Wednesday, 20 June 2018

WEDNESDAY, 20 JUNE 2018

WEDNESDAY, 20 JUNE 2018

The Speaker took the Chair at 2 p.m.

Prayers.

Motions

World Refugee Day—Commemoration

GOLRIZ GHAHRAMAN (Green): I seek leave to move a motion without notice and without debate recognising World Refugee Day.

SPEAKER: Is there any objection to that process? There appears to be none.

GOLRIZ GHAHRAMAN: I move, That this House recognise World Refugee Day and commemorate the strength, courage, and perseverance of the millions of refugees forced to flee their homes due to war and persecution.

Motion agreed to.

Oral Questions

Questions to Ministers

Economic Programme—Cost of Living, GDP, Regional Fuel Tax, and Rental Costs

1. Hon SIMON BRIDGES (Leader—National) to the Prime Minister: Does she stand by all her statements and policies?

Rt Hon WINSTON PETERS (Deputy Prime Minister) on behalf of the Prime Minister: Yes.

Hon Simon Bridges: How can the Prime Minister say it is “unadulterated rubbish” that the new Auckland regional fuel tax and national excise tax will increase costs for an average family by up to $700 a year, when it’s calculated on the Government’s own website figures of suburban Auckland families’ travel and 25c per litre, which is what the Government is legislating for?

Rt Hon WINSTON PETERS: To begin with, on behalf of the Prime Minister, to even make that calculation, given the number of people who live in Auckland, is extraordinary if that member is relying upon it. The second thing—

Hon Grant Robertson: It’s $5 a week for the average family.

Rt Hon WINSTON PETERS: Yes, it’s $5 a week for the average family, but here’s the real point: last night, in this House, every member over there was shouting out for a regional tax for their own region whilst opposing Auckland’s.

Hon Simon Bridges: When the Prime Minister said yesterday “every sane, sound economist” disputes that the regional fuel tax and excise tax increases will increase costs on Auckland families by hundreds of dollars, can she name one?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister—who was on fire yesterday, I might add—can I say that we’ve done the equations on the costs to families under the previous regime’s rule and under ours, and it’s a dramatic improvement for families today.

Hon Simon Bridges: So is the reality that when the Prime Minister said yesterday every “sane, sound economist” disputes the hundreds of dollars, she was talking arrant poppycock?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, what we heard yesterday was an extraordinary statement. For example, what we heard yesterday was that we were going to get $1,000 per year tax cuts for New Zealanders and families, right?

Hon Simon Bridges: You voted for them.

SPEAKER: Order!

Rt Hon WINSTON PETERS: No, no. That’s what—

SPEAKER: The member—the Deputy Prime Minister will resume his seat. I think three times yesterday, the member was subject to warnings for exactly the same thing, and it is a matter, as I’ve said, of showing some leadership in the application of the rules in the House, and I expect him to do it.

Darroch Ball: No surprises there.

SPEAKER: Order!

Rt Hon WINSTON PETERS: Let me say—

SPEAKER: No, resume your seat. The member will stand, withdraw, and apologise.

Darroch Ball: I withdraw and apologise.

SPEAKER: And the National Party get two extra supplementaries.

Rt Hon WINSTON PETERS: Yesterday, there was a claim—and he made it—that $1,000 per year tax cuts equals $40 per week. That suffers from some basic arithmetic. If you, for example, divide 1,000 by 52—that’s the number of weeks in a year—you get $19.23, and not $40.

Hon Simon Bridges: Does the Prime Minister stand by her position yesterday that her Government’s policies will lower rents?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, yes.

Hon Simon Bridges: How on earth can she say that when her own Government advisers estimate rents have already increased an average of $23 per week since she’s been in office, and when additional taxes such as the brightline test and the ban on negative gearing will inevitably be passed on to renters this term?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister—because for the last six months, we have been setting out policies that are now going to be rolled out and implemented that will arrest nine years of decay and neglect, and then when you compare rents, you compare it with earnings as well, and that’s why we’re able to make the claim we’re making.

Hon Simon Bridges: Why, as she said yesterday, is the New Zealand Herald at least to some extent incorrect to report that the cost of fruit and vegetables is set to rise because of higher fuel prices, increasing minimum wages, and increased costs of rent?

Rt Hon WINSTON PETERS: Could I just say that anticipated price rises of food are not a result of the policies and actions of this Government—a fact that was identified by the very authors of the Otago University report which the member based his false assumptions on.

Hon Simon Bridges: Well, how can Retail New Zealand be wrong when it said last week in that New Zealand Herald report “There are cost pressures across the board, it’s pretty much everything that is likely to be impacted, … Fuel prices, and therefore freight and transport costs, the increase to minimum wage and rising property prices are expected to push up the cost of goods.”, and aren’t at least some of those factors absolutely because of Government policies?

Rt Hon WINSTON PETERS: Every day, every week, every month, and every year, we’ve had that for the last 50 years. The real issue is what are the Government’s policies to address them, and he put his finger on one of them when he talked about the increase in wages.

Hon Simon Bridges: Is the Prime Minister really seriously trying to tell us that the increases in fuel prices that are coming from taxes being passed in the House this week by the Government, that the increases in rental costs that her policies absolutely have a significant effect on, and that other cost increases such as significant minimum wage increases are having no effect on costs on hard-working Kiwi families?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, who has always been serious, can I just say that the member’s neglecting, for example, the Families Package, which will put $75 per week in the hands of 385,000 families, or, for example, GP visits for 600,000 New Zealanders by up to $30 in terms of assistance, and, dare I say it, every child under 14 years of age getting free doctors visits as a result of this Government.

Hon Simon Bridges: Why does she believe, as she said yesterday, that GDP will be higher than forecast when the numbers are released tomorrow?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, could I say she’s been patient, and he should be patient and wait one more day.

Hon Simon Bridges: Can we just confirm the Prime Minister definitely thinks that the GDP figures will be higher than forecast tomorrow?

Rt Hon WINSTON PETERS: Could I just say, on behalf of the Prime Minister, no such statement was made. And let me say it very slowly: unlike the gloom-and-doom merchants over there, the sharemarket is the highest this country has ever seen, and, dare I say it, it is the best performer in the world. Those are real indicators, not the blind jealousy and envy of people denied power rightfully.

Economy—Current Account Deficit and GDP

2. Hon AMY ADAMS (National—Selwyn) to the Minister of Finance: Does he stand by the statements and policies of this Government regarding New Zealand’s economy?

Hon GRANT ROBERTSON (Minister of Finance): Yes, in their appropriate context.

Hon Amy Adams: Why is he showing no concern that Treasury’s forecast average GDP growth over the next two years has dropped by now half a percent since the Pre-election Economic and Fiscal Update, which means $2.7 billion less in our economy, or for him is any growth figure above zero good enough?

Hon GRANT ROBERTSON: What we are seeing is that the consensus forecasts, as released by the New Zealand Institute of Economic Research at the beginning of the week, are in line with the Budget forecast. It is true that GDP levels were forecast to slow from the beginning of 2017, a period of time in which the member asking the question was in Government. They have slowed somewhat. We’ve been very open about the fact that it will take time to turn the economy around from one based on speculation, as overseen by the previous Government, to one based on productivity and sustainability, as overseen by this Government.

Hon Amy Adams: Well, given that last answer, does he stand by his statement that this Government won’t be relying on population growth for our economic growth when GDP per capita forecasts have worsened since he took office and actual GDP growth per capita flat-lined in the last quarter to just 0.1 percent?

Hon GRANT ROBERTSON: As we’ve said from day one, it will take time to turn around nine years of basing economic growth on population growth and housing speculation. As the policies of this Government roll out to improve investment in R & D, lift skills in the economy, and get better trade agreements, we will see growth based on productive growth, not the previous Government’s approach.

Hon Amy Adams: Does he agree with Statistics New Zealand’s statement today that the current account deficit is—and I quote—“an important indicator of the economy’s health” when they today reported that we now have the largest current account deficit since the 2008 global financial crisis?

Hon GRANT ROBERTSON: The current account deficit does fluctuate from time to time, and it was largely in line with expectations: 2.8 percent of GDP in the year ended March 2018, compared with 2.7 percent of GDP in 2017. That’s not the kind of difference the member should be getting worried about; the kind of difference she should be getting worried about is people having $75 per week extra in their pocket, knowing that this Government is delivering to them.

Hon Amy Adams: On what date was the public-private partnership (PPP) contract to build Waikeria Prison that he referred to in question time last Thursday signed?

Hon GRANT ROBERTSON: I don’t have that specific information with me. What I am aware of is that the PPP contract for Waikeria Prison was in place and that breaking it would’ve cost significant sums of money to this Government, given that the contract had been earlier signed. Variations to the contract may well have been signed since then, but the overall break fees for the original contract signed by the previous Government would have been substantial.

Families Package—Impact and Reaction

3. Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Finance: Will this Government’s Families Package support low- and middle-income families; if so, how?

Hon GRANT ROBERTSON (Minister of Finance): Yes. The Government’s Families Package, most of which will come into effect on 1 July, will provide targeted income assistance to boost the incomes of middle and low income families, particularly by increasing the Working for Families tax credits and raising the abatement threshold, introducing a Best Start payment of $60 per week to assist families during the critical first few years of life, and increasing paid parental leave to 26 weeks. When rolled out fully, Mr Speaker, as I’m sure you’re aware, 385,000 families with children will be better off by an average of $75 per week.

Dr Duncan Webb: What specific examples can the Minister provide of families that will be better off under this package?

Hon GRANT ROBERTSON: Once these changes begin to take effect on 1 July, a majority of Kiwi families with children will be pleased to see their incomes rise. For example, a Hamilton couple with a six-month-old and a four-year-old earning $65,000 a year will see their income rise by $63.87 a week from 1 July this year. Once the package is fully rolled out, from 1 July 2020, a family in that same situation would be $123.87 per week better off. The Families Package represents a major step in delivering meaningful improvements to the lives of New Zealanders—in particular, our children.

Dr Duncan Webb: Has the Government received any feedback from people who will benefit from these changes?

Hon GRANT ROBERTSON: People have already begun to write in to us and to say what this package means to them. One woman who contacted the Prime Minister’s office said this: “It is more than money. It is that someone actually has validated our existence and seen that we are not victims, that life has just played a curly hand. Thank you, Jacinda and your team, for caring. It has given me such a motivation to get well and back to being a proud and productive citizen of New Zealand.”

Health, Minister—Counties Manukau District Health Board

4. JAMI-LEE ROSS (National—Botany) to the Minister of Health: Does he stand by his answer yesterday when he said “I reject the premise of that question” when asked why he allowed “his office to put pressure on the CEO of the Counties Manukau DHB not to release documents that would have contradicted his own public statements”; if so, how does he reconcile that with the Counties Manukau DHB CEO emailing board members saying “unfortunately we are under some pressure from the Minister’s office about what we can and cannot say”?

Hon Dr DAVID CLARK (Minister of Health): Yes, and in response to the second leg of the member’s question, I’m not responsible for what the acting CEO of the Counties Manukau District Health Board (DHB) does and doesn’t say.

Jami-Lee Ross: Why did he damage the reputations of the Counties Manukau District Health Board chair and CEO by putting them in a position where his office pressured them not to respond when he was told in text messages and phone calls repeatedly that his public statements were wrong?

Hon Dr DAVID CLARK: I did not damage the reputation of those people.

Jami-Lee Ross: When Rabin Rabindran texted him and said, “I take strong exception to the connection between the state of the buildings and your knowledge of them and my removal from the board, which is damaging my reputation”, why did he not publicly apologise then to Rabin Rabindran?

Hon Dr DAVID CLARK: Ministers appoint the chairs of DHBs. That is the Minister’s prerogative. I appointed a chair that I believe has the right skill set to address the nine years of neglect that that DHB has suffered—the nine years in which we got rot and mould in the walls of the buildings. That will take a long time to repair, and I have the job, as Minister, to select the team that I think will best be able to address that historical legacy of underfunding in the health sector.

Jami-Lee Ross: I raise a point of order, Mr Speaker. I don’t believe the Minister did answer my question.

SPEAKER: Well, I think he did.

Jami-Lee Ross: Why did his draft press release announcing the sacking of Rabin Rabindran further damage his reputation by stating the decision had come “after revelations about the state of some of Middlemore’s buildings”, when he told Rabin Rabindran privately that Middlemore Hospital’s issues had happened before Mr Rabindran’s time?

Hon Dr DAVID CLARK: I’ve been absolutely explicit that the reason for Mr Rabindran’s departure was not due to anything about his performance; it was due to the historical situation we inherited of underfunding. That is what we needed to have refreshed leadership about. The other point I’d make to the House is that that was a draft press release, not released into the public except by that member opposite.

Jami-Lee Ross: Why did he have his office draft the press release after his voicemail message to Rabin Rabindran attempting to gag him from speaking publicly and, at the same time, offering to appoint him to further positions?

Hon Dr DAVID CLARK: I reject the idea that Mr Rabindran was ever gagged, and I would also note that the DHB fronted media regularly, both with statements and with interviews.

Jami-Lee Ross: Point of order.

SPEAKER: A point of order, Jami-Lee Ross—with a bit of a warning.

Jami-Lee Ross: I seek leave to table a draft press release from the Hon Dr David Clark around the changes at Counties Manukau District Health Board which contains the statements that I just read out.

SPEAKER: Is there any objection to that document being tabled? There is.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. A draft press release that wasn’t released is not a press release.

SPEAKER: Well, that’s almost certainly true, but it’s also not a point of order.

Jami-Lee Ross: I seek leave to table a transcript of a voice mail message given to Rabin Rabindran by Dr David Clark on 18 April at 2.24 p.m.

SPEAKER: I want to ask—I mean, I know it’s a transcript that I have seen—is it in general circulation?

Jami-Lee Ross: Point of order.

SPEAKER: Well, has the member released it to the media or anything like that?

Jami-Lee Ross: A transcript hasn’t been released by me to the media.

Hon Chris Hipkins: It’s been published in the paper.

SPEAKER: I don’t know that that’s absolutely the case. I will put it to the House. Is there any objection to that being tabled? Yes there is.

Jami-Lee Ross: I seek leave to table the Microsoft Word document properties of that draft press release, which shows it was created on 18 April at 2.53 p.m.

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

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

Health Services—Funding

5. Hon MICHAEL WOODHOUSE (National) to the Minister of Health: Does he stand by all his statements and actions?

Hon Dr DAVID CLARK (Minister of Health): Yes, in the context they were made and taken.

Hon Michael Woodhouse: Does he stand by his answer to media this morning? When asked “Did the Ministry of Health give you an indication of what the DHBs were looking for?”, he answered, “We did.”

Hon Dr DAVID CLARK: I’m not quite clear—I appreciate the member’s quoting back to me what his question is. Is he asking: did we get an indication from the district health boards (DHBs) of what they were after? In which case, I would answer that the work that Ministers do in setting the Budget is done with the Ministry of Health, who look at what they believe the demographics look like, where the cost pressures sit, and we prepare an answer on that basis and a Budget on that basis

Hon Michael Woodhouse: I raise a point of order, Mr Speaker. Interesting answer, but it didn’t address the question.

SPEAKER: I’ll get the member—because it was a little bit unclear because it was a partial quote—to ask it again.

Hon Michael Woodhouse: Does he stand by the answer he gave to media this morning? When asked “Did the Ministry of Health give you an indication of what the DHBs were looking for?”, he answered, “We did.”

Hon Dr DAVID CLARK: In the respect that the Ministry of Health works off demographic pressures, and so on supplied information that DHBs hold about their area, there’s ongoing conversations. But I’m not quite sure where the member’s heading with this.

SPEAKER: I’m taking that as a “Yes, probably.”

Hon Michael Woodhouse: Well, on the basis of “Yes, probably.”, does he also stand by his comment “District health boards this year needed at least $650 million to stand still, but they’re over $200 million short of what they need.”—

Hon Dr DAVID CLARK: I raise a point of order, Mr Speaker. I believe that the honourable member is referring to statements made a long time ago, not in my responsibility as a Minister.

SPEAKER: Well, we might get to that point. If it was a quote from before the member was a Minister, there are ways of getting it in, but the approach taken by the member so far doesn’t.

Hon Michael Woodhouse: May I rephrase the question? I didn’t get to finish it.

SPEAKER: Fair enough. If the member had finished it and not got there, he would have used it up if it was ruled out, but I’ll let him have another go.

Hon Michael Woodhouse: To the Minister, are there statements he has made prior to obtaining his ministerial warrant that he no longer stands by?

SPEAKER: Order! That is out of order. He has no responsibility for them.

Hon Michael Woodhouse: To the Minister, is he satisfied that district health boards were adequately funded in Budget 2018 when the amount of new money given to them was more than $200 million less than he himself said they needed?

Hon Dr DAVID CLARK: I reject the last part of the statement, and, in answer to the first, yes.

Hon Michael Woodhouse: Does he stand by his statement that “My job as Minister of Health is to defend the interests of the patient.”, and how is pending strike action by nurses in the interests of those patients?

Hon Dr DAVID CLARK: I am here as health Minister to defend the interests of the public patient. That is my priority as Minister.

Rt Hon Winston Peters: Could the Minister give us the secret of his success with respect to his negotiations with the Minister of Finance, having inherited, when he got the job as Minister of Health, nearly every district health board with a massive debt?

Hon Dr DAVID CLARK: I can’t reveal too much about the Budget process, but I am delighted that health got such a big chunk of the Budget and the largest increase in a decade, because it was so long neglected under that Government—run down. Those people let the staff exist in a situation of underfunding where the staff were more and more stretched and the pressure went on. The health system deserves to be supported adequately so it can deliver the services that New Zealanders would expect, and I’m proud that we’ve done that in this Budget.

Tax System—Compliance

6. Dr DEBORAH RUSSELL (Labour—New Lynn) to the Minister of Revenue: What recent announcements has he made in relation to cracking down on non-compliance in the tax system?

Hon STUART NASH (Minister of Revenue): This coalition Government is committed to creating more fairness in the tax system. Budget 2018 gives inland revenue $31.3 million of operating spending over the next four years to improve tax compliance. Of this, $23.5 million will be dedicated to a targeted campaign, ensuring that outstanding company - tax returns are filed, and $3 million will be used to analyse the potential legislative opportunities. This is expected to recover approximately $183 million, or a return on investment of $6 for every $1 spent.

Hon Grant Robertson: Oh, well done.

Hon STUART NASH: Thank you.

Dr Deborah Russell: What advice has he received around the scale of non-compliance in the tax system?

Hon STUART NASH: IRD officials have informed me that companies currently have over 100,000 returns outstanding, and recent research by inland revenue and Victoria University estimates that the average under-reporting of self-employed and contractual work is at 20 percent, on average, or around $800 million per year. This is simply not fair on all those hard-working Kiwis who comply with their tax obligations and pay their fair share of tax.

Dr Deborah Russell: What measures is the Government undertaking to support compliance, in addition to cracking down on non-compliance?

Hon STUART NASH: Hand in hand with measures to encourage compliance, the Government knows it needs to do more to simplify the tax system. The Business Transformation programme provides these opportunities to get things right from the start—for example, taxpayers now have the ability to enter into instalment arrangements online instead of calling the IRD, and for individual taxpayers, we are also making progress to eliminate the burden of secondary tax.

Housing New Zealand—Tenants

7. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: Does he stand by all his statements and policies regarding evicting anti-social Housing New Zealand tenants?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): Yes. In particular, I stand by my statement that “people all over this country of different persuasions and colours and tendencies all live together in diverse communities” and “This Government is not going to engage in the kind of vile demonising of State house tenants and stereotyping … to try and stigmatise people”.

Hon Judith Collins: Does he stand by his statement that “Housing New Zealand is a landlord … they’re not the police.”?

Hon PHIL TWYFORD: Yes, I do.

Hon Judith Collins: If a Housing New Zealand tenant complains that their neighbouring, gang-affiliated Housing New Zealand tenant is selling methamphetamine, what action will Housing New Zealand take?

Hon PHIL TWYFORD: Housing New Zealand works with the police and other agencies to help make our communities safer, and if people have concerns about their safety or suspect illegal behaviour, Housing New Zealand encourages them to contact the police. The good news is that there are now more police on the beat, following years of cuts under that former Minister.

Hon Judith Collins: What obligations does he, as the Minister of housing, have to keep Housing New Zealand tenants who are living within the law safe in their homes if they have intimidating behaviour from their neighbouring tenants?

Hon PHIL TWYFORD: My view about this is that Housing New Zealand has an obligation to be not only a good landlord but a good neighbour, and that antisocial behaviour should not be tolerated in Housing New Zealand tenants or, in fact, in any tenants and in any neighbours. But this is a complex issue, and Housing New Zealand’s policy tries to strike a balance between being a good neighbour and sustaining tenancies. Evictions, as that member seems to advocate, should be an extreme last resort. Our Government does not share the previous Government’s enthusiasm for throwing people out on the street.

Priyanca Radhakrishnan: What is the Minister’s view of Housing New Zealand’s announcement that it will help tenants with alcohol or addiction problems?

Hon PHIL TWYFORD: I thank the member for that question. I’m glad that Housing New Zealand is now helping those who have problems with alcohol and addiction, rather than throwing them and their children out on the street. Making tenants and their children homeless doesn’t make their problems disappear; it’s only likely to make things worse for them and society. The Prime Minister said that this Government brings kindness back, and I’m happy that Housing New Zealand is embracing that.

Hon Judith Collins: Why does he agree with his Housing New Zealand Chief Executive, Andrew McKenzie, who said last week, in relation to antisocial and criminal tenants, “So our objective is to keep them in the house.”?

Hon PHIL TWYFORD: Housing New Zealand has a range of options for dealing with these kinds of situations. The exchange that the member was talking about was about the idea of moving neighbours on, and I would have thought that would be an extreme last resort. While we should not be tolerating antisocial behaviour in public housing or anywhere else, we should also not be tolerating the kind of demonising and stereotyping that that member routinely engages in.

SPEAKER: There is no question No. 8.

Regional Economic Development, Minister—Statements on Fonterra

9. Hon PAUL GOLDSMITH (National) to the Minister for Regional Economic Development: Does he stand by his statement to the House last week, “Fonterra cannot wander around making advertisements, such as they did this year, drawing on the countryside and the personalities of country people and not expect the ‘champion of the country’ to hold them accountable”?

Hon SHANE JONES (Minister for Regional Economic Development): In response to the question, the word “champion” is a verb and a noun, and I am delivering it by deed and by word.

Hon Paul Goldsmith: Was he speaking in a personal capacity at the time he made that statement to the House?

Hon SHANE JONES: I repeat, I will remain an avid defender of the standards of accountability. Unlike that member, I will not be sucked in by this corporate-based pecuniary prattle, smooth tongue, and what I said, I owned.

Hon Paul Goldsmith: I raise a point of order, Mr Speaker.

SPEAKER: Well, I probably should have ruled the question out. I mean, it is absolutely obvious that if a member makes a statement in the House in response to a question as a Minister, then he is speaking as a Minister.

Hon Paul Goldsmith: How does he reconcile his response in the House with the statements of the Prime Minister, who repeatedly said that his comments regarding Fonterra were made in a personal capacity—“end of story”?

Hon SHANE JONES: Just to remind the House, those candid remarks were made to an audience organised by KPMG, where we were told it was Chatham House Rules, and then, when I returned to the House, obviously someone associated with the National Party leaked those remarks to the press gallery. And as befits a plain-speaking, forthright advocate, champion, citizen of the provinces, I own what I said.

Hon Paul Goldsmith: When he told the House last Thursday, the day after the Prime Minister had asserted that his comments about Fonterra’s leadership were made in his personal capacity, “I stand by my remarks in terms of accountability that should be shown by a failing corporate governance culture at the highest levels of our largest company—and if the cab doesn’t suit, then shanks’s pony is just as good”, was he intentionally setting out to make the Prime Minister look weak?

Hon SHANE JONES: My style is strong and forthright. However, nothing that I have said, done, or am contemplating to do is designed to undermine the Prime Minister, Jacinda Ardern, or indeed the Deputy Prime Minister, soon to be the Acting Prime Minister. And I think what the member needs to understand, it was a rapidly changing narrative. It started where I was invited as the “champion of the country”, I gave the remarks to an adoring audience, and I said them to the face of the chairman of Fonterra—not behind his back, like other people on that side of the House.

Rt Hon Winston Peters: Has the Minister seen the supportive comments of the New Zealand Herald writer Fran O’Sullivan, and why would it be that she is allowed to see the common sense of the argument about Fonterra’s lack of accountability but the National Party can’t?

SPEAKER: Order! Order!

Hon Member: He has no ministerial responsibility.

SPEAKER: Well, you know I am allowed to make my own rulings. The member can answer the first part of the question but not the last.

