Labour—Rongotai): Thank you, Madam Deputy Speaker. Keep the member from Mana under control, please, Madam Deputy Speaker.

Matt King: This is going to be good.

DEPUTY SPEAKER: And the same goes for that side.

PAUL EAGLE: Keep the member for Northland under control, too, please. Thank you, Madam Deputy Speaker. There’re a lot of out of control people in the House this afternoon.

Look, it is a privilege to take a call on this and also to be part of the Governance and Administration Committee. I can’t see anything wrong with the comments made by the chair of the committee, Brett Hudson, the harder working and, did he say most competent or competent—look, I won’t get into it. It’s about the only thing I agree with him on, but, nevertheless, it’s a competent committee—[Interruption] It’s a competent select committee, thank you, the member for Ōhāriu.

I was looking carefully at this bill that’s been brought to the House by the Hon Chris Hipkins, and I thought, “What’s formulated this bill, and why is it here?” We’ve heard the words “integrity” and “trust” mentioned in nearly every speech this afternoon, and I think this just reinforces the notion that this is all about the integrity of our Public Service, no matter what side of the House you’re on. It’s also talking about the powers, or the lack of and the need for more powers, for our State Services Commissioner, and examples have been given there, too. But, most of all, I think this is about transparency and accountability for every New Zealander, so they can have that confidence and trust in our senior public servants.

It puzzled me when I came in this afternoon and heard some members opposite going round and round and round the issue with lots of excuses. I thought, “This astounds me.”, because they are saying that it’s only got, essentially, conditional support to the first reading. Considering the issues that are detailed—and some of those issues talked about the fact that there are three Crown entities who ignored the commissioner’s guidelines, two implementing changes that even ignored what the Minister’s advice was—even looking at the strategic context of this bill and just some of the actions taken by Crown entities, one would have thought this was just an obvious bill to support.

I want to remind members, too, that these are public organisations that use public money and are there for the public good, so, therefore, as I’ve said, our public have every expectation that the senior public servants and the appointment of them—chief executives—is undertaken in a transparent manner. That’s key. It’s key because these are some of our most highly paid people in our nation.

And, look, I’ve been fortunate to have been part of local government, and the Local Government Act specifies, clearly, the appointment of chief executives. In fact, I was chair of the performance review committee for the local authority that I came from, and it’s a clear process. It’s a five-year term; two years if the city or district council chooses to roll over the incumbent, or a five-year reappointment should they choose to externally advertise the role. So it’s very clear—the Act lays it out. It doesn’t involve the State Services Commission—maybe some of the work through the Governance and Administration Committee could address this as part of a wider view.

But what disturbed me in that process—and Jan Logie, the Green member, pointed it out—is that as part of that process, no matter how thorough it was, there was a point in time where you had an external agency come in, and they told us about the market. And I pick up on what some of the Opposition members say, that, “Look, we need to get the best person for the job.” It’s code for “we need to pay them as much as they want”, and that’s what this external agency said: “Here is the benchmark between local government and the private sector”—and, boy, was it high. What it needed was bold leadership from the entity that said, “Actually, if the CEO wants to stay in this organisation, then the entity needs to say ‘Well, look, this is what we’re prepared to pay.’ ”

I think this bill picks up on that. It’s not the never-ending climb that goes higher and higher and higher, where we just keep paying what external agencies say to us is what the private sector pays, because this isn’t the private sector, and any one of our Crown entities should be able to distinguish itself and say, “Well, we’re not a private company; we are a publicly owned company. We have reporting mechanisms, etc. that define who we are.”

The most interesting bit is the CEO of the local authority. He took what he was given by the council. The council didn’t fall over. Ratepayers didn’t stop getting their services delivered, and he’s still on the same amount that he was three years before. My point is that when you have guidelines and you have a strong monitor of those guidelines, the very fact that this notion that people will quit, run away, they’re irreplaceable—it’s wrong. And that’s why I think what we’ve seen here today in the presentation of this first reading is so strong.

I’m lucky enough to have sat on three council-controlled organisations—three boards: the stadium here; the venues company; and our cricket venue, the Basin Reserve Trust Board. Three council-controlled organisations that are, essentially, Crown entities, in local government - speak. And I’ll tell you this—never a board chair walked back to its parent body with the recommendation of some outrageous salary, because the elected membership body knew that when they went to ratepayers and said the little entity, the council-controlled company entity, is being paid $250,000, $260,000, $300,000 when, only years earlier, that person was a council unit manager being paid $100,000 and a Toyota Corolla to go with it, there would be outrage from ratepayers.

And that same outrage is bubbling underneath the surface here in Aotearoa, where people are saying, “We’ve had enough of this.” And that’s what’s come through in speeches from my colleagues on this side of the House. That’s why it’s important something has to be done. It’s been picked apart as if this is some teeny-weeny, irrelevant matter that could have been looked at at any time during the 12 to 20 years that the Government will be in power, but it’s important we do it now. It’s important we send the right signal, and our members here talked about sending those signals around making sure, as I said at the start, that this is about trust and confidence.

You’ll see in the paper, and it’s been talked about too, that this covers several entities. It also picks up our public health agencies too, and those educational institutions that actually are already required to obtain the commissioner’s advice. This is one of the small but powerful amendments that I think everyday New Zealanders will look back on and say, “Thankfully someone had the nous to make a couple of minor amendments that have a couple of major outcomes.” The outcome for New Zealanders will be a State Services Commissioner that’s got real teeth and a Public Service led by senior public servants who are paid a wage that doesn’t make everyday New Zealanders open their mouths wide with horror around how much they get paid, without knowing why they get paid that much. I commend this bill to the House. Kia ora.

HARETE HIPANGO (National—Whanganui): I rise to take a brief call. It’s the first time this year that I do stand to speak to address the House on the passage of a bill, and, albeit being brief, in the last call as a speaker for the National Party this afternoon, it’s to address the State Sector and Crown Entities Reform Bill. It is an omnibus bill, which, in other words, is the combination of a number of other Acts wrapped into one to be considered for amendment.

It is interesting to note, as has been noted by previous members, colleagues of mine from this side of the House, that this was work that was already underway through the State Services Commissioner reviewing the processes, and is now formally being addressed under this bill. Also, it’s been noted that National has been somewhat, a little bit, surprised by this bill appearing on the Order Paper. It didn’t appear to be a matter that was of any regard or note during the campaign. However, with the matter now being brought before the House by this Government, notably, the purpose is to provide for greater integrity and accountability in the management of the State services.

By going through this first reading, by taking this passage, it’s noted that it’s actually a pleasing change to that pathway that’s been taken with a number of pieces of legislation before the House in recent months. One would question whether that pathway was in fact a pathway of transparency, integrity, and accountability. So it is pleasing that this is a bill that’s not being rushed under urgency, that views and submissions are appropriately being taken into consideration, and that, enforcing that pathway of integrity and accountability, it will go before a select committee for due consideration.

I will speak briefly to summarise what this omnibus bill will address. It is about a single integrated approach in the State services across the dimensions of the Crown Entities Acts and the State Sector Act. It’s been noted that it amends section 117 of the Crown Entities Act and that it requires the board of a statutory entity to obtain the written consent of the State Services Commissioner before finalising the terms and conditions of employment of the chief executive.

Notably, the previous speaker, the member across the House Paul Eagle, spoke of his experience of being the chair of a review committee for a chief executive and in the appointment of a chief executive. My time is short, but it’s simply to share, having been in a similar position also, that this piece of legislation will encompass and wrap up and ensure that there are standards of consistency, and that in those standards it provides that level of integrity and accountability. We would certainly urge and encourage the Government to maintain that pathway in addressing all other matters that come before the House.

VIRGINIA ANDERSEN (Labour): Thank you for the opportunity to stand and speak on the State Sector and Crown Entities Reform Bill. It’s a really good thing to see this Government take action in an area where it is needed most definitely, and I do refute claims that we’ve heard from members opposite that this is a small or a trifling matter. As a former public servant myself, I think it’s very important that this Government brings forward a bill that provides consistency and instils trust in the public in how our State services are run. But it is also important that it’s fair—that it’s fair to people.

People being paid who work hard deserve to be paid, and during the times when we’ve seen these large increases happening, during the time when we’ve seen $20,000 and $50,000 going up at the top end, we’ve seen jobs lost. We’ve seen empty desks in the public sector. We’ve seen people going home on cut hours who can’t afford to pay for their groceries and who are cut back. And in their place we’ve seen contractors hired at $100 or $180 an hour. We’ve all seen it. It’s cutting public services and paying more with contractors and taking the difference and topping up at the top end, and this Government says that that’s not good enough.

We want consistency across our Public Service, and we’re prepared to act right now. In February last year Bill English stood up at a press conference and was very displeased at the 36 percent increase that was delivered to the chief executive (CE) of the New Zealand Superannuation Fund. That’s a year ago, so in terms of the comments we’ve heard from members opposite that it’s a surprise that this suddenly pops up on the Order Paper and that we’re suddenly jumping into getting work done—well, it’s about time. It was known that it was a problem well over a year ago and no action was taken, and I’m proud to be part of a Government that puts this up front and starts addressing those issues that need to be looked at.

This bill is about strengthening the public’s trust and confidence to make sure that Crown entities remain aligned and connected and part of that. Part 1 of the bill, in particular, requires boards of statutory Crown entities to obtain the State Services Commissioner’s written consent to the terms and conditions of employment of a chief executive, and it introduces terms of appointment of up to 5 years, able to be renewed, for future chief executives. So what is the issue here in terms of a problem? The State services exist to serve the public interest, and it’s important that we remain at the heart.

We’ve heard today issues around how there is competition between the public and private sector, and I think it’s important to note that there is a clear difference between the private and the public sector. There are different reasons that the pay levels are not the same. Companies work in an environment where competing for business has a limited life in terms of a business’s success. You’re in a competitive environment, and that is a necessity to be successful. That is not the same as the Public Service. A key difference is the spirit of the Public Service, the foundation of the idea of serving people and delivering to those people. That is maybe something new for the members opposite. I have been proud always to deliver services, as a public servant, and that is a key area that’s different. That is why we can’t go down the path of trying to compare the salaries of private sector CEs with those in the Public Service. The public can and should expect Crown entities to be governed in a responsible and responsive manner that is consistent with them being part of the State. State services chief executives deserve to be paid fairly, but they are still public servants with accountability to taxpayers and the public, and that is the difference.

It is important in terms of trust and confidence in the public sector that we look at how the public know that that money is being spent well. And when we look at Part 2 of the bill, it’s good to see that there are clear measures made there in terms of enabling the State Services Commissioner to apply a code of conduct to the board members of the entities that are subject to that code of conduct, and it’s also good to see that it modernises the commissioner’s investigation powers by aligning it with the Inquiries Act 2013.

Right now, the commissioner can issue a code of conduct to most Crown entities but not for Crown research institutes and the tertiary institutions and their subsidiaries, and that is an important change that is made by this bill. There are three main areas that this addresses, to really sum up the key areas that it does. It replaces the use of the old Commissions of Inquiry Act 1908, which, substantially, has similar powers to the Inquiries Act 2013—again, another measure that provides consistency across the Public Service. It also puts in place a trigger to enable the commissioner to use the full suite of investigatory powers in the wider State services, so all those powers of the commissioner are now available to be used across all entities under the State sector. And, thirdly, it enables the commissioner to use the full suite of investigatory powers under the commissioner’s own motion for investigations into matters of integrity and accountability.

It’s interesting to see too in terms of where we’ve seen the areas that have had difficulty, that they are also places that had significant cutbacks in terms of the Public Service. It has been interesting to see that it was the CE of the Superannuation Fund that got the pay increase, while there was an inability to restart payments to the Superannuation Fund, and to wonder whether that money was going to be parked off on a side account to try and top up and restart those funds down the line. I don’t know what the plan was there.

It is important that we’re able to make sure that the public have a strong sense of fairness and trust and confidence—and that is exactly what this bill sets out to achieve—to know that the way that all Crown entities are being treated and governed is done in the same manner, and that we don’t have a separate set of rules, as has been occurring. It’s important that Ministers and the Government can be confident that the way people are being remunerated is consistent across the Public Service, and I’m proud that as a Government we have stood up and made this a priority. It is by no means a small or trifling issue that should be parked to the side; it’s a big one. If we are going to operate by fair rules in this House, it is only right that we should make sure that occurs right across the Public Service.

I would like to thank the members of other parties for supporting this bill to select committee. It’s good to see we have agreement across the House on a bill of such importance. I commend this bill to the House.

Bill read a first time.

Bill referred to the Governance and Administration Committee.

Bills

Families Commission Act Repeal Bill

First Reading

Hon CARMEL SEPULONI (Minister for Social Development): I move, That the Families Commission Act Repeal Bill be now read a first time. I nominate the Social Services and Community Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by Monday, 30 April 2018, and that the committee has authority to meet at any time while the House is sitting, except during oral questions, during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 191 and 194(1)(b) and (c).

This bill repeals the Families Commission Act 2003 in order to disestablish the Families Commission, which, since 2013, has operated as the social policy evaluation and research unit, or SuPERU. The bill also provides for the other such arrangements required as a consequence of the disestablishment of SuPERU, such as the management of residual assets and liabilities, and employment-related matters.

The Families Commission, SuPERU, is an autonomous Crown entity attached to the social development portfolio. Its functions are set out in the Families Commission Act 2003 and centre around acting as an advocate for the interests of New Zealand families in general and providing independent monitoring and evaluation of, and research into, key issues, programmes, and interventions across the social sector.

The decision to disestablish SuPERU was originally made by the previous Government as part of a number of changes to social sector leadership arrangements. This decision has now been considered and endorsed by this Government. As a result of this bill, all remaining functions and activities currently undertaken by SuPERU will cease on legal disestablishment, and have been proactively managed down in the interim. Action has already been taken to transfer all of SuPERU’s key functions to other agencies in the social sector, along with their associated funding and, in some cases, staff. Functions that have already been transferred include management of the New Zealand Family Violence Clearinghouse contract—this is transferred to the Ministry of Justice. The annual family and whānau status report and supporting research—this has been transferred to the Ministry of Social Development. Oversight of the Growing Up in New Zealand longitudinal study is also transferred to the Ministry of Social Development.

It is also expected that the Social Investment Agency will pick up some of the work previously undertaken by SuPERU—this includes the operation of the social sector research database known as “the Hub”, which the Social Investment Agency will assume responsibility for in April. Particular care will be taken to ensure that all research publications, online guidance materials, and tools will continue to be available to those who wish to use them. This will ensure that any disruption arising from the disestablishment of SuPERU is kept to a minimum.

It’s important to note that the disestablishment of SuPERU does not lessen our commitment to research and evaluation excellence in social science. However, this is seen as a necessary step towards achieving greater efficiencies in the provision of social science research within the public sector, and is an opportunity to reflect on lessons with regards to what has and hasn’t worked in the past and how we can improve things moving forward.

I would like at this stage to acknowledge the professionalism of Mr Len Cook, the outgoing SuPERU board chair, and other members of the SuPERU board. They’ve taken an active role overseeing the disestablishment process, especially over the process for transferring functions to other agencies. At the same time, they have ensured that SuPERU has continued to deliver on its 2017-18 work programme and that all legislative commitments are met. They have also acted as a good employer, ensuring that disruption to SuPERU staff is kept to a minimum.

I am confident that the changes associated with this bill will provide for the more effective and efficient use of social science research into better decision-making. I am pleased to be able to present this bill here today. I commend this bill to the House.

Hon LOUISE UPSTON (National—Taupō): Thank you, Mr Assistant Speaker. I’m pleased to stand and say that National will of course be supporting this piece of legislation. It was, of course, the work of the Hon Anne Tolley in the former Government. I’m somewhat surprised, though, given that this bill is a bit of a mechanical one in terms of wrapping up the changes to disestablish the Families Commission, which was restructured into the social policy evaluation and research unit (SuPERU) in 2014, that this is actually so much of a priority of the new Government, instead of, actually, things that they campaigned on in the election last year. But, needless to say, we are very keen that this is a piece of work that the Government wants to put forward.

I want to emphasise one particular part, because what this legislation actually does is part of the reconfiguration of agencies and resources that was designed to support social investment. We haven’t heard too many occasions where the Government is picking up the social investment model, but the fact that it has got this legislation up as so much of a priority, I think, actually gives a very strong message to the sector and the country that social investment is here to stay. So I am excited by that, and, in the spirit of cooperation, I’m also very hopeful that Government members will also put serious consideration into working across the House for the proposed changes for the Child Poverty Reduction Bill, one of which, of course, is to embed social investment in that legislation to ensure that we are lifting an even greater number of children out of poverty than we did in our term of office.

I thought I would just touch on a few areas. I don’t want to take too much time on this. It’s clearly a tidy-up piece of legislation and, as the Minister has said, is about reconfiguring the agencies. The Families Commission was, of course, set up through the Families Commission Act in 2003, but that was then streamlined into the social policy evaluation and research unit, or SuPERU for short. As I said before, part of the reconfiguration of the agencies was aimed very directly at supporting social investment, and we heard a description of social investment last week at the select committee that I thought I would put on record here: social investment is about making good choices on how best to support New Zealanders. That was, of course, the Chief Executive of the Ministry of Social Development, and the Ministry of Social Development will, of course, be taking up some of the functions of the Families Commission, which is being disbanded by this legislation.

So social investment isn’t a mystery; it’s quite straightforward. It’s about changing lives, and I’m absolutely delighted that the Government has decided that this is an important part of the mix and is supporting legislation that changes the structures to better enable social investment, because, of course, this side of the House is incredibly proud of what that provides and what it enables in changing the lives of New Zealanders, particularly those who have needs greater than others.

So I thought it was worth just having a bit more of a discussion about the social sector leadership that was discussed by the Cabinet that I was part of in the last Government, and this was really taking steps to embed the social investment approach with the decisions to establish the social investment board and the Social Investment Agency. I have asked questions in this House around greater use of the social investment boards and, for example, the place-based initiatives where this is very much, kind of, at the grassroots and the forefront, and I haven’t actually had any answers about that yet. So I shall wait to see—and I am very hopeful, again, and optimistic that the Government is going to support that very important work on the ground.

This is absolutely about making sure that we continue research and evidence-based work, and some of the work that’s already been undertaken, the families and whānau status reports, is going to the Ministry of Social Development. The Ministry of Justice will get the Family Violence Clearinghouse contract, and then, of course, the Growing Up in New Zealand study, which is key to New Zealand and our future, is also important. So I’m very pleased to support this legislation, which our previous Government did the bulk of the work on.

Hon PEENI HENARE (Associate Minister for Social Development): Tēnā koe e Te Māngai o Te Whare, otirā tēnā tātou katoa kei roto i ngā āwhā o te wā.

[I greet you, honourable Assistant Speaker, indeed I greet all who are here while we are in the midst of a cyclone.]

Sir, thank you very much for this opportunity and, in recognising you, I also recognise our families out there who, right now, are hunkered down with the onset of Cyclone Gita onto our shores. We wish them all the best at this point in time.

Can I thank the Minister for Social Development for the introduction of the Families Commission Act Repeal Bill, and I take the point from the member opposite, Louise Upston, that this is, for the most part, while reading the bill, rather technical—technical with respect to winding up the social evaluation policy evaluation and research unit (SuPERU), as referred to by the Minister, properly, making sure that employment contracts are met, asset liability is met, but also that it’s done in an expedient manner. The Minister made mention of this particular bill being a decision made by the previous Government, and while we are here left holding the baby, it is important that we continue the good work for the benefit of Aotearoa New Zealand, and I will touch on that as my speech progresses, because the member opposite makes a few points around the Social Investment Agency that I’d like to touch on.

But, first, can I, in introducing this bill and supporting it, thank all of the people who have been involved in both the Families Commission and, of course, SuPERU since its inception. A lot of good work has come out of SuPERU. We know that they’ve been a leader in terms of research and evaluation for social impact. One of those particular matters that they’ve been at the forefront of, which I’m really quite proud of, I guess, and interested in as Minister for Whānau Ora, is about the engagement with Māori communities, not just in research, not just in evaluation, but also in the use of the data, and that’s an important point.

Most people in the House will know that Māori in particular seem to be at the wrong end of every bit of social statistics read in this country. Therefore, a lot of data is collected about them, a lot of research and evaluation is done, and I know that SuPERU in the past have done a good job at actually engaging with communities, one, so that they better reflect the communities that they serve, but, two, that the data and the research and evaluation they collect and, of course, publish best serves and informs Government on policy direction in relation to those communities who are affected.

Can I point, briefly, to one of those, just in recognition of the work that SuPERU have done—one of them is the Youth Mental Health Project evaluation. I think it’s an important part, as Minister for Youth. I want to acknowledge the work that they’ve done there. It acknowledges that while some sectors actually did benefit from some of the decisions from the former Government, it was made clear, once the evaluation was done properly, that there are still many minority communities out there, and minority groups, who are left out of a lot of the mainstream services that are provided for young people and their mental health services.

One of those, of course, is the LGBTIQ sector. One of those, of course, is also the Māori - Pacific Island sector. Of course, one that’s dear to my heart, as the member of Parliament for Tāmaki Makaurau, is those young people in South Auckland. There are many South Auckland MPs in the House tonight who will acknowledge that the work done by SuPERU certainly highlighted that effective research and evaluation is important.

Another one of those is, of course, the Families and Whānau Status Report. This plays, of course, a pivotal role in the rhetoric around research and evaluation. What that particular report did was it put whānau at the centre of all policy and decision making made by Government. That’s important and I will pick up on some of these points as we get to discuss the Social Investment Agency and then, certainly, the future prospects for our people under the leadership of this Government.

