Wednesday, 16 May 2018
Volume 729
Sitting date: 16 May 2018
WEDNESDAY, 16 MAY 2018
WEDNESDAY, 16 MAY 2018
The Speaker took the Chair at 2 p.m.
Karakia.
Oral Questions
Questions to Ministers
Budget Policy Statement 2018—Priorities
1. Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Finance: What priorities did the Budget Policy Statement 2018 set out?
Hon GRANT ROBERTSON (Minister of Finance): The Budget Policy Statement 2018, released in December, was our first action in preparing Budget 2018. It sets out the key priorities, including building quality public services for all New Zealanders, such as health and education; taking action on child poverty and homelessness, on which we made a significant start in the 100-day plan; supporting families to get ahead and sharing the wealth generated by our economy with a wider range of New Zealanders; sustainable economic development; and supporting our regions. On Budget day, New Zealanders will see that we are delivering on our priorities as we set out the first steps of our plan to make our economy and communities stronger, more productive, more sustainable, and more inclusive.
Dr Duncan Webb: What progress has the coalition Government already made on these priorities?
Hon GRANT ROBERTSON: When the coalition Government was formed, we immediately set about putting in place our 100-day plan and Families Package through the December mini-Budget. Our Families Package cancelled the previous Government’s poorly focused tax-cut package and will instead see $5.5 billion over the next four years targeted at improving the incomes and living standards of those who need it the most. This includes, starting on 1 July, the Best Start payment, the winter energy payment, and increases to Working for Families.
SPEAKER: Order! Thank you.
Dr Duncan Webb: How will Budget 2018 further progress the Government’s priorities?
Hon GRANT ROBERTSON: Budget 2018 will make the investments required to begin rebuilding the critical public services that New Zealanders rely on. We can’t fix every problem in one Budget, but health, education, and housing will finally receive the support they deserve under this Government’s plan. We have a plan to progress our economy to be productive, sustainable, and inclusive, and we will protect and enhance our environment. We are a positive, stable, energetic Government, getting on with the job.
David Seymour: If the Minister characterises the previous tax cuts as “poorly targeted”, how would he characterise giving the winter energy payment to millionaires?
Hon GRANT ROBERTSON: What I’d say is that I’d characterise the winter energy payment as “helping superannuitants get in the position to pay their bills throughout the year”, because not every superannuitant has the opportunity to be employed as a celebrity dancer.
David Seymour: Was that really the Minister’s best answer?
Hon GRANT ROBERTSON: Actually, if we want to talk further about celebrity dancing, I can indulge the member. But, actually, what we’re doing with the winter energy payment is recognising that there is an increased cost of living, not only for our superannuitants but for those on fixed incomes, and this Government is going to do something practically about that.
Prime Minister—Government Funding Priorities, Police Resourcing, and KiwiBuild
2. Hon SIMON BRIDGES (Leader of the Opposition) to the Prime Minister: Does she stand by all her Government’s policies and actions?
Rt Hon JACINDA ARDERN (Prime Minister): Yes, as I did yesterday, the week before, the week before that, and I think, in fact, to probably every question I’ve been asked by that member.
Hon Simon Bridges: Why did her Government consider that nearly a billion dollars for foreign affairs was more important than delivering on their promise on cheaper GP visits for all New Zealanders?
Rt Hon JACINDA ARDERN: I would have hoped for the same reason that that last Government invested significant amounts in overseas aid and development as well. What we faced coming into Government was that the last Government allowed their official development assistance funding to drop to a point where even to keep the status quo required $590 million of investment. We are a Government who is focused on our international responsibilities, and we balance that against delivering for New Zealanders as well.
SPEAKER: Order! Before I call the member, I am going to remind him of methods of interjection. While some members might be known universally by their first name, it’s not appropriate to use it across the House.
Hon Simon Bridges: Can the Prime Minister confirm the billion dollars per year for Shane Jones’ Provincial Growth Fund will all be new funding, and not simply reprioritised from other sources?
Rt Hon JACINDA ARDERN: We’ve traversed this many times in the House. Substantively this is new, but we have reprioritised. We have prioritised elements of the Budget as well. Overall, I think what matters to the people most is the fact that we are actually investing in the regions that have experienced significant neglect over the last nine years, and reinvigorating those local economies.
Hon Simon Bridges: For clarity, can the Prime Minister define “substantively new funding”?
Rt Hon JACINDA ARDERN: One more sleep and the member will see the entire breakdown. But, again, we are absolutely proud of the huge investment that this coalition Government is making back into our regions, and I don’t think you’ll hear the local mayors making the same complaint that that member is.
Rt Hon Winston Peters: Can the Prime Minister confirm that some of the Ministry of Foreign Affairs and Trade’s new funding is to address declining trade from this country, some of which the previous Government promised not to do but after nine years delivered—failing trade against GDP?
Rt Hon JACINDA ARDERN: Yes. This is a Government that’s focused on growing prosperity. That includes a focus on trade, that includes a focus on research and development, and that includes investment in trades, education, and training—all of those things the last Government did not invest appropriately in.
Hon Simon Bridges: Is it still her Government’s policy to add 1,800 new sworn police officers over the next three years?
Rt Hon JACINDA ARDERN: Yes.
Hon Simon Bridges: How many of the 1,800 new police officers will have powers of arrest themselves and will not require a sworn officer to be with them to do so?
Rt Hon JACINDA ARDERN: We had this period of education in the House the other day. The member seems to think that authorised officers cannot perform a suite of important roles as officers on the beat. In fact, I heard him even having a go at forensic accountants employed by the police, when they undertake work on child exploitation, human trafficking, anti - money-laundering, terrorist financing, illicit drug trafficking—[Interruption]
SPEAKER: Order! I’m going to interrupt the Prime Minister and I’m going to ask her to start her list, which will be heard in silence. When I can’t hear the Prime Minister with the assistance of the mikes and the speakers which are aimed at me, I think the level of interjection has got too much. I am reluctant to intervene, but the Prime Minister will start that list again.
Rt Hon JACINDA ARDERN: As I was saying, I’ve heard the member criticise even the employment of forensic accountants by the police when they undertake work around child exploitation, human trafficking, anti - money-laundering, terrorist financing, illicit drug-trafficking, large-scale fraud, cyber-hacking, and weapons trading. The point I’m making is that authorised officers, warranted officers, and support staff are the entire suite that we need to have a well-functioning, well-resourced police, and that’s what this Government will deliver.
SPEAKER: As a result of the six interjections I heard from my left, there will be minus six. That’s mitigated by the four that I heard from my right. So the National Party have lost only two.
Hon Simon Bridges: Is the Prime Minister trying to tell this House that accountants are the same as cops, who can actually arrest people on the beat?
Rt Hon JACINDA ARDERN: No. What I’m saying is that in this modern day and age, police officers can’t do their job without that support too.
Hon Simon Bridges: Is it still her Government’s policy to add 1,800 new sworn police officers over the next three years?
Rt Hon JACINDA ARDERN: As I have said, yes.
Rt Hon Winston Peters: Could I ask the Prime Minister as to whether the last question from the Leader of the Opposition was the same as the question he asked about five minutes ago?
Rt Hon JACINDA ARDERN: Yes, but the—
SPEAKER: Order! We are going to have some ministerial responsibility, and I don’t think the Prime Minister is going to claim responsibility for that.
Hon Simon Bridges: Is it her Government’s policy to plant one billion trees over 10 years, as initially said, or 500 million, as Shane Jones later clarified, or has that number fallen even further?
Rt Hon JACINDA ARDERN: As a total, we will plant one billion trees.
Hon Simon Bridges: Is it her Government’s policy that KiwiBuild houses in Auckland will cost less than $600,000 as initially promised, or $650,000 as Phil Twyford later clarified, or has that number increased even further?
Rt Hon JACINDA ARDERN: As we have clarified in the House yesterday, it won’t be a mystery to anyone in this House that over the two-year period since we developed KiwiBuild, the cost of building houses and supplies has increased. That’s why this Government committed to a plan to do something about that, so first-home buyers can own their own home, rather than the last Government, which did nothing.
Hon Simon Bridges: How much will a KiwiBuild house in Auckland cost?
Rt Hon JACINDA ARDERN: As we’ve said many times before, for a one-bedroom home in Auckland and Queenstown the maximum price is $500,000, $600,000 for two bedrooms, and $650,000 for three. Outside of Auckland and Queenstown, the maximum is $500,000 for all houses.
Hon Simon Bridges: Is it her Government’s policy that superannuitants will not be worse off as a result of removing National’s Family Incomes Package, and, if so, why does the winter energy payment not come into force until 1 July, meaning superannuitants will be $267 worse off this year?
Rt Hon JACINDA ARDERN: Because it is one of the most significant changes to our welfare system in a decade. We had every expectation that we’d move to do it as soon as possible. That’s why we moved this House into urgency in December to put it through. But we had to heed advice that said if we brought it in any earlier we might risk it falling over. We’ve done it as quickly as we could.
Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Nobody is concerned that we have robustness in this House. But when you see 12 members of one party shouting at the top of their mouths, that’s probably in excess by about 10, and they should be asked to discipline themselves. Show some leadership.
SPEAKER: I want to thank the member for his advice to me. I do agree with him that the barracking—and I don’t think it can be described in any other way—during that answer was unreasonable. It will not be tolerated, going forward. There is no right whatsoever to interject in this House. We have been liberal, as Speakers, over the years with it, normally on the basis that they’re infrequent and preferably witty. We’re missing out on both of those counts.
Hon Dr Nick Smith: Winston used to stand up for old people.
SPEAKER: Who was that one?
Hon Dr Nick Smith: Mr Speaker, I said that Winston used to stand up for old people.
SPEAKER: The member will now—for reasons which I’m sure he’s aware of—stand, withdraw, and apologise.
Hon Dr Nick Smith: I withdraw and apologise.
Budget 2018—Impact on New Zealanders
3. Hon AMY ADAMS (National—Selwyn) to the Minister of Finance: Is he confident that each of the decisions made as part of Budget 2018 and all savings made will improve the well-being of New Zealanders?
Hon GRANT ROBERTSON (Minister of Finance): Yes. The Government has made a commitment to put improving the well-being of New Zealanders at the heart of what we do. As part of this, we have reviewed policies and spending to ensure that taxpayers are getting the best value for money and that the policies will benefit the greatest number of people, as every responsible Government would do. For example, the Government does not believe that spending $8.8 billion on untargeted tax cuts that would have given $1,000 to her or to me, or $327 million per kilometre on the world’s most expensive road without any cost-benefit analysis, are good examples of value-for-money spending that improves New Zealanders’ well-being. I can say one thing for certain: I do not think New Zealanders’ well-being is enhanced by adherence to trickle-down economics.
Hon Amy Adams: Can he confirm, then, that the savings he’s made and the Budget bids refused or scaled back will not lead to a reduction in the level of protection provided to vulnerable New Zealanders?
Hon GRANT ROBERTSON: I am extremely confident that the package of measures we put through in the 100-day plan and in Budget 2018 will, in fact, enhance the lives of vulnerable New Zealanders.
Hon Amy Adams: Why, then, is this Government overseeing the Department of Internal Affairs, over coming months, slashing by one third the number of fully trained inspectors investigating the creation and distribution of child sex offence imagery, leaving more New Zealand victims unable to be identified and protected and more New Zealand perpetrators undetected?
Hon GRANT ROBERTSON: I don’t have any direct ministerial responsibility for those matters, and I would have to check the accusation that the member’s just made.
Hon Amy Adams: Given his Government and the Prime Minister’s commitment, stated today, to standing by our international obligations, is he at all concerned that these cut backs will leave New Zealand in breach of its obligations to the global alliance combating the sexual abuse and exploitation of children online?
Hon GRANT ROBERTSON: Again, that is a matter of detail within a portfolio area. I encourage the member to put a question down to the Minister responsible. What I can say is that this side of the House stands proudly on our record of protecting and enhancing the lives of vulnerable New Zealanders, and there are plenty of initiatives in the Budget that will show that.
Hon Amy Adams: When he made his Budget decisions, did he think that it was appropriate that, as a result of these changes under his watch, the only South Island office of this unit working with South Island victims of online sexual abuse will now no longer include a fully trained female investigator, given that those investigators have to have the most delicate and intimate discussions with young female victims of child sex abuse?
Hon GRANT ROBERTSON: The member started that question by talking about the Budget that will actually be announced tomorrow. I invite her to wait for the details of that.
Government Tree-planting Programme—Progress
JENNY MARCROFT (NZ First): My question is to the Minister of Forestry and asks: what recent announcements—[Interruption]
SPEAKER: Order! I am going to interrupt and ask members on both sides—both sides—to stop trading comments. Thank you. Jenny Marcroft, start again, please.
4. JENNY MARCROFT (NZ First) to the Minister of Forestry: What recent announcements has he made regarding the one billion trees programme?
Hon SHANE JONES (Minister of Forestry): The 1 billion tree programme is sprouting and shooting forth. In Rotorua, supported by the Prime Minister and a host of other Ministers, we announced that the stand-alone agency will be located in Rotorua and it will continue to drive the status of the forest industry and move it beyond its current fiscal value.
Jenny Marcroft: Why is the new forest agency’s head office based in Rotorua?
Hon SHANE JONES: It is reflective of the fact that Rotorua is the forestry capital of New Zealand, and it’s a small part on a bigger journey of relocating various Government functions into the regions. Not only will it connect with the local landowners but in Rotorua, with the right husbandry, the billion-tree forest strategy will definitely bloom.
Jenny Marcroft: How can members of the public and Kiwiblog readers track progress towards the 1 billion trees target?
Hon SHANE JONES: We have a new website. That website is being developed in association with one of New Zealand’s most successful businessmen, Sir Stephen Tindall. That is like a tree counter, and, as each tree counts, greater the popularity will be not only for the forest sector and for careers but also for the modest proponent, Matua Shane Jones!
SPEAKER: Oh, you are allowed irony in answers, I suppose.
KiwiBuild—Housing Supply and Pricing
5. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: Does he stand by all his reported statements and promises?
Hon PHIL TWYFORD (Minister of Housing and Urban Development): Yes; except the ones I’ve corrected.
Hon Judith Collins: Ha, ha! Sorry, Mr Speaker. When he promised that the Government is going to build 100,000 KiwiBuild homes, did he mean that the Government is going to subsidise private investors to build the homes that the Government has promised but cannot itself build?
Hon PHIL TWYFORD: We’ve always talked about building 100,000 houses, and we’ve always talked about a number of ways that we will deliver KiwiBuild. One of the ways we have been saying, for the last six years, that we will deliver KiwiBuild houses is by working directly with the private sector—something that, frankly, I’m surprised that member of the House is so opposed to.
Hon Judith Collins: Which of these promises to build KiwiBuild houses is now correct: 1,000 in the first year of Government, 1,000 by 30 June 2019, 16,000 in 3 years, or 8,000 before the next election?
Hon PHIL TWYFORD: Our plan is to deliver 1,000 in the first year of the KiwiBuild programme, 5,000 in the second year, and 10,000 in the third year, and we will have built 100,000 affordable homes for young Kiwi families by mid-2028.
Hon Judith Collins: What percentage of the KiwiBuild homes that he says he’s building will be priced at the reported cap of $650,000?
Hon PHIL TWYFORD: The cap is precisely that: it’s a cap. I’m happy to have the opportunity to correct a number of misinformed comments in the media in recent days, who have interpreted the $650,000 Auckland and Queenstown price-cap as a target. It’s not a target. And, in fact, in the member’s own electorate, at McLennan, we’re building three-bedroom homes that will sell for $579,000.
Hon Judith Collins: I raise a point of order, Mr Speaker. I asked about the percentage. We got nowhere near that—not even a guess.
SPEAKER: The question was addressed.
Marja Lubeck: How will KiwiBuild build new affordable homes for Kiwi families?
Hon PHIL TWYFORD: I thank the member for that excellent question. Many residential developments across New Zealand have stalled because the developers are struggling to get finance on acceptable terms. We know that KiwiBuild rescuing these stalled developments will add new homes to the market. Forecasting investment in residential housing is inherently uncertain and depends on a number of assumptions, but the Ministry of Business, Innovation and Employment suggests that KiwiBuild could generate up to $11 billion in additional investment in residential housing over the next four years.
Hon Judith Collins: When he told the media yesterday, “We’ve been flat out trying to build more houses”, has he built any in the 200 days that he’s been in Government?
Hon PHIL TWYFORD: Well, we’ve been very busy for the last six months, laying the foundations for the KiwiBuild programme. And I would note that the first Labour Government took two years to complete the first State house. I’m confident that the first KiwiBuild homes will be completed by September this year, less than a year after we were elected. I’m surprised, frankly, that the members across the House seem to be such experts in the building of affordable houses, given that they built none in nine years.
Marja Lubeck: What reports has the Minister seen on KiwiBuild’s price points?
Hon PHIL TWYFORD: I’ve seen some bizarre comments about KiwiBuild’s price points. In particular, a number of media commentators have said that these are the prices of KiwiBuild homes, rather than the price caps. KiwiBuild homes could range from $300,000 to $500,000, or $300,000 to $650,000 in Auckland and Queenstown. The first KiwiBuild homes at McLennan will be built for $579,000 for a three-bedroom home—that’s $71,000 less than the maximum.
Provincial Growth Fund—Release of Funding Information
6. Hon PAUL GOLDSMITH (National) to the Minister for Regional Economic Development: Does he agree with MBIE Deputy Chief Executive Paul Stocks’ 12 April comments to the Economic Development, Science and Innovation Committee in relation to the Provincial Growth Fund, “we are working on the basis that we want a good deal of sunlight where public money is involved”; if so, will he instruct his officials at MBIE to release any funding agreements between MBIE and the recipients of funds for the projects announced so far?
Hon SHANE JONES (Minister for Regional Economic Development): In respect of said official’s remarks, yes, I think that he’s accurately reflected. We want a good deal of sunlight, and he also knows that sunrise is coming to the provinces politically.
Hon Paul Goldsmith: I raise a point of order, Mr Speaker. It was a two-part question. He didn’t answer the second part at all.
SPEAKER: Well, the member can ask two parts. All the Minister has to do is address the question, and he certainly did.
Hon Paul Goldsmith: I raise a point of order, Mr Speaker. I understood, and perhaps I’m wrong, that for a primary question, where it had two parts, you are supposed to address both parts of the question.
SPEAKER: The member is probably right. I will ask the member to give some comments—[Interruption] When I’m ruling in favour of one of the member’s colleagues, it’s probably a good idea to keep the member’s mouth shut, otherwise it might result in either a decision reversal or a further loss of a significant number supplementaries. The member is slightly lucky that I didn’t get on my feet.
Hon SHANE JONES: I raise a point of order, Mr Speaker. Sir, there are distinctly two limbs to the question, and we all know that I have met the threshold by addressing the first limb.
SPEAKER: If it was a supplementary question, the answer to that is yes. When it’s a primary question and has two limbs, just saying “sunrise” doesn’t get him there for the second part.
Hon SHANE JONES: In respect of instructing officials at the Ministry of Business, Innovation and Employment (MBIE) to release funding between MBIE and the recipients of funds for the projects announced so far, I think I’ll take the advice of the former Auditor-General, who described funding under the last regime as not only non-transparent but very, very dangerous.
Hon Paul Goldsmith: I raise a point of order, Mr Speaker. That did not at all answer the question.
SPEAKER: I think it did address the question. Does the member want a supplementary?
Hon Paul Goldsmith: Bearing in mind Mr Stock’s later comment to the same committee “Pretty hard to imagine that anyone is taking wholly a grant from the public purse—that there shouldn’t be full transparency on that”, when will he insist that his officials release basic information on these projects, beyond a few vague lines in a press release?
Hon SHANE JONES: Obviously, the officials are providing me with advice, and I’m encouraging them to be proactive. I will remind said official that daylight is close to sunlight.
Hon Paul Goldsmith: Is the reason that the information isn’t being released that some agreements are nothing more than a few scribbles on the back of an envelope?
Hon SHANE JONES: There’s a host of proposals that have been provided by the work done by the last regime through regional action plans, and some, indeed, are not scribbled but are tedious, long-winded, and it takes a great deal of effort for the officials to wade through them all.
Hon Paul Goldsmith: Does he think that the Prime Minister’s promise to lead the most open and transparent Government applies to him and the Provincial Growth Fund?
Hon SHANE JONES: As I’ve said earlier, not only will the growth fund allocations pass muster in terms of the four Ministers who must sign off the significant allocations; hefty allocations need to come to the entirety of the Cabinet, and as I said, “Auditor-General criticises Government’s Primary Growth Partnership”—I promise not to go there—2015.
Housing—Public Housing Demand and Supply
7. PRIYANCA RADHAKRISHNAN (Labour) to the Minister of Housing and Urban Development: What reports has he seen on the public housing waiting list?
Hon PHIL TWYFORD (Minister of Housing and Urban Development): New figures showing the public housing waiting list has more than doubled over the last two years are both confronting and unsurprising. There are currently 7,890 families in need of public housing. We’ve known for some time that the national housing crisis and hidden homelessness were worse than we thought and will get worse before it gets better, but we are committed to building more State housing, providing more public housing places, and more support for people who are in urgent need.
Priyanca Radhakrishnan: What is the Government doing to reduce homelessness this winter?
Hon PHIL TWYFORD: Well, 1,500 fewer families will be living in cars and garages this winter. The Government has announced $100 million for the more than 1,500 additional transitional public and Housing First places, and Budget 2018 tomorrow will also fund Housing First services for more than 1,450 households over the next four years.
Priyanca Radhakrishnan: In what regions is the need for public housing the greatest?
Hon PHIL TWYFORD: Well, compared to the same time last year, there’s been a big increase in the number of public housing applicants in Wellington, up 94 percent; Hastings, up 87 percent; Auckland, up 57 percent; Napier, up 51 percent; and Hamilton and Christchurch, both up by over a third. There is growing demand for these services right across New Zealand, and we are working hard to address that need.
Priyanca Radhakrishnan: What is the Government doing to reduce the public housing register?
Hon PHIL TWYFORD: This Government has an ambitious plan to tackle the national housing crisis. KiwiBuild could generate, according to the Ministry of Business, Innovation and Employment, up to $11 billion more investment in residential housing as it ramps up over the next four years. We’re committed to increasing the supply of public housing, we’re investing in more transitional Housing First places, and we’re going to tackle every aspect of the national housing crisis to ensure that every family has a warm, dry, secure home.
Simon O’Connor: Does he agree with Property Institute of New Zealand chief executive Ashley Church that his Government’s “ring-fencing of tax losses for property investors will almost certainly contribute to a worsening of the shortage of rental properties in our major cities over the next few years.” and that his Government’s consequent approach is directly contributing to the wait-list shortages he’s lamenting?
Hon PHIL TWYFORD: Well, I often agree with what Ashley Church has to say, but in this case I think he’s completely wrong. Part of our policy programme to address the housing crisis is reining in the unchecked demand, and the tax preference for property speculation that led to house prices doubling under that Government over the last decade. Our Government’s committed to doing something about it.
Transport Infrastructure—Rail De-electrification
8. JAMI-LEE ROSS (National—Botany) to the Minister of Transport: Does he stand by all his statements, actions, and policy commitments?
Hon PHIL TWYFORD (Minister of Transport): Yes, when described and reported accurately.
Jami-Lee Ross: Did he read the section of the KiwiRail briefing of 21 March 2018 about electric locomotives where KiwiRail stated that prior to the September 2017 election the Labour transport spokesman wrote to KiwiRail saying that a Labour Government would “issue a cease and desist notice on the de-electrification programme”; and, if so, when will he issue such a notice?
Hon PHIL TWYFORD: Well, conversations with the KiwiRail board and management on the de-electrification of the North Island main trunk line are ongoing.
Jami-Lee Ross: Does he agree with the rail and transport union when they accused his Government of breaking its promise to stop the removal of electric trains from the North Island main trunk line?
Hon PHIL TWYFORD: Well, I think when a conversation is ongoing and a matter is under active consideration, it’s by definition not a broken promise.
Jami-Lee Ross: What value if any can be put on statements from his Government if they’re happy to break promises made to the unions about rail, happy to break promises to New Zealanders about no new taxes—will he be joining the Minister of Housing and Urban Development, who breaks his promises too?
Hon PHIL TWYFORD: Well, I utterly reject the old multiple premises in that member’s question. This Government has a transport policy that we’re proud of, to make sure that rail is part of the backbone of this country’s transport system—both passenger rail and freight. We’re committed to mode-neutral transport planning and decision-making. The big contrast is we’re not going to waste billions of dollars on handpicked expressways simply for the purposes of pork barrel politics. That is the difference between that side of the House and this side.
SPEAKER: Order! I didn’t interrupt, but I must say to the Minister of Finance and the Leader of the Opposition that when the volume of their conversation gets as loud as Mr Twyford’s, it’s getting a bit serious.
Immigration Policy—Implementation and Objectives
9. Hon MICHAEL WOODHOUSE (National) to the Minister of Immigration: Does he stand by his response to Oral Questions on Thursday 10 May that his Government was working to turn Labour’s “manifesto commitments into policy that can be implemented” and we “will see the fruition of that work in the very near future”; if so, when specifically will he implement those policies?
Hon IAIN LEES-GALLOWAY (Minister of Immigration): In answer to the first part of the question: yes. In answer to the second part of the question: in the even nearer future.
Hon Michael Woodhouse: Did he agree with advice from officials in November that recommended to “analyse whether further changes are needed to meet your policy objectives. If the recent reduction in international students studying sub-degree programmes is sustained, it is unlikely that there will be a need for further revisions to in-study work rights.”?
Hon IAIN LEES-GALLOWAY: All the advice that I’ve received on in-study work rights is under active consideration, and the member will see the results of that in due course.
Greg O’Connor: What are the Government’s priorities on immigration?
Hon IAIN LEES-GALLOWAY: We have two overarching priorities for immigration. The first is better matching the skills and talents that people bring to the skills that we need and where we need them. The second is tackling the rampant exploitation of migrant workers and students.
Greg O’Connor: What has the Minister been hearing around New Zealand about the current immigration settings?
Hon IAIN LEES-GALLOWAY: Well, what I’ve been hearing as I’ve been visiting chambers of commerce, Federated Farmers, and other groups around the country is that the changes that were made in August last year are causing far more consternation than anything that the current Government is proposing.
Hon Michael Woodhouse: Did the Minister agree to officials’ proposal to provide advice to him in October this year on whether change is even needed to settings for in-study work rights; and doesn’t that suggest that the Government is far from convinced of its own policies?
Hon IAIN LEES-GALLOWAY: Well, I continue to receive advice from officials on an almost daily basis. I agreed to receive that advice. What we do with it is a matter for this Government to decide, and the member will see the results of that very soon.
Hon Michael Woodhouse: The very near future, he says. Isn’t it the case that despite the drum-beating rhetoric of the campaign trail, the failure by the Minister to implement a single campaign policy and those delays constitute another broken promise?
Hon IAIN LEES-GALLOWAY: Well, my approach to policy development is strongly guided by the lesson I learnt from that member when he was a Minister, when he tinkered for years and then rushed out policy at the last minute before the election—policy that I hear on a day-to-day basis is causing havoc around the country.
Budget 2018—Health Priorities
10. Dr LIZ CRAIG (Labour) to the Minister of Health: What are the priorities for health in Budget 2018?
Hon Dr DAVID CLARK (Minister of Health): Budget 2018 will set out the Government’s plan to rebuild our health services. This will include fixing our hospitals, making sure more people get the care they need, and turning around nine years of underinvestment and neglect of health.
Dr Liz Craig: How will Budget 2018 address capital spending required in health?
Hon Dr DAVID CLARK: Spending on health capital is a priority for Budget 2018. We know that significant capital investment is required so that New Zealanders have health facilities that are at the standard they expect. This Government is committed to rebuilding core public services like health, and committed to addressing the nine years of neglect by the previous Government.
Dr Liz Craig: So how will Budget 2018 assist district health boards (DHBs) to respond to capital needs?
Hon Dr DAVID CLARK: Investing in capital will allow DHBs to plan ahead with more certainty. It will also ensure that those DHBs which receive that funding do not have to spend ever-increasing amounts on maintenance costs for assets past their use-by date. For example, this half-century-old hot water system at Auckland DHB has been leaking excessively over a period of years and will now be able to be replaced.
Police Resourcing—Phasing in of New Officers
11. CHRIS BISHOP (National—Hutt South) to the Minister of Police: Why did he receive a paper entitled “Alternative Five Year Phasing Options for 1,800 New Police” on 29 March, and what were the main recommendations of that paper?
Rt Hon WINSTON PETERS (Deputy Prime Minister) on behalf of the Minister of Police: On behalf of the Minister of Police, the Hon Stuart Nash Esq., the reply is as follows. A draft paper was prepared by police officials in response to a request from Treasury as part of the normal Budget process. The three-page paper noted there were phasing options of three, four, and five years to recruit police staff. That paper was never presented to Cabinet, and, of course, as some members understand, if Treasury had their way phasing would be over 50 years.
Chris Bishop: Why did Treasury discuss and propose phasing in the 1,800 new sworn police over five years rather than the coalition commitment of three?
SPEAKER: Order! Order! Neither the Deputy Prime Minister nor the Minister has responsibility for that. Further supplementary?
Chris Bishop: Does he agree with the Prime Minister, who has just said to the House that there will be 1,800 sworn police on the beat over the next three years, when he said on The Nation TV programme that 250 of the 1,800 are only authorised officers and that only 1,100 of those 1,800 will be front-line police?
Rt Hon WINSTON PETERS: On behalf of the Minister, if that member thinks that cybercrime isn’t the front line, then he needs to wake up; or that child sex exploitation on the internet is not the front line; or that human trafficking is not on the front line; or that anti - money-laundering is not on the front line; or that terrorist funding is not on the front line; or that illicit drug-trafficking is not on the front line; or that large-scale fraud, cyber-hacking, and weapons trading is not on the front line—then he must wake up.
Chris Bishop: Is it correct that the police have warned him that delivering 1,800 sworn front-line police over three years will be challenging, and that they recommended to him phasing it in over five years rather than three?
Rt Hon WINSTON PETERS: On behalf of the Minister, that is not correct. The reality is that the police have told the Minister and the Government that they can train the requisite number over three years. That’s why our promise at the beginning was to strive towards that number. But I want to make it very clear—I want to make it very clear—unlike that previous Government, that gave the numbers out and never financed them or gave any forward planning, we have the money assigned to it. And one last thing: we are not talking about 2,680 new police officers; we’re talking about 1,800. Do the maths.
Social Development, Ministry—Relocation of Regional Commissioner Role
12. Hon LOUISE UPSTON (National—Taupō) to the Minister for Social Development: Does she stand by all her ministry’s recent decisions and actions?
Hon CARMEL SEPULONI (Minister for Social Development): I stand 100 percent behind my ministry and the thousands of front-line staff who work every day to support New Zealanders in need of assistance. However, for nine years, they worked under the previous Government’s punitive and deficit-focused policy settings. This influenced practice at the Ministry of Social Development (MSD) and, as a result, some mistakes still occur.
Hon Gerry Brownlee: Point of order.
Hon CARMEL SEPULONI: I’m working with MSD—
SPEAKER: Order! Order! A point of order, the Hon Gerry Brownlee.
Hon Gerry Brownlee: I raise a point of order, Mr Speaker. You’ve been very, very good, I think, at making sure that Ministers answered questions that related to their ministries without making reference to the past Government or past policies, or other such. How do your past rulings sit with the way that question has just been answered, which is highly political and making points that are not relevant to the question but are gratuitous in the extreme?
SPEAKER: And I think if the member had listened to the phrase after the one he objected to, he would have seen the context which, in my opinion, made it—while marginal—an acceptable answer.