Hon SHANE JONES: The journalist referred to is a highly respected, well-versed, leading writer about matters of governance and accountability, and I’ve got every confidence when she congratulates my call for accountability she speaks truth to power.

Hon Paul Goldsmith: So have I got the sequence right? The Prime Minister told him off for attacking corporate leaders, then he did it again, then she said he was only speaking in a personal capacity—not as a Minister—then the Minister rode over that fig leaf in a steamroller and repeated those statements in the House—

SPEAKER: Order! Order! I’m now going to ask the member to very quickly come to a question that doesn’t have the level of embellishment—even if the fig leaf embellishment he used is a small one.

Hon Paul Goldsmith: Well, I started with the question, Mr Speaker. The question was—

SPEAKER: Well, if the member started with the question, has he finished?

Hon Paul Goldsmith: Well, no, because I was continuing the question and I haven’t got to the end of it.

SPEAKER: OK, right, get to the end quickly.

Hon Paul Goldsmith: Well, I’ll start again if I—

SPEAKER: No, no. Does the member have a further supplementary?

Hon Paul Goldsmith: No. I haven’t finished this particular question.

SPEAKER: No, no, you have.

Hon Paul Goldsmith: Well, I’ll let him answer it then.

Hon SHANE JONES: The member obviously doesn’t understand the reproductive cycle. This was a story where seeds were planted in an audience full of farmers and their grandees. It changed. At what point he missed the impregnation, I’m not sure.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I could see that throughout that question you were asking yourself whether or not it should progress or otherwise and what was right and what was wrong. You at one point said that you thought the simple question about whether he was acting in a personal or ministerial capacity was irrelevant because, clearly, if he’d spoke about it in the House, he was acting ministerially. I wonder if you might consider asking the “provincial champion” to provide some sort of timetable for when he is acting personally and when he is acting as a Minister? Because our understanding is that Ministers are at all times Ministers, and when they are invited to speak somewhere as a Minister, they are accountable as a Minister for what they say.

Rt Hon Winston Peters: There is no other authority than the member’s former leader John Key, who made the very distinction which everyone else got but Gerry didn’t.

SPEAKER: Well, now the Deputy Prime Minister will stand up and address the honourable member for Ilam in the appropriate manner.

Rt Hon Winston Peters: Well, which the honourable member for Ilam didn’t get.

SPEAKER: Right, now, what—

Hon Gerry Brownlee: A further point of order.

SPEAKER: No. I’m—

Hon Gerry Brownlee: Well, hang on. If we’re dealing with a point of order and someone makes a contribution on it, everyone’s got to understand it. What circumstance is the Deputy Prime Minister referring to, because there was a long discussion in this House where someone can be considered a party leader, and the Speaker will remember those long discussions some time back. That has been a long-held tenet in this country that if someone is doing something as a party leader, that’s separate from their other roles, but a Minister is always a Minister as long as they hold the warrant.

Rt Hon Winston Peters: The former Prime Minister Mr Key said that he was not always acting as a Prime Minister, and he gave examples such as when he was put the putting the cat out. So the very principle that that member outlaid to the House just doesn’t stand.

SPEAKER: Right. I want to thank both members for their contributions. I think they have highlighted something which is an important issue and one which I think in New Zealand we haven’t quite got our heads around. I was reminded earlier today of some comments, I think, attributed to the honourable Mr Finlayson when he referred to the Roman habit of indicating whether or not senators were on duty—whether they were acting as senators—via the colour of their toga. It mightn’t have been Mr Finlayson, but in those days it was very clear whether or not people were acting as Ministers or not. These—[Interruption] Amy Adams—

Hon Amy Adams: Sorry.

SPEAKER: Well, we have had in this House some quite long discussions, I think without any real conclusion, as to when people are Ministers and when they are members and when they are acting in private capacities. It is clear that Ministers do at times act in all three different capacities. Clearly, there are things which they do—especially those who are constituency members—which they’re not doing as Ministers; they’re doing on behalf of constituents, and that is clear. There have been a number of examples given by Mr Key—I think putting out the cat was one of them. I think there were some others which weren’t quite as repeatable in the House—and we wouldn’t want to get into them in the House—which were done in a personal capacity rather than in a ministerial capacity. So it has been accepted by the House previously that there are occasions where, effectively, the ministerial hat is taken off and people act in a personal capacity. But what I’m not certain of—and maybe we need to have a discussion at the Standing Orders Committee at some stage—is to get things a bit more codified so members can better understand these things.

Hon Gerry Brownlee: That process will be a good one, but it’s a long process, as you’re aware. In this case, Mr Jones was at a function, invited to speak, because he is a Minister. At no point, as far as we know, did he say “Look, I’m happy to speak, but I’m speaking to you in a private capacity.”, and if he was speaking in a private capacity, then clearly the criticisms he could make could stand, but certainly would not have got the publicity they did as result of his making those statements. So I think some sort of interim ruling from you about what is in and what is out as far as Ministers acting would be useful for the scrutiny of the House.

SPEAKER: I will see if I can get my head around the issue.

Employment, Minister—Funding for Young People Not in Employment, Education, or Training

10. TAMATI COFFEY (Labour—Waiariki) to the Minister of Employment: What recent announcements has he made about young people not engaged in education, employment, or training?

Hon WILLIE JACKSON (Minister of Employment): On 1 June, in Northland, I announced $4.4 million in funding to three community-led initiatives in Te Tai Tokerau that will support rangatahi into industry-related training and employment pathways that are underpinned by pastoral care. In the past few months, I have announced funding for seven He Poutama Rangatahi initiatives in Te Tai Rāwhiti, Te Tai Tokerau, and Ōpōtiki—some of the regions in New Zealand with the highest levels of young people not earning or learning. This represents a financial commitment of up to $6.75 million over the next two years.

Tamati Coffey: Why was that particular announcement significant?

Hon WILLIE JACKSON: The announcement is significant as it represents a shift in the paradigm in funding in that we are partnering with communities who’ve identified the issues and establish solutions with a community-centric focus. This is dedicated funding, the first of its kind to address the gaps that our young people are facing. These regions have been clearly underfunded for the past nine years, and this is part of this Government’s commitment to show we care about the ongoing success of young New Zealanders.

Tamati Coffey: What other announcement has the Minister made or will make about young people not earning or learning?

Hon WILLIE JACKSON: As part of Budget 2018, this Government announced that just under $14 million has been set aside to tackle the number of rangatahi Māori who are not earning or learning and who come from our urban centres. The news gets even better, as this Friday, in the Hawke’s Bay, I’ll be making even further He Poutama Rangatahi announcements to a community committed to the ongoing success of their young people, and this Government is backing them all the way.

State Services—Office Accommodation

11. Hon Dr NICK SMITH (National—Nelson) to the Minister of State Services: What advice, if any, has he received about accommodation for Government departments?

Hon CHRIS HIPKINS (Minister of State Services): I have received a range of advice about accommodation for Government departments in my capacity as the Minister of State Services with functional lead for Government property. This has included updates on the Wellington Accommodation Project, phases one and two, and other opportunities to reduce the overhead cost associated with Government departmental accommodation.

Hon Dr Nick Smith: Is it appropriate for a Government department to share offices with a member of Parliament?

Hon CHRIS HIPKINS: I’m advised that a story in a local newspaper has made that suggestion and that that story is not true, and that a correction has been requested.

Hon Dr Nick Smith: Was it appropriate for the Parliamentary Under-Secretary to the Minister for Ethnic Communities to state in a story that the Department of Internal Affairs’ office of ethnic affairs would be shared with a Labour list MP?

Hon CHRIS HIPKINS: I think the member didn’t listen to my last answer. The story in the local paper was incorrect and a correction has been requested.

Hon Dr Nick Smith: Is it appropriate for parliamentary under-secretaries and list MPs to misrepresent their political parliamentary office—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The Minister has given two denials and has stated in the House—and it’s on his word, and his integrity’s at stake when he says that—that this matter has been corrected and that there’s going to be a media statement to that effect. Despite that, this member has kept the same line of questioning as though the denial was never made in the first place, and he should be stopped because now he’s impugning a member of this House without any grounds whatsoever.

Hon Dr Nick Smith: Speaking to the point of order, it’s entirely appropriate for a member to ask questions about statements that are in quote marks from members of the Government.

SPEAKER: Sure.

Hon Dr Nick Smith: While I accept—

SPEAKER: The member will resume his seat. I’m not stopping him asking that question.

Hon Grant Robertson: I raise a point of order, Mr Speaker. It’s a different point.

SPEAKER: A different point of order.

Hon Grant Robertson: In the question that Dr Smith had begun to ask, the words he used were “Is it appropriate for an under-secretary to misrepresent”. My understanding is that’s the kind of language that is not allowed in the House. You can’t accuse a member of doing that.

SPEAKER: You certainly can.

Hon Dr Nick Smith: Is it appropriate for a parliamentary under-secretary and other members of Parliament in the Government to represent their list office provided by Parliamentary Service as an office of a Government department to ethnic communities?

Hon CHRIS HIPKINS: I haven’t seen the story. I have been advised that the story is incorrect and that a correction has been requested.

Hon Dr Nick Smith: Is it appropriate that when members of the public approached this office this morning, they were told that it was part of the Office of Ethnic Communities, when, in fact, it was the office of a Labour list MP?

Hon CHRIS HIPKINS: I haven’t seen any evidence of that.

Building and Construction Industry—Aluminium Composite Panels

12. ANDREW BAYLY (National—Hunua) to the Minister for Building and Construction: When did she receive the peer review of Dr Tony Enright’s report on CodeMark accreditation of aluminium composite panels?

Hon JENNY SALESA (Minister for Building and Construction): I have not received the report. The peer review of Dr Enright’s report has been received by the Ministry of Business, Innovation and Employment (MBIE). MBIE is currently reviewing the findings and will advise me on its decision as soon as it is made. As the member will appreciate, when MBIE is assessing whether CodeMark certification should or should not be suspended, the process must be appropriate; it must be fair and robust. The safety of New Zealanders is paramount.

Andrew Bayly: When did MBIE receive the peer review report?

Hon JENNY SALESA: I can advise the member that in terms of addressing this particular report, on 1 June this year, MBIE wrote to the accreditation folks about this report, to give them a chance to respond to the report. This is something that, according to our Building Act 2004, is under the chief executive of MBIE to make the decision on that. In terms of the report, as I said in my first response, I myself have not received this report.

Andrew Bayly: I raise a point of order, Mr Speaker. I couldn’t have been clearer with that question, which was when did MBIE receive the report. I don’t think it’s been answered.

SPEAKER: And if the report flowed directly from the primary question—if the member really wanted that date, he would’ve phrased his primary question to ask for that as well, as he could have.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I think, with all due respect, that you are not allowing the member to ask a question that flows from the answer to the primary.

SPEAKER: No, sorry. I let him ask the question, but what I’m saying is that if notice of it is not part of the primary question, he can’t expect an exact reply from the Minister.

Andrew Bayly: Did the peer reviewer come to a similar conclusion as Dr Tony Enright, which was that the use of aluminium composite panels (ACP) should be suspended and that the accreditation of the product was not justified?

SPEAKER: I am going to let the Minister answer the question, but can I say to members that it is probably important that they listen to primary answers. When a Minister says she hasn’t seen the report, asking for details of it of the Minister is probably not a reasonable thing to do.

Hon JENNY SALESA: MBIE has undertaken an internal validation. They’re following a robust and legally sound process. I will be advised of the chief executive’s decision on this very soon. But can I just refer the member to the Building Act of 2004, where it states clearly, in section 271(1), that suspension or revocation of a product certificate is under the product certification body and the chief executive of MBIE.

Kieran McAnulty: What steps is the Minister taking to ensure building products used in New Zealand, such as ACP, are fit for purpose?

Hon JENNY SALESA: It is very important to me to ensure our building products are robust and keep New Zealanders safe. MBIE is currently undertaking a review of our building products assurance system right now. I am listening to feedback from the sector and people in our community who want confidence in our building products assurance system while also embracing innovation and change. All of this is in contrast to the inaction by the previous Minister in this area.

Andrew Bayly: Why has she not released the contents of the original Enright November 2017 report and the peer reviewer’s April 2018 report, both of which say the use of aluminium composite panels should be suspended?

Hon JENNY SALESA: I don’t know how much clearer I can be that this particular report is an operational matter that the MBIE has received. I myself have not received this report.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. You appeared to miss quite a significant flick at the member asking that question—when the Minister said that there had been inaction by the previous Government. The Grenfell fire occurred in June of 2017. Reports were commissioned. We’re now nine months away from the time that the Government changed and we’re simply asking what has the Government done in those nine months. It’s not unreasonable to think that between June and September, there was some consideration being given to this matter, which is clearly something that the current Government has to deal with.

SPEAKER: OK, I hear what the member’s saying, and if I was being absolutely strict, then I would have indicated that a Government question shouldn’t be used to flick at the Opposition. There was certainly a flick in there, which was inappropriate, but if I ruled out everything that was inappropriate today—thinking of the bench immediately to my left—there were probably about five supplementaries that wouldn’t have been allowed through. So I have been asked to try and relax and soften up and be a bit more flexible, including by people on my left, and I’m trying to do that.

Rt Hon Winston Peters: Could I ask the Minister to ensure that when the report is complete, she outlines who the member of Parliament was who was involved with the launch of that company’s product in New Zealand in the first place?

SPEAKER: Order! Order! That’s not something she has responsibility for.

General Debate

General Debate

Hon GRANT ROBERTSON (Minister of Finance): I move, That the House take note of miscellaneous business.

What a good time it is to be in Government in New Zealand, when we have a Government that has got ourselves in a position where we’re managing the accounts carefully and prudently and making the investments that will make a difference to building a more productive, more sustainable economy, because that’s exactly what the Government is doing. In the Budget that I had the honour to deliver, we are investing record sums of money in the provinces of New Zealand, in lifting skills and building our research and development capability, and in taking the necessary steps to create the economy for the middle part of the 21st century.

We are a Government focused firmly on the future, and that future is more productive, more sustainable, and more inclusive for New Zealand. Sadly, on the other side of the House, the eyes are fairly, squarely fixed on the rear-vision mirror, and that could not have been made more clear than by the National Party’s associate finance spokesperson Alastair Scott.

Hon Members: Who?

Hon GRANT ROBERTSON: Alastair Scott. So in last week’s debate on the Investment Statement, the National Party’s associate finance spokesperson uttered the following words: “But why should all our doctors and nurses work out of a building that’s owned by the Government?” That’d be a hospital. That’s why they should be working out of a building owned by the Government, because it’s a hospital.

It gets better. Alastair Scott, the associate finance spokesperson for the National Party, said, “We cannot and do not know how to manage $28 billion to $30 billion - odd worth of houses”. Well, that lot didn’t know how to manage them, but on this side of the House we do, because we’re actually investing in them.

Mr Scott, in his speech, then got philosophical for all of us. He said he wanted to know what the purpose of us all being here was—what’s the purpose of Government? This is what he said: “Is it to own buildings? Is it to own hospitals? Is it to own schools and social houses?” And do you know what Mr Scott’s answer to that question was? “I say no, absolutely not.” The associate finance spokesperson of the National Party is now revealing to us all where the direction of the National Party is going: it is firmly in reverse—firmly back to the old, tired ideological idea of privatising everything.

Mr Scott wasn’t finished. He carried on. His privatised paradise had more to it. Mr Scott said to the House, “Just imagine if we sold $30 billion worth of housing assets and gave it to the 65,000 tenants and said, ‘See you later.’ ”—see you later. Now, he did go on to say, “We will still look after you. We will still have wraparound services. We will still take taxpayer money to support those … most in need, but we do not need to house you.” That’s the National Party of old. That’s the National Party we know so well—“We don’t need to house you.”

So if we summarise the associate finance spokesperson for the National Party, his plan is we don’t need hospitals, we don’t need schools, and we don’t need social housing. Actually, I haven’t even got enough time today to go through all of the other things.

He also described universities as being “lazy assets” for the Government. Several problems with that statement: the first of them is that we don’t actually own the universities. They own themselves, and they’ll be thrilled to learn how lazy they are all being. He also had some concerns about tarmac and how much tarmac the Government should own, which I found to be an interesting statement given the obsession by the National Party members last night to make sure they owned as much tarmac as they possibly could in every single part of New Zealand.

So Alastair Scott, the associate finance spokesperson for the National Party, is now leading the way. Now, Simon Bridges did talk about possibly a breakaway party. I think the time has come for the “Alastair Scott Party”, and I know there’ll be members all over that side of the House who will be dead keen to join that. On this side of the House, we’re just going to get on with running the country.

Hon PAULA BENNETT (Deputy Leader—National): Well, there’s a vast, vast difference—the difference being, of course, that the Government, in this general debate, thought they would scan around and they might try and find one Opposition MP that might’ve said something that they don’t agree with and they could try and stretch that out for five minutes, yeah? So good on you, you managed to find one that you didn’t agree with.

My list—that I’m going to try and get through in less than five minutes, because I’ve spent 30 seconds already—could go: Winston Peters, David Parker, Kelvin Davis, Andrew Little, Eugenie Sage, Shane Jones, Stuart Nash, Phil Twyford, Chris Hipkins, Jenny Salesa, David Clark, Iain Lees-Galloway, Michael Wood, and list MPs’ offices. I’m going to try and show the incompetencies of all of those in the short four minutes that I’ve got left. I don’t have only one to get through like they did, in five minutes of trying to find it; I managed to get through such a long list. It is a rich smorgasbord of dysfunction that is happening on a daily basis from this coalition Government.

So, first of all, we have Mr Winston Raymond Peters, who continuously told us that immigration must be slashed by 30,000—“These people were dreadful, but now we’re in Government we’ll just zip it.” Of course, these foreigners that are buying all these houses and are doing such a dreadful job—“We will do something about it.”, he said in Opposition. Now in Government—zip. In fact: “We’ve changed it.” It’s a complete back-down that we’re seeing.

Kelvin Davis doesn’t know how to house prisoners, doesn’t know if they’re double-bunked, doesn’t know what he’s doing in a tourism portfolio, and makes a fool of himself in select committee.

Andrew Little is one that’s really up my goat at the moment. He can’t actually talk to his coalition partners, work out what he might do with stuff that’s going through, and then has the audacity to stand in this House and say that a sexual assault against a corrections female officer—where her buttocks were grabbed for seconds, where she had time off work, where she was followed and intimidated—is a low-level assault. Shame on him, and shame on the women of Labour who sit back and let him make those statements, yet would be the first ones to leap on us if we were to say anything even close to it. In fact, they go looking for our men to say something wrong. This was a man who said that a sexual assault on a corrections officer was considered low level, and did not consider and think about how women these days feel when they want to stand up and be heard about the violence that’s happening out there. So that’s one that I think is absolutely shameful.

Eugenie Sage went out there and said “No bottling of water.” and everything else, and we were supposed to believe that during the campaign. I was a Minister who was involved with the Overseas Investment Office and made the decision not to go ahead with Lochinver Station. She did not ask the right questions, she did not have a stance on it that actually meant something, and she could’ve made a different decision but didn’t actually have the courage to do so. I think that that is shameful, when you stand there.

Quite frankly, Shane Jones and what we saw today in this House—you may find it mildly entertaining. You may find it embarrassing that the Prime Minister had to stand there repeatedly and say of your comments—even though you were invited as a Minister and were speaking as a Minister at an event, you then, in this very House, where you are a Minister, made statements that are degrading one of the best companies that we’ve got in this country, quite frankly. The Prime Minister herself has to say that you made them in your “personal capacity…, end of story”, and she had to say that a good half a dozen times in the media. It’s actually—

Hon Shane Jones: Champion! Champion! Champion!

Hon PAULA BENNETT: You may find it amusing; most of us find it actually embarrassing, but that’s fine.

Stuart Nash—I mean, where to start on that? The changes for policing: I get that we come in and make our own stamps as Ministers and do what we want to do, but to actually go out there and campaign that we need more police stations and that New Zealanders need to live closer to them, and then drop that completely—this is not getting noticed by the public at the moment, but, trust me, we’ll make sure it does. Actually, what they’ve done is taken away that every New Zealander should live within 25 kilometres of a staffed police station. I think the “champion of the provinces”, as he likes to call himself, should get on that, because I think it is an absolute shame that they will not be opening the stations that we promised them, and instead are closing them.

Phil Twyford—well, let’s be fair. He has KiwiBuild numbers that just don’t add up and aren’t possible, and we’re buying houses instead of building them. Then, today, we hear about a list Labour MP who then brags in the papers with Michael Wood, saying that they are sharing offices and this is a way for—

SPEAKER: Order! The member’s time has expired.

Hon STUART NASH (Minister of Police): Thank you very much, Mr Speaker. Well, what an interesting contribution. We heard the deputy leader of the National Party have a go at Mr Little, a man with incredible, incredible, respect and dignity and purpose, and yet when her Prime Minister pulled a girl’s ponytail, where was she? Where was she? Did she stand up and defend that woman? No, she didn’t. She thought it was funny. She thought it was funny. Well, I don’t see any difference, and that member has the audacity to stand up here and say we’re not doing anything for police.

Well, let me tell you—let me tell you—that member is a former Minister of Police, and between 2012 and 2017, the police service numbers dropped by 77.

Hon Nanaia Mahuta: By how much?

Hon STUART NASH: By 77. The population increased by 380,000. Gang numbers increased—[Interruption]

SPEAKER: Order!

Hon STUART NASH: Gang numbers increased by 2,000. Meth went through the roof. The only thing that dropped was the number of police in our communities—the number of police in our communities. And, what’s worse, in the last workplace survey, over 60 percent of police said they experienced an undue level of workplace stress and only 40 percent of police—only 40 percent of police—said that they were meeting the promises they made to their community. But the really good thing about the New Zealand Police service is over 80 percent of them said that they were committed to the New Zealand Police service and the communities we serve. So what we have is we have an incredibly dedicated group of men and women who are committed to our communities, committed to the New Zealand Police service, and who know what they need to do to keep our communities safe, but they just do not have the resources.

So what happened? Mr Ron Mark, from New Zealand First, and myself went around the country, and we heard this wherever we went: people respect the police. People have the utmost respect for police, but they knew that the the police weren’t there in our communities like they used to be. So what happened? Enter New Zealand First and Labour: 1,800 more police over three years—1,800 more front-line police over three years. And that’s not all: 485 back-office staff to support those 1,800 police in our community.

Hon Paula Bennett: But no one believes you can deliver.

Hon STUART NASH: This is about delivery. This is about delivery. What we are seeing at the moment is an immense increase in the number of police going through the Royal New Zealand Police College. Every four weeks, a new recruit wing starts. In fact, two weeks ago, the largest wing in over a decade, of 100 officers, started training in the New Zealand Police. Every four weeks, an amazing group of men and women who have chosen a career less ordinary, who want to go out there and keep our communities safe and make sure that New Zealand is the safest country in the world and cut the head off the snake that is organised crime, are going to be out there keeping our communities safe. So when I hear the Opposition saying “Well, what are you doing about policing? Where are your targets?”, I’d say to them the number one target is 1,800 more police—1,800 more police right throughout our community.

Hon Paul Goldsmith: It’s the results that count.

Hon STUART NASH: And when I hear that member say—

Hon Paula Bennett: Not lowering crime.

Hon STUART NASH: When I hear that member say “Well, the Minister of Police has dropped these operational targets.”, my response is it is not my job to set operational targets; it is my job to ensure that the police have the resources to keep our communities safe. It’s up to the police—it’s not up to politicians to set operational targets. It’s up to the police, and Mr Mark Mitchell knows this. He was a police officer. He worked incredibly hard to keep our communities safe, and I’m sure when Mr Mitchell was a police officer, if he had heard a politician say “You must do this from day to day”, he would have gone, “That’s not your role.”

It is my role to give the police the resources they need to keep our communities safe, and what I can say is New Zealand First and Labour heard our communities. We heard them say we need more police, and we are delivering the greatest increase in the New Zealand police service ever—the greatest increase in New Zealand Police ever.

Hon Paula Bennett: You should prepare better, honestly. It’s only five minutes—20 more to go.

Hon STUART NASH: And when we come to that member’s electorate and open up stations, when we deliver more police to her electorate, then I’m sure she’ll be there saying, “Well done. It’s what my communities want.” I just want to reiterate: 77 less police over five years; 1,800 more police over three years.

Hon MARK MITCHELL (National—Rodney): You know they’re in trouble when their Minister of Finance gets up to deliver a speech and all he does is talk about our associate finance spokesperson. He doesn’t talk about anything the Government’s doing. They all stay in the House—they all stay in the House—so they can rise to their feet and give him a standing ovation—

Hon Member: They’ve got nothing else to applaud.