I can’t highlight enough the cultural perspectives taken on board by the Families Commission and SuPERU to make sure that the cultural dynamics of our communities are heard in research and evaluation. But it’s important to remember, and I quote my grandfather at this point in time, that we’ve come too far not to go further; we’ve done too much not to do more. In acknowledging the good work of SuPERU, we want to focus on the future. One of those is actually about making sure that this bill goes through the House expeditiously, to make sure that we wind up the role of SuPERU but focus, more importantly, on the future.

What does that future hold for us? Well, I’m excited about it. The Minister has already explained how some of the functions will transfer over to the Ministry of Justice under the stewardship of the Minister of Justice. Of course, the Ministry of Social Development will hold on to significant parts of the work that’ve been done and will continue them; in fact, better them—and, of course, there is the Social Investment Agency. And this brings me to a few points I’d like to make in reference to the contribution of the member before me.

The Social Investment Agency, under the last regime, was one about making sure that fiscal risk did not fall upon this country. It was focused on money and data. What we hope to lead in social investment is actually focusing on people. It’s putting people at the forefront of our decision making, making sure that the data, the research, the evaluation, and the analytics done with social data and in the social sector actually inform us to move forward; not looking at individuals as a future fiscal risk to this country.

That particular model led by the last regime—I’m dumbfounded. Why? Because across the rest of the world, they actually focus on people. Our Government, under the last regime, actually led us by focusing on the fiscal risks. They weren’t aspirational for our people. They didn’t think that our people had the capability, the capacity, or the aspiration to actually make this place a better country. That’s a concern. So in addressing the last member’s contribution—we have a different role and a different perspective on social investment. We’re not a ministry. It’s an agency to support everything else that this Government has in place and in plan and in train for our country.

One of those things is making sure we get it right. Under the last regime, they noticed that actually they’d been missing the social sector conversation, and they left their run too late. What happens there is that the establishment of the Social Investment Agency was done hastily. We are, on this side, of course, prepared to make sure we do the groundwork to make sure that we don’t rush into it and we learn from the mistakes of the past so that our outcomes and our policy direction are actually enduring, sustainable, and achievable for our country—they reach the aspirations that our people have for each other, our people have for each other; not just what the Government tells them to do but what our people in our communities have for each other.

I’m excited about that. I’m excited about that. Under the leadership of Minister for Social Development, the Hon Carmel Sepuloni, she and her ministry and all of her advisers are really focused on making sure that our fingerprint is on the Social Investment Agency model; not the one of the former regime, which, once again looked at the fiscal risks and not at the potential of our people. So I want to leave that part there.

I’m also excited to say to the House tonight that while some might question why we might be doing this expeditiously, it’s important that we remember that we are a Government that’s committed—committed to working towards a social sector that achieves long-term good for our people. How do we do that? We do that with effective data and research—effective data and research. We do that by using that effective data and research to inform our policy direction. From there, only then can we have sustainable outcomes for our people. I’m excited and I support this bill in its progression and, of course, moving it expeditiously through this House to ensure that we forget the regime in its direction of the past and we focus on a brighter future for our people in the social sector and achieve their aspirations within their communities and in their whānau. Only then can New Zealand truly realise its potential. Therefore, on that note, I commend this bill to the House.

Hon ALFRED NGARO (National): I want to acknowledge my honourable colleague across the way, because the Hon Peeni Henare is a great orator in this House. He’s given many speeches in the House that have been articulate, that have been charismatic, that have been passionate, but I have to say that speech had none of that. Why is that? Because he was swallowing a tuna that he did not catch. This tuna he did not catch, and so it was like a dead rat that he’s had to swallow. And why is this? Because this bill is a bill that came from the National-led Government.

All the things that he talked about—social investment—it was amazing. It’s almost like he read the copybook that came from our caucus that talked about social investment and the importance of it. He went on and on, but I have to tell you, when I looked across the way—and I’ve seen this orator speak. When he’s spoken, he’s captured the attention of the people. That speech was not one of them. Why? Because he knows he’s had to swallow the tuna that he did not catch. But he knows that this is a good tuna. Why? Because this tuna has all the elements of doing the right things.

Let’s see where this tuna actually came from. In 2002, the Hon Peter Dunne, what did he do? He had an agreement. There was an agreement with the Labour Party of the day that they would actually form a Families Commission. The intent was to provide research, to provide data, to provide evidence that would ensure that their policy, which focused in the right direction, with fiscal accountability, would truly make a difference. So none of us ask the question: why? This is the issue—the question is: how? So we’re here today because under a National-led Government we talked about the disestablishment of the social policy evaluation and research unit and the Families Commission because we wanted to put it in a place that would truly make a difference. So we stand here.

We enjoy the fact that the Government of the day are struggling to make their speeches because they know that their speeches are written exactly here from this caucus when it was the National-led Government, which truly made a difference. They are sounding like us. This is what they’re saying: we want to make a difference for our families; we need to have the right data; we need to talk about social investment; we need to have an agency. Mr Assistant Speaker, I’m going to tell you this: it’s as if they were sitting inside the caucus room themselves and they wrote their speeches by listening to us as we spoke. But, you know, we criticise a little bit, but we support the fact that—we will support this bill because they support this bill.

I’m proud to say that in this bill—one of the things I’m proud that will continue on is the Growing Up in New Zealand, a longitudinal study that started under a National-led Government to ensure that we had the right tools in the right place to make the right difference. I don’t need to speak too much. We support this bill into the House.

Hon TRACEY MARTIN (NZ First): Kia ora, Mr Assistant Speaker. I rise on behalf of New Zealand First to speak to the Families Commission Act Repeal Bill. I acknowledge the Hon Alfred Ngaro, who has just resumed his seat. He is right. This is another piece of work, another loose end after nine long years, that this Government is having to tidy up for the previous administration. So I acknowledge that.

I’m very pleased, also, that the honourable member acknowledged where the Families Commission Act 2003 actually came from. It was with a support agreement between the United Future party, led by Peter Dunne, and the Labour Party. I don’t know how many people remember how controversial this piece of legislation was when it first came in. Something unusual happened, and what it was was that the opposition to this piece of legislation had the majority on the select committee that it went through. I believe it was Georgina Beyer who was actually the chair of the select committee at the time that the original Families Commission Act 2003 went through. The supporting administration didn’t have enough votes inside the select committee to actually make any amendments or to provide any report back, like a minority report or whatever, on this piece of legislation.

It was very controversial at the time, and the Hon Peter Dunne did a large number of press releases and a large number of media interactions about how awful he felt that was. However, in the House the bill went through. I think it cost about $28 million to set up; so it cost $28 million to set up back in 2003. I guess we could say—I think we should say—that actually the Hon Peter Dunne was visionary with regard to the creation of the commission in the first instance and what its purpose was, which was to provide research for policy development and policy direction. Many have taken hold of that vision, I suppose, and used it in ways that they believe suits their purpose.

We’ve had others today talk about the fact that the words “social investment”, and so on and so forth, are mentioned throughout the documentation that will repeal and therefore remove this entity. But I think it’s very interesting, and I want to pick up on the contribution by the Hon Peeni Henare, because New Zealand First doesn’t use those words. We don’t use the words “social investment” actually, and I think what this Government—in one of the areas that I’m responsible for, we actually talk about well-being. We talk about the well-being model that’s being developed, and the hope from my office, anyway, is that the well-being model will do what the Families Commission Act hoped would be done, and that is that we would be able to know what were the key things that identified well-being for our people; not what the risk was but what were the key things that would identify well-being.

Once we have identified well-being, that is the line in the sand that we hope that none of our citizens will fall below. So, unlike some of my colleagues, I don’t use the phrase “social investment”. I am more focused on, actually, the well-being of our citizens, rather than treating them as some commodity that we’re either going to put dollars into or dollars not into. I think that is going to be one of the markers of what will be a test with this piece of legislation.

The reality is, the disestablishment of the commission has gone so far that it would be inappropriate to turn it back. The previous Government had taken it so far forward that to turn it back would actually have incurred much higher costs. They had already redistributed those moneys and those responsibilities.

I think it is interesting that Alfred Ngaro mentioned the Dunedin study, the Growing Up in New Zealand study. I think it’s interesting that he mentioned it, because it’s actually that party that tried to shrink it—actually went to take away funding from it, so that it went down from the number of young people that we were going to follow and continue to study in New Zealand. But there was conversation by one of their Ministers in the previous Parliament that they were going to shrink those numbers; they would not fund it to that level. So I do think it’s interesting that that was raised by one of the speakers there.

I think what’s going to be interesting as we go forward is to see where these responsibilities have been shifted to. For example, the Family Violence Clearinghouse contract has now gone to the Ministry of Justice. The Family Violence Clearinghouse produces some incredible pieces of work. They’re confronting, they identify areas of—I’m going to say “challenge”, which really minimises what they actually identify, but they identify areas of challenge for New Zealanders, for our citizens, that many a Government has not gone far enough to address. We’ve either ignored it because it’s uncomfortable and we don’t want to believe it about ourselves, or for whatever other reason somebody decided that that investment wasn’t worth it. So I would be interested to see that the quality of reporting that has come out of the Family Violence Clearinghouse continues, even though it has been shifted into the Ministry of Justice. As I mentioned, the Growing Up in New Zealand study, the ministerial social sector research fund questions—they’ve gone to the Ministry of Social Development, and the Department of Internal Affairs has picked up the qualifying social enterprise.

The online hub—I would suggest that as many New Zealanders as possible, before this bill goes all its way through and that website disappears, please go and have a look at the research that the social policy evaluation and research unit did and put online. It has impacted positively in so many ways, so we certainly don’t want to take it away, but I think it’s going to be important to see whether that quality of research, that quality of policy advice, is going to continue once we have now moved all these functions to somewhere else.

So, in closing, this is another situation of the current Government just tidying up some of the loose ends left behind by the previous administration, who appeared to be so busy—we’re not sure doing what in nine years—that they couldn’t complete a few things. So this Government will pick it up, and New Zealand First will support, with our Government members, this piece of legislation through. We want to honour the Hon Peter Dunne and United Future, which way back in 2003 had the vision to start us on a pathway that some wish to now refer to as the social investment model, but many of us now talk about the well-being that we will place for our people. Kia ora.

Hon MICHAEL WOODHOUSE (National): What a very good place to start: loose ends. The member who has just resumed her seat, Tracey Martin, said that this was the Government tidying up loose ends from the previous Government. Well, actually, what I would describe it as is loose beginnings, because I don’t think there is a single piece of legislation that we have got through, apart from that one that we’ve just had, that wasn’t the work of the previous National Government. This is certainly an example of both an extremely busy National-led Government and an extremely quiet Labour-led Government, who can only see their way clear to progressing the Families Commission Act Repeal Bill because nothing else is coming through the pipeline. But obviously we support it; it was our work. It’s the tidy up of a body of work that will improve social policy in this area.

I want to just make a couple of quick points, firstly about the term “social investment”, which was referred to both by the Hon Peeni Henare and the Hon Tracey Martin, and that, I think, reflects a sad lack of understanding about the term “investment” as if this was some kind of pecuniary thing. Actually, what we were talking about was investment in people; not in dollars—and in people who needed that help the most. And I hope in whatever review that the Minister for Social Development wants to embark on, and whatever changing nomenclature that the Government will implement, that that core goal of what we call social investment—that is, the target interventions to those individuals, children, and families who needed it the most in order to live healthy lives independent of the State—is not lost.

I’d also like to quickly touch on the Dunedin study, which was mentioned by the Hon Tracey Martin in the context of that perhaps being at risk—of undermining its funding. Nothing could have been further from the truth, and I can say as the National member of Parliament based in Dunedin that would never have happened on my watch. That is one of the world’s leading social inquiries, it has been going for 46 years this year, and it will go on in perpetuity. But I do encourage Tracey Martin to consider going to the Minister of Finance at Budget time and saying that she would want one of her programmes to be budgeted in perpetuity; it just doesn’t happen. Every programme, however worthy—as the Dunedin multidisciplinary study is—is certainly subject to periodic budget scrutiny.

I note there is a shortened report back, not, in fact, because this has been well consulted on, but actually because the Government is so desperate for work that they need to get the second reading, committee stage, and third reading out before the Budget, because they’re worried about running out of work. So we’ll probably let that one go through to the keeper, whether or not we support it. We certainly support the bill.

JAN LOGIE (Green): Thank you, Mr Assistant Speaker. I rise in support of this and to offer the Green support of this legislation as well. I just do need to, for the record, make a couple of corrections for the previous speaker, Michael Woodhouse. I think there was the suggestion that all of the legislation that’s been introduced has been the work of the previous National Government. This is a very fundamental shift to their approach to employment relations—that they would have introduced legislation that would be strengthening collective bargaining to this House, as was suggested and I suspect is not quite accurate, as well as the Families Package, which I think was the Labour Party’s policy going into the election. So it’s quite strange to hear that National is now claiming that policy.

Also, to correct a point, the previous speaker seemed to be under the misapprehension that when we’re talking about the survey Growing Up in New Zealand, we’re talking about the Otago longitudinal study; they are different studies. And I will back up the Hon Tracey Martin in her claim that the previous Government had put that they were reducing the scope of that study and that they were funding a reduced number of participants, which would have reduced or constricted the way that that survey would be able to be analysed. So it is interesting to hear them speaking so positively about it now.

The Greens are supporting this. I do want to endorse the previous view that, really, the disestablishment had gone too far to be able to reverse that and maybe it is the time to be absorbing the learnings that we were given from the social policy evaluation and research unit (SuPERU) into the core working of Government and to consider an alternative agency having oversight of that. I also notice that the transfer of the core functions has been already made to other agencies. The Family Violence Clearinghouse contract has gone to justice and the family and whānau status report has gone to the Ministry of Social Development, as has the oversight of the Growing Up in New Zealand longitudinal study, and the Social Investment Agency will pick up the social sector research work—the work of the Hub. Care is being taken to ensure that the research and the tools that were produced by SuPERU will still be available for community-based organisations and interested people, because the research has been useful—and I would not want my speech to suggest that it hasn’t been.

The Greens, I think, from memory, opposed the Families Commission legislation in the first instance, and that was in the context of a very politicised environment and what seemed to us at the time a very constrained view of what a family was. It has been pleasing, over time, that actually the Families Commission, and then SuPERU, has taken a far more accurate look at and an understanding of the diversity of our families—and, in fact, has promoted the diversity of our families—and has been a very strong proponent for an understanding of the differences between “family” in different cultural contexts, including the culturally specific constructions of whānau.

I would like to mention Len Cook for his recent work as the Families Commissioner. In the times he appeared in front of the select committee for reviews, I found his analysis and view and the independence of it very helpful. I do not take from his comments that he was a fan of the social investment approach as it was articulated by the previous Government, and I am also of the school that does not believe that “social investment” is the right language for us as a country.

I think that if we went to most people in the street and said “Investment: what does that mean to you?”, most people would say it meant something about money. In their heads, they would go towards thinking about what would give them the best return on their money, and I think that if we gave them “investment” versus “support”, we’d be thinking about very, very different things. I believe part of our challenge as a Government is to actually refocus ourselves on what is our duty to our people and how can we best support people to live their best lives, and that’s a very different conversation than a conversation about investment and money. So I share the Hon Tracey Martin’s view that maybe a focus on well-being and support would be better for all of us.

I do also want to mention and acknowledge the letter that was sent by Len Cook, the Families Commissioner, to the Minister for Social Development, accompanying the briefing to the incoming Minister, where he pointed out several of their learnings over recent years and asked the new Government to consider how those learnings could be maintained or integrated after the disestablishment of SuPERU. I do think he made some very poignant points, which we will be keeping in mind as we move forward.

One of the points he made was that there is significant unrealised potential of existing data and research resources held within Government and the wider social services sector. In recent times, we’ve had a lot of focus on creating new information without thinking about what information we do actually have and how can we analyse that to inform good decision-making, rather than collecting more and more data and putting it into a database and hoping it’s magically going to give us the right answer to our social policy challenges.

He also pointed out that we need to be using a variety of evidence sources, both qualitative and quantitative—that they’re essential for social policy and service delivery. I think that goes to some of the research that they did at a community level that looked at how we can strengthen our interventions, and what they found was that with a shared vision, it needs to be owned by community. There needs to be community readiness, intentionality and a focus on outcomes, long-term and adaptable funding arrangements, a focus on community capacity-building, and a focus on relationships.

Now, when we hear from the Opposition that what we’ve been saying on this side is just more of the same, they couldn’t be more wrong. The approach we heard from the previous Government around social investment was all about information divorced from relationship—divorced from community—and what we’ve been told by SuPERU and the research at the ground level is that, actually, we need to restore relationship. We need to get back to considering and hearing from people about how the system is working for them and to shape our responses based on their experiences. That was not part of the previous approach, and that needs to be informed by a cultural understanding.

He specifically pointed out that “The actuarial analysis of administrative data … has not been evaluated against the likely larger and more immediate payback from attending to the wider range of opportunities to develop an evidence base.” I’m quoting from his letter, which is clearly saying we need a change of direction.

While we are supporting the disestablishment of SuPERU, we are very much cognisant of his recommendations and committed to a different framework for evaluation and policy making in terms of our social services. We want to return people to the decision-making process. Thank you.

JO HAYES (National): Thank you, Mr Assistant Speaker. I just want to echo the sentiments that have come from this side of the House on this bill. I just want to say how great it is that the Labour-led Government has prioritised the Families Commission Act Repeal Bill, a National-led Government bill that prioritises, really, a social investment approach. It’s great that Labour are starting to see the light through the eyes of the National-led Government. I think it’s great that that’s what’s happening today, with this bill.

I think it also signals that the Labour-led Government is running out of ideas, it’s running out of policy, and it’s running out of all of those things that a Government’s supposed to have. But—thank God for this side of the House—it has got plenty of work coming before it.

I just want to comment on a few of the things that have been said here in the House. The first one is around the Families Package, that it was a Labour initiative. It wasn’t a Labour initiative; the Families Package came from this side of the House and we had a very strong families package, and, at the end of the day we were putting more back into the pockets of those middle- to low-income families through our families package. So, you know, if people are out there saying that it was a Labour-led initiative, it’s a load of bollocks.

So, as I stand here and I’m very pleased that this Families Commission Act Repeal Bill has come through—you know, at the end of the day it does tidy up just a loose end of disestablishing the social policy evaluation and research unit from the Families Commission so that this repeal bill can actually go ahead and make it all pretty much smooth running from here on out. So, without any further ado, obviously this side supports the bill—we would, because it’s our bill that the Government has taken up. So without any further comments, I support the bill. Kia ora.

ASSISTANT SPEAKER (Poto Williams): I understand this is a split call. Marja Lubeck, you have five minutes.

MARJA LUBECK (Labour): Tēnā koe, Madam Assistant Speaker, and thank you for the opportunity to speak on the Families Commission Act Repeal Bill. For the record, I would also like to make some corrections to the previous speaker’s comments, because the narrative from the other side of the House continues to be that we somehow seem to prioritise the previous Government’s bills. Well, unlike the member Michael Woodhouse said, we are not desperate for work at all, because if you look at what we actually prioritised in the previous 100 days—maybe we should just repeat some of those. We had the first-year fees-free study; we had the healthy homes bill; we had the extension to parental leave; we had banning foreign speculators; we had stopping the State house sell-off; we had setting up the Tax Working Group and the inquiry into State care; we began our KiwiBuild; we passed the Families Package; we did the mental health inquiry; we restarted payments to the Superannuation Fund; we addressed child poverty. You asked what we prioritised and what we actually did, so here is your list: medicinal cannabis, we increased the minimum wage, we did the Pike River Recovery Agency, and we established the Employment Relations Amendment Bill.

Hon Alfred Ngaro: Point of order, Madam Assistant Speaker.

MARJA LUBECK: I’ll get to the bill right now, if that was your point of order.

Hon Alfred Ngaro: I raise a point of order, Madam Speaker. I just want to bring to your attention that for the last two or three minutes the member has been speaking out of scope from the bill.

ASSISTANT SPEAKER (Poto Williams): I thank the member for his intervention. I’d encourage the member to come back to the content of the bill.

MARJA LUBECK: Absolutely. I just thought I wanted to get that off my chest. So what we’re doing here, as we’ve heard, is we’re repealing the Families Commission Act 2003. Pretty much, from what I understand, it is basically a tidy-up of the processes of transferring the Families Commission’s function.

The Families Commission was established in 2004, restructured in 2014, and has been operating as the social policy evaluation and research unit (SuPERU). Now, it can be quite a challenging exercise to focus on improving the lives of families, children, and whānau because the diversity of the family forms nowadays has made it probably quite hard to target assistance where it’s needed. So SuPERU has done a great job in that aspect. There are also plenty of really good examples of good literature reviews that have come out in social science research, which have made it easier to make better decision-making. Minister Martin mentioned the Hub research database, which will remain available. There’s some really awesome stuff on there. So it’s important work that they’ve done, but there was significant doubling up and overlap with other Government agencies and it will be more efficient and effective to embed the functions of those agencies rather than having a stand-alone Crown entity.

Some of the key functions have been taken over already by the Ministry of Justice, Ministry of Social Development, and the Social Investment Agency. Some of the examples we’ve heard were about the Family and Whānau Status Report, putting whānau at the centre of policy making, which has gone to the Ministry of Social Development, and the management of the Growing Up in New Zealand study, which I understand is the study to provide evidence about what actually shapes children’s early development, so that every child can have the best start in life. That hasn’t stopped; it is now the responsibility of the Ministry of Social Development. Also, the responsibility for managing the New Zealand Family Violence Clearinghouse contract has transferred to the Ministry of Justice.