Hon Gerry Brownlee: I raise a point of order, Mr Speaker. If we are then to learn that from the phrase and the ability of a phrase to put something into context, can we now expect to be able to use that same technique in the asking of primary questions?
SPEAKER: I will consider primary questions on a case by case basis.
Hon Louise Upston: Supplementary question—
SPEAKER: No, no, the member hadn’t finished.
Hon CARMEL SEPULONI: This influenced practice at MSD and, as a result, some mistakes still occur. I’m working with MSD to undo the damage to ensure every New Zealander seeking support—whether they be a young unemployed person, a solo parent, a disabled person, or a superannuitant—gets the absolute best advice and support we can give. [Interruption]
SPEAKER: Order! The Leader of the Opposition will stand, withdraw, and apologise.
Hon Simon Bridges: I withdraw and apologise. I raise a point of order, Mr Speaker. What was the aspect that offended the rulings of the Speaker, because I genuinely would like to learn.
SPEAKER: Well, if the member doesn’t understand that, I’m happy to give him a tutorial later, but I don’t think we need to have it in front of the whole House.
Hon Louise Upston: Will the decision to cease the role of the Regional Commissioner for Nelson, Marlborough and West Coast and to have this role done by the Wellington commissioner improve services in these regions?
Hon CARMEL SEPULONI: Despite this being an operational matter, I cannot consider this move as a mistake. Nelson is not being absorbed into Wellington. It will continue to be an MSD region in its own right with its own senior management team. Work and Income has a significant presence regionally, and I am assured that MSD is committed to maintaining the excellent level of service the region expects.
SPEAKER: Order! Order! Can I just recommend to members that they be very careful about the nature of their interjections.
Hon Louise Upston: How is the decision to relocate the MSD Regional Commissioner for Nelson, Marlborough and West Coast to Wellington consistent with the coalition agreement and promise that states the Government will relocate Government services to the regions?
Hon CARMEL SEPULONI: As I stated in my previous answer, this is an operational matter, but I can assure those living in Nelson that they will continue to get the excellent service from their local Work and Income New Zealand office and MSD that they can reasonably expect.
Maureen Pugh: Does the Government now consider the West Coast to be part of Wellington?
SPEAKER: Order! There’s no responsibility for that.
Hon Gerry Brownlee: I raise a point of order, Mr Speaker.
SPEAKER: A point of order—she’s not the “Minister for Geography”.
Hon Gerry Brownlee: No, that’s quite right, and quite evident from the way she’s behaving in her ministry.
SPEAKER: Does the member have a point of order?
Hon Gerry Brownlee: I do, because the question simply asked in response to the answers given by the Minister: does the Government consider that the West Coast is now part of Wellington? What’s wrong with that? If that is—it’s obviously the case, because it’s what they’re doing.
SPEAKER: Order! I mean, I don’t know if the member’s sort of serious in his approach. If the member wanted to ask that question in relation to MSD districts or Work and Income districts or where commissioners cover, then some of that should’ve been included in the question. None of it was. That concludes oral questions. [Interruption] Sorry. One more. Sorry—no. No more. I apologise. The Opposition’s run out of supplementary questions.
General Debate
General Debate
Hon AMY ADAMS (National—Selwyn): I move, That the House take note of miscellaneous business.
So tomorrow’s Budget day. It’s Budget day tomorrow, the first Budget of this new coalition, three-party Government, and isn’t it exciting? It’s exciting! This is where we get to find out what really matters to the Government. This is where all of the sound bites and the virtue signalling and the value statements count for nothing and we find out what actually matters to this Government and whether they intend to deliver on any of their promises. Tomorrow is where we find out and where the rubber hits the road.
So what do we know so far? Let’s just recap. Well, one thing we know is that this Government inherited one of the strongest economies that they could’ve hoped for. We know that thanks to the National-led Government’s careful management over nine years, not only did we turn around the decade of deficits from the loose spending of the last Labour Government but we left this country with strong and growing surpluses and a GDP of 4 percent in 2016 and well over 3 percent for the last several years.
This is a Government now that is awash with cash. It has at least—at least—$6.5 billion more tax coming to them in the next four years than they thought they would have when they wrote their fiscal update, and that’s before the $2.27 billion of new taxes that they’ve already imposed. Over the next four years, the Labour Government will have $20 billion more tax to spend of New Zealanders’ money—$20 billion more—and they’re taxing New Zealanders more and they’re borrowing another $10 billion. They’re putting $10 billion more on credit, taxing hard-working Kiwis more, and they’re awash with cash.
Now, I think it’s pretty clear that the fundamental job of any Minister of Finance—and what Mr Robertson will be judged on tomorrow—is: is he making the most of the financial conditions that he’s lucky enough to have to fulfil his obligations to New Zealand? Right—that’s number one. Then, secondly: is he doing his best to ensure that the future economic conditions are as strong as those he’s inherited—right?
So you take those two roles, and you ask yourself, “How’s the Government going?” Well, it’s no surprise to me that GDP numbers are still holding up pretty well, because GDP is a reflection of the work that’s already gone on. It’s a reflection of the work of the last Government. It’s a reflection, more importantly, of the work of businesses and workers up and down this country. That’s why GDP growth is still looking pretty good.
If you really want to know about the future, if you want to see where New Zealand’s going or what our prosperity is going forward and what our ability to pay for this Government’s spending habits is really looking like, the far better indicator, the lead indicator, is business confidence. Business confidence—anyone who understands the economy knows that it’s businesses who create prosperity. It’s not Government spending. If you want to know what businesses are thinking about their ability to get ahead in this country, look at business confidence.
So what is that telling us? Well, we know the ANZ survey is down negative 23 percent. This country’s businesses are saying to the Government, “We have no faith in your ability to support this economy.” Staples Rodway came out yesterday and had 500 business leaders, more than half of whom expect this to be a bad Budget for the economy of the Government—and, by the way, half of whom are saying this Government’s economic performance has been poor or extremely poor. That’s what the people who create wealth and jobs in this country are saying. And you’ve got a 39 percent decline in the New Zealand Institute of Economic Research business confidence survey.
So you look at the indicators that tell us where the country is going, and it’s clear we’re going backwards. And it’s no surprise, from a Government that’s wiped out a $2.5 billion oil and gas sector—wiped it out; don’t care. They’re doing their level best to destroy the remaining financial viability in agriculture. They clearly hate farmers. They’re increasing wage disparity with Australia. They’re bringing in industrial relations reforms that are already seeing bullish unions—frankly, an arrogant Minister who thinks that if you can’t cope with everything Labour wants to do, you should just go out of business, and never mind the jobs that go with it. They’re turning off the foreign capital tap. They’re signalling more debt and more taxes, and they’re not even protecting New Zealand exporters from the US tariffs. They can’t even manage that.
So it is, for all the world, looking like a Government that wants to—
SPEAKER: Order! Order! The member’s time has expired.
Hon DAVID PARKER (Attorney-General): It is Budget day tomorrow. It’ll be a great day for the Government, it’ll be a sad day for the Opposition, and they’ll be even quieter tomorrow than they were during that contribution.
The greatest contribution we’ve had from the Leader of the Opposition in the last week has been trickle-down theory. Well, what trickled down under the last Government? I’ll tell you what trickled down: homeownership rates went down to the lowest since the 1950s. Homeownership rates for Māori and for young people—they didn’t just trickle down; they plunged down. This Government’s going to do something about that. What else went down? Under the last Government, exports trickled down from 30 percent of GDP to 27 percent of GDP, when they had an ambition to lift them to 40 percent of GDP.
Tomorrow’s Budget will do much good for New Zealand. There will be measures to strengthen the economy. There will be measures to rebuild some of our services. Everyone in New Zealand knows that our hospital sector is under pressure—you just need to go and see someone in hospital. People are running around—you know, some of the facilities are a bit shabby. People are so overstretched it’s obvious that there’s been not enough taxpayer money going into the health service, and we all know that most of us need to have a publicly funded health system in case something goes wrong for ourselves or those that are dear to us.
I’m not going to take fiscal advice from Amy Adams or other members of the Opposition. Last time Labour was in Government, we reduced gross Government debt from 38 percent to 18 percent of GDP. We reduced net Government debt from 18 percent of GDP to zero, when you take into account financial assets like the Superannuation Fund—the super fund that, of course, the National Party paid no money into. What did National do? National borrowed an extra $49 billion and took net debt to well over 20 percent of GDP.
We’re going to do lots of good things in the Budget tomorrow, but what we’re not going to do is run a deficit. The fiscal responsibility rules that Grant Robertson outlined before the election are being adhered to by the Government. We will be in surplus. We will be showing a route back to net debt of under 20 percent of GDP.
I want to say a little bit, in the time I’ve got, about the money that the Rt Hon Winston Peters has secured for the Ministry of Foreign Affairs and Trade. Another area of trickle-down under the last Government was that the amount that New Zealand spent on overseas development aid trickled down from 0.28 percent of gross national income to 0.23 percent of gross national income, and the Budget bid that Mr Peters has secured takes it back to 0.28 percent of GDP, before we do better in the future. Why is that necessary? Well, there are pressures in the South Pacific that are varied. They relate to a diversity of factors at large in the Pacific, and we need to take care to both help the Pacific and protect our interests in the Pacific.
More broadly, though, the Ministry of Foreign Affairs and Trade includes the word “Trade”. As the Rt Hon Winston Peters said in question time today, it is a threatening time in our trading interests at the moment. There is rising protectionism. There are new tariffs against steel and aluminium. There are trade wars breaking out between different countries. There are non-tariff barriers going up everywhere. None of this is in the interests of New Zealand, and we’ve got to fight even harder to secure our place in the world. This Government’s got an enormous trade agenda on. We brought home the Comprehensive and Progressive Trans-Pacific Partnership agreement, and I acknowledge the work that Mr McClay did on that before he left, but we’ve improved that and we’ve landed that.
We’ve got work in the Regional Comprehensive Economic Partnership. We’ve got impending negotiations that the Prime Minister and the Deputy Prime Minister put an enormous amount of political effort into, meeting Emmanuel Macron and Angela Merkel, and other countries in Europe, in order to get those negotiations under way. We’ve got the Pacific Alliance negotiations with parts of Central and South America under way. We’ve got the upgrade to the China free-trade agreement. We’ve got the upgrade to the Singapore agreement. We’re doing all of these things. In the meantime, of course, we’ve had a hugely redistributive package in favour of some of these people who were not doing so well in society under the last Government, in the 100 days, and lots more good news tomorrow.
Hon TODD McCLAY (National—Rotorua): David Parker, what a hard-working trade Minister. All of that negotiation from his desk in the Beehive. When he says we’ve got these challenges in the US around steel exports, he writes a letter to them. He doesn’t go and see them. And then he says, “It’s only $40 million of trade. It doesn’t really matter.”
What happened last year in the Budget was the last Government, National, announced $100 million, the largest ever investment in trade policy. David Parker—nothing. Winston Peters has got almost a billion dollars for foreign affairs. David Parker—nothing. He is the comprehensive and progressive David Parker. He’s just the same as he was in Opposition, except he’s put his Trans-Pacific Partnership protest sign down. But I’ll tell you what, as soon as he’s back to Opposition, he’ll get it back out again and he’ll be marching in the streets against trade deals because he’s a wolf in Opposition; he’s a lamb in Government. Mr Parker, writing a letter from your plush chair where your desk sits in the Beehive is not cutting it when it comes to trade negotiation. But I do congratulate you on your progressive and comprehensive approach to writing letters.
The last Government worked very hard on foreign affairs, as this Government is, and particularly when it comes to development assistance. I want to congratulate Winston Peters on a billion dollars of diplomats over doctors, because he knows how to get money in a way that the Australians don’t. The Australians in their Budget, just last week, actually siphoned off development assistance. They said they’re keeping their foot on the throat of overseas development aid. I have a question—a simple question—for Mr Peters: whose throat did he have his foot on to get that billion dollars? And it will be well spent. At least he has an opportunity to stand up and tell us in this House, tell every New Zealand taxpayer, that there is the ability for all of these countries to absorb this money, because it’s hard-earned taxpayers’ money. But he must also explain why the coalition Government is happy not to meet its commitments to New Zealanders, but in place believes that this is a greater priority.
Now I don’t begrudge the money to be spent on the Pacific Islands and on other countries. It is very, very important. But this Government has been left with very large surpluses, much more money than was seen in any single year over the last nine years, and the one thing we certainly see is they’re very good at spending other people’s money. So the commitment they must give is that the money that they’ll be spending around the world will be well spent—an absolute guarantee of that—and then why this is a priority, when they say they can’t put the money they need to into almost every single other area of promise they made before the election.
I want to talk about the investment in a new embassy. Congratulations on that. I’m still not sure why they’ve chosen Stockholm, other than they said we closed it. We closed it, so they want to go back there. Although, we did hear the Prime Minister say all of a sudden that the European Union trade is important. We’ve just had the Foreign Minister in Europe, visiting countries, going to Brussels, talking more about Russia than about trade with the European Union. But what they forgot to say is that in the largest ever one-year investment in trade under a New Zealand Government last year, we committed to and are opening an embassy in Dublin, because of the importance of both Brexit and the European Union; Sri Lanka, because that’s an important nation where we will have more trade; and Columbia as well. Three embassies last year—we were able to do that and meet our promises to New Zealanders. So why are New Zealanders getting one embassy and no doctors? Why are they getting 50 diplomats, and the promise of cheaper doctors visits to all New Zealanders is being phased in? Well, that’s something that actually every New Zealander will be interested in.
The thing is—and Jacinda Ardern as Prime Minister will get to know this—if you’re going to make commitments in the run-up to an election, you absolutely have to meet them. Mr Peters, I hope you make sure taxpayers’ money is spent well. Congratulations on holding the Government to account and getting $1 billion for diplomats, over doctors. I guess New Zealanders will judge whether that’s a good use of money in so far as priorities are concerned. I can only assume that’s the cost of becoming Prime Minister when you’re in coalition with New Zealand First. Wouldn’t it be good if we actually saw a bit of “New Zealand first”, instead of every other country overseas first.
Hon RON MARK (Minister of Defence): Mr Speaker, thank you very much for the opportunity. Look, isn’t it amazing? I think that side over there is showing all the classic signs of Budget envy. Budget envy: things they wish they could’ve done, but under Steven Joyce—[Interruption] Look at Mr Mark Mitchell smiling. He knows about can-kicking. He knows about not making decisions. He knows about the troubles of getting money out of Steven Joyce. And now he’s sitting there, watching record expenditure in areas that are of key, prime importance. Want to ask questions about foreign policy? Multilateral contributions under that Government were the lowest in the whole of the OECD. This is an enlightened Government that takes its responsibilities for security, trade, and social security in the Pacific very seriously. Large surpluses? You’ve got to be joking. That was a ghost surplus, built on the biggest social deficit this country has ever seen—ever seen. There were holes in the Budget all over the place. If that man wants to talk about the EU, look at the track record. Nine years in Government, in terms of EU trade? Zero—nothing. Six months of this Government, and it’s all happening.
I’ve said enough about them. Let’s talk about National’s Nathan Guy, who’s having a road to Damascus experience on biosecurity right now. His speeches and his questions in this House on biosecurity might be seen as a pathway to redemption if his performance in the role as Minister of Agriculture hadn’t been so pathetic. Likewise, his cause for struggling farmers fighting to stave off the banks on the back of the Mycoplasma bovis issue would be laudable if his track record wasn’t so laughable. Under that Government, there were over 150 biosecurity breaches. Mr Carter is smiling, looking down, because he knows it’s true. And Mr Guy wants to talk about compensation? He wants to talk about response? Come to the Wairarapa, Mr Guy, and listen to the farmers talking about that member’s performance over pea weevil. What about velvet—
Hon Members: Velvetleaf.
Hon RON MARK: —velvetleaf? Where was that Minister on velvetleaf? What would he say to the farmers now? Was there compensation, Mr Guy? Was the compensation rolled out at lightning speed, like that which one is asking of our Minister, Mr Damien O’Connor? No. There is silence over there now, because that member knows full well that the cause of the issues that this Government is now dealing with were laid by him and his pathetic performance, supposedly as a defender of the New Zealand agribiz sector. But no, this is the man who’s become known as what? A fair-weather farmer. He’s not even a Queen Street farmer; he’s now being talked about as a Lambton Quay farmer because all they ever see is him padding up and down the footpath going out for runs. He doesn’t actually farm. That man over there has got a classic record of a dollar each way. He spent no dollars in protection, underfunded biosecurity; 150 incursions later, he dares to stand up in this House and question Damien O’Connor on his failings and the things that he didn’t do through his poorly funded, poorly led, pathetically managed ministry of his own? We won’t even get into the other range of 150 biosecurity incursions. Nobody is fooled by that fair-weather farmer. No one is fooled by Nathan Guy, the Lambton Quay farmer.
I played half back, Mr Speaker—as you know—alongside of you. If I had a pass as good as his buck-passing and if I had a kick as good as his can-kicking—you know, “Oh, I don’t think I’ll make a decision. I’ll just kick it out for a little bit.”—I would have been a damned All Black. I’d be right up there with Sid Going and Chris Laidlaw and the rest of them. That man over there might well have been a Minister of Agriculture, but he’s a has-been Minister of Agriculture. Every time he wants an answer to the question of biosecurity breaches and what this Government is doing, I’ll give him only one word of advice: go and look in the mirror, Mr Guy—go and look in the mirror and ask your questions right there.
Hon JACQUI DEAN (National—Waitaki): It’s always a pleasure to follow a contribution by Ron Mark. It certainly makes us look good in contrast.
I have got a question for the New Zealand First - Labour Government, and that is: why are they walking away from the regions? Why are New Zealand First and Labour walking away from the lower South Island of New Zealand? Why is it that they are walking away from the Lumsden Maternity Centre? Why is it that they are failing in their obligations with the Otago Rescue Helicopter Trust? Why is it that they are walking away from their obligations with West Otago Health Ltd? And, most critical and most important, as far as I’m concerned, why are they not supporting the Roxburgh health camp?
Let me tell you a little bit about the Roxburgh health camp. It is the one residential wraparound facility for children who have suffered trauma in their lives and their families in the whole of the lower half of the South Island. We have huge distances to cover in the lower half of the South Island. We do have social problems. We have vulnerable children, and now Roxburgh health camp, just yesterday, has failed in its funding application with this Government and is being forced to close its doors. There have been many, many angry people in the lower half of the South Island.
I visited Roxburgh health camp just recently. They cannot believe—they cannot believe—they’re going to lose this residential service. The local mayors cannot believe that this Government, New Zealand First and Labour, are walking away from the vulnerable families in the lower half of the South Island. What happened to their promises? What happened to the promise of the Labour and New Zealand First Government to look after those vulnerable children in their society? They have broken that promise. I made a personal representation to Tracey Martin. She put up her hands and said, “It’ll be all right, it’ll be all right—there’ll still be services.” It won’t be all right, Minister—it will not be all right.
It’s ironic to see that the Government has announced almost $2 million, just yesterday, for the Growing Up in New Zealand study—a study. This Government—Carmel Sepuloni—has put up $2 million for a study. Well, I’ll you how much Roxburgh needs: they need $3 million to support vulnerable children. Carmel Sepuloni goes on to say, “This Government wants New Zealand to be the best place in the world to be a child. Hearing the voice of children will be a powerful contribution to Government policy makers’ and service providers’ understanding of how to best meet the needs of diverse New Zealand families and children.”
Well, I’ll tell you what, I’ll give you the voice of the child. I’ll give you the voice of the eight-year-old little girl who stood up at a public meeting in Roxburgh and said this—and I quote—“This is my second time at Roxburgh. It has changed my life, because I’ve had a lot of hard times where I haven’t been able to talk about stuff.”, and then she pauses and says, “Yeah, talk about stuff … It’s just changed how I can talk about how I’m feeling, and it’s just changed my life. It’s helped my mum, it’s helped my dad, and my annoying little brother”—she got a laugh for that comment—“and I really want to say I really want it to stay because it’s, like, the only thing that helped.”
So Carmel Sepuloni, the Hon Tracey Martin, and Minister of Education Chris Hipkins—who’s been very, very quiet over this issue—this is my message to you: you have broken your promise to the people of Roxburgh to look after vulnerable children. You have broken your promise to the people of the lower South Island to look after vulnerable children—shame, shame, shame on you. Shame on you, on behalf of that little eight-year-old girl and all the other children that have crossed the threshold of the Roxburgh health camp over the last 60 years and who have come out of that residential facility where life is just a little bit better. Surely that—surely that—is worth supporting by this Government.
I leave you with a Tremain cartoon in the Otago Daily Times, which says, “The talk, the walk”—
SPEAKER: Order! The member’s time has expired.
MICHAEL WOOD (Labour—Mt Roskill): Thank you, Mr Speaker. As the rain trickles down on the roof of the House this afternoon, isn’t it great to be here one day out—one day out—from the first Budget of this coalition Government, a Budget that is going to rebuild the social and infrastructure foundations of our country that have been let go so badly over the last nine years. In my address, I actually want to speak to the future. I don’t want to speak to the past, which is what we’ve heard a lot of from the members on the other side of the House in this debate; I want to talk about the plan that this Government has to rebuild those social and infrastructure investments.
Even though we have to wait one more sleep until the Budget tomorrow, we already have a very, very clear indication from the coalition Government about what our priorities are through the series of announcements over the last couple of weeks. Let me put some of those concrete things on the table, and let’s hear what those members opposite think.
How about the $81 million investment to rebuild New Zealand’s investment in our forests and our birds, to make up for the underfunding of the Department of Conservation over the last nine years, to make up for the fact that rangers have been walking away from the Department of Conservation because they have been so utterly depressed about the rundown of that department over the last nine years? When that Government put up a target—admittedly, a good target, a bold target, and an ambitious target—of making New Zealand predator-free by 2050, this Government actually has a plan to do something about it by putting the resourcing on the table: $81 million of funding to expand the extent of the conservation estate that we actually fund to be free of predators.
What about the $21 million announcement earlier this week to help 8,000 preschoolers with their learning needs? These are the kids who need extra support, who might have special education needs, and, once again, if any member in this Chamber in a constituency goes and speaks to the specialists in our schooling system, they’ll tell you that over the past nine years they have been crying out for resources, crying out for support, unable to meet the needs. Even before this first Budget, the coalition Budget is here, investing $21 million in preschools so that those kids get the assessment and get the support that they need to succeed at school. That is rebuilding the foundations of a decent education system, which gives every single child—every single child in our country—the ability to learn and reach their potential, as Clarence Beeby said our education system should.
How about that $700 million investment in overseas aid in the Pacific and rebuilding our foreign service? We had a very confusing exchange across the House, because, of course, Mr McClay stood up before and he was singing its praises. He was saying that investment was good. But, of course, if you’ve listened to members opposite over the last couple of weeks since that announcement, you’d think it was the worst and most wasteful and profligate thing out. The arguments they put forward were those typical inward-looking, myopic, conservative world-view arguments that forget that we are actually connected to the region around us, that forget about the fact that the ability of New Zealand to make its way in the world rests on the relationships that we build and rests, particularly, on the strength and the resilience of our Pacific partners. So while those members make fun of that announcement, we welcome the comments from the Hon Todd McClay—or Roger McClay, as the Speaker referred to him—in favour of that $700 million investment.
SPEAKER: Order! Order!
MICHAEL WOOD: Thank you, Mr Speaker.
SPEAKER: Don’t bring me into the debate, and bringing my mistakes into the debate is foolish.
MICHAEL WOOD: I apologise, Mr Speaker. What about the $80 million investment in family violence services—those critical services—the women’s refuges, and those other grassroots organisations who look after women and children and families in desperate need, escaping awful situations, who have more or less had their funding frozen over nine years. They have welcomed with arms wide open that $80 million investment that this coalition Government has put into rebuilding their ability to care for the people and the families of New Zealand.
And how about the $100 million package to rebuild the foundations of a housing sector, to mean that every New Zealand person should have a decent and safe place to sleep at night—$100 million to make sure that that stain of homelessness in our communities starts to be worked on, because we say that in a wealthy and prosperous country, in New Zealand, with the values that we have, people shouldn’t be sleeping out in the cold this winter.
This is a Government with a plan—with a plan to rebuild the social and infrastructure foundations of New Zealand. We believe that New Zealanders deserve more than a trickle-down from the rich; they deserve a Government that gives every person in this country a fair go and good health, education, and housing, so that all people in this beautiful country can reach their potential. That’s what this coalition Government is going to deliver tomorrow. Thank you, Mr Speaker.
MATT DOOCEY (National—Waimakariri): That last member, Michael Wood, set down the challenge: let’s talk about announcements; let’s talk about infrastructure. Well, I’ll tell of an announcement that happened in my electorate of Waimakariri on Thursday last week. The local Pegasus Residents’ Group and the Woodend town residents association had their AGM. They invited the New Zealand Transport Agency (NZTA) to come and talk about a long-overdue Woodend bypass that’s been agreed to and is going to be constructed by 2027. In the words of the NZTA representative, he said, “The Woodend bypass is now off the table. The Woodend bypass is not a priority for the Labour Government. The Woodend bypass is not a priority, because the new Government is prioritising for public transport in main cities.” That’s the announcement that is happening in regional New Zealand.
New Zealanders, like the people of Waimakariri, are very pragmatic, and they know a Government that supports them. The former Government built the Western Belfast Bypass and the northern corridor was under construction, and now we have a new Government that is reneging on the Woodend bypass. At the start of this year, I started a petition, and the media approached the transport Minister, Phil Twyford, who used words on me that said I was misleading, it was Opposition politicking, and now it was disingenuous. Yet last week, NZTA came out and said the Woodend bypass is off the table. It’s not a priority for this Government, and this Government is prioritising public transport in main cities. These are the announcements that are going to happen more and more around regional New Zealand.
Let’s talk about the announcements for mental health. Now the Government talked up a big game for mental health in the campaign. What have we heard? Eight months in, we’ve had one announcement: $25 million for schools’ mental health professionals in Canterbury. Yes, a good programme—it was one of our pilot schemes announced last year. But here it is: it’s not new funding. The $25 million was out of the $100 million that this Government has inherited for the contingency fund for mental health. So eight months in, they’ve already short-changed mental health by $75 million. Not only that—short-changing $75 million—they’re actually cutting mental health services in rural New Zealand. The Rural Health Alliance is having funding cut. Now, they’re people best placed to provide suicide prevention services in rural communities, and there we have it: short-changing mental health by $75 million, cutting mental health services in rural communities, and what do they announce? A mental health inquiry, which is already causing division in the mental health sector.
Shaun Robinson from the Mental Health Foundation says, “One of the dangers is that this review isn’t going to tell us anything we don’t know already.” Kevin Allan, the Mental Health Commissioner, said, “There is no need for an inquiry. We need action.” Corinda Taylor, who is a Life Matters Suicide Prevention Trust spokesperson, talks about how much time the public has to submit on this inquiry. How much time has the public got to submit on a year-long inquiry: 80 days, 60 days, 40 days, 20 days? The public has 15 days—15 days to submit on a national inquiry.
So the pressure’s back on this Government for mental health. David Clark said, “A visit to a GP for mental health issues will be free, and there will be mental health coordinators in primary care.” So there they go. That’s what they pledged. That’s what we’re expecting for mental health in the Budget tomorrow. Free mental health visits to GPs, and primary mental health care teams—that’ll need to be in the Budget, because what the benchmark is is a year ago, pretty much to the day, the last Government in Budget 2017—
SPEAKER: Order! The member’s time has expired. I want to remind the member that when I’m on my feet, he doesn’t—I mean, his mike’s cut off so no one can hear him anyway, out in the world, so he just looks a bit funny. But the member must resume his seat when the time’s up and I’m on my feet.
Hon EUGENIE SAGE (Minister of Conservation): Tēnā koe, Mr Speaker. Thank you. Tomorrow’s Budget is about people and planet, because this Government recognises the importance of both. That’s why we’re investing in public transport so that we can get our cities moving again. The National Government’s preoccupation with building more motorways didn’t unblock the congestion problems in Auckland. This Government’s investment in the Auckland transport package will. But I am really proud as the Minister of Conservation to have announced last weekend increased investment because of Budget 2018 in conservation—$81 million more in new funding over four years to tackle our predator crisis.
Under National, there wasn’t trickle-down into conservation; there was slashing of conservation funding. This Government, as part of its plan to rebuild the public sector, to invest in people and planet, is significantly increasing the resources that are available for the department, for the first time, to do ongoing predator control on a landscape scale and plan for that. Under National, the Department of Conservation (DOC) was only able to do 200,000 hectares of predator control on an ongoing basis. It had to go cap in hand to Government each time there was a predator crisis in a mast year to get some more funding.
The announcement of an extra $81 million in new funding over four years means that that funding for predator control is secure and the department can plan, and that is the basis—getting rid of the rats, the stoats, and the possums—for securing the future for our native forests, for our native ecosystems, and for our precious native birds, snails, insects, and plants. This Government is investing in conservation, not cutting the funding like the last one. It’s about the three parties in Government—Labour, New Zealand First, and the Greens—delivering on their commitments in the confidence and supply agreement and the coalition agreement to significantly increase DOC’s funding, and that is a very strong contrast to what we had under National.
Our taonga species—our kiwi, our kākā, our kea, our cabbage trees—are at the heart of who we are as New Zealanders. They and our natural landscapes are what draw visitors here. They are the basis for our number one export industry and the basis of our primary production sector, but for those things to thrive we need to invest in their protection, not assume that you can have a catchy phrase “Predator Free by 2050” but just have the phrase and not the plan, not the investment.
We are making the commitment to more funding for the regions, because where does predator control happen? It doesn’t happen on Lambton Quay or Queen Street; it happens in the regions. So I utterly reject Ms Dean’s comments. This Government is investing in the regions. This extra $81 million will help the regions, just as Minister Jones’ work with the big forestry project of a billion trees is investing in the regions. We have just seen the announcement of a major funding and partnership with Mānuka Farming to plant mānuka trees. It’s a pity National never had that vision. This Government does, to reafforest areas that are risk of erosion, creating more sustainable land use and also enabling the opportunities for the export industry based on mānuka honey and those high-value products. That’s showing that you can get benefits for the environment and the economy by good forward-thinking, sustainable initiatives, that we were well short of under the last Government.
I’m looking forward to the Budget tomorrow because the predator control announcement is the centrepiece of what’s happening in conservation, but there are other announcements to follow. We need a healthy environment, and with things like the increase in mast years that are happening with climate change, where we get prolific flowering of the beech forest, where we get rat numbers increasing, stoat numbers following, and increased pressure on our native species, we need a sustained plan to deal with that, and Budget 2018 is about that. It is about people and planet. The losers are the rats, stoats, and possums, and the winners are our indigenous species.
SIMEON BROWN (National—Pakuranga): Thank you very much, Mr Speaker. The member who just sat down, Eugenie Sage, was talking about how this Budget will be investing in people and planet, but if I was listening correctly at question time, it sounds like they’re more likely going to be investing in websites—websites about forestry in Rotorua. That sounds a little bit more like it, so I’d better start investing in the tech sector.
Well, we’ve certainly had an exciting start to the first half of this year. We’ve had the ups and downs—well, let’s be fair, mostly downs—for this Government. It’s been ambition, transparency, relentless positivity, but now we see business confidence starting to track down a long, long way. And we might need to downgrade the outlook for this Government to “maintaining the status quo”, or maybe “a bit hedgy on the edges”, or “buck-passing” at best. As we head into the cooler months of this year, this Government will be starting to take off the warm, sunny, rose-tinted glasses that they’ve got, and the kindness, and might need to start looking at how they’re going to actually work out the details of some of their policies.
