Tuesday, 27 February 2018

TUESDAY, 27 FEBRUARY 2018

TUESDAY, 27 FEBRUARY 2018

The Speaker took the Chair at 2 p.m.

Karakia.

Privilege

New Zealand Bill of Rights Act—Declarations of Inconsistency

SPEAKER: I have received a letter from the Hon David Parker setting out a proposal to provide a statutory basis for the senior courts to issue declarations of inconsistency with the New Zealand Bill of Rights Act 1990 in respect of legislation.

The Attorney-General’s letter raises matters that warrant early consideration by the House. The provision of a statutory basis for the courts to make findings of inconsistency and the way Parliament might respond to such findings would have an impact on the relationship between courts and Parliament.

The matters raised in the letter are ones that should be looked at by the Privileges Committee. It has considered the relationship between the courts and Parliament in recent years and has the power to hear evidence and formulate recommendations for the House that will provide guidance for the future.

I have determined that the general question of privilege does arise in respect of this matter. The question therefore stands referred to the Privileges Committee.

Sittings of the House

Sittings of the House

Hon CHRIS HIPKINS (Leader of the House): I seek leave for the House to rise for the evening at the conclusion of the Rt Hon Bill English’s valedictory statement on Thursday. Reflecting on similar such events in the past, I think it’s unlikely the House will make much progress with the rest of the afternoon if we don’t follow that course of action.

SPEAKER: Is there any objection to that process being followed? There appears to be none. That will be the case.

Oral Questions

Questions to Ministers

Economy—Government Policies and Reports

1. PAUL EAGLE (Labour—Rongotai) to the Minister of Finance: What reports has he seen on the health of the New Zealand economy in the final quarter of 2017?

Hon Dr DAVID CLARK (Acting Minister of Finance): On Friday, Statistics New Zealand released retail sales data for the December 2017 quarter. It showed retail sales were up 1.7 percent after adjustments for prices and seasonal effects. This was higher than economists’ expectations. The rise was led by more people eating and drinking out away from home, obviously in good spirits as they celebrated the end of 2017 and looked forward to the new year and new beginnings.

Paul Eagle: How did economists react to the larger than expected growth in retail trade?

Hon Dr DAVID CLARK: ANZ economists revised forecasts for the December quarter up to a rate of 0.7 percent and an annual rate of 3.1 percent following the figures. Meanwhile, Kiwibank economists said the retail sales data looked supportive of respectable GDP growth. However, I would caution people against getting ahead of themselves due to other growth indicators for the December quarter being mixed. For example, dry weather conditions hampered dairy production during the three months, which may have had an impact on primary production output. [Interruption]

Paul Eagle: How will the new Government’s policies—

SPEAKER: Order! [Interruption] Order! A little bit of tolerance for the member today. The member will resume his seat. Ms Bennett, we had, I think, five people interjecting from your side, and two from the other. If we want a strict interpretation, we’d have one, but waving your arms at me is not a way to get it.

Paul Eagle: How will the new Government’s policies help support economic growth?

Hon Dr DAVID CLARK: Treasury forecasts growth in the current year to June 2018 of 2.9 percent, rising to 3.6 percent in 2019 and 3 percent in 2020. Treasury, the Reserve Bank, and other forecasters, including the international credit ratings agencies, all acknowledge that growth over the next four years will be supported by the coalition Government’s domestic policy programme to raise wages, lift activity in our regions, and become a more productive workforce. The Government’s progressive stance on trade will also help drive growth as we continue to seek deals like the Comprehensive and Progressive Trans-Pacific Partnership, which will boost exports and lift incomes.

Provincial Growth Fund—Decision Making and Funding

2. Hon SIMON BRIDGES (Leader of the Opposition) on behalf of the Rt Hon BILL ENGLISH (National) to the Prime Minister: Does she stand by all her Government’s policies and actions?

Rt Hon JACINDA ARDERN (Prime Minister): Can I begin by congratulating the member and wishing him all the best for his new role as leader of the National Party. And, to answer the question, yes.

Hon Simon Bridges: How many of the projects announced on Friday were projects not already under way or planned under existing Government programmes? [Interruption]

SPEAKER: Order!

Rt Hon JACINDA ARDERN: We’ve actually been quite open about the fact that, predominantly, they had been ones that had pitched themselves to the last Government, but, obviously, were not progressed and were not funded. It took this Government to accept that those regions had produced initiatives that were worth progressing, and so we’re making them happen.

Hon Simon Bridges: Which region received the most cash in the initial round of projects announced on Friday?

Rt Hon JACINDA ARDERN: I think this early on, it would be premature to pick a winner, of course, because it is a $1 billion fund per annum. We have only just started with a little over $60 million worth of investment. We always said that we would highlight, for instance, Northland, the West Coast, areas like the Bay of Plenty—wherever there is a lack of investment, high levels of unemployment, and deprivation. So we’ve started with those areas, and that’s included places like Northland.

SPEAKER: Order! It was quite a specific question and—

Rt Hon JACINDA ARDERN: And I mentioned Northland twice.

SPEAKER: You did mention three regions. I’m going to ask the Prime Minister just to very briefly address the question again.

Rt Hon JACINDA ARDERN: In this first, initial round, there was a dominant feature for Northland, as there should be.

Hon Simon Bridges: Why is that?

Rt Hon JACINDA ARDERN: Because that region was totally neglected by the last Government.

Hon Simon Bridges: How much of the $61.7 million announced last Friday was already appropriated funding from the last Government, and how much of it was new money from this Government?

Rt Hon JACINDA ARDERN: As I said in the first answer, we’ve made no secret of the fact that the last Government ignored the pitches that were made by those regions, which made a strong business case for investment and were ignored. That’s why we decided to progress them. So on the one hand you can’t argue that they were reasonable business cases when, on the other hand, you never funded them.

Hon Simon Bridges: So how much of the $61.7 million announced last Friday was already appropriated funding from the last Government, and how much of it was new money from this Government?

Rt Hon JACINDA ARDERN: The member is ignoring some of the projects—on the West Coast, for instance. The trails down there were initiatives that were promoted by Damien O’Connor and were progressed by this Government. As I said, we’ve acknowledged that the last Government didn’t progress, predominantly, ideas from Northland, which is one of the many neglected regions, and so a good portion of the $60 million is going to them.

Hon Simon Bridges: How much of the $61.7 million announced last Friday was already appropriated funding from the last Government, and how much of it was new money from this Government?

Rt Hon JACINDA ARDERN: The billion-dollar fund that this Government announced on Friday, of which we’ve announced a small portion to kick-start us—

SPEAKER: Order! I’m sorry to interrupt the member, but the Hon Amy Adams—I think it might be an idea just to leave the Prime Minister to answer the question, especially—

Rt Hon JACINDA ARDERN: If I can finish it.

SPEAKER: The member will get a chance to finish it, but her interjection has resulted in the Opposition getting an additional supplementary. I’d want to say to Amy Adams: she’s quite a long way away, but her voice is dominating at the moment, and I would prefer to go back to the answer, thank you.

Rt Hon JACINDA ARDERN: The vast majority were new allocations. Perhaps the member would like to talk to us about the bridges he was meant to have built, as well.

Hon Simon Bridges: How will the Government’s provincial fund compensate the regions for all the backwards-looking policies being enacted, such as industrial relations, immigration, and red-tape restrictions?

Rt Hon JACINDA ARDERN: I have to correct the member. When it comes to issues like the skills gap for our regions, this is the one party and Government that collectively have said, “We will allow a regional skills migrants list to respond to the fact the last Government didn’t listen to the problems that they had.”

Hon Simon Bridges: In light of the Government’s big spending initiatives in tertiary education and KiwiBuild, with no evaluations, why do we now have $3 billion of spending on regional development that we’ll never know how big a flop it is until 2023, because Labour have made sure there’s no evaluation?

Rt Hon JACINDA ARDERN: So on the one hand these were all your ideas; on the other, they’re going to be a flop. The member needs to make up his mind over whether or not the regional growth fund’s a good idea.

Hon Simon Bridges: Why is the Prime Minister comfortable with the provincial fund advisory panel being headed by a private political donor to Shane Jones and David Parker, the two most important Ministers for this policy?

Rt Hon JACINDA ARDERN: I would make the comment that the only reason the member knows about that is that it was declared, it was transparent, and we’ve made it clear that that donation was made. But I think the member discounts the vast experience of every member of that advisory board, including the referenced person’s background in investment—exactly the kinds of skills we want on that advisory panel.

Hon Simon Bridges: So why has the Prime Minister set up a fund that gives the biggest dollop of cash to Winston Peters’ home region of Northland, is advised by a private political donor to Shane Jones and David Parker, has a New Zealand First list candidate on the independent panel—

SPEAKER: Order! Order! Question, please.

Hon Simon Bridges: —and deliberately has no assessment of its effectiveness until 2023?

Rt Hon JACINDA ARDERN: Of course we’ll be monitoring the effectiveness of our own policy, but one comment I would want to make is: is the new leader of the National Party telling Northland that they have no need for investment in infrastructure for their region, because that is a disgraceful claim to make?

Businesses—Foreign Investment

3. Hon GERRY BROWNLEE (National—Ilam) to the Minister of Foreign Affairs: Does he expect any foreign policy gains to result from the Government’s decision to raise the threshold for Overseas Investment Office approval of sales of New Zealand businesses from $100 million to $200 million?

Rt Hon WINSTON PETERS (Minister of Foreign Affairs): I want to thank that member for his question. In answer: those same foreign policy gains that were contemplated when the regulations were drafted and consulted on when his party was the Government and did it in 2016.

Hon Gerry Brownlee: Has he received any advice from officials on how many more listed or private New Zealand companies will be in play as clean takeover targets for foreign investors as a result of raising the Overseas Investment Office approval from $100 million to $200 million?

Rt Hon WINSTON PETERS: I suspect that list was constructed for the previous Government, but it has not been made available to me, because the comment is without merit.

Hon Gerry Brownlee: If the comment was without merit, then why does the Minister, by his own admission, accept that there will be 40 percent of New Zealand’s companies now able to be purchased without any scrutiny whatsoever?

Rt Hon WINSTON PETERS: The plain fact is that we inherited a circumstance written into the Trans-Pacific Partnership (TPP), which collapsed, but that was something that we had to strive to deal with when we were reorganising this wild animal called the TPP and turning it into a respectable trade deal, which means that now we will gain far greater access and protection for our people in all of those new markets we will be entering.

Hon David Parker: Was the questioner of the last question in error when he implied that businesses could just fly through, when, in fact, because of changes that we have been making, whether they are purchasing rural land or residential land, they will be screened?

SPEAKER: Order! The Minister has no responsibility for Mr Brownlee.

Hon Gerry Brownlee: When the Minister engages in post - Comprehensive and Progressive Trans-Pacific Partnership bilateral discussions with other countries, will he highlight the ease with which his Government has enabled foreign investors to be able to secure assets in New Zealand up to $200 million without any scrutiny whatsoever?

Rt Hon WINSTON PETERS: In the interests of informing international investors, we will tell them that the screening threshold for significant business assets is just one of the categories of screened investment under the Overseas Investment Act. The others are sensitive land and the fishing quota. To use his phrase, “It pays to sweat the detail in the Cabinet papers.”, because clearly he didn’t.

Hon Gerry Brownlee: As foreign Minister, does he believe that raising the Overseas Investment Office threshold from $100 million to $200 million for the purchase of New Zealand assets will allow this country to become “putty in the hands of big business abroad”?

Rt Hon WINSTON PETERS: It will be a matter of great irony to people watching this television show today, from Parliament, that that member is complaining about the very actions he and his thoughtless party took when they were selling our country out.

Hon Gerry Brownlee: What has changed, in his view, in the last six months that makes him now support the National Party view that this is a good deal for New Zealand and that there is much to be gained by raising those thresholds, which he has now done?

Rt Hon WINSTON PETERS: Land, investor screening, a change in the fishing quota, and, above all, the restoration of this country’s sovereignty, which were the principal reasons the Americans pulled out in the first place and today are saying they want back in.

Hon Gerry Brownlee: Will companies subject to a takeover be required to isolate land assets in the business transaction?

Rt Hon WINSTON PETERS: I think that member should consult with his new leader. He’s a lawyer and understands that you cannot divide these assets out unless it is not part of their essential business.

Schools—Teacher Supply

JAN TINETTI (Labour): Thank you, Mr Speaker. My question is to the Minister—[Interruption]

SPEAKER: Order! Prime Minister, Mr Brownlee—please let Jan Tinetti ask her question. Start again, please.

4. JAN TINETTI (Labour) to the Minister of Education: What reports has he received regarding the underlying cause of teacher shortages?

Hon CHRIS HIPKINS (Minister of Education): I’ve received a report from the Ministry of Education showing that the number of people enrolled in teacher training dropped by a massive 40 percent between 2010 and 2016. That’s a drop of around 5,700 teacher trainees per year, meaning thousands fewer early childhood teachers, thousands fewer primary teachers, and thousands fewer secondary school teachers are being trained.

Jan Tinetti: What are the consequences of this decline?

Hon CHRIS HIPKINS: It’s left an immediate shortage of teachers, which we are currently dealing with, but, more worryingly, a ticking time bomb for schools as a significant cohort of baby boomer teachers start to retire over the coming years, and we simply do not have enough teachers being trained to take over from them. It is a shocking failure to plan for the future on the part of the previous Government.

Jan Tinetti: What action has he taken to begin to address these shortages?

Hon CHRIS HIPKINS: One of the first things the new Government did was announce a $9.5 million teacher supply package right before Christmas to deal with some of the most immediate areas of concern. We have also started to deal with teacher workload issues, including by scrapping national standards, which have been a complete waste of time. We’ve moved to give teachers and principals more say over how their profession is governed, and we’ve started the ball rolling on a long-term teacher workforce strategy—something that is long overdue.

David Seymour: How is it that no partnership school ever reported a shortage of teachers, despite having the same funding per student as equivalent State schools?

Hon CHRIS HIPKINS: Well, it could have something to do with the fact that they didn’t have to report and they didn’t have to employ qualified teachers.

Hon Nikki Kaye: Why did he slash—[Interruption]

SPEAKER: Mr Seymour has just lost any further questions he had this week. Of course, he only had one. [Interruption] Because he interjected—that’s why. And the member’s lost one for her party. The Hon Nikki Kaye—starting again.

Hon Nikki Kaye: Why did he slash the voluntary bonding payment for Auckland teachers from $17,500 to $10,500, and what does he think the impact of that will be?

Hon CHRIS HIPKINS: You cannot slash something that didn’t exist in the first place. I am aware of the campaign election promise made by the National Party, which they had not budgeted any funding to pay for and had not gone through any process to put it in place.

Biosecurity Management—Offshore Inspections and Stink Bugs

5. Hon NATHAN GUY (National—Ōtaki) to the Minister for Biosecurity: Does he stand by all his statements in relation to biosecurity?

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

Hon Nathan Guy: How can the Minister stand by his statement in the House, on Tuesday last week, that no vehicles were unloaded off the ships carrying stink bugs from Japan recently when the Courageous Ace vessel unloaded approximately half of its vehicles before loading was halted and those cars, trucks, and buses sat on the wharf for several days prior to being reloaded back on to the vessel?

Hon DAMIEN O’CONNOR: The information I had was that none had been unloaded. I will follow up on that. The important thing to know here—regardless of the actions that took place—is that we are absolutely committed to keeping out the brown marmorated stink bug, something that that member failed to do because he failed to resource the Ministry for Primary Industries (MPI) and their biosecurity responsibilities properly.

Hon Nathan Guy: I seek leave to table an email from a local resident, Mr Stephen Chester, who outlined to me that half of these cars, trucks, and buses were unloaded off the—

SPEAKER: Is there any objection to that? There appears to be none. The member may table it.

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

Hon Nathan Guy: I seek leave to table an email from Mitsui OSK Lines, who are in charge of the Courageous Ace. It goes on to say that MPI directed us—

SPEAKER: No. Order! Is there any objection to this document being tabled? There appears to be none. It will be tabled.

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

Hon Nathan Guy: How can the Minister say that the biosecurity net is working well, last week, when, in November last year, 15 live stink bugs—nine of them female—went on a 1,000-kilometre road trip to Christchurch having already passed MPI’s inspection in Auckland?

Hon DAMIEN O’CONNOR: I have to admit that the biosecurity system we took over had huge holes in it. As we have discovered those holes, we have moved immediately to shut them down. Can I say that, of the 1,200 import health standards that govern—

SPEAKER: Order! No. The member will resume his seat. David Bennett will stand, withdraw, and apologise.

Hon David Bennett: I withdraw and apologise.

Hon DAMIEN O’CONNOR: Can I say that the biosecurity system that we took over from the National Party was full of holes. In fact, of the 1,200 import health standards that the previous Minister was responsible for, very few had been reviewed and upgraded. That’s why we are having to move through every part of the biosecurity system to give security to those New Zealand producers in the country—because we desperately need them.

Hon Nathan Guy: How can he reconcile his statement, “We cannot afford to let … in [stink bugs] and we will shut down the pathways [whenever] we find them.” when large construction equipment was left on the wharf for days prior to it being eventually fumigated?

Hon DAMIEN O’CONNOR: Once again, I can’t explain the protocols and systems left to us by the previous Government. But I can tell you that we’re working through every one of those, and every member of the biosecurity system in this country knows that they’ve got a new Government with a new focus on biosecurity; they don’t have the same lazy old lax one that they had in the past.

Hon Nathan Guy: When in this week’s Farmers Weekly he’s quoted as saying, he’s “not able to call the shots.”, has he requested new urgent funding for extra resources in Japan after stating that MPI does not have enough people offshore to inspect every vehicle; if not, why not?

Hon DAMIEN O’CONNOR: The statement regarding “calling the shots” is that I don’t write the cheques for compensation. In regard to the offshore resources for MPI and the new Biosecurity New Zealand, we don’t have enough people to inspect every single car being loaded on to a ship, but I can tell you that the protocols around that will be upgraded and offer us security that was never there under the hundreds of thousands of cars that that member let into this country.

Mental Health Services—Children and Young People in Earthquake-affected Areas

6. Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Health: How is the Government supporting better mental health for children and young people in earthquake-affected areas?

Hon Dr DAVID CLARK (Minister of Health): Last week, the Government announced our plan to deliver dedicated mental health support to years 1 to 8 school students in Canterbury. During the first phase of the roll-out, 15 schools in Hornby and Christchurch East will share six dedicated mental health staff. This is part of a $28 million programme that will be rolled out rapidly over the next three years. The Government will ensure that every primary school - aged child in Canterbury and Kaikōura has access to a mental health worker.

Dr Duncan Webb: Why has the Government made this one of its top priorities in mental health?

Hon Dr DAVID CLARK: Since 2011, there has been a 93 percent increase in children in Christchurch requiring support for mental health issues. Children across the region have suffered long-term psychological disturbance following the Canterbury and Kaikōura earthquakes. Unlike the previous Government, who took its foot off the accelerator in this area, our Government is committed to addressing mental health, and it starts with children.

Dr Duncan Webb: How is the Government’s plan to deliver mental health support—

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Well, quite apart from the fact that I take huge exception to the comment made by Dr David Clark on what is an extremely serious issue, and which the Government did take very seriously throughout the six years that I was involved, it is totally extraneous to the question that he was actually asked and a gratuitous statement, which you have been trying to stamp out. I actually watched the last half of question time last Thursday from outside of the House and could see the direction you are taking. That totally contravenes that direction.

SPEAKER: Yes, that’s a fair comment. I think I was being too kind to the Minister. We will be tighter in future.

Dr Duncan Webb: How is the Government’s plan to deliver mental health support for Canterbury kids going to be funded?

Hon Dr DAVID CLARK: As I’ve said in the House many times, this Government will implement initiatives with a good evidence base, and mental health support in primary and intermediate schools is just such an initiative. This initiative will be funded out of the $100 million contingency set aside over four years by the previous Government in Budget 2017, which was never appropriated for any specific programmes.

Matt Doocey: Given that it’s accepted that the town of Kaiapoi was one of the most hard hit in the earthquakes, why are they receiving no support under this programme?

Hon Dr DAVID CLARK: As I have said, this is a rapid roll-out. We’re starting in Canterbury and in Hornby and in east Christchurch. We believe in starting at the core, where there are schools ready to deliver this programme and where the parents are crying out for it.

Employment, Minister—Regional Meetings and Statements on Work

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

Hon WILLIE JACKSON (Minister of Employment): Yes—obviously in the context they’ve been made in, and particularly in the area of the regions.

Hon Paul Goldsmith: When he told the House on Thursday that “Dignified work is about job security”, was he saying that the thousands of Kiwis who have their own small businesses, who have no security other than their ability to persuade people to buy goods and services day in, day out, are not engaged in dignified work?

Hon WILLIE JACKSON: No.

Hon Paul Goldsmith: Does the gig economy provide dignified work?

Hon WILLIE JACKSON: I’m very clear about where we stand in terms of the economy. I described dignified work previously as work that is about job security—about knowing you’ve got a job three months down the track, six months down the track. Dignified work is also about investing in employers, investing in communities, and investing in regions, which is what the previous Government failed to do in nine years.

Hon Paul Goldsmith: Would he describe his work as dignified, given he clearly has little job security?

SPEAKER: Kiritapu Allan.

Kiritapu Allan: When the Minister said that he was going out into the regions to meet with those communities, what does he expect to achieve?

Hon WILLIE JACKSON: Kia ora, thank you for the question. This is an opportunity to listen to and discuss with these communities, employers, service providers, sector leaders, and rangatahi about what their hopes and aspirations are and how these form the basis of strong proposals that will attract funding support. I was very pleased to begin the regional engagement with a visit to an initiative in Whangarei last week, where I saw some amazing work going on. The next stage in the process is for communities to submit proposals, which will be assessed by the agencies.

Rt Hon Winston Peters: Would the Minister regard dignified work as taking a job that’s depended upon an underhand deal with another party member?

Hon WILLIE JACKSON: No.

Hon Paul Goldsmith: Does the Minister stand by his statement to the Manukau Courier that one of the solutions to the “crisis in New Zealand employment” is to “fund and resource and target some of our community organisations directly—not with crumbs but with real funding and resourcing”; and if so, what extra resources beyond the $50 million allocated in National’s last Budget will he commit to deal with this crisis?

Hon WILLIE JACKSON: Absolutely I stand by my comments in terms of the Manukau Courier. Of course, there’s a long way to go in terms of the funding, and we have just made a start.

Provincial Growth Fund—Announcements

8. JENNY MARCROFT (NZ First) to the Minister for Regional Economic Development: What announcements has he made recently pertaining to the Provincial Growth Fund?

Hon SHANE JONES (Minister for Regional Economic Development): This will take so long to answer.

SPEAKER: No, it won’t.

Hon SHANE JONES: Sir, in the interests of serving the public interest, I have to be expansive. Ah, yes; well, $61.7 million was announced as an investment in the regions. It covers the packages for Northland, Gisborne, Hawke’s Bay, Manawatū, and Whanganui. These are initiatives that the regions have brought forward. They lay neglected under the old regime, and they’ve felt the love from my good self.

Jenny Marcroft: What has the reception to the Provincial Growth Fund been like?

Hon SHANE JONES: Rapturous. Starting with a Mayor Cole on behalf of the entirety of the local government fraternity, amplified by a certain Mr John Carter, and, also, I received a personal congratulations from the new director of Far North Holdings, Mr McCully.

Jenny Marcroft: What can we expect in the coming weeks and months?

Hon SHANE JONES: I’m expecting that work will take place very soon in terms of the Wairoa-Napier rail upgrade, which will take trucks off the road, which will give a shot of fiscal adrenaline into the neglected KiwiRail business. I’m also expecting to name the members of the working group who will lead the work in terms of the upper North Island supply chain study, with a particular focus on Whangarei. I will be visiting other priority regions, and I’m overwhelmed by the number of Opposition members who have encouraged me to go to their provinces.

Hon Steven Joyce: Can the Minister please confirm that the largest project announced last week is a roundabout not far from his home in Northland?

Hon SHANE JONES: I can confirm that the $9 million roundabout in the north is taking place, in contrast to the 10 bridges.

Public Media Advisory Group—Appointments, Funding, and Redacted Information

9. MELISSA LEE (National) to the Minister of Broadcasting, Communications and Digital Media: Were there any aspects of the process and then announcement of the public media advisory group that could reduce confidence in its outcome?

Hon CLARE CURRAN (Minister of Broadcasting, Communications and Digital Media): No. The final outcomes on the Public Media Funding Commission are yet to be determined, and I anticipate that they will be presented to Cabinet later this year.

Melissa Lee: Is she disappointed with the way she handled the appointment process of William Earl, whose name she included in the Cabinet paper even though he declined her offer of the role?

Hon CLARE CURRAN: No. Mr Earl made it clear that he didn’t want to be part of the advisory group for personal reasons, and it would not be appropriate for me to comment further.

Melissa Lee: Does she think $1.4 million for an advisory group taking 18 months to advise her on whether to set up another advisory group represents value for money?

Hon CLARE CURRAN: Yes, absolutely. This Government is committed to investing in public media—something that the previous Government had no intention of doing. It froze funding for nearly 10 years for public media. There is a lot of work to do in this area, and this advisory group will do its job.

Dr Liz Craig: So why did she appoint the ministerial advisory group?

Hon CLARE CURRAN: Good question. This Government recognises that a well-resourced public media is necessary to tell our stories and inform our democracy, unlike that previous Government, which froze public funding for nearly a decade. Our commitment to public media was made clear during the election. It should come as no surprise that we’re looking to reverse the damage done by the previous Government. This advisory group marks the first step in progressing this work.

Melissa Lee: When wearing her Minister for broadcasting hat, does she agree that when choosing between the competing demands of open government and ICT security, she made the right call to proactively release her Cabinet paper in its entirety, with the redactions visible to all, thus providing the ultimate example of open Government?

Hon CLARE CURRAN: Yes. I’m deeply disappointed that the paper was released in a way that meant the redactions were reversible—absolutely committed to the proactive release of Cabinet documents.

Melissa Lee: What would she rate her announcement out of 10 given she proposed the appointment of someone who had already declined her offer, she released a redacted document with all of the text clearly visible, and she released budget-sensitive information?

Hon CLARE CURRAN: Mr Earl made it clear he didn’t want to be part of the advisory group for personal reasons, after the Cabinet paper went through. It would not be appropriate to comment further at this time.

Families Package—Effect on Senior Citizens

10. PRIYANCA RADHAKRISHNAN (Labour) to the Minister for Social Development: Will the Families Package benefit seniors; if so, how?

Hon CARMEL SEPULONI (Minister for Social Development): The winter energy payment is a significant part of the Families Package and will help 710,000 superannuitants to afford the heating they need to keep themselves warm and healthy. It is one of the most ambitious policy moves to address rising costs of living, with a particular emphasis on some of our most vulnerable. When fully implemented, the annual payment for every person over 65 will be $450 for single people and $700 for couples.

Priyanca Radhakrishnan: So why is the winter energy payment such an important part of the Families Package and supporting seniors?

Hon CARMEL SEPULONI: Too many of our seniors are hospitalised every year due to respiratory documents. I’ve been told of seniors staying in bed all day in an effort to keep warm because they simply can’t afford the heating costs. That’s not right, and we can do better by our elderly. The winter energy payment is a simple but important way of supporting our seniors to keep warm and stay healthy.

Priyanca Radhakrishnan: Are there any other measures in the Families Package that will benefit seniors?

Hon CARMEL SEPULONI: Absolutely. The changes to the accommodation supplement outlined in the Families Package will also benefit eligible seniors. Around 14,000 seniors will see an average gain in income of $30 a week. These changes also support the Government’s broader housing agenda, helping our most vulnerable to meet rising housing costs.

Hon Louise Upston: Of the seniors that will receive the winter energy payment, how many are earning over $50,000 a year?

Hon CARMEL SEPULONI: All those who receive superannuation and the winter energy payment have the option of opting out of the winter energy payment. If that member is concerned about targeting, can I remind her that her Government was going to put $400 million worth of tax cuts into the pockets of the 10 percent highest-income earners in this country.

Hon Louise Upston: How does providing an extra $700 a year to someone who already earns superannuation plus getting $50,000 a year deliver more money to families with children and reduce child poverty, which is the Government’s initiative?

Hon CARMEL SEPULONI: We’re doing all we can to help New Zealanders, especially low to middle income New Zealanders. We don’t think there is anything wrong with putting a little bit of extra money into the pockets of superannuitants over the cold winter months when they are most at risk of being admitted into hospital for respiratory ailments.

Rt Hon Jacinda Ardern: Can the Minister confirm that the winter energy payment for over-65s is going to the exact same people who already receive universal superannuation, something, presumably, the National Party now no longer supports?

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Admittedly, it was a weak question, but to try and strengthen it up by making an accusation like that is completely unparliamentary and totally unacceptable. It is not the National Party policy to in any way attack national super, but it has been the current Government’s policy not to increase it by virtue of their overturning the tax package.

SPEAKER: The problem I have is that I did listen to the Hon Louise Upston’s question, which certainly implied a questioning around the universality of such payments—

Hon Louise Upston: The winter energy payment.

SPEAKER: —of such payments—and I therefore think it was not unreasonable for the Prime Minister to make the same interpretation.

Hon CARMEL SEPULONI: Yes, we do support the winter energy payment and we do support superannuation as a universal entitlement.

Question No. 11 to Minister

JAMI-LEE ROSS (Senior Whip—National): I seek leave to hold this question over until Nanaia Mahuta comes out of witness protection.

SPEAKER: I’m going to ask the member to put the leave properly. I’m going to give an expected response to him for the way he asked the question, and I’m going to ask him to consider carefully the leadership that he shows from the chief whip’s seat in the future. Right, ask for leave properly.

JAMI-LEE ROSS: I seek leave for this question to be held over until Nanaia Mahuta is available in the House to answer it.

SPEAKER: Do we want to make it clear? Does the member want it held over as an extra question or just one of the National Party questions next time?

JAMI-LEE ROSS: An extra question.

SPEAKER: An extra question. Is there any objection to that? There appears to be objection. Right. The member declines to ask the question.

Māori Development—Government Initiatives and Te Ture Whenua Māori Bill

12. NUK KORAKO (National) to the Minister for Māori Development: What specific legislation has she introduced to advance Māori in the first hundred days of this Government?

Hon KELVIN DAVIS (Minister for Crown/Māori Relations) on behalf of the Minister for Māori Development: The Minister has not introduced specific legislation, but this Government has put into legislation the Families Package, which introduces the winter fuel payment, Best Start, and increases paid parental leave. This package alone will help thousands upon thousands of Māori families across New Zealand.

Nuk Korako: Why has the Minister removed specific Māori legislation that would have enabled a greater utilisation of Māori-owned land?