Other key functions have been reallocated and this legislation will ensure that any remaining residual responsibilities, liabilities, duties, debt, and assets will be transferred to the Ministry of Social Development. Any information held by the commission will also go to that ministry. Any work that is not transferring to another agency will finish by the time this legislation is repealed, likely around mid-2018. But, again, it is important to note that the important work at SuPERU will continue. It will just be done more efficiently, without doubling up within Government agencies, and it won’t be doing it as a stand-alone unit.

It’s also really important to make a mention of several of the former SuPERU staff who have transferred to the ministry and will continue to be involved. I echo the sentiments of Minister Sepuloni regarding the professionalism of all the staff and of all the leadership that were involved.

So, lastly, thank you, members on the other side of the House, for helping us tidy up yet another loose end, and thank you for supporting this bill. I support it and commend it to the House. Thank you.

ASSISTANT SPEAKER (Poto Williams): I call Simeon Brown. You have five minutes.

SIMEON BROWN (National—Pakuranga): Thank you very much, Madam Assistant Speaker. It’s great to hear from Government members how important it is to be tidying up loose ends. Well, I think the emphasis needs to be on the word “loose”. But it’s good to be here to speak on another National Party piece of legislation, the Families Commission Act Repeal Bill.

Kieran McAnulty: You’ve said this speech before.

SIMEON BROWN: Well, I have. I have given this speech so many times because this Government has run out of ideas and they’re still in their first six months in Government. So I’m really glad to hear that. It is great to be here again progressing our legislation, and I’m sure that we’ll continue doing some more of that over coming weeks.

I’ve been hearing a number of members on the other side of the House talking about the term “social investment”, and how they could use this term or that term to rename it. But I think at the end of the day, that’s just semantics. What it comes down to is the work that has been done by the previous Government—the work that we’re very proud of in terms of helping those and investing in those who need support most, in terms of turning lives around and ensuring that we support the families and whānau up and down this country who need the support of our Government. We could argue the semantics of these words, but what is actually more important is the work that is being done by many people up and down this country and the work that we should be recognising here in this House.

It’s a pleasure to rise to speak on this bill. This bill will be achieving some greater effectiveness and efficiencies in the provision of social science research and advocacy in the interests of families across this country. The National Party is pleased to be supporting it, and we look forward to seeing it progress through the House. Thank you very much.

PRIYANCA RADHAKRISHNAN (Labour): Tēnā koe, Madam Assistant Speaker. It is an honour to take a call on the Families Commission Act Repeal Bill, as someone who has been a social policy researcher before and a social worker as well. It is, however, slightly bitter-sweet as well, given that I have had a fair bit to do with the Families Commission and the social policy evaluation and research unit—which is more popularly known as SuPERU—in some of my prior lives, I guess, before I came to this House. When I was a newbie researcher looking into the issue of forced marriage in New Zealand, it was the first piece of research into that area that was done in New Zealand, and the Families Commission was one of many entities that I approached for support in terms of the research work that I was doing. I want to thank them for the support that they gave me and for the work that they’ve done over the years.

I want to take a moment as we—and actually, before that, I might just go into the purpose of this bill, which, of course, is to repeal the Families Commission Act 2003 and to disestablish the Families Commission. Given that we are discussing the disestablishment of something—an entity that has been going since 2004 and has contributed tremendously to the social policy research landscape in New Zealand—I think it’s apt to take a moment just to thank the board, the chief executive (CE) and the successive CEs over the years, and the staff who have worked at the Families Commission, and now SuPERU, for the work that they have done, for their contribution to evidence-based research in New Zealand, and for their unwavering focus on improving the well-being of families and whānau since their establishment back in 2004.

Now, it is heartening to know that as a result of this bill—and this bill does have support from across the House, which is great. Actually, at this point, I might bring in a point made by a member on the Opposition benches, which was that it was started by the Hon Anne Tolley, and just recognise the work. I mean, it might be that we’re supporting this because the disestablishment has gone too far, but I do want to just take a moment to acknowledge the work that has been put into this bill, and also the process of disestablishment to date.

Kieran McAnulty: Fair call, fair call. They still fluffed about, though.

PRIYANCA RADHAKRISHNAN: Well, yes, but you know, we’ve still got to acknowledge some of the work, even if it was a little bit fluffy, as the member Kieran McAnulty puts it. But anyway, the work of SuPERU will not be lost, and that is incredibly important, because there is a huge amount of research. A large number of publications, I understand, will still be available. There have been online guidance materials and tools that have been produced by SuPERU that will continue to be available to those who really need them. An example of that, which has been taken up a fair bit in the community and voluntary sector more specifically, is the NGO capability guidance material and tools.

So for those who might be watching at home, and so on and so forth, let’s just also go into a little bit about the functions of SuPERU and what would happen to some of those functions if this bill were to go through to select committee. One piece of work that I want to highlight is the Families and Whānau Status Report and related work that SuPERU has been conducting or undertaking in that space over the years. That will transfer to the Ministry of Social Development, and I understand that former staff who have been working in that area of research have also transferred to the Ministry of Social Development, which is great from a continuity point of view. So what is the Families and Whānau Status Report? It’s a report that is published annually and measures how New Zealand families and whānau are faring across a wide range of well-being measures.

Another contract that has been undertaken by SuPERU is the Growing Up in New Zealand longitudinal study. The cohort for that, I was quite happy to notice, is broadly generalisable in terms of ethnicity and socio-economic status to contemporary New Zealand, and that’s a nod to how the research has been undertaken by this entity, which is in keeping with the changing demographic—the changing face—of New Zealand. The purpose of this particular study is to provide evidence about what shapes children’s early development, so that every child in New Zealand can have the best start in life. This was a study that was started in 2008, and it will also be transferred to the Ministry of Social Development.

Now, another area that SuPERU has had oversight over is the Family Violence Clearinghouse. Having been an advocate in this space and having been a family violence activist and a policy analyst in this space as well, the Family Violence Clearinghouse is a part of SuPERU that I’ve had a lot to do with. Some amazing research reports that have been produced by the Family Violence Clearinghouse are still available online, so I just want to urge everyone to go back and have a read through of the research that’s come out from SuPERU, because, as I mentioned before, it’s still available online and it’s absolutely valuable work.

Family violence has been a key priority of SuPERU since 2005. Actually, the Family Violence Clearinghouse has been known to be the national centre of research and information on family and whānau violence, so I’m really pleased to note and highlight that this work won’t be lost—that the Family Violence Clearinghouse contract won’t be lost, but it will, in fact, be transferred to the Ministry of Justice.

Now, we all know that Government policy absolutely has to be based on evidence—on sound, good, robust evidence—and SuPERU has demonstrated this, time and again. One of the reasons that we have to, as members in this House, be cognisant of the fact that our policy must be evidence- and research-based is partly because areas like social policy research—social and cultural problems, I guess—are often known as wicked policy problems. They’re known as wicked because they’re difficult or they’re impossible to solve for a number of reasons: for one, it could be that there’s incomplete or contradictory knowledge; the number of people and the opinions involved; the fact that these policy issues pose a large economic burden on the country; and the interconnected nature of these policy problems, really.

For example, poverty, which is a social policy issue, is linked with education. Education is linked with nutrition. Nutrition, again, is linked to poverty and the economy. So it’s that all these different social policy areas are interconnected in the way that if you make a policy change in one space, it often has ramifications and implications for other policy spaces, as well. So it’s really important, when it comes to issues like crime—which, of course, is outside the ambit of the social policy space. But for things like poverty, or if you’re looking at social welfare, you’ve got to look at them in a way that is cognisant with other policy areas as well.

So, in a sense, taking it out of SuPERU, disestablishing this entity, and mainstreaming the research is potentially a good way of looking at the interconnected nature of these different social policy areas. So they’re complex. They’re hard-to-solve policy issues, and that’s why they’re called wicked problems, not because they’re evil—and I just feel the need to point that out at this point. So there’s no real quick fix for any of these policy issues, but careful consideration is absolutely required, and that’s what we’re going to see. With the disestablishment of this entity and the mainstreaming of the research areas, what we must absolutely highlight is that the work will not be lost. It will remain; it will just take place in a slightly different form.

I also want to note the staff who have worked there. There have been, I think, close to 30-odd staff members employed by the entity, and they’ve been given options to move on—some of them who’ve had responsibility in specific areas—to the ministries that will now be overseeing these pieces of work.

So I just want to say once again that I thank the Families Commission and SuPERU for the work that they’ve tirelessly been involved in. It is my pleasure to commend this bill to the House. Thank you.

DENISE LEE (National—Maungakiekie): Thank you, Madam Assistant Speaker. The purpose of this bill is, of course, to disestablish the Families Commission. I thought it fitting that I talked to a former Families Commissioner. After all, it is quite hallmark, what we’re doing here today. He said that what counted—and this is what every Families Commissioner knew over the years—is that if we keep family, we keep whānau, and we keep them all at the forefront of what we do, then we will build a great nation, build a great family—build a great nation.

At the same time, they knew and they discovered over the years that there were significant and tough challenges that we would face as a Government—a Government of any hue. They came across one particular discovery, which he recalled to me. He termed it the Masterton discovery. Dozens and dozens and dozens of Government-funded agencies were found out, there in Masterton, serving the bottom 2 to 3 percent of struggling families. They all knew who the top 12 to 15 families were in Masterton, but the agencies couldn’t talk to each other. This is a familiar narrative that, of course, led to the birth of the social policy evaluation and research unit (SuPERU) and then to social investment.

So did we, as a National Party Government, sit on that? No, we didn’t. We went from SuPERU, to the Social Investment Agency, and we’ve been defined, we’ve been targeted, and we’ve been intentional. This is exactly what we’ve done and what we’ve followed through on, and it’s now this Government’s challenge. They need to decide whether they are on or off with social investment. Are they willing to admit that the model is actually much bigger than us all? And are families and their lives—Masterton families’ lives, if we want to use that example—more important than political ping-pong? That’s this Government’s challenge.

Thank you to all those who served in the Families Commission. Time has moved on. Social investment is what we need.

GREG O’CONNOR (Labour—Ōhāriu): I rise in support of this bill. Before I get into the winding up of the bill, I just want to speak to some of the things that have been talked about today. Firstly, there’s been quite a lot of commentary from across the floor around the fact that this is work that they began and that we are finishing. Well, it would appear that it only ever was a press release and very little else before this Government came in, and the drafting and the work has been done by this Government. Like all things, this Government is a very responsible Government.

I look at the work that’s been done by the previous Government; there’s been some very good work done, and it behoves us as a new Government to look at what’s been done and to make sure we take the good and do away with the bad—improve it. You’ve seen our legislative programme, and our legislative programme is going to considerably improve—as every Government should seek to do—on the work that has been done. This piece of work is simply something that, when we’ve looked at it, we’ve said, “Yes, this is something that we’ll carry on, that piece of work. We’ll put a lot more meat on the bones”—in fact, there weren’t any bones when we got it—“and we’ll now put this before the House.”

There’ll be many members of the public out there—as my colleague the Hon Peeni Henare talked about—watching with one eye out the window on Cyclone Gita and seeing what effect that’s going to have, who’ll also be watching this in the House. Some of them may be a little alarmed that they think the very tool that they’re about to use when they get the call from the emergency services, their Subaru, may be in some way in danger. I can assure them that it is not the Subaru we’re talking about; it’s SuPERU, which is actually an acronym—a quite badly put together acronym—the social policy evaluation and research unit, which is actually now being wound up.

Also, I’d imagine that a lot of the people watching and listening to this—so often when they watch politics, they see what comes out of this House. We are seen to be always building, putting in some more, investing some more money in various other agencies. They’ll be pleased to know that, actually, we do move on, that we actually do disestablish agencies as well, which is part of that whole evolution, part of making sure that legislation, social—that whatever we are doing, we are actually making sure it is a moving target and that we’re constantly seeking to improve. So no one should be in any way perturbed that SuPERU is going to be going.

But I suppose we should really talk about some of the things that it did do, breaking down what did these guys—if they were that important, why can we all of a sudden do without them? But let me just talk about some of the things they did do, which you will understand were incredibly important and will all continue.

One of those pieces of work they did was the Centre for Longitudinal Research. People watching may be aware of the longitudinal study, which has been referred to before. This is a different piece of work. This was put together by the Labour Government in 2007-08. For those that are interested, when the previous Government came in, they took it on, put some meat on the bones of that, and did recruit the people, but all the work was done, the conception work was done, and it was simply a matter of putting, as I say, a bit of meat on the bones of that research project, which is now in its ninth year.

Just how that works—the parents were interviewed before birth, at nine months, at two years, and at 4½ years in its initial periods. They were also spoken to by telephone during that period as well, just to ensure that those parents, who were all seeking the health and well-being of those children—the family/whānau life, the education, the psychological development, the neighbourhood and environmental issues, and the culture and identity. These were all the things that this questionnaire in this survey that those who were taking part had put to them. It’s been a mine of information for planners and policy makers. That sounds like a piece of work that should continue. It will continue, and that has been transferred to the Ministry of Social Development.

Another piece of work that this agency did was around gangs. Again, we won’t go into the depth of how little work was actually done on gangs by the previous administration—that was something that we’re now paying the price of. One of the real issues around gangs is improving the outcomes for children of gang-involved parents—again, trying to break that cycle. The children of gangs, for instance—and it’s common sense, but it’s nice to actually have this identified—of course are at greater risk of abuse, neglect, and witnessing violence. We can only surmise—we don’t need to surmise; we know the effect of that.

A quarter of families of gang members or gang families are known to Youth Justice. They’re already in the system. They’re more likely to join a gang. They’re more likely to be fatalistic about life in the gangs. They’re going to end up there, and are more likely to have every other family risk factor that is going to result in poorer life outcomes.

Again, this is the work that was done by this agency. Fortunately, that work will continue and it will continue for the greater good of us all. That is an issue we really do need to get to grips with in this country, and this Government is going to be doing that.

What are some of the responses, and what do you do about it? That’s obviously identifying the problems. Helping young people at risk to reach the potential outside gangs, providing alternative lifestyles, sport—you’d be surprised how many of the well-known names in sport, in league, in rugby, in netball—

ASSISTANT SPEAKER (Poto Williams): I apologise to the member. Could I just encourage you to come back to the bill please?

GREG O’CONNOR: Oh, well, yes. Excuse me, Madam Assistant Speaker. I can come back to—

ASSISTANT SPEAKER (Poto Williams): I have given you quite a bit of leeway.

GREG O’CONNOR: Certainly, Madam Assistant Speaker. Another aspect of the bill I will come back to is the decommissioning. We don’t just wipe an agency. They don’t go away. Some of the previous speakers have spoken, too, about the very good work that has been done by the previous people working, but it’s important that we do identify where, for example, these organisations have assets. Where do they go? They don’t go to the local auction shop. Progress on various management tasks are required upon the legal disestablishment, and these include preparing physical and electronic records for archiving, and the identification of residual assets and liabilities. These are, again, aspects that are addressed in the bill quite specifically, so it’s very important that we don’t just shut down an agency, shut down a building, but that we know where the work is going to go, but, also, it’s very important that we know where the physical assets are going to go, and the records.

One of the previous speakers—we should take time to actually think of those that have actually worked for this agency, for SuPERU. You grow. Whatever we’ve done before we came to this place—we’re all part of an agency, we’re all part of a life. You have ownership. You’ve seen this thing grow, and now that organisation is—hopefully all those people have found work in other agencies. They’ll take their work elsewhere, but it’ll never be quite the same around the ownership they’ve had of this—as it turned out—relatively temporary agency that had done its work.

To sum up the work, to sum up this bill, this is now going to be—the Act that we are set up to disestablish—the Families Commission Repeal Bill, which is actually the bill, which, essentially, is now going to disestablish SuPERU. This bill now, which is before the House, is going to ensure that while we make a good transition, it also ensures that that work will carry on. The best thing about that, of course, is that as each new agency takes on that new work, there’ll be a large element that will ensure that they are looking at the good part of that work. It’s going to be re-evaluated, and I’m sure that it will be a better product.

Each of those different aspects that the bill addresses, whether it be the Family Violence Clearinghouse or the Families and Whānau Status Report, in their new home, I’m confident will be a better product as a result of this work. So I commend this bill to the House.

Bill read a first time.

A party vote was called for on the question, That the Families Commission Act Repeal Bill be considered by the Social Services and Community Committee.

Ayes 63

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

Noes 56

New Zealand National 56.

Motion agreed to.

Bill referred to the Social Services and Community Committee.

Hon CARMEL SEPULONI (Minister for Social Development): I move, That the Families Commission Act Repeal Bill be reported to the House by Monday, 30 April 2018 and that the committee have authority to meet at any time while the House is sitting (except during oral questions), during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 191 and 194(1)(b) and (c).

Bringing forward the report date for the select committee is important to ensure that the bill is passed in time to allow the social policy evaluation and research unit (SuPERU) to be formally disestablished on 30 June 2018, the end of the current financial year. The timing of disestablishment is administratively easier, both for SuPERU and for the various agencies taking over its functions, and will support a smooth transition to the new operating arrangements. It also saves unnecessary costs by avoiding the need for a further round of accountability documents and associated reporting requirements.

I do want to make the point that the Opposition, at this very time, are shaking their heads at this motion, but it is the responsible way forward. The previous Government made the announcement that this entity would be disestablished. Public confidence can be affected when an agency has announced that it will be disestablished. There are also issues with morale for anyone working for that agency or entity if a public announcement is made that it’s going to be disestablished and then that disestablishment doesn’t happen in a timely manner. This Government is doing the responsible thing. We also need to be cognisant of the fact that functions of SuPERU have for the most part been transferred or wound down, and staff capacity has dropped significantly as a result.

The social development spokesperson on the other side continues to shout as I deliver this speech, and I need to remind that member that they made the decision, initially, to disestablish the Families Commission. On this side of the House, we had to draft the legislation because it hadn’t been done when we came in, and now, as I said, we’re doing the responsible thing by disestablishing in a timely manner, after functions have already been transferred to other agencies and after staff have already been released from SuPERU to other agencies.

Sticking to this time frame for disestablishment by requiring an earlier report back from select committee provides a degree of certainty for SuPERU staff and members of the SuPERU board about their own next steps. I recommend this motion to the House.

Hon Kris Faafoi: Madam Assistant Speaker.

ASSISTANT SPEAKER (Poto Williams): Before I call the honourable member, I just want to say that this debate is about the specifics of the motion, and I want to urge participants in this debate to stay close to the specifics, not talk about the bill, and then we will all be happy. So I encourage complete relevance.

Hon KRIS FAAFOI (Minister of Civil Defence): Thank you, Madam Assistant Speaker. I’ll stay relevant and then sit down at that point.

ASSISTANT SPEAKER (Poto Williams): That would be great.

Hon KRIS FAAFOI: Ha, ha! Thank you very much. I acknowledge humour when I hear it.

The decision to truncate a select committee period should never be taken lightly, but it is an operational matter as to why we have taken this decision. The select committee process is one of the most important in the legislative process, to enable the public to have their say. But I would point out to the Hon Louise Upston, who was showing some discontent with the decision to truncate the period down to two months, that the truncation has been forced, essentially, by the inaction of the previous Government. In order for us to have this piece of legislation in force to disestablish the social policy evaluation and research unit (SuPERU) by 30 June this year—I guess, in layman’s terms, we have to get our skates on. In order to do that, the Minister in charge of the bill has asked that the public be given, or the select committee be given, that two months.

I would also like to point out, in terms of the time frame, the previous Cabinet made the decision, I believe, in July of last year to disestablish SuPERU by 30 June this year.

Hon Christopher Finlayson: Don’t you want to talk about cartels?

Hon KRIS FAAFOI: Oh, look, I’m, happy to take the opportunity to talk about a myriad of things.

Because the previous Government had made that decision in July last year and wasn’t able to get the legislation to this House before the previous Parliament was dissolved, that’s why we’re here, asking for this piece of legislation to have a truncated select committee process. So I find it just a little bit rich of the member who was shaking her head earlier in this debate to say, “Why are we doing this?”, when this timetable was, essentially, forced upon us, to make sure that SuPERU is disestablished within the time frame that the previous Government has set.

There are some practical reasons for that, in terms of doing it within financial years and to have some certainty—which I think is important—for those employees who are still working within SuPERU. So, on that note, seeing that the member showed some discontent with that time frame, I’d just like to push some of that responsibility back to the previous Government, as to why we’re asking the select committee to take a truncated amount of time to consider this bill, for operational reasons.

Hon PEENI HENARE (Associate Minister for Social Development): Tēnā koe, Madam Assistant Speaker. I just want to make a short contribution here. In saying how New Zealanders value democracy, I want to allay the fears the public may have, certainly stirred up by that side of the House, around a truncated process to make sure that work has already taken place to date.

What we are, simply, doing here is actually an administrative function that will see it fit within a certain time frame. The public are well aware, the employees and staff of the social policy evaluation and research unit are well aware—and, to the point made by the Minister for Social Development—to give them confidence and certainly some certainty around their particular job is important.

My contribution is to make sure we allay the fears of the public, who may see democracy being sidestepped, if you like, in the House. But we make a very clear point that it is administration, and it is actually finishing the job that the former regime were unable to do because they acted with the strength of a hairless Samson. And that’s simply not good enough. We’re making sure that we get this job done. We can do this by making sure we have a truncated process.

So my only contribution is, simply, to allay the fears of the public that we are sidestepping democracy here—no; in fact, we are making sure we stick to a good administrative time frame that not only sits well with the financial years but also allows this aspirational Government to achieve for the future of New Zealand.

KIERAN McANULTY (Labour): Thank you very much, Madam Assistant Speaker. I was tempted to just sit there, but I do stand, with some reservation, simply in fear that if we do not speak to this motion, the other side of the House will simply portray this as something that it is not. So I feel it’s upon myself to come and stand and speak in support of the Minister for Social Development and her motion, and to congratulate her on bringing this forward, because this Government simply has no choice.