Hon MARK MITCHELL: —because they’ve got nothing else to keep them going. This is a clear indication of how desperate they are and how bad things are. The most undignified thing I’ve seen in this House is the Hon Ron Mark tripping over himself and falling over himself to get to Grant Robertson to shake his hand for such a great speech. It was embarrassing. He’s had no papers into Cabinet. I assume that he’s putting on a big effort to try to actually secure some funding to actually buy some assets for our Defence Force.

But I want to use my general debate speech today to make an acknowledgment. We always in this House stand and acknowledge our first responders, whether it be the police, whether it be the fire service, whether it be the ambulance service, or whether it be our front-line medical staff that are having to deal with cases that come in through the emergency department. But the one service that we don’t really acknowledge, because they’re basically invisible to us as the public, is our corrections service.

Our corrections staff do an outstanding job every day of making sure that the people that can create harm in the community are actually kept in our corrections facilities. It is an incredibly challenging profession. It requires strong character and resilience to each day turn up and not know what they’re going to face during the day. They might face a prisoner that is completely motivated to self-harm, and they have to show compassion. They might face violent prisoners that want to spit, kick, punch, assault, and attack them. They may even have to face a prisoner that’s actually got a weapon, whether it’s a toothbrush that’s been filed down or some sort of shank.

Two hundred and fifty-nine corrections officers were assaulted between June last year and now—259 assaulted or attacked in the workplace. The one thing that we can do as a Parliament is we can apply sanctions. We can put laws in place that send a clear message. I feel strongly that assault against a corrections officer is actually an assault against the State—it’s an assault against all of us—and the one thing that we can do in this House is we can apply sanctions to say that we support corrections officers and we take it very seriously as a country when they are assaulted while they are just trying to do their job and keep the rest of us safe and happy.

So it brings me to a point that I want to raise. I was shocked last week when I asked in this House the Minister of Justice for two things: a definition of a low-level offender or offence, and a definition of a non-violent assault. The non-violent assault—to be honest with you, I thought the House might pick up the fact that there is no such thing as a non-violent assault. There has to be some sort of force used, even if it’s spitting. There’s got to be some sort of violence attached to that offence—there is no such thing. He stood in this House and he used as an example an indecent assault against a female corrections officer. That’s the example that he used, and every single one of the members opposite—and especially the female members of the Labour and the Green caucuses—have been completely silent on this.

Chlöe Swarbrick: We care about outcomes.

Hon MARK MITCHELL: Sorry, who’s that? The sponsor of the bill, the domestic violence bill—what’s she got to say about it? What’s she got to say about it, as the great saviour and the advancer of these issues?

I was deeply offended by it. You had the justice Minister of New Zealand stand up and trivialise an indecent assault against a female corrections officer, and I think that that is a disgrace. That message that should be sent from this House is that we support them—

Jan Logie: You are the problem right now.

SPEAKER: Order! Order! Ms Logie, I remind you who you’re addressing.

Hon MARK MITCHELL: Thank you, Mr Speaker. This seems to have touched a raw nerve, and it should touch a raw nerve. Get up. Get up and take a call. Get up and take a call and explain, because I’ve been inundated with correspondence from women since the debate in the House—the questions in the House—last week, including another female corrections officer that was also indecently assaulted on the job. And, actually, the result of her assault meant that there was a second strike against the offender.

If this is the only example they can come up with against three strikes, it’s a terrible indictment on the fact that they don’t have an argument against three strikes. Thank you, Mr Speaker.

Hon MEKA WHAITIRI (Minister of Customs): Tēnā koe, Mr Speaker. I am the proud member for Ikaroa-Rāwhiti. I’m also a very proud Minister in this coalition Government. I want to start off my contribution with the closing remarks of the Minister of Finance, which is “This is the Government getting on to do the mahi.” We’re getting on and doing the mahi, and I want to just first of all acknowledge that in my electorate of the East Coast, as a result of the floods on the recent Queen’s Birthday weekend that’s just passed.

Can I just say, in August of 2016—again, in another part of my electorate—we had a gastro outbreak in Havelock North, where 5,000 people were hospitalised, and a couple of people lost their lives—a very, very serious incursion for the people in Havelock North. It took the Government of the day 10 days to come into the House to acknowledge we had a gastro outbreak—10 days—and the only way that they did that was that our side of the House caused an urgent debate. We called an urgent debate, and then the Minister was forced to get up on his feet and explain the gastro outbreak. But on the East Coast, that I represent and I’m proud of, within two days of the flood, not only myself but officials from the Ministry for Primary Industries (MPI) and Gisborne District Council were in the air—two days. We were in the air to make sure that we were scanning the outbreak of the floods. I can say that although the flooding was quite localised in Tolaga Bay, the devastation that people saw on their televisions and on social media was devastating for communities and those families that lost their homes, and for farmers that are still recovering from those floods.

So I want to make sure that this House acknowledges the response in which this side of the House responded to those floods. I do want to acknowledge my colleague the Minister of Civil Defence, the Minister Kris Faafoi, for his attendance up in Tolaga Bay over the weekend, where he got to meet first-hand and hear from those that are actively on the ground, because this Government is about action. This Government is empathetic to the causes that small communities like Tolaga Bay and Whangarā experienced as a result of not just one flood, but two floods. I want to acknowledge all the farmers that are doing it hard.

I want to acknowledge my colleague Minister O’Connor, who, within seven days, called a medium-scale event. Why is that important? Because then that sends a message to the people of Whangarā and Tolaga Bay that the Government is caring about what’s happening to them—that we are unlocking the services and support of the Government agencies, be they the Ministry of Social Development, be they MPI, around supporting communities and families. It is important that I stand and acknowledge the devastation that’s happened, and still continues to happen, to those communities of Whangarā and Tolaga Bay.

The other issue is around this Government being empathetic not only to communities like the two I’ve mentioned but, actually, to all whānau and families within New Zealand. Within our first 100 days, we put families first—we put families first with our Families Package, which would see incomes boosted for 384,000 whānau. So we talk about not doing anything of action—that’s what we’ve done. We also passed the extension of paid parental leave to 26 weeks, we increased the minimum wage to $16.50 by 1 April, we announced changes to strengthen workers’ rights, and we announced legislation to set child poverty targets.

So let’s not kid ourselves in this House: this side of the House is about action. We’re an empathetic Government, but we’re also bound by strong, principled economic management commitments through our fiscal responsibility codes. We want to make sure that when we leave office—which may be three, four, or five terms away, or 18 terms away—we want to leave the books in a lot better place than what we inherited. So economic fiscal responsibility is a commitment on this side.

In the short time that I’m standing—engaging with industry is important. Last week, at the Fieldays, I announced scholarships for forestry degrees targeting Māori and women. We want more women and Māori in the forestry industry, so last week we announced that. I announced science scholarships, because we need more primary industry scholars in science. And I also announced the good employer awards. If we are going to recognise good employment in the regions, then we need to start giving that opportunity to celebrate. Kia ora tātou.

Hon PAUL GOLDSMITH (National): Thank you, Mr Speaker. This Government, with its reckless disregard for the drivers of this economy, its arrogance towards its critics, its lack of self-discipline, its replacement of the previous Government’s clearly articulated economic plan with random and naive do-goodery, is putting this country’s economic prosperity at risk. A weaker national economy means fewer opportunities for New Zealanders. A weaker economy means young Kiwis will decide their prospects are better overseas—quite probably in Australia, where the economy is picking up. A weaker economy means less money available for world-class healthcare, for access to the latest medicines and the latest technology. It means less money available to help those in need.

How can this possibly be happening at a time when our terms of trade—what New Zealand sells into the world—is at record high prices? This Government needs take some responsibility for what’s going on. It needs take responsibility for business confidence falling through the floor—in particular, the measure of businesses’ own assessment of their future investment. The latest ANZ survey, showed that the figure for New Zealand businesses’ assessment of their own future activity is falling. It’s now plus 14 percent, which is very close to the level where the economy is starting to stall, and yet Mr Parker, the Minister for Economic Development, says that’s all junk—it’s junk—and the Deputy Prime Minister, Winston Peters, agrees with him. It’s junk. Well, the ANZ said, in defence of their survey after Mr Parker’s attack, that it’s a service of businesses’ expectations of their own activity and that this “maps well with official GDP figures produced by Statistics New Zealand … meaning it provides a reliable and robust gauge of business activity.” So it’s an unbelievably arrogant thing to say to call it junk. I mean, in effect, what he’s saying is that the 1,500 - odd business people who are talking about what they’re planning to do in the next year don’t know what they’re talking about—he knows better. Their concerns aren’t valid. It’s no surprise that business confidence and business investment intentions are going down.

Primarily, it’s because there is so much uncertainty in this economy. New investment leads to jobs and growth, and would-be investors are keeping their hands in their pockets. Everyone I talk to is keeping their hands in their pockets and not investing because everywhere they look, they see uncertainty. They don’t know whether they’re going to be facing a capital gains tax or not. They’re uncertain about the effect of the new labour laws and the strengthening of union powers, which are seeing strikes everywhere we look. They’re uncertain, if they’re a foreign investor, whether they’re welcome or not—and they’re probably not welcome. And they’re uncertain about the decision-making processes in this Government, as we’ve seen with the oil and gas decision, where a major economic decision was made in the absence of any detailed advice and in the absence of a proper Cabinet process.

They see an arrogant Government that has no sympathy with the wealth creators in this economy. We have an economic development Minister, as I say, who thinks that their opinion is junk; we have a workplace relations Minister who says that if they’re worried about increased labour costs, then businesses are just not resilient enough; and, of course, finally, we have the regional economic development Minister, who goes around attacking business leaders and calling for their sacking and their resignation.

And, on that point, the most alarming element in that is the chaos that it points to in this Government. So we see Mr Jones and his leader, Winston Peters, in open defiance of the Prime Minister. Let’s recall the sequence of events. He blurted out an attack—because a few days had gone past and he hadn’t been in the news—on Fonterra’s leaders. He had been warned by the Prime Minister before, when he attacked Air New Zealand, not to do it again. He did it again, and then she came along and said, rather hopefully, “Well, he was speaking in a personal capacity, not as a Minister.”—remember, she said that four times—“end of story.”—end of story. Nobody believed that, but at least that might’ve created a fig leaf that she could’ve stood behind. If it’d stopped there it might’ve gone away, but it didn’t stop there, of course, because then, immediately afterwards, Shane Jones came along and rolled over that fig leaf with his steamroller and said—actually, in the House—“I stand by all those statements.” and continued his attack on Fonterra’s leadership in this House, speaking as the Minister.

So he made the Prime Minister look like a twit, he made her look weak, and he’s done it again in this House, attacking Fonterra in open defiance of the Prime Minister. The only point that he’s making—the message is clear that the Prime Minister may be in office, but she’s not in power—

SPEAKER: Order! [Interruption] Order! The member’s time has expired.

ANGIE WARREN-CLARK (Labour): Today, I’m going to take a call in this general debate, and I want to talk about an issue which is actually partisan, and I believe it should be partisan—

Hon Member: Oh that’s a shock!

ANGIE WARREN-CLARK: I know, it is a shock. The issue is climate change. We as a nation face challenges ahead of us, and we have heard the member Meka Whaitiri talk today about the adverse weather events that’ve happened in her communities. We’ve heard about these across many, many areas in our country and these are happening more and more frequently, and this is attributed to climate change. So I believe it’s a really important issue, and it’s one that I want to talk to the public and to this House about.

Of course, the Prime Minister, the Rt Hon Jacinda Ardern, has said that climate change is our generation’s nuclear-free moment. Why is it so important to this coalition and, indeed, to our country? There are many reasons—many reasons—our Pacific nations, that are our close relatives, and there are also the adverse weather effects. But, actually, I’m a fisherwoman, so I’m going to, very selfishly, talk a little bit about the reasons why climate change is important.

I’m based in the Bay of Plenty. I fish all the time, and I want to focus on the sea—the effect of climate change on our sea. If we don’t address climate emission reductions, this will affect sea levels. It’ll affect sea levels to the point that our Pacific neighbours are not going to have homes, but it will also affect the migratory patterns of our sea fish as they move more poleward towards cooler water. We will see acidification in our sea waters, affecting our pāua and mussel aquaculture. Now, acidification is quite horrific. The effects on our food chain and, let’s face it, our recreation as well as our industries are going to be horrific.

We as a group need to address this matter. The Parliamentary Commissioner for the Environment has called for cross-party collaboration on climate change. We need this issue to be one that is not kicked from election cycle to election cycle. We need to act together, and we need to do it now. I would like to remind the listeners at home that there is currently, under the Ministry of the Environment, www.mfe.govt.nz, the opportunity to have your say around the zero carbon bill. It’s an opportunity for all of us in this nation to have our say around zero carbon emissions. And I encourage everyone to contribute.

So climate change and how we respond is something crucial to us all. But let’s look at the last nine years. The Paris Agreement was signed in 2015, and 194 countries in the coalition worked on this around the reduction of emissions without affecting food production—very important. We signed and the then National Government set a target of reducing emissions by 30 percent below the 2005 level by 2030, and then they set a 50 percent reduction by 2050. Well, we’re seeking a new target—one that is actually in line with global ambition—and the member Todd Muller, in his briefing note of 8 June, said, “We are comfortable with our 2030 and 2050 targets. We will defend against any expansion in ambition.” What is that about? We’re behind in the world, and we’re not going to have any ambition on this issue?

I’m not surprised, however, because I have just recently seen the National Party’s climate change policy—and I’ve gone on quite a bit—but, remember, the Hon Simon Bridges isn’t even sure—

SPEAKER: Order! The member’s time has expired.

FLETCHER TABUTEAU (Deputy Leader—NZ First): Thanks for the opportunity to speak and make a contribution today, Mr Speaker. I haven’t done it for a while, so it’s a genuine pleasure to be part of the debate. Can I start by acknowledging the Hon Tau Henare, who was in the Chamber earlier during question time, and thank him for his contribution and his time in Parliament. Unfortunately, what it did in my mind was make me think of the National Party and the Opposition over there. It made me think there is—or there was; excuse me—a genuine contender for the Leader of the Opposition, and I’ll tell you why—I’ll tell you why. He came into the room and it made me realise he’s got more popularity than the current Opposition leader has. Internally, he’s more well liked than the leader is. It’s just ridiculous.

So that led me on to think: what is the situation in the Opposition benches over there? What we saw, actually, was incredible timing in terms of reinforcing my thinking, because as they stood up, one after the other, each of those factions within the National Party was represented by those spokespeople, and so it just goes to show you that everybody is positioning, jockeying, and putting themselves out the front there to try and be seen not only by the New Zealand public but by the membership of the National Party. So congratulations to Mr Mitchell—good job! A bit intense. And they’re probably way off the mark, Mr Mitchell—probably way off the mark. Congratulations to—was it Goldsmith? Did Goldsmith—I honestly can’t remember who has stood up this far. What we are seeing now is a frustrated and disgruntled Opposition.

So, actually, my point is a serious one, because what we’re seeing in that are the backroom operations of the Opposition, where these factions are contending with one another. What that means and what we’re seeing, as evidenced today, is a party that in their dysfunction, are not functioning as a true, strong Opposition. They’re not doing their job properly, is what I’m telling you, Mr Speaker, and the House. They’re not doing their job properly because what we’re seeing are petty attacks on personalities and people instead of a genuine contesting of ideas, of principles, and of policy, and it’s incredibly upsetting to watch and observe from this side of the House. So, instead of debating the issues, we have dysfunctionality, and it is evident in the performance of the Opposition.

What I would like to say—oh, jeez, that took me way too long to go over that. So I was going to talk about their deputy finance spokesperson, but I can’t even remember his name either. So look, Mr Speaker and to those members opposite, for the first time in nearly a decade, we have a Government that is focused on the people of New Zealand—all of the people of New Zealand.

Erica Stanford: All of them?

FLETCHER TABUTEAU: Thank you for reiterating and making the point to Mr Mitchell; I don’t think he heard me. Thank you so much. [Interruption] Ha, ha! Yeah, he’s not getting it.

So this is a Government that is about capability building. It is about, despite the—was it—Scott? Is it Mr Scott who was going to create the far-right breakaway party for National, the next leader of the far-right party?

Universities are important and they need to be invested in. Our hospitals are important and need to be invested in. Homes for people who are struggling right now, guys—get this—are important and need to be provided for those who are desperate. Flip that on its head and ask yourselves the question: if we don’t do that, if a Government doesn’t do that, what is the true long-term cost to the people of New Zealand, to this Government, when what we would be doing—and, unfortunately, what this Government is doing now—is picking up the pieces of 10 years of a party that refused to give genuine investment in the people of New Zealand who need it most, and at a time they so desperately needed it. Basically, I’d better end there because I’m out of time and I really want to hear what the Opposition has to say to that. Thank you.

JAN LOGIE (Green): Thank you, Mr Speaker. I’m feeling tempted to respond to some of the speeches earlier in the day, but I’m going to hold it and see if I’ve got time left at the end, because, really, I wanted to speak about nurses.

I’m the daughter of a nurse, and I feel as if I have, through my mum’s experience, a bit of an insight into their technical skill and the physicality and the emotional nature of their job. I just have so much respect for the work that they do, and I really want to put it on record in this House that they have been, historically, underpaid and undervalued in our healthcare system. So, in the Green Party, we believe that our nurses deserve to be paid more. And we support their call for urgent mediation in their pay dispute with the district health boards (DHBs).

I want to acknowledge too that what’s happening now is in the context as described by Richard Wagstaff of the Council of Trade Unions that around the world there’s this wave of action from women, who are saying, basically, that they’ve had enough of waiting for things to get better, and these women are expressing their absolute frustration with the refusal of the system to acknowledge their value. As the quote goes, I believe, “Well-behaved women rarely make history”. So I want to acknowledge their efforts in this current time.

In my experience, nurses are exceptionally professional, and their rejection of the DHBs’ offer reveals how undervalued they feel after nine years of the health budgets just being squeezed to breathlessness by the previous National Government. So the nurses are standing up for themselves and all women, but they’re also standing up for us as a society. Nurses are the largest occupational group in our health sector. We have an ageing workforce and an ageing population and an increasingly globalised labour market. If we want a strong and effective healthcare service, then we would do well to listen to what the nurses are telling us.

I want to recall the interview on Radio New Zealand yesterday with a nurse, Kathleen. She’s worked as a nurse for eight years and she was saying that she would benefit from the offer, with a 15 percent pay rise. But her concern was for junior colleagues, because at the moment they would only get 3 percent, and they are hearing on a regular basis from junior nurses talking about going to Australia because the pay and the ability to have a decent life looks better over there. She was acknowledging that nurses are working long hours, often they’re in shift work, they’re on their feet all day, and often they don’t get lunch breaks. She’s working most weekends and doesn’t get to have a decent life and is struggling from pay cheque to pay cheque. And that is on top of increased complexity of their work, and the fact that, many days, they are verbally and physically assaulted in their work.

The nurses are telling us that we need to pay attention, as a country, to ensure that people want to go into this work and stay in this work. The Green Party thank them for their efforts for us to understand that and for us to have a strong healthcare system that we can all rely on when we need it. It’s becoming clearer and clearer that the previous Government patched up efforts around health—where they neglected the buildings; where we have mould in the walls of Middlemore and asbestos in Dunedin—and they have been underpaying the staff, and that has put us to the point of crisis.

When we hear Simon Bridges say that he’s standing by the nurses but he just doesn’t think that they deserve more pay, I challenge Mr Bridges to go to a protest of nurses and stand there with a placard and say “Nurses don’t deserve more pay.”, because that’s effectively what the leader of the National Party has been saying. The Green Party supports—we recognise it may not happen overnight, but we thank the nurses for their challenge.

Dr PARMJEET PARMAR (National): Thank you, Mr Speaker. I would like to start on a positive note, and that is that I had my office’s open day just a few days ago. I have to say that it went really well, as I have moved from 165 Stoddard Road in Mount Roskill to 68 Stoddard Road. So I want to thank each and every one that came to my office.

In those conversations—they were casual conversations, but there were things that came out from each and every person that visited. People are really concerned about the consequences of the policies of this Labour-led Government. There were some business people, those who visited my office—they are saying yes, they don’t have the confidence. They don’t want to invest more in their business. They don’t want to employ more people. So that survey that was done for business confidence is not a waste of paper; that is what we are hearing on the ground and that is what the businesses are saying. So I ask the Government members to go out and connect with businesses to understand what they are saying.

As I am the spokesperson for research, science and innovation, we also talked about research and development tax credit policy. People clearly know that this policy is nothing but a copy and paste of 2007’s research and development tax credit policy. The Minister didn’t take any opportunity to do any homework to see what’s happening in other countries. All she’s done is copy and paste that policy and put that out for consultation.

Very interesting it was when we had Estimates hearings in the select committee process—Minister Megan Woods, she could not answer even simple questions. So I wonder if she has done any homework before putting out that policy for consultation. For example, I asked if she could tell me how much of that money that she has allocated for the R & D tax credit will go for existing business R & D. She said she didn’t know. We know how much business R & D is there. We also know what they’re proposing in terms of tax credit: 12.5 percent. She couldn’t calculate that and give me that figure. This is because she knows that some of that money will also go towards reclassification of work as R & D.

It became even more interesting when I asked her how it’s going to be monitored, and she said the Inland Revenue Department will be monitoring all the R & D tax credit claims. And when I asked if any money from this money that she has allocated for the R & D tax credit policy is going towards IRD, she said no. So no wonder that Ministry of Business, Innovation and Employment and IRD staff are planning to go on strike, because if you squeeze people for resources and funding, that is what you get.

Hon Grant Robertson: Ha, ha!

Dr PARMJEET PARMAR: Yes. It’s not a laughing matter. That is what you get—strikes—because this Government is just squeezing the IRD without providing any resources and is assuming that R & D tax credit policy will work fine. This policy is so flawed that no matter how much consultation is done on that policy, the design aspects of the policy cannot be fixed.

Then it became even more interesting when I asked about the minimum threshold. So the Minister didn’t know what’s in the consultation document. One of the officials tried to answer, and she couldn’t confirm who was correct. Then we also see that there is a maximum threshold for companies to claim research and development tax credit, and how that’s going to work? That’s going to be at the Minister’s discretion. So the Minister will decide which company will get the tax credit if they’re spending more than the maximum threshold, and how is that Minister going to decide? We don’t know. So the Minister is going to decide—tick for one company, cross for another company. How is that going to be decided? We have no idea.

But maybe we can pick up some hints from how these Government ministers are operating, especially from Minister Shane Jones, as he’s going around spraying the money that he’s got for his portfolio for his political motivations. We need that confidence that this R & D tax credit money that the Minister has allocated will not be used for ticking and crossing the companies based on their own political motivations.

I am calling on the Minister to stand by the Prime Minister—the Prime Minister who keeps saying that she wants to see that her Government is a transparent Government. I’m calling on Minister Megan Woods to make all the submissions public. And, yes, I understand some submissions on the R & D tax credit policy are public; that is because the submitters have made them public. But I’m calling on the Minister to make those submissions public so that we know what businesses are saying, because we know there is nothing for businesses that do not have a positive cash flow. There’s nothing for small businesses that are working really hard and contributing to research and development.

The uncaring policies of this Government are pinching people. But we know that this Government doesn’t care about people’s back pockets being pinched—or even their bottoms being pinched, as we have heard from the justice Minister Andrew Little.

SPEAKER: Order! The member’s time has expired.

GREG O’CONNOR (Labour—Ōhāriu): I find the general debate a great opportunity to see exactly what’s happening in this House. We propose; they oppose—is how I would really sum it up—and look, to be fair, it’s their job. The only way they’re going to get back into the Treasury seats is by pulling down everything we on this side of the House do—to be completely negative—and look, that’s fine. There’s some very able people there and they do it very well.

However, what I’d like to speak about today—I’d just like to appeal to those members on the Opposition benches to think about the effect of what they’re actually doing in one particular area, and that’s in law and order, in crime, and fear of crime. Now, traditionally around the world, Oppositions home in on the easy wins. They home in on those things that they can directly translate to speaking to the public, scaring the public, making sure that they’ll come back and build up a picture of a country, of a city, or wherever it is actually in peril. The problem with that is that in building that up, it’s an easy win, it’s a damaging win, and it hasn’t actually got anyone anywhere.

I stand here speaking as an ex - police officer with 41 years’ experience who’s still very much involved in those who are in the crime scene. I’m speaking about someone who I’m trying to assist through a gang experience at the moment, who has just had a horrific beating, and through that I’ve gained a reminder of just what we’re dealing with there.