Hon KELVIN DAVIS: For multiple reasons. Māori don’t want it. It was bad legislation. We can do better. And, if I recall the consultation hui that I attended last year, there was almost rioting in the streets because of how terrible the legislation was.

Nuk Korako: Does the Minister accept the statement in the briefing to incoming Ministers from Te Puni Kōkiri, who advised that that Te Ture Whenua Māori Bill increases the ability of Māori land owners to use their land by empowering them to make decisions by and for themselves—so why has the Minister disregarded the advice from Te Puni Kōkiri?

Hon KELVIN DAVIS: For the very same multiple reasons: that Māori don’t want it, it’s bad legislation, and we can do it. Good luck to that member for, as we say in Māori, “E hiahia ana ia te whakaaraara taua tūpāpaku.”

[“He wants to rouse that deceased.”]

Willow-Jean Prime: What is the highest legislative priority for the Minister?

Hon KELVIN DAVIS: Dropping the previous Government’s changes to Te Ture Whenua Maori Act 1993. We all know that it was a poorly-thought-out process, handled badly. The Minister is focused on delivering practical benefits for Māori land owners, whānau, hapū, iwi, and Māori collectives.

Willow-Jean Prime: And how will the Minister ensure there is a strong emphasis on improving outcomes for Māori?

Hon KELVIN DAVIS: This Government is committed to improving the lives of our Māori whānau, through the creation of the Crown/Māori Relations portfolio; through regional development that has a focus on local partnerships, which would include iwi and Māori collectives; and through improving the outcomes for Māori in housing. We’ve been in Government for only just over 100 days, but we have delivered more for Māori during that time than the member [Points at Nuk Korako] did in the previous nine years.

Nuk Korako: How does her decision to discharge Te Ture Whenua Māori Bill advance Māori interests in developing over 20 percent of Māori land that remains landlocked?

Hon KELVIN DAVIS: As I’ve said, we can do a lot better. The big thing about Te Ture Whenua Māori Bill is that it actually caused the demise of the Māori Party, because it was such bad legislation that Māori, collectively, said they did not want it, but the previous Government would not listen.

Rt Hon Winston Peters: Can I ask the Minister as to whether the Government’s view was in part formed by the fact that not one Māori Land Court judge supported that legislation?

Hon KELVIN DAVIS: The member is correct. In fact, Māori Land Court judges were very dismissive of the proposed legislation from the previous Government.

Question No. 11 to Minister

Hon GERRY BROWNLEE (National—Ilam): I raise a point of order, Mr Speaker. It’s to do with the question that was not asked by the National Party today. I think, over the years, if you go through Speakers’ rulings, there’s been a number of rulings about members being away, etc. A lot of those rulings were based on the fact that, sometimes, members couldn’t get to the House, and the most recent stuff in there is, of course, from 2011 and 2014, when the Standing Orders Committee considered how best to deal with those particular matters. So what I’m suggesting is that where there is—could you have a think, on behalf of the House, about how reasonable it is for a side of the House to determine whether or not a member who is a Minister should be able to have the time granted to them to be here to answer questions about comments and other statements that they have made.

Hon Chris Hipkins: Speaking to the point of order—

SPEAKER: No, I don’t require any support from the Leader of the House. This matter was considered by the Standing Orders Committee, certainly in 2017. A lot of members of the committee were supportive of putting into the Standing Orders a requirement for the Government to indicate which Ministers would be available on the morning, possibly at 9 o’clock, before questions were to be lodged. The member was the person who led the opposition to it. Now, I hope—I hope—[Interruption] Order! I hope that, at some stage, notwithstanding the previous Government’s opposition to it, we can get to the point of the Government implementing that, which does not require a change to the Standing Orders. But I just want to say to the Hon Gerry Brownlee that I think he’s pretty cheeky bringing it up.

Hon GERRY BROWNLEE (National—Ilam): I raise a point of order, Mr Speaker. It’s clear that there’ll be a number in this House who have full recollection of that discussion. You’ll also, I’m sure, recollect that my concern was that it would be a forward notice of who was going to be there at any particular time. The reality is that, on a daily basis, that’s not a bad practice, but it was in the context of something that, I would have to say, was completely new to the House in my time: an initiative, from me, to give the House a week’s notice of the business—full business—that was likely to be transacted. So I think your characterisation of me being cheeky in raising this is completely unreasonable and a misrepresentation of a select committee discussion of which, I imagine, there is some record.

SPEAKER: Well, I certainly—and I can see from the faces of other members present—have a different recollection, and I don’t like it being characterised as a misrepresentation. We certainly have a different recollection of what occurred there, and I might say it was an issue on which a couple of members, including myself, were, I think, more heavily focused than the member might have been at the time.

Hon GERRY BROWNLEE (National—Ilam): I raise a point of order, Mr Speaker. I think that’s a bit of an unreasonable statement from the Chair, actually—to suggest that any member was not focused while they were at a hearing of a select committee, let alone the Standing Orders Committee. But it’s become quite a practice, I think, in recent weeks, for the Speaker to make these strong statements, which, personally, I would caution against. Might I also say that it’s not unusual for people to change their mind on these things, much as we’ve seen the Deputy Prime Minister change his mind on the “CPPPT”—whatever it’s called nowadays.

Rt Hon WINSTON PETERS (Deputy Prime Minister): I raise a point of order, Mr Speaker. I want you to reconsider whether there should be not further consideration of a “not as I do but as I say” rule, otherwise Mr Brownlee will have no chance of protesting in this House.

Hon MICHAEL WOODHOUSE (National): I raise a point of order, Mr Speaker. At the risk of prolonging this discussion, I want you to reflect on the comment that you made in your answer where you said that the previous Government had opposed those moves, and just to remind you that the members of that committee—of which I was one—are representatives of this House and not of the Government.

SPEAKER: Yes, and the point that I will reiterate is that members, I think, from all three parties currently in Government supported that change, but because of the way that the committee works and the fact that we do seek at least a substantial majority at the committee, it was a suggestion that was blocked by the National Party.

Bills

Appropriation (2016/17 Confirmation and Validation) Bill

First Reading

Hon Dr DAVID CLARK (Acting Minister of Finance): I move, That the Appropriation (2016/17 Confirmation and Validation) Bill be now read a first time.

Bill read a first time.

Reports

International Treaty Examination of the Marrakesh Treaty to Facilitate Access to Published Works for Persons who are Blind, Visually Impaired, or Otherwise Print Disabled

JONATHAN YOUNG (Chairperson of the Economic Development, Science and Innovation Committee): I move, That the House take not of the report of the Commerce Committee on the International treaty examination of the Marrakesh Treaty to Facilitate Access to Published Works for Persons who are Blind, Visually Impaired, or Otherwise Print Disabled.

The Marrakesh Treaty is a multilateral treaty concluded by the World Intellectual Property Organization in 2013. It is a treaty on copyright adopted in Marrakesh, Morocco on 28 June 2013. It aims to help people who are blind, visually impaired, or otherwise print disabled to have more timely access to a greater variety of books and other literary works in accessible formats such as Braille, audio, and large print. The Marrakesh Treaty provides an international legal framework for copyright exceptions that allows for the reproduction, distribution, and cross-border exchange of copyright works in accessible formats between countries party to the treaty. The treaty sets a norm for countries ratifying the treaty to have a domestic copyright exception covering those activities and allowing for the import and export of such materials.

Fifty-one countries signed the treaty as of the close of the diplomatic conference in Marrakesh. The ratification of 20 States was required for the treaty to enter into effect. The 20th ratification was received on 30 June 2016, and the treaty entered into force on 30 September 2016. The treaty went to the then-known Commerce Committee of the New Zealand Parliament, and they reported back to the House on 7 July 2017. The House rose on 19 August 2017 for the election, and so we now come to the debate in this House regarding the acceding to this treaty.

In the New Zealand context, an estimated 90 percent of all written materials published worldwide are not published in formats accessible to individuals with a print disability here. This lack of access is a barrier to participation in public life and restricts employment, educational, and recreational opportunities for an estimated 168,000 New Zealanders who have a print disability. Acceding to the Marrakesh Treaty is expected to have a positive social, economic, and cultural impact on New Zealand. Individuals with a print disability are expected to be the primary beneficiaries. It is likely to improve access to education, enhance participation in public life, provide greater autonomy and independence, and improve health outcomes. Acceding to the Marrakesh Treaty is also expected to achieve better value for money from the Government’s investment in the production of educational material for individuals with a print disability, which is currently provided by the Blind Foundation.

On 22 June 2017, the then National Government’s Minister of Commerce and Consumer Affairs, the Hon Jacqui Dean, and Minister for Disability Issues, the Hon Nicky Wagner, announced that New Zealand will join the Marrakesh Treaty. The Hon Nicky Wagner said at the time, “This treaty will make a meaningful change to the lives of thousands of New Zealanders by ensuring they have access to a greater variety of books and other publications in accessible formats. It also supports the Government’s vision of creating a ‘non-disabling society’, as outlined in the New Zealand Disability Strategy.” The Hon Jacqui Dean said the Government will make other changes to further improved access to copyright works: “These changes will allow more organisations and individuals to produce and provide accessible format works without breaching copyright laws.”

As an international treaty subject to ascension, the Marrakesh Treaty must be presented along with a national interest analysis to the House for parliamentary treaty examination in accordance with Standing Order 397. At the request of the Leader of the House this is what we are doing now. In July 2017, the Commerce Committee considered the Marrakesh Treaty in light of the national interest analysis to form a view on whether New Zealand should accede to the treaty. Public submissions were not sought, given strong support from domestic stakeholders to join the treaty, including by the Blind Foundation, educational institutions, and copyright holders.

New Zealand already has a copyright exception that facilitates the production of works in accessible formats. However, the exception does not allow those works to be imported or exported. The Marrakesh Treaty will allow New Zealanders to import copyrighted works in accessible formats such as Braille, large print, and audiobooks from other countries that have ratified the treaty. Enabling legislation will follow ratification of this treaty.

The Commerce Committee heard evidence from the Ministry of Foreign Affairs and Trade and the Ministry of Business, Innovation and Employment. The committee has conducted the international treaty examination of the Marrakesh Treaty and recommends that the House takes note of its report. Taking the necessary steps to accede to the Marrakesh Treaty is expected to go some way towards addressing the lack of access to works in accessible formats for individuals with a print disability in New Zealand. I commend the Marrakesh Treaty to the House and our Parliament’s acceding to it. Thank you.

Hon TRACEY MARTIN (NZ First): Kia ora, Madam Deputy Speaker. I rise on behalf of New Zealand First to address the international treaty examination of the Marrakesh Treaty to Facilitate Access to Published Works for Persons who are Blind, Visually Impaired, or Otherwise Print Disabled.

The Marrakesh Treaty establishes a set of international rules that ensure that there are limitations or exceptions to the copyright rules for the benefit of people who are blind, visually impaired, or otherwise print disabled. It also, as my learned colleague who just resumed his seat outlined, enables the cross-border exchange of copies of published works that have been produced in an accessible format. Persons who are blind, visually impaired, or otherwise print disabled continue to face many barriers in accessing books and other print material. The need to increase the number of works and other protected subject matter available in accessible formats such as Braille, audiobooks, and large print has been recognised at an international level. I would like to outline the significance for New Zealanders of the Marrakesh Treaty.

If I can just quote Clive Lansink: “Blind people dream of a world in which we have access to the same information as sighted people already enjoy. When I was younger we just accepted that it was physically impossible for us to read, so we made do with the assistance of others to do the reading for us. But that was before today’s world of information being published electronically, but I can access all the books out there.”

And that is what this is about. This is about recognising that there have been barriers placed upon those New Zealanders that are blind, visually impaired, or actually reading disabled. Copyright law and publishers currently limit access to public works in a restrictive manner that many argue is in violation of the basic human rights of the print-disabled community.

It’s estimated that only five percent of the world’s written materials are available in accessible formats for print-disabled people. This is commonly referred to as the book famine. The Marrakesh Treaty addresses the book famine by providing exemptions to copyright laws for print-impaired people and their information access providers. Hungry minds may be fed by facilitating accessible formats of text to cross international borders legally and allowing print-impaired people to legally unlock digital text to make their own accessible formats.

There are New Zealanders who are print disabled and yet they don’t meet the Blind Foundation’s membership criteria. But they also have barriers to overcome in terms of access to information. “Stroke victims, arthritis sufferers, people with dyslexia or neurological conditions such as Parkinson’s disease all have difficulty reading print, holding a book or acquiring reading material in a format that best suits their individual needs. In some cases, isolation is a contributing factor to how a person acquires their information or recreational [reading] material.” That was a quote from the Library and Information Association of New Zealand Aotearoa conference in 2011.

According to Statistics New Zealand, 24 percent of New Zealanders identify as disabled, meaning that over one million people have a permanent condition that restricts their everyday activities. This is more likely to be a physical impairment in older people or learning disabilities in children. These numbers have gone up by over 20 percent since 2001, partly because of our ageing population and possibly because of improved methodology in data collection and higher rates of reporting. The origin of disability varies according to age. Around 42 percent of disabled children were born with an impairment. However, most adults’ disabilities are the result of illness or disease.

Statistics New Zealand states, and it has been quoted earlier today, that New Zealand currently has 168,000 print-disabled citizens. However, the Dyslexia Foundation of New Zealand estimates that approximately one in 10 New Zealanders—and that is conservative; it is more likely one in seven New Zealanders—are dyslexic, and that would include up to 70,000 school children. It appears, therefore, that people with learning disabilities like dyslexia, who struggle with numeracy and literacy, are not included in the numbers provided by Statistics New Zealand—and they provide that figure of 168,000. The Dyslexia Foundation states that the oral delivery of information, including the use of audiobooks, is an important tool for dyslexics.

The definitions of the term “print disability” from Article 3 of the Marrakesh Treaty reads as follows: “A beneficiary person is a person who: (a) is blind; (b) has a visual impairment or a perceptual or reading disability which cannot be improved to give visual function substantially equivalent to that of a person who has no such impairment or disability and so is unable to read printed works to substantially the same degree as a person without an impairment or disability;”.

The New Zealand Copyright Act, section 69(4), reads: “For the purposes of this section, a person has a print disability if he or she—(a) is blind; or (b) suffers severe impairment of his or her sight; or (c) is unable to hold or manipulate books; or (d) is unable to focus or move his or her eyes; or (e) suffers a handicap with respect to visual perception.”

In the Marrakesh Treaty, provision is made for reading disability and in the New Zealand Copyright Act inclusion is offered to those challenged with respect to visual perception. A distinction is made between visual perception and the severe impairment of sight. This implies that the impairment is a cognitive one. However, dyslexia was only recognised by New Zealand as a condition in 2007. There may be a gap here, inside the treaty and inside our copyright law, where accessible formats of text and services around their provision may have a broader client base in New Zealand than expected, and this will need to be addressed.

There are many other ways that New Zealanders find themselves at a disadvantage with being able to read, and if we think about those that affect our older citizens, macular degeneration is the most common cause of blindness in our older citizens, affecting one in seven of all New Zealanders over 50. This is why New Zealand First made a point to negotiate a free eye test every year for our seniors, so that we can address, and catch early on, this degeneration.

But what we have seen—and this is why it is so important for this treaty to be brought in at this time, and for us to acknowledge it—is that as technology has improved, access through Kindle, access through other free delivery of books, like audiobooks inside our libraries, and so on, has become more and more important to more and more people. If we talk about the school students who need the Dragon speech recognition programme or other audiobooks, being able to have access across borders is going to be a major improvement for them, and that is one of the side effects of the treaty.

In closing, I want to talk about the fact that it’s also hoped that this will free up resources to make audiobooks in Pasifika languages and Te Reo Māori more available. It’s not currently feasible because the user group for these books is a minority within a minority. However, both Māori and Pacific Islanders have high rates of disability when it comes to being reading disabled, and so the requirement for these books will grow over time. This is an area where New Zealand can lead the way, now that we have the treaty, when it comes into full force in this country. We do have some little bits and pieces that we need to work around with our own copyright law, which I know will be a focus for the Minister responsible, later on in the year and later on in this term. But this is an exceptionally good start, and New Zealand First supports the report.

MELISSA LEE (National): Thank you, Madam Deputy Speaker. Thank you for the opportunity to speak to the examination of the Marrakesh Treaty today. This treaty has been a long time coming for the support of the disabled and special-needs communities in our country and across the globe who require alternate literary options to learn and engage with the wider community.

It was a privilege to have chaired the Commerce Committee during the last Parliament, when we examined this important treaty, and I’d like to commend my colleagues from the committee, including those who are no longer with us in this House, for their due diligence and consideration of the issues that may arise from New Zealand’s ratification of the treaty.

As my learned colleagues who spoke before me have actually said, it is estimated that 90 percent or more of the written materials that have been published across the globe are unable to be accessed in a format that supports the literacy needs of those with particular impairments, such as the blind, the visually impaired community, or those who have print-learning disabilities.

In New Zealand, this means that there are nearly—as the Hon Tracey Martin said, there could be more than one million people who are limited in their content of learning, understanding, and growing of their knowledge that they want to undertake. This creates significant barriers to their lives. It means they cannot have the same opportunities for work pursuits that their friends and their family can access, or enjoy the same educational or recreational pursuits. It is important that New Zealand resolves this grave omission.

The Marrakesh Treaty provides for an international legal framework to deal with copyright implications in facilitating the cross-border exchange of written materials that are being provided for the purposes of supporting those who are print disabled.

The treaty requires countries who accede to its terms to provide copyright law exemptions for the reproduction of work exclusively for individuals with print disability, allow for the distribution of these materials, and ensure that they can be exported or imported in accessible formats, rather than solely in the existing formats, such as large print, Braille, audiobook, and other accessible written material methods.

The treaty will have a positive cultural, economic, and social impact on our country. It will help those Kiwis expand their horizons and open up opportunities that are currently being restricted from them by the lack of this important legal framework. It is important to note that, through section 69 of the New Zealand Copyright Act, New Zealand has had a standing exemption for people, regarding this issue, but many countries have yet to fully embrace the needs of the print-disabled community and take action.

The treaty, in being implemented, will also save money for New Zealand’s economy. At present, our Government has invested in the production of educational materials for the print-disabled community through the Blind Foundation. At present, recording a single book costs up to $3,000 and producing a Braille publication can cost up to $5,000 or more, depending on the length, the complexity, and whether there is content that is more complex to transfer into the accessible media. But with a wider adoption of the treaty, more educational and recreational materials will be able to be made available from a myriad of nations, supporting a broader base, which the print-disabled community can take information from.

The treaty is, in effect, a furtherance of international human rights—a field New Zealand has been a leading champion for many, many years in. It improves our obligation under several United Nations agreements, including the Convention on the Rights of Persons with Disabilities and the Convention on the Rights of the Child. Our closest neighbour, Australia, was one of the first nations to ratify the treaty, but, with our ratification, more New Zealanders will be able to reach a wider supply of materials to support their learning.

In conclusion, I endorse this examination of the Marrakesh Treaty, and look forward to further ratification by nations across the globe.

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): Thank you, Madam Deputy Speaker. Can I acknowledge the previous speaker in this debate, Melissa Lee, who was the chair of the Commerce Committee in the previous Parliament for that select committee’s full examination of this treaty, to advance it to the stage where we are able to debate it here in the House.

It is a pleasure to speak here today in New Zealand’s Parliament to the Marrakesh Treaty debate, to facilitate access to published works for persons who are blind, visually impaired, or otherwise print disabled. Due to a new Standing Order, if an international treaty is to be implemented by a bill, the select committee report on the treaty must be set down for debate as a Government order of the day, and that’s what we are doing here today.

As the Minister responsible for the bill that will implement the Marrakesh Treaty, I’m pleased to be speaking on this agreement, which will pave the way for 168,000—potentially, plus—New Zealanders with print disabilities to have greater access to copyright works in accessible formats, such as Braille, large print, and sound. Before I go on, can I acknowledge Neil Jarvis of the Blind Foundation and Rose Wilkinson of Blind Citizens New Zealand, who I met earlier today, who I think are amongst many who are excited to see this treaty being progressed in this House.

I also acknowledge two former Ministers in the House Jacqui Dean and Nicky Wagner as commerce and disability Ministers, who in the previous Government made sure that this issue was progressed. I’m sure there’s willingness across the House to make sure that the legislation that will be introduced as a result of our supporting the Marrakesh Treaty will be progressing through the House as fast as possible.

It’s estimated that only 10 percent of all written materials currently published worldwide are published in formats accessible to people with a print disability, and this lack of access is a barrier to participation in public life and restricts employment, educational, and recreational opportunities. I just want people at home who may be listening to or watching this at some stage just to think about the simplicity of being able to go to a book store and pick up a book for most New Zealanders, and how difficult that would be for the 168,000 New Zealanders who are affected if that day-to-day function wasn’t available to you—if you couldn’t go and pick up a Harry Potter book and give that to your child because they wouldn’t be able to read it, if you weren’t able to study because of your inability to be able to access books.

So the Marrakesh Treaty is, as many speakers have said, a multilateral treaty negotiated by the World Intellectual Property Organization. It was developed to provide an international legal framework for an exception to copyright infringement to facilitate the production and international exchange—as other members have spoken about—of copyright works in accessible formats. This exception allows non-profit organisations, such as educational institutions, libraries, and charities serving print-disabled persons, to produce and exchange accessible-format copies of copyright works without permission of the copyright owner.

So far, we understand around 30 countries have ratified the treaty, including Australia, Canada, Chile, and Singapore. The debate today is another step towards New Zealand ratifying the treaty. I understand there are also steps being taken to ratify the treaty in other jurisdictions, including the EU, and I understand, from my conversation with Neil Jarvis this morning, that when the EU ratifies this treaty, it will essentially double the number of countries that would support this treaty and open up a lot more content to those New Zealanders who are desperate to do that.

Ratifying this treaty will bring New Zealand into alignment with international obligations, including those under the United Nations Convention on the Rights of Persons with Disabilities. Most importantly, however, this treaty will make a real difference to the lives of those who use these resources and their families and the community. But I don’t think the status quo is good enough. Our current legislation, enacted through section 69 of the Copyright Act, has an exception to copyright infringement that allows prescribed bodies, as it says in the Act, to make accessible format copies of copyright works without the need to seek the copyright owner’s permission. However, this is inadequate, as only a small number of the 168,000 New Zealanders with a print disability have access to accessible-format copies of copyright works, and this access is limited.

We know that only a small number of organisations with limited resources are providing accessible-format copies to a small group of persons. Meanwhile, imported materials of copyright works are not subject to the accessibility provisions of domestic works, which results in costly and time-consuming duplication of converting works to accessible formats when accessible-format copies of those works may be available from other countries at much lower cost.

This is why joining the Marrakesh Treaty is a vital step in the right direction for New Zealand—so we can expect expanded, faster, and greater access to a wider variety of accessible-format copies to New Zealanders with print disabilities. We hope to see more effective use of resources by schools, libraries, and charitable organisations that serve people with print disabilities. The provisions of the treaty will also provide greater clarity around what kind of activity is permitted under the existing exception for those producers of copyright works.

The next stages for the Marrakesh Treaty to be implemented will come in the form of a bill introduced into this House that will amend the Copyright Act. In addition to providing the minimum amendments necessary for support to the Marrakesh Treaty, the bill will make additional amendments to the Copyright Act to further improve the availability of accessible-format works in New Zealand. The proposed amendments to the Copyright Act include amendments that will expand the range of organisations and individuals that may use the section 69 exception to make accessible-format copies for persons with a print disability.

Both imported and exported accessible-format copies between New Zealand and other countries party to the Marrakesh Treaty will be included, and this will enable content to be accessed much faster and easier by Kiwis. It will mean delays currently experienced will, hopefully, come to an end. In addition, clarity will be provided on the extent to which people with a print disability, or someone acting on their behalf, can convert copyright works into accessible-format copies for personal use.

Once the bill is passed through this House, where I hope to see cross-party support, New Zealand will be able to deposit its instruments of accession to the World Intellectual Property Organization. The Marrakesh Treaty will enter into force for New Zealand three months later, with the amendments to the Copyright Act coming into force at the same time. These changes to the Copyright Act will benefit those with print disability to copyright owners and the rest of New Zealand society. This Government is committed to being a Government of inclusion, and disability should never be a barrier from accessing information and material.

I commend the work that the key organisations, such as the Blind Foundation and Copyright Licensing New Zealand, are already doing to improve access to print material for the visually impaired. I thank the involvement of these groups, who have been working alongside the Government through the initiatives such as the accessible formats forum to improve access and assist in the smooth implementation of the treaty.

Can I go back to the beginning and acknowledge the work of the Commerce Committee in the previous Parliament. I understand there were some concerns raised by the copyright owners, and that was around access to digital formats and the fact that they may be disseminated, and I believe that those concerns were raised and addressed in the select committee report, and, hopefully, I will see them addressed in the legislation that comes to the House.

Away from the technicalities, I’d like to acknowledge the exciting step that this is for those 168,000 New Zealanders who can see this as a beginning of a legislative process to change their lives. The ability to be able to have access—quick, cheap access—to a book, to a work, or to a piece of literary work, which has been difficult for them for some years, and some decades, is a milestone moment for them. I think it’s something simple for most New Zealanders to be able to pick up a book or pick up a text book, but for those 168,000 New Zealanders who have been waiting for this treaty to pass through this House, I think the fact that we’re here today and that legislation is imminent is a great day for them, and I acknowledge the Commerce Committee from the previous Parliament and all those who have worked to make sure we can get to this stage here today.

DEPUTY SPEAKER: Like the member, I’d like to go back and insert a piece that I overlooked. The question is that the motion be agreed to.

Hon JENNY SALESA (Minister for Building and Construction): Madam Deputy Speaker, thank you so much for this opportunity to speak on the Marrakesh Treaty. This is a multilateral treaty that was agreed and concluded in the Moroccan city of Marrakesh—thus its name—in 2013. We know that, to date, there are 33 member countries who have acceded—they’ve agreed—to this particular treaty, including our neighbours in Australia, Canada, and Singapore. This is a very important treaty, and it is my hope that we will have cross-party support for it.

The Marrakesh Treaty has the objective of having a framework for producing and distributing copies of materials for people with print disabilities in formats that are accessible to them. Now, the definition of those with print disability include someone who is blind; a person with a visual or perceptual impairment that is not able to be corrected, for instance, with glasses; and/or a person with a physical disability that prevents him or her from being able to read a book.

I’d like to acknowledge and thank the Hon Kris Faafoi for giving us an outline of the background of the Marrakesh Treaty as well as its history and the amendments that we would need. I’d also like to acknowledge and commend the former chair of the select committee that actually sat through this particular treaty, Melissa Lee, for all of the processes that they went through. I know that there were many submitters that came through to that select committee, the Commerce Committee, that strongly supported this country for making the amendments that would accede the Marrakesh Treaty.

In going back to what does this Marrakesh Treaty allow us to do—well, it would, if we are to accede the Marrakesh Treaty do the following. First, it would allow authorised entities to make and distribute accessible formats of literary artistic works within their own countries without seeking the permission of the owner or the copyright of those works. Now, the reason why this is important is, as you heard from speakers that have spoken about this particular treaty before me, it takes several months, and sometimes it takes between $3,000 to up to $6,000, just to convert or just to make works available, say, for instance, in Braille. If we were to have this treaty, it would allow us to bring materials from other countries—member countries—to be able to distribute it here in New Zealand.

Secondly, we would be able to export copies—if we were to actually do these ourselves in New Zealand, we would be able to export those copies after we make it accessible in our country. Third, we would be able to access those materials from other countries who are authorised entities of the Marrakesh Treaty.

The definition of an authorised entity though, are those including schools, it includes libraries, and it includes charities that serve those with print disabilities. However, if we are to ask the question, do we in New Zealand allow in our own copyright legislation exceptions that would allow us to print these—well, the answer is yes. Section 69 of the Copyright Act 1994 actually allows some exceptions. However, only a few people can print and are actually allowed to do this. So in New Zealand we have two authorised entities, and as far as I know the Blind Foundation is one of those, and the University of New Zealand is also one of those that is allowed to do this in our country.

However, even though section 69 of the Copyright Act 1994 allows us to have prescribed bodies to make accessible formats available, without the permission of the copyright owner, it still makes it very, very challenging for us to fulfil the conditions of section 69, which is why it is important for us in this House to accede to the Marrakesh Treaty. The amendments to the Copyright Act of 1994 would then allow New Zealand, as I said, to be able to produce materials and distribute materials that are much cheaper, and be able to import various materials from overseas from those who have already made it accessible to their folks.

When the Commerce Committee listened to the submissions for this treaty last year, one of the things that they found was that 7 percent of the respondents to a Blind Foundation survey found such limited access to materials, to the point that when they accessed tertiary education they gave as the reason for them leaving their studies—ending their studies, basically—that they could no longer access materials. And so when we allow this treaty to make it more accessible to those with print disabilities, it would make it more available, make it more accessible, to those of our students who are having difficulties when they study to be able to access materials when they study.

Another thing that the select committee also found was that 40 percent of those accessing tertiary education here in Aotearoa New Zealand could not keep up with their studies because they felt that there was not enough support and that there was negative impact on their studies because of the lack of materials that they were able to access. So one of the goals of the Marrakesh Treaty is to change this sad reality for so many of our students.

As you heard from the Minister, Kris Faafoi, earlier on, it is estimated that here in New Zealand those with print disability is up to a number of about 168,000 people. That is a whole lot of people that will be able to access more materials, and be able to have better access when they have tertiary education, when we accede to the Marrakesh Treaty.

The other thing that the Commerce Committee also found is that the Marrakesh Treaty would be able to allow those with disabilities better autonomy, better independence, and better health-improved outcomes. Those individuals will be able to find and interpret and use information for health services. They’ll be able to make more effective decisions for themselves related to their health and well-being. And I believe it is our job, as members of Parliament, to ensure that New Zealanders are not disadvantaged, to ensure that they have better access to education, better access to employment and social well-being. I encourage all members in this House to support the Marrakesh Treaty. Thank you very much, Madam Deputy Speaker.

Hon JACQUI DEAN (National—Waitaki): Thank you, Madam Deputy Speaker. It’s an easy thing to get full consensus across this House to support the Marrakesh Treaty, because it has been in the machinery of government under various Ministers for a few years now, and has just passed through the able chairmanship of Melissa Lee in the previous Parliament’s Commerce Committee and its treaty examination. So any question that the House might not support this I don’t think carries any weight, particularly when, as politicians, we talk to the people we represent, and those who have access to only 10 percent of published works, and how frustrating that is for the people who are members of the Blind Foundation, the blind citizens of New Zealand.