A shortened time frame should ensure that this bill is passed in time for the financial year. It is a little bit rich for the other side of the House to suggest that this is not needed. That was certainly the indication that we got when the motion was moved by the Minister. It is indeed needed, and in many respects it is needed because of the actions of the previous Government. It is no secret now that this decision was brought to the previous Government in July 2017. If this issue was so important, and if this is something, as has been said today, that was their idea—they’re certainly pleased to be able to say that, and it’s, in fact, all that has been said on the other side of the House—why on earth was it not actioned in July 2017 in order for it to be in place in November last year? Yet again, this Government comes forward and tidies up something that wasn’t finished by the previous Government. In fact, it was only last week that we were discussing the Dairy Industry Restructuring Amendment Bill, another example of something that could have been done last term and was not.

In specific reference to this motion here, it is very important to note that at the moment the process of disestablishment is already under way. The staff within the social policy evaluation and research unit need that certainty, and if we went through the full process of the vital select committee process, that may add unnecessary uncertainty to those workers. So I do support the Minister in this motion, and I ask that the other side of the House do so as well. If it is indeed such a good idea, as they’ve told us, and if there is such a need to get this underway, let’s do so.

Priyanca Radhakrishnan: Madam Assistant Speaker.

ASSISTANT SPEAKER (Poto Williams): Before I call the honourable member, I just want to encourage against repetition in this debate, as well. Relevancy and lack of repetition are key elements of this debate, so I encourage the member in her contribution to be mindful of those two aspects. I call Priyanca Radhakrishnan.

PRIYANCA RADHAKRISHNAN (Labour): Thank you, Madam Assistant Speaker. I’ll keep my contribution brief as well, at the risk of repeating some of the very important points that previous members have made. The one thing I will say, though, is that many of us on this side of the House have stood up previously and spoken about the important work that the Families Commission, now the social policy evaluation and research unit (SuPERU), has done, and the fact that this bill, if it were to go through, which it probably will, will actually disestablish that entity. We’ve also talked about the staff and the people who’ve been involved in this process, and the importance, therefore, that the process is followed well.

That being said, of course the role of select committee is vital. It’s often been described as the engine house of Parliament, where detail is nutted out about the legislation and where members of the public have an opportunity to contribute. So I just want to highlight that this is not something that we take lightly. However, it is an issue of balance. Firstly, as other members have pointed out, our hand is being forced, to a large extent. This is something that could have been dealt with by the previous Government but was not, and therefore we have to be mindful of the fact that the process has, in effect, already started. There are a number of contracts and projects that have already been transferred out of SuPERU to other ministries and staff as well, so this is something that is time bound, and that is why, going back to the substance of the motion, I’m standing in support of a truncated select committee consideration period, because we have to get this done by a certain time frame so that there’s some certainty for those involved, and because, in effect, the process has already started.

The final point that I will make before I resume my seat is that this is a very straightforward bill. The entities and potential submitters who have a stake in this can quite easily be identified and so can be invited to provide submissions on this bill, which, of course, is incredibly important, but it is not a bill that is likely to elicit a huge amount of submissions, so it can be done in that short period that we are talking about when this bill goes through select committee. That’s the final point that I wanted to make, so thank you, Madam Assistant Speaker.

JAMI-LEE ROSS (National—Botany): Madam Assistant Speaker, can we just assess for a moment here what is happening in this Parliament. We have a motion to shorten a report back on a very simple bill where we’ve just had three Ministers of the Crown stand up and debate a motion that Governments typically don’t even want debated. We had three Ministers of the Crown stand up and debate the motion. We’ve had several other Labour MPs standing up debating the motion, when it’s highly likely it’s going to go—I’ll tell you right now: it’s going to go through unanimously. We also had the bill, which is a simple 12-clause bill that we probably would have done through a statutes amendment bill, and it would go through unanimously, but we’re seeing here delaying tactics where the Government is chewing up House time with a motion on an instruction to shorten report-back time.

So I just want to put on the record for this House that the New Zealand Government, the great Green - Labour - New Zealand First Government, has so few opportunities to pass legislation that they’re now debating instructions that are going to go through unanimously.

When it came to the select committee opportunity for other bills in this House, like the Dairy Industry Restructuring Amendment Bill just last week; like the extension to the brightline test, which they’re not giving the public an opportunity to comment on; like the issue with the Families Package last year—no select committee opportunity. But here we have the Labour Party trying to slow down the Parliament, trying to chew up House time, trying to filibuster their own legislation and their own instructions because they’ve run out of ideas. That’s what’s going on right now. The Government has run out of ideas. They’re chewing up time.

ASSISTANT SPEAKER (Poto Williams): I’d just encourage—[Interruption] Order. I’d just encourage you to just come back a little bit more closely to the motion, please.

JAMI-LEE ROSS: Wow—I think it’s pretty relevant, Madam Assistant Speaker. I think it’s relevant to highlight for New Zealanders that are watching this important debate, which members of the Government are standing up and diligently having their say on, that this is simply a delaying tactic because they’ve got no legislation.

I say to the Government: come here with some real legislation—more than a 12-clause bill that we were going to do anyway. Carmel Sepuloni’s an intelligent individual. She’s a hard-working Minister, we’re told. Why can’t she do better than a 12-clause bill that they’re now filibustering? That’s what I’ve got to say: that we are wasting House time. It’s important to remind New Zealanders exactly what the Government’s doing right now, and I think they should do better for New Zealanders.

A party vote was called for on the question,

Ayes 63

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

Noes 56

New Zealand National 56.

Motion agreed to.

That the Families Commission Act Repeal Bill be reported to the House by Monday, 30 April 2018 and that the committee have authority to meet at any time while the House is sitting (except during oral questions), during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 191 and 194(1)(b) and (c).

Bills

Commerce (Criminalisation of Cartels) Amendment Bill

First Reading

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): I move, That the Commerce (Criminalisation of Cartels) Amendment Bill be now read a first time. I nominate the Economic Development, Science and Innovation Committee to consider the bill.

This bill seeks to amend the Commerce Act 1986 to introduce criminal sanctions for serious cartel conduct. Last year, the previous Government removed criminalisation provisions from the bill through a Supplementary Order Paper submitted to the committee of the whole House. This Government believes that was a mistake. We believe the previous Government failed to understand the need for strong deterrents to prevent parties from intentionally engaging in cartel conduct.

Serious cartel conduct harms New Zealand consumers. Cartels are formed when competitors agree to fix prices, restrict output, or allocate markets. This reduces competition in the market. This results in high costs and reduced choice for ordinary New Zealanders. Labour committed to implementing this reform, and it is being delivered by this coalition Government. Criminalising cartel conduct is necessary to protect consumers and honest business. A criminal sanction will send a clear message that our society is not willing to tolerate this type of behaviour. It’ll also provide a clear deterrent to those who deliberately engage in cartel conduct. Increased awareness of criminalisation will reduce unintended cartel conduct, as businesses will more thoroughly consider the competition impacts of their arrangements.

Internationally, most of our trading partners have criminalised cartel conduct—Australia, Canada, the United States, and the UK—and cartels can cross borders, as we have seen in the past. Aligning our laws with these jurisdictions should allow the Commerce Commission to participate more fully in international cartel investigations. This bill implements a criminal regime for cartel conduct that will run alongside the civil regime. A sanction for an individual will be up to seven years’ imprisonment, a half a million dollar fine, or both. And this puts this offence on par with white-collar crime and corruption. In the eyes of most New Zealanders this conduct is worthy of such a sanction.

This bill went through a full select committee process last year. However, given the previous Minister’s disregard for the committee’s recommendation to include criminal sanctions for the worst cartel behaviours, the bill must return to a select committee. I would encourage the business community and all other stakeholders to consider making a submission. It is important that the Government works with the business community to achieve the most robust and efficient business environment for all New Zealanders. In the interests of business certainty we will retain sound provisions of the current legislation, for example, the exception relating to collaborative activities.

The collaborative clearance regime introduced last year allows businesses to seek assurance from the Commerce Commission that their proposed joint ventures meet the requirements of the collaborative activity exception. In short, this will mean that businesses can check if their proposed collaboration is free of competition risk. This is not compulsory, and businesses can continue to self-assess as they mostly do now, but this clearance regime gives them an option for certainty.

Honest businesses should have no concerns, and this bill provides a defence for those who believed a collaborative activity exception applied. For similar reasons, the bill also provides a defence for those who believe their liner shipping block exception applies to any conduct in question. I believe that this block exception is well targeted. It balances the need for the industry to work together to achieve efficiencies but to do so in a way that does not harm competition. I do not propose to revisit this matter during the course of the consideration of this bill. It has already been well considered by this House.

The regime won’t come into force until August next year, after which we can review the block exception in due course if the need arises. This bill provides an appropriate transition period of two years, and during this time I expect business and individuals to take note of the impending introduction of criminal sanctions and to reflect on their conduct, ongoing and proposed.

This Government has an ambitious programme of competition law reform, and I will soon introduce a bill enabling the Commerce Commission to conduct market studies. This will allow the commission to shine a light on markets that aren’t performing as effectively as they could or delivering the best outcomes for consumers. It would also allow Governments to assess whether further action is needed to protect consumers and our robust business environment.

The review of section 36 of the Commerce Act will also continue under this Government. In New Zealand, many of our markets have few dominant players, and this provision of the Commerce Act is vitally important to deter the misuse of market power. The section is clearly in need of reform to deter firms from abusing their market power but also to make it workable in terms of enforcement. We are in a position to assess the changes implemented in Australia but at the same time ensuring any reform is fit for purpose in the New Zealand context.

I look forward to engaging with stakeholders in the most appropriate mechanism as an alternative, and this work underpins the Government’s commitment to build a strong economy, be fiscally responsible, and provide certainty for consumers and business. We will work with business to deliver shared prosperity for all. This bill is one of a number on our work programme that will encourage the economy to flourish. I commend this bill to the House.

Hon CHRISTOPHER FINLAYSON (National): I’m delighted the Government filibuster stopped so that I could address this bill before the dinner adjournment. I thank Mr Faafoi for his excellent speech, which, unfortunately, was devoid of any merit whatsoever, which is why we are going to oppose the legislation. We say the legislation is unnecessary and, secondly, it will give rise to additional costs that cannot be warranted.

The fact of the matter is that our competition law is working pretty well in this area. There has always been a jurisdiction on the part of the Commerce Commission to pursue cases involving price fixing, and some of the penalties that have been imposed on various companies have been very large indeed. So, for example, I go to the wood chemicals area. Koppers Arch Wood Protection, for example, was fined $2.85 million for price fixing plus $750,000 for exclusionary conduct jointly and severally. I think the ophthalmologists were done over a couple of years ago. In the air cargo area in 2011, the High Court approved a settlement requiring Air New Zealand to pay a $7.5 million penalty for price fixing in breach of the Commerce Act, and the same applies in the freight forwarding area.

So the civil regime—which Mr Goldsmith, when he was the Minister of Commerce and Consumer Affairs, built on and Jacqui Dean also built on through the legislation that was passed last year—in my opinion, works very effectively. This was a matter that has been the subject of—it could almost be a Homeric epic, because it was discussed at such length within Government from about 2011 to 2017, and it was a good, robust debate on these very important issues.

Hon Kris Faafoi: And you still got it wrong.

Hon CHRISTOPHER FINLAYSON: You don’t know what a Homeric epic is—Mr Faafoi doesn’t know what a Homeric epic is. It’s a poem. He probably hasn’t got beyond haiku.

The second point I would make is that it adds considerable costs to the Commerce Commission. The Commerce Commission was before the Economic Development, Science and Innovation Committee last week. It is doing very well, and when they go to court, more often they win, and win big. The committee was very impressed by their hard work. But if we impose this criminal jurisdiction on them, they will, of course, have to instruct Crown solicitors. That will add to cost and expense in an area where I don’t think too much more is gained. So I think there are questions of costs that need to be looked at, but, more than that, I think that the current regime, which was updated by the legislation passed in August 2017, is working very well indeed.

The third point I would make is that the assumption that criminalisation of cartel behaviour is the norm is not necessarily correct. Of course, we have the Sherman Antitrust Act, which was passed in 1890 in the United States, and, I think, Canada’s had the ability to impose criminal sanctions since about 1889. But, generally speaking, across the globe, while there have been some countries that have moved towards criminalisation, it’s not necessarily the norm. For these reasons, the National Opposition is going to oppose this legislation.

I find it extraordinary—this legislation is almost a metaphor for the legislative activity of this Government. They’ve got nothing really original to contribute to debate in this House, so what they have to do, and what they’ve clearly been giving instructions to officials to do, is to scurry around and try and find something that can be brought to the House.

Section 36 reform is a crunchy issue. Market studies reform, as was set out in the brief to the incoming Minister, is a crunchy issue. There are so many really good issues in competition law, but this is not one of them. It’s a makeweight piece of legislation in an area that is very well traversed, and what I think we need to do for certainty in competition law is leave the law as it is. So, with those brief comments, I indicate that National will oppose this scruffy little bill.

MICHAEL WOOD (Labour—Mt Roskill): It’s always a delight to follow on from the Hon Chris Finlayson. He is erudite, informed, articulate, and in these respects he singularly stands out on the Opposition benches. But in listening to the Hon Chris Finlayson, it also brings a note of sorrow to my heart, because it reminds us of great National Party MPs who are no longer in the House with us. And in respect of this bill, I am referring to a truly Churchillian figure, one of the great legislating Ministers of our times—I don’t really need to say his name. Everyone knows who I’m thinking about: the man from Tukituki, the Hon Craig Foss.

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

MICHAEL WOOD: Thank you. Well, somewhat unfortunately, in my opening remarks, I’d just built up to a punchline just as the bells rang, and the punchline was Craig Foss, so let me just backtrack a little bit to give some context to members who have come to the House specifically for this debate and for this speech. Really, it was a kind punchline, because in my comments I was acknowledging the former Minister of Commerce, Craig Foss, who, at the point at which the previous bill, the Commerce (Cartels and Other Matters) Amendment Bill, was introduced in 2012, which contained within it the criminalisation of cartels’ behaviour, was the Minister of Commerce. I think he’s someone who we can actually look back to a little bit fondly, because the passage of that bill, in the latter days of the previous National Government, had all of the speed and the dynamism of an aged sloth with a gangrenous leg. The first reading was in 2012, the second in 2014, and we got to the final reading in 2017. This was a bill that was dealing with the serious matter of cartel behaviour in the New Zealand economy, and it took five years for it to make its progress through the House.

The reason that I raised the fine example of Mr Craig Foss, the former Minister, is that Craig Foss actually got the issue that we are debating in this bill, the Commerce (Criminalisation of Cartels) Amendment Bill. I actually want to refer back to his excellent first reading speech on the Commerce (Cartels and Other Matters) Amendment Bill back in 2012. Here is what Craig Foss, the former National Minister of Commerce, had to say at that point: “I believe that with the introduction of criminal sanctions [in relation to cartels], New Zealand stands to benefit in three ways. First is the increased deterrence of hard-core cartels due to the severe sanctions, associated stigma, and possible restriction of an individual’s freedom. Second is the increased detection of hard-core cartels from improving the effectiveness of the leniency regime by increasing the value to the individual applying for leniency.”—I’ll talk more about this later—“The leniency regime is administered by the Commerce Commission, and encourages cartelists to come forward in return for leniency. Third is an improved ability to cooperate and detect cartel conduct.” That was Mr Craig Foss, the National Minister for Commerce, in the first reading of that bill, recognising the value of the criminalisation of cartel behaviour.

And it didn’t stop there, because we got to the Commerce Committee and there was a unanimous report from that select committee—a National Party - majority select committee—that recommended proceeding with the criminalisation of cartel behaviour, having listened to submissions from across New Zealand society. Mr Craig Foss, in his second reading speech: “Notably, the committee endorsed the introduction of criminal sanctions for hard-core cartel conduct. This change aligns New Zealand with Australia and some of its major [committee] partners.” So there we had a legislative process that recognised the value of criminalising cartel behaviour, right up until the committee stage.

Unfortunately, between that point and the committee stage we had a change in ministerial leadership, and I want to welcome to the stage Mr Paul Goldsmith, who took over—welcome, Mr Goldsmith—and who, somewhat out of the blue, at committee stage tabled a Supplementary Order Paper that gutted that bill and removed the provisions around the criminalisation of cartel behaviour. All we got was, basically, a one-liner—a one-liner from that Minister and from the National Party—and it was one of those lame ones, saying there will be a “chilling effect.” “Chilling effect” is one of those phrases that you use when you just don’t want to do something and you don’t want to have to argue the toss, and that is what happened. I actually looked back on the committee stage debate, the point at which this House considered that significant change to that piece of legislation, and there was a very, very scant response and discussion to that major change by the Minister in the chair, at that stage, who was the Hon Jacqui Dean.

So I just want to refer back to those comments from Mr Craig Foss. He got it right. It is entirely appropriate to criminalise cartel behaviour, and he described the reasons well. Let’s just go back to those: the first he said was “the increased deterrence of hard-core cartels due to the severe sanctions, associated stigma, and possible restriction on an individual’s freedom.” So it’s, basically, that logic that we have in the criminal law that when we want to seriously deter a kind of behaviour, we make sure that there are sanctions to match, and, in this case, the sanctions potentially include imprisonment of up to five years. I think that is entirely appropriate. It is entirely appropriate because it makes it consistent with other white-collar sanctions that we see for fraud, for insider trading, and the like, but, for some reason, cartel behaviour has been excluded up until this point.

The second point that Mr Foss made—he said, “Second is the increased detection of hard-core cartels from improving the effectiveness of the leniency regime by increasing the value to the individual applying for leniency.” This is, effectively, where one party who may have been involved in cartel behaviour can come forward, can fess up because they’re worried that it might go wrong further down the line, and get the information into the hands of the relevant authorities so that it can be dealt with. And, of course, you increase the likelihood of that happening if people are concerned about the consequences. So having some serious consequences by way of criminal culpability on the line means that the leniency regime is more likely to actually be used.

The third, Mr Foss noted, is “an improved ability”—and I’m quoting here—“to cooperate and detect cartel conduct. This is particularly important for global cartels, where information is more likely to be shared with countries that have criminal regimes.” And, of course, this is where the rhetoric around a chilling effect becomes completely unstuck, because virtually all of our major trading partners, all of the major OECD economies that we trade with have criminalisation of cartel behaviour. Has there been a chilling effect on business investment in Australia, in the UK, in the US, in Japan, or in Korea? Of course, the answer, which we all know, is no. Those countries have perfectly functional economies, and the criminalisation of cartel conduct has not had any significant effect on them whatsoever. It was simply a weak excuse from the previous Government, which didn’t want to go down a path that, quite frankly, was opposed by some of the people that they have close relationships with, and I view that as utterly unacceptable.

There are two arguments that I want to add to Mr Foss’s reasons for supporting the criminalisation of cartel behaviour. The first is consistency with other offences. What is cartel behaviour? It is powerful players, often in oligopolistic markets, coming together to abuse the market for their own personal enrichment. That is what it is about. Cartel behaviour is about distorting markets so that those particular players do better, so they can raise the prices and reap more profit. It is about taking money out of the pockets of other businesses and out of consumers.

When other people within our regime of sanctions do that, whether it’s a few people conducting low-level fraud in a bank or a supermarket chain or whatever, those people face criminal sanction, and very often for amounts that will be significantly below what we see from cartel behaviour. In New Zealand, in the airfreight industry, we had a well-known case a few years ago where approximately $200 million of excess profit was made because of proven cartel behaviour. Now, I will warrant you, Madam Deputy Speaker—I will warrant you—that people operating at a far lower level, engaging in fraudulent behaviour, abusing rules, and breaking the law will potentially face jail terms, but the big boys engaging in that behaviour at the moment don’t face criminal sanction, and that is simply an inequity that this Government will not stand for.

And here’s a final one for the sons and daughters of Milton Friedman on the other side of the House that I want to put to those members tonight: cartel behaviour is an abuse of the market place. If you believe in free and equitable and functional markets, you should be taking a stand against cartel behaviour in the strongest possible terms, because it undermines your economic philosophy, it undermines the functioning of free and efficient markets. It is an abuse of those markets and, given the scale of it, why would we not stand up for it in the strongest possible terms by sending a message to those people in the towers of Queen Street that we expect them to play by the rules and that we will not stand for cartel behaviour that distorts our economy and rips money out of the pockets of our businesses and our consumers. I commend this bill to the House and look forward to other contributions. Thank you.

Hon PAUL GOLDSMITH (National): Well, that was a very interesting speech. As if there is anybody in this House who thinks cartel behaviour is a good thing and something that the public is in favour of! Everybody is opposed to cartel behaviour, and that is why in this country there have been very strict and severe civil sanctions against cartel behaviour, running to fines of up to $10 million—huge sums involved. So it has always been treated as a very, very serious offence.

Well, what we’ve seen here today is a very unedifying spectacle of a new Government filibustering away over its own bills, dragging things out because it has no agenda. So what we’ve seen is the Government has sort of sat down and realised, “Oh my goodness, we’ve got all these weeks of sitting time and we have no bills.” And all the new Ministers were sent off on a little errand to find what are, in effect, a bit like members’ bills—to find some bill that is easy to draw up and flicks a little switch that they can introduce into the House so that they can look like they’re a Government that have any idea of what they are doing. So here we have this bill brought into the House, which overturns a decision that was made by this House only last year after long and due consideration.