As the associate education spokesperson, I’d like to spend a little bit of time talking about the Government’s policies in education—the unrealistic, broken promises that they have been peddling across New Zealand in the campaign around education—and how tomorrow’s Budget will be something where raised expectations will not be fulfilled. So let’s go through a few of these promises.
The Government has promised to ensure that every New Zealand school will have modern learning environments by 2030, at a cost of—how much, do you think?—$10 billion to $15 billion. They’ve promised a big injection to school infrastructure in the Canterbury schools build, money which they failed—failed—to put in their own costings as a line item. They promised to provide $150 per school student to try and end school donations. They’ve promised free iPads and devices to every child in schools. They’ve promised to boost early childhood education (ECE) by $193 million. They’ve promised Te Reo lessons for every ECE and primary school teacher, and they’ve promised school-leavers kits for every school leaver. The list could go on—the wish list could go on—and the reality is that they will not be able to fulfil their unrealistic list of promises, which they have peddled up and down the country.
On this side of the House, we have a strong and proud record in education. We increased education spending every single year while we were in Government, from $8 billion to $11 billion per year in the compulsory sector alone, and we did this while dealing with the global financial crisis (GFC) and the Christchurch earthquakes.
Kieran McAnulty: Were you even alive then? Were you even born in the GFC?
SIMEON BROWN: Over nine years, from 2008 to 2017, we invested $5 billion in school infrastructure—
SPEAKER: Order! I’m going to remind Mr McAnulty that I certainly was, and he shouldn’t be interjecting in the second person.
SIMEON BROWN: We invested $5 billion in school property—in school infrastructure—over our nine years, which compared to only $3 billion in years prior, under the former Labour Government. When we came into Government, we inherited a neglected portfolio of property with an average age of 40 years. In Budget 2017 alone, we invested $456 million into school property to increase capacity. We planned for growth in Auckland, with the Auckland education growth strategy, which the Minister of Education has refused to release and refused to work on, and we increased ECE spending from $0.9 billion in 2008 to $1.7 billion in 2017. From $0.9 billion in 2008 to $1.7 billion in 2017—that’s an investment worth making in our kids to ensure they get the best start in life. We invested where it really made a difference.
But the ultimate arrogance of this Government is that they think they know best. They’re ideologically driven, and just today, in the Education and Workforce Committee, they voted against the select committee going to South Auckland Middle School to hear submissions on their legislation to ban and shut down—
SPEAKER: Order! The member will resume his seat. I’m going to seek an assurance from the member that that decision was one that was taken in a public part of the committee. If not—
SIMEON BROWN: It was taken, and we decided to release it immediately to South Auckland Middle School.
Kieran McAnulty: I raise a point of order, Mr Speaker.
SPEAKER: Well, can I rule on this? The member’s assured the House that, in fact, that decision is a decision which has been made public, and if that is the case, he may continue. Does the member have a further point of order?
Kieran McAnulty: May I seek some guidance, Mr Speaker—
SPEAKER: No.
SIMEON BROWN: This is a Government which says it knows best. They’re ideologically driven. They think they know what—[Interruption] By some fluke, they’ve ended up in Government. Their saving grace at this stage is that they have a strong foundation delivered by a National Government, which has grown our economy with strong Budget surpluses, which have been put in place by strong economic management and economic policies. Thank you, Mr Speaker.
Dr DEBORAH RUSSELL (Labour—New Lynn): One sleep to go, and I’ve got some advice for the members of the Opposition. One sleep to go, and to my colleagues across the House, tonight I’m going to invite you to head home and to sit down. Perhaps you might have a nightcap—you know, you might ask the Speaker for a whisky, perhaps a cup of tea; Mr Brown might like to have a nice warm milk—and sit there and reflect a little, just think a little, about what has gone wrong over the last nine years.
You see, I don’t think that my colleagues on the opposite side of the House are bad people. I think they came into the House for a reason, and the reason—like all of us—is to try to make New Zealand a better place, to make this country better. But they’ve made a mistake. They’re just mistaken, and it’s a bit of a sad mistake. They thought that holding back on health funding would make the health sector more efficient, but, sooner or later, you cut and cut and cut and there’s no fat left to cut and you’re cutting into the bone, and things have gone wrong. We all know that.
You know, they thought that introducing national standards in schools would somehow magically improve education, but in terms of the fact of the matter, the standing of our children in international tests has gone down. It didn’t improve it at all.
They thought that the market might perhaps provide sufficient housing—the market, the saviour of all, would have the right solution. Well, I tell you, we’ve had an excellent market solution in housing; it’s just not the solution we want as New Zealanders. We could not solve that problem through the market, and that is the mistake that our colleagues on the other side of the House have made—a simple mistake.
So I’m urging the members of the Opposition to take heart, to be courageous, to sit down and think about what has actually happened over the last few years, to acknowledge that they’ve made a mistake, and to think about what could be done better. We all know the difficulties in health, in education, in housing, and in welfare. This is common knowledge in our country now, and on this side of the House we have a plan to fix it. We have strategies, we have time lines, and we have work under way to fix up the mistakes of the last nine years.
You know, we’ve started with our Families Package—384,000 families who will be about $75 a week better off. That’s a great start. We’ve continued with $21 million going into early childhood education, specifically to help children with learning needs. We’ve carried on with our KiwiBuild. Within just months of the election, those first houses are under way and being built as we speak. This is a Government that is taking action.
This is a Government that is not afraid of the tough decisions. We could see the writing on the wall for the oil and gas industry when Shell pulled out of Taranaki. Courageous leadership from the other side of the House would have worked with people in Taranaki to let them know that they needed to change. We took the courageous and tough decision to stop oil and gas exploration. We are looking after the regions. We’ve got a billion dollars in our Provincial Growth Fund. We are working with our biggest city to deliver a fully funded transport plan, not a plan with a $4 billion funding gap, but a real plan that will work. This side of the House is taking action.
I’m just going to say that this is what we are doing. We know that, sadly, New Zealand is one of the worst in the world for domestic violence, and what have we done on this side of the House? We have come up with $76 million to fund providers of family violence services.
This side of the House has a plan and it is taking action. That’s why I invite the members of the Opposition to go home tonight to sip their whisky, their tea, their milk, and to reflect, and then to sleep well. And remember, my colleagues on the other side of the House, it’s the putting right that counts.
MATT KING (National—Northland): In 2015 and 2017, Northland was invaded by Mr Peters and his band of followers. Like the Pied Piper, he promised everything to everybody. You remember those endless, non-negotiable bottom lines? There were hundreds of them. “Send them a message”, he said. “Had enough?”, he said. Well, Northland has answered those messages loud and clear. They’ve had enough of Winston Peters and his band of merry men and women—5 percent in the polls tells us that.
Hon Members: Three.
MATT KING: Labour gave him—well, it’s 5 percent now. Labour gave him the kitchen sink to get into power. They gave him the kitchen sink, but I don’t blame them. They were desperate. They were looking at 12 years in Opposition. Imagine that—12 years. What about the top-secret 38-page coalition document? They fought so hard to keep that secret. So much for an open and transparent Government!
Winston Peters came up north and he said, “Free ferry rides for the Kohukohu and Russell ferries for SuperGold card holders.”—not achieved—“Sort out the Mangawhai $30 million rates debacle.”—well, we’re still waiting—“A referendum on the super-city for the Wellsford voters”—that’s not going to happen. “I’ll shift that Auckland port to Northland.”—he said that. Not in his lifetime and not in mine, probably. “Hundreds of millions of dollars invested in the rail line to the port and an upgrade to the northern line.”—I’ll believe that when I see it. I’ll believe that when I see it. But what’s worst of all, he rubbished the Northland motorway, a motorway that’s been identified by Northlanders and our three mayors as the biggest driver of economic growth in Northland. His sidekick, the self-appointed champion of the regions, Matua Shane Jones, helped kick that billion-dollar motorway into touch in exchange for some rumble strips, a couple of roundabouts, and a few pet projects.
Peters offered a binding referendum on the Māori seats. That hoovered up a heap of votes. He offered a binding referendum on reducing MPs from 120 to 100. That got him a few more. He promised to reduce immigration to 10,000. That got him thousands more votes. But what’s happened? None of it. Remember, he pledged no more synthetic carpet and insulation in Government buildings and in Housing New Zealand homes. He cannot be serious. They made the Pike River tragedy a political football—shame on them. They cancelled National’s tax cuts under urgency, criticising us for using urgency—tax cuts that New Zealand First and the Greens voted for and then changed their minds. They didn’t even campaign on it.
They are a Government that has smashed the oil and gas industry. Everyone that understands that industry knows that’s what they’ve done. They’re passing the Electoral (Integrity) Amendment Bill, a bill that is devoid of integrity. They opposed it—there’s been universal opposition, including experts and former Labour and Green MPs. It should be called the “Save New Zealand First Bill”. New Zealand First and Green MPs are supporting it like turkeys voting for an early Christmas.
But you know what? Northlanders are not fooled by that political rhetoric. Voters feel betrayed, and we welcome an early election. This coalition Government is a flip-flop, backflip Government. Open, transparent Government—what a joke. Honestly, you could not make this stuff up. Bring on 2020.
WILLOW-JEAN PRIME (Labour): Āe, kia ora. E Te Māngai o Te Whare, tēnā koe. Where to start? I really think I might just put some of my notes aside and respond to all of those comments made on the opposite side of the House, but I will try and give some structure to this speech.
Kiritapu Allan: Never mind structure—throw it away.
WILLOW-JEAN PRIME: Yeah, never mind structure, they’re saying. Throw it away. Respond to all of that. Clearly, the member for Northland is having different conversations to the ones that I am having where just yesterday people are still pinching themselves, going, “Willow, is this really for real?” We have had so many Ministers in the North, so many announcements already, so many pieces of legislation that have passed that are going to make such a meaningful difference to the people in Northland, and guess what? There’s more to come. But you will have to wait. Just one more sleep, Matt.
SPEAKER: Order!
WILLOW-JEAN PRIME: Aroha mai. If economic growth isn’t reflected in the well-being of people, then what is it for? Northlanders know that the trickle-down just doesn’t work. If the trickle-down worked, then we would not be suffering some of the worst statistics in the country. We just don’t buy the argument that the trickle-down works, because our people have some of the lowest average incomes in the country, some of the highest unemployment in the country, highest youth unemployment in the country, lowest academic achievement rates, and lowest homeownership rates—and continuing to fall.
I am so proud of the announcements that we have already made. I reflect back to December, when we made announcements around the Families Package: an average of $75 per week, and for lower income families even more. That’s over 384,000 families that are going to be better off. And when you look at our statistics in my region, many of them are going to be benefiting from that.
I look forward to our kaumātua, our kuia, and our families receiving the winter energy payment—a winter we can look forward to. I am so proud of the $100 million announcement we made to address homelessness this winter, right now, in offering to partner with those in our communities who are trying to do something about it for their people.
This Budget is about building strong foundations. It is about addressing the issues, the immediate needs, right now, but also looking at the next three years and the next 30 years. So it’s those fundamentals: housing, health, and education. Those are the announcements I am looking forward to in our Budget announcement in just one more sleep.
Housing—every whānau deserves a warm, dry home. We want to end homelessness. We want to build more State housing, build affordable homes for Kiwis to buy so that Kiwis can own homes of their own, and this Budget will tackle the housing crisis head-on. We are taking responsibility to fix it. This is a Government that has a plan and we are putting our money where our mouth is.
Health—there’s a lot of work to do in this area. I have seen this first-hand in recent weeks and months. There have been nine years of neglect. Our district health boards (DHBs) are stretched. Our DHB in Northland reported a major deficit. Deficits are growing, our hospitals are crumbling, and our hard-working health professionals are under huge pressure.
A quality education is the foundation for a good life and we want all of our young people to have the best opportunities in life. I’m told—but I can’t reveal any details here; you will have to wait for just one more sleep—that the Budget will deliver a much-needed boost to our schools and our early childhood centres.
Chris Bishop: Oh really? Are you sure?
WILLOW-JEAN PRIME: In fact, we have made an announcement already about the extra $21 million, Mr Bishop, that is going to help over 8,000 preschoolers with extra learning needs.
I am also so proud of the recent announcement I saw about banning oil and gas exploration, and then $80 million for pest control. We are putting people back at the centre of everything that we are doing. We are protecting our taiao. We are addressing immediate needs while also laying down the foundations for our future generations, our uri whakatupu.
I’m out of time. Tēnā koe.
The debate having concluded, the motion lapsed.
Privilege
Consideration of Report of Privileges Committee
Maritime New Zealand—Action Following Evidence Given to Regulations Review Committee
Hon DAVID PARKER (Attorney-General): I move, That the House take note of the report of the Privileges Committee on the question of privilege regarding action by Maritime New Zealand following evidence given to the Regulations Review Committee by the managing director of Maritime Management Services Ltd.
Motion agreed to.
Bills
Election Access Fund Bill
First Reading
CHLÖE SWARBRICK (Green): I move, That the Election Access Fund Bill be now read a first time. I nominate the Governance and Administration Committee to consider the bill.
Tēnā koe e Te Māngai. Tēnā koutou e te Whare. Tēnā koutou e te whānau Haua. Nā koutou anō tēnei Whare.
[Thank you, Mr Speaker. I greet the House. I greet the Haua family. This is also your House.]
I want to acknowledge the incredible people who are in the gallery today to show their support for this bill, including many of our disabled whānau. Welcome to Parliament, to Our House—this Whare belongs to all of us.
In the final few weeks of 2017’s general election campaign, before it could be known that I would be elected—let alone that we would have a change of Government—former Green MP Mojo Mathers requested that the Election Access Fund Bill be drafted. Mojo was introduced to politics when she took up a role in Canterbury as spokeswoman for clean water. Later, when she was elected to Parliament, Mojo became renowned for her work on animal rights. She became well respected across the House as a compassionate and warm politician, able to collaborate cross party to get things done.
Mojo was also, as it happens, Parliament’s first deaf MP. In conversation, time and again, she’s told me that she never intended to enter this place as a champion for the rights of deaf and disabled people, but by virtue of who Mojo is, who and what she represented, and her life experiences, which are starkly unique and notably underrepresented in a place like this, it’s who she became. My point is that simply by being involved and visible and unapologetic about existing in this space as New Zealand’s first deaf MP, Mojo profoundly and irrevocably changed our Parliament. Mojo, I want to acknowledge your presence in the Chamber today and say thank you.
In her time in Parliament, Mojo achieved real change. Amongst other things, she worked with former Speaker of the House Lockwood Smith to see that the additional costs incurred by her as a deaf MP—for things like a note-taker in select committee and live captioning of question times, so that she had fair access to what was actually being said—were covered by Parliament and not out of her individual office budget, which would have wiped out her MP fund and left her with no funding for MP duties, for costs that other people, other MPs, simply don’t face. That is the principle at the heart of this bill—that the additional hurdles and costs that those with disabilities incur just to participate on an even footing should be shared amongst all of us as a society and not be the sole responsibility of persons with disabilities. That is the definition of equity.
Mojo was a representative with lived experience of a society not designed for her—something that Statistics New Zealand reports is experienced by approximately 1.1 million New Zealanders living with disabilities. But the contributions a person can make to our society extend well beyond the limitations or boxes that we as a society foist on them. People living with disabilities—as indeed all people—have their own values, their own vision of a better society, their own remarkable skills and passions that make them who they are, and it is incumbent on us in this Parliament to ensure that everybody gets a fair shot at participating in our elections, let alone becoming an MP.
This is a pretty succinct piece of legislation, but it has the power to be transformative. Fundamentally, it establishes the Election Access Fund to facilitate the participation of persons with disabilities in general elections. This fund will be administered by the Electoral Commission, a well-respected independent organisation tasked with coordinating our electoral process. The Electoral Commission will create the criteria for which a person with a disability seeking to stand in an election, a non-governmental organisation organising an election education event, or a political party may access this fund and notify it in the Gazette.
The Electoral Commission will be required to consult with, and I quote, “persons and organisations that the commission considers appropriate, prior to creating the criteria or putting out notice.” Payments made by this fund to candidates or parties will not be treated as an electoral donation per the Electoral Act 1993. This will enable, for example, New Zealand Sign Language interpreters at candidate debates, political information distributed in Braille, and coverage of special transport costs incurred by disabilities. The bill also contains a trigger for the review of its own efficacy. Under clause 9, no later than three years after the commencement of this bill the Minister must review, or arrange for the review of, its operation.
In 2008, New Zealand joined dozens of other countries around the world in ratifying the UN Convention on the Rights of Persons with Disabilities. Article 29 of the convention guarantees that signatory countries will, and I quote, “ensure that persons with disabilities can effectively and fully participate in political and public life on an equal basis with others, directly or through freely chosen representatives, including the right and opportunity for persons with disabilities to vote and to be elected” and “promote actively an environment in which persons with disabilities can effectively and fully participate in the conduct of public affairs, without discrimination and on an equal basis with others,”.
An equitable playing field creates the foundation for a robust and representative democracy. This bill contributes to ensuring that we level that playing field. It targets all levels of democratic engagement from information sharing through to voting and potentially standing as a candidate. Of course, not every person with a disability wants to be a politician; indeed, not every person wants to be a politician. In New Zealand, we do not coerce people to engage in politics, but I believe that all of us in this House believe that it should never be hard to engage with politics, should we want to.
Working in the lead-up to this first reading of this bill, I’ve seen the best side of our democracy. I want to thank the Minister for Disability Issues, the Hon Carmel Sepuloni, and Ruth Dyson for their ongoing support for the principles laid out in this legislation. I want to thank the Hon Nick Smith and Dr Shane Reti for constructive input and a collaborative spirit. Thank you to the Hon Tracey Martin for your commitment to improving outcomes for disabled peoples. So too, I want to thank David Seymour for his support. I want to acknowledge as well the Clerk’s Office for their immense and incredible mahi, working with my office and throughout Parliamentary Service and systems to ensure that this reading was as accessible as possible.
The fruits of this labour have demonstrated how accessibility is achievable when it is a priority. How about we work to make it a normality? At present, our Parliament is not designed to be a House of Representatives. That’s not a dig at any of the hard-working MPs that make up either side of these benches, but it’s a quick observation of the many little things many of us here take for granted: seemingly little things like not second-guessing the climbing of the stairs to our seats, or seeing the Speaker as they rise to their feet to call order, or hearing and indeed jeering at each other’s speeches.
This bill is not drafted perfectly and it will not be able to address or fix all of the inequities, but it is a crucial and overdue move in the right direction and I look forward to addressing the questions and concerns raised by other members of this House in my final speech in reply.
Whether we identify with it or not, all of us will find ourselves disabled at some point in our lives, whether by our environment or a service that never considered our interaction with it, or as we age and our senses naturally deteriorate, or by way of accident or otherwise. The Election Access Fund Bill is a step towards consciously creating a more equitable, democratic, and empathetic playbook for how we as New Zealanders engage in not just politics but society at large. I commend this bill to the House. Ngā mihi.
Hon Dr NICK SMITH (National—Nelson): National will be supporting the first reading of the Election Access Fund Bill, and we wish to acknowledge the work of both Chlöe Swarbrick and Mojo Mathers in bringing it to the House. The bill is about making our democracy and Parliament more accessible for people with disabilities by providing extra support that is available both for voters but also for candidates that may have a disability. National wants our democracy to be as vibrant and representative as possible while also ensuring that our elections are fair and that we have the highest standards of integrity around our voting systems.
Now, New Zealand, in my view, can be very proud of its rich democratic heritage. We are one of the oldest continuous parliaments in the world, starting back in 1854, albeit initially with only men owning property being able to vote. The Māori seats were added in 1867. In 1879, the property-owning requirement was removed, and it’s very well-known that we were the first country in the world to provide women with the vote, in 1893. Further changes were made in lowering the age from 21, firstly, to 20, and then to 18 in the 1960s and 1970s. This bill is a logical progression of being a leader in ensuring Parliament is as representative as possible, albeit it is focused on the practical barriers rather than the legal barriers to participation.
I also want to acknowledge the efforts that the Electoral Commission has already made to try and be as inclusive as possible of people with disabilities. For instance, I note that our current electoral system provides a dictation service for those people who, through either being blind or having another disability, are not able to mark the voting paper. I also note that in the 2017 electoral review, the level of satisfaction from people with disabilities grew from 88 percent in the 2014 election, to 92 percent of people with disabilities being satisfied with the electoral system at our last election. Ninety-two percent is not 100 percent—that does not mean that we should not strive to be better.
The areas we need to improve are not just the mechanical processes of how one might vote but, actually, the electoral system in a broader sense of how people are able to participate. I know from my own experience of being a candidate in 10 elections that some organisations like the Deaf Association make special provision at their expense, of which they have limited resources, for candidates and for people with disabilities. But they have repeatedly expressed to me a desire for—rather than having a separate meeting over there of people with disabilities—there actually being a sign language interpreter at the general candidates’ meetings so that people can be fully inclusive. And that’s valuable not just for the capacity of those people with a disability being able to participate but also in making sure that we don’t sort of cubby hole away those issues that are important to people with disabilities—that they’re actually issues for all voters as we go through that electoral and that contest process.
Now, there are important issues of detail with this bill that National will want to scrutinise. We are interested in the data around the levels of participation of people with different types of disabilities because we want the funding to be focused on those areas where the participation levels are poor. Actually, by international standards, New Zealand has a very high level of participation in elections, but here is an opportunity to improve it further.
We also want to ensure that any allocation of additional resources is done in a politically neutral way and that we are going to be neither advantaging nor disadvantaging any particular candidates or parties. There has been a history, not just in New Zealand but overseas, of public taxpayer resources being used to screw the scrum politically, and while we want to provide the support for people with disabilities, we also want to ensure that it is being done with integrity.
National has a high level of confidence in the political neutrality of the Electoral Commission, and the bill properly provides for that. We would prefer that as much of the funding as possible is going to non-political organisations, whether it be the Blind Foundation, whether it be the Deaf Association, or whether it be a body representing people with disabilities of all sorts, than have it necessarily going to political parties, which we think has a greater level of risk.
To be clear, National has historically not supported, and continues to not support, State funding of political parties. Political parties should stand or fall on their merits in being able to generate support. But we do support State funding for ensuring that people with disabilities are able to fully participate in our electoral process.
I want to conclude by underlining National’s broader philosophy around people with disabilities, and I want to acknowledge the work of both my colleagues Nicky Wagner and Shane Reti in championing the importance of recognising and providing for the rights of people with disabilities. Their focus has been about ensuring every arm of Government recognises and supports an inclusive approach for people with disabilities.
National believes that we need to focus more on what people can do, rather than focusing on those things people cannot do. We also want, as much as possible, to empower people with disabilities to be able to make the choices for themselves, rather than have the temptation by Government agencies to use the funding support to control people’s lives. People with disabilities have as much right to make choices about their lives as others do. If we look at the recent Commonwealth Games, where there was the inclusive approach to people with disabilities, it is in the same vein as the philosophy behind this bill, and, yes, this Parliament will need to make some further changes to be more accommodating of those people with disabilities.
There is one issue I have with the mover of the motion on the bill in suggesting this bill should go to the Government and Administration Committee. National would prefer it went to the Justice Committee. The Justice Committee is where all other electoral bills go. The Justice Committee is where we have responsibility for doing the review of the 2017 election. We regularly have engagement with the Electoral Commission. We’ve got other electoral bills. We think that would be more appropriate, and I’d ask the member to consider whether the Justice Committee would be the more appropriate committee. It’s my intention to move an amendment to the mover’s motion to ensure that’s where it goes.
Again, I compliment the mover of the bill, Mojo Mathers, and the work that has gone into this bill. National supports the concept. We will want to scrutinise the bill further, as I have indicated, but it is a further step along the road of ensuring this Parliament and our democracy is as inclusive as it possibly can be.
Hon CARMEL SEPULONI (Minister for Disability Issues): [Uses New Zealand Sign Language] Kia ora koutou. I’d like to welcome individuals and groups from the disabled community who are here on the precinct today, and I’d like to acknowledge, in particular, Access Alliance, a coalition of disabled peoples’ organisations who are working hard to increase accessibility legislation and create a more inclusive Aotearoa. I’d also like to acknowledge our Disability Rights Commissioner, Paula Tesoriero, and also I’d like to say, “Kia ora. Thank you.” to former MP Mojo Mathers, who I know has worked so hard to get this piece of legislation started.
I commend the Green Party and member Chlöe Swarbrick for carrying this bill forward into this Parliament. This bill is about furthering the participation of disabled people in our general elections, and we absolutely support this important work. The Government is working to build a truly inclusive society and supporting disabled people to live their lives to their fullest potential. Removing disabling barriers is pivotal to achieving that.
Disabled people make up a large proportion of the New Zealand population. The last disability survey in 2013 found that 24 percent of New Zealanders were identified as disabled. That proportion is higher for Māori at 26 percent. But you would not know that from looking around the House of Representatives. While there have been steady gains over the year in members of Parliament increasingly looking like the people we represent, particularly with more women, Māori, and Pacific people, there has yet to be similar representation for disabled people.
I know it’s not from lack of interest in disabled people wanting to stand. The reality is that New Zealand is still far from being a non-disabling society. Under the New Zealand disability strategy, we are working towards a New Zealand where disabled people have an equal opportunity to achieve their goals and aspirations, and all of New Zealand works together to make this happen.
A part of this is ensuring that disabled people can exercise their full rights as citizens. Not only is this about including the experiences and voices of the disability community, it’s also about representation and leadership. “Nothing about us without us.” is the slogan that underpins our approach to addressing disability issues. We need more disabled leaders to be involved in policy development and in making decisions about New Zealand’s future.
There is also, currently, a huge range of skills, expertise, and experience in the disability community that is being underutilised. This is our loss.
This bill helps create a pathway for greater inclusion of disabled people in our elections and in leadership roles by proposing a dedicated fund administered by the Electoral Commission to reduce and remove access and communication barriers that presently arise when disabled people seek to participate in general elections.
I applaud an inclusion in the bill of a review of its operation and effectiveness. This will give the Government an opportunity to consider how well the fund is removing barriers to political participation and whether other measures might be needed.
As the Minister for Disability Issues, my goal is that one day we won’t need these targeted supports because there won’t be barriers to participation in society. However, until we have a truly inclusive New Zealand, we need to put these specialist supports in place to make this happen. Our Prime Minister has already shown how we can take these steps to becoming more inclusive by having sign language interpreters at post-Cabinet media briefings.
While the fund proposed in this bill cannot alone solve the problem of our lack of disabled MPs, it is an important part of making New Zealand a non-disabling place. This bill sends a signal that disabled people of all ages can share in aspirations to become members of Parliament and have the honour and privilege to represent communities and to serve in Government.
I look forward to and encourage consideration by the select committee on this bill and, again, I commend the member Chlöe Swarbrick for bringing it to the House.
Dr SHANE RETI (National—Whangarei): Thank you, Madam Assistant Speaker. It’s a pleasure to stand and speak as the National Party disability spokesperson on this bill, which is a very good bill. I’d like to commend Chlöe and Mojo for having it in front of us today and lead off with the statement that I and we are strong supporters of disabled voters.
I want to talk to the three initiatives within the bill and then actually provide some background, some of which the select committee, hopefully, will be able to fill in. The three funding initiatives within the bill are, first of all, funding for disabled candidates to stand—I sort of envisage sign language interpreters as an example. Yep, that makes sense. Secondly, for not-for-profits to be able to fund meetings, such as meet the candidates. Yep, that makes sense also. And the third is for political parties to be able to access the needs of their members. This may need a bit more work in select committee—not clear that that arm clearly ties to elections. It sits within the election bill and within the title, but we would need just some affirmation that it’s not meaning—or maybe it does—the general needs of disabled people within a party. I’m pretty certain this relates to election requirements, and that would be a good thing.
So if we look at the recent 2017 election, let’s look how disabled voters fared. First of all, the commission had 1,649 fully accessible voting places, and 854 were assisted voting places. As my colleague Nick Smith said, after the election, a survey conducted by the commission showed that 92 percent of disabled voters were happy or very happy with the overall process. The dictation voting—I’ll come to that in the Access 2020 strategy, but it turns out 586 disabled people used the dictation voting system.
Now, the overall cost of the 2017 election was $38,204,000. Of that, the disabled budget for 2017 was $343,826. That is 0.9 percent of the total election budget. I’ll be very interested to see, through select committee, how that compares internationally and how that compares per capita as well. Kind of interesting—of that disabled budget, half of that was actually on trestle tables for the tabletop voting. You might’ve thought it was dictation voting but, no, it was actually the trestle tables.
Now, there are learnings from overseas that we should take into this bill—that we should take into account. More specifically, in 2012, the UK had exactly this sort of fund, called the Access to Elected Office Fund. It ran from 2012 and it was then closed in 2016. The fund was for a grant of between £250 and £40,000 if you were disabled and standing for election across UK Parliaments—even mayoral elections, police, and crime commissioners. It was kind of interesting.
The fund was for disability-related costs. It did not cover general campaigning costs, like leaflets or living costs. What it did cover was transport needs, sign language interpreters, and extra travel and accommodation if you needed a carer. Eligibility for the fund was if you were clearly standing for election and you had a letter from your doctor proving disability. Their criteria also had that you could prove that you were involved or interested in civic, community, or relevant activities and your application was supported by a member of your political party.
I think we should explore why the fund closed down. I actually tried to call the Minister in charge—but wasn’t able to get to him or her—and find out what their learnings were, and I think we should take those learnings on board. Let’s not reinvent the wheel. What was successful? What wasn’t successful?
I’d also note that in the past 18 months, the UN special rapporteur on disabilities told the UK Government, “The UK Government should reopen the [Access to Elected Office] fund”. So, clearly, and not surprisingly, it has UN support.
I was going to talk to the Electoral Commission’s Access 2020 disability strategy, but I think we may keep that for another time. So I’ll just conclude by noting two points. First of all, some of the questions we want to ask are: who will manage the fund? Presumably, the Electoral Commission—we would support that. What is the size of the fund? I mentioned political party access—that third arm to this. Surely, it relates to elections. Eligibility criteria—eligible for what? And what are the learnings from overseas?
Can I also note a petition that was presented in the House just last week from Kim Robinson, a constituent of mine in Whangarei. His petition reads “That the House of Representatives note that 356 people have signed an online petition requesting the House guarantee the right of Deaf or Hard of Hearing voters and candidates to barrier-free elections by 2020 by updating the Electoral Act 1993”. So, clearly, there’s another piece of work making its way through the House as well. I think this should be taken into account, but I’m happy to see this bill in select committee. Thank you.
Hon TRACEY MARTIN (Minister for Children): Kia ora, Madam Assistant Speaker. Thank you very much. I rise on behalf of New Zealand First to support the bill to select committee. I want to acknowledge Mojo Mathers. I was here in 2012. I remember the discussion around the funding issue, and how unprepared this Parliament was at that time for Ms Mathers’ requirements.
I remember the caucus meeting that we had, because it was quite an interesting period of time. It was quite contentious. I remember the caucus meeting that we had, and normally we’re not allowed to breach conversations in caucus, but I remember the Rt Hon Winston Peters putting forward a solution and asking caucus whether we would support that solution. Then he went public with that announcement.
I quote from an article talking about—I believe it’s the New Zealand Herald, but it was certainly an article from 15 February 2012—the Rt Hon Winston Peters: “NZ First leader Winston Peters has offered to contribute [their] staff funding towards the cost of [the] electronic note-taking. ‘It is [unbelievable] that the Parliamentary Service insists on a working environment free from discrimination on the basis of disability yet a deaf MP is refused funding to enable her to do her job.’ ” I know that at the end of the day a satisfactory arrangement was reached with the Speaker’s office, and the $30,000, I believe, that was actually requested from Ms Mathers’ budget that New Zealand First offered to help supplement, was not required. So that was a good thing that that was the outcome.