We’ve met them or we’ve talked to them in our own parts of New Zealand and heard their frustrations, particularly on behalf of young people and children who are making their way through the education system and come up against this barrier of having only 10 percent of printed works available to them in a format that they can access and use for themselves. So the Marrakesh Treaty and this examination in the House is another good step along the way to enacting this treaty so that we can join the other 30-odd international countries around the world who will, in their own legislative way, provide exceptions to some form of commerce Act. In our case it’s section 69 of the Copyright Act that will provide exceptions for non-profit organisations, and that is so they can access this material in a form that can be used and then can distribute it to the people who wish to use it.

Many of the issues in the Marrakesh Treaty have been traversed in the House, and I see that the Government members are taking full calls, so it doesn’t seem to me that I can add anything particular in traversing the details of this treaty, except to say that it enjoys the full support of National, as it did when we were the Government. We moved this process along, and now I’m very pleased to see the Hon Kris Faafoi continuing the work of previous commerce Ministers in enacting this very worthwhile and worthy treaty. Thank you.

GOLRIZ GHAHRAMAN (Green): Thank you, Madam Deputy Speaker. It is with great pleasure that I rise to speak in support of the implementation and accession of this treaty, especially in the context of consensus in this House. The Marrakesh Treaty, as has been said now six times, is vital to New Zealand’s compliance with our obligations to the disabled community, in particular the community of New Zealanders some 168,000 strong who suffer from some form of print-reading impairment, from blindness to all sorts of other types of perceptual impairment.

I was astounded to find that only 10 percent of printed material caters to this group. As we all know, this restricts their right to access employment, education, and recreational opportunities, and, for children who suffer this type of impairment, to be able to read the same books as their friends—to form friendships based on reading is such a great pleasure that I think we all probably remember from childhood—to engage in school learning that’s the same as other children, and later on to engage in public discourse, from political activism to all sorts of cultural engagement. I remember once asking my mother what the hardest part of moving countries and changing her whole life was, and she said that it was that she couldn’t share the pleasure of reading with new friends that she made, because she couldn’t always read the same books. They weren’t available in Farsi and English. She was a stranger in a strange land, but to think that visually impaired New Zealanders are suffering the same hardship, what she found to be the gravest hardship about her move across the world, is incredible.

This is an initiative that actually affects the very basic rights for print-impaired New Zealanders. It affects our compliance with the United Nations Convention on the Rights of the Child, our compliance with the United Nations Convention on the Rights of Persons with Disabilities, and I would say also our compliance with the Universal Declaration of Human Rights, because, as we know, the rights to access basic education and information are basic human rights. This is a multinational treaty initiated by the World Intellectual Property Organization. It essentially takes away what hinders copyright sharing of printed material that can be printed or produced in ways that can be accessed by visually impaired persons. The exception to that type of copyright law will apply to non-profit organisations like libraries or other educational institutions that have thus far tried to facilitate access for blind New Zealanders or visually impaired New Zealanders in their own ways, but have been hindered by copyright rules that don’t recognise the limitations placed on that community.

The legislation supporting this treaty will affect the current section 69 of the Copyright Act 1994, which does provide for exceptions to copyright infringement, allowing prescribed bodies to print or to produce material in accessible form, but we know now that that exception is far too limited. It applies to a very small number of organisations with very limited resources that are providing accessible-format copies to a small subset of the persons we’re talking about today. So the treaty, and, in turn, the legislation that will be introduced in this House to implement it, will aim to change that and to broaden the scope of the exceptions to the copyright rules to allow for a far larger body of organisations to provide for all visually impaired New Zealanders who are affected by accessibility issues when it comes to printed material.

Inclusion and equality fall squarely within the kaupapa of the Green Party, and I’m reminded of the incredible work of former Green MP Catherine Delahunty on inclusive education in all its forms. So this treaty and eventual implementation legislation fall within that important kaupapa, and I am proud to stand here and see this come through for New Zealand so that we might better comply with our human rights obligations and we might move closer to becoming a more inclusive and equal society. Thank you.

Hon NICKY WAGNER (National): Thank you, Madam Deputy Speaker. I’m delighted to support this Marrakesh Treaty, a treaty that will facilitate access to published works for persons who are blind, visually impaired, or otherwise print disabled, because it will break down barriers for these people and it will open up opportunities—opportunities for them to independently access information and knowledge. As we’ve already heard, it’s an important international framework, and it will enable the reproduction and distribution of books and other literary works in the accessible format without breaking copyright laws, and that’s the key issue—without breaking copyright laws.

I’m particularly pleased to be part of this debate today because the decision to progress the treaty was made in 2017 when I was the Minister for Disability Issues. There was a lot of discussion within the sector and strong support to progress that, and I did that when I was working with the former Minister of Commerce, the Hon Jacqui Dean. The Commerce Committee then began the parliamentary treaty examination process, which has now been completed, and thus we are debating its report.

New Zealand has already been able to produce accessible-format materials through the dispensation of section 69 of the Copyright Act 1994, but what this does is give access to accessible-format materials in other countries—obviously, access to a huge amount of material that hasn’t been available previously. There are two organisations in New Zealand, the University of Auckland and the Blind Foundation, who are authorised entities to produce accessible-format materials, and they do that well. But they have limited capacity, they have limited resource, it’s a very expensive exercise, and the worst thing is that they’re often duplicating work that has already been done internationally. So becoming part of this treaty will give New Zealanders—these New Zealanders who have a print disability—much easier access to a whole variety of accessible works. It also will help New Zealand adhere to our international responsibilities and obligations under the United Nations Convention on the Rights of Persons with Disabilities and also to the United Nations Convention on the Rights of Children.

Of course National supports this Marrakesh Treaty because it absolutely will improve the life of people who are blind, visually impaired, or have a type—any type, actually—of print disability. There’s a large number of New Zealanders in that circumstance. We’ve heard already in the House somewhere up to 200,000 New Zealanders—168,000 and counting—and, also, it covers a wide range of materials: Braille materials, large-print materials, and also audio format. At the moment, a huge majority of materials—up to 90 percent—are not available in accessible formats, so this treaty will make a huge difference, and it will make a huge difference to a wide range of people.

It is expected to have significant long-term social impacts for people with a print disability, and I just want to give a couple of examples of that. For example, people with a print disability—many of them discontinue their education and studies because they can’t get the material to study; there’s no accessible material available for them. In fact, 40 percent of the students in this situation say they felt it impacted their results, and you can see this in the stats. At the moment, only 33 percent of working-age people with a print disability have a tertiary education, whereas that can be compared to 41 percent of the wider population. This difference continues into the employment figures: only 54 percent of people with a print disability have a job, compared to 69 percent of the general population. Of course, by not being part of the workforce, this affects incomes, but, also, these people lose the intangible benefits of being part of work teams, of the social interaction, and of the ability to use their skills.

There are other benefits of having more accessible formats, particularly through international access. It will give disabled people more opportunity to be independent, more opportunity to have choice and control in their lives, more opportunity to be better informed about every part of how they want to live their lives. It will also give them greater access to works in foreign languages, which is useful, and, also, we think, with an expectation of the international established libraries. There are huge libraries of accessible material around the world, particularly in developed countries, and that will be available to New Zealand but also to less-developed countries, and that will make a huge difference to their people. We also feel that because New Zealand won’t have to print some of the standard texts, we’ll be able to print more New Zealand material, including Māori and Pasifika works.

So, in conclusion, implementing this Marrakesh Treaty is a significant step forward. It’s been strongly supported by stakeholders, strongly supported by the disability sector, and strongly supported by the National Party, and we see it as an important milestone to step up to the vision that we have in the 2016 New Zealand Disability Strategy. That’s a vision of a non-disabling society—of a truly non-disabling society—and I think that’s a very important part for New Zealand. Kia ora.

GREG O’CONNOR (Labour—Ōhāriu): Madam Deputy Speaker, it gives me great pleasure to rise to speak on this Marrakesh Treaty. Just—

DEPUTY SPEAKER: My apologies—this is a split call, so five minutes; bell at one. Sorry to interrupt the member.

GREG O’CONNOR: Thank you, Madam Deputy Speaker. Just to build on the presentation by the Hon Nicky Wagner, I think what the important thing is, when we get to debate a treaty like this, is that it highlights disability issues. We’ve talked about the 168,000 New Zealanders whose lives will be enriched by this, potentially. But what it also does is ensure that—what we often forget when we’re talking about disabled people is that it’s actually so much of the pleasure of the world that they are deprived of. Those of us who grew up understanding the pleasures of literature in particular understand just what a journey we can take into that area.

It’s quite ironic that it is called the Marrakesh Treaty, because Marrakesh is somewhere that those of us who, in our youth, backpacked around the world—Marrakesh is one of those places and occupies, in our minds, an exotic location. It is very exotic—it’s not the oldest place in Morocco, it’s not even the capital of Morocco, but it is the cultural centre of Morocco. What better way to have a treaty that is going to enable so many people in New Zealand who are currently deprived of the ability to fully partake in the cultural pleasures of our world than to be called the Marrakesh Treaty? So I am very much proud to stand here and be in support of this.

The print disabled, blind, severely impaired, unable to hold or manipulate a book, unable to move or focus their eyes, or experiences a disability with respect to visual perception—they’re just words, but they mean so much if you’re one of the people who are subject to any of those disabilities. I know through my own personal involvement with the disability sector that it is a part of the world that constantly looks not for pity, not even for assistance, but just to feel that they belong to the world in which those who are, shall we say, privileged enough to be normal, occupy. It’s treaties like this, it’s measures like this, that just go that little bit further to ensuring that those people do get to participate fully in the world.

The Marrakesh Treaty—it’s a treaty on copyright, adopted in Marrakesh, as you’ve said, on 28 June 2013, and it seems a long time ago, but in the lives of so many people, anything that improves is worth waiting for. The UN Convention on the Rights of Persons with Disabilities—New Zealand is a party to. Of course, that guarantees full equality under law for people with disabilities, so, again, it is absolutely appropriate that New Zealand be part of any legislation, any treaty that improves the lot of those people.

Before the legislation comes in, there’s only a small number of organisations that are prescribed bodies under section 69 of the Copyright Act that exists now, and there’s only two organisations in New Zealand who are actually able to produce material under that Act. It is extremely expensive, and in the absence of this Marrakesh Treaty, it would continue to be a bar to so many fellow New Zealanders accessing the whole world—the world of literature, the world of every written and other word that we need to be part of the world.

This also explicitly provides for the import and export of accessible-format copies. At the moment, of course, if someone does wish to import any material, they are subject to the copyright of those countries as well—so, again, a big restriction. So part of not only ensuring that those with disabilities, the sight-impaired in New Zealand, become part of the New Zealand society—fully functioning members—but they can actually also become part of that world, I suppose, as I said at the start, prefaced by that exotic land of Marrakesh in Morocco. So it gives me great pleasure to recommend this treaty and our participation in it to the House, and, as it progresses through the House, just a thought for those who will be watching who will be very pleased to know that they’re going to be part of a bigger, wider world.

Hon PAUL GOLDSMITH (National): Madam Deputy Speaker, thank you. I’m pleased take a short call on this issue that we’ve got before us, the international treaty examination of the Marrakesh Treaty. It was my honour, I suppose, when I was Minister of Commerce and Consumer Affairs a couple of years ago—that this issue had been before various Ministers for a number of years, and, as anybody who’s had the privilege to be a Minister will know, there’s a lot of competing priorities for the time of officials to get the work done in order to prepare for such things. This was one thing that hadn’t made it to the top, and I was determined that the officials do the work so that we could accede to this Treaty, because it will make a difference to the lives of many New Zealanders.

I want to reach out—well, I want to refer to the hard work done by the Blind Foundation, who are based in Parnell, where I am based, and who work so hard on behalf of the broader community who struggle with their vision.

The problem that we’ve had here is that the New Zealand copyright legislation allows for the reproduction or production of works in accessible formats but it doesn’t allow for those works to be imported or exported, and so New Zealand has to recreate the world in every example, and that, of course, is very expensive and very slow. We’ve got a whole world of opportunity out there, in terms of audiobooks in particular, which have been done in many other countries, and so this is a no-brainer in terms of giving New Zealanders access to that wonderful store of knowledge and entertainment and joy that is out there.

I think everybody in this House sees this as something good, and I’m so pleased that we’re in the position to make further progress on it. I commend this to the House.

PRIYANCA RADHAKRISHNAN (Labour): Thank you, Madam Deputy Speaker. It is an honour to rise and speak to the Marrakesh Treaty to Facilitate Access to Published Works for Persons who are Blind, Visually Impaired, or Otherwise Print Disabled. Now, I understand that about 33 countries have actually ratified this treaty, and that includes Australia, Canada, Chile, India, and Singapore.

What does this treaty do, however? It is known as the Marrakesh Treaty, because the actual name is quite long. What it does is provide an international framework for the production and the dissemination of copies of books and of other literary works in formats that are particularly accessible to people with a print disability. So that includes those who are blind, those who have a visual impairment that cannot be rectified with the use of glasses, and those who have a physical disability that prevents them from being able to read a book. This treaty is about fairness. It’s about being inclusive as a society. It’s about being ambitious for all New Zealanders and actually ensuring that all New Zealanders can participate fully in public life.

We understand that there are about 168,000 New Zealanders who have a print disability, and we know that it is difficult for those with disabilities, including visual impairments and other print disabilities, to participate in public life. We know that they’re twice as likely to be either unemployed or underemployed.

Just last week, I met with an organisation whose national office is based in Onehunga, in the Maungakiekie electorate where I’m based. They’ve got branches across the country. I’m referring to the ELEVATE Christian Disability Trust. I met with members of this trust last week and they gave me some really concrete examples of how their members feel underutilised in society. Those who are applying for a job feel that their opportunities are limited, largely because of how employers perceive them and their ability to contribute in the role that they’re being considered for or, in many cases, not being considered for, unfortunately. I’ve also grown up with close family members who’ve had visual impairments and been unable to hold a book or read a book, especially later in life, and so we know that this treaty has the power to change the lives of so many.

I also want to acknowledge, as speakers before me have done, the work of the Blind Foundation. They’ve actually been pushing for New Zealand to accede to this treaty for many years, and it is in that sense also an honour to be able to speak in the House to this treaty.

So, now, what does the Marrakesh Treaty do? It requires member States to provide copyright exemptions that allow authorised entities to make and distribute accessible format copies of literary and artistic works in their own countries without seeking the permission of the copyright owners. It also allows these member countries to export these accessible format copies to other member countries and allows them to also import them, and therein lies a huge benefit to New Zealand. It allows us to export, if we were to ratify this treaty, New Zealand content around the world to member countries, and it allows them to export to us as well.

Some have suggested that we just tweak New Zealand’s existing copyright regime. “Why can’t we do that?”, they ask. Section 69 of the Copyright Act 1994 does provide an exemption to prescribed bodies—which, I was shocked to learn, were actually only two—to make accessible format copies of literary and dramatic works for people who have a print disability, without needing to seek the permission of copyright owners. So people have asked, “If we already have this ability, why don’t we just go with that?” But there are some issues to this. There are issues of cost. It is hugely expensive. I think, as we heard before from the Minister Jenny Salesa, it can cost up to $6,000 to transform, or to translate or to make accessible, books and other literary works. So it’s very expensive. It’s cost prohibitive in some cases. It’s time consuming. It takes quite a lot of time to make that happen, and there are too few organisations. There are only a small number of organisations that are prescribed bodies under section 69, and these organisations serve only a small subset of people with a print disability. This means that a large majority of New Zealanders who have a print disability continue to miss out. They continue to have very limited access to accessible format copies.

Now, what are the amendments that are required to the Copyright Act 1994 in order for us to accede to this treaty? A lot of them we actually already comply with. We will retain provisions that are laid out in section 69. However, there are some amendments that are required before we can actually accede to this treaty. Some of them are quite explicit. So I’m just going to read them out from the Commerce Committee’s report. So the amendments that will be required to align the current section 69 with the Marrakesh Treaty include explicitly providing for the “import and export of accessible format copies” to and from New Zealand and other countries parties to the Marrakesh Treaty.

Actually, at this point I just want to add that from some of the advocacy work that the Blind Foundation has done specifically on this, I was actually quite shocked to find out that in some cases we’ve got students who have print disabilities and are finding it really difficult or impossible to access school textbooks that they require to continue with their education. Those who want to learn, for example, a different language, are struggling to be able to access books in those languages in New Zealand. And I think that’s actually absolutely unfair and unacceptable. If I wanted to learn a language, it would be extremely easy for me—well, not extremely easy to learn the language, but extremely easy for me to access the materials that I would need in order for me to do that, and I feel that the same should be applicable to everyone, including those with print disabilities.

So back to the amendments noted in the report. Another amendment is to “extend the definition of ‘works’ (to which the section 69 exemption applies) to include artistic works;”. We would also need to expand the conditions applied to prescribed bodies in section 69, as I mentioned before. My understanding is that prescribed bodies is limited to two entities, so we would have to expand the conditions and the exception to include “the maintenance of due care in, and records of, its handling of copies of works;”. Finally, another amendment would clarify that the definition of a person with print disability includes “individuals who have a visual impairment or perceptual or reading disability, which cannot be improved to give substantially similar function as a person without such an impairment.”, and that’s the point that I was alluding to previously in my example of wanting to learn a different language.

Many countries have a disability exception to copyright infringement, but there is a need for an international instrument that allows for cross-border distribution of accessible format copies, and that’s what we’re discussing here. This treaty has come about after four years of intense negotiations among member States. And I’ve also got to conclude on the note that I’m actually extremely proud to be standing on this side of the House, part of a Government that’s actually pushing this forward, because one of the concerns of the Blind Foundation was that the previous Government was not giving this due importance and that it would slip down the priority list and actually get lost amongst some of the other work.

We consider this extremely important. As I mentioned at the start, it’s about fairness, it’s about inclusion, it’s about inclusivity, and it’s about ensuring that all New Zealanders have the right to access the information that they need to enhance their dignity and their well-being. So I’d like to commend this to the House. Thank you, Mr Assistant Speaker.

Hon CHRISTOPHER FINLAYSON (National): Well, there’s nothing to commend to the House, because this is not a bill; it’s a treaty discussion. I heard the pious claptrap of the previous speaker, Priyanca Radhakrishnan. The reality of the matter is that it’s because of all the excellent work of the Hon Paul Goldsmith, an outstanding Minister of Commerce and Consumer Affairs—it’s a kind of a shame he’s in Opposition, but it’s comedy hour when he questions Willie Jackson; it’s a great laugh—and the other people who have been involved in this work from the National Government’s days.

Fletcher Tabuteau: You’re even more bitter than usual.

Hon CHRISTOPHER FINLAYSON: Can I offer—and I hear his interjection—my warmest congratulations to Mr Tabuteau on his assumption of the deputy leadership of New Zealand First.

Hon Shane Jones: Hear, hear! Hear, hear!

Hon CHRISTOPHER FINLAYSON: But if I can—and I know Mr Jones is bitterly disappointed, but I have to say this to Mr Tabuteau: being deputy leader of New Zealand First is like being the Prince of Wales in Hanoverian times, because whoever was Prince of Wales, the old man always hated you. So I would say to him: enjoy the deputy leadership before someone else moves in—probably Mr Jones.

Look, one could go on at length about this matter, but really it all falls to a close examination of section 69, which shows why an amendment is needed. I was very interested in the report of the Commerce Committee. I’d refer honourable members particularly to paragraph 22, when it talks about the failings of section 69. Section 69, as other speakers have said, deals with the “Provision of Braille copies of literary or dramatic works”—it doesn’t cover artistic works—and subsection (4) deals with the definition of those persons who have a print disability—so, for example, if a person is blind or suffers impairment of his or her sight, is unable to hold or manipulate books, and so on. There’s also a definition—it probably applies to the Deputy Prime Minister—unable to focus or move his eyes.

So there are some gaps in the legislation. It talks about a grey area, but I would have thought it was quite black and white, even though it hasn’t been tested in the courts, that there is real uncertainty over the legality of prescribed bodies importing accessible-format works. I would have thought it was a no-brainer that there’s an obstacle, which is why there needs to be an amendment to the legislation. Paragraph 23 sets out what other speakers have said about why we have this Marrakesh Treaty and why an amendment to section 69 is required.

So it’s a very important piece of work undertaken with zealotry by the previous National Government, and I would have thought that we could get an amendment bill in, given the dynamic and hard-working Minister of Commerce and Consumer Affairs that we have now—get it into the House and off to a select committee. I don’t think too much more need be said about it.

LOUISA WALL (Labour—Manurewa): Tēnā koe e Te Māngai o Te Whare. Tēnā koutou katoa. It is my pleasure to contribute to the debate on the International treaty examination of the Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired, or Otherwise Print Disabled.

I actually want to start with a quote from a man called Dan Burke, who was 52 years old. He was a blind man—he’d become blind through retinal disease—from Montana. I quote, “Information is what we want. Information is the power to become economically viable members of society. This is a world in which if you don’t have money you usually don’t have access.” The reason I chose to start with that quote is because the quote came from an article dated 12 November 2009 and it was titled “Copyright Owners Fight Plan to Release E-Books for the Blind”. I really wanted to put this treaty within a context of the community that has been fighting and had been fighting for so many years to get the World Intellectual Property Organization (WIPO) to create this treaty.

On 16 November 2009, there was a meeting in Geneva to consider the WIPO treaty for sharing accessible formats of copyright works for persons who are blind or have other reading disabilities. It was proposed by Brazil, Ecuador, and Paraguay, but what I want to highlight was that it was fought against by the US Chamber of Commerce representing 3 million businesses. In fact, there was only one American organisation who supported this treaty, and I think it’s worth noting—that was Google. Google and their chief copyright officer at the time, William Palfrey, said that this treaty was about a group that needs and deserves protections of the international community. So I have chosen to highlight what I think was the beginning of a process that enabled the treaty that we are debating today to be assented to, including by New Zealand.

Just as a bit of a background, there are millions of books published worldwide, and between 1 and 7 percent are provided in a format that 285 million persons in the world who are blind or visually impaired have access to. In New Zealand, that’s 10 percent of books and it affects 168,000 New Zealanders. And 90 percent of the people who will be affected by this treaty live in low-income settings and developing countries. So that’s the context of the treaty. It was also framed within a context of a global book famine. It’s only in this treaty that human rights principles outlined in the Universal Declaration of Human Rights, the United Nations Convention on the Rights of Persons with Disabilities have been enshrined, so this is the first copyright treaty to include a clear and transparent human rights perspective.

The treaty is really simple. The treaty looks at who the beneficiaries of the treaty are—so the blind and visually impaired. It looks at what can be made accessible, and it also looks at which formats the works can be adapted or translated or modified to, to become accessible. Our obligations as a country or as a party to the treaty are twofold: firstly, to provide for a limitation or an exception to copyright, which will allow the beneficiaries—those who are blind and visually impaired—through authorised entities to reformat and adapt the work to then make it accessible. It also allows for the exchange of those accessible materials across borders. Herein lies, I think, our obligation as a leader within the Pacific. I believe that through this piece of legislation and the need to create formats that address Pacific, Samoan, Tongan, other Pacific speakers, there is an opportunity for us to contribute to ensuring that our Pacific Islands Forum member country partners are also beneficiaries to this treaty.

So the benefits, generally, are increased access to books and magazines for the world’s populations of persons with print disabilities. It’s also about increasing the awareness of the challenges faced by the print-disabled community and persons with disabilities. I just want to linger on that for a moment, because, at the end of the day, treaties such as this and discussions that we’re having in the House are about priorities, and it is an important opportunity for us to say that this treaty and the legislation that we eventually introduce into our Parliament says to our disabled community, our blind and visually impaired community that, “Actually, you’re incredibly valuable and important and that’s why we are doing what we are doing.”

And we’re doing what we’re doing to ensure that there’s increased access to education. So we know that through education you learn—well, knowledge is imparted and that knowledge then provides an opportunity for people to study in concentrated areas. It’s also really important for enhanced social integration and cultural participation. Lest we forget how important it is to understand, for example, some of the things that are happening in our community that we get through newspapers and that we get through other modes, which really do communicate what is happening in society. So, I think that developing opportunities to learn to participate, to engage in social inclusion or inclusiveness, conversations, and also to get a good education to get a good job can’t be underestimated.

In fact, that is probably the last area I want to focus on. It is the one about poverty alleviation and how, through the transmission of the knowledge in the books in formats and in ways that ensure our blind and visually impaired whānau can then build on a learning regime, that enables them to be contributing, constructive, self-sufficient members of society, which is something that we all should take incredibly seriously, but also we should all be incredibly proud that we’re part of.

When this treaty was assented to on 30 September 2016, 20 countries automatically provided for the treaty. I do think it’s an interesting mix of countries and I would like to indulge the House by reading them out. The first countries were India, El Salvador, United Arab Emirates, Mali, Uruguay, Paraguay, Singapore, Argentina, Mexico, Mongolia, the Republic of Korea, Australia, Brazil, Peru, Democratic Republic of Korea, Israel, Chile, Ecuador, Guatemala, and Canada. In understanding, I think, the relevance of this treaty to developing countries, it’s heartening to see the mix of developing and developed countries that have ensured and will ensure the implementation of this treaty.

From my perspective and the perspective of the House, I think that it’s incredibly important that we do thank the Commerce Committee for the evidence that they’ve provided to this House for us as a country to assent to this treaty. I do look forward to the progress of the bill through the House, which will enable us to contribute to translating 90 percent of our books into mediums and modes that allow our blind and visually impaired fellow citizens to fully participate in our society. At the end of the day, information is knowledge and if we go right back to what Mr Burke said, if we want our disabled community to have the means to be self-sufficient, then it’s actually treaties such as this that will give them the tools for that to become a reality. Kia ora, Mr Assistant Speaker.

Motion agreed to.

Bills

Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Bill

Discharge and Referral to Finance and Expenditure Committee

Bills

-18, Employment and Investment Income, and Remedial Matters) Bill be discharged and that the bill be referred to the Finance and Expenditure Committee for consideration.

ANDREW BAYLY (National—Hunua): I move, That the order of the day for the second reading of the Taxation (Annual Rates for 2017

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

Ayes 56

New Zealand National 56.

Noes 63

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

Motion not agreed to.

Second Reading

Hon STUART NASH (Minister of Revenue): I move, That the Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Bill be now read a second time.

What an extraordinary call that was. Normally, these sorts of bills move through the House. That member, Andrew Bayly, sat in the Finance and Expenditure Committee (FEC). He heard all the deliberations. It went through the normal process. This is the way this Opposition is going to behave—oppositional the whole way. Well, if that’s how you want to do things, be our guest—be our guest. In the meantime, we are going to put forward an aspirational vision for New Zealand. Oppose it all the way—we’ll love it. In the meantime, we’re going to be aspirational.

I would also like to congratulate Mr Fletcher Tabuteau for being elected the deputy leader of New Zealand First. Congratulations, mate—well done. You’ll be a fantastic deputy leader.

This bill sets the income tax rates for the 2017-18 tax year and contains proposals aimed at strengthening the current tax settings to ensure that taxes are applied fairly and evenly—

Brett Hudson: Has anyone seen Ron today?

Hon STUART NASH: He can’t listen. But the principal focus of this bill is to simplify and improve taxpayers’ experience of tax administration in New Zealand—something I would think we all strive for. The bill contains measures that will provide the IRD with good, more timely information, direct from employment and investment income payers. Better information will mean greater accuracy of tax collected through the year, which will help prevent people getting into debt. It will also help reduce the annual tax return chore for many. So it’s important to this Government that these changes to our tax administration are well-designed to deliver these benefits to the New Zealand taxpayer. I am very grateful, therefore, to the Finance and Expenditure Committee for their careful consideration of all the proposals in this bill and their recommendations for improvement.

Many of the recommendations focus on further smoothing processes or reducing compliance obligations for businesses, particularly for the process of filing income information to inland revenue. Some employers provide PAYE information to inland revenue on paper, but because of declining demand, the postal service makes fewer deliveries and no longer offers Fastpost. With this in mind, instead of the originally proposed seven working days from payday, or deemed payday, to provide this information to IRD, the proposal in this bill is that these employers have 10 working days. Further, these employers would also only have to file a maximum of two returns per month, rather than for each payday in a month, for information reporting.

In addition to regular paydays, many employers make out-of-cycle payments—for example, to pay a departing employee their final pay on the day they leave. It is now proposed to generally allow employers to report out-of-cycle payments with their reporting for the next regular payday, rather than having to file separately. Again, this limits the number of returns an employer is expected to file and makes life easier for taxpayers—something the members on this side are very happy about. For schedular payments—for example, payments to certain contractors in employee share scheme benefits—it is now proposed to allow an option that would, at a minimum, require reporting on a twice-monthly basis, rather than every payday in a month.

It is also proposed that for payments by non-resident employers to persons on shadow payrolls, the recognition of payments can be deferred by 20 days and add the option of reporting on a twice-monthly basis. This allows them more time to calculate the New Zealand taxable income in PAYE deductions for their New Zealand - based employees. These are the changes recommended to help smooth processes.

Another change recommended related to the repeal of the payroll subsidy. The bill as introduced proposed to repeal the subsidy with effect from 1 April 2018. However, submitters told the select committee that the subsidy should remain in place until PAYE improvements such as payday reporting of PAYE information are bedded in, and the select committee has backed this—well done, FEC. The Government has, therefore, decided to retain the subsidy for another two years, until 1 April 2020—another case of the Government listening to those who appear in front of the select committee, and I congratulate the chair on the great work he did in getting this through.

Some changes have also been made to reduce compliance costs associated with proposals for reporting investment income. The main change means that payers of investment income will not be required to report on exempt recipients.

I now turn to the second major component of the bill: proposals to modernise and improve the taxation of employee share schemes. The main objective of the proposed reforms is to ensure that, as far as possible, the tax position of both the employer and the employee is the same, whether remuneration for labour is paid in cash or shares. This includes ensuring that the share scheme cannot be structured to give employees tax-free remuneration. It’s about paying your fair share. For example, under current law, an employee can be given a disguised share option without ever being taxed on that benefit, whereas the provision of an actual option is taxable when the option is exercised.

The Government is very keen to improve the fairness and integrity of the tax system, so the proposal in this bill will remove this distortion and bring this form of remuneration more in line with other forms of remuneration. The Government expects that employers will particularly welcome the ability to claim a deduction for employee share scheme benefits without the need for complex structuring. The bill also clarifies and modernises the provisions related to widely offered share schemes, because the benefit that can be offered under these schemes is relatively modest and it’s tax exempt. The trade-off for this is that the provision of the benefit is also not deductible for the employer.

Five new charities are proposed to be added to the list of donee organisations in schedule 32. These are Byond Disaster Relief New Zealand, Flying for Life Charitable Trust, Médecins Sans Frontières New Zealand Charitable Trust, the Tony McClean Nepal Trust, and Zimbabwe Rural Schools Library Trust.