Yes, intelligent people can argue about whether it is a good thing to criminalise cartel behaviour or not. There are some countries that do and there are some countries that don’t. There are perfectly legitimate arguments on both sides. On balance, as the Minister in the previous Government, I was opposed to the criminalisation for the simple reason that up to now we have seen this as a civil matter with very severe penalties involved. But, ultimately, if the Government does, every year, pass a new way for directors of companies to go to jail, come up with a new way for them to go to jail if their judgments are wrong, then ultimately it does add up and have a chilling effect, as the phrase that has been used, on innovation. We want our directors to be cautious but if you push them to be ultra-cautious, then there is a cost in terms of innovation.

The Government members may make out it’s the simplest thing in the world to detect cartel behaviour or to understand cartel behaviour, but the boundary between pro-competition collaboration and anti-competition collaboration is not as clear-cut as you would think, and what may be pro-competitive one year may turn out to be anti-competitive the next year. So this is an area, in many countries in the world, where there is a detailed and long, drawn-out public process about how best to handle it.

We, on balance, were strongly of the view that the regime that we’ve had in place in New Zealand for many, many years, in a small economy with small businesses, on the average, dominating, was the appropriate one for New Zealand. There’s been no robust evidence put forward by officials or before the committee that makes a strong case for changing what has been in place. If you have the view that regulatory restraint is a good political philosophy to hold, then this is the approach that you should take. So this Government is introducing this one, and we’ll look forward to taking it to select committee and hearing what people have to say, but let’s not forget what this is all about, which is filling up the Order Paper in order to avoid embarrassment on the part of a new Government that doesn’t have a clear programme to put forward.

FLETCHER TABUTEAU (NZ First): Thank you, Madam Deputy Speaker. Look, I just wanted to address the comments from the previous speaker, Paul Goldsmith, because one of—

Hon Member: Goldstein.

FLETCHER TABUTEAU: Ha, ha! One of the more valid arguments he raised was around how the criminalisation process works. So let’s not confuse the point that the legislation itself, and what we’re trying to achieve around holding cartels to account for behaviour, fundamentally didn’t change. It was the criminalisation aspect that you guys, the Opposition now, seemed to have the issue with at the time. The legislation itself fundamentally remains the same.

We got to a point where—I put it to the previous speaker—there are several defence mechanisms for the individual in terms of an honest belief defence and operating in good conscience. We’re not seeking to criminalise these operators; it is those with malicious intent. So they have to clearly break the law, which that side of the House agreed we needed to implement in the first place. I just wanted to address that point made, because it was one of the few fair points.

It’s much more fun to go back to one of the previous speakers, Mr Finlayson, who—

Hon Member: Who?

FLETCHER TABUTEAU: Mr Finlayson.

Clayton Mitchell: Who’s he?

FLETCHER TABUTEAU: Maybe I’ve got the name wrong—ha, ha! But I’d like to quote him, because he said this bill was unnecessary. His quote was, “It’s working pretty well.” That’s what the erudite member had to say about the current structure.

But what I wanted to touch on now is that when the Commerce (Cartels and Other Matters) Bill came up in the last term, in its third part—five years after it was first introduced to the House—what I particularly liked in the conversation, on behalf of New Zealand First, was that, actually, here’s a piece of legislation that’s looking to be more permissive in terms of good business working together. We have to be—as the previous member himself, the Hon Paul Goldsmith, the former Minister, said—mindful of cartel operations. It’s bad, and everyone in the House disagrees with it. But what that legislation was seeking to do was to be more permissive in the operations of business so that they could actually seek to put a case forward where their coming together, in terms of two big firms providing services together, was actually beneficial for the end consumer. There are cases where we see that, around the world, and, if it’s managed well, it’s a really good thing. That was what was exciting about that legislation. What was typical was that it was a response to what other jurisdictions around the world were already doing, but, credit to the Government of the time, they saw what was happening around the world and thought, “Yeah, let’s do that in New Zealand.”

The challenge then, and what the rest of the world highlighted in their practice, was, yes, a more permissive regime—let’s allow these guys to work together if we can bring proof that the end consumer would benefit from that coalition, that working together—but the balancing act was really important. New Zealand First said at the time, “Fantastic, you’ve got the balance right.” If there was intent, if there was malicious operation where those individuals sought to use this permissive new regime maliciously, we could now hold those individuals to account through the criminalisation that was introduced and well-spoken to by the previous Ministers—criminalisation. The previous Ministers who first brought this to the House, the National Ministers of the time, spoke eloquently about the need for this criminalisation.

So here we are today, fixing what was clearly a mistake at the time. I’m not sure if we could call it cold feet, but cold feet from what? One of the great arguments that most traders in the House—parliamentarians who respect trade and working with our international neighbours—always speak about is the alignment of regulation and policy. Now, our biggest trading partner is Australia, and here we were, following along the lines of our Australian neighbour so that in our closer economic relations we could be in alignment and work together to hold international companies to account. It just made a lot of sense. And Australia wasn’t the only jurisdiction that did that. We’ve spoken about Canada. I think we mentioned Korea and Japan. There are examples, and more and more are coming online all the time, so that is the challenge for New Zealand. We are a small country that must deal with the rest of the world, and the best way we can do that is through the rule of law and good and agreed rules of engagement. This bill will remedy the mistake made by that previous administration.

The bill itself would have cartel behaviour prohibited—it goes without saying now. We know it currently has only civil sanctions—that’s what the bill’s seeking to remedy tonight—and it was absurd of the former Minister to remove those criminal sanctions. You know, in the whole debate leading up to that period where it had gone through select committee—and I’m happy to be corrected, but if memory serves—all of the submissions said that criminalisation was appropriate and the correct thing to do, and the Minister of the time absolutely agreed—absolutely agreed. And yet in the next step in the legislative process, the bill was—“gutted”, I think, was the word used by a previous member. It just made no sense, and it makes no sense, and this is why we are here this evening to fix a mistake made by the party opposite.

I think, really and truly, I’ve touched on the most important parts. It is something that we need to do to align our legislation with our international neighbours. It’s important that we get that right. We are moving—it is a permissive regime and there must be a balance to that so that we can hold individuals to account who maliciously seek to benefit off defrauding New Zealand consumers through cartel behaviour. So it is with pleasure this evening that I do recommend this bill to the House. Madam Deputy Speaker, thank you.

ANDREW BAYLY (National—Hunua): Thank you, Madam Deputy Speaker. It’s a pleasure to be talking on the Commerce (Criminalisation of Cartels) Amendment Bill. The previous speaker, Fletcher Tabuteau, just said that the Government were trying to address the issues of the last Government. Madam Deputy Speaker, I put it to you that this is a Government that is meddling—meddling on the edges. I am very disappointed that the new Minister of Commerce and Consumer Affairs has chosen this bill to be his opening gambit in terms of trying to improve the environment for businesses and people of New Zealand. This is a vexed issue, of course, and all New Zealanders hate the concept of cartels operating in New Zealand and causing all the disadvantages of that. Everyone agrees with that; that’s an absolute given, but let’s just go and remind ourselves about what powers are already in the existing Act.

First is that under the civil sanctions provision of the Commerce Act, individuals can be fined up to a maximum of $500,000, and corporations can have financial penalties the greater of $10 million—three times the value of the ill-gotten gains, however they are assessed—or 10 percent of the company’s turnover. Madam Deputy Speaker, I would say to you that those are significant penalties. The second provision under the existing Commerce Act is that companies are prohibited from indemnifying their directors and management, and that is a common practice. Under the existing Act they are prohibited from providing that financial assistance—in effect, cover for their directors and management. The third thing is that directors and management can be banned—if they are found to be operating cartels—for a maximum of five years. I put it to you, Madam Deputy Speaker, these are substantial penalties.

So what is this new bill—this new bill that seeks to be the wonderful lead-off on the commerce section of the Government’s new agenda. Well, under clause 4 it inserts new section 82B, which inserts a provision around criminal cartels. In order to commit an offence a person must give effect to a cartel provision and intend, at the time of giving effect to the cartel provision, to engage in price fixing, restricting output, or market allocation, which, of course, are provisions already under the current legislation in terms of those specific elements. But by introducing a criminal content, what it does is it introduces a whole new test that the courts now have to assess. One is about establishing intent, and it has to be in relation to the detriment of the public. So, already, we’ve added a complication.

But even if you accept that argument, the penalties that are proposed under this new bill are basically the same. The only difference is that in respect of an individual not only can they have a maximum fine of up to $500,000, but they may be imprisoned up to a period of seven years. And there are already watered-down provisions in the new bill, which, rightly so, excludes things like shipping companies and other collaborative arrangements. So there are already existing exemptions.

I think there’s a very legitimate conversation to be talking about how a Government should promote healthy competition, but I ask you, Madam Deputy Speaker, where is the evidence? Where is the evidence for the need for this change? There is no evidence. There is absolutely no evidence for the need to introduce a criminalisation issue.

I think that what this bill does is it introduces this additional test that really cuts to the core of those people who manage New Zealand businesses legitimately but introduces a whole new area of risk. These are the very same people that the bill seeks to target. They may inadvertently give rise to a situation that may border on the issue of cartels, but this issue about this criminalisation clause is that it is a very grey area. If you think about issues where people are doing joint bids, where they are working collaboratively within the market place—we’ve got a very vibrant creative sector working together to develop new products and services—or even where companies are vertically integrated, all those are grey areas under this criminalisation, and I think what’s going to end up is an absolute field day for lawyers.

So I think this just purely a philosophical change by this Government who is anti-business—anti-business—and I don’t believe that this is actually going to achieve anything. Already the courts have handed out a vast number of convictions over the last few years; they are effective. We’ve got a whole stack of parties against this, including Treasury and the Productivity Commission. I think this is a feel-good bill for everyone on the other side there to be able to say, “Yes, we’re doing something, but in reality we’re not doing anything at all.”

GARETH HUGHES (Green): Kia ora, Madam Deputy Speaker. Ngā mihi nui ki a koutou. Kia ora. We took the kids to the circus recently. I don’t think they saw in the circus events more acrobatics and backflips than we saw from the National Party tonight. Every single allegation against this legislation can be rebutted with the simple question: “Why did you put it to the House in the beginning?”

What we heard from the last member, Andrew Bayly, is it was a philosophical chase, it was anti-business, it won’t achieve anything. Why didn’t the member ask Minister Goldsmith when it was originally put to the House? We also heard that member say, “Where’s the evidence?” Well, I would point to the OECD. I would point to the market studies that we’ve seen conducted by the US Department of Justice, the studies conducted in the UK, the studies conducted in Japan. Where’s the evidence? It’s all over the world, Mr Bayly, and you should look at it.

Now I also heard from that member this was all about meddling. This Parliament is acting on behalf of consumers, making sure they get a fair go; making sure businesses operating in a competitive, fair environment get a fair go and can compete. What we are talking about tonight isn’t about meddling; it’s about making sure we’ve got a fair market so consumers and market participants can have confidence in the system. That’s exactly why the Government put it originally. Now, remember the National Party was for it, then they were against it, and we don’t know where they are today. I urge them to support it, because what we’re talking about is—the evidence is very clear—that criminalisation of cartels is effective. That’s what the OECD has found.

What they’ve also found is that New Zealand is particularly susceptible, as a small economy with limited market participants in various fields. When you look around the world, there’s $16 trillion of activity estimated by participants associated with cartel behaviour. Where New Zealand is particularly susceptible, and we’ve seen various cases in our history, from the ophthalmologists through to the air transport case—look, it’s important that we make sure that we listen to the evidence and actually have the deterrents. Now, what we know from the data is that having a criminal charge on our statute book does act as a deterrent. The OECD has also found that it’s more effective at actually finding it.

It’s important because the negative impacts on an economy are so widespread. It’s in terms of market concentration—the ability to screw the scrum. Now, as a country that saw one of the most closed economies outside of the Soviet bloc in the 1970s through to the 1980s, where you saw companies get rich simply because they were able to get an import licence under Muldoon’s Government, we’ve got to be wary of concentrating too much power and screwing that market scrum. For a country that’s languishing in the bottom half of the OECD, or the developed world, when it comes to investing in R & D, and when the officials are advising us that cartel behaviour limits innovation in an economy, we should be acting, and the evidence says that criminalisation means detection is easier and it’s also a more effective remedy to stop it in the first place.

So, look, we’re absolutely right behind this legislation. We even note that similar countries such as Australia, the UK, the US, Canada, and Japan all have these. The officials have advised the Parliament that international cooperation will be furthered if cartel behaviour does have a criminal charge on the statute book. Look, it’s been through a select committee at the moment, and that’s why we’re supporting the process. We’ve got to speed up. I mean, this was originally—we saw the first report back in 2010. The legislation was originally put to the House back in 2011. We’ve got the opportunity to protect consumers and protect our economy at the moment. I would note that the Minister has pointed out the very pragmatic and reasonable exceptions, such as collaborative activity to encourage business certainty, and the block exemption—for example, in the shipping industries and noted the transition period of two years to give businesses certainty and the ability to get up to speed with this new statute. Look, it’s all about protecting consumers.

What I’ve heard from the National members is, for some reason, for want of activity, this is the only legislation the Government has put to the House. Well, we heard from the Minister that all the work on his work programme is to protect consumers and to protect the economy, such as the Commerce Commission market studies and the section 36 review to stop the abuse of market power. This Government is acting to protect consumers and to make sure that all participants in the market get a fair go and that no one is screwing the scrum, because, ultimately, what this is about is giving New Zealand consumers the ability to purchase products and services at a fair price. When you look at our supermarket sector and at food prices and petrol prices, important questions have been raised as to whether Kiwis are, in fact, getting a fair go. In a small economy and a small country like ours, it’s particularly important.

I’m disappointed that National originally had the right idea based on evidence, flip-flopped, and back-flipped, and here we are tonight. I hope they can flip back the right way, look at the evidence, and make sure they’re voting along the right side to protect the Kiwi consumers. Thank you.

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Madam Deputy Speaker. It’s interesting, over this side of the House tonight, when we’ve got the Government—a mix of Government—trying to solve a problem when they haven’t really described where the evidence of a problem is. We’re looking for the evidence of a problem, and we heard Gareth Hughes, the last speaker, talking about the OECD. We heard him talking about Japan, and we heard him talking about the EU. That followed on from a speech before by Fletcher Tabuteau, who talked about the challenge for New Zealand.

In all of this, there is a challenge for New Zealand, because we don’t have the population of many of those countries. In fact, we don’t have the problem of most of those countries. That is a challenge, and Fletcher Tabuteau alluded to it before: we are small and we need to collaborate. So we in this country, under this piece of legislation, are going to have businesses walking an absolute tightrope. I can see that the legal fraternity is going to be making a fortune out of this, because where do we draw the balance between companies wanting to collaborate? We’re a trading nation and we know that. We don’t sit around selling stuff to each other. There’s going to be a lot of collaboration that needs to go on for us to be on the world stage. We’ve been doing trade agreements—we’ve even got this current Government pulling together and doing trade agreements—and we actually need to be very careful that we’re not sending the wrong signals here.

So there is a lack of evidence of a problem, and the suggestions from the arguments that came forward before were that the current penalties are currently effective. “They consider that criminalisation would offer little benefit,” but what it would do is it would impose “substantial costs on businesses”. So there we go again. We’re starting to put in extra substantial costs, so everyone that wants to collaborate to make a difference in this country is going to have to have compliance books and red tape to the limits—which is just typical of what we hear from the other side of the House—to solve a problem about which no one’s given us any evidence that it exists. It’s going to be a real deterrent for people actually getting up, getting in, and working together and helping us have the opportunity to take on the world.

Another concern that the submitters raised was that there will be “mid-level managers and senior managers [who] may already”—and I’m reading this from the regulatory impact statement—“be reluctant to engage in pro-competitive, efficiency enhancing conduct with competitors because of the risk” of what might be in the breach.

Tonight I’ve heard people talking about existing exceptions. So how do you get a fairness around that? Mr Tabuteau talked before about good and agreed rules. So how do you get good and agreed rules that, actually, it’s OK to have some existing exceptions so that it’s OK for some people to collaborate, and the activity is OK as long as the Government says so because the Government seems to need to control everything around here? It will be a field day for lawyers.

There are already things in place to deal with criminal activity, and there have been a number of people who have gone through the court system and have been convicted of behaviour that is clearly anti-competitive, but the fine line is going to be really, really difficult to draw on establishing intent. I would like some real good explanations from people on the other side of the House as to how clear they see that line, because, for me, that line is not black and white. There are always people, I will admit, that, whatever the law is, will try and find a way around it.

So even if this happens, there will be some criminal intent, but I want someone from over the other side of the House to explain to us here that line—tell me what’s on one side and tell me what’s on the other side. We’ve heard about collaboration and then we’ve heard about the evil nastiness of cartels that get together. Now, we all know what’s criminal, but I think that this is going to put a great onus on lots of businesses in this country. It’s going to constrain—and I could see Gareth Hughes over there talking about facilitating all these ideas about technology and working together, and all this big buzz in his head about all these things that could be created if we put this law in place. I’d like to contend that it’s going to have the opposite effect. Thank you.

DEPUTY SPEAKER: The next call is a split call—five minutes each.

Dr DUNCAN WEBB (Labour—Christchurch Central): Well, I hope five minutes is enough to explain to the member what’s wrong with cartels and why they are, in fact, criminal behaviour. I’ll tell you what: let’s just think for a minute what’s going on here. What’s going on is price stripping—taking wealth from consumers and moving it to corporates.

So let’s talk about price fixing. A competitive market, the so-called market that that lot over there on the other side of the House says it promotes, would see a price equilibrium—a fair price that gives fair profits to the producers and a fair price to the consumers. What a cartel does, if we price fix, is it bumps the price up. It’s a cartel agreement to ensure that the consumer pays too much, so that the money goes illegitimately—illegitimately—from the consumer to the corporate.

And you know what: look at this little word in the bill, that it “intends”, that the person “intends” that to occur. That’s what makes it criminal: that someone intends to get money they’re not entitled to. For that, the penalty could be up to seven years inside, because you know what: it’s just like theft. It’s getting money you’re not entitled to. It’s not rocket science. It’s pretty straight forward. If you take money, if you strip money from a class of people that you’re not entitled to, whether it be through price fixing—

DEPUTY SPEAKER: I’m not doing any of that. I’m not doing any of that.

Dr DUNCAN WEBB: Sorry, Madam Deputy Speaker. If the corporates do that, then they should be—it’s all very nice to say “We don’t want to chill too much activity on the part of these directors, these company directors.” Look, it’s “intends”. The law protects people. There’s such a thing as burden of proof and beyond reasonable doubt, and that’s the protection. The prosecution will have to prove beyond reasonable doubt that the person engaged in this conduct intended to do so, and if they did, then that is deeply wrong. It’s taking, and that’s why they should go to jail.

You’ve asked for evidence. Well, I’ll tell you what: you don’t have to go far. The last Government got that evidence. The Ministry of Economic Development way back in 2010 did a report on this, and do you know what they said? The civil penalties regime is not good enough. It’s not a deterrent. So what we have here is something that will be a deterrent.

It turns out, if you look at the record, that only in 2016 the Commerce Commission said they were having more cartels. They were increasing their work around cartels; it was on the rise. So what we have is a regime that’s not working. We are needing greater deterrents, and that’s what we’ve got here. It’s not enough to say “Look, you really oughtn’t have done that. We’re going to take some of those profits away from you.”, whether it be three times the profit earned or whether it be your $10 million. Whatever it might be, it turns out when you’re playing with the numbers that some of these industries are playing with, it’s good business to take a risk. You might get caught, but let’s take the gamble. Well, let’s set it apart for what it is: it’s deeply wrong, it’s taking, it’s illegitimate. Let’s criminalise it, and let’s make sure that people who go down that road knowing what they’re doing pay the appropriate price. And that’s what we need.

So look, you know, when we think about it we’ve got defences in there for legitimate conduct, because cooperation in industries is sometimes necessary, it’s sometimes appropriate. If that’s existing in the current legislation, unlike the last go at it, which didn’t have that, that is a legitimate defence. So what we have here is an appropriate response, not one that we’re going to put into the water, then get lobbied terribly about and have Chapman Tripp say that it’s a bad idea, and have the Institute of Directors say that it’s a bad idea, and do a u-turn on. No, it’s one that this Government is committed to because it is an entirely appropriate step. What beggars belief is that you’ve got a step here that is looking to make sure that the market is preserved, that it operates effectively. We’ve got an Opposition that’s saying “No. We don’t want that. We want to go back to Paul Goldsmith’s world where we want to give a free pass to company directors so that if they get into a bit of strife, even though they intended to embark upon this course of action, they’re not criminalised for it.” It is wrong. It is taking.

Price fixing is utterly illegitimate, as is any other arrangement such as organising regional procurement or sales regimes. Those kinds of things might be complex. They might take a lot of resources of the Commerce Commission, but we’ve got to stamp on them because they take large amounts of wealth from the New Zealand public, and that’s got to stop. Thank you, Madam Deputy Speaker.

Rt Hon DAVID CARTER (National): I want to thank the member who’s just resumed his seat, Dr Duncan Webb, for a spirited contribution. But my question, having listened to him, is: is the current law already adequate for the very behaviour we talked about? And I want to—

Hon Member: No.

Rt Hon DAVID CARTER: Well, somebody interjected, “No.”, but I want to give an example whereby I suspect the caucus hasn’t been fully informed by the Labour Cabinet. When the previous Government introduced the National Animal Identification and Tracing (NAIT) Act it required the stock and station industry to be deeply involved in the implementation. I think almost inadvertently, some of those companies got together as they sorted out appropriate charges that they’d make at particular sale yards for the completion of the NAIT obligations. As I say, almost inadvertently, I think, those companies fell foul of commerce legislation at the time because they were accused by the Commerce Commission of price fixing, exactly the sort of behaviour that Dr Duncan Webb said we should not tolerate in New Zealand. I happen to know that some of those companies recognised that they’d broken the current law and were fined many hundreds of thousands of dollars. One major stock and station company decided to fight the Commerce Commission and lost, and I think I’d be right in saying their total costs would’ve exceeded a million dollars. So in the spirited contribution you’ve just heard, I ask the question whether the very situation that Dr Webb has raised is not already covered by commerce legislation in this country.