Now, if we, and the Opposition, and as a country, become totally focused on the fear of crime, totally focused on scaring the heck out of the public, then what we will do is we risk missing some very obvious fixes here. Just throwing gang members into jail by itself, without any regard to anything else, could actually cause the problems they have in Los Angeles at the moment. Essentially, the jail gangs run the crime scene in Los Angeles. How they do it is because they’re there for ever. They’re never getting out, so they control it—the authorities have no ability to control them—and how they control it is that anyone who’s going to start committing crime anywhere else in Los Angeles knows eventually they’re going to probably get caught and go to jail, and they’ll come under the influence of those gang members. So I’m certainly not standing here saying “Don’t use jail as a tool to help control our gangs.”; I’m just saying let’s use it smartly.

What I fear is that if we just focus simply on, actually, irrational fear, where we’re building a fear that nothing is happening and that every time, particularly, the worried well in some of our safer suburbs still believe that if they step outside they’re going to be beaten, that there’s going to be sexual crimes committed on their street—which is not reality because, actually, crime generally is stable around the world. In fact, crime has come down generally from its highs, but if I could just focus you on one place where it did work.

Something that worked that didn’t work anywhere else was in New York. I think anyone with any understanding of how crime and how policing methods have changed over the years will focus on what happened in New York in the 1990s. Now, what happened there was that crime came down considerably. There was an influx of police—just the sort of influx that this Government is now contemplating and putting on the street—but it wasn’t just that that worked. It was how they used them—it was how they used them. They actually concentrated on reducing the fear of crime. So the people of New York, unlike the people of Chicago and unlike the people in the other cities that had equal drops in crime, actually believed their cities were safer. That is where we’ve got to concentrate our efforts.

If we are going to use the leverage of fear of crime, I would ask those members opposite now—I’m starting to run out of time, but I’d ask those members opposite to do one thing. When you’re sitting doing your strategy around your board, around your room, around your caucus, just be aware that by grabbing the easy win of fear of crime—grabbing the easy win of grabbing headlines and getting out there and convincing New Zealanders that we’re going to hell in a handcart as a country because crime is rampant on the street—you will not allow the Department of Corrections, and even you yourselves, to make sure that we’re part of fixing this.

So I’m not saying that we don’t use jails; I’m not saying that we don’t need jails. I’m just saying let’s use them smartly, and let’s not, basically, disqualify ourselves from doing that by just simply taking the easy win of scaring the hell out of the New Zealand public. Thank you, Mr Speaker.

DENISE LEE (National—Maungakiekie): Thank you, Mr Speaker. I appreciate the opportunity to speak here in the general debate this afternoon. I would like to spend my short time here referring to some of the issues that have arisen in local government over recent times. We want our local government bodies—do we not—to be effective and for the public to have some trust and confidence in the way that they engage and the way that they feel that councillors and mayors, and even staff and chief executives, can do their job and do their job well. It is incredibly fundamental that we have that trust and assurance throughout the country, but I would like to say and suggest that it is even more so for Auckland Council. You might think that this is something that I would refer to, having been a former Auckland councillor just recently myself, but let’s see what the value is for Auckland Council and why it is that we would undergird this particular local body.

New Zealand’s GDP in 2017 figures is $270 billion. Auckland’s GDP is just a little over $101 billion. That’s 36 percent of New Zealand’s GDP. So that’s the size and the nature of the governing body that we’re going to look at here just quickly this afternoon. So Auckland Council and their council-controlled organisation hold just—if you look at their entire assets and their balance sheet, if I can put it that way—around $70 billion. That’s a very sizable entity—Australasia’s largest council. We’re expected to grow, of course, those holdings, those assets, sizably over the next 10 years, if you look at their recent long-term plan. In the 2016-17 year, the staff at Auckland Council numbered 9,470 full-time equivalents, and, if you look at total headcount, somewhere to the tune of 11,500 staff. That’s massive numbers.

So the importance of Auckland to the rest of the country can’t be underscored. It’s undeniable and it means that the governing body of Auckland Council needs to be stable, needs to be reliable, and councillors need the right information to do their job. This is not rocket science, it’s obvious, unfortunately, that the current system does not seem to be working. We have recently seen councillors blocked from accessing important information, and tensions have been rising to a boiling point—to such a point that it’s come across and cut across here in the House in Parliament.

Council’s been in the news for the wrong reasons. It’s something that I’ve been through myself, but I’ve never experienced the escalation that I have seen in the last week or so. Now, someone could argue that the timing of the regional fuel tax and the tensions there may be related, but I think there’s a systemic issue here. So what’s the Government done to offer a solution in this space? Little—probably nothing.

And that was highlighted when I asked the Minister of Local Government in question time yesterday whether she sensed any urgency to address this issue and, even gave her a solution—in fact, two solutions, if you want to put it that way. One was referencing her capacity to use the Local Government Act 2002, where it states clearly, “The Minister of Local Government may”—and I’m quoting here—“require a local authority to provide to her information on the nature and extent of a problem and how the local authority is addressing or planning to address the problem.” Well, that sounds like an A, B, C way forward for the Minister of Local Government to have a conversation with Mayor Phil Goff and Auckland Council about the nature and the extent of the problem that they’re facing.

Now, there’s another solution, and that’s my particular member’s bill. I have offered—or I tried—to table that bill in the House and that was rejected by the Government. That bill offers a solution whereby the Local Government Official Information and Meetings Act could be amended and, quite simply—look, here’s the problem. Why do councillors have to go through the same exact process as the public to get information that they should be entitled to, to do their job? It’s not right. It’s a simple solution.

Hon Judith Collins: Get on with it.

DENISE LEE: You should get on with it. Pick up—

SPEAKER: Order! The member is—

DENISE LEE: The Government should get on with it. Send a signal. Pick up my bill.

The debate having concluded, the motion lapsed.

Bills

Imprest Supply (First for 2018/19) Bill

First Reading

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Imprest Supply (First for 2018/19) Bill be now read a first time.

A party vote was called for on the question, That the Imprest Supply (First for 2018/19) Bill be now read a first time.

Ayes 63

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

Noes 56

New Zealand National 55; ACT New Zealand 1.

Bill read a first time.

Bills

Appropriation (2017/18 Supplementary Estimates) Bill

Imprest Supply (First for 2018/19) Bill

Second Readings

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Appropriation (2017/18 Supplementary Estimates) Bill and the Imprest Supply (First for 2018/19) Bill be now read a second time.

I thought it might be helpful at the outset to let members know exactly what these two bills are. The Appropriation (2017/18 Supplementary Estimates) Bill makes new appropriations and changes to appropriations in the 2017-18 Estimates to reflect decisions taken by either the previous Government or the current Government since the 2017-18 Estimates were finalised in April 2017 prior to Budget 2017. The Imprest Supply (First for 2018/19) Bill provides interim bulk spending authority for the first two months of the 2018-19 financial year until the Appropriation (2018/19 Estimates) Bill is passed in August.

So, just to be absolutely clear, what the National Party just voted against was making sure that there’s money to pay public servants for the next two months. So just to be really clear on what the National Party—

Hon Member: And beneficiaries.

Hon GRANT ROBERTSON: And people and superannuitants, and enough money for Housing New Zealand, and all of the above, is what the National Party just chose to show New Zealanders that they didn’t want to approve of for the Government to have enough money to run for the next two months. Fortunately, the very unified Government on this side of the House casts the votes to make sure that passed.

But the main thing I want to talk about today is the other bill, the Supplementary Estimates bill. This is, essentially, looking at what happened in the 2017-18 financial year that needs to be tidied up because it wasn’t part of the original appropriations. Because we’ve had a change of Government, there’s rather a lot to do in this area. In particular, the majority of the large changes to appropriations and capital injection authorisations relate to the Government’s 100-day plan, because being a busy and active Government who wanted to get on with the job the moment that we arrived here, there was a certain amount of expenditure that needed to be appropriated and capital amounts to be injected into the economy.

Probably the one of those that’s here in this bill that I want to speak first about is the restarting of Government contributions to the New Zealand Superannuation Fund. So the bill makes the appropriation of $500 million within the Supplementary Estimates. That is the first payment from the Government to the New Zealand Superannuation Fund since July 2009—

Hon Member: When?

Hon GRANT ROBERTSON: July 2009, when the last Government decided they were going to put up the shutters on Government contributions to the super fund.

Andrew Bayly: Oh, but you didn’t want us to take on debt, did you?

Hon GRANT ROBERTSON: Now Andrew Bayly may be—I can’t quite interpret, but he may be saying there was a global financial crisis and perhaps that would have been a reason to have suspended Government contributions, and in fact the then finance Minister, Bill English, went on television and he said, “When the Government books get back into surplus, we will restart these Government contributions.”

Hon Member: Did he?

Hon GRANT ROBERTSON: So we might have differed but that was—it’s in here. It’s in here—for this appropriation, the $500 million that we’re putting in here in the Supplementary Estimates. The reason we have to do that is because the previous Government didn’t put those contributions in. They said they were going to do it when the books got back into surplus, but when the books got back into surplus—no Government contributions; not prioritised. So it is good that we are able through this legislation today to make the necessary financial adjustments to reflect that contribution.

The Prime Minister and myself had the great honour of going across to Treasury and going to the big internet bank in the sky and pushing the button that saw that contribution go through. I have to say it was quite a scary moment, actually, just in case we hadn’t got the right account number, because there was some concern that if they’d entered the wrong account number, $500 million was winging its way—actually in fairness it was $70 million; they do it in contributions.

Chris Bishop: Don’t worry, Grant. It’s only money.

Hon GRANT ROBERTSON: Chris Bishop wouldn’t notice an extra $500 million in the bank account out there in Hutt South, but the rest of us would.

I’m sure the New Zealand Superannuation Fund’s very grateful for that. What that means is that across the forecast period of this Budget there will be $7.7 billion extra going into the super fund. By the time we get to the end of the forecast period, the fund is estimated to be worth $63 billion. So the fact that the Government can continue to make contributions under this coalition Government, I’m very pleased about.

The other area I just want to mention within this Supplementary Estimates bill is the money that’s required for this year to get the fees-free policy under way and going. I want to congratulate my colleague the Hon Chris Hipkins on the fact that he was able to pull this together so quickly. It relied upon some cooperation and collaboration with the tertiary institutions in New Zealand, and the amount that we are bringing across here turns out to be around $254 million. There are some ups and downs in terms of costs that we are expecting to face, but in terms of the 2017-18 year, that’s what’s required.

What that policy means is that we are opening up the opportunities not just for young people to go to university but for people who have never trained beyond school before to be able to take that up, be that in the trades, be that doing an apprenticeship, or be that in workplace training. And it is important to note, too, that because of the cost structures that are around apprenticeships, that means that actually it’s worth two years’ free fees for the apprentice and the employer. We want to make absolutely certain that we are giving every New Zealander the opportunity to train and retrain. This policy is an important plank underneath that. Yes, it will help school-leavers, but it is also about looking ahead to a future of work where we know people who work in industries that are changing, that are being affected by technology, need that opportunity to go and do courses and programmes. They won’t be three-year degree programmes necessarily; they may be short, modular courses—six weeks, six months. That facility is provided for in this policy and funded through the Supplementary Estimates that are in front of us here today.

There are also a range of other changes here. The large ones that I should mention, particularly the reinstatement of the Main North Line in the South Island—the $140 million there to help meet the costs, pending KiwiRail’s insurance claim. Now this is very important because KiwiRail is going through the process of one of the largest ever insurance claims that New Zealand has seen for the rebuilding of that line. They do not have that insurance claim back, and the very reason why we have Supplementary Estimates like this is that we can provide that money in the short term to make sure we get on with the job of giving that vital transport link what it needs.

Equally, for the people of Christchurch, there is a transfer around money for Southern Response, who are the insurance body responsible now for all of the old AMI claims down there. There is a need ongoing for funding there and $137 million needs to be transferred across here. There are also the regular changes that are needed for things like IRD to be able to move forward with its work in terms of student loans and the capital injection that it needs as well.

The other item I want to mention is around school property portfolio management, and this is an area where the Minister of Education and myself are well aware that we are facing a situation where the schools in New Zealand did not get the investment they needed for the last nine years. The Minister, during the Budget process, as he uncovered more and more about what hadn’t been funded, has raised with me the importance of us taking a long-term view of how we make sure we have the school facilities that we need. In this bill here we’ve got around $180 million being moved forward for the Supplementary Estimates to make sure that we are able to meet the costs of a number of school property projects where there’s been revaluation. We have to do this here in this bill now for today, but it represents just a small part of what we need to do to make sure that our school property portfolio is up to scratch.

There are several other appropriations that have been put in place here—

Kieran McAnulty: What about tarmac?

Hon GRANT ROBERTSON: Not so much on tarmac in this one, Mr McAnulty. That comes under a different heading. But here what we’re doing is tidying up the accounts so that they are ready to go for the rest of 2017-18, and indeed the imprest supply bill—that will cover us off for the expenses of the Government through to August, when the appropriations come back. I have much pleasure in recommending these bills to the House.

Hon AMY ADAMS (National—Selwyn): Thank you, Madam Deputy Speaker. Well, I rise this afternoon, of course, to take a call in this debate on both the Supplementary Estimates and the imprest supply legislation, being, obviously, the bills that both adjust the financial accounts of the Government for the completion of the year we’re currently in, the 2017-18 year, and then the mechanism by which Governments are provided with the authority to spend money for the first part of the coming financial year, the year 2018-19, until, obviously, the formal Budget process works its way through.

But in terms of this House and this debate, what it really is, in a more tangible sense, is the first iteration of this Government’s approach to managing the books. It’s the first iteration of us seeing how the Labour - New Zealand First - Greens Government is planning to use the incredibly strong economy that they have inherited, and what we are continuing to see is that this is a Government that is fiscally incompetent, that was not ready for Government, and that has not moved beyond the sound bites of policy. They have no substance, they are as shallow as a puddle, and as we work through the details and the costings of their policies, more and more that’s becoming utterly and apparently clear.

It’s very easy, actually, for politicians in Opposition—as the Government were just a few months ago and as, frankly, they fully expected to be post the election. That’s clear by the lack of preparation that they undertook. It’s very clear when a Government hasn’t done the work. We see that they have found it so easy to simply say things—“We’re going to build houses, we’re going to plant trees, we’re going to fix the world, we’re going to house the homeless, and we’re going to feed the hungry.”—and then they get into Government and they go, “Oh—expletive—”, and they work out that, actually, they have over promised, they don’t know what it’s going to cost, and they have no idea how to deliver. That is what we are seeing through the Supplementary Estimates, the imprest supply legislation, and the pre-funding of the Budget commitments, because that is, of course, what this bill does.

If you look to the promises made—the extensive promises made by this Government in Opposition during the election campaign and in the Speech from the Throne—they had no concept of what was even possible, they had no concept of what it would cost, and they clearly have no concept of how an economy works and what’s needed to keep growing the engine room of our economy, to keep our businesses strong and productive and positive. You only have to look very lightly at any number of business confidence surveys to see the utterly clear message that businesses are sending to this Government: “We don’t like what you’re doing, we don’t trust you, and we don’t have any confidence that you’re going to get it right.”

Now, we have seen repeatedly from this Government—from Grant Robertson, from David Parker, from Iain Lees-Galloway, from Stuart Nash, from Megan Woods—that they don’t particularly care what the business economy is telling them; they don’t particularly care what the officials are telling them. Anybody who expresses an opinion that doesn’t suit their ideology is dismissed and degraded. I mean, we’ve seen the Minister of Justice, in the House, stand up repeatedly and say every single legal academic and expert in this country is wrong. We’ve seen the Minister of Police saying he doesn’t bother to read advice he doesn’t like, that doesn’t suit his needs. We’ve seen Megan Woods say she’s received advice but she just disagreed with it, so she ignored it. We’ve seen Grant Robertson tell us they haven’t bothered to get advice on the fiscal impact of one of the most significant announcements they’ve made—the announcement to end oil and gas exploration.

This is a Government that patently is not concerned about the long-term effects on the economy, and that should worry New Zealand desperately. It should worry New Zealand because in this legislation that we are debating, we are seeing spending being hard-wired in, in that age-old Labour way. There’s one thing Labour Governments are good at—well, there’s two, actually: taxing and spending. This is a Government that is doing both.

So in the election campaign—it’s not that long ago—we all heard Jacinda Ardern standing proudly on the stump, saying “There will be no new taxes under a Government that I lead.”, yet what has happened? Well, they’ve come into office; the Auckland regional fuel tax that was only ever talked about for Auckland is not only now in place and pushing up fuel costs in Auckland but, in fact, is staring down the barrel of every region in New Zealand, as council after council are lining themselves up to say, “We’ll have some of that free money the Government is handing out, too.” Quite apart from the fuel tax, they’ve put up taxes already, in the first nine months, by $2.5 billion. That’s what’s funding the spending in these proposals—$2.5 billion. That’s only in the first few months, and that’s before Michael Cullen gets his fingers on the full range of new taxes that he is looking at.

The impact of the policies that we are seeing funded through the Budget, through the imprest supply and begun in the Supplementary Estimates, are hurting hard-working New Zealanders. That’s where it really comes home to roost. It’s not actually about the economy or the fiscals or the numbers; it’s about the Kiwis who suffer, and here’s what happens: you have fewer jobs in the economy. Under National, 10,000 new jobs a month were being created. You take the steps that this Government has taken to put the heebie-jeebies through the business community, and do you know what that number’s down to already? It’s down to 4,200 per month—less than half of the new jobs. That hurts Kiwi workers. It means less choice and lower incomes.

We know the cost of petrol is going up. The hardest-working—some of the Kiwis who are doing it the toughest—are now facing more than 25c a litre extra on their petrol under this Government. This Government, who pretended to come in and care about hard-working New Zealanders—one of the first things they do is act to put petrol prices up when they’re already going up. One of the next things they do is drive just about every landlord out of the private rental market and push rents up. You look at the change in rents under this Government. That goes straight to hard-working New Zealanders, the very New Zealanders that this Government told us they cared about.

Of course, when you put costs up for business, when you put the minimum wage up, when you put the petrol prices up—

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

Hon AMY ADAMS: —when the Government puts the cost of transport up, the very thing that happens is the cost of goods goes up. So New Zealand families, and those particularly at the lower end who are struggling to get by, they lost the tax cut that the National Government had put in place for them, they lost the strong, growing economy that the National Government had in place, and they lost the fact that 10,000 new jobs a month were being created. What have they had so far? They’ve had higher petrol prices, they’ve had more taxes, they’ve had higher rents, and they’ve had higher costs of living. That is the reality of this Government when you get past the sound bites.

I want to look at some of the other spending initiatives we’ve seen in these pieces of legislation, and I want to start with one of the ones that the Minister of Finance talked about in his contribution. He trumpeted proudly that Labour were going to put money back into the New Zealand Superannuation Fund. Here’s what he didn’t say: Labour are borrowing to play the stock market.

The money going into the Cullen fund is being borrowed. How many financial advisers in New Zealand would say to New Zealanders, “What you should do is rack up some debt and go and play the stock market.”? Hardly any. “Not many, if any”—to quote Scribe—I would suggest. Yet Grant Robertson thinks that that’s an excellent way to play with New Zealand’s finances.

He is borrowing money to play the stock market, and he stands in this House and says, effectively—and I paraphrase—“Aren’t I wonderful?” That’s what he’s saying. Well, actually, no, Mr Robertson; you’re not. Running up more debt, increasing our debt in real terms when the economy should be growing well, when it should be in the best financial times, and when it has got some of the best terms of trade we’ve seen for many years, is a nonsense. It is a nonsense to be putting up taxes, to be raising debt while the economy is so strong—and why? They overpromised, they didn’t understand the cost of the promises they were making, they paid far too much of a dowry for Mr Peters and his ensemble, and now the chickens are coming home to roost.

If there was any truth whatsoever in this nonsense that they are peddling about some crisis in underfunding, why have they funded less into health than National did? Why have they funded less in education than National did? The operational grants for schools are lower this year than they were under National. The increase in district health board funding, as a percentage, is lower this year than it was under National. The total funding to health is lower this year than it was under National last year, and, in fact, it will be lower every year for the next four years. That is not a crisis in underfunding. The same is true in infrastructure spending. We keep hearing about the infrastructure deficit that somehow they need to fix. There is less money in this Budget going into infrastructure than under the National Government.

The Labour Government want to talk about nine years they have to fix. I would suggest to them that they have inherited one of the best economies in the world, and in nine months they have already shown very strong signs that they fully intend to break it and hurt New Zealanders.

Hon CLARE CURRAN (Minister for Government Digital Services): Well, here we are hearing from the Opposition, the Opposition with a very large chip on its shoulder, repeating the tired old lines—the tired old lines that certainly aren’t resonating and that keep changing. They keep changing. They can’t have it both ways. We’re either taxing or spending, or we’re not doing anything.

I’m so proud to be standing up here and talking about this Budget and the Supplementary Estimates. I want to start off with education, as well, because this is $310 million authorised for the implementation of that first-year fees-free policy for post - secondary education. It is one of the most fundamentally important changes—and we’ve got a number of them—that this Government has introduced. It’s just the beginning. It’s the beginning of a much bigger strategy around the importance of lifelong learning. That previous Government, now that Opposition with a big chip on its shoulder, could never think beyond a year or two ahead.

This Government is thinking about the big picture. It’s putting in place the foundations for the future for rebuilding the critical public services, for building a strong economy, but it’s doing a lot more than that. It’s actually thinking about what the shape of the future is going to look like in the near to medium term. It’s making sure that we’re putting in place now the ability for people not to be left high and dry and for people to be able to continue to learn and to build the skill sets that are needed for the jobs of the future, so that we’re not having major disruptions in our country and in our society.

That’s why I’m so proud of that policy that was put in by the Hon Chris Hipkins in post - secondary school education, which isn’t just about kids going to university or polytech. It’s about people going and doing trade apprenticeships, but it’s also about people who are in the workforce now having the option and having the ability and the encouragement to be able to go and retrain for the jobs of the future, so that they can have a future. I feel incredibly proud of that.

Our productivity story over the last decade has been woeful. One of the biggest issues that emerged under that previous Government was our low productivity and our lack of ability to be thinking about where the value-add in our economy needed to be and what were the things that needed to be done and be put in place for that. That Government never went there—never went there. This Government is putting in place the foundations so that we can boost our productivity. We can do that volume-to-value story that will mean that our children and our grandchildren will benefit from that. It will be a much stronger economy and a much more unified and inclusive society, and we’re rebuilding critical public services at the same time.

I heard the comments made by Amy Adams around putting money back into the New Zealand Superannuation Fund. What New Zealanders can do is trust that this coalition Government is safeguarding the future of superannuation. How can they argue that we are not doing that? This, again, goes to longer-term thinking, which is something that New Zealanders have been crying out for.

I give speech after speech after speech to business audiences in this country, and what they are crying out for is a plan and to know that there is a Government with a plan. [Interruption] Oh, they’re laughing because they consider that the new economy is not—are they not effective businesses? Are they not the businesses of the future? What they want is a Government that listens, a Government that’s prepared to work with them, and a Government that has a plan, and that’s what this Government has.

New Zealanders can trust this coalition Government. It was Michael Cullen who set that fund up and it’s Grant Robertson who has resumed those contributions after Bill English and Steven Joyce ignored it, and that is the hallmark, that is the legacy, of that previous Government. It is that they ignored the future. That decision by National meant that we forwent more than $23 billion for the Superannuation Fund over that period. Our plan for the Superannuation Fund is to contribute $7.7 billion over the next five years, with $500 million in 2017-18, and I’m really proud to be part of the Government that has done that.

On the infrastructure deficit, the infrastructure deficit from the previous Government—the national housing crisis is just a part of that. The infrastructure deficit in education and in local government and the lack, again, of a plan and a lack of forward thinking—we are putting in place the foundations for the future. This Supplementary Estimates bill invests $600 million to invest in the water and roading infrastructure to support the increase in housing supply. Under our infrastructure spending, this Government will invest $42 billion—that’s $42 billion—in new capital and infrastructure over the next five years.

That previous speaker, Amy Adams, had the temerity to get up and say that this Government was not investing as much in infrastructure as they did—$42 billion over the next five years is a Government that has a plan and is putting in place the foundations for the future. We are absolutely committed, and that is what is resonating out there, because people know that this Government will rebuild critical public services and will put in place the foundations for a strong economy.

In the regions, lifting regional productivity—well, my goodness, where was that? Where was the impetus for that under the previous Government? This bill appropriates $124 million to lift regional productivity through the Provincial Growth Fund. This Government is addressing regional productivity—something that that previous Government neglected for far too long. You see it everywhere you go around the country, and you also see the people and the communities that are just so thankful that they have finally got a Government that is listening and a Government that is enabling regional productivity to be a priority and that is seeing the value in regional New Zealand. The $1 billion per year Provincial Growth Fund—it’s the biggest fund of its type in the world per head of population. It represents the biggest investment in our regions in our lifetimes. What that is demonstrating is true leadership as we roll out our plan to make New Zealand’s economy more productive, more sustainable, and more inclusive.