Now, I would also like to advise members that I intend to release a Supplementary Order Paper that will give effect to the Government’s intention to extend the current brightline test for residential property sales from two years to five years. This is about the integrity and the fairness of the tax system. I would have thought that this was something that every New Zealander is passionate about—fairness and the integrity of the tax system. It sort of boils down to paying your fair share—that’s all it is. The thing about this is that when it arrived in select committee in the last term, it was debated vigorously, and the Government, unfortunately, came up with two years. But we have said that the fair way to do this—the fair way to bring the people who flip houses, who speculate on property, into the tax system is through changes to the brightline test.

In bringing the bill to its second reading, I must again acknowledge the significant contribution by the Finance and Expenditure Committee to the clarity and practicality of the bill, and especially the chair, who I think does a fantastic job—well done, Mr Chair. In my view, these recommendations have greatly improved the bill and, as mentioned, have brought a level of clarity, fairness, and integrity to the tax system. It is my pleasure to commend the bill to the House.

Hon STEVEN JOYCE (National): Thank you for the opportunity to take a call on this bill. Just to be clear, for Mr Nash’s benefit, given that this bill is literally a bill from the previous Government, introduced by my colleague the Hon Judith Collins, we are, of course, keen on its main aspects, its main provisions. But, can I say, it sticks in the craw, on this side of the House, for the Minister of Revenue to salute the performance of the Finance and Expenditure Committee of this Parliament and then refuse to send his brightline test to the Finance and Expenditure Committee for even a cursory analysis of whether it is the right thing to do or not. This is how shoddily this Government has behaved.

That bill was reported back to the House by the select committee last week, and one day later—one day later—the Minister of Revenue announces that he will release a Supplementary Order Paper (SOP) on the brightline test, extending it to five years. That is an appalling way for the Minister to behave—an appalling way for the Minister to behave—to actually disrespect the Finance and Expenditure Committee while at the same time coming down to the House and saying they did a good job: “They do a great job, but I’m not prepared to put this significant policy change in front of the Finance and Expenditure Committee.”

I’m sorry, but that is appalling from the Minister, and it shows that the Government is determined to hear absolutely nothing from anybody as it rushes to extend the two-year brightline test to five years—nothing from anybody. It will allow a short process in the House, but no submissions—no submissions from the people actually affected: people who have investments. These are not imaginary people; these are mum and dad Kiwis who have investments in property, Mr Jones, and others—

Hon Stuart Nash: These are speculators, Mr Joyce.

Hon STEVEN JOYCE: —who are not speculators. I’m sorry; for Stuart Nash to sit there and call them speculators is arrogance in the extreme—arrogance in the extreme—because it is not fair to call those people speculators when you will not even invite them to submit on your policy change, because you are afraid, Mr Nash, to hear what they’ve got to say.

It gets worse than that, because the Inland Revenue Department doesn’t even want the brightline test extended to five years. Inland revenue have opposed the change. They have said that the two years is the better brightline period, mainly because this reduces overreach. Treasury notes also the risks of overreach. So the two advisers to the Government—and these aren’t just any old departments; this is inland revenue and Treasury; these are probably some of the most senior advisers in the Government—have said to the Government, “Don’t do this, because it will not achieve what you’re seeking to do.”, and it’s been ignored by the Minister, which compounds the fact that he cynically decided to hold back this policy change until after the Finance and Expenditure Committee had reported back the bill. I say shame on the Minister of Revenue, and I say shame on the Minister of Finance for allowing the Minister of Revenue to behave in this manner. If this is the way it’s being done, then New Zealanders have the right to say, “This Government has no interest in protecting our interests, whatsoever.”

There is no urgent need for this. The Minister could have come to Parliament a few weeks ago. This is not a hard change—he said so himself; it’s two years out to five years. Why didn’t he come at the beginning of the year to the Finance and Expenditure Committee and say, “I’m going to propose this Supplementary Order Paper. Why don’t you take some submissions on this? Why don’t you give the opportunity of the New Zealand public, of New Zealand investors who own these properties?” Why wouldn’t the Minister come to the select committee and say, “Why don’t you go out and take some submissions?” It would not have been a hard thing to do.

And I’m sorry; I see no other way of looking at this than it is the arrogance of such a new Government to not be prepared to consider other views on something that is so important. These are people that own property, that have bought property, that have bought it on the basis that they can behave in certain fashions, and this Government, without even offering those people the opportunity to make a submission, has come into this House literally a day after the bill was reported back—one day after; how can you not see that as the most cynical thing?—and brought it to the House and said, “We aren’t going to take submissions. We’re not going to put it to the select committee.” This, I believe—sorry, Mr Nash—is very arrogant at this stage in this Government’s life, Mr Nash. It is very arrogant indeed, especially when the Government’s officials—Inland Revenue aren’t prone to oppose increases in reach for themselves. It doesn’t happen often that Inland Revenue says, “Hey, we actually don’t want these powers you’re proposing to give us.” They have said that this is not good policy.

So, again, one would think that the Minister would say to Parliament, “Yes, it is policy.” And Mr Jones has rightly said, “Labour actually campaigned on it.”, and Labour did campaign on it. I don’t want to go back and talk about the poll results, Mr Jones, but 37 percent only gets to 50-odd percent with two parties that didn’t campaign on it. That’s the way that works, Mr Jones. And so, here we are. We have an SOP that isn’t supported by the majority of this House, except by a coalition arrangement, that comes to the House after it would have had the opportunity to be considered at select committee. That is shoddy behaviour by this Government, and they should be ashamed of it because there is no need for it. It is early short-term arrogance of a type that, actually, you see in dying Governments, not in Governments that see themselves as taking up the Treasury benches responsibly.

And I come back to the most important point: this is not a theoretical discussion. This is not a theoretical discussion; this is a discussion that affects the investments of New Zealanders. This is not an interesting technical point; this is how they can treat their nest eggs, their investments: mum and dad, who’ve bought a second property, how they can treat their investments when they sell them. It’s got nothing to do with speculators. In fact, inland revenue says it’s not going to catch speculators. Inland revenue says it’s going to overreach and capture legitimate property transactions—that’s what inland revenue says. And the Government is determined to hide behind the fig leaf of saying that it’s for speculators. That fig leaf is getting very, very small.

The other thing that this Government needs to be put on notice about is that they are after property investors. They’re after mum and dad property investors. It’s not just this; this is alongside other issues like negative gearing, like a capital gains tax. Again, these are real people. To Stuart Nash, they might be theoretical people and “It’s OK, we won, you lost, therefore, you have to put up with this.” That might be his view, but, actually, it’s not about this side of the House; it’s about ordinary hard-working Kiwis who’ve saved up a nest egg, who are behaving in a certain way because the law allows them, and who are not getting even the opportunity of submissions to a select committee to be able to consider how this stuff will affect them—not even the opportunity of sending it to a select committee for a discussion.

So Mr Nash can salute the Finance and Expenditure Committee all he likes, except he’s not prepared to send his policy decision to the Finance and Expenditure Committee. He’s not prepared to do that. He, I’m sorry, is running scared of public analysis of this change. He is running scared of being tested by the public on this change. No Government should be like that, particularly one that considers itself a new Government. This is the smell of a dying Government already.

This should have gone to the select committee. This party will support the bill, but we will oppose this Supplementary Order Paper and the way it’s been treated. Thank you, Mr Assistant Speaker.

MICHAEL WOOD (Labour—Mt Roskill): I’m delighted to rise in support of the bill and the Supplementary Order Paper. I want to thank the previous speaker, the Hon Steven Joyce, for his detailed exploration of the 197 pages of detail that emerged from the Finance and Expenditure Committee on this important tax bill that covers a wide, wide range of areas. But actually, of course, he spoke about the three-page Supplementary Order Paper.

I understand it’s been a long, long, difficult day for the National Party, and I want to fill in a few of the gaps—a few of the things that he missed in his comments about this piece of legislation that’s been in the works for about nine months, and on which the select committee, across the House, has engaged very constructively. But before I do that, I think I would be remiss if I didn’t provide a little bit of additional commentary on the Supplementary Order Paper that we do have before us here today.

What I want to start with is an example that was provided by CoreLogic, the public policy organisation who’s done a lot of work about the housing crisis and probably understands the state of the New Zealand housing market more than most other organisations who are out there. Here’s an example that they raised in recent public debate about the brightline test. As it happens, it relates to my own beautiful electorate of Mount Roskill, where a property on Raurenga Avenue sold for $1.95 million on 30 August 2016. It was then settled in November. In June of the next year, it was flipped for $2.8 million—in nine months a huge, big capital gain of $836,000.

The changes that this Government is going to implement in the housing market, inclusive of this capital gains tax, are about moving towards a fairer and more reasonable regime that says to New Zealanders, “Yes, we’re going to treat you fairly.” If you go out there and you work hard in your job, you get paid your salary, you get taxed on it. If you have a whole range of other investments, you get taxed on it. But in cases like this one, people who are making huge capital gains are not necessarily being taxed on them, and that absolutely is one of the factors that is contributing to a property market that is absolutely out of control. Every single member of this House, if they care to ask around, will find people in areas that they represent who have simply been driven out of the property market.

I’ve got to reflect on Mr Joyce’s comments and his passionate plea for more time to look at this issue. Well, after nine years of utter inaction in the housing crisis, nine years in which hundreds of thousands of people have been driven away from the dream of homeownership, nine years in which homeownership rates have slipped to their lowest level since the early 1950s, when Sidney Holland was the Prime Minister in this House, this Labour-led Government says, “We’re not going to sit on our hands any more. We’re actually going to do something.” We are going to implement those commitments that we made at the time of the election, when people said, “We want a new Government that will actually take action on the housing crisis.”

What did we have from Mr Joyce? We had him deferring to the Government departments. Well, of course we take advice; of course we listen to our Government departments, to consider what they have to say. But leadership in Government means knowing what your policy is, it means knowing what the problems are, and it means marching towards some solutions with some determination.

It doesn’t mean you always simply say, “Yes sir; yes madam. We’re going to listen to what Treasury or the IRD say.” We’ll listen to what they say, but this Government will actually take action on the issues. One of the reasons that we have properties like Raurenga Avenue, with a capital gain of $800,000 over nine months, is because for nine years that previous Government did absolutely nothing about this issue. So I have to say that I’m absolutely in support of this Supplementary Order Paper.

I’ve got to also mention the sort of emotive point that Mr Joyce came back to—that somehow this is going to impact your honest, hard-working mum and dad investor looking for a nest egg. Well, those kinds of investors aren’t flipping properties within five years. Those kinds of investors are setting up a long-term investment for their retirement. It is simply scaremongering, it is simply inaccurate, to say that a five-year brightline test—

Brett Hudson: Ask Inland Revenue. Inland Revenue have a different point of view to you, Mr Wood. Try asking Inland Revenue or Treasury.

MICHAEL WOOD: —which is aimed at cracking down on those speculators, is going to have any impact on those long-term investors. That is simply not the nature of it. Let’s also just respond to the high dudgeon that we hear on the other side of the House. What that previous Government did, after the last election, when they were forced into doing something, to look like they had any solution to the housing crisis, is pretty quickly they introduced the brightline test. It was a two-year brightline test.

But let’s be realistic about this. There’s no great point of principle here. We’re talking about making it a longer brightline test, to make it more effective. That is what we are talking about, and that is what this Government—

Brett Hudson: The officials don’t agree with you, Mr Wood.

MICHAEL WOOD: That’s right. Well, you keep backing the officials. You keep pretending, Mr Hudson, that there is nothing wrong.

What I would say to the new National Party Opposition, with their new leadership, is that if they keep putting their heads in the sand and saying, “There is absolutely nothing wrong with the housing market.”—if that Opposition continues pretending that all is fine and dandy with the housing market, with the lowest rates of homeownership since the 1950s, after nine years of their watch, then please go ahead. New Zealanders know that there is something wrong. This Government knows that there is something wrong, and we are quite happy to be the ones who do something about the matter.

Having dealt with that little issue, I want to return to some of the other aspects that come through in the bar 2 version of the bill that has been reported back from the select committee. Notwithstanding my previous comments, I actually do want to pay tribute to members of the House, from all different parties, who are part of the Finance and Expenditure Committee who worked through what was a pretty complex piece of legislation. I think they’ve come to a really good outcome. I want to acknowledge the former Minister Judith Collins, who’s in the House, who put the bill before the select committee prior to the last election, and the current Minister Stuart Nash, who’s shown a willingness to engage around the issues and come back with an improved piece of legislation.

The bill that is before us does a few key things. One is that it confirms the tax rates for the current tax year. That is, of course, rather important. We want to make sure that the money that we appropriate from the good residents of New Zealand is done so lawfully. But it also has a number of measures within it that modernise and improve the tax system, and these, to a large extent, relate to the Business Transformation project—quite a lot of changes relating to pay day, the frequency of reporting, moving to a pay-day reporting system, and investment income reporting.

The benefit of these changes is that they allow the Inland Revenue Department and the broader apparatus of Government to have better and more timely information, and in doing so, we are more likely to ensure that we’re actually taxing individuals at the correct amount. So while there are potentially some small burdens that fall on those who have to file, in terms of more regular filing—and I’ll address some of the changes made at the select committee here—the benefits for taxpayers across the board are actually quite significant, in my view.

The third key purpose of the bill, at the outset, was improving the settings, to ensure that we retain that broad based - low rate tax system that has pretty wide support in the New Zealand tax community and in this Parliament. You do that by making sure that you’re taxing fairly across all areas of economic activity. The key one that this bill looked to address was the area of employment share schemes where, after quite a lot of dialogue over a number of years, Inland Revenue Department, the past Government, and this Government have arrived at the conclusion that we do need some improvements to ensure that earnings that are received as a result of employee share schemes are effectively taxed in more or less the same way as earnings that people receive in other ways. There was a concern that our previous regime didn’t achieve that.

In the time I have left, I just want to touch on one or two of the key changes that the select committee made. One of the ones that I really want to focus on, which I think was a good change, that we got agreement on across the committee is what’s called the payroll subsidy. This is a small amount that is paid to ensure that largely small employers have the ability, have a bit of support, to go through a payroll intermediary, to make sure that their tax has been filed electronically and in the right way.

This is quite a useful innovation that was introduced a number of years ago. It gives those quite small employers, mainly, just a little bit of extra support to make sure that they’re paying their tax in the right way. The original proposal of the bill was to do away with that payroll subsidy. In the view of the committee, that was a bit hard line, a bit arbitrary, and a bit ideological. In our view, it is entirely appropriate, particularly when this bill puts a number of new obligations, in terms of the frequency of filing on employers, to provide just a little bit of support to those small employers.

So the payroll subsidy has been reformed, under the bill that has emerged from the select committee. We’re keeping it in place for two more years, to allow people to transition into the new requirements. It will now be more targeted, so it will apply just to those employers who file under $50,000 of tax each year. But those employers, as a result of the select committee’s work, will still have access to that payroll subsidy. I think that was a very good change indeed.

So overall this is an important bill. It modernises our tax system. I commend it to the House, along with the Supplementary Order Paper. It will bring back a little bit of fairness to our property market. Thank you, Mr Assistant Speaker.

Hon JUDITH COLLINS (National—Papakura): Oh, thank you, Mr Assistant Speaker. It’s been a delight to listen to the discussion this afternoon and, as the former Minister who brought this bill first to the House, it’s good to see it continued on, except with one exception.

I want to talk about the brightline test changes. So, for a start, as someone who has been involved in tax and the tax system for a long time before I came to Parliament, speculators are already subject to tax. The issue was whether or not they were found to be speculating at the time that they bought and sold properties. So it’s always been a taxable activity to buy and sell properties with the intention of profit. The issue has always been about finding them in the first place. With the tax administration changes and also the electronic transfer of documents, it’s a lot easier for departments to be able to police this issue.

When the two-year brightline test was brought in—or was proposed, I should say, and brought in—by National, it already caught many people who had been engaged in what’s been called by Mr Wood “flipping properties”. It’s an entirely different thing to say two years and then five years. I thought this Government wasn’t going to have new taxes before its working tax group came back with its response. What we know is that this is actually quite a severe imposition of tax on people who weren’t expecting it.

When we look at the five-year brightline test, what that actually means is that no new houses are going to be built with this—nothing new in terms of building. We’ve heard a lot about how there’s not enough housing, particularly in Auckland, that some people are making more money—well, in which case they should pay tax if they’re buying properties for the purpose of reselling and making profit, and they already would have been caught by that, if that was their intention. So what about in those relationships where a relationship breaks down after a couple have bought, for instance, an investment property to rent out? What about that? Is that going to be now caught by the five-year brightline test? The answer is, it most likely will be, or else people are going to have to try and prove somehow how they can get out of it.

The Inland Revenue Department has undergone tremendous transformation, particularly with the Business Transformation project, but there is more to come. None of that is actually easy for the department, and when the department says that this bill or this proposed change is going too far and it will catch too many people, this Parliament should listen. The Inland Revenue Department is an incredibly professional bunch of people, and what they do when their advice comes through—my advice to the new Minister of Revenue is that he should listen. I’ve found that they are very responsive in trying to deal with solutions, but I’ve never before heard where a Department of Inland Revenue has said, “Hang on. I think this is going to wrongly catch too many people—too many investors.”

Is it, in fact, the purpose of this Government to drive mum and dad investors out of a market where they’re already leaving? Is that their point? None of this will affect the big investors. None of it will affect the people who don’t have to worry that, if a mortgage rate goes up, they don’t have to bother about selling the property because they’ve already got enough money. This will open up a market to people who don’t have to go to the banks to ask for money to borrow. This is actually not going to add one new house into any market, let alone the Auckland market.

So what happens to this Tax Working Group if it comes back and says a five-year test is too much? What happens then? Are we going to come back again? Why has this not gone back to the Finance and Expenditure Committee? I heard Mr Wood say that this has the support of their side of the House. Well, actually, on that basis, then nothing should go to select committee, should it, really. Any bill put up by the Government should just go straight through! Because why would you want to hear from the people who might know more?

Is it that this Government is too frightened to ask the people for their comments? Are they too frightened to hear from the tax experts—the people who actually understand the area and what happens when you overtax? Are they too frightened to hear from the property investors as they say that all this is going to do is to feed the property investments of those who are already extremely wealthy, who will actually no longer have to compete with the mum and dad investors? Are they too frightened to hear that?

What we’re seeing is a Government that is actually filibustering its own bill—well, actually, our bill, by the way, which they took over. Why are they doing that? It’s because they’ve got nothing new to talk about, because otherwise this bill would just go through without any comment at all. So they’re relying on us having to say, “This is not good enough.” A Government that’s too frightened to go to the select committee to ask for the advice of experts is a Government that doesn’t expect and is too frightened to actually make those big decisions.

So I’d say to this Government and to the new Minister, so what happened to your promise of no new taxes before the Tax Working Group came in? What happened to GST on goods, which you said you couldn’t do until after the Tax Working Group? What happened to everything else you promised that you couldn’t do until after the Tax Working Group?

This is just another capital gains tax on mum and dad investors and, as I say from my experience in this area, there’s going to be a lot of big investors who’ll be very happy because it will take the small investors out of the market. And if the Inland Revenue Department is saying it’s too much, you should be listening.

Hon SHANE JONES (NZ First): I rise to speak in favour of the Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Bill. It’s very disappointing that the only element that the Opposition can focus on is that particular provision that has been swept into this new bill as a consequence of democracy.

The mandate for this amendment to stretch the brightline test from two to five years derives its legitimacy from democracy. Now, OK, I accept that National went through a process today that defeated democracy, but rest assured: those who were disappointed today will be leading the pack in several years’ time; of that we’ve no doubt.

But let’s come back as to why we should support this bill. Both sides of the House should try and find common ground when, really, what we’re doing is refining the actual administration of our taxation system. Now, the particular select committee that’s dealing with this, ably chaired by Mr Wood, follow in the footsteps of my good self in 2005—we tried to find unanimity on that committee.

Now, let’s just quietly go through and identify why this is a bill that really, other than a small diversion between two years and five years—the principle was enunciated, and the principle was legislated by the other side of the House. What was that principle? That there would be a test to curb the appetite of speculators, the effect of which is to drive first-home buyers out of the market. So the principle didn’t come, necessarily, from this side of the House; the principle was enunciated and legislated on that side of the House.

Now, it’s not surprising after an election, after a mandate has been delivered—formed a glorious coalition Government—that that overdue business should be taken care of, and now it has been. It’s disappointing that tawdry politics have been made of this point, but anyhow, let’s continue on.

The key point that, really, the officials have brought to the attention is that there’s got to be a continued improvement of efficiency in identifying ways of how people can honour their tax obligations in the most efficient way possible. Now, those obligations will grow in volume as a consequence of great things that are going to happen in the provinces. And, without a doubt, through $60 million - odd, then we’re likely to see an uplift of $364 million worth of happy activity and 700 jobs. Naturally, it’s important that the tax system prepare for the inevitable expansion of economic activity that will happen in these benighted, neglected areas, forgotten about over the last nine years—but more on that later. Far be it from me to use up the entirety of the House’s time reciting the many press statements of affirmation and support that have been thrown my way; modesty precludes me from talking about it any further.

I’m just going to sort of say a little bit more as to why this particular extension does not defeat the purpose of the Tax Working Group. Now, the Tax Working Group is a substantial assemblage of people that I have to acknowledge. One, in particular—and I’m sure that the former Minister of taxation would agree with me—is Joanne Hodge. I must acknowledge her in particular—a highly skilled, senior woman tax practitioner, tax analyst, senior partner at one of our bigger law firms. She deserves to be mentioned, because to survive in that world, not only as a practitioner and a professional but also as a women and a mother, they deserve—

Hon Judith Collins: She’s also married to Rob McLeod.

Hon SHANE JONES: Ah! She’s worked it out. Married to Rob McLeod—yes, of course—both of them high quality people.

Hon Judith Collins: Good people.

Hon SHANE JONES: Oh, were you taking a point of order?

Hon Judith Collins: No, no.

Hon SHANE JONES: Well, I must continue.

Hon Todd McClay: He sat down.

Hon SHANE JONES: No, no, I never sat down. Madam Assistant Speaker, I heard her call for your attention.

ASSISTANT SPEAKER (Poto Williams): Just a moment there—

Hon Todd McClay: I raise a point of order, Madam Speaker. Just a point of clarification: he may not have intended to, but I’m sure part of his anatomy did touch the chair unexpectedly. It’s the same as sitting down; he’s given up his right to speak.

ASSISTANT SPEAKER (Poto Williams): No, I don’t require—[Interruption] I did not call you—just a moment—I did not call the member; neither did I call the Hon Todd McClay to speak, either. We were in the process of changing shifts, so at this stage—thank you very much for your intervention—I will allow the Hon Shane Jones to continue with his speech.

Hon SHANE JONES: Thank you very much, Madam Assistant Speaker. Democracy could have been wrecked but for that unwise intervention on the other side of the House from the member for Rotorua.

Let me continue and point out the other areas. Now, the bill deals with petroleum mining decommissioning amendments—hmm!

Hon Todd McClay: What does that mean?

Hon SHANE JONES: What it means is that we’re in a transition economy. We’re heading towards carbon neutrality but gas still has a role in a modern economy. I think that’s what it means, in terms of my contribution.

But I would say these particular areas, and, indeed, our tax changes—not only the administration of the system and the efficiency and the maintenance of the subsidy and the affirmation that there should be constant vigilance against speculation. And there’ll be a debate—there’ll be a debate—as to whether or not there’ll be additional views thrown into the mix from the Tax Working Group. In fact, before I was rudely interrupted, I was just acknowledging a tremendously talented member of that Tax Working Group, Ms Joanne Hodge. But anyway, I don’t want to cause her to be brought into the debate any further and possibly pilloried by the other side of the House.

In terms of the quality of the work that does take place in relation to that select committee, I’m disappointed that there be a hint, on that side of the House, that there’s not collegiality there. I go back to the days when Don Brash was there, John Key was there, Bill English was there—and I think the worst possible day was when Rodney Hide was there, but because the pea weevil [Gestures to Mr Seymour’s seat] is not able to participate in this particular debate, I won’t talk about Mr Hide any more.

In relation to employment income information, changes that were introduced by the last regime, naturally these are refinements; these are matters in terms of quality administration. And it’s wrong for either side of the House to actually worsen the prospects of the professional advisers, who have a duty to ensure that the system raises revenue legitimately, that people are made aware of their obligations and are assisted when they may fall behind in their obligations, and, most importantly, that the system deals with the changing styles of business operation, the changing styles of connectedness—I think it was Mr Nash who talked about the fact that the postal system is grossly changed. In fact, out my way it’s almost like a pony express, up there in the Far North. But help’s on the way. As I understand, infrastructure will improve as a consequence of a certain fund, but more on that into the future. I keep the other side of the House waiting for a new round of great care.

So New Zealand First supports this bill. New Zealand First supports the work of the select committee and the stance of the Minister in bringing forward the test in terms of five years, because, let it be known, the principle was founded by that side of the House. Now, all this side of the House is doing is adding a year or three to that principle. For those reasons, we support the bill and look forward to the committee stage where, no doubt, people will have a chance to ventilate. But it’s important that we give hope and we give confidence to that group of New Zealanders who have been priced right out of the property market, and we’re doing very practicable things in a host of ways, including this particular bill. I support the bill.

Hon TODD McCLAY (National—Rotorua): Thank you, Madam Assistant Speaker. I want to congratulate the last speaker, the Hon Shane Jones, on his appointment, or election, as deputy leader of the New Zealand First Party today. That’s great news. I know it’s something he’s always wanted to do. But what surprises me is that we heard Shane Jones speak so eloquently about taxation. Tax and Shane are not words that go together so very, very quickly or easily. But it must be because he, deep down, knows that the current Minister of Revenue is making a huge mistake here. Now, Shane Jones is an honourable man. He believes the public has a right to have a say, and I know that, deep down, he is willing to stand by any proposal that he would make as a Minister.

On the other hand, we have a new Minister of Revenue, who, to be fair, has not had a great start in the first 100-odd days. At least he got to deliver his second reading speech, because last time he was in the House to speak on a bill he didn’t get to, and that’s a great shame because somewhere there was an official that did a lot of work to write that speech that he was going to read out, but he didn’t get to deliver it.

Then we had his announcement about how he was going to make it fairer for small shopkeepers up and down the country by delivering a tax on online shopping. Instantly, he was put back in his corner, surrounded by officials to protect him, because the finance Minister says, “No, we’re not going to do that. We’re not going to raise any taxes at all until the Tax Working Group has had a chance to have its say.”

And now, here we are: the new Minister of Revenue speaking broadly on a piece of legislation that—with the exception of a Supplementary Order Paper he snuck into this House only a day after the Finance and Expenditure Committee finished its consideration and consultation widely with the public—he’s had nothing to do with, because it was developed by the last Government. It was delivered to this House by Judith Collins, who, as revenue Minister, said, “Tax policy is important in New Zealand. We won’t always get it right, and we believe in the system that’s been in place Government after Government, Minister after Minister, that says when you’re going to make a change in tax policy you have general consultation on it before it goes to Parliament, and then you allow the committee to go through it in detail so the tax community can make sure it will work.”

Now, I was the Minister of Revenue when the brightline test was brought in some years ago. We sought advice, and we looked carefully at exactly where that balance would be. As a Government of the time, we said, “Actually, if you buy a property with the intention of making a capital gain on it, you must pay tax on it—on that capital gain. In fact, if you buy anything in New Zealand—shares, property, a car—with an intention of making a capital gain, then you must pay tax upon that.” But around property, we did realise there could be some uncertainty, and, to clarify that, we would make a brightline test of two years. The advice from Government agencies, from Treasury, and from IRD was to be very careful about that balance because you don’t want to target mum and dad New Zealanders who own property, who rent that out, or it may be something that, for them, will be a nest egg.

The thing about taxation is you need to go and talk to the experts and the wider industry because they will actually tell you whether it’ll work or not, and whether they agree with you. I found as Minister, they would help you make sure that what you were doing would work. So we announced the brightline test before a Budget, and we didn’t rush it through Parliament, we allowed the select committee to consult on it, to work on it. There were people that came in support of it, there were people who spoke against it, and then this House had a full discussion on it.

So I say to the current Minister of Revenue, who hasn’t had a great start as Minister of Revenue in this House, that he’s making a fundamental mistake here. He says he’s about openness and transparency, but the very first thing he actually really gets to do—it’s not this piece of legislation, because it’s Judith Collins—is slam a very important change on the Table of this Parliament the day after the select committee finished its deliberation. And there is just no need for that at all. He owes it to New Zealanders, to mums and dads, and to the tax profession to allow, even for a short period of time, the select committee to go back and have a look at that.

And I’ve got to say, I’m not only surprised but quite appalled by the Green Party, who when they were in Opposition were always wanting people to have a greater say. They wanted proper open processes through Government, and there were many occasions where, as a Government, we might have wanted to shorten the period of time for a select committee, and the Greens actually always would stand up against that and say New Zealanders deserved a say. For them to come to this House today and vote for this—there’s one of two reasons: either the Labour Government told them they had to, or already Winston’s baubles of office are eroding the integrity that the Green Party have always shown, and they’ll have to take that up with the outside world and others.

So it’s disappointing that it’s being rushed through. There is no need. Five years is something that the public deserve to talk about and have a say on. It is something the select committee could very easily open up on, for a few weeks or a little longer, and seek support and advice from the public. For Stuart Nash to come to this House—the first thing he did was not deliver a speech, because he made a mistake; the second thing was announce a new tax to support small New Zealand businesses on overseas online shopping, and then he was told to pull that back, he wasn’t allowed to do it; and now he’s snuck this Supplementary Order Paper 13 into the House on the Table the day after the committee finished its deliberation. It does not suggest he’s going to be a Minister of courage.

Hon JAMES SHAW (Leader—Green): Thank you, Madam Assistant Speaker. It is a pleasure to follow on from Todd McClay and that rousing speech. It’s not often someone gets to deliver a rousing speech on a tax omnibus bill, but Todd somehow managed to pull that off. I’d just like to start my comments by responding to a few of his, because Mr McClay gave quite a long sort of history of the passage of this bill through the House, and the various stages that it went to, and so on, but he neglected late in that history to mention one thing: that there was an election, and that all of those people that he was saying don’t have a say actually did have a say. What they said was that we should change the Government, and one of the reasons why they wanted to change the Government was they were absolutely fed up with a National Government that was continuing to offer massive concessions and allow the investment community to continue to inflate New Zealand house prices way beyond the ability of ordinary Kiwis to be able to afford their own home.