Which leads me to the relevant question that should be asked: is this legislation necessary tonight? I listened to the Hon Paul Goldsmith’s contribution and I think he’s got it in one: Cabinet has sat there and panicked about the amount of legislation that they have to present on an Order Paper. I think we’re getting very, very close to the situation where the Government’s going to have to consider changing the sitting programme that’s been set by the Parliament at the start of the parliamentary term simply because they haven’t got a legislative agenda. That’s what’s going on here. I can imagine the panicked call around to Cabinet saying, “Get your officials to find anything that we can bring before the House, claim it’s urgent, claim it’s important.”, and here we are within five months of the election discussing the Commerce (Criminalisation of Cartels) Amendment Bill. I say to the Government, “Is this all you’ve got to talk about having won an election and with an agenda?” I cannot believe we’re in the House tonight finding this important enough to do.

What’s clear to me after the contribution from Duncan Webb is that he truly doesn’t understand the current legislation. He doesn’t understand the necessity for this legislation. He can’t ask for it. And if you wanted a further example for the fact that the Government doesn’t know what it’s doing, listen to the very lacklustre performance from the Hon Kris Faafoi when he introduced this legislation. This legislation will impose cost on the business community. We’ve got a regulatory impact statement prepared by the Government—well, not prepared by the Government for this particular legislation because it hasn’t had time to do it, but I go back and look at a previous regulatory impact statement, and that then said that they’re not sure about the cost that will be imposed on business by this legislation.

I say to this Government, it’s been around now for five months, you should’ve had an agenda when you won the election, and it’s time to come forward and debate your agenda. The best that the Government can do is come up with the Commerce (Criminalisation of Cartels) Amendment Bill. If that’s the best they can do after nine long years in Opposition, it’s time they really considered whether they’re worthy of being the Government of this country.

TAMATI COFFEY (Labour—Waiariki): Well, that was a very emotional speech just then from the previous contributor, the Rt Hon David Carter—not much to do with the Commerce (Criminalisation of Cartels) Amendment Bill, but it was a contribution none the less. I want to bring this debate back on track and stop talking about could haves, should haves, and would haves—“If we were in Government, we would have done this and we would have done that.”

So let’s just tackle some of the key points around this particular bill. First of all, I want to address one of the previous speaker’s comments about Labour being anti-business. Well, we’re not anti-business. As a business person myself—a successful business person myself in provincial New Zealand—I can stand here proudly and say that we actually stand up for businesses all across New Zealand every single day. As we go forward over the next few years—and maybe quite a few terms after that, on the performance of the last speaker—we may actually get that opportunity to speak to the business community about our aspirations, and things are looking good, can I say.

We, in our party manifesto, which is a collection of all of our great ideas—when we put our heads together, we come up with some good stuff. We’ve included in there a commitment to criminalise cartels. Now, this is very simple. So, when the previous contribution says that this is out of the blue, it’s not. It’s actually very firmly in our manifesto, and it’s something that we’ve wanted to address for a long time.

Price fixing and other cartel conduct harms New Zealand businesses and New Zealand customers, as well. If you want to point to a few recent examples, well, we can talk about the price fixing in relation to the introduction of the National Animal Identification and Tracing Act 2012, where the total penalties exceeded $3 million. There was also another recent example, of attempted anti-competitive conduct for the collection of waste oil in the Upper South Island, with a penalty of $425,000. These examples are recent examples, and they’re out there and they’re happening. So what we want to do is strengthen the law around this.

Most developed countries have a criminal offence for some form of cartel conduct. I say “some” because there are some that don’t, and those examples are Sweden, Finland, and Switzerland. So that’s something interesting for us to take on board. But many of the other developed countries around the world have got some kind of criminal offence in store around cartel conduct.

We want to take a really strong stance against business people that collude against the interests of their customers, and, as you’ve heard from quite a few of the earlier contributions, even the National Party members of Parliament agree with that. If you’ve just tuned in to this debate, then here is the rub. This is the main difference in where they see things and where we see things. You see, the difference is that we think the risk of imprisonment acts as a strong deterrent and reflects the seriousness of the harm that can be caused to the economy by cartel conduct. The current Commerce Act regime and the bill have features that enhance business certainty, such as the collaborative clearance regime and the various exceptions from the Act, and there are other measures in there too. So a lot of the scaremongering from the other side about the changes that we’re putting in here, into this bill—well, they’ve already been thought about and measures have been put in place, and, hopefully, I’ll get to that very soon.

Of real importance with this particular piece of legislation is that we’re going to be talking about the criminalisation of cartels, which will also enable the Commerce Commission to investigate international cartels, as overseas competition agencies in jurisdictions with criminal sanctions will be able to offer more cooperation to the commission underneath those laws. So what is proposed with the new criminal offence? Well, basically, the new criminal regime in this bill is closely based on the regime in the previous Government’s cartel bill, so that’s a good thing—that’s something that they’ll be happy about. The criminal regime will run parallel to the current civil regime—again, it sounds very reasonable.

Now, for it to become an offence, the defendant must have intended to fix prices, restrict output, or allocate markets. The intention element of the offence is not present in the current civil regime, and therein lies the difference. One of the Opposition members talked about how we wouldn’t be able to determine whether or not something was intentional. To that I say, well, that’s why we pay them the big dollars—so that they can actually argue that one out. I don’t think that it’s impossible to find out if there was intention, and, well, as I say, I think that’s something that is valid but also mitigated, as well.

The penalty for the individual would be up to seven years of imprisonment or a fine of up to $500,000, or even both. The penalty for bodies corporate would be up to $10 million, or more in some of those cases.

Now, there’s been a lot of fear about the chilling effect that it’s going to have on businesses—that was contributed earlier by my fellow colleague over here, Michael Wood. We talked about new defences. The new defence, which is included in new section 82C in clause 4, applies if the defendant believes that their conduct was “reasonably necessary” for the purposes of a legitimate joint venture, such as a collaborative activity. Well, that’s there. We’ve identified that, and we’ve mitigated that too. We’ve also put in there, as well, that a two-year transitional period is proposed before the criminal offence comes into force. Now, this would allow for businesses to learn from experience with the existing civil regime for cartel conduct, which came into effect just in August of last year.

Existing exemptions and exemptions from the civil prohibition for cartel conduct would also apply to the new criminal offence. These include the exception relating to collaborative activities such as the joint ventures, and the exception for specified international shipping activities such as vessel-sharing agreements. Businesses will also be able to voluntarily apply to the Commerce Commission for clearance of their proposed collaborative activities, and, if granted, a clearance would confer immunity from the civil prohibition and the criminal offence on the basis that the Commerce Commission would be satisfied that the activity is likely to be consistent with the Act.

So we’ve done our homework on this, and we’ve come to the realisation that this is necessary. This is something that the people want—we heard it in submissions—and we think that it’s a good thing to do.

So, just to reiterate, Labour is not anti-business in the slightest. We are very pro-customer—that’s what we are—and that’s why we are pushing this. I reiterate that it’s in our manifesto, so we’re not just plucking this out of the air. This is actually something that’s very serious to people around New Zealand—enough for us to be able to put it in the manifesto. As I’ve already identified, we’ve got recent examples of where cartel conduct has harmed New Zealanders and New Zealand businesses, and so what we want to do is introduce this—with the addition of imprisonment as a final resort—and put this through the House because it’s the right thing to do. With that, I commend this bill to the House.

LAWRENCE YULE (National—Tukituki): The criminalisation of cartel behaviour so early on in this new Government’s past 90-day period is really an indictment on the lack of thought, vision, and pre-prepared legislation. Nine years, it’s taken. Nine years the Government had to sort out what it was going to do when it got in power, and tonight we’re discussing a minute piece of information. The current regime offers $10 million worth of fines if it’s a civil matter, and, actually, it’s working, and I’m not aware of any significant movement in the media to actually toughen down on cartels. I think what’s happening with this Government is actually having a chilling impact on business, and that’s because the combination of a whole lot of things is forcing businesses to lose confidence. The loss of the 90-day trial period, changes in and toughening of immigration, other changes in the employment relations field—they actually all impact on business confidence.

Hon Member: Cartels.

LAWRENCE YULE: So this bill—on the cartels—actually, in my view, has no robust case or problem to solve behind it.

I go to the regulatory impact report that was given last time. It says, “One [of the concerns raised by submitters] was that even within large, seemingly well-resourced businesses, sales people, mid-level managers and senior managers may already be reluctant to engage in pro-competitive, [behaviour]”. In the world I’m in, and in some of my previous roles, actually working together is a really good thing. We are a small country. We are a small country, and, sometimes, the big model of competition actually works against consumers, and I think this is one of those cases.

We have a problem—an alleged problem—that can’t be quantified and is not supported by Treasury or the Productivity Commission, yet here we are, probably about 120 days in now, on our 20th National Party bill since the House began, because this Government does not have enough of its own stuff. What this is about is slow, incremental, but damaging change to our businesses. It’s all very well to be ideological about sending people to jail for cartel-like behaviour, but, actually, for most people this will end up having a chilling impact, just like health and safety did and just like changes to employment relations, and that is why business confidence is slipping. You guys don’t seem to get it, but out in the real world that’s what people are telling me.

Every time you change a law in this House, you have to say what the value of that change is—and there may be some laudable goals—and what the cost is of that change in terms of time and money and whether it’s worth it. And, in this case, I simply don’t think it’s worth it, other than to fill up the business agenda of this House. Every time we do something like this, it’s a balance, and the balance, in my view, is the balance between collaboration and competition. Competition, actually, by its very nature, is something that this side of the House strongly supports—

Kieran McAnulty: Not when you’re talking about the Dairy Industry Restructuring Bill, though, Yule. You’re not fussed on competition then, are you?

LAWRENCE YULE: —but when you don’t have scale, when you don’t have unique qualities that you can share in a competitive way, then it’s actually better to collaborate. Mr McAnulty, you’ll know that from your previous role.

So while previous members on the other side have been focused on the cost to customers, actually, there can often be a cost to people if you don’t collaborate. So I think the focus of this bill is wrong. It’s simply to fill up the agenda when, actually, there isn’t a major problem. Thank you, Madam Deputy Speaker.

Dr DEBORAH RUSSELL (Labour—New Lynn): New Zealand is a small place. We all know each other—in fact, somewhat worryingly, we might even all be related to each other—and it has its problems. But one of the things that the smallness of our community entails is that it’s easy to connect. It’s easy to cooperate. It’s easy to collude, and that’s when you get a cartel.

On this side of the House, we support that connection, we support the cooperation, but we draw a line at collusion, and it’s a firm line. That is behaviour that we think must be illegal, and it’s behaviour that in some circumstances warrants being criminalised. That is why we have brought this bill to the House—to stop collusion. What we’re talking about here is cartels—about groups of businesses colluding to price fix, to restrict output, and to allocate the market in particular ways, all in order to get a greater profit for themselves. It’s business misbehaviour.

As members on the opposite side of the House have pointed out, business misbehaviour is usually just a civil matter—something that’s dealt with by a fine, a penalty, maybe a period of time when you’re barred from trading. That is what a civil penalty is for; it’s because it’s not criminal activity. But there is something a little bit more when it comes to collusion, and that’s because collusion is not just a civil matter; it is a moral matter, and it is a moral matter because it is theft. That is why collusion needs to be criminalised.

It’s interesting how this collusion can come about. I was very, very interested to listen to what Mr Carter had to say about the National Animal Identification and Tracing Act 2012, where it seemed that, almost inadvertently, stock companies had talked to each other, they’d arranged a few things, and in that way they had come to cooperate in such a way that it became collusion. In fact, the word that Mr Carter used was “inadvertent”, and that does happen. It’s a known phenomenon, a known psychological phenomenon, something that’s studied in depth in game theory—the ongoing tit for tat, where people develop a strategy of cooperating with each other until, in fact, they are colluding. It is done inadvertently, and that’s where you would have a civil penalty. We’ve got civil penalties for that kind of inadvertent behaviour. We’ve already said—and, in fact, it’s in the legislation already—that in terms of the civil penalty, it’s a fine of up to $500,000 for a person who’s involved in cartel activity and $10 million for a company.

But we need a stiffer penalty, and it’s a much more serious penalty where intent is involved; where people set out to defraud, to steal, to price fix, to market allocate, to take money from their fellow citizens and enrich themselves, to undermine the market—the market in which members on the other side of the House so often profess to believe. Only when it suits them, it turns out. One of the things about this collusion is that it’s very hard to see. The people from whom money is stolen are dispersed. It’s often individual consumers who perhaps pay only a small amount each, but the effect is large. Again, that is why this needs to be criminal behaviour.

But imprisonment—imprisonment is a harsh penalty. Normally, we think that it would be a good idea to keep people out of prisons. Normally, we don’t like to incarcerate people. Taking away someone’s freedom is the most serious punishment we can have in this country. So why on earth would we do this? Why would a civil penalty not be sufficient?

Interestingly, members on the other side of the House gave us this answer themselves. They were the ones who made the point, and I think it was Mr Bayly who said that there were hundreds of cases under the law as it stands. Surely that proves, if there are hundreds of cases, that the law is not working, that the law doesn’t have a sufficient penalty? It seems that existing businesses regard those fines and penalties just as a cost of doing business. They can stand a fine of a few hundred thousand dollars if it gives them a much better market position. So we need to find a way to signal clearly to businesses that they must not engage in this behaviour. We need a serious penalty, and that is the criminal legislation—the penalty that we are putting in place.

The theme was echoed by Mr Yule, who said that there was no robust case for this legislation. But if there is no robust case for this legislation, why is Mr Bayly telling us that there are, in fact, hundreds of cases? It would be pleasant if the members on the other side of the House actually cooperated at least a little to sort their arguments out.

Mr Bayly also said that we were introducing a very, very grey area into the law; that we were just incentivising lawyers—we’d give them a great new moneymaking field. Mrs Kuriger said that we were walking a tightrope, that we were making things very difficult for businesses. You know what? It is difficult. It is hard. Being in business is a difficult game, but just because it’s difficult doesn’t mean you’re allowed to be criminal in your behaviour. So we actually need to make sure we penalise the behaviour.

Mrs Kuriger also raised another issue that I thought was very interesting. She talked about the compliance costs that businesses would bear because of this change in the law. But may I point out that businesses already bear these compliance costs? There are already civil penalties in the law. Businesses are already required to assess whether or not their behaviour is acceptable under the law. The difference is they seem to have ignored it; that’s why we need to have the criminal penalty. And let’s be quite clear. This legislation has measures within it designed to reduce those compliance costs. A business may go and seek clearance to ensure that their behaviour does not fall within the bounds of this law. They can get clearance in advance for their connected, collaborative activity. They just may not collude—that’s the difference.

There is something else that I really want to draw out in respect of this legislation. On this side of the House we have talked about the cost to consumers of collusion between big businesses. We’ve talked about how each of us as individual consumers ends up paying a higher price because of collusion, because of cartel behaviour. But it is not just us as consumers who pay this higher price. The businesses who collude, who engage in cartel activity, don’t just steal from consumers; they also steal from honest businesses. They steal from businesses who want to play by the rules. They steal from businesses who are doing the best they can and are playing within the law. You see, those businesses make reduced profits or less profits because some people cheat.

Let’s be quite clear: this legislation is about stopping the cheats, and the bill ought to be supported by the alleged party of business on the other side of the House. I put it to you that the true party of business is the party on this side of the House—the Labour Party—which seeks to ensure that honest businesses do well and that dishonest businesses are stopped in their behaviour. This is what this bill is about and it is why we should support it.

You know, we are hardly alone in doing this. Our major trading partners—countries that we normally like to compare ourselves with: Australia, the US, Canada, the UK, France, and Japan—have all got a criminal offence of collusion. There is no reason why we can’t do it too, and, indeed, it is something that supports ordinary people, and it supports ordinary honest business, so it’s hard to see that it’s an unusual provision that we’re putting in there. For these reasons—because we are supporting the honest businesses, because we are supporting the little people—I urge this House to support this bill.

A party vote was called for on the question, That the Commerce (Criminalisation of Cartels) Amendment Bill be now read a first time.

Ayes 63

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

Noes 56

New Zealand National 56.

Bill read a first time.

Bill referred to the Economic Development, Science and Innovation Committee.

Bills

Health Practitioners Competence Assurance Amendment Bill

First Reading

Hon Dr DAVID CLARK (Minister of Health): I move, That the Health Practitioners Competence Assurance Amendment Bill be now read a first time. I nominate the Health Committee to consider the bill.

The Health Practitioners Competence Assurance Act 2003 was groundbreaking legislation, acknowledged internationally as being significant for health professional regulation. With a focus on protecting public health and safety, the Act provides a consistent accountability regime for practitioners’ practice, conduct, and competence. Currently, there are 23 health professions regulated under the Act. The Act protects the health and safety of members of the public by ensuring health practitioners are competent and fit to practise their professions. In order to claim to be members of their profession, health practitioners must be suitably qualified and registered with an appropriate responsible authority, such as the Nursing Council of New Zealand.

There have been two reviews of the Act, an operational review and a policy review to explore the underlying principles of the Act. The reviews found that the Act was working well but that a number of improvements could be made. Sadly, these changes were not made under the previous Government’s watch.

This bill will implement recommendations arising from both reviews. In particular, the amendments will improve the operation of the Act through providing tangible evidence of responsible authorities’ performance, better visibility of decisions about health practitioner disciplinary proceedings, greater recognition of the importance of interdisciplinary collaboration and cooperation, and better workforce information.

I would now like to outline some of the key changes covered by the bill. The first change is the introduction of performance reviews for responsible authorities—that is, the authorities that register and certify the competence of health professionals within their scope of practice. Currently, there is no way for the public to be certain that responsible authorities are carrying out their functions as intended by the Act and regulating their respective professions to improve public safety. This bill will introduce five-yearly performance reviews for responsible authorities to provide the Crown and the public with an assurance that those authorities are carrying out their functions effectively and efficiently. These reviews would be carried out by independent reviewers against a set of indicators developed by the Ministry of Health in consultation with each responsible authority. The resulting reports will be published on the authorities’ websites.

Performance monitoring will enable continuous improvement within the regulatory system, make it easier to promote good practice, and increase consistency across responsible authorities’ policies and processes. This will assure the public that the regulatory framework for health professionals is operating as it should.

The second key change involves better information about disciplinary decisions. Currently, there is a limited amount of information available to the public about responsible authority decisions in relation to complaints about registered health practitioners and the processes for making those decisions. This bill will require responsible authorities to release information about decisions they have made on practitioner practice to the person who has notified them about concerns relating to a practitioner’s competence.

It will also require responsible authorities to develop policies that set out how they make decisions about releasing the names of health practitioners whose competence, fitness to practice, or conduct has been reviewed or investigated. Health practitioners whose conduct has failed to meet expected standards may be named when it is in the public interest, but this will be balanced with practitioners’ rights to privacy and natural justice.

Greater transparency about decision making will improve public confidence in the process. This approach is consistent with protocols followed by the Health and Disability Commissioner, the Health Practitioners Disciplinary Tribunal, and overseas regulatory authorities.

The third key change is to support better teamwork among health practitioners. Many complaints to the Health and Disability Commissioner arise from failures in teamwork and inter-professional communications. A cohesive team approach across the health and disability system is integral to public safety and achieving better health outcomes for New Zealanders. This bill will provide greater recognition of the importance of teamwork and inter-professional communications in order to support integrated healthcare for New Zealanders. Responsible authorities will be required to promote and facilitate interdisciplinary collaboration and cooperation in the delivery of health services. This will support the one-team approach of the New Zealand Health Strategy.

The fourth key change is to support better workforce information for health workforce planning and forecasting. Having good work information is critical to ensuring we have sufficient health professionals with the right skills in the areas where they are needed. This bill will give responsible authorities a legal mandate for collecting data, such as date of birth and place of employment, and providing this to the Ministry of Health to support workforce forecasting and modelling. This will enable better planning for developing the workforce that will meet New Zealand’s future health needs. Whenever workforce information is published, it will be anonymised or summarised to protect health professionals’ privacy.

This bill includes a number of other amendments that will clarify the operation of the Act, improve efficiency of processes, and ensure consistency with other legislation. These amendments include the following: clarification that responsible authorities can receive and act on information from members of the public about the practice, conduct, or competence of health practitioners; reducing the administrative burden of reporting relating to quality assurance activities; providing for the amalgamation of responsible authorities when it is in the public interest; and clarification that the responsible authorities are responsible for meeting the administrative costs of the Health Practitioners Disciplinary Tribunal.

In conclusion, public expectations, technology, and the way health services are delivered will continue to develop and change. Health legislation needs to keep pace with those changes. I must commend the previous Ministers for progressing the reviews as required by law, but we do need legislation to update our health law so that we can make sure that it’s up to date and fit for purpose. The amendments included in the Health Practitioners Competence Assurance Amendment Bill will contribute to delivering a flexible integrated health workforce, safe practice, and a regulatory system the public can count on. I commend this bill to the House.

Hon Dr JONATHAN COLEMAN (National—Northcote): Well, that wasn’t very lively, was it? I thought we had some sort of rule about reading speeches out in the House. I mean, that was delivered very much in the tone of a parent reading a bedtime story to a small child. I’d be very interested, if Dr Clark was able to throw aside his notes for a moment, if he could tell us anything about what was in that bill, because this is a very technical bill. It’s a tidy-up, effectively. It’s an amendment bill, and I’d like to say at the outset that the National Party will be supporting the Health Practitioners Competence Assurance Amendment Bill (HPCAA bill). As Dr Clark said, but probably can’t remember because he was just reading by rote, this was actually the result of two reviews into the original Act from 2003.