I do draw attention to this particular paragraph in the explanatory note, which does talk to the three legs of the bill: “this bill will establish an Election Access Fund, to be administered by the Electoral Commission.”—so the answer is that it will be administered by the Electoral Commission—“The Fund may be used by any disabled candidate to cover disability-related costs of standing in a general election. These costs … include,”—and it goes on to list a few.
“The Fund may also be used by any not-for-profit body running an election education event”—we would suggest that the Electoral Commission should already be funding fully accessible information, and that there should not be a requirement for a not-for-profit to have to go and do the work that the Electoral Commission is actually charged with, to make sure that all New Zealanders have access to their democracy. So that is a particular point that we would like to discuss at select committee.
“Finally, the Fund may be used by any registered political party to support the access needs of any of their members …”. I draw attention to the fact that New Zealand First was one of the first political parties to select a blind candidate, back in the late 1990s. We, as a party, wrapped our support around our candidate. We had selected that person as the best person to stand in that electorate—I believe it was Manurewa. It was our responsibility to make sure that they understood that they were supported not only figuratively by the party but physically and literally by our party. That was our job. So we have some difficulty with the fact that a political party would then go and seek some other funding, when there is a responsibility for them to provide that support to their candidates—another thing we would want to talk about.
So, in closing, because these are five-minute calls, this is a House of Representatives that has already been acknowledged. Actually, if you can’t look down into this House and see somebody who represents your experiences, your views, and your values, then it’s not working properly. So we support—absolutely support—the intent, but we’d like to have that wider conversation about a requirement, perhaps a template, when candidates are out there campaigning. All stages should have ramps for any candidate that is in a wheelchair. The lecterns are at a level where if you have a candidate in a wheelchair, they would not be seen or they would have to go to one side.
There are small little things, when we just think about our fellow citizens and those with challenges or different needs than some of us. I raise these also as the Minister for Seniors. Seniors sometimes face multiple discrimination, which is ageism as well as accessibility issues. I raise it as the Associate Minister of Education with responsibility for disability and learning support. This is an opportunity for this House to lead the way with a change of attitude towards those of our citizens who have some other challenges than the challenges that I have—because, believe me, I’ve got a few, but they just don’t happen to necessarily be physically obvious. So more power to you.
We hope to have these conversations in select committee. You see we have some concerns, but we don’t think they’re insurmountable, so we look forward to the conversation going forward.
Hon MARK MITCHELL (National—Rodney): Thank you, Madam Deputy Speaker. Look, it’s a pleasure to take a call on this, the Election Access Fund Bill. Can I acknowledge the sponsor of the bill, Chlöe Swarbrick; I look forward to working with her on this bill. Can I also please acknowledge, of course, the presence of Mojo Mathers. It’s a real pleasure to see you back in the House. In my first term here in Parliament, I sat on a select committee with Mojo, and I witnessed—
Hon Ruth Dyson: Which committee, Mark?
Hon MARK MITCHELL: I want to acknowledge Ruth Dyson as well. I’m actually going to come to a point really shortly around what we did with captioning. But can I just acknowledge that sitting on the committee with you gave me a true and a real appreciation of the challenges that you faced, and the type of support that you needed to be able to make the contribution that you wanted to on the committee. And it was an important contribution.
I’d just like to acknowledge the Rt Hon Dr Lockwood Smith, because I know that he was a huge supporter and very sensitive to those needs, and he made sure that that support was provided. So it’s great to see you here today in the House with us. Can I acknowledge Ruth Dyson, because, you know, when I came to Parliament as a new MP, honestly I wasn’t really that aware of the issues that people that have challenges around disabilities had, or what we could do to make their lives easier.
One of the first projects that I really got involved in and got interested in and passionate about was captioning. I was invited by Mojo to a movie night up in Auckland. I met a young lady there—captioning was making a huge difference to her in her life. Then, of course, you started a campaign, and Ruth was a big supporter of that too, in terms of making sure that captioning was even more prevalent, more available here in our own Parliament, and more broadly in New Zealand with that campaign as well. So can I acknowledge both of you for that.
This is a good bill that we are supporting, obviously, at the first reading. We do want to get it into select committee, because we do feel like there’s some very important issues that need to be addressed. I guess probably one of them, primarily, is around the funding and where is that funding going to sit, and who’s going to be responsible for overseeing it, because of course when you’re using taxpayers’ money—New Zealand as a country and a nation, we’re proud of the fact that political parties are responsible for fund-raising themselves and raising their own funds. So we just want to be careful around where that money’s going to sit, who’s going to have oversight on it, and how it’s going to be dispersed.
It’s got to be fair, because, for example, the National Party—we’re a mass membership party, and we have a wide, diverse group of people from different cultures and ethnic backgrounds, so you could argue that you’d have translation services and things like that. If the funding’s going to be attached to or viewed in terms of membership or the size of parties, then it could become disparate very quickly. So I think, in terms of fairness, this is going to be a good debate that can be had on the select committee, in terms of finding out how that’s going to work and how the funding’s actually going to be applied.
But, look, it’s a good bill, and there are definitely going to be things that I want to be debated and discussed around it, but I think the spirit of it’s very good. I look forward to it passing through the select committee process and coming back into the House. Thank you, Madam Assistant Speaker.
Hon RUTH DYSON (Labour—Port Hills): It’s an absolute delight to participate in this debate. Can I begin by acknowledging my friend and former colleague Mojo Mathers. I’m delighted that she is here for the reading of this bill. Mojo had a huge impact on our Parliament—continues to do so—and drove many of the changes that have made our Parliament a better place for all New Zealanders. I want to acknowledge Chlöe Swarbrick as well. The luck of newbies in getting members’ bills drawn is frustrating for those of us who haven’t had enough drawn. But it’s a fabulous bill for the member to champion. She has seen the support that this Parliament has put behind it, and we don’t often get that—particularly with members’ bills—so that’s a fantastic contribution.
I want to acknowledge the other speakers. Mark Mitchell, Mojo, and I were on a select committee together which did things that maybe had been a little outside the mandate of the committee, but it was the Government Administration Committee and because we covered internal affairs, we felt that we had a mandate to do pretty well anything. During the term before last, we had an inquiry into the accessibility of Parliament. We discovered, even though we sort of knew it at the beginning of the inquiry—and by the end of the inquiry we were absolutely convinced—that our Parliament wasn’t accessible, our democracy wasn’t accessible, and there were a lot of things that needed to be changed so that we could say we actually are a House of Representatives.
There was a long list of actions from that inquiry. As a result, we see and celebrate the fact that we have New Zealand Sign Language interpretation now, as of yesterday, every question time in Parliament. That’s another step forward. We’re not there yet by any means, but I was so pleased to be part of making those recommendations to Parliament, having them accepted, and continuing the progress that we need to make to, as I say, truly be able to call ourselves a House of Representatives.
This bill, the Election Access Fund Bill, is another very significant step in that process. We know, for any person, that standing for a position, whether it’s a community board or a council, or a mayor or a member of Parliament, it costs money. But if you have money, that shouldn’t make you the best candidate. We should have a level playing field as much as possible, so that anybody, any New Zealander, can stand for an elected position. This bill will remove one of the barriers, one of the disabilities that people have, that we can remove, so there’s no barrier.
I think it’s a great step forward. Finance is not the only thing, but once the first step is taken, once we have—as the Hon Tracey Martin pointed out, New Zealand First some years ago had our first blind candidate. I have to say I’ve never voted New Zealand First.
Darroch Ball: Ha, ha!
Hon RUTH DYSON: I know; I know it will come as a shock to you. But he was an outstanding candidate and would have made a fine contribution in our Parliament, had he been elected here. I hope that this bill enables more people like him and like Mojo and like the thousands of other New Zealanders who would enrich the thinking and experience of our Parliament and make our decisions better.
Since MMP was introduced in 1996, we have seen a huge expansion in the representation in our Parliament. If you look at the photos in our corridors, you can see how poor the representation was, despite all those fine Pākehā men—I’m sure they all were. But you can see, as the photos progress, how much broader our representation has been. But we are still lacking in having people with lived experience of disability, as members of Parliament.
It’s just such a delight to see this. I’m going to sub on to the select committee, I’m sure, because I will enjoy the submissions so much. I want many submissions to this bill, so that people can feel the empowerment that it will offer, and so that members of Parliament will understand that we will be a better place as a result of having the better representation that this bill will enable. So thank you, Chlöe Swarbrick; fantastic work. I look forward to the progress of the bill.
Hon MAGGIE BARRY (National—North Shore): Thank you, Madam Assistant Speaker. I rise with pleasure to speak to the Election Access Fund Bill at its first reading, in the name of Chlöe Swarbrick. I also acknowledge Mojo Mathers, who was the architect of this bill. I think that as a country—as other speakers have mentioned—that has one in four New Zealanders who are disabled, this is a very important and, I would say, overdue piece of legislation.
The bill will establish a contestable fund, to be administered by the Electoral Commission and used by any disabled candidate to cover the disability-related costs of standing in a general election. That is an eminently sensible thing to do. It is something that we need to do. As a House of Representatives, we need to represent all aspects of New Zealand society and all people, and we are the better for it. In debates in this House, if we can understand better the barriers that exist, the problems that occur, and therefore, as legislators, find ways through this minefield, then I think it is a very important element of informing and making our debates and therefore our legislation so much better and better informed.
National has always been very confident about wanting to support people with disabilities, and I commend the Hon Nicky Wagner, as a former Minister for Disability Issues, who with her Enabling Good Lives I think has done some tremendous things—a vision and a set of principles for transforming the cross-agency disability support system so that, therefore, people with disabilities have greater choice and control over their supports and their own lives. I think it says it all: Enabling Good Lives. This is part of that—not only a good life but also a significant and meaningful one in terms of a contribution that people with disabilities can make to lawmaking in New Zealand.
National fully supports increasing access to electoral processes for disabled people because we want them to have that strong voice. We are of course, as other speakers on this side of the House have indicated, somewhat uneasy and not inclined to support State funding for political parties. We’re very much of the view that political parties should be able to attract their own support. By helping them and financing them, it takes away some of what we consider perhaps the grassroots momentum that propels people into this place and under the political banners. So I think that will be something that we will examine very closely if this bill gets through to select committee, and we are supporting it to do so.
I guess the main provisions to go through that—with clause 6, enabling the Electoral Commission to establish a contestable fund. It is very interesting to tease out what elements of that contestable fund are accessible and available, and where you draw the line. I think by discussing the broad range of prospects and possibilities, it’s also perhaps important to discuss what the parameters might be. Would the Electoral Commission, for example, at some point feel it might be appropriate to assist in childcare facilities or transport mechanisms for getting people into political meetings or into places where they might be standing for political life? I guess these are the kinds of things—overcoming disability-related barriers is one thing, but where do those limits come in?
Clause 7 of the bill requires the commission to determine that criteria for eligibility, and that includes the individuals standing as candidates. I think that anybody—and we all in this House have stood as candidates. We know it’s a gruelling, rigorous, and robust process, and I think that people with disabilities need and deserve to have some assistance to get them to where they need to be, to mount a realistic challenge to be considered as a candidate. Non-profits organising election education events is also, I think, a very good thing. But it will be interesting to tease it out at select committee.
Clause 8—grants not being counted as a donation—I think that probably does need to be explicit. Clause 9, requiring the Minister—and we’re assuming here it’s the Minister of Justice, although it has been suggested by its sponsoring member to go to the Governance and Administration Committee, and there may be more developments on that this afternoon. But if it was the Minister of Justice—to periodically review the Act to consider the fund’s impact on participation and access, and whether any other changes are needed, and whether it has to come back into primary legislation before the House or if there are other mechanisms and other devices for ensuring that disabled people have proper access to this House of Representatives. Therefore, I support the progress of this bill through to select committee. Thank you, Madam Assistant Speaker.
ASSISTANT SPEAKER (Poto Williams): Who’s taking the next call?
Chris Bishop: Oh, well, I’ll take it.
ASSISTANT SPEAKER (Poto Williams): OK; I call Chris Bishop.
CHRIS BISHOP (National—Hutt South): Thank you very much. I thought there was going to be a Government member standing up, but it appears not. I’m not quite sure why that it is. But I’m looking forward to making this contribution, so I’ll make it.
I want to acknowledge Miss Swarbrick for bringing this bill forward, which of course—
Chlöe Swarbrick: Thank you, Chris.
CHRIS BISHOP: She’s saying thank you; I don’t quite know why—and of course former member Mojo Mathers. It’s great to see you here in the Chamber, Mojo. I also want to acknowledge the contributions made by members so far, particularly the Hon Ruth Dyson, who I think is going to sub into the committee. It’s not clear whether or not it’s going to be the Justice Committee or the Governance and Administration Committee, but I’m sure that Miss Dyson will sub in where she’ll make a very worthy contribution. It’s great to see the passion, actually, from members, particularly Mark Mitchell on our side of the House, for these issues.
I hope it actually does go to the Justice Committee, not only because I’m a member of that committee. I think it would be more appropriate because we’re about to kick off the review of the 2017 general election, and one of the issues we’ll be considering in that review is the accessibility of election-related materials, how easy it was to vote, and whether or not the dictation services that the Electoral Commission started rolling out in the last few elections have been adequate. That’s intimately tied up with what this bill’s trying to accomplish, so I think it’d be helpful to consider the bill at the same time.
Look, I think the intent of this bill is extremely worthy, and we need to do all we can to support increasing access for people with disabilities to participate and enjoy the electoral process. That’s their right, guaranteed in the New Zealand Bill of Rights Act, and that’s actually the right thing to do both from a moral point of view but also just from a democratic mandate point of view, which, of course, is why we’re all in this place.
I do want to sound a note of caution, though, which is that the traditional view of the National Party—although not necessarily, I think, of the Labour Party—is that parties should fund themselves; that we don’t support State funding of political parties for both principle and pragmatic reasons, which I won’t go into in this speech. But we hold quite firm to the idea that parties should fund-raise from their members and their supporters to run things like policy discussion meetings and to run things like branch AGMs and meetings where you talk about what you’re going to do in the next election, and how you’re going to campaign, and things like that.
All that should be funded from party supporters, and I sound a cautionary note about some of the things that this bill starts to talk about, which is that the contestable fund administered by the commission, funded by taxpayers, will be allowed to be accessed by people to allow them to participate within the party. So we are heading towards, essentially, State funding of political parties, but State funding for a particular group within political parties. It may be that that’s justified, and I think there are very strong arguments as to why that would be the case for people with disabilities, but you could equally mount strong arguments for people from different backgrounds who also find it difficult to access the democratic process. Members on this side of the House, in particular, have talked in their contributions about some of the groups that you could mount arguments for, and I think we’re going to have to tease that out at select committee. That’s one of the reasons why the National Party is supporting this bill to committee—to tease that out.
I think things like funding to cover the cost of standing in a general election with disability-related costs—I think that’s probably far more justifiable when it comes to spending taxpayers’ money. Likewise, funding for not-for-profit groups, which is one of the other purposes of the contestable fund—funding for not-for-profit groups to run education-related events. That’s actually quite in line with what the commission does already.
I was one who was opposed to the Electoral Commission funding the Vote Compass tools. I personally think that went too far, and I think that was funded in the 2014 election. But getting out the vote is of paramount importance, obviously, in a democracy, because the greater the percentage of the population that registers and then turns up to the polling booth, the more legitimate this place is—the more legitimate all of our mandates are to be here representing the people in this Parliament. So funding for groups to run events and to run seminars and things—we support that—
ASSISTANT SPEAKER (Poto Williams): I apologise to the member. Sorry, your time has expired.
VIRGINIA ANDERSEN (Labour): Thank you for the opportunity to speak on the Election Access Fund Bill, and I’d like to acknowledge Chlöe Swarbrick for bringing yet another great member’s bill to this House. I’d also like to acknowledge Mojo Mathers here today and all the work that she has done over the years to bring this piece of legislation to this House today. I acknowledge those in the gallery today as well, and their participation in hearing the first reading of this bill.
This bill is about furthering the participation of people in New Zealand society, and that’s a good thing for this House to be supporting. I’m proud to be part of a group that will be supporting this bill further to select committee, enabling people to live full lives and take full advantage of the opportunities that are available to us as New Zealanders. It is important that all those things are made equally available to everybody.
Specifically, this bill looks at enabling people with a disability to be a candidate in the general election, with the establishment of an Election Access Fund. The fund will be administered by the electoral body, by the Electoral Commission, and, specifically, it will enable any disabled candidate to cover disability-related costs of standing in a general election, in terms of having an interpreter or having access to being able to do that.
Can I just say, and pause at this time, that the importance of inclusion, and people having the ability to participate—I would just like to stop and acknowledge for a moment a champion within my own area by the name of Michael Grigg. Mike Grigg passed away this year, sadly. He was a tireless champion for those people with any disability to be fully included and have the ability to participate in New Zealand. He fought strong—with the Hutt City Council, with Government, with anyone who would take him on—to enable people to have rights. He was a frequent visitor to my office and I learnt a lot about the importance of inclusion from him.
So this Government is working to build a more inclusive New Zealand, and, by doing that, it’s important to look at all the areas where there can be improvements to how that works. In terms of employment: with equal opportunities in hiring practices—that is incredibly important—in education: ensuring that children coming through our education system have full access to learning sign language—students as well as teachers—in health: ensuring that the support and the implementation of the New Zealand Disability Strategy is fully implemented; and also through our housing projects that are going on right now to make sure that we are building houses that are accessible, and that those homes meet the needs of people.
In terms of my own experience, in terms of my own learning about the importance of this area, I’d have to say it was participating twice in a TriAbility Triathlon in Wainuiōmata, where able-bodied competitors competed alongside those people with disabilities. What it taught me was the importance for people who don’t have disabilities to be included in those areas so that we learn—so that we understand and learn the importance of everybody having access. Through having an electoral fund that would set up the ability for people to be included—I see that in a similar way: that by working together and by being side by side in our daily work, that enables a greater understanding by all New Zealanders of some of the difficulties that those with disabilities face on a daily basis.
I look forward to this bill coming to the Governance and Administration Committee, as I sit on that committee as deputy chair. I look forward to hearing all of the submissions, and how we can improve what we do right now. It is up to the community to come and talk to us and tell us how this bill can make the most of what it offers now. Thank you for the opportunity to speak, Madam Assistant Speaker, and I commend this bill to the House.
CHLÖE SWARBRICK (Green): Thank you, Madam Assistant Speaker. It is an absolute pleasure to rise after what I think has been a succession of the most pleasant speeches that I have ever been fortunate enough to hear in my six-odd months in this House. I want to thank all of the members for their very constructive and collaborative and creative contributions to the debate so far. It is with the utmost joy that I’m conscious of the fact that we’re going to pass this unanimously, so I just want to thank all of the members in this House for their participation in the process to get to that point.
I also, with just the five minutes that I have, point to and address the concerns that I felt were raised by a number of the different members, starting in particular with a point, mentioned by both the Hon Maggie Barry and Chris Bishop, that parties should fund themselves, particularly with regard to one of the three kind of funding points where the Electoral Commission would be able to allocate their funds—this Election Access Fund. On the point that parties should be able to fund themselves, currently it is the case that the Electoral Commission—and I’m sure all members in this House will be aware—provide a pool of funding for free broadcasting time for all political parties, and I just wanted to bring this to the members’ attention because that fund rose to the tune of $4.1 million this past election.
The reason that I wanted to bring that quantum to mind is for the sake of contrasting it with a similar fund, which was similar to the Election Access Fund, which the United Kingdom had available for both its local and general election periods of 2012 to 2014, which approved 57 grants of the 50 applicants—the average value being about ₤4,500, which cost around ₤244,000 in total. That’s the equivalent of less than half a million New Zealand dollars, for a population far more than 16 times our size. If we were to extrapolate that out, we’re talking there about the United Kingdom, who has 16 times our population, utilising a similar fund which costs the equivalent of half a million dollars. So if we’re talking about State funding there, I’d just like to put that point in context.
With regard to the comments about select committee, particularly the willingness to be open to the submissions of the general public, I would absolutely invite all members of the public—both those who have concerns and ideas about how to improve it, and those with lived experience, in particular of attempting to navigate our political and democratic system—to have their thoughts be heard and, in turn, provide this Parliament and the select committee with an opportunity to improve this bill.
I’d also like to touch on the points made by the Hon Dr Nick Smith around these not being legal barriers but, indeed, financial or political barriers. That’s exactly right to the heart of what this bill is seeking to address: to not, in the words of the Hon Carmel Sepuloni, disable people with a lack of access to the funding that they require to jump over those barriers which others simply do not face.
Perhaps the most pertinent point, as raised by both, actually, members of the Government benches and members of the Opposition is around how this fund is actually going to be facilitated, the eligibility criteria, and the fact that political parties are one of the three groups which may apply for this funding pot. On that point, I would just refer back to the critical nature of that select committee process and the fact that I am absolutely willing to be upfront about the fact that the bill is not perfect in its current form. I’m absolutely keen to work across the House and ensure that we collaborate to tighten it up so that we can continue to progress in such a collegial and positive manner to ensure that we end up with a more robust representative democracy at the end of the day. Thank you very much.
Bill read a first time.
A party vote was called for on the question, That the Election Access Fund Bill be referred to the Governance and Administration Committee.
Ayes 63
New Zealand Labour 46; New Zealand First 9; Green Party 8.
Noes 56
New Zealand National 55; ACT New Zealand 1.
Bill referred to the Governance and Administration Committee.
Bills
Farm Debt Mediation Bill
First Reading
MARK PATTERSON (NZ First) on behalf of Darroch Ball: I move, That the Farm Debt Mediation Bill be now read a first time. I nominate the Economic Development, Science and Innovation Committee to consider this bill.
Before I begin, can I please thank the House for yesterday granting leave for this bill to be introduced. I especially thank the Hon Gerry Brownlee, who last week indicated that the National Party was willing to explore farm debt mediation. I would like to think the National Party is a party that has previously been viewed as supportive of farmers, and I hope that they will join us in supporting this bill.
This bill provides more protection, a pause in proceedings, a cooling-down period as a firewall to help embattled farmers in an unbalanced power relationship. In 1999, when former New Zealand First MP Doug Woolerton got a farm debt mediation bill through the first reading, agricultural debt stood at $11.7 billion. In 2015, when the Hon Ron Mark had a version of this bill in the ballot, farm debt stood at $54 billion. Today, according to the Reserve Bank, agricultural debt stands at $60.7 billion.
Of course, debt is not just a rural issue—household debt to March stands at $260 billion. The reason why we stress rural debt is because it has unique features. Aside from being large, rural debt is concentrated in relatively few hands. Debt is also intergenerational by nature and features heavily in farm succession, subsequently underpinning the cornerstone of New Zealand agriculture, the family farm.
There is another vital dimension in the fact that the farm is also the family home. Farms aren’t like an urban store that can simply close the doors and put the closed sign up. In these exceptional circumstances, animal welfare is a complicating factor. Cows still need milking. Sheep still need to be fed. This bill is a circuit-breaker that allows those critical animal welfare issues to be considered, and best practice to be observed.
Of course, receiverships also impact farm workers, sharemilkers, and contractors and have a flow-on effect to the wider community. Should agricultural debt go bad, it has the potential to start a domino effect that will cascade through the wider economy. This is all interconnected. The Reserve Bank consistently lists the level of farm debt as a risk factor in New Zealand’s financial stability.
Recently, I sat with a family who had lost their farm in a brutal receivership, a farm that had been in their family for 150 years. Their story was one of seeking to grow their business to accommodate the aspirations of their three sons. Through extenuating circumstances, their situation led to financial difficulties. Yes, this is normal business risk. We don’t seek this bill to mitigate against genuine commercial liability. But what that family, and several others, have outlined is a process where a series of decisions that are made under haste and duress have soon spiralled out of control, ultimately left in the hands of unscrupulous secondary lenders. Farmers will do almost anything to retain control of their family farm. Unfortunately, this does not appear to be an isolated case. This bill may well have made a difference to them, and we hope it will make a difference to many more farming families in the future.
We are in the midst of the biggest biosecurity outbreak in New Zealand history. While we don’t know the eventual extent of that outcome, this bill gives another layer of certainty in uncertain times. While the M. bovis outbreak provides immediate focus, the long-term overarching goal of this bill is to provide a more orderly mediation process. The halving of the milksolids price in the 2015 and 2016 seasons shows just how vulnerable we are to market volatility. The recent case—the cases of mis-selling of interest rate swap products—is also another case in point.
Dairy farm debt stands at $40.9 billion according to the Reserve Bank. DairyNZ’s 2016-17 economic survey puts the average farm-to-loan ratio at 49.4 percent. Term liabilities expressed as per kilogram of milksolids sits at 25 percent. Share milkers’ debt-to-asset ratio stood at 53.6 percent and term liabilities at $4.05 per kilogram. Sheep and beef farmers, according to Beef and Lamb’s mid-season update, have debt of $13.6 billion. Even horticulture has debt of $3.8 billion, and we recall the recent Psa outbreak that shows just how vulnerable they are, as well.
We also know that farmers are particularly vulnerable to mental health issues because of isolation. Last year saw a jump in the number of farmers that took their own lives, an increase to 22 from 18 the year before. Financial stress in pressured circumstances is potentially a significant trigger. There is real human cost as well as the financial cost in not putting mediation as a prerequisite before receivership.
This bill is not to bail people out for poor business decisions. We can, however, ensure the banks play fair, and we note the Australian ones are currently under the regulatory microscope across the Tasman. This bill provides some protection, helping to halt predatory and unsavoury lending, forced receiverships, and making money lenders accountable. I note with interest that Australia has recently enacted similar legislation.
As to the bill itself, clause 4 proposes a new Part 2 to the Receiverships Act. With “agricultural debt”, we mean debt from commercial farms, forests, plantations, orchards, vineyards, fisheries, as well as agriculture. The new Part 2 represents a cooling-down period, a pause, that could see creditors reach an accommodation over debt that can sometimes rush headlong into an emotional rush into receivership.
New section 44, inserted by clause 4, means that farmers are given notice that a creditor wishes to appoint a receiver. They have a right to nominate a mediator within 10 business days from a list of accredited persons drawn from the Arbitrators’ and Mediators’ Institute of New Zealand. The most appropriate administrator for this scheme is the Banking Ombudsman, given that all the main banks and their subsidiaries are members of this scheme, one that is funded by way of a levy. It is a good model, and the bill also enables new section 45 as a fair cost-recovery from any lender, whether they are a member of the scheme or not.
While the ombudsman scheme and codes that operate are good, there is an inadequate compensation cap of just $200,000. This is something Federated Farmers have highlighted and New Zealand First agrees with. That is why section 45 also removes the compensation cap, to make compensation open-ended, as it ought to be. This is important because, as the mis-selling of the interest rate credit swaps showed, financial loss is often much greater than $200,000.
As detailed in new section 46, lenders cannot nominate a mediator but must either accept or reject a mediator nominated by the farmer. Where creditors reject the farmer’s nominated mediator, there is a further process, but default resides with the Banking Ombudsman to appoint a mediator on the farmer’s behalf.
New section 47 of the bill makes it clear that the function of the mediator is to assist the farmer and creditor to arrive at an agreement for current arrangements and for future conduct of financial relations between them. Just doing this requires the lenders to ensure that they have dotted the i’s and crossed the t’s.
New section 48 requires that mediation sessions are conducted with little formality and technicality, and with as much expedition as possible. This is a positive development.
New section 49 reinforces the confidential nature of mediation, while new section 50 prohibits disclosure of information.
New section 51 is about ensuring that mediation is between the affected farmer and the creditors unless there is a compelling reason why an agent should speak for the farmer.
New section 52, importantly, protects the mediator from any liability, while new section 53 stipulates that the summary of mediation must be published to affected parties one business day after mediation. Only after 10 working days following a mediated summary of mediation can a receivership process commence.
As you can see, this bill is about correcting power imbalances that exist between creditors and individual farmers who are under deep financial stress. It, importantly, removes current compensation caps from the Banking Ombudsman scheme, proven by the Commerce Commission investigation into the mis-selling of the interest rate swaps. This bill conveys an important signal to rural New Zealand at a time of great uncertainty and also to the financial institutions. I hope that the whole House will see merit in this and support it through to the select committee, where we can make further changes if required. Thank you.
Hon GERRY BROWNLEE (National—Ilam): This bill most certainly needs a huge amount of attention from a select committee, because in its current state it will do very little of what the previous speaker, Mark Patterson, has claimed it might, and I want to explain why that is.
Firstly, we have supported it strongly to get to this stage in the House, and we’ll support it going to a select committee, and we’ll engage at that select committee to try and get a bill that is more reasonable for the House. But we make no commitments on the bill as it’s written. It may better be named as an amendment bill to the Receiverships Act 1993, because, in fact, all it does is put one step in front of the moment that the receivership is enacted, and at that point it is too late. If someone has got so far into debt, so far down the track of not being able to put together a solvent package that’s going to see them successfully farm their way out of their difficulties, it’s too late. So for the bill, while it does set out a proposal for how mediation might take place, a select committee will need to consider exactly where that moment might be triggered and how it might be triggered.
I was a little alarmed to hear about the cases that the member who just spoke previously raised—particularly his suggestion that there was a family caught by, effectively, mezzanine financing all their way through. That would tend to tell me that there was some advice that might have been taken earlier that might have helped them. I’m not being critical of that family. I understand the stress they’ll have gone through, but we can’t pretend that this bill is an answer to that sort of problem.
I think it’s also worth noting the big connection between the productivity of a farming property, the debt level on that property, and the equity that’s held in that property. And, when you hear the member, previously, talking about the $60 billion worth of agricultural debt in this country, that may not be the problem that the figure itself might suggest. If, in fact, that represents a reasonable percentage of the 100 percent equity in those farming properties and that equity is backed by a production percentage as well, then that’s just the sort of thing you would expect to happen in a dynamic and growing economy. It is not necessarily a problem.
People will choose to invest more and more in their farms, and if that proposition isn’t accepted, then look at somewhere like Marlborough, where, once upon a time, not so long ago, perhaps two decades ago—which might seem like a long time to some younger people in this House—you’d be lucky to get around about $30 an acre for sheep farming activities. But the huge investment that went into converting some of those properties from either sheep farms or, in many cases, orchards up to high-quality producing grape operations for the wine industry sees now the return per hectare thousands of times greater than was the case back then by any kind of adjusted measure that one might like to put on it.
So I don’t think it’s reasonable always to assume that the debt levels in agriculture represent the problem itself. The problem is where the productive capacity of a property falls below the cost of meeting the debt servicing or the capital returns on those properties. So I think there’s a whole lot for a select committee to dive into and consider. Further, I think it would be reasonable to say that it is not in the interest of any lending institution in New Zealand that we have a runaway problem with farm failures in this country. So the interest for the Bankers’ Association and for other banks to come along and to participate in that select committee process, I think, is quite high. Many of them, I’m sure, will tell good stories about how they do—and I don’t mean that in a derogatory way; factual stories—engage with the rural communities, do engage with agricultural producers, to ensure that they do have access to capital at the times that they need it and that they do have a clearer understanding of cash flow management in what is, effectively, no matter what the operation, a somewhat seasonal income picture for each of those properties.
I note that it’s always easy to point to the terrible cases that exist, but we shouldn’t also assume that if you’re not a very good farmer, then the huge amount of work that goes in by other farmers to meet their commitments, to manage their cash flows, and to organise their debt structures should be set aside for that individual on the basis that, somehow, mortgage payments can be optional. It’s, simply, not the reality or realistic for people to assume that. I think, in this effort to say—well, if a lending institution can see someone getting into trouble, early intervention and an acceptance by the party that is heading in that direction, of a process, is a good place for us to get to.