So the transition from a two-year brightline test to a five-year brightline test was one of the debates of the election campaign. It was one of the policies that we stood on, that the Labour Party stood on, and, I believe, that New Zealand First stood on, as well, and we won the election. Consequently, I would argue to Mr McClay’s point that, actually, the public have had a say, that they did want to see a further extension of the brightline test, and that that is one of the reasons why they voted to change the Government. And so we are, I think, entirely within our rights as a new Government to change the policy that the last Government had. That’s what happens when you have an election and you change the Government.

The other thing that Mr McClay mentioned was he was referring to this notion of having a go at mum and dad investors who just want a nest egg for their retirement. What he says is that that is the primary reason why you would leave the brightline test at two years rather than at five years. But if you think about it, when people save for their retirement, if they’re investing or if they’re saving, they tend to do so for periods of longer than five years, right? If you’re trying to put something away, if you’re trying to get an investment that’s ready to go for your retirement, if that’s your nest egg, the idea is that, actually, you would be investing in that over a substantially longer period of time than two years or than five years. So the idea that extending the brightline test from two years to five years is somehow going to punish people who are just making an investment for their retirement is completely fallacious. I reject that notion.

What it will do in respect of people who are just trying to make a quick buck through the loophole of not having a comprehensive capital gains tax on property is that it will continue to dampen down that side of the market, and that is what we want to do. We actually want to make sure that the people who buy houses do want them for the long term, either as owner-occupiers or as actual investors whose intention it is to make their money on that house by renting it to people who want to live in it, not by having the house make more money in any given year than the average income. The idea that people should somehow be able to not pay tax on an asset that simply inflates by way of its existence, without any improvement and without necessarily anyone even living in it, just sitting there—the idea that it’s somehow going to destroy people’s pension savings by extending the test out from two years to five years, I think, is ridiculous. So Mr McClay’s speech was a fine one. It was delivered with passion. It was also completely incorrect, entirely fallacious, and we reject all his arguments.

One of the other things that Mr McClay pointed out was that the Green Party voted against this bill on its first reading, and he suggested that we were somehow corrupt for switching our vote. Of course, the National Party’s never switched its vote on anything ever, and never changed its mind based on the evidence. Obviously, continuing to back something regardless of changes in information or regardless of changes in the bill—I also reject that notion. In fact, the main reason why we voted against the bill at the first reading was that the then National Government could not, or would not, give us assurances that the clauses in the bill that related to concessions to the oil industry for the decommissioning of oil platforms at the end of their life didn’t somehow constitute a particular concession to the oil and gas industry. Since then—in fact, since we came into office—we’ve been able to assure ourselves that the simplification of the decommissioning rates that applied to the oil and gas platforms are actually exactly the same rates that apply in any industry to any end-of-life remediation activity—

Brett Hudson: That’s what our Minister said at the time.

Hon JAMES SHAW: —and so therefore do not constitute a particular concession to the oil and gas industry above and beyond what applies to any other industry. That was our main concern, and I’d like to invite Mr Hudson, who clearly doesn’t have enough to do, to spend a bit of time watching Gareth Hughes’ first reading speech, in which he spent the entire time talking about that concern that it was a particular concession to the oil and gas industry. The fact that we’ve been able to clear that up, now that we’re in Government, I’m very pleased to say, removes the barrier for us to be able to vote for the bill.

In addition, the changes to the bill since we became the Government—in particular that extension of the brightline test from two years to five years—give us a more compelling reason to vote for the bill, as well. And so because this bill does align with Green Party policy, in terms of ensuring that there are no particular concessions to particular industries above and beyond what would apply to any industry, and because it does continue to help us with that transition from a sort of overheated investment-based property market to one where people can actually afford to buy and live in their own homes, or where investors are encouraged to get into the business of investing in homes in order to provide homes for people to live in and not simply to allow those prices to inflate and trade them back and forwards with each other like some kind of financial instrument that they don’t have to pay tax on—because it does those things, we’re very pleased to support this bill. Thank you, Madam Assistant Speaker.

Hon PAUL GOLDSMITH (National): Thank you very much for the opportunity to talk on this bill here. Look, we have in this country a long-established framework for the development of tax laws, and this last-minute Supplementary Order Paper 13, changing the brightline test from two to five years, is moving outside of that basic framework. I think it is very disappointing from this new Government that’s come in with all sorts of sanctimony around how it will be an open, consultative Government—they’d create a new style of Government, they’d be always engaging and open and transparent—and what do they do when they get into Parliament? They bring in significant changes to important legislation like this, which will have wide ramifications on the economy, and they have made a cynical decision not to take this back into select committee so that Parliament can have a reasonable chance to have a look at it.

So just to remind people who’ve been watching, what we’ve got here is a significant change to the brightline test when it comes to people trading in properties. The previous Government brought in a two-year brightline test, and, at the last moment, the Government has introduced a change to take that from two to five years. Now, we see that the clear advice from officials is that this is a bad idea, and, certainly, you can argue about that. Of course, no Government is obliged to take all the advice it has received and just agree with it, but you would think, given the strength of the concerns raised by both Treasury and IRD officials, that the Government would take the time to consider this fully.

I mean, I look at, for example, some of the comments from officials around the possible impact: extending this brightline test to five years might have a reduction in the supply of residential rental properties, and anybody in the country knows the pressure that the rental market is having at the moment in terms of supply. So one of the real risks of this move is that due to the reduction of speculators and investors buying and renting out property, it’s likely to put upward pressure on rents, and higher levels of homeownership among former renters is unlikely to completely offset the pressure on rental prices. This is because owner-occupied homes typically have a lower occupancy rate than rental homes, so the reduction in the supply of rental housing caused by some investors exiting the market will probably outweigh the reduction in demand for rentals.

So that’s just one example where the Government is taking a plunge on a significant move. We don’t know what the consequences of it will be. There’s certainly many signals from officials that they could be negative—they could have an impact in reducing the number of properties available for rental, which is a major issue in our big cities at the moment. What they’ve done, in terms of process, by introducing this at the last moment without the ability for the select committee to take it through carefully and have a considered debate about the merits, or lack of merits, of this change, I think is a disgrace.

On that basis, while we support the overall bill, we’re not at all happy with what they’re doing here, and it sends a powerful and negative message about how this Government will operate. I just hope that before long, they’ll change their ways.

Paul Eagle: Thank you, Madam Speaker.

ASSISTANT SPEAKER (Poto Williams): I haven’t called the member yet. I understand—you can stand. I understand this is a split call. Paul Eagle, you have five minutes.

PAUL EAGLE (Labour—Rongotai): Thank you, Madam Assistant Speaker. It’s a pleasure to be here. First of all, can I just acknowledge the new leadership team from the Opposition—not here right now, but that’s OK. I’m sure—

ASSISTANT SPEAKER (Poto Williams): Order! [Interruption] Order! You cannot refer to members who aren’t present in the House.

PAUL EAGLE: OK. I tried not to mention any names, Madam Assistant Speaker, but that’s good. But, look, what I will do is say thank you to those who have brought this bill to us.

When I got a note from the whip, who said, “Look, the reason why”—look, I don’t sit on the Finance and Expenditure Committee, but what I do represent is what’s being hailed today as those mum and dad investors, commonly referred to in nearly every speech from the Opposition. The whip said to me, “We’d like you to come down and talk on behalf of those people, the decent Kiwis who make up New Zealand.”, referred to time and time again in the House this afternoon, and so it’s an absolute pleasure. Really, when you talk to these people—they have names, but we’ll just call them collectively the mum and dad investors—they would simply like to see some action, particularly around the brightline test, but I’ll certainly get to that in a minute.

What I like to do, when I see bills that are about the thickness of a Manawatū telephone book, is really look through them and say: what are we talking about in this bill? When I look at the words, I see words that talk about simplifying and improving and reducing the annual tax chore, and I think that’s an admirable task. We’ve been really negative this afternoon, going through what’s not right, what should have happened, what could have happened. But the objective of the bill is, really, to simplify, improve, and reduce the annual tax chore. I think that’s an admirable objective, considering for those like me and for many it’s an onerous task. Many who are confronted with detailed documents from the tax department can often find it confusing. Even finding your tax code can be confusing. So I want to just applaud that objective, first and foremost.

Secondly, the bill talks about a greater accuracy around the level of tax collected, to prevent people from getting into debt. That’s a second admirable objective. I thought, wow, here’s a piece of work that’s been carefully brought together, for the interests of those mum and dad investors, so they can not only reduce the annual tax chore but prevent themselves from getting into debt—all at the same time helping out the good old Government, to ensure that we have some accuracy around the amount of tax that gets collected. These mum and dad investors are really sick of the questioning and the ideology that protects the wealthy. What they really want is initiatives that will stop their exasperation. You know, I have an electorate office, thankfully, where people do complain about our tax system, so I’m really proud that this bill has got to its second reading.

In terms of the Supplementary Order Paper (SOP), which has been talked about in negative terms, I’m shocked when I hear some of the negativity, because when I look at that, the Government has been clear in its campaign—clear in its campaign—to say, “Look, that’s what we were going to do, and now we’re going to do it.” So where’s the shock in that? A former Prime Minister used to openly say, “Oh, we’ve had an election. That’s what I said I was going to do, and now I’m doing it.” So, certainly, the SOP that’s been put forward, I fully support.

As the Green Party co-leader—sorry, Madam Assistant Speaker—who’s not here said, there’s every right there to cater for those people who want to invest for a long period of time. The intention is not to punish those people; instead, rightfully, punishing those who want to flip property quickly. There was certainly an announcement this afternoon about a chap who did it in Auckland, who flipped something very quickly. The intention of this bill is to dampen that type of speculation. I commend this bill.

ASSISTANT SPEAKER (Poto Williams): I call Brett Hudson. You have five minutes.

BRETT HUDSON (National): Thank you, Madam Assistant Speaker—pleasure to rise. We are supporting the Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Bill in this, its second reading. The bill keeps our tax system working efficiently and will help prepare us for the sort of work we’re doing with Inland Revenue’s Business Transformation.

As previous speakers, including the Minister, have pointed out, the Finance and Expenditure Committee did some great work to bring the bill back to the House in an even better shape. So it is really quite unfortunate that, with all that good work done by that committee—fairly clearly a very capable committee—the Minister decided, one day after the report was returned, to introduce a Supplementary Order Paper (SOP) around the brightline test, which means that that public consultation and submission process has been subverted. This Government does not want to listen to the public on that important matter—a matter that affects so many of them. I think the stats show that its around about 120,000 to 125,000 people that own something like no more than three investment properties, so when people talk about mum and pop investors, that is definitely who they are talking about.

So the Government’s determined they don’t want to listen to the public. They’ve also shown they don’t want to listen to officials on this, because Treasury and inland revenue are both saying that the measure won’t have the intended effect and could have some very adverse consequences. So we’re left wondering, on this side—and I think the public also are left wondering—just who they are consulting with. It appears, to us at least, that they’ve set up this little echo chamber that is a Cabinet room, where they’re sitting around a round table talking to and at each other and thinking that, somehow, that constitutes proper reflection and consultation on legislation.

Just to compound that, we have the Greens, who formerly opposed this bill when it was introduced under the previous National-led Government, who, as Mr Shaw pointed out, did raise issues about the taxation for the mining and oil exploration—end of business tax treatments. If he had referred instead to National Ministers’ comments in the first reading, he would actually have known and been able to acknowledge that the concerns they had were addressed by the then Government in the first reading. But, instead, the Greens appear just to have changed their minds because they now find themselves on the other side—just another principle the Greens appear to have sacrificed for the baubles of office. They’ve done it on this particular bill, they’ve done it on the waka-jumping bill, they’ve done it on urgency being introduced to the House—they even did it last year on the Kermadec Ocean Sanctuary bill. Quite frankly, I listened to Mr Shaw’s speech and I thought of Groucho Marx—Groucho Marx—who remarked, “These are my principles; if you don’t like them, I have others.”

That, I think, absolutely accurately describes the Green Party that we have in this 52nd Parliament, and I’m pretty sure that the public see that and the public will remember that. This SOP is an absolute disgrace, but the bill we will continue to support. Thank you.

Dr DEBORAH RUSSELL (Labour—New Lynn): I want to take my colleagues on both sides of the House back to some of the basic principles of taxation, and the particular principle that I want to go right back to is the one enunciated by Adam Smith in his great book Inquiry into the Nature and Causes of the Wealth of Nations, way back in 1776. In that remarkable text, he set out some rules for taxation, and the first one he came up with is to do with fairness and proportionality. I’ll just give you the words—[Interruption]

ASSISTANT SPEAKER (Poto Williams): Order! [Interruption] Order! I apologise to the member. If I could just encourage members to take their seat on this side of the House. Thank you.

Dr DEBORAH RUSSELL: Thank you, Madam Assistant Speaker. I’ll give you the actual words that Adam Smith used in his great text, the words that, being a bit of a tax wonk, I’ve committed to memory: “The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue … they respectively enjoy under the protection of the state.” That sounds a little complicated, especially, perhaps, for people on the other side of the House, but let me take it simply: it, basically, means that each citizen of the State ought to contribute to the support of the State in proportion to the revenues they earn. It’s a canon of fairness, of fairness in taxation, and, traditionally, under tax principles, we talk about that fairness in two ways. We talk about it in terms of vertical fairness, the idea that people who earn more ought to pay a little more in tax. They can contribute in proportion to their abilities. That’s a well-established principle in our own tax code.

But there’s another interpretation that is even more relevant to the debate today, and that’s talking about horizontal equity or horizontal fairness. It says that whether you earn your income in the form of salary and wages, if you earn it in the form of employee share schemes, if you earn it in the form of a capital gain on a house—doesn’t matter how you earn that income; it should all be taxed the same. It shouldn’t be taxed differently just because it’s one form of income versus another; it should be taxed the same. That’s the principle of fairness, and it is well enunciated in this bill that is before us today, where many of the provisions in this bill are about fairness between taxpayers.

I want to address, in particular, a topic in this bill that has not been discussed this afternoon, and that’s employee share schemes. This bill does something very worthwhile with respect to employee share schemes, and let me take you through it. What can happen under employee share schemes is that an employee can be given shares or given an entitlement to shares. Now, under the law as it stands, that becomes their income and they can be taxed on that income, but, in actual fact, often those shares have to be held in a trust, or maybe they are only given optioned, so, in fact, the employee really only becomes entitled to them five, maybe 10, years later, by which time the shares have increased in value. But instead of being taxed at the time when it’s finally vested in them at the increased value, they’re only taxed at the old value—the lower value when they were first given the entitlement to the shares. In other words, by taxing it right now instead of 10 years in the future, they are taxed on the value right now and none of the increase in value, and yet that increase in value is part of their income.

So what this bill does is it says that just like salary and wages, that increase in value in the shares ought to be taxed, and that’s precisely what some of the rules in this bill do around employee share schemes. It’s not about trying to tax people more, it’s not about trying to give people an unfair advantage; it’s about fairness in taxation, whether you earn your income in the form of salary and wages or you earn it in the form of shares that increase in value. That’s all about fairness, and that’s one of the reasons why I commend this bill to the House.

But there are a number of other issues in this bill that I think are quite important and that I do want to speak to this afternoon, having an opportunity to speak on tax. In particular, I want to address the brightline test. Now, that’s a fairness issue as well, and that’s saying, in a very straightforward fashion, if you earn income through speculating in housing, then we will tax it in the same way as we would earn income through taxing salary and wages. Now, as members on the opposite side of the House have pointed out, if you buy something with the intention of selling it, any increase in value ought to be taxed anyway, but, of course, it is very hard to read intentions, particularly when it comes to residential property. What the brightline test does is it says that instead of us trying to guess what’s in a person’s mind, we just deem that if you sell a house under the existing legislation within two years—under our proposed legislation within five years—then you will be deemed to have bought it with the intention of resale and therefore you’ll be taxed on it.

Now, the members on the opposite side of the House agree with this principle. They agree with the principle of a brightline test. It was put through under their watch. In fact, they’ve raised two objections to this afternoon. They’ve said that putting it out to five years is really complicated and it should have gone to a select committee, and they said we didn’t go through the generic tax policy process (GTPP). Now, Mr Goldsmith noted that we have a very good tax policy process in this country, the GTPP, or the generic tax policy process. You know, we did go through all the technical details of a brightline test back when the National Government instituted the two-year brightline test. There was a robust generic tax policy process back then with the two-year brightline test. So there has been an excellent tax policy process with respect to the test that’s in the legislation at the moment.

So what’s the difference now? Well, when I look at this Supplementary Order Paper (SOP) 13 for all these complications that, allegedly, should have gone back to a select committee, I don’t see that that they’re there. In fact, if the members on the other side of the House had bothered to read the SOP—it’s freely available, right there—they would see that virtually every clause in that Supplementary Order Paper simply replaces “2 years” with “5 years”. It makes no difference. So this is the type of thing—it is literally just replacing “2 years” with “5 years”. There are no complications. All the rules around the brightline test exist already. It is a very straightforward and simple piece of legislation. So it cannot be an objection to technicalities introduced by this bill—[Interruption]

ASSISTANT SPEAKER (Poto Williams): Order! [Interruption] Order! [Interruption] Order, members.

Dr DEBORAH RUSSELL: It cannot be an objection to the principles under this SOP. It cannot be an objection to the technical details under this SOP. It cannot be an objection to anything other than the difference between two years and five years. Then they claim that officials objected to five years, but that’s just an utter nonsense. What they said was there was no clear evidence between two years and five years. What they said was it was impossible to tell how it would go. So there is no real objection to five years other than that the members on the other side of the House don’t like it. I submit that that is not a sufficient reason to reject this Supplementary Order Paper. Frankly, if they cannot understand the difference between two years and five years in the technical way of replacing it in legislation, I suggest that perhaps they don’t belong in this House at all.

So, I put it to you, that like a lot of tax orders, it is a very straightforward measure and it is about addressing the critical issue of fairness in taxation. We want to be fair, on this side of House. That’s what underlies a lot of the measures in this particular bill—a bill that was introduced by the party that was then in Government and that this party has worked with to make it right, a bill that is now looking in pretty good shape after a really good generic tax policy process and a really good select committee process. We’ve listened to the objections from people who submitted to the Finance and Expenditure Committee. We’ve adjusted the bill when necessary. We have implemented our election promises and made it quite a straightforward measure, so we are implementing the basic principle of fairness in taxation. I commend this bill to the House.

Hon DAVID BENNETT (National—Hamilton East): Don’t you love it when those socialists talk about fairness? Ha, ha! Fairness to the New Zealand public would have been to actually go to the election and say, “We’re going to put in a capital gains tax.”; not to hide away from it and to rubbish it and to hide behind a working group that was to come out so that the public could vote at the next election around capital gains taxes.

Michael Wood has said today in this House, “This capital gains tax …”. That last speaker, Deborah Russell, talked about fairness and how it meant that they could bring in an ability to tax capital gains. The Labour Party wanted, and always has wanted, a capital gains tax, and when it comes to election time, they go out to all the constituencies, all the public meetings, and they never admit that they want a capital gains tax. Then, as soon as they come into this House, when they have a moment of time where they do not have to go through consultation, and a moment of time when they can hide it from the public, they will put through a capital gains tax. That is the Labour Party. And if they were true socialists, they would be honest with people when they’re out there, and yet they are duplicitous in their nature. They come into this House and pass things under the darkness of night to get away from actually having the absolute integrity that the public would get through consultation and a select committee process. But we know that’s how the Labour Party operates. We’ve seen that on many occasions in this House, from the Dairy Industry Restructuring Act Amendment Bill to taxation at this time, but there are, in this case, actually some examples where this legislation is just purely bad form.

Now, let’s take the case of a relationship break-up within five years. Now—

Dr Duncan Webb: Read the rules. You’ve got that wrong.

Hon DAVID BENNETT: Oh, so the Labour Party is saying that they’re not taxed. They are taxed. If there is a relationship break-up within five years and there is a second house or a holiday home, that can be taxed under the five-year rule, because it is not their home of residence. In those situations, that is what the Labour Party is going to do. Generally, those situations are very difficult situations. There are a lot of issues going on between the partners. The Labour Party are going to make vulnerable partners spend five years waiting for this period of time to elapse before that house can be sold, otherwise there’s going to be taxation consequences.

Hon Chris Hipkins: Vulnerable partners selling the beach house!

Hon DAVID BENNETT: Oh, so the beach house—an investment property. Often they will be highly mortgaged, in a young family environment, and they will have little or no equity there. And when you’ve got two partners that then want to go out and set their own houses up, how are they going to do that? The best advice they will get is to wait five years and then try and get their own money out to get their own property; otherwise, they’re paying capital gains tax on it. That is the intended consequences of this legislation, for the Labour Party, and that is what they’re going to do to ordinary New Zealanders that may have an issue. They will have that problem.

This is just another example of how democracy has been eroded in this House. We see it every day in question time, and now we are seeing it once again in legislation that hasn’t gone to a select committee, that hasn’t be given to the public, to explain issues like that, which are actually real and honest issues that are a problem in this legislation. That is why we are seeing a Government that has got no respect in the community and a question time that is also not respected. We need to make sure that we have integrity in this House, and that has been lost by that party.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Assistant Speaker. What a pleasure it is to rise to speak to this excellent piece of legislation.

Kieran McAnulty: Oh no, it’s a socialist!

Dr DUNCAN WEBB: Well, it is a socialist piece of legislation because tax is fundamentally socialist. It is about a fair system. Can I also say what a pleasure it was to work on the select committee on this piece of legislation, particularly with Dr Deborah Russell, who is an expert in tax, much unlike the former speaker David Bennett, who, of course, had to try and clean up member Collins’ mess when she suggested that there was a relationship property issue here. What’s worse is when he tried to clean up that mess by referring to the investment property in the beach house, he just made a dog’s breakfast of it. If people are going to have investment properties, then of course they should be caught by the brightline rule, and, what’s more, the very rule he’s complaining about is a rule put in place by the National Party to address this. So it’s his own carve-out—how ridiculous.

Kieran McAnulty: You can’t tell me he doesn’t know what he’s saying, surely?

Dr DUNCAN WEBB: Oh, look—astounding as it may seem, it’s no surprise they’re on that side of the House—tax law is difficult, it’s onerous, and we do need to strike a balance. As we all know, tax law is complicated, and the balance between fairness, clarity, simplicity, and brevity is hard to strike, but I think we’re working hard on it here, because good tax includes not just good tax policy and good tax settings but good tax administration.

While we’ve been talking about the brightline, well, I actually want to talk about some of the other things that are going on here. The Inland Revenue Department is working on its transformation, its business transformation, and this is part of that transformation. This legislation, largely instituted by the former Government, is about progressing that business transformation. I do want to say, however, that there will be some pain in that transformation. Some of the amendments made in select committee are about evening that pain out. I also want to identify that the change within IRD will be hard on its people, and, indeed, in its annual review, this was made clear. I would implore the revenue to be very careful as it transforms its business to look after those hard workers within IRD, who do such valuable work.

But, really, what this is about is about reforming the administration of the tax system to make it much, much more workable. So if we look, for example, even at some things that might appear technical, like the payroll subsidy—a subsidy that is paid to tax intermediaries to assist smaller businesses. Now, the original bill had this being abolished in one fell swoop, but after listening to advice—and, I must say, the independent advice given to the committee was extremely useful—it became readily apparent that a rapid cutting off of this would cause considerable chaos, particularly amongst small businesses. So whilst the subsidy properly ought to go, it’s going to be phased out over time so that there can be that additional period of time for businesses to get used to it, to let those wider changes bed in. It really is those smaller employers in particular that we need to look out for.

Payday reporting was the other thing that really cropped up. This is the idea that employers need to report in as timely a manner as possible their PAYE obligations. Of course, the better reporting occurs, the more efficient tax collection is. So what we’re really aiming towards is getting the most timely and accurate reporting we can so that the tax paid most accurately reflects the employee’s actual obligations. That’s got to be a good thing, as we move, hopefully, towards a system where there is as little adjustment as possible in those end-of-year tax returns.

However, we again have to remember that there are businesses, very small businesses—and, in fact, on the other side of the House they did a good job in pointing out that many rural businesses actually have considerable difficulty in using, for example, online returns simply because of the lack of internet access. The committee listened carefully to submitters and took that on board, so when we come to payday reporting, there were substantial changes made that will affect small businesses so that they don’t have to report quite as frequently. In fact, twice a month is satisfactory on a routine payment, not necessarily in perfect sync with payroll but at the 15th of the month and at the end of the month, particularly when they’re still using paper. We’ve got to recognise that, indeed, some people still will use paper, whether that be because they’re really—believe it or not—not quite up to using web-based applications or also because of that internet access in very remote areas. So, you know, that is a really useful amendment made by the committee, and I commend the committee for the hard work it did and also for the submitters and the advice given.

The other important aspect—technical, but important—was resident withholding tax. There were useful discussions around the fact that interest payments are frequently made, sometimes substantially, even between family members. Now when there’s, for example, a family loan, what a lot of people perhaps wouldn’t realise is that the person who is being paid that interest needs to report that as well as the payer of that interest. So this is the resident withholding tax framework. Of course, we know that we have to give our IRD numbers to the bank so that they can report the interest they’re paying us, but we don’t realise that in many transactions—even amongst family members, small businesses, friends, and colleagues—those transactions also ought to be reported and that interest actually sits in there as income. Obviously, in some of those situations, the compliance of that reporting would be unduly onerous, and so the select committee imposed a $5,000 threshold on the interest payments there. So a lot of those smaller family loans and the like now won’t be captured.

So, look, what this really is about is about getting our tax settings right, getting a system that doesn’t catch people by surprise, a system where people’s tax obligations are as easy as possible to comply with, but also modernising our tax system so that the tax system can be administered in as real time as possible using the best technology available. We’ve got to bring a whole lot of people along with us to do that, and I know the IRD itself and the commissioner are working hard on that, the employees of the IRD are working hard on that. And it is the place for us in this House to really support that through getting these settings as right as we can, to make the transition as easy as possible, so that we don’t unduly burden small businesses in particular—rural businesses in particular—and those hard-working New Zealanders who really are trying their very hardest to earn a living, so that the administration costs there are reasonable, they’re not flying through the paperwork and not doing the jobs that they’re actually being paid for. That’s what this bill does.

So what we have here is a very thoughtful tweaking—admittedly, it is administration legislation, but it is good that we come back to this House regularly to readjust these settings and to think carefully every time about our tax policy and our tax settings and the administration of our tax Act to say, “Let’s make it as workable as we possibly can.”, because when we do that, what we will get is greater compliance, more timely payment of tax, and what we will get, indeed, is a responsive revenue.

So, look, what we have here is a vastly improved—and I can’t conclude without saying that the brightline five-year test is also a significant improvement. The National Party recognised that steps were needed here, the step they took was not enough, the property market remained rampant, and so we—as we should and must; as every good socialist would—changed it so that it worked properly. We extended that period to five years because that will make a significant difference. This Government has said time and again—and I’ll say it again—it is committed to bringing the housing market under control so that ordinary New Zealanders can afford their own home and they can buy their own home, and this is just yet another plank of this Government’s aim to do exactly that. So not only is this a great improvement to the system of tax administration; it’s another step forward by this Government to making housing affordable in New Zealand. Thank you, Mr Assistant Speaker.

Bill read a second time.

Bills

Education (Tertiary Education and Other Matters) Amendment Bill

In Committee

Part 1 Amendments to principal Act relating to international and domestic school students

Hon PAUL GOLDSMITH (National): Thank you, Madam Chairperson Williams. Look, obviously, this is a bill that has been developed by the previous National Government and much of it we support—in particular, a number of measures designed to strengthen the ability of the agencies responsible for maintaining the integrity of the system. There are a number of changes in this legislation that will make it easier for the Tertiary Education Commission and the New Zealand Qualifications Authority to maintain and ensure the quality or the integrity of, particularly, the international education sector. We support that. We see it’s an incredibly important sector to the New Zealand economy—$4.5 billion worth of export revenues—and we think the logical response to inevitable areas of poor performance in part of that sector is to ensure that we’re giving the parties responsible for maintaining the quality of the sector every ability to do that properly. So we support the Government in doing that.

What we don’t support is the removal of the section that was in the legislation that asserted the principle of equal treatment of all tertiary education providers. I have Supplementary Order Paper (SOP) 17 here, which reinserts those two clauses, because we think it is, essentially, a piece of ideology on the part of the incoming Government to just simply remove that assertion, which really is a very hard one to understand. What we have, and had for the last five or so years in practice, is that if the Government is purchasing a quality piece of education and looking for an outcome, it doesn’t matter who delivers that piece of education; it’s the outcome and it’s the quality education that is delivered that counts. I think most people would understand that. If you’re getting a particular degree in a particular area of study, it doesn’t matter who delivers that; it’s the quality of the education that counts. That’s been the practice over the past five years or so, and the bill as introduced by National asserted that principle.

I can’t understand why the new Government—I’d be very keen to hear from the Minister what the rationale is for pulling this away at this stage. You know, I would have thought—again, we’re seeing in a number of instances bills that have gone through select committee processes and then, at the last moment through an SOP, Government is making changes, and not necessarily going back and giving people an opportunity to make a contribution on that.

So, overall, we’re about to start through this committee stage, and this bill is an important one in terms of giving the enforcement agencies the ability to do a good job, particularly in that international education sector. We see that as important, but we are disappointed with what we see as just a piece of ideology that the new Government has stamped on it, and we’d hope that they would reconsider.

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

JAN TINETTI (Labour): I’m delighted to have the opportunity here to talk to Part 1 of the Education (Tertiary Education and Other Matters) Amendment Bill. Part 1 deals with clauses 4A and 5 through to 8, and I’m particularly interested in talking to this part. I’ve got a few points that I want to make, and I do have a few questions that I would like to ask the Minister. This part of the bill is a really important part. It’s not the tertiary part, even though that’s really important too, but this is the term “Other Matters”. It deals with the international students and our care of international students and schools’ management of the misconduct of these students.

The reason I’m so passionate about this, and have become so in the last few weeks, is that I have been on the select committee—the Education and Workforce Committee—that took over this bill from the last Education and Science Committee in the 51st Parliament. It’s well-known in this House that I’ve got a strong education background and have been a principal, but one area that I had—up until I had taken and worked through this bill—very little knowledge of was international students. Some of the work that came from this bill—and because of the amendments that we’re making, through here—has actually surprised me, and that’s one of the reasons why I want to focus on this area and make sure that we get it right. We have this one opportunity now to make certain that we are not only protecting the students but protecting the schools, as well.