Those two reviews first looked at the implementation of the Act. That was the first one that was done, published in 2009, and that brought about a few legislative changes, which are incorporated in this bill. Then there was the strategic review in 2012. So this really is going to clarify a few points around the implementation of the bill and it will just make things a bit clearer, both for those responsible authorities who are administering it—there are 16 of them administering 22 professions—but also greater transparency for the public around how the professions are regulated.

But I will tell you what is concerning. It is, you know, I mean, you’d think a new Government would be pretty busy. You’d think there’d be a major agenda to push through, but this is all that they can bring to the House. What are we in? The third week of February. You’d think they’d have many more important things to do. You’d think they would want to really crack on with some serious legislation in terms of the health portfolio.

I mean, I was asking the Minister of Health today if he’d given any specific instructions around the establishment of a third medical school, because that is, of course, a matter that is of wide public interest. It’s a matter on which the health Minister, as the then Labour spokesman, made a number of statements. You know what he said when we asked him if he’d issued any plans around a third medical school? He said, “It’s not in the public interest to answer that.”—it’s not in the public interest.

ASSISTANT SPEAKER (Poto Williams): If I could just bring the member back to the substance of the bill.

Hon Dr JONATHAN COLEMAN: I must say, this bill is in the public interest, but I think there are matters that are more in the public interest than this particular one. It’d be interesting to see if there could be any further amendments to the bill. It will be interesting to see if the Minister brings any more legislation to the House, maybe describing any plans he might have in the health portfolio. Of course, often plans may just be the result of policies, which you then implement. They may not necessarily need legislation. But one of the things that could be amended, be here, and added in a Supplementary Order Paper in this Health Practitioners Competence Assurance Amendment Bill is that maybe the Minister might want to actually legislate for some changes that he may wish to make. Maybe he has some ideas other than those of the previous Government, and maybe there might be an opportunity at the committee stage for the Government to amend this bill, because by then I think the Minister may actually have had time to read it, and I’m sure, at the second reading, Madam Assistant Speaker will be far less generous than letting the Minister just come here and read his speech by rote. It’s very important that the Minister actually understands what he is spouting there—

Hon Dr David Clark: I raise a point of order, Madam Speaker. I think there is a well-established convention that where there are technical issues in the bill it is very important to have them read correctly into the record. I take offence at the Minister implying that I have not read the bill I’m bringing to the House and that I’m ignorant of it. That’s plainly not true.

Hon Dr JONATHAN COLEMAN: Speaking to the point of order, whether he’s ignorant or not is a debating point.

ASSISTANT SPEAKER (Poto Williams): Right, OK. [Interruption] No, we won’t have any more points of order on this matter. Do you have any more contribution to make?

Hon Dr JONATHAN COLEMAN: I do, actually—quite a bit. The great thing about this current health Minister is you bait the hook, you cast it out. I didn’t think we were going to get a bite, but he couldn’t help himself. He took it hook, line, and sinker, fell into the trap, and he’s getting up and telling us that he is not ignorant. Well, the one thing that is clear is that if he did know about what was in this bill, he wouldn’t have actually got up and read a speech by rote, which, of course, is very poor convention. He did do, though, when he was reading what was there, what he said, although he wouldn’t actually—

ASSISTANT SPEAKER (Poto Williams): Order! [Interruption] Order! Look, I have asked the member to come back to the substance of the bill. Can we?

Hon Dr JONATHAN COLEMAN: Madam Assistant Speaker, I was actually saying that what he read out was correct. It would have been better if he had spoken it, but actually his description of what is in the bill—even though he doesn’t understand it, quite clearly—is actually correct. But, look, it’s very important that the public can have confidence in the standards of practice of health professionals in New Zealand. They’ll soon learn that they can’t have confidence in this new Minister of Health, but they will be able to maintain full confidence in New Zealand’s health professionals, because we do have excellent health professionals in this country, but it is important that the public is protected.

What I’m really disappointed about is, as I’ve known for the past four months, it’s quite clear by the presence of this legislation in the House today that the Government has no pressing legislation that they want to push through this House, and they’re resorting to scraping the bottom of the barrel, looking for the scraps and the leftovers that the National Government left them as we departed office, and they’ve thought, “Gee, we’ve got to fill this Order Paper up. Thank goodness, we can do that HPCAA bill. We’ve got something to talk about on a Tuesday night.” But I’m going to be really interested to see what they’ve got coming up after this. I’m sure the Labour research unit will be upstairs packing themselves, knowing that soon their members are going to be running out of material. But what we can say is, National will be supporting this bill.

Hon AUPITO WILLIAM SIO (Minister for Pacific Peoples): I’m happy to make a contribution to this bill, and I want to acknowledge the Minister of Health because not only has he produced a comprehensive bill to this House that incorporates the recommendations made in the reviews of 2009 and 2012, which they should have done something about but they did not—not only is the bill made available for the Opposition to see—but you also have a departmental disclosure statement as well as the regulatory impact statement, which I think will help members of the Opposition to make a meaningful contribution to this particular debate.

I think it’s important for the House to note that we are debating amendments to the 2003 Health Practitioners Competence Assurance Act, an Act that was introduced by a Labour Government, I might say, and an Act that, when it was introduced by a former Labour Government, was considered groundbreaking legislation and was recognised internationally as being significant for health regulation. The focus of the Act was about promoting and providing public health and safety, and it provided for consistency in accountability regimes for practitioners’ practice, conduct, and competence. The Act regulates, as my colleague the Hon Dr David Clark said, 23 health professions, and is considered as a significant piece of legislation aimed at protecting and providing public safety.

The Act does ensure health practitioners are competent and fit to practice their professions and requires that in order for people to claim to be members of their profession, they must be suitably qualified and registered within that particular authority for their particular profession. So the origins, as my colleagues have previously said, go back to the original review in 2009—and then again in 2012. The 2009 review found that the Act was generally operating as intended but recommended a number of legislative amendments to clarify the Act’s interpretation and improve its operation. The recommendations from the 2012 review aimed at providing tangible evidence of responsible authorities’ performance, better visibility of decisions about practitioners’ performance, greater recognition of the importance of interdisciplinary collaboration and cooperation, and better workforce information.

So the first change that this bill is introducing is the performance reviews of responsible authorities. Many of us that use our public health system or our health services often don’t know that there are these health practitioner authorities that register, and have an obligation to regulate, health practitioners—we don’t. From time to time, my office in Māngere has received a consistent flow of complaints. They’re complaints about our health system, and that occurred right through the nine long years that this Opposition were in power. The complaints were often about the lack of services or lack of accessibility of service, but from time to time I would often receive a complaint about how they were treated by a health practitioner.

Now, one of the things I learnt when I first came into Parliament was from the former Minister of Health Annette King, who said, “We don’t want to create an environment where we’re constantly blaming our health practitioners. We have to create an environment where our health practitioners can own up to mistakes that are made and look at making changes.” And so there’s a bit of a balancing act that has to be acquired—the right to make complaints, absolutely, but also the right to recognise that we’re all human and that we will make mistakes. But I think the challenge that we have—an ongoing challenge—is to make sure that the environment is such where people can own up to their mistakes and look for ways of improving. I would hate for our country and for our health systems to get to a point where—I’ve seen reports from other countries—they deliberately hide the mistakes that are made and only years after do we ever find out about it.

So the authorities that register and certify the competence of these health practitioners, they will now be under a regime where their performance and them taking greater responsibility for ensuring that the health practitioners are carrying out their functions as intended by the Act—are actually able to do that. The bill introduces five-yearly performance reviews for responsible authorities—and I’m talking about authorities such as the Nursing Council of New Zealand and other medical groups. This will provide the Crown and the public assurances that these authorities—which we are asking them to—take on board the watchdog role on our behalf. And so it gives us some assurances that these authorities are carrying out their functions effectively and efficiently.

The reviews will be conducted, as I understand, by independent reviewers. Those reviews will be against a set of indicators developed by the Ministry of Health in consultation with each of those responsible authorities. The resulting reports from these reviews will be published on the authorities’ websites, which is the same thing that the Education Review Office does when they conduct reviews of our schools and our educational facilities. Those reports are often published on each of those schools, and that gives us some confidence about what is happening within those organisations. So this performance monitoring will enable continuous improvement within the regulatory system, and I think it will make it easier to promote good practice and increase the consistency across the board within these responsible authorities.

So the second change is making information about an authority’s decisions or orders about disciplinary decisions more widely available. This goes back to my previous point that the public has to have confidence that our health practitioners are competent and have the ability to be able to carry out the practice to make sure that people are safe. Making information about the authorities’ decisions and orders—particularly when somebody has been disciplined, making that available is going to be important. Currently, limited information is available to the public. The bill will require authorities to release information about decisions on practitioner practice to the person who has, firstly, notified them about the concerns, and it would also require authorities to develop policies that set out how they make their decisions about releasing the names of health practitioners whose competence or fitness to practice or conduct has been reviewed or investigated, and the names of health practitioners whose conduct has failed to meet the expected standards may be named when it is in the public interest.

I note that with the Law Society, when they discipline somebody, that is made publicly available. We see it in the newspapers, and sometimes they won’t reveal the name of the lawyer that has been disciplined, but, certainly, having that information, knowing that, really gives the public confidence in the role that these authorities play. It also gives us confidence about the people who are charged with the responsibility to provide health and protection to our general public.

There is one other thing that I wanted to just point out, and that is that in the regulatory impact statement there are five recommendations that are pointed out there. There is one that makes reference to changes to enable interdisciplinary communication, and the point that was made there is that often mistakes are made because there’s the lack of communication between the practitioners that are dealing with one patient. Now, that makes sense, because here in this place we all are trying to get the Government to provide this whole-of-Government approach to service our families—

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

MATT DOOCEY (National—Waimakariri): Oh, what a disappointment, Madam Assistant Speaker, I must say. In fairness to that member who just sat down, Aupito William Sio, I do enjoy when he gets up and speaks. It’s just his tone: it’s so welcoming, it draws you in, and just for a glimpse, a fraction of a moment, you believe him, until you realise his stories are very much like the fisherman’s tales and they get bigger and they get bigger and then you realise that all he is is just a great storyteller.

It’ll please the House to say that I won’t take much of its time up. I’ll be very brief. This is a technical bill. What I’m looking forward to, as I look over at the Government backbenchers and see the whites of their eyes—who would have looked over this technical bill on the weekend and thought, “Oh, that’s OK—only a couple of minutes.” And then today, the chief whip of the Government would have come in and said, “Righto, 10 minutes”—10 minutes—and they’re all thinking “How am I going to speak on this for 10 minutes?” So we’re looking forward to that. We’ll be watching. And what’s really good in the House is that Hansard records everything and those speeches will be locked in for life as part of your parliamentary record and your history—back to the bill.

This bill is at the heart of our health system, and for someone who’s worked over two health systems—one here and one in the UK—I must say what a great health system we do have. The trust and the confidence our public has in our health system—and, really, that is primarily to do with our health professionals. They are hard-working and committed. In a field I used to work in, in mental health, where you don’t have much consumables and you don’t have much technology, you strip it back and all it is to do with is the health professionals. So what we need to do is make sure that that trust and that confidence are at the heart of our health system and the quality assurance.

Now, this bill will pass in the first reading, so what I want to do is just quickly outline three key points that I think in the select committee we need to look at. The first is: how do we ensure that as much of this information that gets collated around competency, fitness to practise, and scope of practice is available to the public? There’s a real issue around information in health being asymmetrical, where it’s only the provider’s side that holds on to it, and I think that by giving the consumers more information it provides more trust and confidence. The second is: how do we ensure in this bill that the mechanisms are in place that they will intervene quickly when there is an issue around competence, scope, and fitness to practise? And, finally: how do we make sure the data we collect is shared appropriately to make sure those mechanisms come in at the right pace and, equally, shared upwards to inform workforce planning? Thank you very much, Madam Assistant Speaker.

JENNY MARCROFT (NZ First): Thank you, Madam Assistant Speaker, and thank you for the opportunity to stand and speak on behalf of New Zealand First on the Health Practitioners Competence Assurance Amendment Bill. New Zealand First will support this bill and would like to also congratulate the Minister of Health for finally getting these much-needed amendments before the House. So we acknowledge you, the Hon Dr David Clark, on doing that.

Now, these amendments have been through a number of reviews and have been widely discussed amongst the public and with various health practitioners and the regulatory bodies that are affected, but they have languished for years. Somehow, the amendments seem to have suffered the same fate as the previous Minister’s leadership aspirations. We waited a long time for this legislation to come before the House, and it’s a credit to the new Minister that he has managed to get things moving quickly.

One of the most treasured aspects of our accident compensation scheme is that we don’t have great piles of litigation by tort lawyers clogging up our courts, suing doctors and medical institutions. Under ACC, we have a no-fault basis, which means, in most cases, we have forgone our privilege to sue at-fault parties. Now, the flipside of this, though, is that we better make sure that anyone practising medicine is a competent professional who knows exactly what they’re doing. That is why New Zealand First strongly supports getting the Health Practitioners Competence Assurance Amendment Bill passed into law.

The Health Practitioners Competence Assurance Act 2003 provided a framework for the regulation of health practitioners. The law is designed to protect the public by preventing unqualified people from claiming that they’re registered practitioners. It regulates those health professionals where there is a risk of harm from malpractice. It doesn’t regulate professions considered to have low risk of harm, like traditional Chinese medicine, for example.

The Act also established separate regulatory authorities, like the Medical Council of New Zealand to enact legislation for each group of health practitioners. The associations cover chiropractors, dentists, dietitians, radiographers, doctors, midwives, nurses, occupational therapists, optometrists, osteopaths, pharmacists, physiotherapists, podiatrists, psychologists, and psychotherapists, and these health practitioner authorities were tasked with describing their provisions and scopes of practice and determining what qualifications are appropriate. They were also required to register and issue practising certificates, review and promote ongoing professional competence, and judge whether practitioners are unfit to practice by establishing professional conduct committees to investigate misconduct and set the standards for clinical and cultural competence and ethical conduct. This is why this Act is such a critical part of the health system in New Zealand. This is where the rubber hits the road when it comes to whether we can trust the health system is safe for all of our fellow citizens.

What the amendments are seeking to do is make sure that the Act is working and that it can be seen to be working. We want to know that the responsible authorities are performing and that their decisions are visible and clearly understood. By adopting many of the suggestions in the 2009 and 2012 operational reviews, we believe the amendments will ensure the various professional associations will be much more transparent with the decisions that they make. The amendments also encourage the various health disciplines to collaborate so that there is more information about the people providing the health services. It is long overdue.

Now, more specifically, the amendments will require the health practitioner authorities to develop naming policies that will determine the circumstances in which practitioners whose competence has been investigated by the authorities are published. Furthermore, we want people who may be affected or professionally interested parties to be notified about these decisions.

The bill also requires the professional associations to provide the Director-General of Health professional and basic personal information about registered health professionals. This will help with workforce planning and development. As part of the drive to produce clear evidence that the associations are meeting their expectations, regular performance reviews will be undertaken, and these reviews will also encourage the various authorities to collaborate with the others. The bill also requires the authorities to fund the general administration costs of the Health Practitioners Disciplinary Tribunal.

New Zealand First generally supports the amendments, but we do have a few concerns, and we hope that these could be ironed out in select committee. The Act still doesn’t prevent unregistered practitioners from setting up shop and offering health services outside the associations, so we’d like to see if an ambulance can be placed at the top of that particular cliff. We also want to make sure that health-associated occupations that, on the face of it, carry a low level of risk are not exempt from the regulations if there are indeed real risks in carrying out their services. Now, take an example of the beauty therapy industry injecting facial filler. That’s now quite common, but it does have the potential to cause blindness and blood clots if the beauty therapist is incompetent. Beauty therapy does carry serious risks, and the public should feel confident that the therapists are in fact well-trained.

New Zealand First would also like to look at the status of paramedics and where they fit within the framework of this legislation. In fact, we know that the paramedics themselves want this to happen. Paramedics Australasia is the professional body representing paramedics in New Zealand and Australia. They want the title “paramedic” to be protected in New Zealand law so that it can be used by those who have attained a nationally recognised standard of training. Now, it’s pretty obvious that a paramedic who hasn’t been properly trained poses a serious risk. Paramedics—they’re the first responders and usually the people that are there in those vital minutes between an incident and hospital. At some point, it is likely that paramedics will be regulated under the Health Practitioners Competence Assurance Act, and we would like to see this happen.

We’re also concerned that some practitioners who provide services to the disabled—the people providing the various services are subject to the Code of Health and Disability Services Consumers’ Rights whether they’re regulated or not, and the trouble is that if something goes wrong, some practitioners may not belong to a professional body that can take action. Home-care workers may not pose a significant risk, but people receiving care should be entitled to know that the caregivers are capable. So a wider discussion on who needs to be regulated and how we regulate health professionals in New Zealand should be had, but we believe this could be achieved during the select committee process.

So, in conclusion, New Zealand First supports the Health Practitioners Competence Assurance Amendment Bill. Kia ora.

Dr SHANE RETI (National—Whangarei): Thank you, Madam Assistant Speaker. It’s a pleasure to offer a few comments on this bill, the Health Practitioners Competence Assurance Amendment Bill. As I look around the House, there’s probably a few practitioners who will be directly applicable to this bill, myself included, and I think we have that unified voice to progress this legislation along.

The legislation primarily reviews the strategic review from 2012. In 2003, the Act came in. There was a review in 2009, and then in 2012. Fundamentally, there were five recommendations coming from that review, as is shown in the regulatory impact statement. The first recommendation was a five-yearly performance review of the authorities. The second recommendation was for the responsible authorities to make their findings public. The third was for the responsible authorities to set standards of skills. The fourth was to include a statement in the Act aligned to the purpose, which is around transparency, and really, fundamentally, the fifth recommendation was to require collection of workforce data.

Now, that was the 2012 review. The regulatory impact statement (RIS) came out in November 2015. From then till a few weeks ago, when the departmental disclosure statement came out, there have been three additions to that, which I just want to touch on. First of all, what has been added since the RIS came out is (1) a defence of “without reasonable excuse” has been incorporated into new section 92A in clause 16 and section 95 in clause 19; (2) the bill now includes a penalty in new section 92A; (3) the proposed amendment to the Act to have regard to the importance of principles and transparency; and the fourth recommendation has actually been incorporated in other legislation.

So I really just wanted to highlight very briefly the main recommendations coming out of the review, as per the regulatory impact statement, and the new ones that have been added since then, in the departmental disclosure statement. We’re looking forward to this bill going to select committee. Thank you.

Hon JULIE ANNE GENTER (Green): Tēnā koe, Madam Assistant Speaker. Tēnā koutou e Te Whare. I am very happy to be speaking on this bill this evening, the Health Practitioners Competence Assurance Amendment Bill. What I will note, just in response to remarks made by the Hon Jonathan Coleman at the beginning of this debate, who was complaining that the bill is technical in nature and asking why the Government doesn’t have more substantive bills in the House—actually, I think that this says a lot about the previous Government. This Government has come in and we do have a lot of substantive work that we need to do, and the process of good lawmaking is such that you can’t just rush legislation to the House. We actually have our work cut out for us in order to—

Hon Nicky Wagner: Nine years.

Hon JULIE ANNE GENTER: No, actually, nine years in Opposition, Nicky Wagner. You may not realise you’re not in control of the Government departments, who actually have to go out and consult and do the work. And, of course, the Government departments have been horrifically run down by the previous National Government—totally under-resourced—and haven’t been able to do the good policy work that this Government is planning to do. So here we are. We’ve got a mountain of excellent policy work being done, and it’s going to take some time to get robust, well done legislation before the House, but in the interim we can finally catch up on the housekeeping that the National Government never got around to.

Perhaps, if the National Government actually had acted on this minor, technical amendment bill earlier—because there were two reviews, of course. The first review was back in 2007—

Hon Nicky Wagner: 2009.

Hon JULIE ANNE GENTER: —and there were a number of changes recommended—2007 to 2009 there was a review, and by the end of 2009 there were a number of operational amendments that needed to be made. But then, instead of making those amendments, we had to wait till there was a substantive policy review in 2012—2012. That was six years ago. What was the last National Government doing? Why didn’t they get these changes made? If they support them, and they were important changes—perhaps, if they’d made these changes, particularly around the workforce planning, so that the Ministry of Health was able to collect good data on the workforce, we wouldn’t be having the crisis that we’re having across many areas in the health system right now. Like, for example, midwives—it’s pretty clear that there hasn’t been sufficient workforce planning around midwives and a whole raft of other professions in the health sector.

So now this Government, which is absolutely committed to finally fixing the problems with our health system, is left with quite an enormous task of having to do the work that the last National Government didn’t do and to make up for nine years of underfunding our core public services. We’re seeing every day—I think there’s going to be another front-page story about a crisis in midwives, that there aren’t enough. And, of course, as many people in the Chamber will know, suddenly I’m very, very interested, personally, in the availability of midwives. Going through the public system, I am very much aware that the Auckland District Health Board (DHB) is struggling, but there are stories around the country of there not being enough midwives, and we know that there is a significant number of workforce planning issues that could have been dealt with if this bill had been progressed under the last Government. Well, luckily, it is going to be progressed now.

Speaking to the specifics of the workforce data and how that’s going to work, basically what this bill does is it has to do with the responsible authorities for different aspects of the professional bodies in the health sector. This bill will give those responsible authorities a legal mandate to collect a range of data, which will help the Ministry of Health to support workforce forecasting and modelling. This will assist better planning for developing the workforce required in order to deliver on New Zealand’s future health needs.