One of the triggers for us wanting to support this bill coming into the House a little sooner than might have been the case had it languished in the members’ ballot is that we do have the hugely challenging M. bovis activity that’s going on in New Zealand at the moment—hugely threatening to many, many farms. It will be interesting to see exactly how the Ministry for Primary Industries (MPI) eventually settle on how they should tackle it. There are farmers who’ve had to slaughter their stock. There are farmers who will have a limited amount of return on the slaughtered animals because of the stage at which they have to go to the works, and there is a process that’s being negotiated at the moment for some compensation in that area. What we were concerned about was there being nothing for farmers to turn to if they were dependent upon a financial plan on their property that meant that they, in a disrupted circumstance, fell into an even worse position than they might otherwise.
This bill does have a high degree of merit as a concept but not as a bill itself, and if anyone wants any convincing of that, they need only read the explanatory note’s first sentence, where it says, “… Debt Mediation as a mandatory step before the appointment of a receiver in respect of Agricultural Debt.” If it is simply a mandatory procedure, a mandatory step, then it’s just something they do or would do prior to calling in the receivers. It may in fact work to the disadvantage of some farming operations. But having a point clearly defined where a lender is obliged to speak to their lendee in order to protect the capital that ordinary New Zealanders have invested in the bank, by way of their savings or any other particular instrument they might like to use, is, I think, a reasonable thing.
We look forward to the discussions that we’ll pursue in the select committee. We’ll take full part in those, and our agricultural team will be very, very interested to see that we get the right sort of bill coming out of it. But we, as it stands, while voting for it to go to that select committee for that discussion, could not support it through a third reading as it’s currently structured, because the claims that are made for it cannot be delivered by this bill.
With those comments, I look forward to the rest of the debate and, hopefully, for a number of other parties in the House—well, there aren’t too many, are there; only one, the major one—to indicate that they too have an interest in ensuring that there is a good quality bill come out of this in the end. It may even be that the Minister of Agriculture stands up this afternoon in the House and indicates that the Government has an interest in taking it over as a Government bill so that there are appropriate officials from Treasury, perhaps from MPI and from the amorphous empire known as the Ministry of Business, Innovation and Employment, putting their stamp on it, providing the best of advice available in civil service to ensure that the engagement with the financial sector in New Zealand is positive and focused on the best outcome for farmers. You know, it’s too easy for us all to think, as city people, that farmers are just people who wander around the paddocks looking after their animals and nothing more. They are complex businesses these days, and the skills that are needed go well beyond just the physical skills that most of us would associate with farming. This bill could be something shaped into a serious support for their activity, which is very important for this country’s economy.
ASSISTANT SPEAKER (Adrian Rurawhe): Just for the removal of doubt, I omitted to say earlier: “The question is, That the motion be agreed to.”
Hon DAMIEN O’CONNOR (Minister of Agriculture): Thank you, Mr Assistant Speaker. I’ll take a short call to, firstly, acknowledge New Zealand First for their initiative. I think it was very good and very timely. Good things take time, like a good wine, a good cheese, and wisdom in the National Party, and I have to acknowledge the previous speaker, Mr Brownlee. I think he’s made some very fair points—that is, that this bill is a good attempt. It will need some adjustment, and the Government does support this both into select committee and at select committee. We haven’t had time to consider the extent of the changes and the level of support that we will give, but I think we have to admit—and you don’t have to be a rocket scientist to work out—there are pressures in the primary sector at the moment, coming up into winter, with things getting a bit colder. I was reminded of that more so in the South Island than the North. All of those little climatic changes and regional changes are felt very much by farmers up and down this country, and we can sit in Wellington here and sometimes forget that.
This bill is an attempt to, I guess, bring some balance to a relationship that is usually very productive across the primary sector—that is, that farmers need capital to, firstly, buy farms and then to operate them—but it’s a relationship that is not always in balance. The reality is that there has been a huge amount—and the speaker from New Zealand First, Mark Patterson, pointed to the level of debt: about $68 billion, or thereabouts, owed by farmers up and down this country. It’s not an insignificant amount of money. It’s not much less than the Government owes, and it’s dependent upon the hard work of families and corporations and other people to pay that money back eventually and, certainly, to be paying the interest on that on an annual basis.
From time to time, because of fluctuating markets, some people go broke. They simply can’t pay the bills, and the banks are forced to—don’t want to, necessarily—actually sell them up. At that point, then, the balance of power is not often always fair. I guess you’ve had, ultimately, the bank, with all the rights through contractual arrangements, basically demand that they get their money back, and, often, farmers and families having to walk away with not just nothing but actually with still huge debt owing to them.
Someone sent me a copy of a press article here from June 2013 where, indeed, myself—along with the assistant to Janette Walker, who’s done a lot of work in this area, and still does, putting forward a debt mediation bill that was, ultimately, blocked by the National Party at the time, who couldn’t see the value of it. I have to say that we’ve all moved on, and I acknowledge, as I say, the wisdom that’s emerged from us all—that is, that we need to ensure some fairness in a situation that will occur for too many farmers in the near to medium future. If they’re having to sell up, the reality is that there are more farms on the market now that we’ve probably seen for a very long time—probably since the 1980s. People are holding up for their estimated value on their asset, because they need that return when they sell to pay back the bank and to have something for themselves, and if the values were to drop and sales start to progress, then someone’s going to be losing something.
I have to say that the banks are currently looking at—and I had a couple of discussions on the weekend—this whole debt mediation proposal, and I have here a committee report from Queensland, where a select committee looked at the whole debt mediation situation and recommended a bill. There are pieces of legislation throughout Australia dealing with this issue, with different levels of success. In summary, the banks actually really like debt mediation, because it provides a fair process that protects both parties as they work through—not arbitration, but mediation. I think that over there in Australia, actually, the banks like it more than the farmers.
Look, on balance, of course there’ll be people who walk away who are not entirely satisfied. I think if we can bring in a regime here in New Zealand that does bring some balance to, I guess, a difficult solution—it always will be difficult—but one that is fair to both parties, then we will have achieved the outcome that New Zealand First is seeking with this piece of legislation and, I think, that all the House now seeks to have for the farming sector across New Zealand.
So, in summary, I thank the Opposition parties and New Zealand First. This is a timely piece of legislation. The Government’s committed to assist it through to a better conclusion. Kia ora.
BARBARA KURIGER (National—Taranaki - King Country): I would like to acknowledge the mover of this bill and again reiterate that the National Party will be supporting this bill to select committee. I do think it’s really prudent to do something around fairness in situations, as the mover alluded to before, around farmers getting themselves into difficult situations and having to find a way through it. So I’m supportive of this, but, like the others, have actually queried the structure of this bill and look forward to Parliament having a discussion about it.
As the Minister just said, it’s easy to sit in Wellington and, you know, forget about things that go on out on farms, and I know that there’s a number of people in this House that don’t do that and that is across the House, because I’ve seen already a couple of you last weekend and I’m sure that both of—sorry, Mr Assistant Speaker. I’m sorry that the Minister and also the mover, when they were out at the dairy awards last week, heard a lot from farmers.
What really worries me about some of the conversations we’ve had around this bill was when the mover, Mr Patterson, talked about speed. He talked about the speed, and it seems to be about getting people through these processes and getting things done quickly and getting the reports out. My question is: at the moment, while we’re talking about M. bovis, which is completely dominating the discussions in the industry, how do you even introduce mediation financially when there is no certainty? That is the hard thing that I’m trying to get my head around at the moment, because when you’re dealing with a normal debt situation where perhaps there’s been a drought or there’s been a flood—or downturns actually have no certainty either, because the last downturn went on much longer and went much deeper than we thought it was going to go. We knew it was going to go deep, but there was a very, very long point in time when we couldn’t see the end of the tunnel. So it makes it very, very hard to mediate when there’s no certainty.
With this M. bovis thing, it’s even more difficult, because with the downturn there was always a light at the end of the tunnel. There was always going to be an upturn in prices, and people know that they can hold on for a period of time. But the uncertainty that we’re working through with M. bovis right at the moment—farmers are very fearful out there. They don’t know where it is. They don’t know how far it’s gone. They don’t know how it’s got into the country. They don’t know what the cause of it is. Some of them know that it’s potentially on their farm. Some of them know that it is on their farm, and some of them don’t know when it’s going to come to their farm, don’t know when it’s going to be eradicated. So a lot of the questions we’re getting from farmers at the moment are around certainty and asking the Ministry for Primary Industries to give some certainty, because I’m sure they would be quite happy to sit down and have some mediation around this process, but you have to have a point of starting a negotiation around that sort of stuff.
Often, as it was talked about before, the debt is too high for the productive capacity on the farm, and that is what we look at when we look at droughts and floods and those sorts of things in those adverse circumstances. But I worry, going forward—and I’m sure we’re going to have a lot of discussions around this as we go through the select committee process on this bill—about the glut of farms for sale. I think the point is that it’s been a very hard few years, but if we can’t supply farmers with certainty—and this whole M. bovis thing, I’m already hearing people say, “Look, I’m just going to sell up my herd and I’m going to move on because I’m not sure, long term. I want to be prudent now and I want to make that decision.” We’ve only got to get a few people starting to do that and we’re going to get some real big uncertainty about land prices if we don’t get into a situation where we have some certainty around this.
So, yes, I support the concept of the bill, as I said before—but not the actual make-up of the bill—but one thing I will call for while I’m making this speech is to call again for the Ministry for Primary Industries to be really prudent and try and be as speedy as they can to give some certainty to farmers so that at least farmers then know what they’re dealing with, and if they do have to mediate or negotiate, or whatever their decision is, then they have the facts on the table to be doing this. I know it’s a difficult time, but some certainty would be really, really helpful right now. So thank you, Mr Assistant Speaker, for the opportunity.
GARETH HUGHES (Green): Kia ora, Mr Assistant Speaker. Ngā mihi nui ki a koutou. Kia ora. My heart goes out to farmers facing Mycoplasma bovis at the moment. You read the stories in the newspapers and see it on the telly—the pain and the hurt when you see your animals, which you’ve raised from birth, unfortunately having to be slaughtered because of this biosecurity crisis. My heart goes out to them.
What we also know is that bankruptcy and receivership on farms occur because of results like this, and M. bovis absolutely puts it front and centre in our national discourse, but it’s also the effects of droughts, which we heard the last speaker, Barbara Kuriger, speak about. We know this is simply going to get worse as climate change takes more of a toll on us. What the Green Party wants to see is those family farmers stay on their farms.
Now, previously there’s been a big debate on the role of debt mediation and if there’s a special case for the agricultural sector. Because of the intergenerational nature of farms in New Zealand, as it is around many other countries in the world, I think it is a special case. We do want to make sure these family farmers can stay on the farms that their parents and their grandparents and, in some cases, multiple generations further have farmed.
So I want to acknowledge the New Zealand First Party. I guess this really shows the case for persistence. I understand this was first put to Parliament back in 1999, and here we are again. It’s a very persistent push from the New Zealand First Party. We acknowledge that. It’s not the traditional way that members’ bills get in front of this Parliament, but it’s good to have unanimous support of all parties in Parliament.
Look, it’s a debate that we’ve debated repeatedly from Doug Woolerton’s original bill through to Ian McKelvie, who tried to introduce similar legislation back in 2012. The issues have always been vexed around the costs of compliance, whether it’s needed—arguments being put that banks have an interest in not seeing their customers go bankrupt, which we understand. But, look, it’s important that we do have this debate around the select committee table. We urge people to make sure they participate, because what this Parliament is trying to do is redress the power imbalance between banks and farmers. When you’ve got $54 billion outstanding in the agricultural sector in 2015—was the advice New Zealand First has put forward—it’s a huge amount of money. What we want to make sure is that the power balance is appropriate to encourage innovation, encourage entrepreneurialism, but also encourage good capital investments.
We know it works overseas. Looking and researching for this debate—it appears to work successfully in Australia, in Canada, and in other countries. I understand from New South Wales research that Queensland farmers were benefiting, with 75 percent of cases in mediation resulting in settlement, which is very good.
The key thing I think for us, when you take it back to that intergenerational ownership of many farms, is that we do want to support those family farmers. A criticism I often hear is that you see a lot of Queen Street farmers in New Zealand, and there’s a different farming model and a different approach. Now, I was quite fortunate to be visiting farms in the Hawke’s Bay on the weekend, and, look, there’s some fantastic farms doing fantastic work in New Zealand; I mean in an environmental sense, and in a sustainability sense, we’re seeing some amazing leadership from the sector.
Now, I genuinely believe farmers when they say that because of the intergenerational nature, because of their close connection with the land, they are true environmentalists. I genuinely believe it. But I also believe there can be a difference when you’ve got a farm being run out of Queen Street or a corporate-run outfit versus a farmer who’s literally getting his hands dirty and wants to pass it on to the next generation—his children. So we see this bill as a step in that direction, to make sure that we can keep those farms being handed down the generations to their kids. We genuinely believe there will also be positive sustainability benefits as an outcome.
So, we congratulate New Zealand First for putting this legislation to Parliament. We look forward to hearing the debate around the select committee table, and we think it’s a very reasonable, prudent approach.
Hon DAVID BENNETT (National—Hamilton East): Thank you, Mr Assistant Speaker. This is an interesting bill, because generally you wouldn’t expect farmers to be treated any differently from any other business. If someone borrows a lot of money and then gets into trouble, well, then what about other businesses in the community and why aren’t we advocating for them as well? There is a certain aspect of that, and New Zealand is a very high agricultural and horticultural producing country, and there is high debt. But that’s a result of the business approach—you know, New Zealand farmers have been very efficient in being able to cover that debt in the past. It’s not so much about drought or even biosecurity issues like M. bovis that will actually cause this issue. It’s more around a high amount of debt that a farm may have, their profitability being reduced by reduced prices from overseas. Actually, the biggest issue would be interest rates. You see Argentina just hitting 40 percent interest rates today; that happens if you have got a very poorly run economy. For farmers, the best thing you can do is actually have a stable economic base that actually enables them to make the investment decisions like anybody else.
But this bill does have an area of interest that this Parliament wishes to see pursued through to select committee, and it’ll be interesting to see the submissions there. And some very strong points have been raised by people like the Hon Gerry Brownlee—that if you are in receivership it might be too late at that point. There is also the point that my colleague Barbara Kuriger made around the need for certainty and support, and that if there are going to be Government responses to issues, farmers need to know those responses are timely and they are important.
There also have been a number of farms for sale in regions like the Waikato, and that has shown a change in the land price. I think you’re seeing that they are selling, but at different land prices dependent on location and profitability. So I think farmers generally are very efficient in that regard. Many have multiple bank lending arrangements, so they do play off banks against each other, and so they’re not sometimes as innocent in that as they may wish to be seen.
But we need to actually look at the fundamentals that drive an economy that actually enable farmers to succeed, and although New Zealand First has brought this bill towards this Parliament, and I appreciate that, you know, when you support a Government that is against international trade; is against overseas investment; is going to put interest rates up by poor Government spending, as we’ll see tomorrow; is going to bring in new taxes on farmers from capital gains taxes to higher income taxes; hasn’t supported farmers and the labour relations reforms that you’re going to see come through; hasn’t supported farmers and the Dairy Industry Restructuring Act reforms; seeks to bring agriculture into the emissions trading scheme—all those factors together, if you put all those Government policies that New Zealand First is supporting in with higher interest rates that will come, and then, potentially, if there were a drop in income for farmers, then that is a mix where farmers really do have a disaster. That is the problem that farmers face going forward: poor economic management coming out of this House. And if we really want to support farmers, we have strong economic management here and don’t make those silly decisions that the Ardern-Peters Government wishes to make.
This is a bill that will progress to select committee, and there will be submissions on it. I believe there will be submissions from other sectors in our community that wish to have the same opportunity for mediation at a stage in their business, and that’s something for which there is going to have to be a reasonable reason given, in terms of why farmers should be treated differently from others. But with the nature of the agriculture industry and the huge role it plays in the New Zealand economy, how it is split into a number of smaller businesses that actually work together through a co-operative structure, there may be cause for having a good look at this and seeing what opportunities there are to provide that kind of incentive or structure for farmers and, potentially, for other businesses as well. Thank you, Mr Assistant Speaker.
RINO TIRIKATENE (Labour—Te Tai Tonga): Kia ora, Mr Assistant Speaker. I’m pleased to add my contribution to the first reading of this bill. Just in reference to Mr Bennett’s speech, for the first three minutes I was actually very much in agreement with Mr Bennett, but then he completely lost the plot for the last few minutes of that contribution. But I’m here to talk to this bill, and can I commend Mr Patterson for bringing this bill to the House. Certainly, we are generally in agreement that we support the intent of this bill, but it does need a lot of work and I’m sure that there will be many submissions made. I certainly hope so, particularly from the farming sector, farming groups, but also the banking industry as well.
You know, it’s a fact of life that some businesses can get into difficulty and have trouble paying back the money that they’ve borrowed, I guess. But, you know, the function that banks play is actually vital to our economy and in ensuring that our whole national economy runs. But what this bill is doing, I guess, is it’s adding a step prior to the appointment of a receiver or the potential appointment of a receiver. I think we mustn’t forget that every secured creditor, every bank under their security agreements, has the right to appoint a receiver at some point. What we’re doing with this bill is adding a step prior whereby there is a mediation that takes place. So I commend that.
Certainly, one would hope that as a result of that mediation a pathway forward can be found whereby a bank does not appoint a receiver, but, inevitably, I guess, it is the right of a secured creditor to do that. And I think what is lacking from the bill at the moment is—you know, is this merely a step which can prevent the inevitable? It’s not quite clear. Sure, there might be a compulsory mediation step but, again, that may provide no comfort to the farmer concerned and it may just delay the inevitable. This bill may provide some comfort for the farming sector—that at least they can engage in those discussions—but again, ultimately, it can’t remove the right of a secured creditor to appoint a receiver, and I think that needs to be teased out some more in terms of the work that the select committee conducts on this bill.
There are just a few other remarks I’d like to make in my remaining time. I guess the bill is talking about farm debt, but I’m just interested in the scope because I know Mr Patterson mentioned fisheries—I think he mentioned fisheries—along the line, but equally this bill could be applied to other primary sector industries such as aquaculture as well. It’s farming that’s done in the marine environment, but, again, they all borrow money and they all have to deal with banks.
So, again, the scope of this bill could extend beyond just simply agricultural borrowers. Who pays? And I know that the bill mentions that the Banking Ombudsman will pay, but, ultimately, the costs will be borne somewhere along the line by the borrower, and so we have to think of the merits of going through this additional process. Is it merely delaying the inevitable, or can it, ultimately, come to a better outcome—and that’s what we would like to see. So maybe these provisions could be beefed up.
So there are a lot of issues that need to be teased out. But I support the intent of this bill and I certainly hope—and I’m sure—that the select committee will give it a thorough examination. Thank you.
STUART SMITH (National—Kaikōura): Thank you, Mr Assistant Speaker, and kia ora to the last speaker, Rino Tirikatene, who made some excellent points in his very good speech. I think he’s quite right. I think that the scope of the bill as it stands at the moment does cover other industries like forestry, and I thought he did say aquaculture, but I might stand to be corrected in that; it certainly was covering fishing. Look, you know, we are supporting this bill to the select committee and I think that’s a great place. Points have been made not only by the previous speaker but also by the Hon Gerry Brownlee earlier on in this debate. I do question why it’s being sent to the Economic Development, Science and Innovation Committee when, in my own personal view, it would have been better suited to the Primary Production Committee or perhaps the Finance and Expenditure Committee. However, that’s probably a minor issue.
But, you know, the point’s been made a lot about the size of agricultural debt or the quantum of agricultural debt. Mark Patterson, the bill’s promoter, made the point that from 2015, debt has grown from $54 billion to over $60 billion, and that’s a large number. I think it’s very difficult for anyone to imagine how much money that is. But my understanding is—certainly, in the dairy sector—that the largest part of the debt is held by a few, rather than it being evenly spread across the industry, and that really speaks to the fact that some in the dairy industry have quite a sort of corporate approach to dairying and have gone quite large.
I think one of the things we also have to remember is that it’s not just people that fuel growth and drive innovation in any sector—and particularly in the agricultural sector—but it’s actually debt. Farmers are risking their capital, but in order to maximise the benefit of that, they borrow some money against it, thereby leveraging their own equity.
That has driven—as the Hon Gerry Brownlee said—in my patch a massive change from what was dryland sheep farming to a very highly profitable vineyard operation, which has created a huge boon to the economy, not just to the farmers who became grape growers but also to the people living in Blenheim and the surrounding areas. The population has had to grow exponentially to actually supply the people to work in that. And it’s not just people working in the vineyards. We have people working in laboratories, we have winemakers—all of those associated industries that go around that—and it’s not unique to the wine industry. We’ve seen that replicated with kiwifruit, with the apple industry, and also with the hop industry. All of those industries are growing, and that is fuelled by debt.
Mycoplasma bovis, of course, is top of mind at the moment for most of us, and we really do feel for the farmers affected by that. This bill will, I think, send a bit of a message to those in the banking sector that we are watching them and that they really do need to back up their clients.
I do share the concerns that the Hon Gerry Brownlee and Rino Tirikatene raised around the timing of this, and obviously these things can be sorted out in the select committee. But in my own experience of dealing with a downturn in the wine industry, and with people in trouble with the banks, if you wait until the stage where the banks really get anxious and bring in a mediator at that stage, you’re only delaying the day when they’re going to have to probably leave anyway. It’s better to get in earlier.
How you structure that in a bill—I don’t have the answer to that. But I would hope that the select committee are able to tease that out, because getting that cooling-off period which is in the bill is great, and to have that mediation, where people can get around the table and sort out a plan to move forward, really needs to happen before we’re sorting out how to get in the lifeboat, because by then, a cooling-off period is only decreasing their equity with every hour that goes on because of the increase in the interest bill that’s building up.
So the intent of the bill is great. I support it. I think it’s fantastic. I do question the select committee that it’s being sent to. However, I’m sure that the bill’s promoter will ensure that there is really good support around that, and that the right questions get asked. I really urge all the rest of the House—I’m sure everyone supports it—to ensure that they get good submitters in, to highlight the areas that really do need to be sorted out in the bill. So, with that, I commend it to the House.
KIERAN McANULTY (Labour): Thank you very much, Mr Assistant Speaker. It’s great to see that all parties in this House have stood up to speak in favour of what is a very important issue—the issue, of course, of debt mediation when farms and livelihoods and families’ connections to productive land are under threat. I stand here a little bit uneasy. I’ve never agreed with National Party MPs so often as I have today, but it is good to see. [Interruption] The point is—in fact, I haven’t agreed with so many National Party MPs since the day that nearly half the caucus said that Amy Adams should have been leader instead of Simon Bridges.
But the point here is that speaker after speaker has highlighted the importance of agriculture to this economy. In fact, I want to acknowledge one member, who I don’t believe I’ve ever agreed with previously—David Bennett, the member from Hamilton East—who posed a pretty careful question and one that we want to consider at the select committee stage. It was: why should farmers be treated differently to any other business people? I think the answer is quite clear. It is that agriculture has such a special place in New Zealand. It contributes significantly to the economy directly, but then also influences other contributors to our economy such as tourism.
New Zealand is graced with many beautiful places in this country, but the role that farming has played in terms of broadcasting what this country is about to the world cannot be overlooked. So when you have an industry that contributes so much to this country, and yet is actually, in many respects, in such precarious positions given its reliance on commodity prices, the boom and bust nature of agriculture, and the significant impact to our economy if a drop in commodity prices was to affect the industry given its high level of debt, I believe it’s only right that this House investigates how we might be able to impose some level of mediation at some point in that process to preserve families’ connections to their farms.
The Mycoplasma bovis scare at the moment makes this bill quite timely. There is tremendous uncertainty amongst agricultural communities, rural communities, and the primary industries in this country as a result of an unprecedented breach of biosecurity in this country. Such is the nature of Mycoplasma bovis that it is difficult to contain and difficult to trace, and I personally have every faith that the Ministry for Primary Industries is doing what the good member from Taranaki - King Country has called for. They’re being prudent and they are being as fast as they can, but the nature of this disease means that it is difficult. It is not like mad cow disease and it is not like foot-and-mouth, because it is not immediately identifiable on the animal. The point here is that it is creating uncertainty, and that anxiety amongst our communities—it is unknown when that will rest.
So in that sense, and in the broad essence of the importance of agriculture in our economy, it is important, I think, that we support this bill through to select committee, and then we can have a discussion. We can have a discussion across the House as to the best way in which we can do something in this area. There are some issues with the bill as it is currently written, but I am confident—as are previous speakers on this bill—that once we get it to select committee stage, we can actually look at improving it. Indeed, that is what that stage is about.
I must say, as a new member in this House, that I am quite pleased about the number of occasions that both sides of this House do work together on particular issues, and given my background and my particular interests, I want it known on the record that I am very pleased to see that many of those instances are around issues affecting, or potentially affecting, our rural communities. This bill is important. It is timely. It identifies an issue that this House should take seriously, and from my perspective and, I think, from the perspective of the Labour Party, it is heartening not only to see New Zealand First put it forward but to see every single party in this House support it.
HAMISH WALKER (National—Clutha-Southland): We support this bill through to the select committee stage. It’s a bit like life: life’s never perfect, nor is this bill. But we’re voting it through to the select committee because we’re hearing that with the spread of M. bovis, some payments are taking their time to come through and some banks are putting pressure on farmers.
Banks are an interesting one. We can’t live without them, and sometimes we wish we could. With banks, for farmers and for businesses to grow and to ensure future generations stay on the land, we need capital, and the reason why banks provide the lowest cost of capital is because they have information on us. So if we didn’t have the banks, I would have to come up to you, Andrew Falloon, and say, “I’d like to borrow some money.” You don’t know too much info about me. Therefore, the interest rate would have to be a lot higher.
I think another important aspect of putting this through to the select committee stage is the fact that we will hear from the banks. I’d better acknowledge Rino, a previous speaker for the Labour Party. He made a really good point: we don’t want to impose additional costs on to farmers, additional red tape, so it will be good to hear from the banks to get their thinking around this, because at the end of the day we don’t want interest rates to go up, which would cost farmers a lot more. I do want to acknowledge the banks in Southland dealing with a lot of farmers affected by M. bovis at the moment. The feedback is banks are working with them well in Southland. It’s not so true in areas like South Canterbury and North Otago. There are four or five farmers that are really, really struggling up there with M. bovis, and the banks are putting pressure on them, so it’s very timely that this bill’s come up.
I was speaking to one farmer this morning, talking about this member’s bill lodged by New Zealand First member Darroch Ball, and I acknowledge Darroch, and also, Mark, your contribution earlier. It’s great to have you in the electorate, as well. But when I was talking to this farmer, I was sort of describing and outlining the bill to him, and he was talking about his experience of the bank that he’s been dealing with for about 25, 30 years. He had a second bank come in just for a chat, just to review his banking facilities and his lending, and one point that bank made was, “Well, we do feel you have been under a bit of undue pressure here from your bank.” So he did mention that this bill would be a good idea, and just having an independent voice will help. Farmers, especially when they first buy farms, are under a huge amount of debt for the first 10 to 15 years. A lot of that is because of the good work that they’ve been doing for their environment. They’ve been investing in riparian planting, effluent systems, fencing—97 percent of farms are now fenced, which is the equivalent of, I think, from Wellington to Chicago and back. So quite often the reason why farmers do take on additional debt is the upgrades they have been making.
I just want to highlight a couple of areas of concern around new section 49 and new section 50, inserted by clause 4. It’s around the confidentiality of mediation sessions and disclosure of information. It’s all very well in theory having these sorts of strict rules about disclosure and who’s going to find out about it, but my experience with M. bovis is that if a farmer does have M. bovis at the moment, they’re protected by law, to basically protect them and to ensure farmers come out at the first possible opportunity. All it takes in a small rural community is one, possibly two, phone calls, and it’s pretty easy to pick up gossip. So those are three clauses I’d like to work through at the select committee stage.
Just my last comment is it’s great, I think, that nearly every person on the Primary Production Committee has risen and spoken to the bill. I’m not too sure why this is going to the Economic Development, Science and Innovation Committee. It would be great if it could come through the Primary Production Committee. I am a new member, so I’m not too sure of the procedures, so that’s my last remark. Just quickly, I just want to acknowledge all the farmers in Southland, who have had a pretty tough few months with the droughts and with M. bovis, and just one wish for me is: how about we take the political crap out of M. bovis? Let’s get on with it, let’s give these farmers a chance, and let’s get this country going, especially for farmers.
ASSISTANT SPEAKER (Adrian Rurawhe): Mark Patterson—5 minutes in response.
MARK PATTERSON (NZ First) on behalf of Darroch Ball (NZ First): Mr Assistant Speaker, thank you. Look, can I start by thanking everyone that has contributed to this debate for the constructive nature of that—you know, the criticism and feedback—and for the positive intent, recognising the underlying issue and being prepared to back this through to the select committee so that we can iron out any wrinkles that we may have identified.
I just would like to pick up on the last comment by Hamish Walker. It was one that I was going to lead off with myself, and it was actually one that was brought up to me on the weekend by Barbara Kuriger in a discussion about taking the politics out of this M. bovis situation. This has been a major biosecurity breach. There has been a failing of the National Animal Identification and Tracking system. There have been some elements of our response through the Ministry for Primary Industries that haven’t been as good as we would like, under pressure in real time. But I don’t think it does us any credit, actually, as a Parliament to be squabbling and bickering over that at this time. Those farmers, as those previous members know, are under huge pressure. They are looking to us for leadership, not for political point-scoring. We will do the background, we will do the research and learn the lessons, but now is not the time, I think, to be having this debate.
Just a couple of issues—I would like to make a reflection on some of the points that have been made. In terms of this being sort of almost at the ambulance at the bottom of the cliff stage, I think there’s a pre-emptive nature to this. Just the fact that there is this debt mediation mechanism that will be there actually puts some onus on the banks or the lenders, at the start of that process, to make sure that they’re absolutely doing the right thing. Farmers often have a lot of equity that banks can see as an easy target to get money out there, to get it earning interest for them and their shareholders, and I think it is just a wee check and balance on them—that this may come back, and that in the cold, hard light of day, when they’re under genuine scrutiny from people that actually understand these things, if there are practices that aren’t appropriate, they will be exposed.
The other side of things is it, actually, gives the opportunity for an honourable exit. In the case I made of the family that had been on their farm for 150 years, they ended up—I won’t even recount it in the House. It was in horrific circumstances, with the bailiffs turning up. What has been, as I’ve gotten into this and gotten into the case studies, is there is this secondary tier of lenders that are out there. They are genuinely predatory, in my view. There may be a place for them, but there needs to be some more oversight over them, and I think that this bill may prevent people going to that step out of desperation. It might be just that circuit-breaker for them to take a step back and not make another bad decision on the way to those bailiffs turning up and sending them out the door with nothing more than a second-hand car and the clothes on their back.
This is not all about saving the farm and exonerating business risk. It’s totally not about that. This is about putting in another layer, adding some dignity, and just putting another mechanism in place that can add some comfort and some peace of mind. I note the level of debt—there was a little bit of a dispute about that on the Opposition benches. The Reserve Bank makes it very clear that the level of farm debt is of concern to New Zealand’s financial stability. The fact that Australia has brought in this legislation—they’re a country that faces a very similar situation, and they have a large agriculture sector, as well, that is open to a lot of climatic risk, commodity risk. They have seen fit to put this legislation in place. Often, the same banks are at play, so I can’t see why we would not provide the same level of protection for our farmers as the Australians have done for theirs. Agriculture is part of that, as are forestry, fisheries, orchards—a whole lot. It’s not just pasture agriculture.