This Government had a 100-day plan, which it delivered on. We’ve delivered a Budget which puts in place the foundations—the true foundations—for a strong, productive, sustainable economy and to rebuild critical services, which resonates with New Zealanders all around New Zealand. We have put a value on regional New Zealand, we’ve put a value on housing, we’ve put a value on education—particularly on lifelong learning—and we’ve put a value on health and the need in health to rebuild critical services in health.

I’m proud to be part of this coalition Government, I’m proud to be speaking on these Supplementary Estimates, and I’m proud that this country can have a future for everyone, because everyone is included in this Government. It’s a Government for everyone, not just for a few.

Hon JUDITH COLLINS (National—Papakura): Oh, that was a long 10 minutes—that was too long for 10 minutes. Actually, the member who’s resumed her seat is the Minister for broadcasting, and I did not hear her mention one word about the $38 million of funding boost for Radio New Zealand that that Government promised and has not delivered on. Thirty eight million dollars—another broken promise.

I actually think it’s an indication of the quality of the Government that the Hon Clare Curran was the second speaker in this debate. I think it pays some tribute to the Hon Clare Curran, but it doesn’t pay much tribute to the Government. And to hear her say that the Labour, New Zealand First, Green Government has provided certainty for the provinces—well, they’ve certainly given a lot of certainty to Taranaki! They’ve, basically, stuffed their economy.

They’ve gone after farmers. They’ve gone after anything that makes money. They’ve spent years talking about dirty dairying. They’ve gone after oil and gas. They’ve taken an industry which has been the biggest payer in terms of wages to ordinary Kiwis who work in that industry of oil and gas, and they have gutted it. And they can sit here today talking about the provinces—they wouldn’t know how to spell it, and that’s the problem.

So you’ve got here a Government—I think, quite unkindly, called the accidental Government—and they promised so big on the election trail and they delivered so little, and I thought in quite a cynical way, really. So if you look at, for instance, the previous speaker from the Government, the Hon Grant Robertson, Minister of Finance—which I have to say does send shivers down most people’s spine who know anything about finance—he cynically stood up in the House today and he said of us in the Opposition, “Well, they’re not voting for this bill. Therefore, they’re not voting for wages for nurses.” I have no idea why he said that.

I looked on my media indications from the Google people, and guess what? The nurses are striking. I didn’t see the nurses striking under a National-led Government; I see them striking under a Labour, New Zealand First, and Greens Government. I didn’t see teachers striking under National, and yet we see teachers striking under this Government. We’ve got strikes happening in the transport sector, in public transport in Wellington and in Auckland, and that’s happened under a Labour, New Zealand First, and Greens Government.

The people striking are the very people who thought that this Government was going to deliver for them, and their response to this Government and their Budget, which would have to be the biggest flop Budget ever—this dud Budget—has been to go on strike. If we all know nurses, in our families and elsewhere, they are the most dedicated people to their work, and for them to give strike notice, it says a lot.

Having listened the other day to one of the people who are leading this particular strike for the nurses, the comment was this: “The Nurses Organisation”—in other words, the union—“have been promising all sorts of things that were going to happen under Labour. The only thing that’s happened is we’ve had to strike.”, and that sums it up.

Then, of course, this Budget is also a big $2 billion for KiwiBuild, which, it turns out, is “KiwiBuy” off the plans from a few developers, hope they know how to build properly, hope they don’t go broke halfway through the build, hope we haven’t given them too much money up front, and hope it’s going to be all right—Phil Twyford, KiwiBuild—and it’s just amazing. So we are now, what, eight or nine months into this Government, and how many of these 100,000 houses that were promised have been built? How many? Any number?

Hon Nicky Wagner: Zero.

Hon JUDITH COLLINS: Well, the Hon Nicky Wagner knows the answer. The Labour Government’s very quiet on this. The answer is zero.

What do they have to show for all these months? Well, Phil Twyford’s gone along to a developer who was struggling, who was working in my electorate—he loves the fact it’s in my electorate, for some particular reason—and that particular builder says that he was struggling, he can’t get financing, couldn’t do it. And what that really says is this: if someone’s a developer, you can’t get your financing, and you’re not maybe the most financially secure developer, Phil’s your man. Phil’s your man. Go to Phil—he’ll buy it.

What happens once you’ve bought this house? What happens once Phil Twyford’s bought the house? He’s going to sell it on to the KiwiBuild first-home buyer. And what do we know about who can be that KiwiBuild first-home buyer? Well, apparently anyone, as long as they’re a first-time buyer in New Zealand. I don’t know whether or not it’s the first-time buyer by themselves or a first-time buyer in this particular relationship they might be in, not the previous one—no detail has been forthcoming from Phil Twyford. I’ve asked parliamentary questions. I’ve asked written ones; I’ve asked oral ones. We’re asking Official Information Act questions. No answers from Phil Twyford, because nothing has been agreed.

That tells us that we’ve got a Minister with $2 billion, with no idea what he’s doing. He’s moved from “We’re going to build all these houses and we’re going to build them in our first 10 years.” to now saying, “Oh, we’re going to buy some houses.”—apparently, not build any houses at all, because he hasn’t got any carpenters, plumbers, electricians, or gib-stoppers; the people that you need to do this—and they’re going to buy them off developers, in many cases where the developments have been failing.

And why should anyone buy a KiwiBuild house? You’d like to think that you’d want to do it so that someone got a start in life—that, actually, the asset that they’re buying might at some stage have a bit of value added to it—and, at the same time, you’d like to hope they were going to have a nice neighbourhood full of people who are aspirational, trying to get ahead, looking after their properties, looking after their neighbourhood. And what we have from the same Minister, the Hon Phil Twyford, is that State house tenants under his watch—now, we have a no-eviction policy for antisocial behaviour. So that means that if you’ve bought your KiwiBuild property, you’ve been in the ballot, it’s great news, you’ve got your KiwiBuild property, and you pay for it, next door, Phil’s got one of his houses and there happens to be some antisocial tenants. What happens then? You move, apparently, according to Phil Twyford.

Dr Duncan Webb: Who moves?

Hon JUDITH COLLINS: You move.

DEPUTY SPEAKER: No, not me.

Hon JUDITH COLLINS: Not unless, Madam Deputy Speaker, you wish to buy one of those KiwiBuild houses, which I’m sure you’re not silly enough to do.

So should the KiwiBuild homeowner have a tenant problem with Housing New Zealand, what we’ve heard from this Minister today and previously is they’re on their own. They’re on their own because Housing New Zealand now has a no-evictions policy for antisocial, gang-connected behaviour from tenants. As long as they pay the rent eventually, at some stage—possibly in the future—it’ll be just fine.

And this is a Government that has overseen the biggest jump in the State house waiting list of any. So after all the carrying on, all the talking in Opposition about what they were going to do for State house tenants and people who needed a house, that waiting list has grown by 2,000, by the Minister’s own admission in the select committee the other day—2,000 under his watch. He’s only been in the role for eight or nine months. Imagine what could happen in a year. There are 2,000 people now on the waiting list.

Hon Clare Curran: Tired, old Opposition. Tired, old line.

Hon JUDITH COLLINS: And that member over there—somebody; I don’t know her name—has called out something about tired, old—

Hon Clare Curran: Lines.

Hon JUDITH COLLINS: Don’t talk to me like that—an unknown person. What I would say to that person is this: don’t make out you’re going to deliver to people. Don’t tell people they’re going to get $38 million at Radio New Zealand, Clare Curran, and then fail to deliver.

This Government will be a one-term Government. It will be a one-term, and we will make sure of it.

FLETCHER TABUTEAU (Deputy Leader—NZ First): Thank you for the opportunity, Madam Deputy Speaker, to speak to the Imprest Supply (First for 2018/19) Bill and Appropriation (2017/18 Supplementary Estimates) Bill, which I’m not sure former Minister Collins was actually doing, or the person before her, or the person before that. So I’ll take the opportunity to address some of the comments made by the member opposite, although I’ll start by contrasting the styles of the two Governments.

What the imprest supply and Supplementary Estimates bills highlight to me is this is a Government that is willing—and, in fact, more than willing; ensuring—that the people of New Zealand and their representatives are actually talking about the issues. We’re actually talking about them, and we’re dealing with them, as evidenced in these pieces of legislation. I say that because, in contrast, only a year ago there were six stopwork strikes under the previous Government’s control, but you didn’t really notice it because what that Government was good at when they had the reins, as it were, was suppressing this information. Not stopping it, because people need the ability, and it’s one of the strongest and most powerful ways of people having their voices heard, but—urgh! It’s frustrating listening to the contributions from those opposite.

Amy Adams, for example—my understanding is she’s the spokesperson for finance in Opposition. Apparently they want the New Zealand public to believe that the National Government never taxed anyone. We know, in contrast, they never spent on anyone in New Zealand, but they keep throwing up this whole tax and spend argument like they never did it. It’s just unbelievable, and quite sad to watch as they make the argument, when, yes, they taxed. They increased petrol taxes in their time. They did it constantly and consistently. They increased GST in their time, despite actually saying that they wouldn’t. It was that party that introduced the brightline test, capital gains, to New Zealand’s legislation books, yet somehow they’re telling the public that it is this Government that did that.

One of the examples that Ms Adams used was around this whole tax and spend argument, and then in the conclusion of her contribution she made the point—and it was a very interesting one, which is highly debatable. But the point she was trying to make was they spent more on hospitals and homes, and she listed—it’s really hard to talk about because it’s so hard to believe, but her final argument was that party spent more than we are now.

Darroch Ball: It doesn’t make sense.

FLETCHER TABUTEAU: It just typifies and is a great example of the arguments coming from that side of the House. They’re inconsistent and contrary. They don’t make any sense.

Hon Paul Goldsmith: It’s not our fault you can’t figure it out.

FLETCHER TABUTEAU: You’ll hurt my feelings if you say that, Mr Goldsmith.

DEPUTY SPEAKER: I won’t.

FLETCHER TABUTEAU: Despite Ms Adams’ calls of the sky falling in, unemployment continues to fall in New Zealand, whilst incomes rise in a steady pace. Our forecasts say it, but OECD forecasts have steady, sustainable growth in New Zealand over the next year at over 3 percent, all the while—in contrast to the kinds of National Party - sponsored business confidence surveys—our businesses are increasing their investment on non-residential fixed assets. For the Opposition’s benefit, in non-residential fixed assets you’d include transport equipment, plant and machinery equipment, those assets that are growing the business, improving productivity—investment in the business. All the while that they’re decrying lack of business confidence, those very businesses in New Zealand are spending more than they ever had in investing in their businesses in New Zealand.

So it’s an interesting time that we live in, because unemployment’s falling. Wages are going up, which apparently—I won’t go there. That was another argument from Ms Adams. But she decried the spending on our provinces. She said the Provincial Growth Fund was a waste of money. I am not quoting her literally—those were her words to that effect. Our provinces deserve so much better than the now-Opposition provided them in their time.

These communities, these people, are the lifeblood of this country, and this is a Government that has stood up and said we will invest in those provinces, because we know if we do that, it’s good for everyone in New Zealand. They, disproportionately more than any other part of the country, provide a return to New Zealand’s economy more than anywhere else, and this Government’s investment now will empower that, will accelerate that, will grow that, and the nature of the investment is such that it is being done by a great team of people who are working with the communities. In fact, thus far it is the communities themselves who are coming to the Government and saying, ‘This will be good for us—not just good for us; this will create jobs. This will create sustainable jobs. This will grow our communities, this will grow our local economy, and this will be good for the people who live in our provinces.” That was a promise we made to them leading into the election, and that is a promise that we have kept and are delivering on every day as a Government, and I’m proud to play a small part in that.

I just wanted to touch on some of the key Supplementary Estimates that have been raised in this legislation, because, as I started with, they highlight that this is a Government that is addressing the issues, that is willing to engage and talk about issues that the previous Government—that National Party—never wanted to talk about while they were in control of the Government.

Hon Dr Nick Smith: Oh, rubbish—just rubbish.

FLETCHER TABUTEAU: So education and training—I’ve hurt Mr Smith’s feelings, so there’s one little win for the day. Thank you, Mr Smith. This is very important. So just in this legislation—just in the Supplementary Estimates—we’re talking about $310 million being spent in education and training, and some of the previous speakers on this side of the House highlighted the fact that a lot of that actually is in the capital and the infrastructure of our schools that had been neglected over nine years such that some of those teaching environments were unsafe. It was, again, one of the 100-day plan policies, and the New Zealand public knows that in that 100-day plan we kept the promises that we made, and in this legislation today we’re ensuring that we can continue to do that as we wait for the Budget to be passed in the House. I think that’s in August.

So education—what we’re saying, and what perhaps isn’t obvious for those opposite in this House, is that this is an investment in the long term. There are now 80,000 people who are eligible for the fees-free programme, and—as was pointed out earlier again, but is worth repeating—in doing this we are empowering those who are looking at trade training, not just universities or polytechs but those in apprenticeships and trades, and that’s incredibly important to get that fundamental groundwork. Actually, there’s quite a lot of money to be made at the moment in those professions.

Hon Paul Goldsmith: Come on, this is waffle.

FLETCHER TABUTEAU: Wait your turn, Mr Goldsmith. This bill invests $600 million in water and roading infrastructure for timely increases in housing supply. Despite what the Opposition is saying, this Government is on its way to building more homes, and we’re getting the job done—a job that they knew needed to be done in their time, but they went on a tour of Auckland to find suitable sites to build homes, and some of those sites were power exchange sites and graveyards, from memory. It was an unbelievable example of that previous Government in action. Anyway, Madam Deputy Speaker, thank you for the opportunity. It’s good enabling legislation. It’s obviously timely, and it’s a pleasure to support. Thank you.

Hon PAUL GOLDSMITH (National): Thank you, Madam Deputy Speaker. We’re speaking, obviously, about the Budget that has been passed by this Labour - Greens - New Zealand First Government, that is wreaking so much havoc in this country and this economy. But when we look at the overall Budget there’s no question that it represents, as the last Budget did and the Budget before that, a huge investment on behalf of all New Zealanders in health, in education, in innovation, in keeping our people safe through the justice sector, and in all the many ways in which Government contributes to the lives of New Zealanders.

Interestingly enough, I was watching that well-known political commentator Anika Moa on TV recently when she interviewed Winston Peters. Winston Peters, who, as everybody knows, is, effectively, the Prime Minister at the moment and will be for the next few weeks—it’ll be the first time in New Zealand’s history that the leader of a party that has garnered so few a vote, about 7 percent, ends up as the Prime Minister of the country for an extended period of time, but that’s all by the by. Winston Peters was explaining his understanding of the New Zealand economy. His two basic points were that it all went wrong in 1984 and, secondly, that subsequent to that there was a massive free-market experiment that has led to all sorts of terrible consequences for New Zealand—excessive and uncaring capitalism.

I just wanted to sort of make those points because, obviously, he seems a little bit—

Darroch Ball: What are you speaking on?

Hon PAUL GOLDSMITH: I’m talking about the Budget and the context to the Budget.

Darroch Ball: You’re not talking about the legislation.

DEPUTY SPEAKER: Order! I decide. The previous speaker spoke for three minutes without mentioning the Budget, all right? So I decide.

Hon PAUL GOLDSMITH: Thank you. So the acting Prime Minister says 1984 was where it all went wrong. He forgets that before 1984, we had a totally unsustainable economy, high unemployment, and massive Budget deficits and we couldn’t carry on the way that we were doing because we couldn’t, ultimately, pay our bills. Subsequent to that, we had reforms.

Now, when you look at this Budget, and you look at the Budget of last year and all the Budgets of the previous National Government, there’s no way that any honest assessment of that could be made which says that this is a hard right capitalist country that we live in where we’ve gone according to the trickle-down theory and somehow we don’t care about people. If you look at the Budget and you look at last year’s Budget under the National Government, most of the Governments spending has been about taking money off better-off New Zealanders and giving it to New Zealanders who are struggling. There’s massive redistribution. If you look at the papers in the Tax Working Group, you’ll see that, basically, half of the population of New Zealand receives more in services—whether it’s free education, free health, Working for Families tax credits, and grants—than they put in, and a relatively small group, a third of the population of New Zealand, pays, by far and away, the largest proportion of tax.

So, fundamentally, what this Budget represents is a massive redistribution of wealth and income from those who are better off to those who need it, which is right and proper. But you have to have a very warped view of the world, if you look at that and say—

DEPUTY SPEAKER: I don’t.

Hon PAUL GOLDSMITH: Sorry. Any commentator, such as the acting Prime Minister, Winston Peters, would have to have a very warped view of the world if you were trying to categorise that as trickle-down economics or some hard right, free-market, extreme example of capitalism. So we don’t have that in New Zealand, we haven’t had that in New Zealand, and in New Zealand we invest very heavily in ensuring that all New Zealanders have access to the opportunity to live a full and healthy life.

Now, you can have arguments about whether you should spend even more or redistribute even more, and this Government has talked a big game about doing that. We haven’t seen a huge amount of evidence of it. Yes, they cancelled the very modest tax adjustment that would have seen wealthier families receiving a small or modest tax cut, but there was no coherency in the way that they went about it, because they then went and turned around and spent $2.8 billion on middle-class welfare in terms of giving free access to tertiary education. It probably means that the overall effect of the Budget is less redistributive than it was before, so they’re muddled and confused in their thinking. But, certainly, there hasn’t been a fundamental shift to what the New Zealand Budget is all about.

But what we have seen since they have been in Government is a series of decisions that have undermined the business confidence of this country. We know that the economic development Minister thinks all those surveys are junk, and we just heard from the previous speaker, Fletcher Tabuteau, who said that they’re National Party - sponsored business surveys. I’m sure the ANZ will be thrilled with that characterisation of their work, but that’s how it was described. And that arrogant view, that more than 1,500 business leaders who were asked about what their investment plans are for the next year, what they’re planning to invest in—and the answer to that question by 1,500 leaders was they don’t know what they’re talking about, according to the economic development Minister, because the results are pure junk, according to him. I don’t think they’re junk. I think what they indicate is that all those business leaders and would-be investors are putting their hands back in their pockets and they’re not spending and they’re not investing because there is an enormous amount of uncertainty about what this Government intends to do.

We all know that there’s 122 reviews going on about what they should be doing, the biggest of which is around tax policy. This Budget that we’re debating today didn’t include the introduction of a capital gains tax, but the Government has signalled that they want to do that. The ideological leader of this Government—not the Prime Minister, not the acting Prime Minister, but David Parker, the most ideological Minister in this Government in the economic sense of view; there’s all sorts of strange ideologies in the other areas of the Government, but in economic terms—desperately wants to introduce a capital gains tax and will do so, and it will probably affect people’s KiwiSaver accounts and all sorts of other things that will surprise people when it comes up. But when people are trying to make a decision about whether to invest, to hire people, to buy new plant, to buy a new business, or to take a risk, they’re all sort of asking themselves, “Well, am I going to be paying a capital gains tax or not?” They don’t know, and as a result of that and all sorts of other uncertainties that this Government has introduced, there is less government going on.

Anyway, time rattles on. There’s been over the last couple of weeks this Estimates process, whereby we on the Opposition side have had a chance to question Ministers. It has been a rather dispiriting period because we haven’t got any decent answers. We had, for example, Shane Jones come in to talk about the regional economic development portfolio and the $1 billion a year that he is meant to be spending on the Provincial Growth Fund. We call it the political survival fund, because it turned out that the vast majority of the spending so far was going to one region. Northland had asked for about $55 million worth of projects. They’ve got $61 million, so that was good for them—they got more than they asked for. But the rest of the country had asked for $240 million, and got $42 million. So there would seem to be a bit of a bias in the way that the fund was operating.

So we asked him some questions about that—got no answers. One of the most fundamental questions we asked was: is this actually $1 billion that you’re spending as you talk about—is it new money? It turns out in the Budget figures that, actually, a quarter of the $1 billion is not new money at all; it is what the previous Government were doing. So it’s actually $750 million new funding for the provinces. But, even worse, it turned out that of that $750 million, actually, $250 million - odd of it was funding for forestry over 10 years. So it’s not actually $1 billion that’s being spent next year. A quarter of that is existing spending, and a quarter of the rest of it is actually going to be spread over 10 years.

We asked some basic questions about how that money is going to be spent and he didn’t answer, refused to answer, and fudged. We all know, in this House, that that Minister has a very strange approach to answering a question. He speaks in complete gibberish most of the time. Today in the House he was talking about planting seeds and impregnating things, and I didn’t know what he was talking about, but that’s how he operates. So we haven’t got any clear answers about exactly how much money we’re spending in the Provincial Growth Fund, and it’s a disgrace.

Hon JAMES SHAW (Leader—Green): Thank you, Madam Deputy Speaker. It’s a pleasure to get to rise and to debate the Supplementary Estimates 2017-18. I just wanted to pick up on some of the comments that the previous speaker, the Hon Paul Goldsmith, was making.

There’s a debatable point, I think, about the nature of business confidence surveys and how they affect the economy. I think it’s entirely legitimate to say that, you know, it’s a well-run survey, it asks people their opinion, and it’s therefore a statement of what people think. The issue that we’ve had with using business confidence surveys as some kind of barometer for economic performance, as opposed to actual economic performance as a measure of economic performance, is that business confidence surveys tend to be high when there is a National Government and tend to be low when there is a Labour-led Government, regardless of what’s actually going on in the economy. So, absolutely, there’s no relationship to what’s going on in the economy.

The last time business confidence surveys were this low was when Sir Michael Cullen was running 10 years of surpluses, making massive investments in things like the Superannuation Fund, getting debt down to zero—all of the things that the National Party thinks are absolutely terrific, all of those actual things that actually take place in the economy that National are so, so keen on. Business confidence was really low during that period of time. It bore no relationship to the actual economy, which is why now, every time they bring out one of these business confidence surveys to say, “Business confidence hasn’t been this low since the last time Labour was in Government.”—well, Labour happened to be running an incredibly strong economy during that period of time.

So it’s all very good to pull out somebody’s opinion, but it doesn’t actually match the reality of what’s going on in the economy. I just wanted to start by picking up on that point, because it is nonsensical. They do keep trotting it out all of the time, because it’s the only piece of data that they’ve got to grasp hold of, even though it doesn’t bear any resemblance to actual reality.

I just wanted to pull some highlights about some of the things that are in the Appropriation (2017/18 Supplementary Estimates) Bill. As Grant Robertson said when he opened this debate, because there has been a change of Government which does have different priorities to the old Government, there have been a number of significant things that have changed that have shown up in this Estimates bill. From the Green Party’s perspective, in our confidence and supply agreement with the Government we’ve classified three areas—that is the sustainable economy, a fair society, and a healthy environment. This appropriations bill brings out a number of things in line with that confidence and supply agreement, and I’ll just pick three each in each of those three categories.

The first is in relation to the sustainable economy. As someone who was an Opposition spokesperson for a long time, I kept banging on about the need to invest in the long term and in the health and well-being of our economy over multiple decades, particularly when we have a demographic bubble in front of us. I remember having a real go at the National Government at the time for completely focusing only on the short term and ignoring the long term when they refused, even when things started to recover post - global financial crisis and post-earthquake, to start reinvesting in the Superannuation Fund. So one of the things I am most proud of in this Government is that in this Supplementary Estimates we have restarted payments to the Superannuation Fund.

One of the things that I keep hearing now Opposition members saying is “You shouldn’t borrow to invest. Who borrows to invest? Why would you borrow to put money into the Superannuation Fund? You know, it doesn’t make any sense.” Well, let me tell you who borrows to invest: everyone with a mortgage, everybody who buys a house, every single business that ever borrowed money to be able to build plant and to get extra trucks on the road, or whatever it is that they do for a business. Every single business borrows to invest. Every homeowner borrows to—that’s who borrows to invest. So if you have to do a little bit of that in order to make sure you’ve got long-term income for this country, then I’m down with that, particularly at a time when you’ve got historically low interest rates.

Now, having said that, we’re actually not, because the other thing that we’re doing is we’re continuing to bring down net debt as a portion of GDP. The thing that the National Party finds, sort of, hardest to get their heads around is the idea that you actually can walk and chew gum at the same time. You actually can invest in the long term as well as pay down your debt, as well as invest in social services, right? This is former members of that previous Government who insisted that the only reality that you can possibly have is not to invest in the future, to not just cut debt but also cut spending as a portion of GDP, like that was somehow going to make sure that we had a long-term future, and I think it did anything but.