In the past, schools have recognised the limitation of the Education Act 1989 and have created a second line of enrolment contract to supervise students’ conduct in other areas. This was recommended by the Ministry of Education in guidelines that were set out in the code of practice. But incidents happened in schools where the students showed misconduct out of school time and their enrolment in schools was ended. Schools were then taken through to the High Court, and at that point it was shown that just having the enrolment guidelines as related to the code of practice wasn’t enough. So we have to therefore address that here at this level. It’s really important that schools are able to maintain the responsibility for international students outside of schools, but, at the same time, the code of practice is important to outline protections for international students.

So my first question to the Minister relates to the code of practice in relationship to the definition of enrolment that we have put into this Act. With the changes through the bill, I’m presuming that the code of practice will need reviewing and, as the time frame of this bill coming into effect is quite tight, what will the time frame be around reviewing the code of practice, if that’s the case? I believe that the code of practice is still a really, really important part of this piece of legislation, because the code of practice gives both the school and the international students surety around the fact that for the schools, they can protect themselves around the misconduct of the student, and for the student, they’ve got due process in any issues that they may face.

I guess another question that I have on that is that if that’s the case and you’ve got students whose enrolment has been stopped, is there going to be a pathway for those students to question the decisions made about their enrolment? So that is looking into what future pathways going forward will they have in those areas.

When this part of the bill came before the select committee, there were only two submissions that were made on it. One was from the Nurses Organisation, but the other one was from the Schools International Education Business Association—or, as I’ve already said in the House, the acronym is SIEBA. Now, SIEBA works on behalf of those schools and is supporting the schools in those situations. SIEBA questioned why there wasn’t a definition of the enrolment contract in the Education Act—which was why this was amended going forward, to put that definition into the Education Act.

So I do have another question for the Minister going forward here, because SIEBA said that it wasn’t just important to deal with the misconduct of students outside of school; the changes were also needed to support schools with their decision to return students if they found out that there were non-disclosed conditions when those students turned up at the school. Now, one thing that was a surprise to me was that those non-disclosed conditions are actually quite common, or, as they said, not uncommon. Often that was made because parents back in the home country were scared that if they did disclose those conditions, those students wouldn’t be accepted for enrolment. So SIEBA believed that the changes needed to be made to support the schools’ decision to return those students to their home countries as well if those non-disclosed conditions were found out. I guess my question here is: does this definition of enrolment contract that we’re putting into this Act ensure that schools have that ability as well, going forward?

On that, the last question that I have on this is on the distinction between the international students living here with their parents and international students living with a host family, and just ensuring that we have that covered in the Act. Being someone that has had many—I think I counted five international students myself over the years. So, having been a host mum to five international students, there is quite a big distinction, even though the same conditions exist for those students when they are in enrolment in schools, and I’m wanting to make sure that this is dealing with the students who don’t have their parents here and are not living with their parents. We’re actually looking at the distinctions there for the overseas students living with host families.

I think that’s about it that I have on that particular clause, so I’ll be interested to hear what the Minister has to say around those. Thank you.

CHAIRPERSON (Hon Anne Tolley): I call Erica Stanford—no, sorry. I beg your pardon. I should know my own—Denise Lee.

DENISE LEE (National—Maungakiekie): Thank you, Madam Chairperson Tolley. I appreciate the chance to take this call and speak to this particular bill. I’m going to speak and briefly touch on three matters here, all related to Part 2. The first is clause 16, which inserts the catch-all words “(c) conditions that the Commission considers [are] reasonably necessary to enable the Commission to”—and here we go—“effectively monitor the performance of organisations and the tertiary education sector generally.”

CHAIRPERSON (Hon Anne Tolley): I don’t like to interrupt the member, but I think you’re on Part 2 when we’re still on Part 1.

DENISE LEE: I do apologise, Madam Chair.

CHAIRPERSON (Hon Anne Tolley): Part 1 is quite narrow, on clauses 4A to 8.

DENISE LEE: All right. Can I—

CHAIRPERSON (Hon Anne Tolley): You can continue as long as you talk about Part 1.

DENISE LEE: I can continue, but I’m sorry, Madam Chair, I do want to speak to Part 2.

CHAIRPERSON (Hon Anne Tolley): Oh, that’s all right. You can take a call there.

DENISE LEE: So excuse me in the interests of being a new MP, and I’ll let someone else speak to Part 1.

ERICA STANFORD (National—East Coast Bays): Thank you, Madam Chairperson Tolley. On the whole, this is a good piece of legislation introduced by the National Government. I’d like to take a look at Part 1 of the bill, in particular—similar to Jan Tinetti—at clause 5(2), inserting new subsections (2A) and (2B) into section 4, relating to the international student conduct.

As an electorate MP for East Coast Bays, I have many schools in my electorate that have international fee-paying students. In fact, almost every single school in my electorate has these students, including Long Bay College and my old school, Rangitoto College, with students from all over the world offering international perspectives, an introduction to new cultures, and some long-lasting international friendships. The income provided by these students to our schools is not insignificant, and provides opportunities for these schools that they would not otherwise have had. But with these opportunities comes responsibility. Our schools know they have a responsibility to provide for the welfare, the well-being, and the safety of these students for this and for the reputation of the export industry. A collapse in numbers of these fee-paying students in our schools would have a very negative impact. As such, ensuring the safety of those international students and protecting our international reputation is of vital importance.

Any increase in an ability to further look after the well-being of international students would be welcomed by our schools. This bill plays a really important part in doing this. It responds to a recent High Court ruling that a school had no rights to manage their international students’ misconduct outside of the school. This ruling found that schools could not stand down, suspend, or exclude international students for misconduct outside the school, even though their enrolment contract allowed for it. This has massive consequences for international students’ safety and their well-being. So schools are currently unable to effectively manage that risky or potentially harmful behaviour. This bill will ensure that schools manage international student misconduct outside the school so they can uphold their contractual duty to ensure international students’ health, safety, and well-being, and, therefore, protect the reputation of our export education industry.

We believe that enabling the State schools and State integrated schools to manage international student misconduct outside of the school is a change that schools will absolutely welcome. I understand that the Regulations Review Committee raised concerns around the fact that international students would be excluded from sections 13 to 18AA of the Education Act, which are those provisions around exclusions and disciplinary actions. I understand I wasn’t part of the Education and Science Committee or the Education and Workforce Committee, but I read their report and I understand that they were satisfied that the disciplinary action against international students being governed solely by the code of practice would be a cleaner and more effective way of managing that rather than legislation, which has been specifically designed primarily to protect domestic students’ access to schools.

We’ve been a constructive Opposition. While there are some things in this bill that we’re not happy with, overall, we’ve taken a constructive approach. We worked, as I understand it, in the select committee, to ensure that these international students, their conduct outside of schools, is able to be regulated to ensure their welfare and their safety.

I understand there was agreement between the committee members as to the changes made in the Education and Workforce Committee to these clauses. I note there were some changes made at the select committee that were agreed upon unanimously, and I know that the schools—certainly in my electorate—will be very happy with these changes.

The only question that I would have for the Minister is around these international students being excluded from sections 13 to 18AA. Because I wasn’t part of the select committee, I’ve read the report, but if the Minister was able to provide some further clarifications around why they aren’t able to be included in that part of the legislation, that would be helpful, just for my benefit. There wasn’t a huge amount of notes in the select committee report that I read around that for my own knowledge, but if you could address that, that would be ka pai. Thank you, Madam Chair.

MARJA LUBECK (Labour): It gives me great pleasure to speak to the Education (Tertiary Education and Other Matters) Amendment Bill. I took an earlier call—I think it was on the second reading—talking about how this bill strengthens the education system, brings in more accountability, and also provides additional student protection.

Now, I have some notes prepared on Part 2 of the bill. Are we able to speak to Part 2, or is it just on Part 1?

CHAIRPERSON (Hon Anne Tolley): No, we’re on Part 1 at the moment. We will come to Part 2, so there’s plenty of opportunity.

MARJA LUBECK: Right, right. OK. In that case, I’ll see if someone else wants to seek the call on Part 1.

Hon CHRIS HIPKINS (Minister of Education): Thank you very much, Madam Chairperson Tolley. I’m very happy to answer some of the questions that have been raised on Part 1 of the bill so far. So the question that was raised by Jan Tinetti—

Andrew Bayly: What questions?

Hon CHRIS HIPKINS: If the members listen, I’ll happily review the questions for them, as they seem to be having difficulty keeping up. There haven’t been many questions, so I’m surprised that they’re having difficulty keeping up, but I will answer the questions that have been raised.

So the first question was raised by Jan Tinetti, which was what will happen if these provisions are inconsistent with the existing code that relates to international students. Now my understanding is that they’re not inconsistent but that the code will be reviewed once these provisions have been brought into force, as you would expect when there is a law change. So it’s not a question of there necessarily being great inconsistency at the moment, but when the law changes, of course, the code should be reviewed and that will happen.

The second question that Jan Tinetti raised was whether or not the students who have been subject to a disciplinary action would have some ability to challenge that decision. I think that’s a very good question, because the consequences for these international students of being subject to the disciplinary action are obviously very high—potentially very high—and, therefore, it’s very legitimate to ask what they could do to challenge that. There are some existing provisions within the code that will, of course, continue to apply. They can make a complaint via the code of practice administrator, the New Zealand Qualifications Authority, and the dedicated international student contract disputes resolution scheme. So there are a number of potential avenues already available, and if an international student feels that they have been treated unfairly, they’ll have the ability to do that.

The other question that Jan Tinetti asked was around international students who might be living in New Zealand with their own family. They are treated differently to international students who are living with a host family. The reason for that is the international students living with a host family will be subject to, basically, a contract with that host family, whereas the students living with their own family, of course they’re not subject to that. So, therefore, those provisions that relate to the contract will, of course, not apply to people in their own home.

So what does all that mean in plain language? It means that if you’re a domestic student and you do something wrong outside of school hours, the school doesn’t have an ability to discipline you regarding that. If you’re an international student—as of today—and you do something wrong outside of school hours, the school doesn’t have the powers at the moment to undertake disciplinary action either. With the change, they will have the ability to take disciplinary action for those students who are living with a host family. But the provisions relating to those students living with their own families, of course, will not change. So I think that clarifies that.

The other issue that was raised by Erica Stanford—a very legitimate question—is why different provisions will now apply to international students rather than to domestic students. I think that’s simply for the case of clarity. Those provisions that apply to domestic students apply only in so far as they are in school time, in school hours. So the school doesn’t have an ability to discipline a domestic student outside of school hours. As the new powers are going to be broader than outside of school hours, it was deemed appropriate that that be the subject of separate provisions, rather than extending the scope of existing provisions to some students but not to others.

CHAIRPERSON (Hon Anne Tolley): I call Marja Lubeck. We’re still on Part 1.

Marja Lubeck: OK—no.

CHAIRPERSON (Hon Anne Tolley): I call the Hon Clare Curran.

Hon CLARE CURRAN (Minister of Broadcasting, Communications and Digital Media): Thank you, Madam Chairperson Tolley. Can I take a short call on Part 1 of this bill regarding the schools’ management of international student misconduct. Can I thank the Minister in the chair, Chris Hipkins, for the clarification around the contract of enrolment and misconduct. My question to the Minister in the chair goes alongside that, which is essentially around how this bill allows schools to more effectively manage international student misconduct—not only misconduct, but pastoral care. So my question is around pastoral care and around how that can be manifested and improved under this legislation, while alongside disciplinary action—

Hon Christopher Finlayson: What pastoral care are you getting?

Hon CLARE CURRAN: I would ask the members on the other side of the Chamber to take this seriously because the contribution of schools and our tertiary institutions to international students is considerable in this country, and I would hope that they would take that seriously.

This Government stands for balance, because alongside disciplinary action and the ability to take disciplinary action comes the pastoral care element and the importance of that. In Dunedin, in my city, international students play a considerable role in the education ecosystem, whether it’s at the secondary school level or tertiary level. There was a report earlier last year—I think in March—where there was a contribution from international students of $117 million to the secondary and tertiary economy. Maybe in Auckland terms that might not seem that considerable, but in Dunedin terms it is. Not only that, but it’s actually seen as being an absolutely critical part of the way that our school system and our tertiary system runs that we treat the international students with respect and we have good processes around them.

So I’m particularly interested in the pastoral care aspect of that, because I think that, again, this Government stands for balance. While it’s important to clarify the contractual arrangements between the host families and the international students and their families, and that there are stronger protections around that, the pastoral care environment is critical. Speaking for the school system in particular, when these young people are coming from countries and into an environment where they have cultural differences and where they’re on their own, they’re young people, they’re teenagers, and they’re thrust into an environment that is not within their own family and not within their own culture, and obviously issues arise. So alongside any disciplinary or misconduct process goes the pastoral care process.

I’m very keen to hear from the Minister in the chair around the importance that is placed in this piece of legislation on that particular process. Thank you.

CHAIRPERSON (Hon Anne Tolley): I just make the point that the member might be very interested in a reply from the Minister, but that’s not actually what Part 1 is about.

Hon DAMIEN O’CONNOR (Minister of Agriculture): Thank you very much, Madam Chairperson Tolley. The point I’d like to raise in the brief speech that I’ll give tonight is the one, I guess, of equity or discrimination. We’re talking about foreign students here.

I reflect on my own personal experiences of being a foreign student—not in a tertiary institution, but actually in a secondary one. I, as a West Coaster, went to Canterbury for my secondary education, so I was very much a foreigner. The issue and the parallels I draw here are the differences in the way that I, as a foreign student, was treated compared to the domestic one. The domestic one was a student from Christchurch, and I was from the West Coast, and believe me, they saw us in a different light. It was, in fact, around discipline.

In fact, I can recall a particular incident with my good friend and colleague. I’ll mention his name: Pete Verhall, who’s now very unwell. Both of us got caught smoking at lunchtime. The discipline dealt to both of us was quite different—absolutely. I got five of the cane and he got nothing. So the consequences of that—because I felt very, very unfairly treated—was that he went on to have some, I guess, challenges and I learnt that discipline was dished out fairly bluntly. It was fair, I thought, but in a way that was different from the domestic student.

The point here is that if we are going to, and we have done, welcome foreign students into our country, we’ve got to make sure that we treat them with equity and that the discipline that we are bringing here—and the question I ask of the Minister in the chair is: can he assure me that the domestic students and the foreign students will be dealt with fairly? Because in my experience, as a foreign student in Canterbury, I wasn’t dealt to fairly, I have to say. Some may blame a lot of things on that. I’m not going to pass judgment, other than to say that as we move forward and learn from our own experiences, I would hate to be part of a Government that passed a law that was going to discriminate unfairly against foreign students.

So the question I have is: what will be in the contract of enrolment? One of the particular issues that we’ve referred to—and, as Minister of Agriculture, there are a number of foreign students who are helping out a number of our horticultural producers, I have to say. If the contract of enrolment makes reference to attendance at courses, then the foreign students may be unfairly disadvantaged if they’re not allowed to scarper off and do a bit work, but the domestic ones are.

It’s a legitimate question, because the foreign students pay quite a lot of money to come to a school. In my experience, I was paying $150 a term, which wasn’t a lot of money—just to pull it back to my own personal experience. But the point is that the contract of enrolment, while dealing with this issue of foreign students—and I accept that they have a privilege to come to our country and learn, but there will be a fine line somewhere in here that means that we’ve gone too far, and in which case we’ll be discriminating against them. Or we may be drawing the line in a fair way that says, “Well, it’s OK for a domestic student to go and get a bit of work and not turn up at a course, but for a foreign student, maybe they have to turn up to each and every one.” Without seeing the contract in front of me, I can’t work out which particular areas may be problematic, but knowing the Minister, I think he will be doing everything he possibly can to ensure a fair regime, and I applaud him for that. But the devil’s always in the detail.

Drawing once again on my experiences, sad as they were at times—discriminated against unfairly as a West Coaster—I have to say that I’d hate to then impose that discrimination on anyone else. So it’s a legitimate part of any contract. I think you do need to ensure that someone who comes here as a foreign student is going to adhere to the reasons they came to New Zealand. There has always been this option of a year’s work permit, along with a student permit. Whether that then complements or contradicts what we’re doing—maybe the Minister can answer.

Hon TRACEY MARTIN (NZ First): Kia ora, Madam Chairperson Tolley. Thank you very much. Just to take a call on the Education Amendment Bill, and just to the speaker Damien O’Connor, who resumed his seat—we don’t have foreign students anymore; we have international students. Just so you know, “foreign” is a very old-fashioned word, associated with colonialism, and now we have international students. So you wouldn’t be considered an international student, sir—and I do not mean you, Madam Chair.

If I can speak to Part 1, “Amendments to principal Act”, can I first just compliment the Minister on clause 4, which amends section 60A(1)(ba) to remove the requirement that the Minister publish national standards. Can I compliment you on having the courage to deliver that for New Zealand children, quite frankly. Can I also compliment you on clause 5, which amends section 61(4)(a) and means that a school charter is no longer required to include—the wrong bill. I do apologise, ma’am. I do apologise.

CHAIRPERSON (Hon Anne Tolley): I’m frantically looking through to see where this is!

Hon TRACEY MARTIN: I may have to actually give over the floor while I—this is what happens when one is a hard-working Minister. One finds that one has more pieces of legislation to speak on than one would like.

So if I actually do go to Part 1 of this particular bill, which is the Education (Tertiary Education and Other Matters) Amendment Bill—and I still wish to actually compliment the Minister, Chris Hipkins, because there are amendments that he has made right now that are very pertinent to today’s school environment. And I take on board the rarking up from the Opposition members, because, of course, what we’re undoing is some of the silliness that they put into place.

So if we go the provision after section 4(2), in clause 5, we see new section 2A, which says that if an international student’s conduct is in breach of the contract of enrolment, the board of the school may take appropriate disciplinary action against the student.

Hon Christopher Finlayson: We knew you were thick, but we’d think filibustering would be a bit more effective than this.

Hon TRACEY MARTIN: Having, in the first person—Mr Finlayson, please stop. One wants to speak about education, not necessarily about your failings. So if we take into consideration the first person in this, what we have had is we’ve had schools having to deal with international students that have breached several levels of their contract, and mostly—

Jami-Lee Ross: Why is she in Fletcher’s seat? Didn’t she get the memo?

Hon TRACEY MARTIN: —that is around drug taking or other offences that a domestic student would be held to account for, would be suspended for—Mr Jami-Lee Ross—and possibly excluded from the school because they have broken the school rules. And what we are trying to do here, and what the Minister quite rightly is trying to do here, is make sure that when international students—which are a large part of the market for our secondary school environment. It’s a positive thing for New Zealand society. It’s the interaction between our young people and young people from other nations, and the strength inside that interaction is that it is much more difficult to make a decision—that you believe you know a country from what is portrayed to you in the media when you individually know people from that nation, and that is the strength of the international student industry inside our secondary schools.

But the schools must have the opportunity to make sure that their school rules are followed, and that is what gave rise to this sort of piece of legislation—to make sure in circumstances where an international student, or the agent, actually, that made money from them, was able to take the school to task or was able to actually stop the school from implementing the school rules that any domestic student would have to follow, because, supposedly, by paying money there was some exemption to that. That is why this is a very important piece of legislation from that perspective.

I know many schools are looking forward to this piece of legislation passing through into law so that they can be confident that when they manage their international student body, that when they market overseas, and that when agents who make a commission off seeking those students, and they can be held to account in the same way that domestic students are held to account.

So I, again, compliment the Minister. I endorse the bill on behalf of New Zealand First. We recognise that this is something that has been needed and that schools have been calling out for, and so we’ll definitely support the bill going forward.

JAMI-LEE ROSS (Senior Whip—National): I move, That the question be now put.

TAMATI COFFEY (Labour—Waiariki): Thank you, Madam—

Hon Louise Upston: I raise a point of order, Madam Chairperson. I’m just interested, in terms of the closure motion that my colleague Jami-Lee Ross has just put forward. It seems that speakers opposite are struggling with your repeated direction around Part 1, and then to have a speaker speaking completely on the wrong bill seems to indicate that there are actually insufficient things for them to debate. So I would seek your guidance on the decision not to accept a closure motion.

Hon Tracey Martin: Speaking to the point of order.

CHAIRPERSON (Hon Anne Tolley): I don’t need any help, thank you. It is entirely in the hands of the Chair to make those decisions. I will say to the Government that it is getting repetitive, but I decided not to accept the closure motion at this stage. Tamati Coffey’s been seeking the call for quite some time. Ministers have stood ahead of him, which means they have to get the call, so I am now giving him the call.

TAMATI COFFEY: Thank you, Madam Chairperson Tolley. I’m happy to take a very short call on this particular bill.

Alastair Scott: Something new. Add something new and fresh.

TAMATI COFFEY: You want something new? I’ll give you something new. How about this: I think that it’s, first of all, timely that we’re talking about this. I just saw three toga-wearing students outside, and, as students all around the country are preparing for their first week of university, I think this is very appropriate that we’re debating this.

Let’s talk about Part 1, because the part that I’m interested in is the use of allowing wānanga to apply to use the protected term. This has been a debate that I’ve had in my electorate for quite some time—about the ability for wānanga to apply to be called universities, basically.

CHAIRPERSON (Hon Anne Tolley): I’m sorry to interrupt the member, but the member is speaking to Part 2 of the bill at the moment, and we’re still on Part 1.

TAMATI COFFEY: Is he?

CHAIRPERSON (Hon Anne Tolley): So you could continue, if you speak to Part 1—[Interruption] I don’t need any help, thank you—or else you can sit down and allow another speaker, and seek the call for Part 2.

TAMATI COFFEY: I’ll allow another speaker.

JAMI-LEE ROSS (Senior Whip—National): I move, That the question be now put.

Motion agreed to.

Part 1 agreed to.

Part 2 Amendments to principal Act and other enactment relating to tertiary education

TAMATI COFFEY (Labour—Waiariki): Well, Madam Chairperson, thank you for that. Timing is everything, and mine was just off. But that’s OK.

Look, I wanted to stand and have the discussion about wānanga, and the ability of wānanga to be able to apply to use the term “university”. It’s a conversation that I’ve had in my electorate quite a few times with some of our whare wānanga that find it a bit hard to compete when attracting international students. When you get overseas students that are looking for a place to study here in New Zealand, unfortunately, they don’t understand the term “whare wānanga” like we do here in New Zealand, so the ability to be able to use that is very good, and the fact that this bill is addressing that is also very good.

My question to the Minister is just around the flip side of this, I guess—so the ability for universities to be able to term themselves a “whare wānanga”. And I just wondered whether or not there were any submissions around that throughout the process because, whilst this bill deals with the ability for whare wānanga to be able to be called universities, on the other hand, is it just as easy for universities to call themselves whare wānanga? I think that it’s a valid point that I’d like to hear a wee bit more about.

There’s also the second part around the refund entitlements for domestic students enrolled in short courses at private training establishments and the refund entitlements of international students—so just making sure that we’ve got a balance when it comes to that. My question to the Minister in the chair, Chris Hipkins, around that is just around what kind of submissions were heard on behalf of students in that particular area of refunds. I’m just keen to know what the arguments were from those submitters.

I think it’s a great piece of legislation. It’s something that’s necessary, and, like I said earlier, I think that as we go into O-Week all around the country at whare wānanga, at polytechs, and at institutes of technology, I think it is very apt that we’re taking calls on this part of the bill, Part 2, right now. Thank you, Chair.

Hon NIKKI KAYE (National—Auckland Central): I’m very pleased to take a call in the committee stage of the legislation. Firstly, can I just acknowledge my colleague the Hon Paul Goldsmith, who couldn’t be here this evening. But he has tabled Supplementary Order Paper (SOP) 17, which is about amending a particular section that is in Part 2, and I will be very focused in my comments to talk to Part 2, but I’m just going to weave in a few broader themes into those clauses as well.

So I just want to mention a couple of things. Firstly, it is important to understand what we’re trying to do here with this legislation and how Part 2 works. Firstly, the reason that the Hon Paul Goldsmith has made this SOP—and the SOP is absolutely focused on equal treatment of tertiary providers—is very simple. There is one point, and it has played out throughout this Government’s tenure of office: ideology, plain and simple—ideology before the opportunities of young people. The Hon Paul Goldsmith’s SOP—I’d encourage all members to read it—is about a very simple principle that we have some equal treatment for all tertiary providers, and that was taken out of the legislation by the Government members at select committee, and we oppose that.

I do want to mention, today, I found out that the Aspire scholarships, for a whole lot of disadvantaged young people, have been scrapped, and that is relevant to Part 2 of the bill because it demonstrates complete ideology—whether it’s scrapping partnership schools or getting rid of all these opportunities for young people. Again, I come back to this SOP and say it’s all about ideology. A whole lot of young people are missing out. Shame on the Government—shame on the Government—that a whole lot of young Māori and Pasifika students will not get opportunities, as a result of these scholarships, and these partnership schools as well are being scrapped. So we on this side of the Chamber are not afraid to make amendments like the Hon Paul Goldsmith has made to ensure that every New Zealander understands that we on this side of the House will do what’s right for young people and those on the opposite side of the House will do what is absolutely about being anti-ACT or about ideology.

Just coming back to Part 2 of the bill, can I also mention that we are supporting the bill. There are some very good provisions in Part 2. There are some very good provisions around community tertiary education providers. Again, if we come back to what the heart of this bill is about, it’s about lifting quality in terms of our tertiary sector. That’s why we supported the provisions in Part 2 in terms of improving compliance. We heard in Part 1, again, that this bill does enable us to ensure that we’ve got quality, and where we might have issues with international students—corrected quite rightly by the Hon Tracey Martin—we have the ability to deal with that.

So this is a good bill overall—and I want to acknowledge that on this side of the House we will scrutinise the Government and sometimes we will oppose—but there are some fundamental flaws, like the issue that the Hon Paul Goldsmith has tried to address. It does come back to a very strong theme that many New Zealanders are starting to understand, which is that on this side of the House everything we do is about the best opportunities for young people and on that side of the House everything is about ideology and taking opportunities away from those disadvantaged young people who were getting $16,000 scholarships. Three-hundred and fifty young Māori and Pasifika students since 2009 have got those scholarships, but no longer. Why? Because of hell-bent ideology, which is very important to Part 2 of this bill.

Hon TRACEY MARTIN (NZ First): Kia ora, Madam Chairperson Tolley. Thank you very much. I rise to speak on Part 2 of the Education (Tertiary Education and Other Matters) Amendment Bill, and I recognise the bill because I happened to be on the hard-working select committee that discussed these items. So I thank the Hon Nikki Kaye for her acknowledgment of the select committee and the fact that the work done by it, predominantly about this bill, in the last Parliament was very worthy work.

Can I address the two Supplementary Order Papers, Supplementary Order Paper 15, in the name—actually, I’m not sure who this is in the name of. Oh, I know, it’s in the name of the Minister. First of all, what it does is, in clause 36, after section 253C(3)(d), insert, “(e) in … case of a wānanga, consult with … persons or bodies who are knowledgable in … (Māori tradition) … and tikanga Māori … with a kaupapa Māori pedagogy as the Minister considers appropriate.”

This, I believe, is an eloquent solution to what was submitted to us, that wānanga—and I believe my colleague Tamati Coffey articulated it very clearly—that are also trying to attract international students, that are also trying to spread the pedagogy that is based in tikanga Māori to the world, have a problem with the understanding of what is Te Reo Māori. Nobody should be surprised by that, because Te Reo Māori lives here, which is why it’s so precious. It’s the only place that it actually lives—not to be confused with Cook Islands Maori.

So I think what the Minister has done—if the public go and have a look at who the Minister must consult with when an application is made to use the protected term “university”—provides wānanga with an opportunity to present themselves to the Minister of Education and for him or her to also consider both sides of what is the educational story around that narrative before making a decision whether a wānanga can actually use the protected term. And it’s appropriate because wānanga are producing a high level of education for many of our students, in a different model. It’s something unique to New Zealand, and it needs to be recognised, I believe, inside New Zealand law. So, certainly, New Zealand First will be supporting Supplementary Order Paper 15.

If I can go to Supplementary Order Paper 17, which, I believe, if I listened to the colleague that just resumed her seat, Nikki Kaye, is in the name of the Hon Paul Goldsmith. Now, this is merely an attempt—if I read it correctly, and perhaps the Minister could clarify for me—for the National Opposition to reintroduce a requirement for funding for private institutions, profit-making institutions, to be enshrined in law to be paid for by the public purse so that no future Government could possibly have the opportunity to fund the public sector—as in Public Service sector—at any different rate.

The argument that was made—

Hon Louise Upston: What about choice?

Hon TRACEY MARTIN: The argument that was made, Ms Upston, was that if this is enshrined in law, there is also no opportunity for any future Government to actually fund a private training provider at a higher level. That was the conversation, and that was the context with which I put it to the then National Government members on that select committee. There may very well be in the future of this nation a requirement for any Government to fund at a higher level—let’s say, rural provision, regardless of who is providing that rural provision.

We’ve heard the word “ideology” bandied about here today—we’ve heard the word “ideology”. The fact that both of these pieces of ideology that have come into this House have been part of a negotiating deal with a political party—and that’s how they ended up a supply and confidence agreement, and that’s how they ended up in legislation—appears to have been overlooked.

That is not how this current coalition Government has made policy. The current coalition Government changed no policy at all when they actually entered into negotiations afterwards, so it’s very interesting to hear that, supposedly, from the Hon Nikki Kaye, the problem with the Government—and we will be opposing Supplementary Order Paper 17—is all about ideology. Actually, it’s about common sense. It’s about the fact that the rural provision of education that is required may mean that any future Government needs to address shortfalls, whether that is a public or whether that is a private institution. There’s nothing ideological about it; it’s practicalities.

What drove this Supplementary Order Paper, what drove this piece inside the original Part 2 of the legislation, was, actually, a desire to make sure that no future Government—and I think that, possibly, the current Opposition had a little bit of an instinct that the future Government might have a Labour Party in it; they wanted to try and tie it up before that happened.

Just with regard to the community tertiary education provider, I’m very pleased to see this amendment also inside Part 2 of the legislation. There was a suggestion put forward at the select committee by the original architects of the bill—which was the National Government at that time—that the reason why private training enterprises (PTEs) should not be called that is because some of them were not-for-profit. Interestingly enough, the argument was made by the many submitters on this bill that nobody used the phrase “PTE” or “private training establishment except officials”. So, front-facing out to the public, any private training provider can call themselves anything they like—nothing required them to call themselves private training providers.

But, for some reason, they did not wish to be known as that when they were dealing with ministries or when they were dealing with funding models. And, again, the argument was that there were a few of them, or a few people in that playing field, that were not-for-profit. Now, I think that we have to have a look at that “not-for-profit”, when CEOs are paid $200,000, or whatever, a year. I think there’s some interesting statements being paid by not-for-profits and by trusts in this field or in the field of education, where they are paying far too much money for chief executives (CEs). They set up a not-for-profit, they set up a trust, and then they become the CE, and they find themselves with a $200,000 salary. But what we have done here, and what the Minister of Education has very cleverly, I think, done here, is identify community tertiary education providers—so the real providers that are not-for-profit, those that truly serve the communities that are needy, that nobody can make any money from—

Alastair Scott: So profitable organisations don’t serve?