To the point about the select committee—as a new member, I’m taking advice on that, but that’s where it sits at the moment. But thank you to the House for your support with this bill. Thank you.
Bill read a first time.
Bill referred to the Economic Development, Science and Innovation Committee.
Bills
Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Bill
Second Reading
STUART SMITH (National—Kaikōura): I move, That the Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Bill be now read a second time.
This bill is about friendly societies and credit unions. A friendly society is formed to provide for the relief or maintenance of members and their families during sickness, old age, or in widowhood by voluntary subscription or the aid of—
ASSISTANT SPEAKER (Adrian Rurawhe): My apologies to the member. Sorry for interrupting, but it is time for me to leave the Chair for the dinner break.
Sitting suspended from 6 p.m. to 7.30 p.m.
STUART SMITH: As I was saying—maintenance of members and their families during sickness, old age, or in widowhood by voluntary subscription of their members or the aid of donations.
A credit union is a financial cooperative which encourages saving, thrift, and education to enhance the social and economic well-being of its members. Any surplus the credit union makes is reinvested for the benefit of its members. The credit union sector covers 13 credit unions and their 190,000 members, with assets of $1.7 billion and transactional values totalling nearly $10 billion. The sector plays a vital part in the country’s financial system.
Credit unions have become highly progressive in their development of innovative payment methods. This is despite operating within the confines of legislation that has not kept pace with developments in the financial services and payment industry within which they operate. This is an opportunity for a much-needed update to the legislation.
Credit unions touch as many as one in 20 Kiwis, and for over 60 years have provided a full range of banking services to diverse and far-flung community groups and industrial organisations. As such, they play a significant part in the financial services market. Credit unions have access to the latest core banking services, including their own ATMs; payment services, including domestic EFTPOS cards and MasterCard debit cards; anti - money-laundering services; and insurance and payment infrastructure services.
The bill makes certain changes to the Friendly Societies and Credit Unions Act of 1982, which was enacted around the same time ATMs were first introduced to New Zealand, and was well before the days of internet and mobile banking. Most of these changes relate to credit unions, although the Finance and Expenditure Committee has also recommended one change to the Act to be made in relation to friendly societies. Credit unions have a very important social role as well in areas where traditional trading banks no longer want to operate, such as smaller communities.
The bill aims to remove unnecessary operating and compliance costs; promote greater efficiency, innovation, and accountability under the current Act; bring credit unions into alignment with other financial service providers; and maintain the element of mutuality, which can be defined as being owned and operated by the members for the benefit of the members, one vote per member, and the requirement of a common bond between members. The bill also includes measures to reduce the minimum number of credit unions needed for an association.
The other important provisions relate to associations of credit unions under the Friendly Societies and Credit Unions Act. There is currently one association: the New Zealand Association of Credit Unions, trading as Co-op Money NZ. Co-op Money NZ is a cooperative owned by 11 of the 13 active credit unions in New Zealand. Co-op Money NZ enables credit unions to offer banking services similar to those offered by the traditional banks. In fact, Co-op Money NZ operates a tier one banking platform, and owns and operates the largest ATM switch in the country, with over 1,000 ATMs connected to the banking system through them.
Co-op Money NZ made a submission to the Finance and Expenditure Committee strongly supporting the bill, stating, “The changes set out in this Bill … are … very welcome, absolutely necessary and long overdue.” This bill is intended to remove any uncertainty in the current Act, and to confirm that associations of credit unions have the flexibility to provide services to other parties, where doing so is authorised by their rules.
At the select committee stage, the bill was examined by the Finance and Expenditure Committee. I would like to acknowledge their consideration. The committee heard 20 submissions from interested groups and individuals, and received advice from the Ministry of Business, Innovation and Employment. The committee has recommended the bill should be passed with amendments, and I would like to address some of those key changes now.
Allowing friendly societies to offer securities—a submission from the Manchester Unity Friendly Society sought to allow friendly society insurers to issue securities so that they could meet their minimum capital requirements under the Insurance (Prudential Supervision) Act of 2010. The select committee added new clause 9B, so that friendly societies can issue financial securities to raise money from their members, meaning that they can grow to meet the demand of their members.
The second area was around allowing members who have a small to medium sized enterprise to borrow directly for that enterprise from their credit union. Changes have been made throughout the select committee stage to allow small to medium sized enterprises related to a credit union member to operate more efficiently. An example could be either a lawnmowing company or a hairdressing company currently owned by a credit union member who operates such a business—they are not able to borrow money to utilise financial products and services in the name of their business. This can lead to members reluctantly leaving the credit unions for the trading banks. Credit unions can now provide other financial services, including credit cards, debit accounts, and trading accounts for a member’s small to medium sized enterprise.
Initially, the bill would have considered a member to be related to a body corporate when they had the power to exercise 25 percent or more of the voting products or shares, if you like, of the body corporate. It didn’t have a similar rule, however, for partnerships and trusts. So the select committee added new clause 25A to replace section 110 of the Friendly Societies and Credit Unions Act. New section 110(3)(b) provides that a firm under the Partnership Act can receive a loan if the member of the credit union was a partner of the firm and they had a 25 percent or more share of the voting products, or, (c) in the case of a trust, the member or a member of his or her family has a beneficial entitlement to 25 percent or more of the trust’s assets. The select committee has also recommended excluding limited partnerships registered under the Limited Partnerships Act from loans to enterprise provisions.
Mutuality was a concern of some submitters—that incorporating credit unions may compromise mutuality, and therefore lead to credit unions not acting for the benefit of their members. I would like to acknowledge the help of Dr Duncan Webb, who worked with me on a recommendation to officials for an amendment to allay the concerns of some submitters. The select committee has accommodated for this by amending clause 15 to insert new subsection (1AA) into section 101 of the principal Act, to state “A credit union is to operate, on the basis of this Act, for the mutual benefit and assistance of its members.”
High Court powers to make a restraining order—if a credit union is acting outside the Act, there is now an additional check, adding, in clause 24, new section 107F to the Act. This is a useful intervention, giving the High Court the power to make an order restraining a credit union from acting contrary to the Act. Officials have advised in the departmental report that this was a good way to mitigate fears that a credit union might go rogue. The select committee also reinstated the power of the Registrar of Friendly Societies and Credit Unions to suspend the business of a credit union as a useful means of protecting the interests of the members.
So, in summary, this bill is a much-needed update to the Friendly Societies and Credit Unions Act of 1982. It removes uncertainty in the current Act, and confirms that associations of credit unions have the flexibility to provide services to other parties, where doing so is for the benefit of their credit union members. It allows friendly societies also to issue financial securities to raise money from their members. So it is with great pleasure I commend the bill to the House.
Hon CLARE CURRAN (Minister of Broadcasting, Communications and Digital Media): Tēnā koe, Mr Assistant Speaker. First of all, I’d just like to acknowledge and congratulate the member Stuart Smith for having a bill progress through the House. That’s a big deal. And also to the Finance and Expenditure Committee for the work that it has done to make it a better piece of legislation, and for the cooperative, collaborative approach which has occurred, which is a demonstration of how well Parliament can work.
I’m very pleased to be able to stand in support of Stuart Smith’s member’s bill. Credit unions operate on mutuality principles. They’re an essential part of New Zealand’s market for banking services, particularly for people on low incomes and beneficiaries, who can find it difficult to obtain banking services through banks. Credit unions have changed hugely over the last 35 years. The value of the assets under credit unions’ control has quadrupled in real terms, to more than $1 billion. However, the number of credit unions has fallen by 95 percent, from 284 to 13.
In 1982, credit unions controlled assets of less than $1 million on average, in today’s money. Now the average is about $80 million. There has been much regulatory change over that time. Prudential supervision and investor protection regulation have both been strengthened considerably. However, the governance framework contained in the Friendly Societies and Credit Unions Act has not kept up with the way that credit unions have changed. Although the core concepts of mutuality and common bond continue to remain as relevant as they ever were, it is clear that other parts of the Act as it applies to credit unions and associations of credit unions are out of date.
This bill will make three important sets of changes to the Act. First, credit unions will become bodies corporate with perpetual succession. Incorporation will reduce the cost of operating credit unions because they will no longer need to have internal trustees in whom the credit unions’ property vests. Instead, credit unions will have the capacity and powers to undertake activities and enter into transactions in much the same way as other entities that are legal persons.
The Finance and Expenditure Committee has made important modifications to the capacity and power provisions in the bill. Those changes will remove any doubts that credit unions must act in accordance with their objects. Giving credit unions legal personality will also better protect the interests of third parties that deal with credit unions in good faith. In addition, incorporation will have certainty and accountability benefits, because it will be clear that the responsibility for all aspects of a credit union’s strategy, governance, and oversight will rest with the board.
The second important change will be to permit credit unions to make loans direct to businesses that are owned or substantially owned by their members. This change will reduce compliance costs because it will no longer be necessary for the credit union to make the loan to the member, with the member then on-lending to the business. The enterprise lending provisions will also provide credit unions with the opportunity to grow. A number of credit unions made this point in their written and oral submissions on the bill.
The final set of changes was to provisions in the Act that relate to the registration of an association of credit unions and that describe an association’s objects. Like credit unions, associations of credit unions will become bodies corporate. This will provide associations with the same governance benefits and third-party protections.
The bill also provides welcome clarity about the range of services that associations can provide and who they can provide them to. Changes contained in the bill make it clear that other than providing services to members, associations can also provide services to non-members where authorised to do so by its rules. There had been a dispute about this, about whether associations were able to provide services to non-members, at the time that that bill was introduced in April last year. The dispute was resolved by the High Court in November 2017, in Osborne v First Credit Union. The High Court stated that “NZACU has the power to take any action or do anything directly in pursuance of [its] objects or incidental to them, provided that action is authorised by … [NZACU’s] Rules or the Act.” The changes contained in the bill are consistent with the approach outlined by the High Court.
I acknowledge that some credit unions oppose the bill in part or in whole. There were concerns, in particular, about whether incorporation would compromise or undermine mutuality, which is a defining feature of credit unions. Several supporters of the bill stated there is no incompatibility. If there were any doubts about this as a matter of law, then the select committee has removed them by adding a subsection to section 101 of the Act, which states that a credit union must operate “for the mutual benefit and assistance of its members.”
To summarise, the bill as reported back by the Finance and Expenditure Committee retains all of the main reforms proposed in the bill as introduced, so, well done, Stuart Smith. The committee has made a number of important changes that have improved the quality, clarity, and accessibility of the bill. My overall view is that this is good legislation. The changes will benefit credit unions and their members and will provide new opportunities for credit unions to compete against other banking service providers. I’d like to thank the Finance and Expenditure Committee for its work on the bill.
Hon JACQUI DEAN (National—Waitaki): Thank you, Mr Assistant Speaker. I want to congratulate Stuart Smith, and I know a number of members in the House have done the same thing. But Mr Smith, well done, because you have brought—well, you’ve called it dry, yourself, in the media, and it could be described as a bit of a dry and complex issue, but it’s an important issue, not just for credit unions and friendly societies but also for their members and the people that they serve.
As I was reviewing my notes for this contribution, I thought I would just perhaps reflect on the benefit that, to my knowledge, credit unions have brought into my part of New Zealand, which is the lower South Island. So I’ll just tell a story about how credit unions can be so very useful to the communities that they serve, and more so now that there are changes to the legislation which will be able to improve the service that they provide for their communities.
So a number of years ago, well over a decade ago, there was an incident in the small southern rural town of Palmerston, which is, roughly, halfway between Dunedin and Ōāmaru. It’s a small rural service town. It’s on the coast. It’s the gateway to Central Otago. But it lost its last bank and it lost its last money machine. So that left the people who work at Macrae’s gold mine, it left farming families, and it left people who live within the Palmerston township without any banking services at all, unless they were able to go into McGregor’s tearooms and get some change or cash a cheque or something—I’m going back a wee bit, now. So it caused a lot of consternation within the community, and we do see this happening through smaller communities in New Zealand as banking services rationalise, modernise, and withdraw from rural New Zealand and provincial New Zealand. But going back 10 years or more, technology has actually moved along, away from then.
I was the deputy mayor of the Waitaki District Council at the time, and we cast around for a solution—how do we serve our community of Palmerston, who are losing their banking services? So we approached the trading banks; they were not interested, because it wasn’t a good financial proposition for them to run a cash machine in a small rural community. In the end, we ended up having a cash machine installed by the Otago credit union, and that cash machine is still there today. It served to prove that credit unions and friendly societies are there to serve their members and their members’ families, associates, and affiliates. If you wanted a concrete example—and I’m sure there are many, and I know that the member in charge of this bill, Stuart Smith, is very familiar with all the circumstances around this—of how a credit union could serve a community, then I would say that serving the community of Palmerston was one. I’ve used the machine, as do the locals. It’s in the library. It’s a community facility and it is well used and well appreciated.
The principal Act was introduced around the same time as cash machines were first installed, and so the story I’ve just told really is a piece of history now. Banking services have changed exponentially quickly since cash machines were first installed. So the Friendly Societies and Credit Unions Act desperately needs updating for a number of reasons, but I want to focus, in my contribution, on why it is so critically necessary for credit unions and friendly societies to have a modern structure in which they can operate to the benefit of their members and communities but also compete with modern banking services.
If I were to pick out one exciting development in banking services, it would be things like, obviously, contactless credit cards, which are revolutionising the way people transact and shop. There are many, many innovations in banking that credit unions and friendly societies can avail themselves of; they just need the legislative framework to do it in, which is why I’m so pleased that Stuart Smith has brought this bill to the House.
I also want to acknowledge the Finance and Expenditure Committee for working so well on this piece of legislation. Now, Stuart Smith—he probably regrets saying it because it will be repeated endlessly—did say it’s a dry piece of work; hmm, maybe. But, actually, it’s got a significant reach into every community around New Zealand.
Under the current Act, credit unions have a very complex supervisory and oversight regime. This inhibits innovation, and the last things we want to do in the banking sector in New Zealand are to create an unlevel playing field but also to inhibit innovation. I think credit to Stuart Smith is that this bill addresses that on behalf of the credit unions.
I also want to acknowledge the credit unions themselves. I know this has been a difficult pathway for them to come to this House, and they must be sitting at home feeling pretty hopeful that this House will support through its final stages this bill on their behalf, so that, finally, they can put to rest their history and they can address the future and be that supportive, community-based banking facility that their members desire and which is beneficial for communities around New Zealand.
If I just pull out one example of the benefits—so, currently, at the moment, credit unions aren’t able to provide financing to small and medium sized enterprises (SMEs) that are related to members of that credit union. It’s quite convoluted, because at the moment, currently, the loan must be made to the member, who on-lends it to the small to medium enterprise with the credit union having to take collateral security from the SME as well. Well, that’s clunky, it’s old-fashioned, and it’s an inhibition to development, and the last thing we need in New Zealand is measures in the banking system which inhibit development and growth—particularly in rural and provincial New Zealand. So that is a measure which has been addressed in this bill.
A further issue is the number of credit unions necessary to form an association. There is a need to gain economies of scale, which has seen the number of credit unions decline to 20, while, under the current Act, a minimum of seven is needed to form an association. So what the bill does is reduce compliance costs, reduce unnecessary operating costs, promote greater efficiency, promote innovation—we know innovation is happening so very quickly in the banking sector—but also, very importantly, promote accountability, accountability to the agencies who have oversight over credit unions but also accountability to their members. It is also very important—and this bill achieves this—to bring credit unions into alignment with other financial service providers in New Zealand.
There’s also the stated aim, and this is something that Stuart Smith has been so strong on throughout the process: to maintain the element of mutuality and the requirement of having a common bond between members. That is why credit unions were started in the first place, and I do applaud all those involved in the long, long passage to bring this to the House. So at this reading of the Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Bill, in its second reading, I do commend the bill to the House. But just one last comment, perhaps: it is a great privilege in this House for a member to bring a bill to the House which has a great deal of meaning throughout New Zealand. I have to say that Stuart Smith has achieved this. I congratulate him and commend the bill to the House.
MICHAEL WOOD (Labour—Mt Roskill): Mr Assistant Speaker, I rise to speak firmly in support of the Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Bill. I’d like to just start off by saying that at the select committee, along with the sponsor of the bill, Mr Stuart Smith, and other committee members, this has been an incredibly satisfying bill to work upon. I think it’s been satisfying because we’ve got to a good outcome on it, but it wasn’t actually all that easy—it wasn’t easy at all.
The passage of this bill goes back a long way, actually. It was originally part of a broader set of reforms, I think, as part of a Government bill back in about 2014. In response to a range of concerns and a difference of opinions in the credit union community, it was, effectively, removed from that bill at that time. Members from the credit union movement who wanted to see progress on these issues then linked up and worked with Mr Smith to bring the bill to the House as a member’s bill.
When it came to the House and when it came to select committee as a member’s bill, none of those issues and none of those points of contention in the credit union community went away, so our job as a select committee was to work through those issues and try and get a good piece of legislation that’s fit for purpose for the sector and that will be enduring. You can never tell the future, but my hope and expectation is that we have reached that outcome. I want to especially acknowledge Stuart Smith for his work in stewarding the bill through.
I want to acknowledge other members of the select committee; it has been a very good example of the Finance and Expenditure Committee working, I think, very constructively and intelligently to take a bill, to treat submitters with respect, to take their concerns on board, and to emerge with a better and more enduring bill. From the Labour side of the committee, I particularly acknowledge Dr Duncan Webb. During the committee process, after the submissions were heard, Dr Webb and Mr Smith basically went off to the side and put their heads together around some of the tricky issues—particularly mutuality, which I’ll come to later—and arrived at some solutions to guide our way forward on the legislation.
I would also like to acknowledge the submitters in this process. We had submissions—I think it must have been from pretty much every credit union and friendly society in New Zealand, and some from overseas, in fact. It attracted a great deal of attention. The folks in the credit union community are a movement. They have a deep history, and the people who are involved in credit unions have a deep sense of mission and a belief in what they are doing. They are different from other financial institutions. Their members own them. They are very wedded to this principle of mutuality; that is, that their purpose is to serve their member owners, end of story. And there is a great deal of unwillingness to see that watered down in any way whatsoever. Then there’s the principle of common bond: that the people who are in the credit union actually have something that kind of holds them together.
If you look historically at the way that credit unions came together, there were officially two types. One were industrial credit unions, and we still have some of those. We have a New Zealand Firefighters Credit Union, a Police and Families Credit Union, and a credit union called Steelsands Credit Union, which was originally a credit union for workers who worked with steel sands in the steel industry.
Andrew Bayly: Still do.
MICHAEL WOOD: Still do. That’s right. That’s why we still have it. They submitted to us. Then we have credit unions that are based on a geographic basis. So we have credit unions like NZCU Baywide, NZCU Central—the clue’s kind of in the title. So that’s the principle of the common bond. It’s not just sort of anyone floats in there. There’s something that brings people together, and the people who lead the sector feel really strongly about that principle and their point of difference within the financial services sector. So that was part of our challenge: how to meet the challenges of the future, make sure that we had modern, fit for purpose legislation that allows credit unions to thrive and prosper and grow where necessary, but also preserve those really important parts of the DNA of the credit union movement.
If I can say, I think this is really important, because one of the things that we want to ensure that New Zealanders have access to is a financial services sector that is diverse. Some of us do feel a little uncomfortable about the relative lack of diversity in our financial services sector. We have four really big players in the big banks, who in many ways do a good job of what they do, but they’re pretty market dominant, and it’s always been my view that a healthy financial services sector provides a range of options for people at different levels.
I just want to pick up on one of the comments made by the previous speaker, the Hon Jacqui Dean, who made the point that credit unions sometimes, in 2018, are filling gaps in New Zealand society where the bigger players have withdrawn. I can think of regional and rural communities where the big banks have withdrawn, and I can think of lower - socio-economic communities in our bigger cities, and I actually think we need to keep holding the big banks to account for that. I think they need to show a bit more of a social conscience and a bit more of a commitment to New Zealand in that respect.
But, in the meantime, credit unions are often one of the institutions who keep providing a service for those people. One of the submissions that I’ll come to a little bit later in my comments is from Aotearoa Credit Union, who are a credit union very proudly based in Auckland. They say, “Our mission is to serve—not exclusively, but to a large extent—some of the lower - socio-economic communities in Auckland.” So they have access to good, trustworthy financial services that aren’t going to rip them off and are going to help them with their savings and in getting on with their lives.
Previous speakers have gone through the key objectives of the bill. I’ll just touch on those briefly, and then I want to talk to some of the changes that the Finance and Expenditure Committee has made in its considerations. The first point is that the bill allows for credit unions and associations of credit unions to incorporate. That removes, in the first instance, the need for credit unions to have what we call internal trustees. They currently have quite a complex, unique structure. We heard stories during the submissions process whereby credit unions who are wanting to lend to someone had to sort of go through this weird, very antiquated process of bringing around and getting people to sign a bit of paper—and Jack was away on holiday and that made it difficult; so quite an antiquated structure. What we’re moving to is something that is far more mainstream in terms of a standard incorporation structure. Ensuring that the credit unions’ board is responsible for all aspects of strategy, governance, and oversight—so, basically, making sure that we have really good, solid governance structures within credit unions and protecting the interests of third parties that deal with credit unions in good faith.
The second key change is—and this is really important, and a number of submitters really did stress this—permitting credit unions to make loans direct to enterprises related to members. So at the moment, credit unions can only lend to those individuals who are their members, and quite often there was kind of a Mickey Mouse sort of walk around whereby, OK, that member might want to get a small business off the ground and wants a bit of money to set up—I don’t know—a small lawnmowing business or something, but the credit union is constrained from actually lending for that business interest. So you sort of have to have this funny arrangement whereby the credit union would lend to the individual, and then it would be passed on, and that created all sorts of issues and lack of transparency. We had a number of credit unions saying to us that they would just lose business out of that. They would have credit union members who would either go to a third party to get that financing for their small business, and therefore have two different financial service sector relationships, or, because that’s too complicated, they’d just take all of their business elsewhere and get the business lending from the other organisation.
I think this is really important. It’s not about credit unions going crazy and lending all over the place—and in the select committee process we’ve refined this a bit, so the lending really is only to small to medium sized enterprises (SMEs)—so it’ll be to SMEs that the member has to have at least a 25 percent equity stake in, and it’ll be to SMEs that employ less than 20 people as well, and we’ve made sure that those provisions are in there really clearly so that we’re targeting this at the SME sector. We don’t want the sector to run away and get into risky situations where it’s lending money all over the shop.
The final point in the original bill is that it provides for associations or credit unions to be incorporated and makes it clear that associations may provide services to non-member entities that are mutual entities or cooperatives, if authorised by the association’s rules. This is really important because most of these credit unions are pretty small, and they actually rely on services provided by the association to be able to do their business. Increasingly, for those association services to be viable, they’re going to need to get a big bigger—they’re going to need to provide services to other entities. And there’s been a lack of clarity around that, so we’re making sure that within this bill that is allowable.
In the time I have remaining I want to come back to this key point around mutuality. This was the big fear from a number of submitters. We’ll put that on the record. It wasn’t just one or two submitters who were concerned about this issue of mutuality; it was a number of sizable credit unions. I think there was a genuine fear of change in the sector and a fear that something important would be lost. At select committee, we considered the option—I think it was raised by David Seymour—about whether we might have a two-tier structure where some credit unions could opt into, effectively, the new legislative provisions and some could remain as they are. We were convinced that in the end that would be overly complicated within the sector and create all sorts of confusion, but what we decided to do was to have a “belts and braces” approach, really putting in the legislation very, very clear requirements that mutuality would be required. I’ll just read out the legislation very clearly here—the new legislation, in clause 15, new section 101(1AA): “A credit union is to operate, on the basis of this Act, for the mutual benefit and assistance of its members.” That is there in black and white in the legislation, and that’s a party message I’d like to leave to ensure that those credit union associations who perhaps weren’t so sure about this legislation can be ensured that their proud history of mutuality is going to continue in this new legislation. Thank you, Mr Assistant Speaker.
FLETCHER TABUTEAU (Deputy Leader—NZ First): Thank you, Mr Assistant Speaker. It is a genuine pleasure to rise on behalf of New Zealand First to speak in support of this bill. Firstly, I’d like to congratulate Mr Smith on his efforts and acknowledge that his work has been genuine and has reflected his commitment to our friendly societies’ industries and congratulate him again on what he has done on their behalf.
It actually feels like quite a long time since we spoke to this originally, because this was actually drawn in the last parliamentary term, towards the end. This is not a reflection of Mr Smith, but it was actually quite a fluke that it was drawn, because it was a member’s bill and it had come out of some omnibus legislation where the previous Government decided to use that mechanism to pass it through the House. So they were getting there. It was curious that it then became a member’s bill rather than a piece of Government legislation, but that is why I’ve started with congratulations on Mr Smith’s effort—because he did pick it up, and it was incredibly timely.
I not only congratulate him, but it’s been said by just about every person who’s risen in support of this legislation that the Finance and Expenditure Committee—actually, I served on the select committee in the previous term and had the privilege to do so in this term, so I have seen it progress through the select committee process in its entirety. I do want to say, it was a coming together of different political minds, but we were in agreeance before we went into the room and so we genuinely wanted to see this legislation succeed and come out the other side in such a way that those who submitted to us—all of those parties—could see their position, their belief, and their passion reflected in this legislation.
It was mentioned before, and I’ll come to it specifically soon—we talked about the mutuality issue and the substantive submissions by those who were concerned at the changes this legislation represented to what they fundamentally thought their operation and their life commitment to their friendly societies meant to them. So credit to the way those particular members came together to work on a solution.
Look, this was an issue well before it came to the select committee, and I had the privilege of working with the industry quite closely in trying to understand what the issues were. But, first, I want to acknowledge, as have others, just what it is our friendly societies and credit unions do. They are different to the big banks. They do provide a more personalised, a more customised, service, for their customers, because it is members working with, and for, members. That fundamental approach to money makes their offering so distinctly different to what we would consider to be the traditional banks—where they provide their services and to whom they provide their services set them apart, and they are to be celebrated on that. In fact, the conversations we had in select committee about financial literacy and the provision of real financial education to its members was a wonderful, wonderful thing to hear about.
So I do want to acknowledge those who submitted to the committee, because, as I have intimated, they are a passionate group. They believe wholeheartedly in what they are doing, and so it was genuinely a privilege to hear from our members of society who so passionately care about what they do. They care because they represent more than 190,000 people from our communities. They have been trying to work within legislation that was originally written in 1982, so a—brief calculation—36-year-old piece of legislation.
To be fair to them—and when you look at what they brought to the table originally—they were modernising their systems. They were trying to provide services that meet the needs of the modern clientele. But let’s be clear, we are here today because they were restrained in the way that they could move forward. So this legislation means that what this House in this reading is enabling is essentially Kiwi money working for Kiwis, which is to be celebrated. It’s for New Zealand First—and actually hearing the contributions from members on this side and actually I acknowledge, I should say, all members of the House, this is something that we should celebrate.
The submissions—I’ll quickly touch on those with the time I have left. There were some issues, but what was celebrated was the ability to lend directly to small to medium sized enterprises. So, previously, the credit unions were restrained in the way they could lend out moneys to small business. So, essentially, they had to lend it to the members themselves. Those members then had to come up with ways to then lend it to their business entities; and, actually, we were told how that created tax liabilities. It created complexity in the process, and so now we have a piece of legislation that has enabled that direct investment, and, because of this, it means we can more readily meet and adapt to the needs of our customers and be more competitive. On another point, in terms of the modernisation of the legislation, we were told that it was critically important to modernise the legal structure and operation of credit unions and associations of credit unions in New Zealand in order to better provide the technical services.
I’ll probably finish there. On the note of mutuality—I know members opposite are anxious to stand up and give their contributions, and I will try and bring this to a close quickly, but speaking to mutuality, it was important to submitters. It was a contentious issue, and the solution—although the legislation in itself didn’t actually set us down a path of removing mutuality, I think it was a creative solution in the end just to simply have it written expressly in the legislation “A credit union is to operate, on the basis of this Act, for the mutual benefit and assistance of its members.” For those credit unions who submitted to us on that area and their fear of—some described it as a slippery slope—thank you for your submissions, and so addressed in this legislation.
Congratulations to the committee again. Congratulations—I’m going to keep going if you keep doing that, Mr Bayly. Ha, ha! No—thank you, Mr Assistant Speaker. It’s a genuine pleasure to support this legislation through the House.
Rt Hon DAVID CARTER (National): It’s a pleasure for me to make a contribution to this legislation, following the very learned contribution from “the Professor”, Fletcher Tabuteau. My involvement was, of course, slightly different to Fletcher Tabuteau’s, in that I wasn’t on the Finance and Expenditure Committee as it arrived before the select committee, so I did miss the opportunity to hear from the officials, and I actually take—
Hon Dr David Clark: What was that member doing?
Rt Hon DAVID CARTER: Oh, at that stage I was doing a completely different job. I was actually keeping this place in order. But, of course, we’ve had an election since then, which the member should know about because he’s now here and he wasn’t here beforehand.
But be that as it may, I did not have the opportunity to listen to the officials, and I found I was therefore at a disadvantage as I listened to the submissions. I find the officials come before these select committees whether they agree with legislation or not—and we’ve got two examples before the select committee at the moment: the overseas investment and the regional fuel tax legislation. Regardless of whether they agree with it, they’re there to work for the Government; they’re there to make sure they present the best possible information to the select committee. And I take this opportunity of just thanking the officials who appear before the Finance and Expenditure Committee for their excellent work. So I did miss the briefings but then came forward and heard the submissions, and I want to talk about those in a minute but not before I want to take this opportunity to congratulate the member who sponsored the bill, Stuart Smith.
It’s not easy to get a bill before the House and to successfully get it passed through this House in such a way as this debate’s been going tonight. First of all, Mr Smith had to realise there was a problem, and he did that. He then worked and found a solution, and then he had to work hard within the financial industry to make sure there was general acceptance of the solutions that he was proposing. He then has to write the bill. Of course, he’s got to get it selected out of the ballot. And it was a privilege then to see it get to this stage where it seems to be getting complete support by the House, and I take this opportunity of congratulating Stuart Smith.
I had the privilege of actually working with Mr Smith over the weekend—on Friday afternoon, Friday night, and Saturday—and I can see the way that he was absolutely respected. He’s well recognised. He’s well known for the hard work he does in the Kaikōura electorate. I was going to say he was revered, that he was adored, but I think that would be going over the top. But he’s certainly very well respected, and more so for this excellent work he’s done with this piece of legislation.
When I look at the bill itself and realise it’s replacing legislation dated 1982, it’s not surprising that it actually needs to be before the House. For those, and there are many other on the other side—Michael Wood, for example, probably wasn’t around in 1982. But I can tell him that we’ve been through significant financial deregulation in that time, and, of course, legislation dated that old will clearly be out of date, and therefore it is a pleasure to see it here.
But what I found really puzzling with the legislation was the way the industry itself did not have a clear position. We’d receive a submission that was fully supportive, and then we’d see another one that was fully opposed to it. We have the Aotea Credit Union absolutely supportive of the legislation, and then we had the New Zealand Credit Union of Auckland, trading as NZCU, completely opposed. You’d then get the next one, which was the Credit Union Central, which was founded in Kawerau in 1967, so you could say it represents the Bay of Plenty area; they were supportive. Co-op Money NZ were supportive. The two that I then found fascinating were the New Zealand Firefighters Credit Union, which came before the Finance and Expenditure Committee completely supportive, arguing that 35-year-old legislation had to be updated, and then we immediately heard from the Police and Families Credit Union, who were absolutely opposed to it. So it wasn’t an easy job, then, for the select committee to wade through this series of submissions and decide where to come forward and come up with a recommendation that was accepted by this House.