The second thing that I’m particularly delighted about in the domain of the sustainable economy in this bill is the shift in transport spending. We’ve gone from a situation where, literally, 350 kilometres of gold-plated motorways in urban areas won out over every other mode of transport, won out over regional roads and road safety; won out over ensuring that there was any kind of rail, freight or passenger rail; and won out over mass transit in our most congested cities—in particular in Auckland, which suffers from $1.6 billion a year of lost productivity due to congestion charges. Finally—finally—we have a Government that is prepared to make the investment decisions to rebalance the transport portfolio, to decongest our cities, and to make sure that our regions have got the kinds of local roads that they need to move people and freight around the country. I think that is the second thing that I’m most proud of in this, in relation to the economy.

The third thing—and one that’s very, I think, dear to the hearts of every New Zealander—is actually to start to solve the housing crisis. It is interesting to me that the now National Opposition uses the phrase “housing crisis” now that they’re in Opposition, because there wasn’t a crisis when they were in Government, apparently, but now that they’re in Opposition there is. So they’ve finally woken up to the reality of the situation that there is a housing crisis, if not woken up to the reality that they’re now in Opposition.

There’s been a lot made of KiwiBuild and other parts of the housing portfolio. One thing that I just want to focus on from this bill is putting some funding into setting up a rental warrant of fitness for homes, because I don’t think anybody previously in the debate has mentioned this yet. I think it is absolutely fantastic that finally—finally—in order to rent a house, you have to guarantee that it won’t kill the resident. That’s pretty remarkable, right? That’s not actually a huge standard. It’s been standard for a long time, for many decades, that if you want to rent someone a car, that car has to be roadworthy. It has to be able to survive an accident and has to not kill its driver or its passengers, but the same has not been true of our homes, and we have had tens of thousands of unnecessary winter deaths and tens of thousands of kids in hospital with entirely preventable respiratory diseases as a result of really shoddy rental homes. So, finally, we’ve made a tough call, and this appropriations bill actually makes it possible for us to finally put in place some minimum standards around our rental properties. So, for that, I’m tremendously proud of this Government.

So it is, I think, a great pleasure for us to support the Supplementary Estimates bill, and I commend it to the House.

Hon MICHAEL WOODHOUSE (National): Thank you, Mr Assistant Speaker. It’s a great pleasure to take a call in this Supplementary Estimates bill debate. After today’s appearance at the Estimates review, I think the list of Ministers of this Government that’ve demonstrated that they are completely out of their depth can have a new name added to it, and that is David Clark. Today, we exploded the myth of the $8 billion of underfunding—remember that? This is a health spokesperson and a health Minister that has crusaded around the country, saying that the health budget had been underfunded by $8 billion over four years, and that’s what this Government was going to do to remedy it. They campaigned on that being Pre-election Economic and Fiscal Update (PREFU) 2017 plus $8 billion. They misled the public into believing that this Government would do $8 billion more than what a National Government would do.

Chris Bishop: That’s right.

Hon MICHAEL WOODHOUSE: Quite right. Only that’s not what the reality is, because what we heard confirmed today by the Minister was that nothing could be further from the truth. Simply turning and keeping the lights on in our health sector over the next four years, whatever Government was in place, would have cost $8 billion. And do you know what this Government’s going to do more than that?

Chris Bishop: What?

Hon MICHAEL WOODHOUSE: Nothing. Not a single thing. In fact, what we have is a seriously long list of broken promises. It started really early, and it started with the GP visits.

Remember that Dr Clark went with Jacinda Ardern to the Māngere market in August last year, to a hero’s welcome, to say—because the previous Government had already just announced a significant package of improvements to GP prices for Very Low Cost Access practices. I can’t remember the exact money—it was about $300 million over four years. It was very significant. It was going to help another half a million New Zealanders. And they said, “We can do better than that. Every single New Zealander will have a reduction in their GP fees—every single one.” They said, “We’ve worked it out, we’ve consulted with the GP community, and this is our promise: $250 million - odd a year.” But where is it? They’re now crowing about the fact that 580,000 New Zealanders are going to get—that’s actually a contested number, but let’s say that it’s right; 580,000—discounts on their GP fees, only they told the New Zealand public it would be over 4 million. That is a broken promise, and it’s one of many.

I want to remind the House what David Clark said after Budget 2017. He said, “District health boards this year need at least $650 million just to stand still, and they’re $200 million short of what they need.” That was a year ago, and he got the chance to fix it. He became Minister of Health. He inherited coffers that were higher than the PREFU had. The numbers are looking better. They wanted to borrow more. They wanted to do more. He said $650 million last year—that’s what they needed just to keep the lights on. He gave them $549 million. He could not even meet his own lofty expectations for himself. He let himself down by $110 million plus inflation, and it’s no wonder that the district health boards (DHBs) are squirming over the massively high expectations that are being set for funding that cannot be met. The best manifestation of the effect of that failed expectation is in the very sad news that the New Zealand Nurses Organisation have now issued a notice of their intention to strike on 5 July, and I’m very sad about that.

I respect the fantastic 30,000-odd public hospital nurses and the other 25,000 nurses in other parts of our health sector who go to work every single day and do a fantastic job. It’s a measure of their frustration and disappointment at the expectations that were raised by this Government that have not been met that they have to take the first strike action of their union in nearly 30 years—

Hon Dr Nick Smith: How long?

Hon MICHAEL WOODHOUSE: —and they can sheet that home—nearly 30 years, Dr Smith, since there was a strike. I believe it was under a previous Labour Government—I’d need to check that—and it’s no surprise when the talk is big and the delivery is zero.

Here’s a really interesting factor: they go on about district health board (DHB) deficits, but the analysis of DHB deficits in the last 18 years—until the change of Government—makes very interesting reading. I’ve mentioned it before, but it’s worth noting again because we’re seeing a new trend emerge since this Government came to office. The average deficit between 2000 and 2008 by DHBs was $66.8 million per year. That’s a lot of money, but bear in mind the DHBs have had in that time probably $8 billion and $10 billion of funding appropriated. Between 2009 and 2017, without even adjusting for inflation, it was 5 percent lower than that. The vote was higher; the deficits were lower. The previous National Government funded DHBs better than the previous Labour Government did.

So the lofty promises come. They come in and they go, “We’re going to fix deficits.” Do you know what’s happened to the forecast deficits since they came to office? In the six short months since they have been in control, it has gone up by 50 percent—50 percent.

Treasury are now forecasting $211 million of deficits. It was $140 million. It was high—it was uncomfortably high. It’s gone up 50 percent since November, and I think we’re going to need to get used to more and more bad news from a Minister who is completely out of his depth.

The lofty promises have been met with the reality that rescue helicopters in Hamish Walker’s electorate and in Scott Simpson’s electorate of Coromandel are at risk. The Lumsden Maternity Centre is about to close. The Rural Health—

Chris Bishop: What about Dunedin Hospital?

Hon MICHAEL WOODHOUSE: Well, good question, Mr Bishop. I’m leading to the big hit, but thank you for your excitement over the list. The Rural Health Alliance have lost their funding. What about the Roxburgh children’s camp? This is a fantastic facility that has been providing care to our most vulnerable tamariki for generations. What did this Government that wanted to do more, be more—

Chris Bishop: That’s right—compassionate.

Hon MICHAEL WOODHOUSE: —more compassionate—gone. Absolutely gone. And then, Mr Bishop, we have Dunedin Hospital.

Now, I have run a gauntlet, and the previous Government was actually criticised by Treasury for going too fast, not too slow—not that you would have that understood by the previous spokesperson, Dr David Clark. How much money was appropriated for the actual build of Dunedin Hospital, a hospital that he petitioned the Health Committee on, imploring the previous Government to start the construction before the last election? Zero. There’s money for design, but not a skerrick of money can be found in this Budget for Dunedin Hospital.

There are so many other disappointments of this Budget, and we are debating a Supplementary Estimates bill and here’s why I think that’s relevant: because there’s no doubt that David Clark will need to come back, cap in hand, to the Minister of Finance and go, “We pared it back too much. We talked a good game, but we didn’t appropriate enough. We didn’t control the spending.” The $8 billion, Minister of Finance, was a myth. The net increase in the vote was zero. In fact, it was lower this year than the previous Government’s appropriation for health in 2017.

This is a deep, deep disappointment, and the biggest disappointment is that such lofty expectations were raised and they weren’t met, and I think we’ll be hearing a lot, lot more. Time doesn’t even allow me to go into the debacle that is Middlemore Hospital, when they created the myth—

Hon Members: Ha, ha!

Hon MICHAEL WOODHOUSE: Oh, laugh if you like. Laugh if you like, but when a Minister phones a chair and says “Shut the hell up. And you’re fired because you embarrassed me over buildings, but, by the way, if you stay quiet, we’ll give you another job.”, there is a word for that. They can laugh about Middlemore Hospital, but there’ll be a postscript. There’s more to come, and so sit up and listen, because these guys are going to learn a great lesson—that is, when a Minister overreaches, they get into big trouble. So chuckle away, Ms Curran, but there’s more to come over that.

ASSISTANT SPEAKER (Adrian Rurawhe): This is a split call—five minutes.

TAMATI COFFEY (Labour—Waiariki): Tēnā koe, Mr Assistant Speaker. Tuatahi, he poroporoaki tēnei ki tētahi wahine toa o te atamira kapa haka, ko Talei Morrison tōna ingoa. Ko tēnei te rā nehu mō te wahine rā, te manu tīoriori o te kapa haka o Te Mātārae i Ōrehu. E hine, ka tangi taku ngākau ki a koe mō tō whānau hoki; haere, haere, haere atu rā ki Hawaiki nui, Hawaiki roa, Hawaiki pāmamao.

Rātou ki a rātou, tātou ki a tātou; tēnā koutou e Te Whare.

[Tēnā koe, Mr Assistant Speaker. Firstly, allow me to farewell a champion performer of the haka stage, Talei Morrison. Her funeral is today, and she was one of the celebrated leading female voices of Te Mātārae i Ōrehu. My heart goes out to you and your family; farewell, farewell, farewell as you go to Hawaiki nui, Hawaiki roa, Hawaiki pāmamao.

Let us leave those who have passed on and return to us who are the living; greetings to the assembly in the House.]

Thank you for allowing me to contribute something small to the Supplementary Estimates legislation. Aren’t we doing well—aren’t we doing well? Aren’t we doing brilliantly? We are doing a great job, and if you would believe the other side of the House, you’d think that the world was going to crash. You’d think that the sky was falling in, and it’s not that bad.

In fact, they just need to cheer up a little. Cheer up team. Start looking on the positive side of life, because there is a lot going on. And if you just step outside this gracious building of ours, you’ll find that there are plenty of people all around New Zealand that are celebrating this Government—that’s right—because they are becoming people that are going to benefit from our policies. This coalition Government, with our confidence and supply partners over here, the Green Party of Aotearoa, we are doing a brilliant job, and they are telling us so, day in and day out.

Let’s talk about a few of those things that they are celebrating alongside us, because coming up on 1 July, it is going to be a momentous day. That is the day where our superannuitants who are sitting there in their very, very cold houses, trying to wrap up warm so that they can keep themselves alive this winter, will actually be able to access the winter energy payment—that’s right—where they will be able to access some funding to help with their heating costs, because it’s a real pressure when you get to their age. They’re telling me, “Tamati, thank you. Thank you for putting that in there. You’ve heard our plea. We’ve been freezing for the last nine years, and thank you to the Government for throwing us a bone and giving us something to look forward to.”

On top of that, what they’ve realised is that we are a future-focused Government. When we talk about superannuation and the fund that’s been sitting in stalemate for quite some time, they’re saying to us “Thank you for restarting those contributions to the Superannuation Fund.” because—you know what?—they haven’t been. It’s been sitting there dormant for quite some time, and they’re afraid that with the influx of people that are coming through that are going to be collecting their super very soon, maybe the country won’t be able to afford it. So they’ve been saying thank you again to us for that. Our plan for the Superannuation Fund is to contribute $7.7 billion over the next five years, with $500 million from the get-go.

Education: education is winning out of our Budget, and, although the Opposition might pooh-pooh the whole idea of spending some money on tertiary education, the students are happy. The students are happy because they get to go and they get to not have that barrier that is cost to their education. It wasn’t so long ago—and I would even theorise that quite a few members in this House took advantage of a time when here in New Zealand, tertiary education was free. That’s right, it was free. It was free once upon a time, but then one day it stopped being free, and, unfortunately, students of our generation were the ones that had to go through and start paying—and not paying a little bit; actually paying a lot—to the point where it became a barrier to their further education. So I am proud to stand here and give the kids of today an opportunity and say, “You know what? This Government is looking after you. This Government is contributing to your well-being, so that you can be circuit-breakers for your whānau and go back and help educate them.”—move them on to further education.

Māori are happy about this because—you know what?—Māori rates of tertiary education are not that great, they are not that high, and anything that can reduce barriers to Māori to be able to take up tertiary education has got to be a good thing and you just can’t dispute that. You just can’t dispute that. So that’s why $310 million was authorised for the implementation of the first year of fees-free post - secondary education. This is a brilliant, brilliant Budget.

CHRIS BISHOP (National—Hutt South): Well, thank you very much, Mr Assistant Speaker. I want to focus in this contribution to the debate on the absolute disarray that the police portfolio is in. Minister Stuart Nash and the coalition Government have gone up and down the country talking about 1,800 front-line cops coming in three years. Let’s just run through what has been revealed as we’ve unpicked that over the last six months, because it’s all very well to talk big—and Stuart Nash is very fond of talking big, talking a good game—but let’s just actually walk through that.

Well, first of all, almost the moment he got his ministerial warrants, Stuart Nash was in the paper talking about, “Oh, maybe we’ll have to bring in some foreign imports. We’ll go back to the days of bringing in foreign police officers.” Well, that lasted about 24 hours before Nanaia Mahuta said, “Mate, we won’t be doing that. Last time we tried that it wasn’t a very good idea.” Also, he probably got a call from the Prime Minister, who said, “We’ve just run an entire election campaign demonising foreigners. It’s probably not the world’s greatest idea to start talking about bringing in foreign police officers the moment after you’ve got your ministerial warrant.” So that went out the back door.

Then we found out that of the 1,800 police, 880 of them were actually funded by National—right—through the Safer Communities package. So every single new police officer on the street right now—there’s about 350 of them; they’re coming through the police college right now, they’re going out on the street—is not funded by the Labour Government; they’re funded by the National Government, and that’s actually in the Supplementary Estimates we’re talking about. So the 881st officer, the first genuine new officer, they’ll probably roll on to the street maybe halfway through 2020, maybe—let’s see.

Then we revealed through questions in Parliament that of the 1,800, only 1,100 of them are front line; 700 of them are working on organised crime. Very important work, none the less, but Stuart Nash has turned up to Parliament and he says—get this, colleagues—“A police forensic accountant is a front-line officer.” Now look, police forensic accountants do very important work.

Hon Michael Woodhouse: I’m an accountant, and I do important work.

CHRIS BISHOP: Michael Woodhouse says he’s an accountant and he does work—they do very important work. They’re going to help smash the gangs and all the things Stuart Nash talks about. But, look, when there’s a family harm incident, when there’s a burglary, or when there’s an assault happening out there, I don’t reckon you’re going to call a police forensic accountant and say, “Mate, get down there and sort out that incident.” I don’t think you’re going to call that. So I don’t think we can call them front-line officers, nor can we call the authorised officers—250 of them within the 1,800—front-line officers either.

What else can we reveal about it? Well, the other interesting thing is Stuart Nash sought $515 million through the Budget—we know that from the leaked Cabinet paper that he doesn’t want anyone to know about, but we know that he did; $515 million—and he said, “$515 million—I can do 1,800 police in three years.” He didn’t get that. Then he said, “In the alternative, if I get $346.4 million, I can do the 1,800 police in four years.” Well, do you know how much Grant Robertson gave him? He gave him $298.8 million. So he’s short, and he admitted this to the Justice Committee. He’s short $220 million, and what that means is either he’s going to have to go back later on next year for more money, blowing out their Estimates, or, secondly—and this is the far more likely scenario, actually—the new police are going to come out over five years.

Well, he says he’s got assurances from Grant Robertson that he’s got the money. Well, the way the Treasury rules work, if he’s got assurances, it’s in the Budget documents. If Treasury and Grant Robertson have told him the money’s coming, well, Parliament has to appropriate that—that’s the way the Treasury rules work. So someone’s doing a bit of misleading, and we’ll wait and see who it actually is.

We know he received advice about getting the new police over five years, because he told me he did. And do you know what he said when I asked him about that in the Estimates? I said, “What did you do when you received the paper phasing options for 1,800 new police over five years?” He said, “Didn’t even read it.” I kid you not. I’ll just repeat that for the House. He said to the parliamentary select committee about advice from his own department about his flagship policy—1,800 new police, in the coalition document—“Didn’t even read it”. “Not even interested”, he said. I said, “Hang on a minute, Minister, this can’t be correct. You can’t be telling the select committee you didn’t even read the paper.” “Not even interested”, he said.

Not even interested—they’re not looking up and they’re not interested, because they know that, actually, to do that to a parliamentary select committee is treating taxpayers with contempt. For a Minister not to even read a paper—disagree with the advice if you like; Ministers are entitled to do that—is, frankly, treating Parliament with contempt.

Dr DEBORAH RUSSELL (Labour—New Lynn): I think it’s worth a reminder of what we are debating today, and what this particular debate is actually about.

Hon Carmel Sepuloni: I could do with a reminder.

Dr DEBORAH RUSSELL: I thought you could, Carmel! It’s an appropriation bill on the 2017-18 Supplementary Estimates. Now, what that’s based around is the Budget that was set in May 2017, and, since then, stuff has happened: Government departments, in some areas, have had to spend a little more money than they thought they were going to need to, particular needs have come up, there’s been an election, and we have a new Government. All of that means that somehow government expenditure is changing—and it has changed—from the Budget that was set in 2017. As I’ll talk about a little later on, it’s not just the numbers that have changed but the values, too. So here today in Parliament, as part of our role, we are examining the Supplementary Estimates, making sure that they’re OK, testing them, and engaging in our role of scrutinising the finances of Government.

You know, I don’t think many people actually read the Supplementary Estimates. For those of you who are watching, here are the Supplementary Estimates—A4-sized, 457 pages long. If you’re listening, I’ll tell you that it’s 4 centimetres thick. It’s a lot of reading.

Hon Carmel Sepuloni: How long did it take you, Deborah?

Dr DEBORAH RUSSELL: I haven’t read them all, and I suspect no one in this House has read them all. But here I want to pay tribute to the excellent public servants who have worked on these Supplementary Estimates, who have kept an eye on the money, and who have done all the figures. We owe a great debt to our public servants, and I think we should express our gratitude to them from time to time.

You see, government is not just what happens in the Cabinet room. Government is not just what happens in this House. It’s not just what happens in the select committees. It is also what happens in the ministries, the departments, and the agencies helping us to run this country, and I, for one, am very grateful to the public servants who enable us to do that. That is what we’re talking about today: all the work that they have done on these Supplementary Estimates. For that reason, I do want to sort of engage with some of the arguments that the Opposition have given us—in fact, the mistaken ideas that they have presented us with. I’m going to say “mistaken” because, surely, no one would say these things in good faith.

Let’s start with Amy Adams, who made the extraordinary claim—the extraordinary claim—that the former National Government had spent more on health than our current Labour and New Zealand First Government, supported by the Green Party. You see, it’s a really straightforward thing, and it’s got me really worried about Amy Adams, actually. You see, the only way you can reach those figures is if you count the TerraNova settlement. So let me just go to the exact figures—let me give you the exact figures. You see, in Budget 2018, the coalition Government allocated $750 million for health capital spend compared to Budget 2017 from the then National Government, which allocated $150 million. She’s just got that wrong, because $750 million is bigger than $150 million.

Let’s talk about the operating budget. If we look at the operating budget in health, we’ll see that in Budget 2018 the coalition Government allocated $3.2 billion of operating health expenditure. In Budget 2017, the amount that was allocated by the then National Government was $2.3 billion. Perhaps she just got the figures a little bit mixed up in her head—$3.2 billion is bigger than $2.3 billion. We could expect that of someone who didn’t know how to back out the TerraNova settlement. Frankly, it worries me that that is the capacity of the person they have as their finance spokesperson. Part of the job of the Opposition is to examine what the Government is doing, and you would at least hope—I would at least hope—that the person doing it knew how to manage figures.

Hon Nicky Wagner: You are a bitch.

Dr DEBORAH RUSSELL: So we have—Mr Assistant Speaker, I’m sorry. I believe I heard an unparliamentary word.

ASSISTANT SPEAKER (Adrian Rurawhe): The member needs to take a point of order.

Dr DEBORAH RUSSELL: I raise a point of order, Mr Speaker. I would like to ask the member on the other side of the House who used an unparliamentary word in response to me to withdraw and apologise.

ASSISTANT SPEAKER (Adrian Rurawhe): Which member, sorry?

Dr DEBORAH RUSSELL: I believe it was Nicky Wagner. I may be mistaken, and if so I apologise, but I do believe I heard an unparliamentary word.

ASSISTANT SPEAKER (Adrian Rurawhe): I didn’t hear the interjection, but I would ask the Hon Nicky Wagner, if she did use an unparliamentary word, that she would withdraw.

Hon Nicky Wagner: I will withdraw and apologise.

ASSISTANT SPEAKER (Adrian Rurawhe): Thank you.

Dr DEBORAH RUSSELL: Thank you. Let me carry on. I want to speak just briefly about what Mr Paul Goldsmith had to say, fantasising about taxes—fantasising, speculating about what taxes might come along. He was speculating outrageously. You see, we have introduced a Tax Working Group who are going to engage in a really well-thought-through structure for our tax Act and think about how our taxation system should be structured. Then we will be taking it to the electorate, unlike the former National Government, which simply imposed an increase in GST without taking it to the electorate in 2010. The people who engage in fantasy are not us.

I want to turn to what the Supplementary Estimates say about us and our values. What they say is that the coalition Government, supported by the Green Party of Aotearoa New Zealand, is a Government that builds for the future, that doesn’t take the short-term temporary decisions but looks well into the future. As my colleague Mr James Shaw so beautifully pointed out, this Government is investing in the future by restarting contributions to the New Zealand Superannuation Fund—the fund that is sometimes also called the Cullen fund, in reference to the foresight of the man who got it going, the man who was a Labour Minister making those courageous decisions for the future. We need that New Zealand Superannuation Fund because we know that with demographic changes, we are going to need to spend a lot of money on New Zealand superannuation in the future, and we are going to start providing for that now. That’s the kind of foresight that this Labour - New Zealand First Government has—prudent, sensible, valuing young people—because we will not impose burdens on them that we should be bearing ourselves. That’s exactly what is going on in education, as well.

We have introduced in these Supplementary Estimates a year of fees-free education for tertiary students—so that’s students at universities, students at polytechnics, students in trade training. It’s a year of fees-free education for young people as they leave school. This is from the Labour - New Zealand First Government that echoes the Government that removed the interest on student loans. Why are we doing this? Well, for starters, we do not want to burden our young people with huge debts. We want to actually value those young people and say, “We want you to have an education.” It’s also a commitment—a tangible commitment—to the value of education itself.

This side of the House believes in education, it believes in education for all, and it believes in free education. Why? Because the only way to have a decent society, the only way to run a great democracy, and the only way to ensure that each citizen can participate is to ensure that those citizens are educated so that they are able to be part of our country, to be part of our system of Government, and to be part of our community. That’s why we value education on this side of the House, because it is an enabling action. It enables people, and that’s why we think it should be free so that everyone may access it. We are committed to that kind of forward-looking, that values-laden spending.

Not for us the minginess, the cutting, the pruning, or the sort of just refusing to look to the future—we’re not into just mere management. This side of the House believes in Government—Government of the people, by the people, for the people; a real living, breathing, active democracy—and that is why we are investing and building for the future. That is why I am so in support of the spending that we have engaged in, in health, in education, in welfare—all the things that make this a decent country.

ANDREW BAYLY (National—Hunua): Thank you, Mr Assistant Speaker. It’s a pleasure to be talking on the Appropriation (2017/18 Supplementary Estimates) Bill and the Imprest Supply (First for 2018/19) Bill. Of course, I think we’ve heard today that these two bills are basically about ensuring that the Government gets sufficient funding to fund the variations to appropriations in terms of the Estimates bill, and the imprest bill relates to new financial spending in the first two months of the financial year until the Estimates bill is passed. Of course, we’ve seen similar sorts of situations where this doesn’t happen, particularly in the US, where, basically, Government closes down. So it is an important couple of bills that we’re talking about tonight, but principally it directs itself towards the money supply of the Government and what it intends to spend its money on.