Hon TRACEY MARTIN: —that nobody can make any money from, Mr Alastair Scott. I’m sure that is not a part of the organisations that you decide to talk to, but these are for those organisations that nobody makes any money from. They deliver a public service, and that’s who we’re trying to make sure can be identified through this term, which is the amendment of section 159 in clause 9.

Again, New Zealand First will be definitely supporting the Minister’s Supplementary Order Paper 15. We will not be supporting Supplementary Order Paper 17 from Mr Goldsmith, and we are pleased to see the amendment to include a descriptor that is the community tertiary education provider.

DENISE LEE (National—Maungakiekie): Thank you, Madam Chairperson Tolley—part two of my attempt to speak on Part 2. I’d like to touch on three matters: clause 16, clause 17, and the Hon Paul Goldsmith’s Supplementary Order Paper (SOP) 17, in so far as it relates to Part 2. Clause 16, which inserts the catch-all words “conditions that the Commission considers [are] reasonably necessary to enable the Commission to effectively monitor the performance of organisations and the tertiary education sector generally.”—this is a good amendment to the Education Act 1989, and it gives, of course, the Tertiary Education Commission the tools that they need to hold organisations and industry to the high standards that we all expect. The name of the game here, of course, is increased monitoring and compliance.

Clause 17 amends section 159YD of the Education Act so that institutions that receive funding under section 159YA are no longer excluded from the requirement to keep records relating to the funding and to make those records available for inspection by the commission. This may sound like a small clause to highlight, but it’s indicative, again, that this bill of National Government origins ensures that the public entities like these are being held accountable for the public funds that they receive. No one will be excluded from keeping records and making them available for inspection, so it’s one rule to cover them all.

That’s why it’s so strange that the Government may not support tonight—I hope they do—the Hon Paul Goldsmith’s amendment. It, too, is one rule to cover them all. I’ll switch to SOP 17 now. We can see no reason why the Government has removed a clause, other than pure political ping-pong. Really! The Government of the day wants to remove the clause that ensures private providers of tertiary education receive equal funding to public providers of tertiary education. This, of course, fails to recognise how private institutions contribute to the education sector, and contribute well. If private providers are delivering results, being monitored, and being accountable for their funding—which, ironically, is what the bill is trying to do here tonight—what is the problem? “Private” is not a dirty word, so I urge all parties in the House tonight to support the SOP in the name of the Hon Paul Goldsmith.

Hon NANAIA MAHUTA (Minister for Māori Development): Thank you, Madam Chairperson Tolley. I’ve been waiting all night to take a call on this great bill, and I want to offer a contribution on Supplementary Order Paper 15 in the name of the Minister of Education as it relates to the Education (Tertiary Education and Other Matters) Amendment Bill. I think there’s a lot of context sitting around the amendment, so I’d be interested in the Minister’s clarification or insight as to what led to the particular amendment, but I am certainly pleased to see it. For a long time, wānanga have argued about and contested whether or not they can use the protected term of “university” as it relates to the provision of education within their particular institutions.

If we think about the wānanga, there are really three key wānanga that this term could relate to: Te Whare Wānanga o Awanuiārangi, Te Wānanga o Raukawa, and Te Wānanga o Aotearoa. In particular, I much suspect that the amendment will specifically relate to Te Wānanga o Raukawa and Te Whare Wānanga o Awanuiārangi, because both of those institutions offer postgraduate and graduate degrees. Much of the debate previously around whether or not they could use the term “university” is because, I think, there’s been some confusion over the type of offering of tertiary education—graduate and postgraduate degrees—and the way in which study takes place at the wānanga. If I am right to suppose that the context for the amendment better allows for the way in which they deliver the style of graduate and postgraduate education at their institutions, and that’s the reason for the amendment, then I am really pleased that that will be taken into consideration in terms of their funding mechanism.

The other reason is that people who have insight into those institutions will know that in fact if you undertake a graduate or postgraduate degree at those institutions, they do hold wānanga, for a period of a week, over a duration of a two- to three-year period in which you not only study, but you also use quite a bit of time to prepare for the equivalent of a thesis. They also host a range of opportunities to have one-on-one specialist time with the equivalent of a supervisor. The point of difference really is not only in the delivery of the programme and the access that you have to specialist supervisors or leaders of learning in your graduate programme, but it’s also in the fact that many of these degrees are actually done in Te Reo Māori.

Now, if you’re going to a normal institution, like the University of Waikato—I’m sure not many people will know that if you actually do your thesis in Te Reo Māori, the institution gets a higher rate of funding for that. So there is a campaign amongst some institutions to actually attract students who will not only do their degree—postgraduate study in education, for example—but you will get a higher dollar if you write it in Māori because of all the extra resources that a tertiary institution, a university, will have to attract in order to provide the competence and the skill to be able to assess and supervise in that way. Now, if this particular amendment helps better lift the quality and support the quality of teaching within an institution that leads to a thesis in Te Reo Māori, then I think we’re all better advantaged for it. But it’s more than that, as well, because it provides for the perspective or world view of Māori knowledge systems to be integrated within their chosen course of study.

I think, again, I’ve made a lot of broad assumptions around the context for an amendment like this, and the context for this type of amendment is also in the ability for wānanga to use a protected term, “university”. If I’m somewhat on the right track, I’d love an explanation from the Minister, but I know that this clause alone will be appreciated by those wānanga that are contributing quite a bit in the postgraduate space. Why is that important? Because many private organisations and companies are seeking skill and expertise from people who have mātauranga Māori at the core of their study.

Hon CHRIS HIPKINS (Minister of Education): Thank you, Madam Chairperson Tolley. I’d like to reply to a couple of the points that have been raised so far, and I’ll start with a point raised by the Hon Paul Goldsmith just prior to the dinner break. He was speaking on Part 1, but he was actually making points relevant to Part 2. So I will respond to the concerns that he raised about Part 2, even though he was speaking on Part 1 at the time.

The allegation that he made was that the Government have made a number of changes to Part 2 without sending them to a select committee. In fact, I’m surprised by that, because he is a member of the select committee and the changes that we are debating in this bill have all been proposed by the select committee. This is not as a result of a substantive Supplementary Order Paper being tabled in this House, as Mr Goldsmith proposed. In fact, these are changes made by the select committee in response to submissions.

The concern that he had was that we were progressing these changes without the public having had a chance to have their say on it; that’s simply not the case. In fact, the changes that the select committee made were very much in line with the concerns that the public raised during the select committee process. So we could get into a very circular argument about this—that if every time a select committee made a change to a bill it had to reconsult, you would get to the point where the committee could never actually report the bill back to the House. So the committee made changes in accordance with the public submissions and has reported back to the House, so I think Mr Goldsmith needs to worry a little less about the democracy there.

But the wider substantive point that’s been raised in relation to his Supplementary Order Paper is around the equal treatment provisions regarding funding for tertiary institutions, and I want to refer members to new section 159NA in clause 12, which is the deleted part of the bill. The provisions previously proposed by Mr Goldsmith—because this was his bill—have been deleted by the select committee. If I turn particularly to clause 4, “For the purposes of this section”, it says “(a) activities are directly comparable if the proposed outcomes in relation to the activities are the same or substantially the same; and (b) approved programmes or training schemes are directly comparable if the qualifications resulting from their successful completion are the same or substantially the same.”

I just want the committee to consider for a moment the potential implications of that principle that we are putting in here. We currently fund degree-level programmes differently, based on the type of institution they are delivered by. A degree-level programme at a polytechnic may not receive the same level of funding as a comparable degree-level programme being delivered by a university. Is the National Party seriously saying that that should change? I’d like to hear their contribution on that.

The other point that I’d like to hear their contribution on is the position that they have left our regional polytechnics in, because this is a very real issue that this Government will face, and this is where this does come into play. We are going to have to put additional money into our regional polytechnics if they are not going to go broke. Tai Poutini Polytechnic, for example, today—we will be announcing very soon some additional funding for them. They are going to have to have that or they’re going to be completely broke. In fact, they’re barely solvent now. The previous Government employed, effectively, a commissioner to go in and run that institution because it was in such dire financial straits.

Is the previous Government, now the National Opposition, seriously saying that the Government should not put any additional funding into the public institutions unless they are willing to put a corresponding amount into private institutions as well?

They’re very quiet, suddenly, but I would very much like to hear from them about that, because this is the very real issue that this Government has been confronted with. We have a network of regional institutions—public institutions owned by the Crown—that are in serious financial difficulty, and this Government is not going to let them go broke. The previous Government was quite happy to let them fall over, because of their ideology—the ideology that underpins this amendment that says that, actually, it doesn’t matter whether an institution is public or private. It’s fine for the private providers to come in and hoover up the profitable bits, leave the unprofitable bits with the public institutions, let them fall over, and then let the regions lose their regional polytech provision. That was the approach taken by the previous Government, and it is not the approach that is going to be taken by this Government.

JAMIE STRANGE (Labour): Thank you, Madam Chairperson Tolley. I appreciate the opportunity. I’d like to begin by acknowledging what the Minister just mentioned about the regional polytechs. I can certainly vouch for that, having travelled around the country and been involved in education before coming to the House—that many of our regional polytechs are struggling. It’s important that the Government take stock of that and look at how we can assist our public institutions in that way.

In terms of the bill, I’d like to focus on clauses 12 and 13. Just a little bit of background to clauses 12 and 13: when the bill was first put forward by the previous Government, clause 12 inserted the new section 159NA, which concerned the principle of equal treatment of all tertiary education providers—so, essentially, saying that both public and private would get the same amount of money. Then clause 13 relates to that—which amends section 159O to require the Tertiary Education Commission to have regard to the principle of equal treatment of all tertiary education providers.

Now, these two clauses received 2,035 submissions—2,035. That’s a significant number of submissions, and the submissions came from a range of areas, like University of Auckland, Universities New Zealand, the Tertiary Education Union—they came from a range of areas. So what’s happened is that with the change of Government, we’ve made amendments to these clauses, and the amendments can be outlined here, in new section 159OA, “Variation of determination of design of funding mechanisms”, inserted by clause 14. I’d just like to focus on that for a couple of minutes, and I’ve got a couple of question for the Minister, if he’d be so kind to answer them as well.

Now, when I read about this, about the determination of funding, where the Minister may vary the determination of the design of the funding mechanisms, it’s basically about valuing our public education system. It’s about saying, “Look, this is a Crown-owned entity and it must be supported.” There’s a phrase here that I’d like to use that relates to this bill, and that’s the fact that education is, first and foremost, a public good. The definition of public good is “A commodity or service that is provided without profit to all members of a society for the well-being of the public.” I wonder if the Minister would like to elaborate on the aspect of education being a public good, and how this bill will support public education providers and, in doing so, support students. So how will students on the ground be practically supported by this bill?

Now, if we have a look, going back to this section 159OA, there are a number of safeguards. There’s a number of safeguards if you look at subsection (2) here: “The Minister may only vary a determination—(a) if it is reasonably necessary to do so; and (b) by making changes in relation to the matters mentioned in section 159L(2).” Then it moves on to talk about consultation, and I think this is a very important point here. It says in subsection (3) there: “Before deciding to vary a determination, the Minister must consult—(a) all organisations that would be affected by a variation that the Minister proposes; and”—secondly—“(b) all other persons and organisations that the Minister considers ought to be consulted.” If I could ask the Minister a second question there, he might want to elaborate around the importance of consultation and what form that consultation will take. Then we move on to subsection (3A) there: “However, the Minister is not required to consult under.” some various areas.

So just summarising my points there, the first one is around the aspect of education being a public good—so how will the Government investing in public education support students, as opposed to what the bill previously sought to do, which was to give equal treatment to both public and private. So why has the Minister focused on the public aspect, and how will that benefit our students? The second is around the point of consultation. Having been a member of this Government for five months, there is a strong sense of collaboration that I’ve noticed from this Government, and I sense a real focus on collaboration, on consultation, and it’s something that I find very encouraging. So I look forward to hearing from the Minister exactly how he practically plans to consult before deciding to vary determination. Thank you.

MARAMA DAVIDSON (Green): Madam Chairperson Tolley, thank you very much. I wanted to pick up a short call, specifically on a couple of points raised by the National Party members, both Denise Lee and the Hon Nikki Kaye, particularly when the Hon Nikki Kaye got quite passionate and righteous about the damage that this was going to do for—I think she mentioned—a few hundred Māori and Pacific children, which we do like to talk about here in the Chamber, and how it was going to harm them. She was referring, I think, specifically to private education arrangements, including charter schools. I know this is the Education (Tertiary Education and Other Matters) Amendment Bill, but it does relate to Part 2 and, particularly, to Supplementary Order Paper (SOP) 17 from the Hon Paul Goldsmith, which, essentially, from what I’m reading, is about continuing with the ideological drive for privatising tertiary education and, particularly, allowing them to have a bit of a bite at public moneys.

So what I wanted to pick up on there is that privatisation is a failed response to when you have gutted funding from public education, when you haven’t paid teachers and tutors correctly, and when you haven’t provided for the education resources. When you are gutting and underfunding public education, that then allows for an ideological response, which is exactly what the previous National Government were trying to do with their original version of this legislation. So it is important that we keep actually saying: who are the ideological ones here?

It’s about making sure that we are clear and up front about the difference between private tertiary institutions and public tertiary institutions, and my understanding in Part 2 is that that was how we were going to start muddying those lines of differentiation, by trying to play around with the definitions and, I think, calling them independent—the proposal was to start to take away the word “private” and instead start calling tertiary institutions independent. That was the roundabout way, I believe—that’s, I think, what this Supplementary Order Paper is about. The Supplementary Order Paper from the National member is trying to put back in that attempt to continue with the privatisation ideology. The reason why the Greens support this now is because this part of the legislation, Part 2—I think it’s after clause 11—was taken out by a smart education Minister, Chris Hipkins, who understands that we do not want to continue to use more public moneys for private institutions. Public money is for public education. The member Paul Goldsmith’s SOP tries to put it back in—tries to put that ideology back in—so of course the Greens will be opposing this Supplementary Order Paper.

When we stand in this Chamber and we throw on to the floor of this debate Māori and Pacific children, who, apparently, are going to lose private contract funding through this legislation, we need to call that out, because we need to also throw on to the floor of this debate the hundreds of thousands of Māori and Pacific students who do not fare well when we gut public education. So if you want to throw numbers and throw Māori and Pacific Island students—I didn’t do it first—on this floor, how about we—

CHAIRPERSON (Hon Anne Tolley): I didn’t do it at all, all right?

MARAMA DAVIDSON: —throw on to the floor of this debate the hundreds of thousands who have not benefited from the very privatisation ideology that this legislation is trying to correct. Thank you.

MARJA LUBECK (Labour): Thank you, Madam Chairperson Tolley.

Andrew Bayly: Oh, good.

MARJA LUBECK: I know, my third time—third time lucky, they say, so I’ll give it another crack. There are several sections and clauses in Part 2 that are worth mentioning that haven’t been spoken about yet, but I would like to get something off my chest that we’ve been talking about quite a lot, which is the deletion of clauses 12 and 13, which go to the heart of the Supplementary Order Paper that has been put in by the other side of the House.

Ideology is not a dirty word. When the Hon Nikki Kaye left, she was getting very passionate about our ideology, and our ideology about people first—people before profit—is nothing to be ashamed about. Now, what the equal treatment principle would have done, as pointed out very eloquently by the Minister, is it would have given the same funding to private and public entities—as the other side likes to call it, one rule for all—where, at the same time, the other rules are not equally applying. You can’t have the same funding for private and public entities but not the same rules. You can’t have the same funding and public entities being accountable to the Government while private entities are not. So don’t call it equal treatment, because it is as far away as you can get from it.

What this equity of funding treatment would have done is it would have allowed private entities to go into unfair competition with our public entities, and that, ultimately, will start eroding the quality of our public entities, which are already stressed by having to compete with private providers. Yes, this has gone to the select committee, as has been pointed out by the Minister. More than 2,000 submissions from individuals and groups were heard and seen and perused by the select committee. None of them supported the change from private to independent. The majority of the 2,000-plus submitters did not support providing the same funding for private and public entities. There’s a Council of Trade Unions submission on behalf of 320,000 members that stated it quite succinctly when it said that they oppose public funding being used to subsidise for-profit private training establishments competing with public TEIs—oh, so many acronyms: TEI, not to be confused with the PTE, but the TEP includes all TEIs plus PTEs, but a TEO includes a TEI, a PTE, and an ITO. So you wonder why I got confused.

Anyway, where was I? Right, there are other provisions I want to talk about in Part 2. What Part 2 also does is it improves significantly the efficiency and effectiveness of the tertiary education institutions’ councils—I’ve got that acronym now. There’s a couple of things—clause 26 to start with. So councils are now no longer required to fill a casual vacancy on the council if that arises more than three months before expiry. So it really is insufficient time to go through a proper process to replace an incumbent, to get that person up to speed and appoint a successor. So what clause 26 does is extends that three months to six months, and that will be giving a good breather to those councils.

I have been on councils like that myself, and when people leave halfway through the term and you’ve only got a few months to go, you’re spending quite a lot of time and effort on trying to replace the person on that council. Sometimes, you’re even starting that process of getting them up to speed on all the knowledge, making them a small to medium sized enterprise, and before you know it, there’s another election and it’s, basically, all wasted. So that’s a really practical, wonderful addition to Part 2.

Clause 27 modernises the operation of the tertiary education institutions’ councils. At the moment, a council has to convene a meeting of council members in person. There’s actually no provision where you can conduct a meeting in any way other than face to face. So the legislation, in effect, restricts the ability to use any modern means such as electronics or digital media to have those meetings. So clause 27 amends section 178.

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

Hon TRACEY MARTIN (NZ First): Kia ora, Madam Chairperson Williams. Thank you very much. I did contribute earlier, but I actually want to just raise a couple of other areas in Part 2. The first part that I would actually like to address is the removal of new section 178A. Now, that was something that had been put in by the original authors of the bill, which was the previous administration, and it’s 178A, “Written resolutions of councils”. This has been removed. What it originally said was “(1) A resolution signed or assented to in writing (whether sent by post, delivery, or electronic communication) by all members of the council who are entitled to vote on the matter is as valid and effectual as if it had been passed at a meeting of the council.”

Now, I think, quite rightly, New Zealand First supports the removal of clause 28 inserting new section 178A from the original piece of legislation. This clause would have meant that councils could make decisions behind closed doors, and I don’t think that anybody would accept, when these are public institutions or when there are students who are paying fees and are affected by the rules that would be made or the written resolutions that would be made by councils, that it is appropriate that councils could—whether it be a series of emails or whether it be a series of phone calls—just decide away from the public face, away from stakeholders, and make decisions that will then, downstream, affect the students. So, I think, actually, the removal of new section 178A, “Written resolutions of councils”, is a very good removal, and we compliment the Minister upon that.

If we then talk about the replacement—so another clause that has been removed so that we can improve this piece of legislation is the removal, in clause 38, of new section 292C(2A). It previously said, “A person commits an offence—(a) who knowingly or recklessly makes a false representation on a student’s record of achievement that the student has achieved a credit: (b) who without reasonable excuse causes a false representation to be made on a student’s record of achievement that the student has achieved a credit.” Now, I would have to say this. This is based on real cases where fraudulent records were made of a student achievement. However, this Government is replacing section 292C(3) with “A person commits an offence if the person—(a) enters or changes an educational outcome on a student’s record of achievement, knowing that or being reckless as to whether the entry or change has the effect of falsifying the student’s record;”—that is, we make it clearer that it is deliberate. That’s something that I find very interesting—that the previous administration did not go that far. We are making it very, very clear that if it is deliberate, you will be held to account.

Replacement section 292C(3)(b) says, “fails to enter an educational outcome on a student’s record of achievement, knowing that or being reckless as to whether the omission has the effect of falsifying the student’s record;”. Now, people might think that’s odd that we’ve talked about an omission, but what we had was a particular case where a particular tutor passed certain students knowing—and with evidence—that they had failed, and yet because they perhaps didn’t like or they did not get some sort of compensation from other students who had passed or could have passed, the tutor did not enter those marks.

Now, this is something that for the reputation of our nation, for the reputation of international students and the international student industry in this country—a $4.5 billion industry—we must stamp out. This Government will be very, very, very clear that we have a high-quality, highly accountable international student industry in this country. We will support it to be that high-level, highly reputable international student industry, and to do that we will stamp out situations that we heard of through submissions. I compliment the Minister for replacing section 292C(3), because it needed to be stronger than what the previous administration had put into place.

Hon CHRIS HIPKINS (Minister of Education): Thank you, Madam Chair Williams. I just want to comment briefly on the “Meetings of councils” clause, clause 27, which the Hon Tracey Martin just mentioned, because this is something that was discussed in the Education and Workforce Committee at great length and, actually, something that I spent a little bit of time on, once I became the Minister, familiarising myself with the rules around that. It seems to me that we’ve got two pieces of legislation. One is the Education Act, which we’re amending here, and the other is the Local Government Official Information and Meetings Act, the LGOIM Act, which have some conflicting provisions. I think, at some point, the Local Government Official Information and Meetings Act also needs to be updated to reflect the fact that there’s now a whole range of technology available to allow meetings to be conducted more efficiently, for it to allow business to be conducted more efficiently, and I’m not convinced that that Act is actually enabling enough to allow all those bodies that are subject to it to do the things that they could do.

But, anyway, moving to the specific provisions that we’re doing here, we’re basically bringing this Act into the 21st century by allowing meetings to take place through audio, audiovisual, or other electronic communication, but there are some safeguards in place, and those are that they can do so provided that each member who wishes to participate has access to technology that will allow them to do so—and that’s very important—and a quorum of members can simultaneously communicate with each other throughout the meeting. So it’s not removing the requirement for people to actually meet; it’s just meaning they don’t have to physically be in the same place.

What the committee did stop short of was the written resolution alternative, which would be that a meeting would not need to be convened in any way, that a council could simply pass a resolution, say, via email, for example, in a written form without actually meeting. The general view, and the advice that we received, was that this would actually be in conflict with the requirement for meetings to be held in public, for the public to be able to follow what was going on, and therefore a closed-shop email loop, for example, to pass a resolution would not be in accordance with that. Now, somebody—I can’t remember who—then raised the question, “Well, what about a teleconference, for example—is that open to the public? Or a video conference?”, and the answer to that question is yes, it does need to be. And the provisions in this bill make it very clear that that needs to be done in a way that is publicly transparent as well. So there isn’t actually a conflict between removing the ability to pass a written resolution and still allowing a council to meet using digital meeting technology, because the digital meeting technology would still have to allow for that public transparency.

So the Minister of Local Government has been participating in this debate, and I hope that at some point the relevant provisions in the Local Government Official Information and Meetings Act will be updated, because, to some extent, what we were trying to achieve here, which was a more efficient and streamlined way for the councils of tertiary institutions to conduct their business, is to some extent limited by our desire not to create inconsistencies between the two Acts. I think that that’s something that, in time, I’m sure the Parliament will be wanting to address.

JO LUXTON (Labour): Thank you, Madam Chair Williams. I’m pleased to have the opportunity to speak on this bill in the committee of the whole House stage. As we know, it’s about strengthening the accountability of the tertiary education sector etc., etc. A lot of my colleagues on this side of the House have talked about the fact that our public institutions are of extremely high calibre and, as I’ve said, I think we all agree on that. But I particularly would like to speak about Part 2 and clause 36, and I do have some questions for the Minister about this, but I will come to that soon. So, as we know, we’ve had over 2,000 submissions with regard to this bill, so I think it’s fair to say that it is of high public interest—well, reasonable public interest—with that many submissions, and I think that’s really good to see that people are contributing in that way.

I want to particularly refer to the amendments to section 253C in clause 36, where we’ve changed the heading and replaced it to say that the “Minister may consent to use of certain terms in name or description of registered establishment or wananga”. So, further down from that, we have replacement subsection 2 and new subsection 2A, which allows for registered establishments and wānanga to ask the Minister to consent for them to apply to describe themselves as a university, a polytechnic, or an institute of technology. So there were quite a few submissions opposing this, based on concerns about reputation risk. As we know, our universities and public institutions are ranked among the top 500 in the world. Rightly so, there were some concerns about this, but I think that with the changes to subsection 5, where the conditions have been put in place—and I note particularly replacement subsection 5(b) and (c): to “(b) ensure adequate protection of the quality and reputation of the institutions that may use the term without applying to do so; and (c) protect the interests of the tertiary education system and the nation as a whole.” So I think these changes in clause 36 strike an appropriate balance between protecting the integrity of New Zealand’s university system while giving the Minister discretion to allow wānanga to use the term “university”.

The other side of the argument here was that some wānanga feel that not being able to describe themselves using the term “university” has hampered their ability to market themselves as a credible option for students, particularly from overseas, as a viable study option, so I have some questions around that. Specifically, I want to know from the Minister what specific characteristics or what criteria the Minister would take into account before deciding to give wānanga and registered institutions the ability to use the description of “university” or such things as that.

The other thing that I would like to highlight on the argument side of wānanga wanting to use the term “university” as a description for themselves is that, often, their courses and programmes meet the required standards of the New Zealand Qualifications Authority and they are held to the same level of performance as universities, so it’s, kind of, only fair that they should be able to apply for consent to describe themselves as one of the options that I’ve already mentioned previously.

I also have another question for the Minister with reference to Supplementary Order Paper 15, which states that “in the case of a wānanga, consult with such persons or bodies who are knowledgable in āhuatanga Māori … and tikanga Māori … within a kaupapa Māori pedagogy as the Minister considers appropriate.” So what I’d like to know is whom or which persons or bodies the Minister would consider to be appropriate.

One last thing, I have another question with regard to new section 253C(5A), inserted by section 36, which states, “The Minister may, at any time, carry out a review of a registered establishment or wananga …”, and I want to know under what situation or circumstances he would review.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Chair Williams. I have a number of questions for the Minister in respect of this amendment bill, and they are really around the integrity of the system. I must say, given the export earner that education is in New Zealand, I entirely understand the importance of maintaining the integrity of the system. Firstly, there are some concerns that they don’t go far enough, and then there are some concerns that other things could have been done that perhaps go a little further.

Clause 9 of the bill defines “educational outcome”, and I’m just wondering if the Minister might give a view on exactly how far that goes, because that feeds into an offence provision about falsifying educational outcomes, including all components of student achievement. If we do look at the offence itself, I guess I do have some concerns that it might catch some people who are fairly low down the academic chain. We have junior tutors marking papers and so on who may indeed come under some pressure—may perhaps misstep—but I’m wondering whether a falsification by some junior tutor, who may themselves be a student, really needs to invoke the full force of this legislation, or does that definition perhaps really mean something else and it means perhaps a full-time academic embarking on that conduct or something like that? So that’s my first question, and that comes out of clause 9, which feeds into clause 38.

Clause 38 increases the fine for falsification to $50,000, and I do note that that is a significant fine. I understand entirely the need for disincentive—and this is kind of a double banger, because in one sense I’m asking: is that too excessive? Is it comparable to other offences? Is there a wider justification for the magnitude of that fine? I’m suspecting the Minister will come back and say “Indeed, it is.” and give good reason for that. If that’s the case, the question for the Minister is: should that then be rolled out across the Act more widely, because a number of the other sections of the Act—the first offence section is section 292, Minister, and then the other parts of the section, section 292A to C, also have offences. But as I read it—and I may have this wrong—those offences remain at $10,000. So the question is: shouldn’t we be amending these all at once and having a much more even approach?

My final point—and I don’t intend to take too long here—is around clause 37, the use of protected terms. There is, of course, a list of protected terms, which I entirely endorse, including “wānanga”, and then the question I have is whether we should be having a catch-all provision in there. There is some concern that many private providers dress themselves up with coats of arms and the words “College”, the “New Zealand” this, the “Institute” of that, and they’re presenting themselves as if they have the imprimatur of the State, and that is dangerous. A private provider is one thing: it is subject to a qualifications regime, but it is no more than a private provider, whereas a university goes through a much more rigorous process, and anything that is, in fact, an arm of the New Zealand Government and the New Zealand education system is something quite different. My question to the Minister is whether consideration had been given to broadening that out to say that any educational institution who engages in misleading conduct as to the nature of their institution or its origins and relationships is indeed committing an offence.

So there really are four points there, and I would very much like to know the Minister’s thinking in respect of each of them. Thank you very much.

Hon TIM MACINDOE (National—Hamilton West): I move, That the question be now put.

Hon JENNY SALESA (Associate Minister of Education): Madam Chair Williams, thank you so much for this opportunity to speak on this Education (Tertiary Education and Other Matters) Amendment Bill. I would like to talk about two Supplementary Order Papers (SOP)—the honourable Minister’s Supplementary Order Paper 15; and I’d also like to address the Hon Paul Goldsmith’s Supplementary Order Paper 17—as well as the use of the term “university” by wānanga.

I’d like to begin with the Hon Paul Goldsmith’s SOP, and I refer to proposed new section 159NA, inserted by proposed new clause 12, where it states: “Funding mechanisms consistent with [the] principle of equal treatment of all tertiary education providers”. Subsection (1) states that “Every funding mechanism must be consistent with the principle that an activity or [an] approved programme or training scheme is to be funded at the same rate … directly comparable activity [to be approved by the programme training scheme] regardless of the identities of the tertiary education providers concerned.” Now, one reads this to mean that when any of our students attend a private training establishment, a PTE, and if a similar student was to attend a university to study a course that is similar—if this SOP was to be approved—the PTE and the university would be paid at exactly the same rate.

Now, herein lies one of the major differences between those of us on this side of the House and those on the opposite side of the House. We do not agree with privatisation of our education system. Our education system in Aotearoa New Zealand is world class. We would like to retain that world-class education system. However, we will do it by making sure that our education is fair and equitable for everyone. Now, another major difference between this this side of the House and the Opposition side of the House when it comes to education is the focus that we have, especially for our most vulnerable children—our Māori students, our Pasifika students—and how they are dealt with in the education system.

When we look at availability and accessibility of tertiary education, one of the things that has been mentioned is our polytechnics. Now, regional polytechnics have been discussed before—the fact that they haven’t been funded adequately. The outgoing Government did not fund our tertiary education system—especially our regional polytechnics—adequately, but what I can say is that I can say the same thing of Auckland polytechnics. The polytechnics in Auckland—for instance, MIT, the Manukau Institute of Technology, which is in Ōtara, as well as Unitec—have also not been getting adequate funding. Therein lies the difference on this side of the House, and our opposition to this SOP is because we will continue to ensure that we will fund the State education system adequately and we will ensure that all of our students, regardless of where they live and regardless of their socio-economic status, get access to good education, right throughout Aotearoa New Zealand.