Given that we have a population that’s growing very rapidly in some parts of the country, particularly in Auckland, it’s extremely important that the Ministry of Health is able to have the data on what is happening in our workforce so that we can be planning, ensuring that there are the right places at university and other tertiary education providers and that we have the right immigration settings so that we’re able to prioritise those professionals who we have a significant lack of here in New Zealand, and so that we can be forecasting and modelling the budgets that are going to be required to ensure that we have training places. For example, we have a shortage of nurses in many parts of the country. There are unfilled vacancies in many of our DHBs, and yet there are graduate nurses who come out and they don’t have places for their first year. There aren’t enough jobs for them. So we need to be able to match up Government policy and funding to ensure that we have the pipeline of jobs available for graduates so that they can advance, and then we have qualified nurses. It’s not rocket science, but there is a lot of work to do because of nine years of mismanagement. It’s important to note that wherever workforce information is published, it will be anonymised or summarised to protect individual identity, so the Privacy Commissioner is across this.

The bill is also aiming to support better teamwork amongst health practitioners, and I think this is something that we could all really benefit from. I know that an integrated health approach will often be more than just a GP by themselves or a specialist by themselves. We actually need to have an integrated approach where you might have the GP working alongside a midwife, for example, or a GP working alongside physiotherapists and psychologists. They can get quite good outcomes when it comes to things like pain management simply by taking a much more integrated approach. Many complaints to the Health and Disability Commissioner arise from failures in teamwork and inter-professional communications, so this bill supports a one-team approach under the current New Zealand Health Strategy. I think that’s definitely going to be a benefit.

The previous speaker, Dr Shane Reti, gave a very short speech, unfortunately, but it was very accurate, and he summarised the five recommendations that came from the second review of this legislation. So I don’t know that I need to go through all the specific details of that, but people at home might be interested that the bill will also introduce performance reviews for responsible authorities. Those are the ones who register and certify the competence of health professionals. Currently, there’s no way for the public to be sure these authorities are carrying out their function as intended by the Health Practitioners Competence Assurance Act, and so this bill introduces a five-yearly performance review for those responsible authorities. This provides the Crown and the public the assurance that the responsible authorities are discharging their functions as they should be.

Reviews are going to be done by independent reviewers, assessed against indicators developed by the Ministry of Health in consultation with responsible authorities, and they’ll be publicly accessible on the responsible authorities’ websites. Monitoring performance will allow for continuous improvement within regulatory frameworks. This will make it easier to promote good practice and increase consistency across the responsible authorities’ policies and processes, because at the moment there isn’t that consistency, necessarily.

Information about disciplinary decisions will be public. At the moment, the public has limited information about decisions that are related to complaints about registered health practitioners and the process that was used for making those decisions. This bill will require responsible authorities to release information about the decisions they make on a practice to the person who has notified them with concerns about the practitioner’s competence.

All in all, I think probably the most important part of this bill, and why it’s so critical, is the ability for the Ministry of Health to collect that data for the purposes of workforce planning.

I think it is going to take a long time. I mean, if there’s one thing that I’ve realised since becoming part of this fantastic Government, it’s that it’s going to take a certain amount of time for us to undo the damage of the last nine years and to build back up the Public Service to where it should be. It’s going to take time for us to get robust, quality legislation that is evidence-based, ready to be in front of the House, and it’s going to take time to build up the capacity of our health sector, in particular. It breaks my heart to have to say to people that there’s no quick fix to this midwife crisis—there is no quick fix—but it’s something that we’re absolutely committed to fixing over time, and we will be involving all of those in New Zealand who are working in this sector, listening to their views, and ensuring that they are taken into account. Thank you, Madam Assistant Speaker.

Hon NICKY WAGNER (National): Thank you very much, Madam Assistant Speaker. This bill, it focuses on ensuring public confidence and trust in our health professionals. It’s designed to protect the health and safety of New Zealanders by providing a mechanism to make sure that our health professionals are competent and that they are fit to practise their professions. As has already been mentioned, it implements practical recommendations from two reviews over the original 2003 Act. It’s a mostly technical and procedural bill and it really tidies up about 14 different provisions.

National is very happy to support this bill, because it is another example of the coalition Government bringing our legislation into law. The bill provides for a number of operational efficiencies, but I think its real strength is about engaging and ensuring and encouraging new ways for health practitioners to work. It requires an authority to promote and facilitate interdisciplinary collaboration and cooperation in the delivering of health services, and it wants health professionals to work collaboratively to assist with workplace planning and development. So, overall, it supports a more sustainable, integrated, more convenient and patient-centred health system, and we support this bill. Thank you.

ASSISTANT SPEAKER (Poto Williams): I call Angie Warren-Clark. I understand this is a split call. You have five minutes.

ANGIE WARREN-CLARK (Labour): Thank you, Madam Assistant Speaker. I’m delighted tonight to take a call on the Health Practitioners Competence Assurance Amendment Bill. You may note tonight that I rise having a bit of a chesty cough. I apologise in advance for any unseemly coughing during this call tonight.

Hon Michael Woodhouse: Do you know a good health practitioner?

ANGIE WARREN-CLARK: Ha, ha—health practitioners bill. The Health Practitioners Competence Assurance Act 2003 was ground-breaking at the time of creation. The focus on protecting public health and safety by providing a consistent accountability regime for practitioners’ practice, conduct, and competence was and still remains crucial to public perception of health and to practice within our health system. We have heard tonight from the Government on the reasons this bill is useful and that this bill is a response to the operational and policy reviews carried out in 2009 and 2012. Those reviews found that the principal Act was working primarily well but that improvements could be made. This bill implements those recommendations.

What we have heard tonight is very little from the Opposition. We’ve hardly heard a thing, actually, about this bill. We’ve heard short calls, we’ve heard the tired old song that this was on National’s agenda and that this bill is their work, etc., etc. Well, that’s really a joke. We are here progressing this legislation because it is needed to keep pace with the changing face of our health system. In 2009 and 2012, you missed your chance to put people at the heart of our health system. Health is something that affects all people in this country, and here is a perfect example of nine long years of ignoring good advice in the health system.

I’d like to focus tonight on some of the key changes. Many key changes have been traversed by colleagues across the House, and I’d like to focus on the aspect of public trust and confidence. Justice must not only be done but it must also be seen to be done. This bill proposes changing the principal Act to improve information to the public about disciplinary decisions—in short, what happens to complaints about registered health practitioners. Essentially, information will be released to the complainant or the person who has notified the responsible body about the concern relating to the practitioner’s competence. Why is this important? Quite simply, complaints made or concerns raised deserve a feedback loop. The public or the person with the complaint needs to know that the concern was taken seriously. Mistrust exists where there is no or very limited response. This bill addresses this issue.

Crucial to this process, though, is that the relevant responsible authority must also develop policies to support natural justice and the practitioner’s right to privacy. So there is a fine balance to support transparency of outcome versus the individual’s rights. This bill also ensures that where sanctions are in place and are addressing the conduct and practice, that information is given to the practitioner, it’s given to who they are practising with and their employer—really key and important to have that feedback loop happening. I commend this bill to the House.

Hon TIM MACINDOE (National—Hamilton West): Kia orana, Madam Assistant Speaker. Please indulge me for 15 seconds, first, to congratulate you on your superb performance in the Coast to Coast recently, and also to congratulate Julie Anne Genter and her partner on the wonderful news that they shared with the nation at the weekend. I have to say I was really excited. Despite whatever else I may have done in my career, I still think that being a parent is the most exciting and the most important job, and I wish them all the very best.

For the reasons that have been articulated by my National Party colleagues, I have great pleasure in supporting this bill.

ANAHILA KANONGATA’A-SUISUIKI (Labour): Tēnā koe, Madam Assistant Speaker. Kia orana. It’s a privilege to stand and speak on the first reading of the Health Practitioners Competence Assurance Amendment Bill. Can I remind the House—because we’ve heard a lot of accolades being accorded to the Opposition in terms of this being their idea—that the Health Practitioners Competence Assurance Act came in in 2003, and, according to the Hon Aupito Su’a William Sio, I understand that it was a Labour Government that brought in this Health Practitioners Competence Assurance Act in 2003.

Can I remind the House that the purpose of the Health Practitioners Competence Assurance Act of 2003 is to “protect the health and safety of members of the public by providing for mechanisms to ensure that health practitioners are competent and fit to practise their professions.” So it’s not a mere technicality, which some of the people on the other side spoke about, as in “It’s technical and it’s not important.” The purpose of this Health Practitioners Competence Assurance Amendment Bill implements the recommendations, as has been spoken of, of 2009 and 2012. It repeals the Health Practitioners Competence Assurance 2003, as I’ve spoken about.

My conversation tonight is about the changes that this will bring about, but before I do that, I want to talk about a personal experience I had yesterday in terms of entering the health system. I don’t have medical health insurance because I believe that we have one of the best health systems in the world. That’s why I don’t have medical health insurance.

So yesterday—I just want to acknowledge the cervical screening system in New Zealand, where women get a notice about when they’re due for a cervical screening. So yesterday, it was my turn. I got my notice—time to screen—so I took my health as a priority, just like it’s a priority for this Government to ensure that New Zealand’s health is provided for by practitioners that are credible through a system that ensures that those people who say they are practitioners are also credible. So I went into my GP to get my cervical screening done.

I’m not sure about the male gender of this House—about how they might feel about the vulnerability one has when you’re going into the general practitioner to conduct a smear test. When you are in the presence—I was advised when I first went for the screening, actually when I first had a child, that you leave your modesty at the front door and you pick it up on your way out. Yeah, you pick it up on your way out—when you leave. But what they don’t tell you when you do that is what happens—who is the person who is in charge of you?

You are so vulnerable. You want to ensure—which is what this amendment brings about. You want to ensure that when you’re at your most vulnerable—we have one life, and health is important. If we don’t have good health, actually, we can’t live as normal human beings.

So what we want to know when we’re going in to see our doctor is (1) that they know what they’re doing, (2) that there’s an authority that tells us that these people know what they’re doing, (3) that there’s a place that we can complain to when we feel that this practitioner is not providing a service that is a credible service, and (4) that there is a place that has authenticated a practitioner to be a credible practitioner—that they actually too have a health check. So I see this amendment, the Health Practitioners Competence Assurance Amendment Bill, as a health check of (1) the practitioner, (2) a health check of the system, and (3) a health check of those authorities that are charged with ticking that my GP actually meets all the qualifications to have a look at every part of me when I’m leaving the modesty at the front door.

So the things that this amendment will do—I think I’ve spoken enough about my personal experience. And, might I say, my doctor, Dr Soshamma George at the Mt Wellington Family Health Centre, did a wonderful job, because while I was at it, she said, “OK, while you’re here, we’ll get your annual warrant of fitness check done.” So we got my warrant of fitness done—tick, tick, tick, tick, tick—and, well, I think that I trust that every general practitioner does that to everyone. When you’re going in to just see one thing, she’ll see that you haven’t done your bloods and everything else, and they’ll say, “Oh, while you’re here, we’ll do that as well.”

So what the recommendations of the 2012 strategic review aimed at providing were (1) tangible evidence of responsible authorities’ performance, (2) better visibility of decisions about practitioner practice, (3) greater recognition of the importance of interdisciplinary collaboration and cooperation, and (4) better workforce information.

I just want to start by talking about tangible evidence of responsible authorities. It talks about the responsibilities of authorities—those who register and certify the competence of those health professionals. Currently, there is no way for the public to be assured that these authorities are carrying out their functions as intended by the Act. So the bill will introduce a five-yearly performance review for these responsible authorities. Not only just that, but the bill will allow the review to be conducted by independent reviewers, who are assessing it against the indicators developed by the Ministry of Health in consultation with the responsible authorities.

I reckon the underpinning aim of this bill is that the health profession or the health sector should not work in isolation, in terms of providing measures to make sure that those people, that those agencies who are to certify the health professions are actually reviewed by independent people that we can trust and rely on their recommendations once they’ve done the review.

The second point is about the better visibility of decisions about practitioner practice. As a registered social worker, I have a competency certificate that says that I can practise as a social worker in this country. I went through a whole process to get to that place. So I speak from a place of understanding, bringing an insight of what one needs to do to be competent, to be clear, and that’s certified to be a confident practitioner.

So what this bill will do is it will ensure better information about disciplinary decisions. At the moment, the public has limited information about responsible authority decisions as they relate to complaints about registered health practitioners and the process for making these decisions. The bill will require responsible authorities to release information about decisions they make on practitioner practice to the person who has notified them about the concerns about the practitioner’s competence. So basically, what that means is that if I make a complaint about my GP, I get the information about what’s happening with the complaint. So that is about continuing on what the aim of this Government—the direction this Government is going in. It is about transparent government, which means a transparent health sector, and that’s what this amendment intends to do.

Ultimately, the greater transparency about decision making will improve public confidence in the process of responsible authorities and is consistent with protocols followed by the Health and Disability Commissioner and overseas regulatory authorities. What I also like about the amendments to this bill is that the authorities that had—I’ll just get that one through before my time is up, because I think it’s important. It clarifies that the responsible authorities are responsible for meeting the administrative cost of the Health Practitioners Disciplinary Tribunal. So that would mean that the cost, in terms of the practitioner, will be fair and that actually the responsibility of the cost lies with the health practitioner’s authority.

IAN McKELVIE (National—Rangitīkei): Thank you, Madam Assistant Speaker. It won’t take a lot of time for me to support this bill. If you took the nine minutes of window dressing off the last speech, basically, I agree with a lot of what Angie Warren-Clark said.

As one of those whose association with the health system becomes more frequent by the year, I’m very much in support of this bill. I trust my health professional, I believe in what they say, and I hope what they tell me is right. If it’s not right, then I’m in trouble.

So I think the premise of this bill’s pretty good, and as a consequence of that, I support it as it goes through the House. I think that we all need safeguards, and for those of us who rely on the health system, even though we think we don’t, it’s critically important that it’s right. So thank you, Madam Assistant Speaker. I commend this bill to the House.

Dr LIZ CRAIG (Labour): Thanks, Madam Assistant Speaker. It’s an absolute privilege to speak in some detail on this bill, which amends the Health Practitioners Competence Assurance Act 2003. This is actually an Act that I’ve practised under for the majority of my career.

As we know, the Act as it stands aims to protect the health and safety of members of the public by ensuring health practitioners are competent and fit to practise in their professions. What I want to talk about tonight briefly is just to go over why we need the Act in the first place, and then, secondly, a bit more about what this bill actually adds.

So why did we need the original Act? I want to think about three scenarios. I think the first one is John. So John’s recently moved to New Zealand. What he wants to do is he wants to earn a bit of money doing cut-price vasectomies. So it’s the Act that empowers responsible authorities, here the Medical Council of New Zealand, to decide what qualifications John needs before he can set up as a registered medical practitioner.

The other thing, though, is it’s also the Medical Council of New Zealand who’ll determine the scope of his practice, because, unfortunately, if John happens to be a psychiatrist who’s qualified in the United States, even if he gets registered here in New Zealand, it doesn’t actually mean that he can start performing surgical procedures out in our community.

Another scenario that’s governed by the Act: Susan qualified as a GP in 1980, and she’s been working as a sole practice practitioner and a rural GP all by herself for a number of years now, so she’s way, way too busy to be reading any medical journals and she hasn’t been able to go to any conferences. So what’s happening with Susan is she’s starting to lose touch with all those developments in terms of diagnosis and best treatment, and her patients really risk not getting access to the best of care. So, again, it’s the Act that empowers the Medical Council to make sure that Susan does some professional development, and also, if they’ve got concerns, they can require her to complete some competence or recertification programme. So it gives them the teeth to be able to do that.

The third scenario is Bob. Bob has been having a bit of trouble at home, and, as a result, he’s coming to work and he’s smelling of alcohol. On one occasion recently, they had to cancel his list because the operating theatre staff decided that he was not sober enough to actually practise. So it’s the Act that empowers the Medical Council to start taking complaints and receiving them from either concerned members of the public or other colleagues and then to refer them to professional conduct committees so they can have a proper look at it, and then, if they think it’s warranted, they can pass that on to the Health Practitioners Disciplinary Tribunal. So what this Act does is it makes sure that medical practitioners are competent to practise in our country and the public is assured that the relevant authorities have got oversight into all of those areas.

But then what does this bill do? What we want to start with is a bit of history. The Act was passed in Parliament in 2003 and it really came into full effect in 2004, and it now covers 23 health professionals. It includes medical practitioners—so, doctors overseen by the Medical Council—but also the nursing and midwifery councils, dental council, pharmacy council—a whole raft of practitioners. Section 171 of the original Act required that the director-general carried out a review of the Act in 2008, so that’s 10 years ago—just noting—and since then there’ve been two reviews. The first was completed in 2009, and that just looked at whether the Act was operating as intended. The second one, completed in 2012, was more policy focused, and it was really trying to work out whether the Act was still doing what it was meant to be doing given the changes in the health system. That reported back in 2012, and both of those reviews recommended a number of improvements. What they were saying was the Act was functioning as intended but they said there were areas that we needed to make a number of legislative changes on. So that was six long years ago, and, finally, we’ve got around to it as a result of an incoming coalition Government.

So there were four main areas where they recommended that changes were made, and the first one was making sure that responsible agencies could actually demonstrate that they were doing what they were meant to be doing. The second one was making sure that they were transparent in their processes so that those who referred concerns in and those people employing people that were being reviewed actually knew what was happening. The third one was looking at how we do interdisciplinary collaboration, because a lot of balls were getting dropped from passing from team to team, so looking at how we actually do seamless communication so things don’t get missed. The fourth one was looking at better workforce information, and I just want to go to each of those in a little bit more detail.

So the first one was looking at whether responsible authorities were actually doing what they were meant to be doing. What this Act introduces is five-yearly performance reviews for responsible authorities. These reviews will be conducted by independent reviewers but they’ll be assessed against independent criteria that are determined by the Ministry of Health, under consultation with the authorities. The whole aim there is to make those reports publicly available on the authorities’ websites so that people can be assured that they’re doing as intended.

The other one is greater information about disciplinary decisions, because sometimes it was a bit opaque about something getting referred to one of these authorities and then not quite knowing what happened to the complaint. It seems quite obvious, but what this bill requires is that responsible authorities have to release information about their decisions back to the person that notified the concern in the first place, and also in terms of their employer as well, because that’s quite pertinent information if you are employing somebody whose performance is under review.

The other issue is about publication of names of those undergoing disciplinary proceedings. You’ve got health practitioners who may have failed to meet standards, and the question is: are those names able to be released to the public, and in what way? I think even though medicine now is very, very much evidence-based, as a practitioner it’s still very much an art as well as a science. Basically, mistakes do get made, and, I guess, what we’re looking at here are not those one-off mistakes but those systematic mistakes that are going to make practitioners a risk to their patients. So it’s always the balance between the public’s right to know and public interest, and the practitioner’s rights for privacy and natural justice. What the bill requires is that the responsible authorities develop policies about how they’re going to notify, whether they’re going to name the health practitioners, and the reasons for those decisions, and put those up on their websites.

Inter-professional communication’s been touched on by a number of people, and this is an area where often it’s not individual practitioners that are making individual mistakes, but it’s where bits get missed in between handing over from one team to another—blood tests don’t get followed up, information’s not passed on about someone being at risk. So this is where the bill provides greater recognition for teamwork and inter-professional communication.

The fourth one is workforce data, and making sure that we’ve got the right data so we can have the right staff with the right skills in the right places at the right times. This is entirely feasible. Every year that I’ve had to renew my annual practising certificate, I’ve had to do a workforce survey, and all the stuff you put on your annual practising certificate renewal about your occupation and who you’re working for—that gets supplemented with how many hours you’ve worked and also what your intentions are for the next year of practice. So that information’s really valuable, but it’s not being collected consistently across all professions, so this bill gives the responsible authorities a legal mandate to collect that data and then to pass it on to the Ministry of Health to use for workforce planning. What will always be the assurance, though, for the privacy perspective—it’s always going to be presented as aggregates or anonymised data.

There’s a range of other changes that the bill proposes. Some of them are just straight clarification about the responsible authorities’ ability to receive complaints from members of the public. Some changes are about reducing administrative burden on reporting requirements for quality assurance procedures. Some changes allow amalgamation of responsible authorities when it’s useful, and some look at making sure that it’s very clear that the administrative costs of the Health Practitioners Disciplinary Tribunal are met by the responsible authorities.

So this is a really great bill, and it makes sure that those responsible for keeping our practitioners competent and practising to the top of their scope are also themselves under scrutiny. Therefore, I commend this bill to the House. Thank you.

Bill read a first time.

Bill referred to the Health Committee.

Sittings of the House

Sittings of the House

Hon CHRIS HIPKINS (Leader of the House): I think the House has made very good progress, and rather than start the remaining bill that we had down for this evening with one minute to go before the bell at 10 o’clock, I seek leave for the House to rise early for the evening.

ASSISTANT SPEAKER (Poto Williams): Leave is sought for that purpose. Is there any objection? There is objection.

Bills

Food Safety Law Reform Bill

Third Reading

Hon CHRIS HIPKINS (Leader of the House) on behalf of the Minister for Food Safety: I move, That the Food Safety Law Reform Bill be now read a third time.

I’m very pleased to be able to speak on this bill, on behalf of my colleague the Hon Damien O’Connor, which makes a range of improvements to the legislation that underpins our food safety system. This is an omnibus bill that amends the Food Act, the Animal Products Act, and the Wine Act to address the remaining issues raised by a recent inquiry. The House will recall my support—my support?—the Minister’s support—

Debate interrupted.

The House adjourned at 10 p.m.