I’ve got to say, when you look at the range of spending, some of it is good and some of it’s not so good. In terms of some of the key aspects, we’ve got the Rt Hon Winston Peters’ $700 million package for the curtains and carpets for the Stockholm embassy that, apparently, is the most important embassy to open in all of the world—$700 million for all those wonderful curtains and carpets. We’ve got the Hon Shane Jones’ $1 billion Provincial Growth Fund for the “Champion of the Regions”. Well, interestingly, today I heard in question time he had elevated his status. He’s no longer the “Champion of the Regions”, no; “Champion of the Country”—of the country, no less. Now, I’m just wondering what the Prime Minister might be doing when she’s sitting at home—and I hope she’s well. But when she may have seen that at question time today, she may have just asked herself whether she’s still as relevant as she thought she might have been, because I don’t know where you go beyond becoming the “Champion of the Country”.

Todd Muller: The universe—that’s next week.

ANDREW BAYLY: Oh, the universe, OK.

I think some of it provides a bit of clarity. I think one of the things that does provide clarity—we all heard about how the New Zealand First Party was going to look after superannuitants, and, of course, we had their proposal of a $700-a-week winter payment to superannuitants—

Hon Clare Curran: Energy payment—winter energy payment.

ANDREW BAYLY: Winter energy payment, if you want to have its full name—yes, that’s right. And of course in the Budget it was highlighted: 700 bucks for couples and how important that was. But what this shows—in fact, they’re not going to get $700; no, they’re not. They’re only going to get, roughly, about $350 to $380. That’s because there was some sort of technical issue that was somehow not worked through previously when they made that promise. There’s only three months, so in some ways it’s pretty easy: rather than spread it over five months, all you could have done is just gross up the value and pay even more over a certain monthly period, and still pay what you promised to pay, which is the $700. But no, when you get down to the detail, you find it’s a lot, lot less; in fact, for an individual it’s even worse.

I think the thing that struck me most of all that was missing in this Budget, and in these accounts, is the issue that there is no money, no appropriation, for mental health. I think that is the greatest oversight in this Budget. For all the work that had been done involving people like the Chief Science Advisor ,Sir Peter Gluckman, and a whole range of individuals who had worked on a range of packages to deal with mental health—we appropriated $100 million, and that has been removed. That has been put into, now, a new working group that will not report back until probably, at the earliest, early next year. By the time the Minister goes through and looks at it, there will be no new programmes implemented for at least two years, in my view. I think that is probably the travesty of this appropriation and Budget.

So I think one of the things we need to look at is the environment we are currently discussing this Budget around. I think the biggest thing is the decline in confidence. It’s no different from a non-performing or poor-performing Cabinet Minister. Once they lose their confidence—once they have lost their confidence—then that becomes a killer, and it’s the same for business confidence. When people and individuals start to lose their confidence, they choose not to invest. When they choose not to invest, they stop spending. Unfortunately, we’re starting to see the signs of it. There is an irrefutable connection between the loss of confidence and growth, or declining growth.

So it’s interesting looking at the Westpac survey recently. They’ve come out and said—this is their recent pronouncement—that the New Zealand economy will continue to underperform its peers for the next few years. Rather damning, I would have to say, particularly when that same bank, only a few months ago when it was under National, described New Zealand as a “rock star economy”. Then, on 19 June, there was an article that highlighted the consensus of a whole range of economic forecasters, including people like—not insignificant organisations, I’d have to say—Treasury, the Reserve Bank, BNZ, ASB, Westpac, the New Zealand Institute of Economic Research, and ANZ, all who are saying, and the consensus is, that they expect GDP will weaken across the New Zealand economy over the next two years. We had the Auckland Chamber of Commerce show that over half their business members—and, of course, business people employ people—expect the economy to deteriorate over the next six months.

Then we’ve had the Hon David Parker describing the ANZ survey on business confidence as junk—junk. Well, I’d say to you that one commentary that may be different from the others—you might accept it as not being valid, but when you get a complete raft of professionals and economists all saying the same thing, that, I believe, is something you need to turn to. Rather, we heard the finance Minister, I think on Tuesday, talking up the Truckometer and all those sorts of really professional surveys as being evidence that he thinks the economy’s still growing.

So what’s happening? That means it’s rather slightly alarming at the moment, and I hope it doesn’t continue, but we’re seeing rents going up on average by $20 a week, which of course hits lower-income people and also hits those people saving for a new house. We’re seeing food go up as a result of the increase in minimum wages and fuel prices, and there was a report on 19 June—I heard someone across the way saying—that healthy food prices for a family of four in Auckland, Wellington, and Christchurch have risen by up to $21 a week. Of course we’ve seen the fuel prices, and of course we’re going to spend more time tonight talking about the regional fuel tax, which, together with the new tax that this Government has imposed, will mean that in Auckland every person, whether you’re rich or whether you’re poor—and of course it will affect the poorer members of our community much, much more, by 25.3c a litre every time they fill up their tank, which, on average, is $15 extra every time they fill up their tank. That’s on the back of an increasing petrol price.

A couple of things in this Budget really worried me. One of them is that we’re talking about housing, and building and construction. Now, you’d think if we’re going to try and build all those additional houses—100,000, and, again, I hope the coalition agreement actually achieves an objective—you would expect that if you’re going to double the number of houses being completed every day, there would be a need for more people in training in building and construction. You would. If you want to double it, you would, even if you assumed some efficiency gains. Well, guess what? In this Budget, not one extra cent was devoted towards increasing training for building and construction, or the trades—or the trades. Well, it’s a disgrace.

If you want to try and achieve something, you actually need to set about doing something and being clear about it and putting your money where your mouth is. I just believe that’s, again, another travesty in this Budget.

Dr DUNCAN WEBB (Labour—Christchurch Central): Tēnā koe, e Te Mana Whakawā. Well, goodness gracious me! Where is the volume switch on this debate? There’s lots of noise but not much sense in there. As for sense—well, there was not only no sense; there was nonsense, because Andrew Bayly suggested that there had been no action on mental health.

Well, at the very same time he was saying that, I was doing a couple of jobs on my tablet here, and this message popped up. The first message came on 22 May from a social worker who is involved in the Mana Ake pilot in primary schools. She says, “I’m one of the social workers involved in getting this off the ground. There are certainly some challenges in the Hornby cluster.”—that’s a fair comment. Then what she said a day or so later was, “We’re getting the schools on board. We’re in the stage where we’re meeting with the key people. Our project manager at the district health board is doing a great job rolling this out.” So that was great—that’s in May.

You know what? On Sunday, she messaged me: “Hey, Duncan”—that’s me—“Just to let you know, Mana Ake is up and running in the Hornby cluster. We now have families to work with. It feels very real. Thank you.” That’s what we’re doing in Christchurch and that’s what we’ll be doing around the country. We will be having mental health professionals in every school there. So that’s what we are doing, absolutely.

This isn’t a Government that’s going to sit on its hands and watch New Zealand incrementally fall apart; this is a Government and this is a Budget that cares. This is a Government which is going to seize itself of the issues which are ahead of us and take care of them. This is a Government that is going to get on and fix the things that are wrong with New Zealand, and this is the Budget that we’re going to do it with.

It’s worth looking at these appropriations—and I don’t want to shout like the previous speaker; I just want to look at what’s actually going on. I want to just do a bit of a case study of Christchurch, because Christchurch is a really good example where some of these supplementary appropriations are simply things which naturally roll over, building on some good work that was done previously, but some of them are new. So $500,000 was appropriated, of course, as soon as we got into Government. We did this straight away. We didn’t wait for a Budget round; we did it, and now we’re going back and appropriating $500,000 for the Christchurch acceleration fund—an acceleration fund that’s been needed for a long, long time. That’s for the planning for that fund, as the former member for Christchurch Central, Nicky Wagner, should well know.

So we’ve now appropriated the $300 million and we’ve planned it in advance. Ōtākaro Ltd, an appropriation for the management of the anchor project—well, you need to appropriate some money to manage them once they get off the ground. So now we’ve got the Metro Sports Facility under way, and the concrete was poured, of course, on the Christchurch Convention Centre shortly after the election.

Of course, it’s worth recognising that there’s a significant appropriation there—$137 million—for Southern Response, and we’ve got to recognise that this remains an important problem in Christchurch and that we’ve got to resolve those outstanding claims. Southern Response, the wind-down company for AMI, which failed—the former Government did bail that out, as it should. We’re going to manage it to conclusion, and we’re going to put in a whole lot of frameworks around it to make sure that those outstanding claims are settled justly and in a timely fashion, because that didn’t happen.

We’ve set up an Earthquake Commission (EQC) inquiry. So money was set aside to form that inquiry as well, and that inquiry is badly needed because EQC has gone wrong, and you know what? We’ve got to make sure that doesn’t happen in future. We look around New Zealand, we look to Rangitoto, we look to Taranaki—which was in the news today—we look to the earthquake fault that this city lies on, and we know it’s going to happen.

I must say this: Christchurch is best placed to understand what those challenges are. We’re having a symposium in Christchurch very soon to revisit the symposium which the last Government deferred because it didn’t want to look at these questions. Well, we’re going to be really open and transparent. We’re going to look at those things and learn the lessons that need to be learnt, both from within New Zealand and from overseas. We’re going to examine that and share it so that this nation is prepared and resilient for the challenges that lie ahead, and they are substantial.

Of course, the member across the Chamber did do a lot of work around the Christchurch Cathedral, that icon of Christchurch, and there is, in all, $25 million set aside for that—a $10 million grant and a $15 million suspensory loan. So what we’re going to do is we’re going to move Christchurch ahead, and this Budget does it. It shows that this Government is a Government that cares, that manages, and that gets on. Thank you, Mr Speaker.

A party vote was called for on the question, That the Appropriation (2017/18 Supplementary Estimates) Bill and the Imprest Supply (First for 2018/19) Bill be now read a second time.

Ayes 63

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

Noes 56

New Zealand National 55; ACT New Zealand 1.

Bills read a second time.

Bills

Appropriation (2017/18 Supplementary Estimates) Bill

Third Reading

Hon CARMEL SEPULONI (Minister for Social Development) on behalf of the Minister of Finance: I move, That the Appropriation (2017/18 Supplementary Estimates) Bill be now read a third time.

A party vote was called for on the question, That the Appropriation (2017/18 Supplementary Estimates) Bill be now read a third time.

Ayes 63

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

Noes 56

New Zealand National 55; ACT New Zealand 1.

Bill read a third time.

Bills

Imprest Supply (First for 2018/19) Bill

Third Reading

Hon CARMEL SEPULONI (Minister for Social Development) on behalf of the Minister of Finance: I move, That the Imprest Supply (First for 2018/19) Bill be now read a third time.

A party vote was called for on the question, That the Imprest Supply (First for 2018/19) Bill be now read a third time.

Ayes 63

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

Noes 56

New Zealand National 55; ACT New Zealand 1.

Bill read a third time.

Bills

Land Transport Management (Regional Fuel Tax) Amendment Bill

In Committee

Debate resumed from 19 June.

Part 2 Amendments to other Acts (continued)

Hon Dr NICK SMITH (National—Nelson): The key clause in Part 2 of this bill is in respect of the application of the GST to the regional fuel tax. I particularly on this clause want to challenge the New Zealand First Party because their leader has given speeches, and I have it on record, in almost every corner of New Zealand, calling it a gross injustice of a tax on a tax—that imposing GST on a fuel tax is wrong. The part that has me gobsmacked is that not once in this debate has the leader of New Zealand First, who can give the speech in every corner of New Zealand that it’s wrong to impose a tax on a tax—neither he—

CHAIRPERSON (Adrian Rurawhe): I’m sorry to interrupt the honourable member, but it has come time for me to leave the chair for the dinner break.

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

Hon Dr NICK SMITH: Prior to the dinner break I was making the point that in Part 2 of this bill and in clause 7 in respect of GST, we are passing a proposed provision that would make absolutely explicit the application of GST to this regional petrol tax. I commented that when I searched our dear friend “Mr Google”, I found 234 references to the Rt Hon Winston Peters saying that a tax on a tax was wrong.

In fact, let me just go through the communities where Mr Peters made that statement: he made it in Invercargill, he made it in Queenstown, he made it in Dunedin, he made it in Greymouth, he made it in Christchurch, I’ve got a record of him saying it in the Marlborough Express—I say to my colleague Stuart Smith—he said it in the Nelson Mail, he said it in the Dominion Post, he said it in Taranaki, and he said it in the Manawatū. He said, in every corner of New Zealand, that imposing GST on the excise tax was wrong. In fact, he used even stronger language—he said it was immoral. Well here’s my question: why is it possible for New Zealand First—Jenny Marcroft—to give speeches in every corner of this land decrying GST on the excise tax and then not only not give a single speech in this Chamber but vote for it. There’s an “h” word for that, which I’m not allowed to use.

But I challenge members opposite, and particularly the representative from New Zealand First: how come you can campaign, by my record, in seven elections as New Zealand First policy that putting a tax on a tax is wrong and then vote for it? I’d love to hear an explanation from Labour members opposite as to how the acting Prime Minister can so blatantly act completely against such a clear public record of opposing GST on an excise tax. Or has this Government descended to that point—“Well, it doesn’t matter a toss what we said to the electorate.”—for New Zealand First to say “It does not matter what we said to electors, we are just breaching our word.”?

I say that the last Government that so blatantly breached its word was the Labour Government from 1984 to 1990, and it got tossed out of office in the biggest landslide in the history of this New Zealand Parliament. I say to members that unless they have a death wish, unless they too want to be thrown out for so blatantly dishonouring what you have said to communities all over New Zealand—now I know I have the attention of Ms Marcroft, I say to her: why has your party told communities all over New Zealand that you oppose a GST? [Bell rung]

I raise a point of order, Mr Chairperson. Why is it that the clock, in terms of my speaking time, provides me for four minutes and yet the bell has rung?

CHAIRPERSON (Adrian Rurawhe): Just for members’ information, if the time left on the clock—and the member will remember I said that he had four minutes remaining. When it’s less than five minutes, we count up, not down, and so the member’s four minutes has expired.

TIM VAN DE MOLEN (National—Waikato): Thank you, Mr Chair. Look, I rise to take a call on Part 2 of the Land Transport Management (Regional Fuel Tax) Amendment Bill. My intent here is to include an amendment to clause 10(5) where we insert a new section 34B(3) into the Local Government Act 2002. So what we’re talking about here, and I think it’s appropriate just to reflect on section 34B(1) and (2)—so this is additional information for the regional fuel tax schemes. What we’re proposing under those two, indeed, in the current proposal of the bill, is that “The regional council of an RFT region”—regional fuel tax region—“in its annual report,” must report on the revenue paid to the council, it must report on how that revenue was applied, which projects, and for what purposes that was allocated, and also any progress with respect to the programme of capital projects. So that was new subsection (1), and then under new subsection (2) it goes on to outline some of the definitions within that to capture that succinctly.

So what I am proposing here with new subsection (3) is to actually signal the intent—so a precursor, if you will—to that original subpart requiring a report on the progress of the revenue and associated expenditure, and actually requiring an outline of that in advance. So the wording I am proposing is “In conjunction with councils application for a Regional Fuel Tax councils must produce a report for ratepayers on their forecasted spending priorities in relation to the revenue obtained from the RFT and make this publicly available.” As I mentioned, it’s about signalling the intent so that ratepayers can justifiably have an understanding of what their council is proposing to cover with their request for a regional fuel tax.

Of course, the regional fuel tax has to be for specific purposes within that council’s jurisdiction and should not be to cover poor funding management, as we are actually seeing under the Auckland Council at the moment. Indeed, actually, we’ve heard already under the discussion last night of Part 1 that had Mayor Phil Goff met his obligation, his promise, his commitment to reduce council expenditure, there would actually be no need for this regional fuel tax.

That aside, and coming back to my proposal here, this is what I’m proposing to be a requirement to make it publicly notified in advance what the intent is of those spending priorities alongside the application process for councils. Really, we’re trying to demonstrate appropriate transparency. We’ve heard a lot from this Government about transparency and how important that is. It would be fantastic if we saw that demonstrated as well. Although that is questionable—and certainly on this side we haven’t seen it demonstrated anywhere near what we would like to—that is what we should be seeing from all levels of governance. Certainly in this aspect, in the application for a regional fuel tax the amendment I’m proposing under the Local Government Act 2002, would require those councils to be fully transparent, up front, so their ratepayers can, indeed, have a clear understanding on what their proposal is, how that’s forecasted to be spent, and the objectives envisaged to be obtained as a result of that.

So, yes, this may create, and likely will create, additional work for the council in having to outline that detail, but it is important and justified, I believe, in giving that transparency to their ratepayers. Also, when you go through that sort of a process, what it actually does is help crystallise the focus or the priorities in terms of what you’re achieving to really reflect on what the aspects are that are critical to any particular proposal, rather than perhaps getting caught up in some of the higher-level or more pie-in-the-sky wishes that might indeed come off the back of an application being expanded into areas that could perhaps be frivolous.

So really, just to recap, we’re looking at, here, including a precursor to the already proposed new section 34B(1) and (2)—although it will come in as section 34B(3). That would provide, in advance, an outline of what we’re anticipating it to be spent on under these sections. I look forward to taking another call shortly on the GST Act. Thank you.

Hon PHIL TWYFORD (Minister of Transport): Thank you, Mr Chairman. Let me make some comments in response to the last couple of contributions.

We’ve heard a great number of contributions from members on the Opposition benches about clause 7 in Part 2, which requires that GST be added on to the regional fuel tax when it’s paid by fuel distributors to the New Zealand Transport Agency (NZTA)—so not at the retail end, not at point of sale, but by the fuel distributors—and a number of Opposition members have suggested that this increases the cost of fuel to Auckland consumers from 10c to 11.5c.

Tim van de Molen: I raise a point of order, Mr Chairperson. Apologies to interrupt the Minister—we are having trouble hearing. The microphone perhaps could do with adjustment, or I’m not sure if it’s working.

ASSISTANT SPEAKER (Adrian Rurawhe): I’m sure the technicians have heard and, hopefully, have resolved the issue. We’ll give it another go.

Hon PHIL TWYFORD: Thank you for that very considerate contribution. So the suggestion that’s been made by Opposition members is that the requirement in clause 7 that GST be paid by the fuel distributors to NZTA at the wholesale end, not at the retail end, is somehow adding to the cost that’s being paid by consumers. That suggestion is quite wrong.

All of those businesses will be registered for GST. They claim back the GST in the regular course of their interest, so they don’t pass that on. So it’s quite wrong, and shows a real misunderstanding by Opposition members. The fuel companies are required to charge GST on the retail price of the fuel that they sell, not the wholesale. So whether or not they have to pay GST, which they would because undoubtedly all of them will be registered for GST, that amount does not get passed on to the consumer.

I want to comment on Tim van de Molen’s amendment, which seeks to add some obligations on to the councils who would be taking advantage of the provisions in this bill to establish a regional fuel tax. Mr van de Molen would like requirements for full consultation publicly notified in advance what the projects are going to be spent on, and it’s an attempt to try to impose some kind of transparency on it. Well, I want to say to Mr van de Molen that there are already extensive obligations on any local territorial authority, any regional council, who wants to take advantage of the regional fuel tax bill. They’re required to fully consult under the terms of the local government legislation and, as Lawrence Yule well knows, those requirements are onerous, to say the least.

Auckland Council has just gone through extensive consultation—two rounds of consultation—with the public and with the elected members of the council on this. They have to provide a detailed description of what the proceeds of the fuel tax will be spent on—a list of very precise, named capital projects with extensive descriptions beside each one. It cannot be spent on vague promises or operating expenditure that’s not directly tied to the items of capital expenditure. So those obligations—actually far more burdensome and exacting than the ones in Mr van de Molen’s amendment—are already in place.

CHAIRPERSON (Adrian Rurawhe): Members, before I call the next speaker, which will be Lawrence Yule, I just want to inform the committee that the amendment in the name of Denise Lee amending the Education Act 1989 will be ruled out of order and so cannot be debated.

LAWRENCE YULE (National—Tukituki): Thank you, Mr Chair, and thank you to Minister Twyford for his last explanation. Yes, he’s correct. I do have some knowledge of the Local Government Act and consultation. I also have some knowledge as to how councils work.

I want to make a couple of observations right at the beginning of this contribution. First of all, it is very easy to look at Auckland. Auckland is a unitary authority, where all the councils were put together under an amalgamation. They have one process. But this bill actually covers every other regional council in New Zealand. There are a number of other unitary authorities like Auckland: Tasman, Nelson, Gisborne, and Marlborough, from memory. All the rest are a conglomerate of territorial authorities within a regional council boundary. How local government works in those other areas, which are also subject to this legislation, is very different to Auckland because they don’t always agree.

So the regional council has the pre-eminent role of setting up a regional fuel tax, but I happen to know—the Hon Stuart Nash also will know this—that territorial authorities don’t always agree. Sometimes they actually fight each other. So when you impose a regional fuel tax and you go through consultation, as the Minister has said, under this special consultative process at the beginning of this, you are assuming that for the next 10 years everybody will agree on the priorities and the projects and how it’s going to happen.

To be honest, I think that’s naive for the rest of New Zealand. We actually have local body elections every three years. In many cases, there are new mayors who come in every three years with mandates to do things differently. I give an example: the Kapiti Expressway. Depending on which person is the mayor, they would’ve made a different decision about where that’s going to be and how they support it. So in year one, that project is set up on a 10-year plan of funding, but in year three, a new mayor comes along, populates the regional transport committee, and seeks to undermine the decision that was made three years ago.

Why that’s important, Minister, is that under section 15 of the Local Government Act, there is a thing in there called the triennial agreement. It requires every three years for all the councils in an area to agree by 31 May, post the local government elections, on a whole series of things. I’ll go through them: “(a) protocols for communication and co-ordination amongst the local authorities; and (b) a statement on the process by which the local authorities will comply with section 16 in respect of proposals for new regional council activities;”—that probably won’t apply in this case—“(c) processes and protocols through which all local authorities can participate in identifying, delivering, and funding facilities and services of significance to more than 1 district.” This is clearly that.

So my suggestion—and it’s tabled in an amendment in my name—is that clause 10(2) be amended and an amendment to the Local Government Act 2002 be made that adds a new section, section 15(8), which says that “Local authorities that concurrently exist in a single region (such as territorial and regional authorities) must include a section in the triennial agreement on the management, operation and cost sharing of a regional fuel tax scheme under subpart 3 of the Land Management Act 2003.”

I say that because of my significant years in local government, when most people look at the triennial agreement as a piece of paper that is never looked at again, that is compliant with the Local Government Act. Up until recently, that’s all that’s been done. How do we apply with the Local Government Act? We will sign the triennial agreement. There is nothing of substance in it. But I believe this is actually significant—10 years of funding commitment on major projects across a region actually requires agreement in the triennial agreement to force every part of that region to comply.

Dr PARMJEET PARMAR (National): Thank you, Mr Chair, for this opportunity to be able to contribute. I’m taking this call to move the amendment in my name that is “After clause 11, insert new Clause 12”. Clause 12 is to amend the Road User Charges Act 2012. So this proposed clause amends the Road User Charges Act 2012: “At the end of section 33(3) replace ‘.’ with ‘, and whether there is a Regional Fuel Tax scheme in place in the region where the [road-user charges] vehicle is primarily used.’ ” The purpose of this amendment in my name is to ensure that a road-user charge collector can take into consideration the presence of a regional fuel tax when deciding whether to waive or refund a vehicle’s road-user charges. Our position is very clear: ideally, we don’t want to see this regional fuel tax legislation, overall, going through. But I’m proposing this amendment to help businesses and also to keep the cost of living for people, especially people on superannuation, as low as possible. If Minister Twyford decides not to accept my amendment, I would like to really hear from the Minister why the Minister thinks that this amendment is not a good one to be accepted and the amendment proposed to be put in the legislation.

I was talking to some people in Mount Roskill, and, yes, there were groups of some business people; there were groups of people there who are on superannuation. One business person that distributes their products all around the country raised this concern with me: to compete with products that are coming from overseas—for some reason, some products that come from overseas, even after the shipping charge goes on them, are able to be sold at a cheaper rate than the products that are manufactured locally. So what this business does is, to compete with these products, it delivers products free of delivery charge, and this is just a tactic that the business has adopted to compete with other products.

The concern that this business person had was that with this regional fuel tax legislation going through—in the first step they know that the Auckland Council has already approved that 11.5c per litre is going to be implemented from 1 July, and with this legislation going through it is going to be around 25c a litre. It’s going to be really hard for this business person to be able to absorb the freight charge—the freight charge of the deliveries that he does all around the country. He said that he might reconsider the number of positions that he has in his office. So somehow these businesses will try hard to absorb this additional cost of freight in their business, but there will be some form of impact, and that could be in terms of someone becoming unemployed.