The SOP of our honourable Minister, the Hon Chris Hipkins—in proposed new section 253C(3)(e) in new clause 36(5B), it states: “in … case of a wānanga, [we would] consult with such persons or bodies who are knowledgeable in āhuatanga Māori ([which is] Māori tradition) and tikanga Māori (Māori custom) within a kaupapa Māori pedagogy as the Minister considers appropriate.” Now, I have one question to the Minister about this particular SOP: who would the Minister need to consult with, with regard to the SOP that he’s proposing?

Now, the last thing that I would like to discuss is with regard to the use of the term “university” by wānanga. We know that under this particular legislation, when and if we pass it, a wānanga would have to apply—so the three wānangas that we have, Te Wānanga o Aotearoa, Te Wānanga o Raukawa, and Te Whare Wānanga o Awanuiārangi, would have to apply to the Minister for consent before they could describe themselves by using the term “university”. Now, I have a few questions for the honourable Minister. If a wānanga is granted consent to use the term “university”, would it then legally be called a university, honourable Minister?

The second question is: is there a risk that students and employers, especially ones overseas, who might be coming to attend one of our wānangas—may they be confused or misled into thinking that a wānanga is a university in the same way as Victoria University or the University of Auckland is?

And my last question, honourable Minister—and this is in reflecting with quite a few of the vice-chancellors that came and presented to us. Some of them, of course, did not agree that wānanga should be allowed to use the term “university” and they thought that it should be kept as a protected term. Now, in allowing wānanga to use “university”, would we create a reputational risk for Aotearoa New Zealand, and, if not, how can this risk be managed? Thank you very much, Madam Chair.

SIMEON BROWN (National—Pakuranga): Thank you very much, Madam Chair Williams. It’s a pleasure to take a very, very quick call on the Education (Tertiary Education and Other Matters) Amendment Bill in its committee stage. I’ve got a question for the Minister: why are we here extending the debate on a bill that we all agree on? We all agree on this bill, and there are Ministers down here in the Chamber asking other Ministers minor questions like “What is the definition of the term ‘university’?” Well, I really want to know what the definition of the term “university” is. Or the other comment was “when and if we pass this bill”. Well, we are ready and we are willing to pass this bill and get on with it.

So that’s a very quick call. I don’t want to take up the committee’s time, but let’s just get on and pass this bill. Thank you.

Hon CHRIS HIPKINS (Minister of Education): I’m very happy to respond to that brief contribution from Simeon Brown, asking why we are here discussing this particular bill. That’s because that’s our job. It’s what the Parliament does. We scrutinise legislation in this House, and the fact that we have the largest and laziest Opposition New Zealand has ever seen should not detract from the fact that the Parliament still has a job of scrutinising the legislation that is being put before it.

It’s interesting, isn’t it, that the Opposition put forward a Supplementary Order Paper—an amendment to a provision of this legislation, which they think is so controversial they should change it—and now they can’t be bothered speaking to it. They’re too busy. They want to scurry on home. They don’t want to actually debate their own provisions—the changes that they want to make to this bill. It’s not unanimous. If it was unanimous, they wouldn’t be trying to change it. So I’m somewhat confused by the confused position the Opposition seems to be taking on this matter.

However, I do want to clarify one or two of the claims that have been made in the very brief contributions that have been made by the Opposition members—all four minutes or so of it—that we’ve heard so far this evening. When it comes to the issue around private training establishments (PTEs), that is because we are changing—we are rejecting the previous Government’s proposal to rename private training establishments as independent tertiary institutions. That was the proposal put forward by the previous Government, and it was strongly opposed by the universities, by the polytechnics, and by many of those who submitted during the select committee process. Why? Well, the reason for the opposition was quite clear. They are independent. The universities and the polytechnics are independent, and particularly the universities—they actually have legal independence. It’s enshrined in the Act. They were concerned that by calling private training establishments independent tertiary institutions, that would somewhat confuse that, and I think that’s a legitimate point.

There were some issues raised by private training establishments, which felt that the PTE descriptor was not accurately reflective of the very broad array of different types of education providers that exist within it. I think that is fair, and the Government thinks that that is fair, because there are a number of community organisations that, under the law, are actually technically currently called private training establishments when there’s nothing private about them. They’re often incorporated societies or various forms of other public not-for-profit entities, and at the moment they are described as PTEs. That’s the reason why I have proposed inserting a new category called “community tertiary education provider”, which would, basically, allow for that to be recognised—that breadth that’s currently lumped within the PTE sector to be recognised in a more diverse way.

I want to talk then about the issues around the term “university”. The National member who spoke said, “Oh, why are we debating what’s meant by ‘university’?” It’s actually one of the most controversial issues for the universities at the moment, as to what could be a university and what shouldn’t. The universities will fight very passionately about what the definition of a “university” is, and I think that they have a legitimate point.

But I want to talk in particular about the controversy, which is the previous Government’s desire—and a desire that’s been adopted with slight refinement by this Government—to allow wānanga the ability to apply to use the term “university”. I want in particular to talk about the things that would need to be taken into account by a Minister when they were deciding whether or not a PTE or a wānanga—because at the moment, a PTE can apply to be called a university, but not a wānanga. So a PTE can use the term, but a wānanga can’t, and that’s something that Parliament, I think, would find very difficult to justify, and that is one of the reasons we want to change that.

But what are the things that the Minister would take into account when making that consideration? The first thing is that the Minister—so if it was me, or whoever takes the job next—must take into account the characteristics of institutions described in section 162(4) of the Education Act. In other words, they have to take into account the characteristics of a university. So in order for a wānanga or a PTE to use the term “university”, the Minister, in doing that, would have to consider the extent to which they met the definition of a “university” in the Act. So this is not guaranteeing that the wānanga can use the term “university”, and I think that’s important. What this is doing is it’s allowing the wānanga their day in court, if you like, or their ability to apply and have their case considered.

The Minister must also, in the process, receive advice from the New Zealand Qualifications Authority and the Tertiary Education Commission, must require conditions to ensure the public is informed of the legal status of the institution and to “protect the interests of the tertiary education system and the nation as a whole.”, and must “consult with [the] institutions, organisations representing institutions, and other relevant bodies, … the Minister considers appropriate.” One would think that the universities collectively, in the form of Universities New Zealand, which is technically the Vice-Chancellors Committee, would be one of those bodies.

I have to say that one of the clauses here, that “the Minister considers appropriate”, is one of the things that I previously criticised the last Government for. I actually think, when it comes to consultation provisions in legislation, we should actually be a little more detailed in what consultation is required rather than simply saying “whoever the Minister feels like consulting.” So I think that’s something that in a future bill maybe the Parliament will want to come back to. I think that, given the controversy around things like this, actually being a little more specific, guaranteeing, for example, that the current universities would need to be consulted when a new institution is applying to use the term—that’s actually quite a reasonable thing. I think that’s something that in the future, in another bill, the Parliament might want to consider.

I am comfortable overall. I have had representations from the universities, who are not happy about this provision. I am, however, comfortable that there are enough safeguards in place to ensure that the reputational standing of our universities can be protected, and that the term “university” is not going to be undermined by allowing wānanga to apply to use it. In order to use it they will need to, basically, demonstrate that they meet the criteria to use it, and, therefore, I think that this is a pretty straightforward decision.

Hon TIM MACINDOE (National—Hamilton West): I move, That the question be now put.

CHAIRPERSON (Poto Williams): Before I take another call, I just want to say that I think that we haven’t been going for an hour yet. I’m still encouraged by the breadth of the debate, so I won’t be taking a closure motion at this stage.

Hon TIM MACINDOE (National—Hamilton West): I raise a point of order, Madam Chairperson. Can I just seek your explanation? Are you saying that it is the time of the debate or the quality and the relevance of the debate, because if it’s the latter, we’ve heard nothing of any relevance whatsoever.

CHAIRPERSON (Poto Williams): Thank you. Part 2 of this bill is actually the substantial part of the bill. So I’m prepared to listen to more debate on Part 2.

JAMIE STRANGE (Labour): Madam Chair Williams, thank you for the opportunity to speak, which I assure the member will be a quality presentation, so the member can take notes if the member so wants to.

I want to look at section 292C in clause 38, which I don’t believe has been covered yet, and that’s around the accuracy of data. Now, our education system relies on accurate data. This is absolutely vital for our educational system to work. Now, I realise the members on the opposite side have had a leadership change, and if this is an example of the new leadership, then I’m a little bit confused, because we haven’t had any—

Hon Gerry Brownlee: Relevance. Relevance.

JAMIE STRANGE: I’m just responding to the member—but we haven’t had any quality conversations from the other side. But I’ll leave that to the Minister, and I’ll return to the bill.

So in terms of the accuracy of data, it says here “A person commits an offence if the person—(a) enters or changes an educational outcome on a student’s record of achievement, knowing that or being reckless as to whether the entry or change has the effect of falsifying the student’s record;”. This is vital, because, as I said before, our education system relies heavily on the accuracy of data. This is in stark contrast to what we’ve seen under the previous Government around national standards.

Just to juxtapose the two and explore this a little bit, in terms of national standards, I once spoke to a principal—obviously, I won’t mention her name—who said that she entered national standards data that went to the ministry and she got a message back saying, “This is not correct.” She knew it was correct, and so she had to change it in order for it to be accepted. So she, effectively, had to falsify it, which basically made a mockery of the system. Then she felt guilty. She met with a group of principals and said, “Look, I have to confess, I’ve falsified the data for it to be accepted.” And the principals in the circle, they said, “Oh, we do the same thing.” This was an example, unfortunate as it is, of data that was not accurate.

So I appreciate this clause being in the bill here, because, like I said, it’s absolutely vital for our education system to be respected and to work properly and that the data is accurate. I’ve got a question for the Minister if he could please answer it: how will the Minister know if falsification has taken place? So what safeguards has the Minister got to know that data is incorrect?

I had another example of this as an intermediate school teacher—

Hon Gerry Brownlee: I raise a point of order, Madam Chairperson. I’m sure that you’ve been listening quite closely to the contribution that’s being made at the present time, because you expressed a desire earlier to hear more in this debate. But, effectively, that member has just accused school principals of doing something that is totally illegal and that other school principals have had the law come down on them pretty hard for.

CHAIRPERSON (Poto Williams): And the point of order is?

Hon Gerry Brownlee: Well, surely it is patently clear to you that it’s inappropriate for a member to make such an accusation here in this Chamber. Oh, the Minister of Education says it’s OK for people to falsify their returns. OK.

CHAIRPERSON (Poto Williams): I don’t believe that is a valid point of order.

JAMIE STRANGE: I was simply conveying an experience I had. This experience was unfortunate, because the accuracy of the data was not correct, and what I’m doing is highlighting one of the issues we had under the national standards that was presented to me. I’m stressing the importance of accurate data. So my question to the Minister is how will he know if falsification has taken place?

I’ve made my point. I’ll leave it over to others to speak, and I look forward to hearing from the Minister. Thank you.

Hon CHRIS HIPKINS (Minister of Education): I’ll just make a very brief contribution in response to that matter. I think it’ll be fairly obvious when institutions or providers have committed fraud. They’re now being picked up by the fairly rigorous checks put in place by the Tertiary Education Commission and the New Zealand Qualifications Authority. That is why we’ve seen so many providers in recent months, basically, being cracked down on, including some of them having their registration cancelled by the New Zealand Qualifications Authority because they are, basically, undertaking very underhand practices that could be described as academic fraud. They’re being cracked down on, and that’s a very good thing. In response to Mr Brownlee, no I don’t condone people falsifying records.

Hon Gerry Brownlee: No, you can’t talk to a point of order afterwards.

Hon CHRIS HIPKINS: I don’t condone people falsifying records, Mr Brownlee, whether they be in schools or tertiary institutions.

Dr DEBORAH RUSSELL (Labour—New Lynn): The naming of tertiary institutions is a difficult matter, and it isn’t just one of your holiday games. You may think at first I’m as mad as a hatter when I tell you a tertiary institution must have three different names. And that’s about as far I can get on bowdlerising T.S. Eliot on “The Naming of Cats”. It was brought to mind by a number of the clauses that are in this bill tonight, which I want to speak about. And it does go back to the issue of what gets called what. So I’m really delighted to see the addition of the idea of a “community tertiary education provider”. I think it recognises a really important group of people within the communities who are offering a type of education. So that’s a really good addition there.

I’m really pleased to see that “independent tertiary institution” is not going to be carried forward as a label. Partly that’s because I come from a university background myself and I’m really entrenched in it and I recognise the power that a name carries. And so that particular name, I felt, did trade on institutions’ standing. I was pleased to see that in clause 9. But the thing that really intrigued me was between clause 9 and then coming to what wānanga may call themselves on application.

In clause 36, which amends section 253C of the Act, we have here that a wānanga may apply for consent to describe themselves as a university, a college of education, a polytechnic, or an institute of technology. But I was just wondering whether a wānanga could also apply to describe itself as a “community tertiary education provider”. There are a number of entities that it can describe itself as—we’re bringing into being these institutions called “community tertiary education providers”—but will it be possible for wānanga to perhaps apply to use that, or is that something we might be able to consider at a future stage if it’s seen to be something that is important for wānanga to be able to do?

What I really like about this ability of wānanga to use these labels is that, to me, it’s very enabling. It enables wānanga to provide education in particular ways. And I think it provides credibility and standing beyond just New Zealand. We all know what a wānanga is here; so it’s great to have that extra recognition there that means something beyond our shores. But I do wonder about whether or not that “community tertiary education provider” could be extended to wānanga as well.

I just want to go back to something else that was raised—incorrectly—by Mr Simeon Brown, who asserted that we all agreed on this. Clearly, we don’t, because, on this side of the House, we don’t agree with Supplementary Order Paper 17. We don’t actually want that equal treatment principle. It’s an odd thing for people on this side of the House to say, because we are very egalitarian in our principles but, in this case, we’re saying, “Well, actually, no.”

I just want to hear a little bit of your thinking around that, because, again, I know, having come out of the university sector—you know, I’ve spent far more years there than I really care to count up, and it takes more than all my fingers and all my toes—I know the importance of research in universities. That’s a critical difference between, I guess, the universities and the polytechnics. It is research-led teaching. In fact, in order to succeed as a teacher at a university, you do need to be doing research. It’s measured. My experience is that the best teachers are often also the best researchers. They’re the people who do engage in that critical thinking.

So I was really just wondering if that was the kind of thinking that was underpinning what’s going on there, where we’re saying, “Well, actually, no; there’s something a little bit distinctive that universities do that is not the same as private tertiary institutions.” And I would like to hear a little bit more about that if you have time. And so that is something about which we do disagree on this side of the House. So, to the Minister, if you are able to enlighten me on some of those points, that would be very helpful. Thank you.

Hon JACQUI DEAN (National—Waitaki): I move, That the question be now put.

Motion agreed to.

The question was put that the amendment set out on Supplementary Order Paper 15 in the name of the Hon Chris Hipkins to Part 2 be agreed to.

Amendment agreed to.

The question was put that the amendments set out on Supplementary Order Paper 17 in the name of the Hon Paul Goldsmith to Part 2 be agreed to.

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

Ayes 56

New Zealand National 56.

Noes 63

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

Amendments not agreed to.

Part 2 as amended agreed to.

Schedule 1 agreed to.

Schedule 3 agreed to.

Clauses 1 to 3

Hon CHRIS HIPKINS (Minister of Education): We come to the summing-up part of the debate, and all I can say is thank goodness for Gerry Brownlee. At least he was here to call for a vote on the Supplementary Order Paper put forward by the Hon Paul Goldsmith, which no one in the National Party wanted to speak to. So passionate were they about the issue, that they didn’t want to speak to it.

Hon Gerry Brownlee: Relevance. Relevance.

Hon CHRIS HIPKINS: So as we sum up—I’d accuse the member of many things, but balance is not one of them—but, as we come to this summing-up part of the debate, it’s very clear that there are some themes that have emerged from this. There is only one side of the House that is actually willing to scrutinise the actions of the Government, and that is this side of the House—clearly not that side over there, despite the fact that that is actually their job. But that’s OK, that’s OK. We’re getting used to that—the largest and laziest Opposition New Zealand has ever seen.

But there are also some other broad themes that have come out of this debate, one of which is that only members on this side of the House seem to be taking seriously the fact that we do have a responsibility to ensure the welfare of international students in New Zealand and we do actually have a responsibility to crack down on some pretty dodgy practices that have been happening in the international education sector. The only members who actually spoke to those issues, even bothered to raise them in the committee, were members of Labour, New Zealand First, and the Green Party—not a jot from the National Opposition on those matters, despite the fact that they are big and serious matters. So I think we can draw that as a theme from this particular debate.

Another theme that we can draw from the debate is that now that they are in Opposition and the Māori Party is out of Parliament, the National Party doesn’t really care what happens to the wānanga. The wānanga have campaigned for a very long time to have the ability to apply to use the term “university”. It’s not a guarantee, as I stressed earlier on; it’s their ability to apply. This was something that the previous National Government were encouraged to adopt by the Māori Party, as one of their partners when they were in Government, and now, of course, they’ve just completely forgotten all about that, now that the Māori Party are out of Parliament and the National Party are free to revert to type.

So, it’s interesting that they didn’t have anything to say on those provisions at all. They didn’t have anything to say on the provisions around providers who are ripping off the system by falsifying student records. I thought that was interesting, and I thank the members to my right who took the time to scrutinise those provisions in this particular bill.

So, overall, I think this bill is a positive development for the tertiary education system in New Zealand. It updates and modernises legislation. Another piece of scrutiny that we received from the Government side of the House was around the modernisation of meeting provisions for tertiary education institution councils—nothing on the National Party side of the House with regard to those provisions, of course. One or two members are still figuring out how to actually use their phones, so I can understand why they found those provisions slightly perplexing. But, overall, this is a good bill and I welcome the National Party’s support for it. I think it does deliver welcome and needed changes to our education legislation.

Hon TRACEY MARTIN (NZ First): Kia ora, Madam Chairperson Williams—just a quick call on the commencement, the title, and just a summing up generally on the Education (Tertiary Education and Other Matters) Amendment Bill. Just to support Minister Chris Hipkins’ statements—I mean, I sat through the select committee with regard to this bill, and the Opposition members who at that time were Government members had a lot of say about this bill with the 2,000-something submitters that came who requested the amendments that have now actually been happening with regard to this particular bill.

I’m going to have to disagree slightly with the Minister. While the Minister says this is a good bill, I would have to say this is a good bill now. And I hope that we’re going to hear, at some stage this evening, from some members who were in the 51st Parliament who were sitting on the Education and Science Committee and argued against the changes that have made this a good bill now, because they were so articulate, on why the things that have now been removed that submitters asked us—and let’s be clear, we’re here to represent the voice of the people of New Zealand, the voice of the public of New Zealand, and when you get that many submitters who come in to tell you that, actually, the Parliament, the Government, had got it wrong in the first drafting of this bill, its behoves us to listen. It not only behoves us to listen; it behoves us to actually interact, because those 2,000-odd submitters are currently sitting, watching, waiting to hear that the people that they have asked to represent them give enough of a damn that they actually participate in the debate.

So I’ll wrap it up there because I’m aware that there are many other members who wish to speak, but just to say that this is a good bill now and it is because the Government of the day—the Government today—listened and took on board all those voices from the education sector and from the public out there, and particularly the wānanga. All they’d been asking for was a level playing field and an opportunity to have the Minister balance his view and who he consulted with when they applied for the use of that term. So I’ll leave it there, but I thank the Minister in the chair for finally listening and bringing this piece of legislation to the House—much improved from when it first came.

Hon GERRY BROWNLEE (National—Ilam): I think it’s worth pointing out, after the last two contributions in the House, that this was a bill brought to the House by the previous National Government. We were very happy with that, and we continue to support it here today with Minister Chris Hipkins’ amendments, which we voted for.

Now, I know that Tracey Martin likes to put the slipper in all the time at every opportunity she gets, but I think, in this case, she’s pulled out the speech from the bill that she was talking on earlier this evening, which happened to be the wrong bill, and has read the wrong speech for the wrong bill one more time. The reason that we’re here tonight spending so much time on a bill that the Opposition is supporting is because of the dysfunctional nature of the current Government—the accidental nature of the current Government—where their members need to come to the House to talk for their Minister because they can’t sort out these things in any other forum.

For Mr Strange to come to the House and start saying he wants to know about how the data is going to be dealt with simply indicates that when he went to knock on the Minister Chris Hipkins’ door, it was locked, he was too busy—no time for the backbench in the Labour Party. And so we come down here and find ourselves with member after member standing up asking questions of a relatively trivial nature for a bill that has widespread support across the House.

Now, of course, another reason for that could be because the Government has an exceptionally light legislative programme—an exceptionally light legislative programme. I think it would be interesting if this evening we had got as far as the Health (National Cervical Screening Programme) Amendment Bill. But no, the Government wants to spend a lot of time talking about a bill that the vast majority of the House supports because, quite clearly, a bill in the name of the Hon Julie Anne Genter from the Green Party does not have unanimous Government support, let alone cross-party support. They’re all saying “Oh, no, that’s not true.”, but how else do they explain the extraordinary spectacle of so many Labour Party backbenchers being forced to give long speeches—because five minutes is a huge effort from anybody in that party asking questions of an exceptionally trivial nature and wasting Parliament’s time? Well, I think the answer, simply, is that the Government is not organised to progress its legislative programme in a timely fashion.

And I have to say, while we’re on that, why don’t we get to the international treaty examination of the Pacific Agreement on Closer Economic Relations (PACER) Plus? I’ve never seen that sort of debate called for in this House outside of extraordinary hours in the whole time that I’ve been in this Parliament. It simply demonstrates the dysfunctional nature of the current Government, and also, I have to say, the inability of the people responsible for the legislative programme to put cohesive, strong legislation on the Order Paper.

We are supporting this bill. There was no need for this nonsense in here tonight. It is simply a convenience for Mr Hipkins’ inability to get a programme running.

KIERAN McANULTY (Labour): I just want to make sure, Madam Chair, you did—

CHAIRPERSON (Poto Williams): I did call you, Kieran McAnulty.

KIERAN McANULTY: Oh, how exciting. You know, as a new member in this House, it’s quite disheartening, really, to see former Ministers stand up and be so cynical about the process. You know, the fact is I’m starting to understand why indeed they are former Ministers, because they are not taking this seriously. All we’ve heard tonight from that side of the Chamber is “This was our bill. We like this SOP, and let’s get on with it.”

Hon Gerry Brownlee: What’s wrong with that, cobber?

KIERAN McANULTY: I’ll tell you what’s wrong with it, Mr Brownlee—and I understand the fact that the people here have elected us here to debate the issues, to do the job. You know, some members, like the MP for Pakuranga, might be satisfied by finishing after 30 seconds, but we want to do a proper job. We want to actually do this properly. You know, we’re not going to enter into this debate and withdraw straight away. That is not how we go about this.

Hon Gerry Brownlee: I raise a point of order, Madam Chairperson. Listening to the impassioned pleas of that member to discuss the bill, I think you should pull him back right on to the topic.

CHAIRPERSON (Poto Williams): I think that’s a very good idea.

KIERAN McANULTY: Thank you, Madam Chair. I must admit, I shouldn’t have followed the previous speaker’s example. I should not have thought that I, as a new member, would learn something from a previous Minister—the previous speaker, the Hon Gerry Brownlee—and stand up here and abuse the other side of the House. I forgot, from the previous example, that I should have actually stuck to the bill. So thank you for that guidance.

The fact is that previous speaker did, in his contribution—and I understand that I can refer to previous contributions; that is relevant—referred to a minor mistake. That side of the House knows about mistakes. They’ve made two today: they have elected Simon Bridges as leader and they have kept Paula Bennett as deputy leader.

Hon Gerry Brownlee: I raise a point of order, Madam Chairperson. Even with the greatest breadth of lenience—

CHAIRPERSON (Poto Williams): Yes, I completely agree with you.

Hon Gerry Brownlee: —that you might like to exercise as Chair, that is completely unacceptable.

CHAIRPERSON (Poto Williams): I completely agree. Please bring it back to the bill.

KIERAN McANULTY: I thought it was quite good.

CHAIRPERSON (Poto Williams): The last few minutes of this debate—please bring it back to something substantial.

KIERAN McANULTY: You know, the major focus of the other side of the House tonight, for those who did decide to stand up and speak on it, was the Supplementary Order Paper (SOP) that was put forward by the Hon Paul Goldsmith.

Hon Ruth Dyson: He didn’t take a call, though.

KIERAN McANULTY: No, he did not. He did not take a call. Not many people did. When they did stand up, they wanted to close the motion. What does that say to the people of New Zealand? Does that side of the House take education seriously? I would suspect that they do not.

But this SOP wanted to bring in some sort of equality measures, so-called.

Hon Gerry Brownlee: I raise a point of order, Madam Chairperson. Talking about an SOP that’s been dealt with by the committee is not relevant for this part. Now, the member says he wants to learn a lot from me. Well, the first thing I’d say to him is: in a tight situation, don’t make it harder for yourself; concentrate on what’s in the bill.

CHAIRPERSON (Poto Williams): Absolutely. I think this is the last chance.

KIERAN McANULTY: Gee, this is a great bill. This is a great bill, and I’m so pleased that this Government has improved it by taking out that measure that I was referring to, the equality funding measure, because in doing so this Government has said that we’re not going to restrict funding to private or public institutions. We’re going to make sure—and that is why it’s called the Education (Tertiary Education and Other Matters) Amendment Bill. This indeed is another matter.

I don’t want to take too much time of the House, because it is an important thing and we do want to get on with it, so I’m going to sit down now. But I thank you for the opportunity for contributing to this debate.

PRIYANCA RADHAKRISHNAN (Labour): Thank you, Madam Chairperson Williams. It is an honour, actually, to stand up and take a call to summarise this bill. It is a bill that will strengthen accountability in the tertiary education system. It’s a bill that will provide for consistent treatment of the tertiary education provider organisations, and it will broaden student protection arrangements. I outline these for a specific reason. I came to this country as an international student myself. This is a sector that I understand intimately, and it is a sector that for many hasn’t really worked.

I want to begin, actually, by addressing some of the comments made by members from the opposite side of the House, which I actually take umbrage to. Firstly, members opposite—specifically the member Denise Lee—have talked about the fact that “private” is not a dirty word. To a large extent, I agree, but I will tell you why for many it actually is. Private providers, she says, are doing such a good job in contributing to New Zealand’s economic landscape. Now, I want to deal with this sensitively, because there are many who do. However, there are many others who don’t, and who have actually been caught out. I mean, if you look online, in about two minutes you’ll find at least 10 names of private providers who have been dodgy. I will broaden it out, because there are specific parts of this bill that address that, and that’s why it’s important.

Now, the member the Hon Nikki Kaye sort of threw around the word “ideology”. We are actually proud of the ideology that underpins a lot of what we do, on this side of the House. It is a system of ideas and ideals that form the basis of policy and that explain how society works, and that’s exactly why we have prioritised public education over private. I had a really good quote here, which I’ve just lost. The fact that education is a human right and a public good has underpinned global public policy since the 1940s. It’s not something that’s new, but it’s something that remains incredibly important.

The specific parts of the bill that I just wanted to draw attention to—and the reason I do this is the number of years I have spent talking to international students who have come here who have been rorted by the system; who have come here because they think that they’re going to get a specific deal from certain private providers, and they don’t. Many come here and find themselves in positions where they are barely able to feed themselves—who have come out and who rely on the goodwill of people from the New Zealand community to actually survive.

Now, members across from the opposite side of the Chamber have accused us of spending time on this bill because we’re a dysfunctional Government. They have said that we’ve been forced to stand up and speak to this bill. They’ve said that questions and comments or points that we raise on this side of the Chamber are trivial in nature. I tell you, for the hundreds of students who have been exploited in this country, they are not trivial. It’s about their well-being. It’s about their safety. It’s about their lives. And I remind you that while we are here, elected to serve the people of New Zealand, we have a duty of care to those we invite to this country. Members on that side of the Chamber have systematically, in the best-case scenario, referred to these people as cash cows, and, in the worst instance, as faulty fridges.

Hon Gerry Brownlee: I raise a point of order, Madam Chairperson. To my knowledge, there is no one on this side who has ever referred to any foreign student in this country as being a cash cow. The real question is why that member is supporting a party that wants to shut the door to immigrants in this country. [Interruption]

CHAIRPERSON (Poto Williams): Thank you. [Interruption] Thank you, members.

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

Motion agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

Clause 3 agreed to.

Bill to be reported with amendment presently.

Bills

Customs and Excise Bill

In Committee

Debate resumed from 22 February.

Powers and Obligations (continued)

CHAIRPERSON (Poto Williams): When we were last considering this bill, we were debating the theme powers and obligations. Rino Tirikatene had the call. He has 4 minutes and 30 seconds remaining.

RINO TIRIKATENE (Labour—Te Tai Tonga): Thank you, Madam Chairperson Williams. I’m pleased to continue my contribution on the Customs and Excise Bill. Hopefully, I can finish it off before you have to report progress, but nevertheless I thank the officials for their patience.

This is a very wide-ranging bill. It’s some 400 pages. I know this theme we’re looking at the powers and obligations, but I wanted to just take a step back, because what we’re doing here is updating and modernising our Customs Service. It’s a very important part of the Government in terms of the work it does on the border for us, in terms of processing travellers and goods and protecting our borders especially. It’s a very high performing organisation, and it’s a very proud organisation with a very proud history. It’s New Zealand’s oldest Government department. It actually set up shop on the shores of Kororāreka—up in Russell there—one week before the Treaty was signed. So they were on the ball even way back into those pre-Treaty days.

This is an updating and modernisation bill for the Customs Service, and it covers a wide range of powers. What I wanted to do, I guess, is start with some questions to Minister Hipkins focusing on some relatively administrative provisions first of all, before delving into some of the more technical aspects of the bill around powers.

I just wanted to start off with a central role in the Customs Service, which is the role of the chief executive, which also carries the title of Comptroller of Customs. I just wanted to seek some clarification, or an explanation from the Minister, as to why we have the term “comptroller” in addition to “chief executive”? Throughout the bill, it’s referred to—obviously, the powers are conferred on to the chief executive, and then we have an explanation later in the administrative clause 248, which talks about how the—

CHAIRPERSON (Poto Williams): I apologise to the member. Sorry to interrupt. The time has come for me to report progress.

House resumed.

The Chairperson reported the Education (Tertiary Education and Other Matters) Amendment Bill with amendment and progress on the Customs and Excise Bill.

Report adopted.

The House adjourned at 9.56 p.m.