But I think the issue, as I go through it, was a real fear from those that opposed it about this loss of mutuality, and when we delved into that issue further—and Stuart Smith just reminded me of it—a lot of them were clouded by the experience of credit union reform in Australia, where they’d then aligned their reform to companies corporate legislation. In other words, the big mistake that perhaps was made in Australia was that they put corporate interest, company interest, ahead of members’ interest. We had no intention of making the same mistake.
One of the compelling things that struck me through the submission process was the lack of an ability to lend to a small or medium sized enterprise—not allowed under the 1982 legislation, but yet they all appeared before us and said, “Well, we’ve found a way to do it. We actually lend it to the member. We know that the member’s then lending it from the member to the business, and we get around it that way.” That just seems to me to completely circumvent legislation, and I could see no good reason at all why these credit unions shouldn’t be in a position to lend to small and medium sized enterprises throughout New Zealand, because they’re the very kernel of the New Zealand economy. We all know that. We all hear it. We heard the rhetoric even from the Prime Minister in the last few days, pointing out how important small and medium sized enterprises are for the New Zealand economy.
Hon Member: Confidence is dropping, though.
Rt Hon DAVID CARTER: But I’ve got to say that actions speak a lot louder than words, as the interjection from Tim Macindoe comes. We are working on a range of new taxes and we’re stopping investment with other legislation before the select committee, but here we have legislation recognising the importance of those small business units, their ability to seek and get capital, and now, under this legislation, they will be able to do so without circumventing the spirit of law—in fact, the very legislation of the law.
So I take this opportunity of commending this piece of legislation to the House. I take the opportunity, again, of congratulating Stuart Smith for recognising the importance of updating legislation that was dated, previously, 1982, bringing it into the 21st century and making it useful. I do hope that those credit unions that opposed it at the time will take the opportunity now to consider the opportunities that are given by the reformed legislation.
I take the opportunity, also, of recognising the importance of this particular small but very important sector within our financial industry. It plays a very valuable part, it services the members, it’s allowed to continue to service the members under this new legislation, and I hope that as a sector it will continue to profit and prosper and help those small and medium sized businesses right around New Zealand—the sort of ones that I don’t agree with what Iain Lees-Galloway said about on Sunday, “if they can’t hack it, just get out.” I think that’s a completely arrogant point of view from the Minister—what is he—for Workplace Relations and Safety. These businesses make New Zealand tick, and I think we should give them every encouragement. I hope this legislation is another avenue by which they can continue to prosper.
Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Mr Assistant Speaker. It is a real pleasure to rise to speak on this bill—and in support of it—the Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Bill. It probably could be called a modernisation bill as well. I do congratulate Stuart Smith for having this bill drawn and undertaking the considerable work that it’s taken. I suspect that the original conception of having a bill to incorporate credit unions was thought to be a simple task. Well, it’s certainly expanded somewhat since then.
May I also congratulate him on embarking upon a project to improve something which is such a fundamentally Labour institution, a friendly society and credit union. If we look at where these entities came from, they are in fact industrial societies in communities that grouped together for mutual support, something which I think we need to still hold dear. In fact, one of the great things I think we’re doing here is that we are in fact ensuring that we have a flexible system so that people can enter into financial arrangements, financial groupings, in a way to support each other.
It’s worth just pausing for a moment and understanding what a credit union is. It is a society of individuals, a not-for-profit society of individuals. Section 101 of the Act sets that out, and it uses some, perhaps, quaint language, language that harks back to the roots in the 1850s when these things first came about. Section 101(1)(a): “the promotion of thrift among its members by the accumulation of their savings”, and also “the training and education of the members in … wise use of money … in the management of their financial affairs”.
Also, it’s worth seeing section 101(1)(d), that the credit union can make payments for “the welfare of its members … the making of donations for charitable, cultural, benevolent, or philanthropic purposes.” Now, those are things which, perhaps, we’ve tended to lose sight of, and certainly in many modern financial institutions they don’t come close. We have financial institutions which are fundamentally corporatist, as David Carter was talking—that’s the wrong turn that was taken in Australia.
So, look, I commend the member on taking this bill, looking initially, perhaps, at a couple of minor improvements in terms of the way these institutions work, but then actually preserving and enhancing—and I congratulate him on that, that he’s in fact enhanced and strengthened the mutuality here. I won’t deny that we had some conversations about that in committee, and those conversations were robust but they were very, very fruitful. The amendment that we’ve now got is actually a dictate to credit unions: “A credit union is to operate, on the basis of this Act, for the mutual benefit and assistance [for] its members.” That is in “Objects of [the] credit union[s]” in section 101. That is a limitation on the powers of a credit union. So a credit union can’t go off on a jaunt of its own and can’t be undertaken for the profit of some third party or for anything, indeed, which falls outside of those constraints. That is a very good thing.
Can I also say that I was most impressed in committee with all of the submitters, and, as member Carter noted, they did not agree with each other. I would encourage them to keep talking. They didn’t agree with each other, but what they all had in common was a fantastic commitment to the promotion of the interests of their members. They entirely understood what a credit union was about, that it wasn’t a commercial entity, although it existed in the commercial world; it was an entity of a social nature to promote the welfare of its members. That, I think, is why this bill is such a great modernising bill, because it remembered what those values were. This is social enterprise that started in 1850, and it’s still relevant here today. So I congratulate the member on embracing that and on certainly being open to including that in the bill.
So we have got a bill there that allows incorporation, and this was perhaps the bogeyman for submitters. There was this sense that if we have an incorporation, isn’t that the same as a company? Doesn’t a company have a profit motive? Won’t things go terribly wrong? I think the lawyers on the committee accepted that that was a leap in logic, that that did not follow, but, nevertheless, we wanted to reassure the credit unions and submitters that that needn’t be the case, and that’s why we looked at that amendment, and, indeed, new section 107B, which is another amendment, made it very clear that the credit union’s powers will be limited in that way, that it can only act in pursuance of its objects. Indeed it went further and noted that a restraining order can be obtained from the High Court to make sure that those credit unions stay within their objects.
So what we have is a modernisation—incorporation. The original framework was madness. You had these really fantastic people working hard, but what they probably didn’t realise was when they signed the loan documentation and what have you, as trustees that were taking on huge personal risk and that, as was noted, the administration of the credit unions really wasn’t workable. We didn’t have a simple ability of one director to sign documentation. The trustees had to agree unanimously and, obviously, if someone’s overseas that caused all kinds of problems. So this is a much, much more sensible framework.
Then we had a further adjustment to make it quite clear that credit unions can loan to associated entities in a small business framework. Look, this is fantastic. Credit unions do occupy a particular part of the finance market. They’re not low-cost lenders; they’re not high-volume lenders. So the interest rates are a little higher but they are directly connected in with their communities. So they take a personal interest in the financial success of their members, at every level. That’s, I think, why it works.
So now, if you’ve got a member who wants to start a small business or has a small business and, wisely, has incorporated it or has it in a partnership or a trust, they don’t have to run around in circles and do legal backflips to try and get a loan from the credit union. They can simply go and say, “This is a company. I, or my family, have a controlling or a significant interest greater than 25 percent.”, and the credit union is then able to loan. Look, that is what prosperity is about. This is a Government which is absolutely committed to small business, and it’s great to see that we’re supporting this move, which will make lending money to small businesses easier, because that’s what we want to see: growth, growth in those small business areas.
So this is a bill about modernisation. What I do like is that it looks forwards and it looks backwards. It’s flexible and I think it’s really important in the financial field to not be a fetter on innovation. So with this framework, credit unions are free to work out new ways of doing what they do better, work out new ways of encouraging thrift, of educating people to use their savings wisely. Old-fashioned words, but really modern and relevant concepts. So I think it’s great that what we now have is a bill where you’ve got an incorporation framework, you’ve got an ability to lend to other entities, to broaden the net of support, and that’s really great. So we’ve got, essentially, a modern social enterprise framework where people aren’t pursuing profit; they’re mutually supporting each other in something which is supporting their communities.
As I said before, really the greatest praise goes to the people who often, for very little reward, support these credit unions, because they have dedicated a life to their communities. They’re not making lots of money. These are not-for-profit societies. There are no multimillionaire chief executives here. These are people who have dedicated their lives to their communities through these credit unions and friendly societies. I commend them for it.
This bill makes their lives easier. There’s going to be some compliance costs. We had a very clear and weather eye on those compliance costs, but what a great step forward. I do commend again member Smith for getting this bill into this House. It’s been a lot of work. I know that, and I know that every so often it was a little disheartening in that not everyone agreed with you all of the time, but I also commend you for working with some very difficult members, not least myself, and getting this through. Thank you.
GARETH HUGHES (Green): Kia ora, Mr Assistant Speaker. Ngā mihi nui ki a koutou, kia ora. When you look, in the last year the big four New Zealand banks made $4.9 billion in profit and over the last 10 years they grew by three times the size of New Zealand’s GDP growth in that period over the 10 years. No wonder so many people are looking at credit unions in New Zealand. They’re looking for an alternative pathway. In fact, there’s 194,000 Kiwis that are members of credit unions. This is an area the Green Party has always supported in Parliament. We want to support cooperative ventures such as this. So we want to commend and join the unanimous support in this House in commending the member Stuart Smith for his introduction of this bill. It is a smart common-sense step forward.
What this legislation does is update the Friendly Societies and Credit Unions Act, which dates back to 1982. When you cast your mind back, all that way back in history—I mean, this was Muldoon’s “Fortress New Zealand”. We had a price freeze in New Zealand; six weeks to get a telephone. You know, you had to get Government permission to import money or products or cars. It’s such a distant country, deep in our country’s past. Given I was born in 1981, I’m feeling rather outdated and old-fashioned myself and maybe in need of some modernisation, but I commend the member for his common-sense legislation to update this 1982 legislation. The legislation is pretty simple. It brings into line similar effects with other banking and financial legislation.
People watching the television tonight mightn’t understand the issue of mutuality, but it’s a very important one. When you cast your mind back even deeper in history, the first credit union came to Germany back in 1852, and this has been a core principle in contrast to, say, the banks, which we’ve seen making such mega profits in New Zealand in the last decade.
The second issue, of course, that this legislation deals with is the subject of the debate tonight, which I think we heard from a Labour member—it was described as mickey mouse—the ability to circumvent the existing rules of lending. So we support the intent of this to make it easier for credit unions to be able to lend money to small and medium sized enterprises. We want to see that productive capital going towards investing in innovation, investing in entrepreneurialism, creating jobs—this is the modern New Zealand.
So we congratulate the member. We commend this legislation. We want to thank all those members, the public, and the experts and members of the credit unions and friendly societies who participated in the select committee. I didn’t have the privilege of sitting on the Finance and Expenditure Committee for this hearing, but I note there’s been a number of common-sense reasonable improvements. It’s quite a substantial report. So it’s something the Green Party has always supported. We commend the process and we look forward to seeing it pass in subsequent stages. Kia ora, Mr Assistant Speaker.
ASSISTANT SPEAKER (Adrian Rurawhe): Kia ora. This is a split call—five minutes, Andrew Bayly.
ANDREW BAYLY (National—Hunua): Thank you, Mr Assistant Speaker. It is an absolute pleasure to be talking on this second reading of the Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Bill. Before I start up, like all the previous speakers I just want to acknowledge the fabulous job that the good member from Kaikōura, who has promoted this bill—this is an excellent member’s bill and, as the Rt Hon David Carter said, he’s also a great electorate MP, and I can attest to that as well. I know he’s fully supported by a wonderful family.
But just turning back to the bill, this is one of those occasions when a member has come to the House, fought hard for the right thing, and seen success in the result of us moving our way and progressing this bill through to fruition. Many members’ bills, I must say, I think all add to the sum total of improving the lot for New Zealand, but sometimes you have quantum leaps. I would suggest this is a quantum leap for the 190,000 New Zealanders who belong to the credit unions around the country—190,000, as we’ve heard before. What this bill does is it makes the industry much more progressive. It makes them able to compete on an even playing field against, of course, trading banks and a number of other financial institutions operating in New Zealand. I think that is incredibly important. We all talk about promoting competition, making sure things are effective, and making sure that people have a choice. This bill, of course, helps to achieve that objective.
So one of the things I want to highlight about these credit unions and friendly societies is that they have a very special place in our financial institutions. That is, they operate on many occasions in areas where traditional trading banks don’t want to operate. We heard that in the submissions that came to the select committee: they provide a very valuable service in smaller communities that require it but often are not able to seek their banking services and other such related services.
So what does this bill do? Well, first of all, it makes some changes around allowing friendly societies to offer securities to make sure that they meet their prudential requirements. As you will know, those prudential requirements are set out by the Reserve Bank, and all banks and all financial institutions have to meet them, which is a way of making sure that they have the required capital to meet demands should the depositors in their various institutions require the money. And, of course, they’re heavily monitored by the Reserve Bank.
The second thing is it allows the co-ops to lend directly to their members. We’ve had a bit of discussion around this. We know what’s been going on: effectively, credit unions have been lending to their members, which is what they were permitted to do, but what this bill has done is extended it to make sure that it provides the opportunity for loans to be provided to a member’s partnership, if they’re involved in it, or a company, provided there’s greater than a 25 percent share or equity or beneficial interest there. Of course, that is fundamental in terms of making these activities more accessible and useful, and, as the proposal of the bill said, it stops many members from actually parking up their money in credit unions and going off to the trading bank.
The final thing is it’s dealing with the issues around mutuality. We’ve heard the definition around that—about acting in the best interests—but we put in place a back-up check where the High Court can make a restraining order on credit unions if they are seen to be acting outside their remit, or ultra vires, if we use the Latin term.
So, I’ve got to say I think this is a great bill. I’m glad to have been part of the Finance and Expenditure Committee when we worked on this bill. There were a number of submitters and I’m glad to see it working its way through the House.
Dr DEBORAH RUSSELL (Labour—New Lynn): Mr Assistant Speaker, I wonder if you’d just excuse me for one particular aspect of my speaking tonight. I got back to my office earlier on this evening to get a call from someone who rang me up specifically for the purpose of criticising me for speaking with my hand on my hip. So, I’m doubling down on that. It probably won’t last; maybe I’ll adopt the David Carter posture.
There is a particular aspect of this bill I wish to speak to, and I want to start with the whole ethos of credit unions. I had this ethos taught to me actually very early on in my time as a member of Parliament, before I was even on the Finance and Expenditure Committee. Credit Union Auckland contacted me and asked whether I would come out for a meeting. That was my first real introduction to what credit unions are about and they told me the ethos of a credit union: it was people helping people. It was about the small guys, the little people helping each other.
Kieran McAnulty: Just like Labour.
Dr DEBORAH RUSSELL: That’s right. Just like Labour. Thank you very much, Mr McAnulty. So, I thought this a really interesting ethos, but then as he talked to me a little bit more, I found out about some of the things that credit unions do. Credit unions will open bank accounts for people with virtually no money. Credit unions will open bank accounts for beneficiaries. They will open them for people who are coming out of prison. They will open accounts that operate like bank accounts for people that the banks won’t go near. So, they fill a very real niche in our communities. They are genuinely there for the little people. I think that is why we want to look after credit unions, to enable them to survive and to flourish in the modern world, because they do have that core of helping people at their heart.
This was reiterated to me by the Westforce Credit Union. I listened to Victor Martick from the Westforce Credit Union with particular care, because the Westforce Credit Union is right next door to my office in Avondale, so they are my near neighbours. I’ve had a long talk to Victor and he had one particular concern about this legislation, and it was the issue on which many of the people who submitted were divided. Now, as Mr Carter told us, there are 13 credit unions in this country and they seemed almost evenly divided on this bill, in some aspects it sought and some that didn’t. The issue was around mutuality. They felt that being incorporated would take them away from the idea of mutuality—the idea that they were a group of people looking after each other and assisting each other.
So, as a committee, we listened really hard to that, because we could see the real merits of this legislation, we could see what the changes were trying to achieve, and we didn’t want it to get stopped by this one problem that was being raised by so many of the credit unions themselves. So, as a committee, we agreed—mutually—to put in place a new clause, a new object of credit unions, and it is there to reassure the credit unions who raised this very issue with us, who were actually concerned that they might lose mutuality.
Now, technically, according to law, they wouldn’t have, but we could see they wanted that assurance that credit unions were about people helping people, they were about the members helping each other, and they were about mutuality. So, it’s sitting there now in clause 15 of the bill, which amends section 101 of the Act. New section 101(1AA) states, “A credit union is to operate, on the basis of this Act, for the mutual benefit and assistance of its members.” It’s right there for their reassurance.
A final thought: the select committee operated with great mutuality, as well, with members helping members. May I commend Stuart Smith and also my colleague Duncan Webb, who engaged in quite a bit of mutuality, helping each other there to sort out some of the aspects of this bill. It was for me a very enjoyable experience, working on this bill. So often we’re fractious; this time we weren’t. It was a tremendous experience. I’d also like to commend the officials from the Ministry of Business, Innovation and Employment, who, I think, are very attached to their credit union legislation, and they took great care with getting it right for the sake of credit unions. I commend this bill to the House.
IAN McKELVIE (National—Rangitīkei): Thank you, Madam Deputy Speaker. It’s a privilege for me to speak on a bill that’s come to the House, the Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Bill, brought the House by Stuart Smith. I think he’s fortunate to have drawn a bill out of the ballot, really, but it’s also actually quite a complicated bill for a member’s bill and I congratulate him on the work he’s done on it. It was an interesting process for me as I knew little about credit unions going into this and I have to say I wasn’t part of the committee at the time the submissions were taken, so I’ve had to do a little study on my way through that. So I came into the deliberations a little later than most, but none the less it was a very interesting process.
I want to comment on a couple of comments that Jacqui Dean made earlier in her speech on this. When you think about New Zealand, mutuals, cooperatives, credit unions, building societies, and that sort of organisation are hugely important to New Zealand. I think our isolation from the rest of the world, and probably our lack of ability to protect ourselves from the wider corporate world, probably makes them even more important. When you think about Jacqui Dean’s speech about the deep South—well, I don’t think she termed it like that; I would call it the deep dark South. But if you think about the great cooperatives in New Zealand, most of them originated in the deep South. You think about some of the bigger cooperatives like Ravensdown; Primary Producers Cooperative Society, which is now Silver Fern Farms, of course; the Alliance Group; the Farmers’ Mutual Group; Farmlands, which Lawrence Yule mightn’t like, also originated in the Outram Hotel, although it did originate also in Hawke’s Bay, in Eskdale.
So it’s an interesting history that we have in New Zealand where we have this history of protecting ourselves. I think the great thing about mutuals, cooperatives, and credit unions and things like that, is it protects the members. I think it was Gareth Hughes that mentioned the profits that the international banks make out of New Zealand every year. When you think about a credit union, it retains all of that profit for the good of its members. That’s the critical fact about those credit unions and the thing that I think is so important.
I heard David Carter earlier mentioning the demutualisation of many of the big Australian mutuals, and there was some fear among the submitters that that was a possibility that could happen as a result of this bill. When you think of the companies like AMP, in its old days, it was a mutual which held insurance policies, basically, for the good of its members. When it demutualised, all of that—well, not all of it, but a good deal of the money that originally was for the benefit of those policyholders went to the shareholders, who in some cases, of course, were the policyholders. But none the less, it was very destructive, and I think that we’ve learnt the lesson. History teaches a lot of lessons, and that’s a particular lesson that I think we learnt the hard way. I suppose, if you think about many of our lines companies and smaller power companies in New Zealand, which primarily were owned by local cooperatives, they were then, effectively, demutualised, their shares were paid out, and they were sold to big corporates, and we no longer own them, either.
These organisations are most important to New Zealand and hugely important to New Zealand’s history, and I also think they have a very real place to play in New Zealand society. So to see these credit unions, effectively, given the full powers of the banking community to act—within reason and, of course, for the good of their members—as a bank acts, it certainly gives them the opportunity to grow the services that they provide to those members, and this bill also, I think, effectively, gives the credit unions a personality which then enables them probably, in a lot of cases, to attract better people to operate them and perhaps even better governance. So I think that will also improve the service to those members and, obviously, all the profit from the activities of those associations goes back to the members. So that’s really important for the members of these credit unions, as well.
As I said, I came into this process late. It was very interesting to follow the process of the bill and to understand exactly where it’s got the credit unions to. I congratulate Stuart Smith and the select committee, which I found—as Deborah Russell said—quite collegial. I thought the discussions on this bill were very collegial, and it certainly worked well.
So with those few words, I was pleased to be part of the process. I look forward to the bill progressing through the House, and congratulations, Stuart Smith, because I’m sure it’s going to get there unanimously. Thank you, Madam Deputy Speaker—very good.
TAMATI COFFEY (Labour—Waiariki): Thank you, Madam Deputy Speaker. I am stoked, as ever, to be taking a call on the Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Bill.
Matt King: Nine and 10—nine and 10.
TAMATI COFFEY: Ah, thank you. I am merely a new member, so learning about things as I go has been a very steep learning curve in the last six months, and one of the things that I’ve had to learn about has been friendly societies and credit unions. Being somebody who hasn’t had to use the services of one previously, I was on a very steep learning curve.
This is a good piece of legislation. Labour does support this bill. I support this bill. I was fortunate enough to be there and to listen to the submissions on the Finance and Expenditure Committee and to listen to the heartfelt stories of people who live their lives inside this sector. As my colleague Deborah Russell said earlier, credit unions—I was pleased to find out—are the places that people go to when the banks don’t accept them. When I finally learnt about this thing and I opened my eyes and I went back to my community, I was made aware that, actually, quite a few people in my community are credit union members. I was quite pleasantly surprised to find out, as well, that there are 194,000 other credit union and building society members all across Aotearoa.
This is a good piece of legislation. I do commend the sponsor of the bill, Stuart Smith, and also too my colleague Duncan Webb, who did the heavy lifting on this particular piece of legislation—so congratulations to you both. It was a lovely experience to be sitting on a committee where everybody was singing the same song. That was a fortunate experience and, hopefully, we can do a lot more of that in the future—I am ever the optimist.
This is an Act that has needed to be brought into the modern age and into the new millennium. As the previous speaker David Carter said, this is an Act that was first drafted in 1982, and it is in desperate need of modernisation. Interestingly enough, I’ve found that many Acts that I’ve stood and talked on in the short time that I’ve been here in the House have been Acts of that ilk—Acts that were, once upon a time, drafted for a time and a place and that have kind of fallen out of use in that time.
So I’m pleased to be presiding over this and representing all of the many submitters that came before the committee. We received 20 written submissions and 13 submitters made oral submissions. Whist my colleague David Carter pointed out that one was in favour, one was against, one was in favour, and one was against, actually, the majority of the submitters were in support of the changes to the Act.
I just want to go over them and just take a short bit of time to do that, before we get down into the nuts and bolts of the bill. The Aotearoa Credit Union strongly supported the bill. They were concerned, however, about their ability under the old legislation to remain valid and competitive in the market—so for Aotearoa Credit Union, we are doing them a favour. The Association of British Credit Unions believed that the legislative framework was restrictive and that it limited the credit unions’ potential, and Co-op Money, which is one of the big players in this sector, believed that the Act was, in their words, not “fit-for-purpose” and hadn’t been for many years.
I was pleased to find that the firefighters have their own credit union, as well, and have been doing it for quite some time for their members. They were looking forward to the bill being enacted. The New Zealand Credit Union (NZCU), another big player in the scene—both NZCU South and NZCU Baywide supported the bill and welcomed the changes, and Samoa NZ Finance definitely supported the bill. They were looking forward to it becoming a full service financial institution that understood and was incredibly responsive to the needs of the Pacific Island community. So there were quite a lot of positive vibes, not just from the committee but also from the submitters, as well.
There were a couple of things that definitely stood out in the submissions, and one of them was around the issue which a lot of the speakers prior to myself have talked about, which is the ability for credit unions to retain their mutuality. There was a certain fear that by incorporating the mutualities, they were going to be slowly turned into a big, corporatised organisation. There was a strong fear about that, and it was also a big departure from what credit unions were initially set up to do, which was, on a very small scale, to look after each other. In absence of the big banks being in there, they were quite happy with that position. Those were probably some of the biggest fears that came out of the submissions that were against it. But the select committee have recommended new sections, including new section 107B(1), which explicitly states that a credit union “must act only in pursuance of its objects or in ways that are incidental to its objects,”.
The other thing that came out in the submissions was about the ability for a credit union to be able to make loans to enterprises related to its members. I remember one particular submission which said that they kind of do it anyway, but they just used another route to be able to get there. It was interesting to be able to sit there and listen to that and to hear them say, “We’re doing it anyway, but if you’re going to modernise the legislation, then why don’t you do it to make it a whole lot more cleaner? We would like to be able to lend to our members for the purpose of business.” Again, that was quite a departure from what they’d traditionally done, but that was the way that they saw themselves as being modern, credible, and responsive to their members’ needs.
Apparently, there are lots of their members that come forward looking for money for their small or medium sized business enterprises, and I’m pleased to say that the select committee recommended mechanisms to allow the credit unions to be able to make those small and medium sized enterprises accessible to loans.
There are—oh, time flies. Let me just cut to the chase, then—
Erica Stanford: We’re not having fun.
TAMATI COFFEY: Ha, ha! Sorry. Let me just cut to the chase, then—
Hon Iain Lees-Galloway: More, more!
TAMATI COFFEY: —to what we had wanted—thank you, everybody. Thank you very much—thank you very much. The bill includes measures, and I just want to ping these off very quickly—the whole point of the reforms was to simplify the objects of the credit union; to cover the activities of its benefits to members; to provide the incorporation, as I’ve just mentioned, of the credit unions; and to enable the credit unions and the associations of credit unions to have all the powers of a natural person. This is a very important piece of legislation, as I’ve said, because the credit unions play a very essential part in the market for banking services—again, as I’ve said before, particularly for people on low incomes and for beneficiaries, as well, those people that find it very difficult to walk in with their head held high to one of our big banking organisations. They can lean back on credit unions to be able to provide that kind of lending.
This is all new territory for me, but I’m proud to have sat alongside the Finance and Expenditure Committee and to have listened to the concerns of the submitters on this. I was pleased to report back to our Labour caucus that this is a bill that we should be supporting. I support the credit unions. I haven’t yet opened up an account with them, but I’m going to be monitoring the progress of credit unions, especially in my community, very closely. Yes, it was done in 1982. It is time for a refresh. Congratulations to all of the submitters, and I’m sure that they will have great pride when they hear that we have listened to their concerns and acted accordingly. To those submitters who are still feeling a little bit left outside of the scope, I hope that they can keep engaging with other credit unions to make sure that they can work together to iron out any kind of differences. Again, I commend the committee and commend this particular bill to the House. Kia ora.
LAWRENCE YULE (National—Tukituki): It’s my pleasure to give the concluding remarks on the Friendly Societies and Credit Unions (Regulatory Improvements) Amendment Bill. Like other speakers, and particularly the Rt Hon David Carter, I joined this process later in the piece, and I do want to acknowledge the work of the member for Kaikōura, Stuart Smith, because this is a complex piece of legislation. It took me a while to get my head around it—and some of it I still don’t know—but what you’ve done and what you’ve brought before this House and this Parliament is actually a very good thing for nearly 200,000 New Zealanders and the business that that will grow on and support.
Chris Bishop: He’s done a great job.
LAWRENCE YULE: It’s a great job, and, Stuart, I know at times—and I remember you shaking your head when submitters were asking questions, and you’d already answered them, and you’d covered them off, and you’d spent hours in the background doing it. But here we are today. I actually believe this bill may, ultimately, go through and be unanimously supported, and for a member’s bill, that’s actually pretty significant.
I also want to acknowledge Duncan Webb for his role in the background and for working with Stuart to iron out some of those complexities. Actually, the committee did work together to try to resolve this, and it was fundamentally about mutuality. Most of the issues that were brought up by the submissions were about mutuality, and if you strip that back, it’s really about not-for-profit—working for each other. That’s really what this is about, and people were concerned that would be lost.
I want to bring a Hawke’s Bay story in here, because NZCU Baywide started from the Whakatū freezing works credit union in 1971. Stalwarts of my community, including people like Roy Gardiner, Iain Taylor, and the likes, set up afforestry schemes. They then set up a credit union, and it has managed to survive the closure of that freezing works and the decimation of all those jobs, to now have assets in a credit union alone of over $320 million, and 16 branches throughout the central part of the North Island. And that is because people in my community—and it’s replicated all over New Zealand—believe they can make a difference for their fellow human beings.
All this bill actually does is support them in those measures, and modernise them with today’s technology, and make sure others—and particularly the large banks—don’t have an unfair playing field. I look at the directors in the NZCU Baywide credit union today, and I’ve been to a number of their meetings. I’ve sat through how proud they are of what they can do for their communities. I’ve sat with hundreds of members—how proud they are of what their particular credit union is doing for them, and that, in my view, is to be encouraged. But it’s not some little backwater organisation. They have to run an Oracle-based platform for banking. Not just anybody can buy and afford to do that, so they have to be commercially successful.
This bill is about two things for me: one, the modernisation of the credit union legislation to allow things like a body corporate perpetual succession, and the fact that people do not need to run around in small towns like mine and get signatures for loans from several different people. It’s about bringing it into the modern era and managing some of the risks of directors and trustees. And, importantly, it’s about how those members can benefit their other affiliated entities, namely their businesses. I did hear at various AGMs I went to how disadvantaged NZCU Baywide was feeling when other banks were poaching clients for business and, ultimately, would end up with their personal accounts as well because they offered things like credit cards and a whole lot of other transactions that credit unions couldn’t. So that has all been worked through in this case, and instead of complex workarounds for business solutions, credit unions can now offer small to medium enterprises lending, such as commercial banks can. They can offer things like credit cards and, importantly, can allow these 194,000-odd members in the financial markets of New Zealand to offer products that allow for growth.
It wasn’t all unanimous, as everybody said, and that was all around mutuality, but I’m pleased to say it will be enshrined in legislation, and, from where I sit, those submissions that were concerned about that have been made null and void. The Finance and Expenditure Committee worked really well on this. They got it sorted, and I commend it to the House and hope it gets unanimous support. Thank you.
Bill read a second time.
Bills
Education (Social Investment Funding and Abolition of Decile System) Amendment Bill
First Reading
Debate resumed from 2 May.
DEPUTY SPEAKER: Colleagues, when this bill was before the House Jamie Strange was speaking, and he has 2 minutes 30 seconds remaining to speak.
JAMIE STRANGE (Labour): I am sure the time will fly by. Look, it’s an honour to stand and speak in this House again, and this time on the Education (Social Investment Funding and Abolition of Decile System) Amendment Bill. I would like to acknowledge Erica Stanford for her work on this bill. I would like to acknowledge her passion for education, and we certainly both share that. Now, some people have sort of a natural sense of intelligence, and may not need as much education as others. Some people, like myself, need all the support we can get, and education is a key aspect around that. Pink Floyd said, “We don’t need no education”, but the reality is we absolutely do, and I believe, as many in this House do, that education is a key driver to lifting people out of poverty and creating opportunity.
Now, the bill talks about the decile challenges that we have in our education system, and, as I mentioned before I was interrupted a few weeks ago, there are certainly challenges in our decile system. One of the key ones is around the perception of school quality. There is a perception out there that schools on a lower decile provide a lower level of education, which is absolutely not true, as those of us who have taught in those environments understand. We have absolutely fantastic teachers across all decile systems. But there is this perception. There is a perception around house price values, which sort of links into that. So we certainly do need to look at this issue. The reality is, unfortunately, this side of the House will not be supporting this bill, because we don’t believe that this bill actually addresses the issues around the decile challenge.
Further work is being done on this issue, so the Opposition members can sleep easy at night, because I understand your passion on the other side of the House for young people who are disadvantaged. The social conscience that exists on that side of the House—I absolutely acknowledge that, and I’d like to assure the members that work is being done around this issue.
DEPUTY SPEAKER: Thank you. The member’s time has expired.
Hon TRACEY MARTIN (Minister for Children): Kia ora Madam Deputy Speaker. Thank you very much. It’s actually with great honour that I rise to speak on the Education (Social Investment Funding and Abolition of Decile System) Amendment Bill. Can I acknowledge the author. Can I acknowledge Erica Stanford. This is one of the areas—I mean, we’ve had the education conversation going on in the last couple of weekends—where there has been cross-party consensus that this is too important an area of Government funding, of Government spending, of Government focus that should be about political parties fighting each other.
So, first of all, I want to acknowledge Ms Stanford, and thank her for her member’s bill. I honestly believe that what she’s tried to do here is to do better by children. I truly believe that, in the same way that when I came into this Parliament the Hon Nikki Kaye—she happened to be the chair of the Education and Science Committee. We had a really strong collegial relationship around what was going to be the vision for children in this country.
New Zealand First won’t be supporting this bill, and I have expressed that. I have had a one-on-one conversation with the author of this bill, because that’s what’s important. It’s not about whether the Opposition moans and decides that the Government’s doing this, and it’s not about the Government deciding that this is happening—whatever, whatever. This is actually about the conversation between parliamentarians about what’s best for children. Ms Stanford and I have had this conversation.
The reason why I won’t support this bill is because I actually don’t think, with the work that I am doing around disability and learning support and the change to the funding system—and Ms Stanford understands that those who are moaning don’t know anything about education. But what we’re talking about is what is actually going to make a difference to children. So I have articulated to Ms Stanford the vision that I have for disability and learning support here inside New Zealand—the understanding that what we are aiming for is a funding system that recognises what each and every child needs, and we will make sure that they can be the best they can be.
We are not restricting it to academic outcomes, as the previous Government was. We are not restricting it to an investment or negative type of connotation; we are deciding that inside those education conversations we are aiming for the skies, with regard to our children. I believe that Ms Stanford and Ms Kaye, and so on and so forth, are going to come along for that cross-party ride about doing better—
Hon Mark Mitchell: Oh, so you want them to support you? You want them to support you but you won’t support them.
Hon TRACEY MARTIN: —doing better for the children that we have in New Zealand. Now, Mr Mitchell and those other sorts of people who actually have this really narrow narrative about what success looks like, because they have been in a place of privilege—they don’t understand this conversation, but I know that Ms Stanford does. I know that she does because at the end of the day what we’re talking about is what is best for children.
I acknowledge her as a partner in this conversation, and I have extended the olive branch, so to speak, or the hand that says that I am more than happy to brief her on where I am going around disability and learning support, to make sure that the funding system changes to ensure that we’re not deciding who is a failure based on some sort of a national census; that we’re not deciding, Mr Mitchell, that those inside Warkworth Primary School, which is a decile 7 school but are of our Kiribati and Tuvaluan community—among the lowest socio-economic levels of our community—are disadvantaged by a decile system. I totally support where Ms Stanford is going here. I absolutely will work with Ms Stanford to make sure that every student, based on the needs of that student, has the funding support, has the resourcing support that they need to be the best they can be across this country.
I think, across this House, we can do better, but I cannot support Ms Stanford’s bill, and I have expressed that to her. I acknowledge her, I honour her and the work that she is trying to do, but I ask her to work with me collegially to make sure we do better for children. Kia ora, Ms Stanford. Thank you for standing up for children, but let’s work together on another way to make this happen.
DENISE LEE (National—Maungakiekie): Thank you very much, Madam Deputy Speaker, for the opportunity to speak to this member’s bill in Erica Stanford’s name. She’s put together a very excellent piece of legislation here. I set up a parent-based network in my area, before I was elected as a council member and as an MP, to counteract the effects of a low-decile school in my area, so I know personally the effects of a low-decile ranking and the perception that it has, right on the ground.
There’s an emerging trend in the Government’s attitude towards members’ bills, which we should all be concerned about. They’ve got a culture of disrespect towards these bills that not only undermines the system of members’ bills but actually belittles the issues that they’re trying to address. During her first speech of this debate, Erica Stanford, fantastically, gave an outline of how she tried to reach out and start a conversation with the Minister of Education about this bill, and it’s appalling. It took five weeks for the Minister to respond to her. He ignored her for five weeks, and the night before the bill was going to be debated he sent a letter that showed he was clearly too stubborn to consider it on its merits.
It seems that Cabinet must be reading from the same dubious playbook, because I had a similar experience with my member’s bill, which would have introduced a framework for women to lodge pay equity claims. I reached out to Minister Lees-Galloway and Minister Genter, and I must admit that they did send back a letter in response to me—yes, they did. It didn’t say much at all, and after reading it I was not clear whether they would support it or not. However, given I received the letter four weeks after the Government voted against it, I think I was able to fill in the gaps. Four weeks after the debate had finished, I received this nothing letter from the Minister that only left the impression that they did not care. Is this the standard that we hold our Ministers to: not confronting the issues, no constructive discussions, only hiding away from making progress for the country?
Like my bill, this bill is a substantial bill that addresses an important issue. It will have a real impact on families, on schools, and on children. It’s not waffle. It’s not a ridiculous bill that would ban music teachers and cooking teachers and dance teachers from calling themselves teachers. The Government was more than happy to support that one. This is a bill that would reprioritise education funding to those children who are most disadvantaged, lift their educational achievement, and help them get ahead in life. The Minister should have leapt at the chance to support this bill, or at the very least engage properly with Erica Stanford to outline his position on it. His Government colleagues Tracey Martin and Chlöe Swarbrick had the integrity and the dignity to do so. Not so for the Minister. What did he do? At the eleventh hour he sent a letter filled with misrepresentations and false assumptions.
We heard from the Government during the campaign that this would be a Government for the children and a Government of compassion, so it would be fair to question why that side of the House has stood up, one after the other, and argued in favour of the current decile system, which unfairly stigmatises the disadvantaged, when—let’s face it—they’re actually opposed to it. It’s so obvious. Why are they opposed to it? It’s the deliberate lack of engagement and the refusal to vote for bills that they actually support in principle. And why? It’s because they don’t want National to get the credit.
They don’t want to take advantage of the progress that’s been handed to you tonight on a member’s bill silver platter. Instead, you’re delaying, they’re delaying. They’re going back to their working groups and waiting for something that they just want to produce themselves and in their own name. The public deserve better. This side of the House will keep trying to deliver for them. I support this bill, and I’m very disappointed that the Minister does not.
CHLÖE SWARBRICK (Green): Tēnā koe e Te Māngai. Tēnā koutou e Te Whare. I rise on behalf of the Green Party to take a short call on the Education (Social Investment Funding and Abolition of Decile System) Amendment Bill. If I may, I would like to acknowledge the member Erica Stanford for a member’s bill which I think has been quite thoroughly canvassed, in particular by the Hon Tracey Martin, which has quite a depth of intention behind it. I know this in particular because, as was acknowledged by the previous speaker, Denise Lee, I did indeed meet with Erica about this.
I want to echo the sentiments made by the Associate Minister of Education, Tracey Martin, in a way that we can kind of bring together the contributions of both the Minister and Denise Lee just previously—the quite fiery and quite heartfelt contributions about the need to work in a cross-partisan way on education. I believe that we’re seeing this working quite well, and it was manifest in the education summit of the past two weekends. It is indeed, I believe, far too important for something like the future of our education system, the funding of our education system, to be something that is deeply partisan.
I don’t believe it’s actually worth overly politicising this, as the situation has been well traversed back and forward, and the Hansard will indeed note that there are strongly felt views on both sides of this House. But, fundamentally, the reason that the Greens will not be supporting this bill is because we don’t believe that it is necessary to duplicate the work that is currently already happening on the Government benches.
I’m very fortunate to be in a position, as a first-term backbench MP, working in confidence and supply, within the Greens, as the education spokesperson with, obviously, the Labour MP and Minister of Education, the Hon Chris Hipkins, and also New Zealand First MP, the Associate Minister of Education, Tracey Martin. I guarantee you that all of these things are things that come to mind when we are discussing the future of the education system.
I would also just like to note that these kinds of things are evidently really complex, and we don’t throw the baby out with the bathwater entirely when there are changes of Government. The work that was done by the previous Government is absolutely being taken into account by this one. It is a very complex thing, when we’re talking about the future and the funding of our education system. I don’t think that the proper mechanism for it is by way of a member’s bill.
So, just in summation, I would just state that I am absolutely keen to continue my constructive work across the House. So too I believe that the Government has signalled that, with the invitation to the Opposition to engage in the likes of the education summit. At the very least, it’s also been signalled by my colleague the Hon Tracey Martin. So I would like to acknowledge again Erica Stanford for her work on this bill and note that the Greens will not be supporting it. Thank you.
MARJA LUBECK (Labour): Tēnā koe, Madam Deputy Speaker. It’s a pleasure for me to take a call on the Education (Social Investment Funding and Abolition of Decile System) Amendment Bill.
First of all, it’s really great to see so many of our new MPs having the good fortune to get their members’ bills drawn out of the ballot, but, unfortunately, it won’t be any surprise to Erica Stanford that we won’t be supporting this bill, because it’s fundamentally flawed.
The member Denise Lee previously asked why we don’t support so many of the members’ bills. I have to disagree, because we just went through a member’s bill from the National Party member Scott Simpson that we supported. So that’s absolutely not right. But we don’t support bills that are fundamentally flawed, like her bill, unfortunately, which was a bill that would have kept women in low-paid employment and that’s why we couldn’t support it. It was not a bill that was a good bill, even though it was, as she said, served on a silver platter. If you put a turd on it and rolled it in glitter, on a silver platter, nobody would still want to have a bar of it.
So basically, the previous National Government announced its intention, back in June 2017, to replace the decile system with a needs index. But what they didn’t do was they didn’t work out the details. They didn’t put the funding aside. In fact, they had no money at all put aside for this policy, despite the advice that the Opposition received at the time that it was likely to need an extra $100 million a year to implement this policy properly.
I did refresh my knowledge of this bill by reading the member Jan Tinetti’s Hansard speech again, because Jan Tinetti obviously is a subject matter expert on this material, having worked in schools ranging from decile one to 10. She made a very good point, that it really doesn’t make much of a difference to the issue—for example, removing a tag like decile 1 from Merivale School in Tauranga—because the issue is about poverty and the effects of poverty on children and on our schools.
So what I’m trying to say is that this bill really is missing the point it’s trying to make, and that’s to address stigmatisation. In fact, what it likely would end up doing is actually stigmatising children by labelling them as likely to underachieve once they meet certain criteria. The bill, as has already been mentioned, is also in complete contradiction to the Education Act, because under the current decile funding system, as per that Act, the Minister is empowered to work out the details of allocation of the grants, and with that flexibility we don’t need to amend the statute every time that we need the funding system adjusted. So that flexibility would be completely lost if we put this proposed needs index in place.
The other rather bizarre aspect of this bill is that it takes the very unorthodox step of, first of all, having to define what the decile system is, and then banning it. Surely, having to do such a step in legislation is a sign of badly drafted legislation. Another comment I would like to make is that a member’s bill, as has been mentioned by Chlöe Swarbrick previously as well, is not really the correct way to review a decile system, to see if it needs to be replaced with something different. The proposed needs index doesn’t serve as a new mechanism for targeted funding. That’s because only around 3 percent of operational funding for schools is decided by the decile rating system. It would be kind of absurd if 3 percent of the funding would be decided by legislation, and the rest, 97 percent of the funding, were to be decided by the Minister of Education and the Ministry of Education.
The Child Poverty Action Group published a statement. They said that if this bill were to pass, it could put schools serving income-poor and materially deprived communities at the risk of losing funding they desperately need, and put students at an increased risk of bias and stigma. So we’re taking heed of that statement.
All children should have access to quality education. This Government is committed to creating a high-quality, fair, and inclusive education system, to produce equitable and excellent outcomes for all New Zealanders. Deciles might be a blunt measure, and something needs to be done about them. We do agree about that. But, as we have heard previously from the Minister, that work is currently being done and this bill would actually override all that work that’s being done. So therefore I don’t support this bill. Thank you.
NICOLA WILLIS (National): I rise in support of this excellent bill by the fine member from National’s “class of ‘17” Erica Stanford. This is a bill that seeks to repair the broken rungs on the ladder of opportunity. It is a bill that takes an old-fashioned decile system, created in 1995, at the same time as the oldest Nokia brick phones and says, actually, we can do a bit better than that, because we’ve got a lot better data now. We don’t need to rely on an old system that creates stigma, that’s poorly targeted, that only gets updated every five years; it is time for the iPhone X. It is time to use the best resources and technology we have to best target support at the children in our schools who need that support most.
This is a bill that acknowledges that here, in 2018, we have far better data that allows us to target the children who most need help. So we ask ourselves: what is it about this evidence-based approach that the Government members are so afraid of? We hear from them that, actually, they want to work with the other side of the House on advancing education objectives. We hear from them that they care about disadvantaged children. But what are the reasons that we’ve had for why this legislation shouldn’t progress? We were told by Tracey Martin that this is a Government aiming for the sky. Well, with all respect to that member, this is a Government that is stuck in the review mud. What we have in front of us is a bill that would allow us to make progress on this significant issue right here, right now.
Now, members opposite are very honourable, as they outline little details of the bill that could be corrected or amended, and I would recommend to members on the other side that that is what the select committee process is all about. What we should be doing is saying, “Yes, this is absolutely the right direction. It is not OK to let schools that are decile 1, 2, and 3 be labelled as poor schools any more. We shouldn’t put up with that for another six months, we shouldn’t up with that for another year, and we shouldn’t put up with that for another week. Let’s progress this legislation now to remove that stigma and to make progress for those schools. It’s not good enough to let children who are coming from the most disadvantaged circumstances—that all of the data, all of the research, tells us are at high risk of educational underachievement—not be supported properly. That’s not good enough, so we’re going to act.”
But no, no; instead, what we have is a Government with a very different approach. We have a Government with a Minister who says to the member, “Oh, yes, I’ll talk to you about your bill.”, then sends her a letter about the bill the day before its due to be read—the day before—attached to it a report written a month before by his officials that he could easily have given to the member earlier to ask to work with her. But that shows poor intent. This was not a Minister who wanted to work on this bill.
So I ask the members opposite—and I challenge them to answer these questions in their coming speeches—is this actually something that you’re prepared to do for New Zealand’s children? Are you actually prepared to change the 1995 Nokia phone funding system to something that works for disadvantage children, that harnesses our data and harnesses our technology? And, if you are prepared to do that, why would you not support this bill to select committee and progress that with haste?
What we are, effectively, doing today in this House—what the members opposite me are doing—is, effectively, putting at risk the children who most need our help. They’re, effectively, saying, “Put your needs on hold because we’ve got some petty politics over here that should take precedence.” We have got a Minister who would prefer to sit on his 22 reviews and come up with something that he can take all the credit for later, and we say that is not good enough. The time to use a social investment approach to put rungs on the ladder of opportunity is now.
It has been broadly acknowledged across this House tonight that the decile funding system has had unintended negative consequences. It’s a system that we all embraced with the good intent of helping those who needed our help most, but it is a system that is no longer fit for the times. Here we have, in Erica’s excellent bill, a system that would allocate money much more efficiently, and that is not something that anyone here tonight has argued against. Instead, what we’ve had is nit-picking about details that would be best examined by a select committee. What we have had, effectively, is a rejection of the great work that the former National Government did with the education sector in reaching out to stakeholders, sitting down, and saying, “How can we work on this system and make it better?”
What we’ve heard from members opposite is that they don’t work with the Parliament on this; they want the Minister to sit in his office by himself and come up with something that suits him. We say that’s not good enough for New Zealand’s children. You can do better.
Hon JENNY SALESA (Associate Minister of Education): Thank you, Madam Deputy Speaker, for this opportunity to speak on the Education (Social Investment Funding and Abolition of Decile System) Amendment Bill. Can I, first of all, congratulate Erica Stanford for having her bill drawn. The member has had much more luck than I have; I’ve been in this House for a few years and I have not ever had one bill drawn, so congratulations on that.
I’d also like to acknowledge and thank the Hon Nikki Kaye, as well as Nicola Willis, who has just spoken—two of the members of the National Party who attended both of the conversations that we had over in Christchurch for two days, as well as in Auckland just last weekend. Can I say that those two conversations, where we had over 800 people in both locations, are part of what it is that we’re doing, as this coalition Government, to move forward the work that we’re trying to do in education. Yes, there are several reviews that we’re doing, but we’re also reaching out and listening to people. As well as those conversations, we’re also having online conversations with folks, where over 9,000 people have written—told us what it is that they would like to do.
Can I just also remind members of the opposite side of the House that nine years was a long enough time for them to have actually put through a decile system—if they were wanting to fix this decile system in education, they could have done it within nine years. We acknowledge that the decile system is not perfect—that is something that we do acknowledge—but we also know that there is not a level playing field in education. We know that so many of our children, when they enter primary school—when they go to school, they do not actually have the same kinds of schools. Many of them in my electorate in South Auckland—many of them miss a lot of things. Some of them don’t even have school uniforms. Some of them do not have access to stationery.
We do have low-decile schools, though, in South Auckland, and I’ll give you one example from my electorate. It’s a decile 1B school, but what that school does is it tries to level the playing field. Yes, they get extra funding because of their decile, but what the principal and the school and the teachers do is they try to level the playing field every single day. How? By providing school uniforms; by helping with school stationery; by helping to pay for some of the fees that these children don’t have.
We must be cautious, with whatever system we come up with to replace the decile system, that we’re not creating a system where there is even worse stigma than what we have already. We know that the decile system we have has stigma that is stigma for the schools. However, the system that this amendment bill is proposing would actually be needs based, but it’s proposing that it’s tagged to an individual child. So instead of actually having a system that has the stigma for a whole school, one of the flaws of this particular bill is that it would actually stigmatise individual students.
So, again, I appeal to the member Erica Stanford as she develops this bill that the system we need to go through with, in the future, needs to be a much better system. Yes, I agree that we need to develop and design the future education system for the next 20 to 30 years. We need an education system that is fair. We need one that is inclusive for all of our students. Currently, we do not have an education system that acknowledges the impact that socio-economic disadvantage has on all of our students’ outcomes. We need an education system that not only acknowledges that but addresses the fact of some of the disparities that our students face on a daily basis as something that they take into school. Our current schools right now—some of them don’t actually acknowledge that some of our students do not even have a house that they live in; that they live in a garage. That has a big effect on when they actually enter school. This new system needs to address that. Thank you, Madam Deputy Speaker.
ERICA STANFORD (National—East Coast Bays): Thank you, Madam Deputy Speaker. I’m really pleased that my bill was drawn. I am proud of the work that the National Party have done in this area and I am proud of this bill.
The decile system is a very outdated mechanism to deliver funding to our most disadvantaged students. It’s a blunt tool. Look, to be fair, it’s probably the best thing that we could have come up with at the time with the data that we had. But we now have access to data and information that can more accurately target funding to those students in schools who are most at risk of not achieving. The decile system we have is basically pretty much based purely on household income, and we know now—we have access to information that tells us—that this is not the best indicator to tell us whether or not a child is going to achieve at school. There are many more complex factors that will determine that, and we know what they are. We know that by taking into account a wide range of indicators, that we can weight, we can determine, a child’s risk of not achieving. We know where these kids are and we know that we can target them. If we have the ability to more accurately target funding to the right kid at the right time in the right place, why would we not do it? Why would we carry on with a decile system that is flawed and that stigmatises schools—because people automatically think that low decile equals a poor school, and we know that that’s not true.
It’s widely recognised in this House that it’s a flawed system. I think, from all of the speeches tonight, we all agree that something needs to be done, and here we have a bill that gives us a better way of doing things. We can break cycles. We can see futures turned around, because, on this side of the House, this party believes in smart approaches, in doing the things that work. This bill will do just that—while protecting privacy, Jenny Salesa, if you’d read the bill—by eliminating the stigma associated with decile.
I would like to thank Chlöe Swarbrick for meeting with me about my bill, and also Tracey Martin, both of whom met with me to discuss the bill. Chlöe Swarbrick even paid for lunch—after she told me she wouldn’t be supporting the bill. That just leaves Mr Hipkins, who said—to be fair—that he would meet with me, and who is currently in the middle of summits on education to hear everyone’s views—to be “inclusive”, to have “conversations”, to use the words du jour of the Labour Party.
The summits, the inclusiveness, the conversations, the open and transparent Government, the cross-party collaboration, reaching across the political divide—all of these words and phrases sound so amazing and warm and fuzzy and inclusive. That’s what this Government would like you to believe that they’re doing, but, unfortunately, these are only words; the reality is very different.
The very first occasion Minister Hipkins has to do some of these things—to reach across the divide, to talk with someone about education, about my bill, a complex technical bill that affects every school in New Zealand and thousands of disadvantaged kids—the very first opportunity he has to discuss it, what does he do? He ignores my repeated requests to meet to discuss my bill. Silence, nothing, nada, not a peep—until the night before the first reading of the bill, he sends me a letter with a memo saying he’s not going to support the bill. And, look, I sound surprised. I sound surprised that all of this has happened, but I shouldn’t be. I shouldn’t be surprised. In fact, this reminds me of a quote from one of my favourite movies, Aladdin, where Iago says, “Why am I not surprised? I may have a heart attack and die from not surprise!”, because that’s how I’m feeling today. It’s 100 percent in line with everything the Minister has done.
Let’s take charter schools. It fits his modus operandi completely. He refuses to meet with them—sound familiar? No consultation—sound familiar? He replaces having a conversation with them with a piece of paper, a press release, announcing that they’re going to be closed—sound familiar? This kind of behaviour is exactly what I should have expected. Mr Hipkins kills policy he doesn’t like with the stroke of a pen. With my bill, it was death by letter at the eleventh hour—no reason. And when he eventually implements the equity index, he will take all the credit for all of the work—the good work—that National did. In his mind, it’s a “my way or the highway” approach, and that is very sad for the disadvantaged kids of New Zealand, who could be much better off under this bill.
A party vote was called for on the question, That the Education (Social Investment Funding and Abolition of Decile System) Amendment Bill be now read a first time.
Ayes 56
New Zealand National 55; ACT New Zealand 1.
Noes 63
New Zealand Labour 46; New Zealand First 9; Green Party 8.
Motion not agreed to.
Bills
Patents (Advancement Patents) Amendment Bill
First Reading
Dr PARMJEET PARMAR (National): I move, That the Patents (Advancement Patents) Amendment Bill be now read a first time. I nominate the Governance and Administration Committee to consider the bill.
It is with immense pleasure I take this call in the first reading of my member’s bill, the Patents (Advancement Patents) Amendment Bill. The timing for my bill to be drawn from the ballot was perfect. It was in the month of April. It is in the month of April that we observe the World Intellectual Property Day. My bill is a substantial bill to address a very important gap in our intellectual property protection legislation. I’m really passionate about supporting more and more research and development and more and more technological advancement, and this bill is a product of my passion to do more for small to medium enterprises and more technological advancement. This bill is to allow incremental advancements that may not qualify for a standard patent to have intellectual property protection rights.
Protecting ideas and advancements helps New Zealand innovators and businesses, and it will help them stand out on the international stage, as well—not only locally. This bill is to introduce a second-tier patent system that is accessible and is quicker, and this is, as I said, for small to medium enterprises making incremental advancements that may or may not qualify for a standard patent under the standard patent Act—that is, the Patents Act 2013. With the introduction of a second-tier patent system, the owners of the advancement patent will be able to enjoy an innovation monopoly in the same way the owners of a standard patent can. If it is a product to be commercialised, they can go out and commercialise it with reduced risk of it being copied or stolen. With this ability, New Zealanders will continue to benefit from the creativity and innovation that we have in our country.
New Zealand is known to be a net importer of technology. We have heard this several times. Yes, New Zealand is a net importer of technology, but I want to challenge our views, and I want to say that we don’t want to be complacent. We don’t want to accept the status quo. If you go out and see innovators and businesses, we know that they are already doing really well not just locally but internationally too, and they are really eager and ready to lead us on the international stage. But what we have to do is move along with these innovators and businesses. We have to provide the tools and means for these small businesses and researchers to do well so that we can shift our status of being a net importer of technology to actually becoming a trader of technology.
This won’t happen without the help that is needed for small to medium enterprises, and protection of intellectual property is a very important tool for that. People that are stuck in that mentality, I say to those people they should come along and visit businesses that I see—research institutes, universities, and businesses doing a great job. They are pushing New Zealand forward on the innovation front. It’s about time we put our money where our mouth is and help to provide the means New Zealand needs for the future of our technological development.
I’m really fortunate to be surrounded by people that are always pushing ideas forward. But, with a large number of people, the necessity of innovation is taken for granted. People don’t realise how time-consuming it is to come up with an idea, an innovation, and then take it to the next level. It’s not only that taking it to the next level but it’s also about securing markets in a successful manner, and that is where the idea of intellectual property protection comes in, because you don’t want to see someone else stealing your idea. As I said, simply innovating isn’t enough. Protecting that innovation is essential, and that is why my bill is important.
Many innovations that would have qualified only for a second-tier patent in other countries were able to get a standard patent here in New Zealand under the old patents Act—that is, the Patents Act 1953. But, as we know, we reviewed our Patents Act 1953, and now we have a new Patents Act—that is, the Patents Act 2013. That was a good thing to do, bringing the level of invention in line with the international norm. But, with that, what has happened is that some of the incremental advancements will have nothing to fall back on when it comes to protecting those advancements. So there is a gap, and this gap needs to be filled. This is to allow small to medium enterprises to enjoy intellectual property rights. I believe that with increased investment in research and development, an increase in economic activity would follow.
According to the World Intellectual Property Organisation, there are 59 countries around the world that already have a second-tier patent system—yes, I repeat: 59 countries around the world already have some form of second-tier patent system. So with so many countries already having a second-tier patent system, it was my job, while creating this bill, to look at what worked and what didn’t work in other countries. So I looked at some successful models in European countries, and I also very keenly looked at the Australian innovation patent system for reasons of it being in the media. We saw that in Australia the Government decided to abolish it but then they decided not to. So that was a big push from small to medium enterprises in Australia.
For someone to do a direct comparison of my bill with the Australian innovation system will be completely wrong, because I want to highlight this: there is no international consistency when it comes to second-tier patent systems. We can adopt a second-tier patent system according to our conditions, according to our uniqueness.
So, as I said, I learnt from other countries what worked and what didn’t work, so it was a great position I was in. Just to give some examples, in Australia we know that when it underwent the review, we saw the biggest criticism of the Australian innovation patent system was that it doesn’t provide certainty. Uncertainty was the big issue there, because examination is optional in the innovation patent system in Australia. But, as members will see in my bill, examination is required at three years, and, if it is not examined, the patent going to lapse. This also addresses another concern of other companies coming and filing patents to block innovation. That has been already addressed in my legislation.
The second thing that was criticised in the Australian innovation patent system was that it was difficult to know if it was already a certified patent. In my proposal, I have made it very, very clear that it is going to be called a provisional advancement patent until it is certified and will be called an advancement patent only after certification. But, as I said, there are some things that are different from other countries, as we are a small country with a smaller economy and our businesses, our researchers, might take longer to secure funding to commercialise their prototype. So I have allowed a slightly longer time than other countries, which is 10 years, for my advancement patent. It’s really important to note that we are a small country, we have small businesses, and we need to do more for our small businesses so that they can thrive.
To summarise, this bill will help innovation. This bill will help research and development. Most importantly, this bill will help start-up companies. This bill will help companies that are going through that very important phase, that growth phase. This is about supporting the ideas that start from garages, the ideas that start up on kitchen benches. Our businesses—96 percent of our businesses are small to medium enterprises. To allow innovation, we should not fear competition. I repeat: to allow innovation, we should not fear competition.
I’m really hopeful that the Government will take a bipartisan approach on this bill and support this bill to go to the select committee to allow the sector to have their say. This is not only about this bill; this is also about raising awareness about intellectual property protection rights in New Zealand. So I’m really hopeful that the Government, if they wish to support small to medium enterprises, if they want to increase research and development—this is a perfect opportunity. I urge Government members to support this very important bill. I support this bill and commend this bill to the House. Thank you, Madam Deputy Speaker.
Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): Thank you very much, Madam Deputy Speaker. Can I start my contribution by acknowledging the sponsor of this bill, Parmjeet Parmar, and the good intentions with which she brings this bill before the House. I think all members of this House want to see greater investment in research and development in New Zealand. We do lag behind other OECD nations in our private and public investment in research and development, and we want to see more businesses engaged in research, engaged in high-technology activities, because we know that is what can help drive productivity, that is what can help drive wages up, and that is what can improve living standards. As a Government that is absolutely focused on transitioning our economy to one that is productive, sustainable, and inclusive, we certainly commend the member for bringing this bill to the House with those intentions, which makes me wonder why the previous Government didn’t include a second-tier patent system when they introduced the new Patents Act in 2013.
By 2013 plenty of other countries, as the member sponsoring the bill said, already had a two-tier system. It was not a new idea, and if it was a good idea, if it was one that was working well and that would be fit for purpose here in New Zealand, I’m quite sure that the previous Government would have introduced it as part of its Government legislation. That was legislation that the Labour Party in Opposition supported. It was a good piece of legislation, and the idea that is at the heart of this bill that the member is bringing is one that could easily have been included in that bill. But I think there are good reasons why the previous Government did not have a two-tier patent system as part of the Patents Act 2013.
The first is that there are question marks about whether two-tier systems really work. In fact, many of the nations that have two-tier systems either have decided to do away with it or are actively considering whether they should do away with having a two-tier system. So, for instance, the Netherlands introduced a two-tier system in April 1995, but in June 2008 they did away with the two-tier system. As is common in most second-tier patent systems, there was no examination for novelty and an inventive step at the patent office. The unexamined six-year patents created legal uncertainty to competitors.
Chris Bishop: Send it to a committee to have the debate.
Hon IAIN LEES-GALLOWAY: Belgium followed the Netherlands in January 2009—and the member raised Australia. Australia is another jurisdiction where they are seriously considering, actively considering, doing away with two-tier systems. So the members opposite are saying, “Well, send it to a select committee.” Well, actually, people have had their say in New Zealand, first of all, by not clamouring for this. We in the Government actually tried to find where the public outcry is, where the outcry is from within the tech sector, and where the small to medium sized enterprises are—those who want to engage in more research and development and want to be more high-technology and be able to get more patents more easily. Where is the cry from them for this change?
There isn’t one. It’s not there. It simply doesn’t exist. In fact, Computerworld New Zealand described this bill as something of a horror film for our industry. Now, I think that’s a bit rough on the member, to be honest, but it does demonstrate the feelings of people out there who are actually operating in this space and would be coming out and supporting this if they thought it was a good idea.
I know I haven’t got much time left this evening, but I just want to touch on a comment that was made at the 10th annual conference of the European Policy for Intellectual Property Association, “As a conclusion, the empirical evidence on the economic benefits of two-tiered patent systems in advanced economies remains non-existent.” Why would we, at this time, introduce a bill that takes us down a path that so many other countries are rejecting at this stage? I do appreciate what the member is trying to do. I understand the sentiment behind this bill, but it is clear that this is not the direction that other nations that we compare ourselves with are going in. In fact, they’re going in the opposite direction.
Debate interrupted.
The House adjourned at 10 p.m.