Then, in that conversation, we had a couple in the group that is on superannuation. Their concern is that it’s not just about the fuel charge, because with freight charges going up—as most of the freight is diesel, and that is where the road-user charge becomes relevant—they said the cost of everything else, especially food, will also go up, and it will become really hard for people on superannuation. I’m talking about families and businesses in Mount Roskill, where we know that the families already find it really hard, and this legislation is going to make it harder for them. They said that the cost of food is the biggest worry they have. As a couple they like to go out once a week, and they were saying that they will have to reconsider their once-a-week outing because even the restaurant food will go up, because it is not just about the petrol prices going up, but it’s about everything else that is linked to petrol or diesel. Everything else that is delivered through various freight mechanisms—the costs of those things are also going to go up.

It’s really important that we take into consideration people—those who are on superannuation, businesses that really want to make sure that they’re doing well and are able to employ more people—so that they are not affected. So that’s why I am proposing this amendment in my name that is that a road-user charge collector can take into consideration the presence of a regional fuel tax when deciding whether to waive or refund a vehicle’s road-user charges. This would give some form of relief to businesses, because they will be able to continue their practice of doing deliveries that are free of charge, and also the cost of food and other things—[Time expired]

PRIYANCA RADHAKRISHNAN (Labour): I move, That the question be now put.

CHAIRPERSON (Adrian Rurawhe): I call Chris Penk.

Hon Tim Macindoe: Oh, really?

CHRIS PENK (National—Helensville): Thank you, Mr Chair. Your decision was more popular in some parts of these benches than others. It’s possibly even less popular with me than with those colleagues who missed out. I wish to speak to a tabled amendment in my name—an idea that had just come to me so freshly that the ink is still drying on the paper. It is none the less a thoughtful, I think, and worthwhile amendment, and I wish to speak to it in the following terms.

There are five main points I wish to make speaking to a new clause 12 inserting new section 26B into the Local Government Act 2002, which would read as follows: “In the event of a reorganisation of local authorities where a Regional Fuel Tax is established in one of the regions, the tax will become obsolete.” The five reasons that I propose this amendment are as follows. I will speak to each of these in some detail throughout the rest of my contribution, but, briefly, in outline first, they are: one, not subverting the intention of the reorganisation effort; two, not subverting the intention of the regional fuel tax itself; three, to acknowledge that the region in the regional fuel tax is different following the reorganisation to that which existed prior to such reorganisation; four, to ensure the consultation process takes place; and five, to ensure the integrity of the alignment between the projects that had been contemplated at first and the geographical area to which those apply.

Taking the first of those, the desire not to subvert the intention of the reorganisation, it seems to me clear that in the case of local authorities being realigned, or reorganised, as we might say, the intention of such reorganisation would be to create a new set of entities, or a new entity, as the case may be, to apply to a certain region. If the arrangements that were in place in relation to a different region were then carried over, then it could fairly be said, I think, that the object of the reorganisation—the desire to provide somewhat of a clean slate and a fresh start—could be said to be defeated.

Secondly, in relation to the desire to avert the subverting of the intention of the regional fuel tax, it would have to be acknowledged, I think, by all in this committee that the purpose of a regional fuel tax is to apply to a specific region that exists at the time that the fuel tax was brought into force. So if a different region were to exist, then surely the arrangements for the tax that would apply to the region should be different as well.

That point really leads to my third point, which goes to the heart of what a regional fuel tax is, which, of course, as it says on the tin, is very much a tax on fuel in a region or regions. So, again, without wishing to belabour the point—or perhaps specifically because I do wish to belabour the point—with a different region in place following the reorganisation of local authorities, a different regional fuel tax regime, or the absence of such a regime, should apply.

Fourth, to ensure that consultation takes place is an important aspect of my amendment. If consultation takes place with one set of ratepayers and residents of a geographical area, and then a different geographical area is created as a result of the reorganisation and a different set of residents and ratepayers thereby is created, then the consultation that had taken place among the first set of residents might produce a different outcome, or might have produced a different outcome, from that which will be the result of consulting with the second set of residents and ratepayers—namely that created post-reorganisation.

My fifth and final point, Mr Chair, as highlighted, and no doubt, therefore, keenly anticipated by you and, indeed, all this committee—perhaps all the country, if I may be so bold—is to maintain the integrity of the alignment of the projects that were contemplated in relation to the first iteration of the regional fuel tax—namely that in the regional authority that existed prior to the reorganisation and the geographical area to which those apply.

Hon TIM MACINDOE (National—Hamilton West): Tēnā koe e Te Mana Whakawā. Kia ora, e Te Whare. Thank you for the call. Just before I resume where I was interrupted last night on Part 2 of this bill, can I just make the point to some of the inexperienced new members opposite that we have only had around about an hour of debate so far on Part 2 of the bill, and, frankly, I’m outraged that they’re already trying to shut down the debate when members on this side of the Chamber have tabled a large number of amendments, many of which have not yet even received a mention, let alone an opportunity for debate. So I would anticipate that we would still be debating this at least until early next week, and they should, instead of trying to shut down debate on an issue of huge importance to New Zealanders right around the country, actually get engaged in that debate and justify to their constituents—particularly if they’re outside the Auckland area—as to why Part 2 of this bill should suddenly be applying to all of them.

As I mentioned, I was in mid-flight on Part 2 of this bill when my last call was interrupted. I’d just like to ask, while the Minister is in the chair, if an answer was provided, because I raised what I thought was quite a serious point under the amendments to the Goods and Services Tax Act 1985—this is clause 7 in Part 2—as to whether, in fact, there was a drafting error. I’m just wondering if the Minister could perhaps indicate by a nod—because I wasn’t in the Chamber later—whether he responded to that point.

He hasn’t responded to that point, so I want to repeat my query as to whether, in fact, the suggestion that in new section 5(6BB), “(a) any amount of regional fuel tax … that is paid is treated as being consideration for a supply of services in the course or furtherance of a taxable activity carried on”—and that’s the key word here—“by the New Zealand Transport Agency, as an agent for and on behalf of the local authority”, etc., etc. My query was whether the word “on” is a drafting error, because “carrying on” normally implies playing up or acting the goat; it certainly doesn’t suggest a sensible piece of legislation, and I’m wondering whether the word should have been “out” not “on”. I’m sorry that that point hasn’t been clarified. I very much hope that it will be, because I don’t see how the House could be expected, intentionally, to consider, let alone to adopt, something that contains a drafting error.

Let me return to the point that I was beginning to discuss during my last call, and that is relating to the changes to the Local Government Act in clause 10 of Part 2. I was making the point that the new section 34B of that Act specifies something that I think is an appalling deceit, because at no point prior to the initial discussions and advocacy from some parts of Auckland for this tax was it ever suggested that it would apply outside the Auckland region, yet when one reads section 34B, “Additional Information: RFT Schemes”, subsection (1) says, “The regional council of an RFT region, in its annual report, must report”—an RFT region. In other words, “Here we’ve suddenly found we’ve gone well beyond Auckland; this could apply to anybody.” I made the point last night: watch out, New Zealand, because this is coming to a town near you.

I am asking how such a deceit, which was not consulted upon, certainly in my area, could suddenly now be adopted into legislation, and even—and I dispute this—if it is seen as some sort of solution to Auckland’s problems, how it can possibly be one—and I’d like to pick up on the point that my good friend Mr Smith, the MP for Kaikōura, was making last night: how can it possibly be a solution for the people of D’urville Island or of the Awatere Valley, who already have to travel huge distances to, let’s say, just get to the shops? To apply such a capricious tax on them in such a sneaky fashion is totally unjustified, and yet this is now being written into the Local Government Act without any mandate whatsoever, not only from the people of D’urville Island but anywhere else around the country.

I ask you not just to take my word for it, but to take the word of a former Labour MP, the Road Transport Forum Chief Executive, Ken Shirley, who put out a press statement today describing this as a really bad idea of an Auckland regional fuel tax which has become contagious and is now infecting various other parts of the country. “From 2021”, said Mr Shirley, “every regional and unitary council in the country can apply to the Government for the right to impose a 10c a litre (plus GST) regional fuel tax on their communities.” So I would like to ask the Minister to respond to Mr Shirley’s—[Time expired]

JO LUXTON (Labour): I move, That the question be now put.

STUART SMITH (National—Kaikōura): Thank you, Mr Chair. It’s a great pleasure to speak for the first time on Part 2 of the Land Transport Management (Regional Fuel Tax) Amendment Bill. It was with great disappointment last night, I have to report, that I had two tabled amendments that I did not get a chance or an opportunity to speak on. I have a tabled amendment—

CHAIRPERSON (Adrian Rurawhe): We’re on Part 2.

STUART SMITH: I know that, Mr Chair, but I am pointing out that last night I did not get the opportunity to speak on those amendments, and I hope that this evening I will get the opportunity to speak on my other tabled amendments apart from the one I’m just about to address.

It is with great disappointment that I look on the other side of the Chamber and see them trying to shut this debate down when we have not even discussed our tabled amendments. This is my first call, and we’re entitled to four calls, I believe, on a part, and I think that’s what we should be able to do.

Hon Member: As a minimum, surely.

STUART SMITH: As a minimum, yes. I’m very delighted that I now have this opportunity.

CHAIRPERSON (Adrian Rurawhe): That’s one minute gone without mentioning anything.

STUART SMITH: OK.

CHAIRPERSON (Adrian Rurawhe): Please do.

STUART SMITH: All right, Mr Chair. Now, I am proposing, in clause 10, to add in a new paragraph to new section 34B, inserting section 34B(1)(d): “the cost benefit analysis that the Council has undertaken in relation to where the revenue was spent.” That should be read, of course, after paragraph (b), which is: “how [the] revenue was applied by the council, including to which projects and … what purposes (for example, capital [expenditure], debt repayment, operational [expenditure]);” etc. So this is very important, and I think it fits well with the tabled amendment in the name of Tim van de Molen, which I think was a new subsection (3) of that very clause.

I think if you have tax, then you have a responsibility to spend it correctly, and I think you have an obligation to your ratepayers to ensure that you report that correctly. Tax is very much like a drug: it’s highly addictive, and councils and like with a drug, Governments become so dependent on that tax that it has quite significant impacts on them. In the sense of a drug, it has an impact on the body and changes in the body, and if we use that as an analogy for a Government or for a council, then what we see is it forming fat—fat in terms of lazy spending and staff doing jobs that are not required.

I think a good example, when we have schemes that might be paid for under a regional fuel tax—let’s, for example, say a sewerage scheme. We have a lot of expenditure on a sewerage scheme, like with the Kaipara District Council, that got itself in a lot of trouble. Had it had really close management and reporting regimes back to its ratepayers, I don’t think it would have got in the trouble it did at that time.

If I look in my own council, the Marlborough District Council in the town of Blenheim, they would likely line up, I think, for a regional fuel tax. The town is growing significantly. The building inspectors tell me there’s a greater boom than there was in 2008, so that’s an amazing amount of building going on, but there’s a significant sewerage infrastructure upgrade that’s required, and a regional fuel tax might well be the vehicle they use to fund that scheme or that expansion. But how do the ratepayers know they are getting value for money? How do they know that that scheme is actually being delivered in a form that will be good for everyone at a reasonable cost? What would be required, certainly in a business sector, would be strict reporting and cost-benefit analysis on that particular scheme to ensure that people are getting what they pay for and no more. We don’t need more than we set out to pay for, and we want to ensure that the efficiencies run right through the system, because I can assure you that if money is sitting there, they will spend it, and they will spend it even if it isn’t necessary or good quality spending.

So I think clause 10 has some really good possibilities in it, but it does need rounding out with Mr van de Molen’s amendment and suggested addition, and with my amendment inserting new section 34B(1)(d) to add “the cost benefit analysis that the Council has undertaken in relation to where the revenue was spent.” So, with that, Mr Chair, I thank you.

JAMI-LEE ROSS (National—Botany): I raise a point of order, Mr Chairperson. I raise this point of order because earlier in the night, you ruled out an amendment in Denise Lee’s name. It inserts a new clause 12. I ask that you hear this point of order because there will be other amendments that seek to insert new clause 12 amendments as well. My understanding, in discussions with staff in the building, is that one of the reasons why this amendment was ruled out is because it incorporates an amendment to another piece of legislation—in this case, the Education Act—and, just for ease of understanding, in this case, the amendment in Denise Lee’s name would have made some changes to section 139D which would have provided a requirement for the ministry to take an action in response to the regional fuel tax legislation. In this case, it’s around school transport.

There are other amendments that are going to be coming along which will make amendments to other Acts as well that we’re wanting to put forward. I don’t believe it would be right, on a wholesale basis—and I anticipate this may be a consideration you’re giving. I don’t believe it would be accurate to, on a wholesale basis, say any amendments that seek to insert a new clause 12 that incorporate another piece of legislation that is not already in the bill—I don’t believe that would be the right decision, because I submit to you that Part 2 already does include amendments to other pieces of legislation that are not required to make the regional fuel tax scheme workable.

For example, Part 2 includes some amendments to the Local Government Act around reporting. If the argument was that it must be an amendment in Part 2 that is required to make Part 1 work—if that was the argument—then I think that could be a basis for ruling out amendments. But, in fact, we already have in Part 2 a particular proposed change to a piece of legislation that is not required to implement the regional fuel tax scheme, because reporting is not required for implementing the scheme.

So I submit to you that it is in order for members of Parliament to put forward amendments which seek to amend other pieces of legislation if it can be related to the regional fuel tax scheme, as the proposed amendments in the Minister’s name already seek to do. Because we have the ability to consider issues related to a regional fuel tax scheme, such as the Local Government Act amendments, we should have the ability to put forward other amendments and other Supplementary Order Papers which seek to amend other Acts of Parliament, because those are legitimate debating points about consequential issues that may arise that can be linked back to the regional fuel tax scheme. I don’t believe Part 2 as it’s currently drafted in the bill solely contains issues that must be addressed to make a regional fuel tax scheme workable.

There are other issues that are superfluous but are related to the regional fuel tax scheme. We should also have the ability to put forward amendments that, while superfluous to making a regional fuel tax scheme workable, are still worthwhile of debate, and I submit to you that when you give consideration to making rulings on future amendments that we put forward or may have already put forward, you give consideration to the fact that the bill already contains matters very, very similar to what Denise Lee proposed and was ruled out and what other members may be proposing as well.

KIRITAPU ALLAN (Assistant Whip—Labour): The member opposite is, effectively, trying to try to draw out a debate on a very tightly—

CHAIRPERSON (Adrian Rurawhe): No, no—e noho. E noho. No, I don’t need any of that kind help, thank you. I want to thank the member for bringing this issue to my attention, the way that he sees it. The reason why I ruled that particular amendment out was based on the fact that I believe that it should’ve been part of Part 1, not of Part 2, and as a rebate, it should not be part of Part 2. However, I’m going to take some further advice and come back to the committee. It may be a situation where I just allow the committee to be the master of its own destiny and make that decision for itself through a vote, but I’ll take further advice on that.

JAMI-LEE ROSS (National—Botany): I raise a point of order, Mr Chairman. Thank you for giving consideration to the issue. May I make one further submission that I hope may be helpful. Whilst the proposal from Denise Lee could, one could argue, go into Part 1, we in fact are restricted—were restricted—by Part 1, given that Part 1 is amendments to the Land Transport Management Act. With the way in which this bill has been drafted, it, effectively, has two parts: Part 1 is all of the changes to the Land Transport Management Act, and Part 2 is all of the changes to any other Acts. Given that Denise Lee’s proposed amendment would seek to amend the Education Act, it would not, in fact, have been possible to put forward Denise Lee’s amendment in Part 1, because Part 1 is related to the Land Transport Management Act.

If members of Parliament are of a view that we should consider as a committee amendments to other pieces of legislation which are related to a regional fuel tax scheme, the only possible avenue for them to do that, if it is contained in a different piece of legislation to the Land Transport Management Act, is to propose it in Part 2, which she’s done. I ask you to consider that point also when you consider your future ruling.

CHAIRPERSON (Adrian Rurawhe): Thank you.

KIRITAPU ALLAN (Assistant Whip—Labour): I raise a point of order, Mr Chairperson. Mr Chair, I refer you to 62/2 of the speaking orders, and the—

Hon Tim Macindoe: Speakers’ rulings or the Standing Orders?

KIRITAPU ALLAN: Speakers’ rulings—thank you very much. Speakers’ rulings are relatively clear that the form of drafting of a bill is to be taken into consideration in terms of length of debate. I refer to the remarks of our colleague over the other side of the House, Tim Macindoe, that mentioned that we’ve been going—

CHAIRPERSON (Adrian Rurawhe): Order!

KIRITAPU ALLAN: This is a separate point of order, sir.

CHAIRPERSON (Adrian Rurawhe): It doesn’t sound like it, so can you get to—

KIRITAPU ALLAN: It is a separate point of order, sir.

CHAIRPERSON (Adrian Rurawhe): You need to come to it now, though.

KIRITAPU ALLAN: Come to—sorry?

CHAIRPERSON (Adrian Rurawhe): You need to come to exactly what your point of order is.

KIRITAPU ALLAN: We’ve been debating this Part 2 for in excess of two hours. We’ve seen an extensive range of amendments that’ve been tabled. There’s nothing in the Standing Orders that require that every single one of these amendments are considered at any length. This Part 2 is a very narrow—

CHAIRPERSON (Adrian Rurawhe): I’m on my feet—[Interruption] I am on my feet; you sit down. Thank you. Whether the member likes it or not, the Chair is the sole decision maker about when to accept the closure motion—OK? For accuracy, it has not been going for two hours. There are—[Interruption] I’m on my feet. Don’t interrupt—seriously, don’t do that. As I said, that is a matter for the Chair to decide. There are other ways of addressing that; that is not one of them. I’ll take the next call.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Mr Chair. Look, this is the first opportunity I’ve had to participate in this debate, either in the first part or now in the second part. I listened carefully to a contribution made earlier this evening by my very good friend the Hon Tim Macindoe, who gave some very good advice to some of the new junior members of the Government backbench. They really do need to have a much better understanding of the basic principles of democracy that exist in this House. They have come to Parliament to participate in democracy and in debate, and what do we find? They want to close that debate down—they want to close that debate down at the very first opportunity.

Well, I’ve got very good news for them—very good news for them, indeed—this is a bill that is going to be fought vigorously by this side of the House, and we’ve got an awful lot of debating yet to do and a lot of very good contributions to make. This legislation is fundamentally flawed and it’s going to need a lot of work to get it right—indeed, if it can even be properly considered to be right in any way, shape, or form.

Now, we have got on the Table tonight a large range of amendments from Opposition members, who have been working diligently and hard on working out ways to try and find a sensible outcome for this piece of legislation, and it’s part of the parliamentary process that here, in the committee stage, that’s exactly what we do. Now, I know that Government members aren’t keen on that kind of democratic proactivity, but they’re going to have to get a little bit used to it because in a Parliament like this, actually, that’s what MPs do: they come to Parliament, they come to debate the issues, they come to debate the policies, and they come to debate the fine detail of legislation like this.

So I represent a region in the Coromandel that is going to be greatly impacted by a potential regional fuel tax, and I was horrified today to read in the media that none other than my local council—my local council—is considering lining up and asking for a regional fuel tax, and it got me thinking about the process that a local district council would be involved, as part of a subset of a regional council, in the imposing of an unfair, ubiquitous tax of this sort on the hard-working and dedicated people of the Thames-Coromandel District Council.

So I have got an amendment in my name that is seeking to provide an opportunity that exists under the Local Electoral Act of 2001 for territorial authorities to have a referendum on issues such as this. We know, from other pieces of legislation and other events that have occurred recently around New Zealand, that when a certain number of citizens get together and sign a petition, they can invoke and cause to be had a referendum on matters such as this. Particularly when it comes to matters of taxation, representation is very important—that old adage about no taxation without representation comes to mind.

So my amendment would seek to insert a new clause after clause 11 in Part 2 and it would be clause 12. It would be clause 12 that would say, “Amendments to Local Electoral Act 2001”. Subclause (1) would say, “This section amends the Local Electoral Act 2001”, and then subclause (2), “After section 9(7) [of the Local Electoral Act 2001] insert a new clause 7(a)”, which would read as follows: “The above section (7) does not apply if the subject of the referendum is a proposed or existing Regional Fuel Tax scheme. All referendum on the subject of a Regional Fuel Tax scheme must be binding.”—must be binding.

The reason for that is to ensure that any referendum that is triggered as a result of the Local Electoral Act 2001 would then have to be voted on by the good citizens of a particular district, or a region, and that then, when that referendum occurred, the result would be binding. And the news for the Government would be very, very sad indeed, because I don’t think that there’s a region or a district in the country that would vote in a referendum of that sort for the kind of terrible taxation—the impost of a fuel tax of the sort that is being proposed here—in a manner that would occur in a referendum where there was a public debate, where there was a debate held among the citizenry of a district, and where arguments for and against were put to the people of the region who were going to be paying this tax. I don’t think that there is a district or a region in the country that would voluntarily vote for a regional fuel tax of this sort.

So I commend careful consideration by this committee of the whole House to my proposed amendment, and I commend the prospect to Government members—particularly the new junior ones—of democracy.

Dr DUNCAN WEBB (Labour—Christchurch Central): I move, That the question be now put.

MATT KING (National—Northland): Thank you, Mr Chair. It’s a pleasure to speak here on this bill. I’d like to acknowledge the assistance of my colleague Harete Hipango from Whanganui, with her legal background, for the drafting of this amendment.

I see in Part 2, clause 11, “Amendment to Search and Surveillance Act 2012”, an enforcement officer must obtain and execute a search warrant to search for evidence of offences against section 65ZC of the Land Transport Management Act 2003. Now, section 65ZC says, “A person commits an offence if that person knowingly or recklessly refuses or fails to file a monthly return under section 65Q”. Section 65Q says, “A regional fuel taxpayer by whom a regional fuel tax is payable under a regional fuel tax scheme in respect of any supplies or transfers of fuel in a month must file with the Agency a monthly return. The return must—(a) be within 20 days of the next month; and (b) be filed in the form and manner reasonably required by the Agency; and (c) contain any information and be accompanied by other documents reasonably required”. If they fail to comply under section 65ZC(2), they are liable, on conviction, to a $15,000 fine, or $75,000 for an organisation. This is bureaucracy gone mad, and it’s what this Government seems to love imposing on our hard-working New Zealanders.

Now, I would like to submit this amendment. This section, under clause 11(2), amends the Search and Surveillance Act 2002, and section 65ZB inserts, after “Land Transport Management Act 2003”, the following words: “an enforcement officer may obtain and execute a warrant to search for evidence of offences against section 65ZC of the Land Transport Management Act 2003 only if there shows a repeated and deliberate pattern of avoidance over 12 months”. The reason I put that amendment in is because as the law stands now and as it’s drafted, a person, after one month of failing to put a return, can be the subject of the execution of a search warrant to search for evidence of offences under the Act. It’s my opinion that that’s Draconian and, in my view, it needs to show a pattern of behaviour. So I submit that.

I also believe that this regional fuel tax brings a layer of bureaucracy to businesses. Anyone that’s run a business knows that this sort of legislation just makes it harder and harder to run a business. I see here under Part 2, clause 10, “Amendments to Local Government Act 2002”, in subclause (5), new section 34B says, “The regional council of an RFT region, in its annual report, must report on—(a) the revenue from an RFT scheme paid to the council … that revenue [must be] applied by the council, including to which projects and for what purposes (for example, capital expenditures, debt repayment, operational expenditure); and (c) progress with respect to the programme of capital projects supported by the RFT scheme.” I submit that this is yet another layer of bureaucracy added to the others that business owners and others under this coalition have to endure.

JAMI-LEE ROSS (National—Botany): Thank you, Mr Chair. I wish to speak to the tabled amendment in my name—there’s a couple there. The one I’m speaking to in this call—and I am hopeful of taking additional calls to speak to other tabled amendments, but the amendment in my name I’m speaking to in this case is a new clause 12 which would make an amendment to the Social Security Act 1964. The reason I have put forward this amendment is because we know through the submissions at the Finance and Expenditure Committee and we know through commentary out there in the media by those well-versed in this topic that regional fuel taxes are regressive taxes. They also have an impact on the cost of living for people out there who have to pay them.

The reason why I’ve put this forward, particularly, is because of that impact on people when it comes to those who are living in greater poverty than the average person. Individuals who receive assistance from the State typically are ones that live furthest away from the CBD of a city. They typically are the ones that may drive the least fuel-efficient vehicles, and they’re the ones that would be hit hardest by a regional fuel tax.

The recommendation that I put forward to the committee contained in this amendment would seek to insert a new section into the Social Security Act 1964. This section reads, “Any person who receives a payment under the provisions of this Act”—so anyone who receives a benefit, essentially, under the Social Security Act—“and primarily resides in a region that has an established regional fuel tax scheme”—in this case it would be Auckland initially, but later on there will be other councils that have already put their hands up, so it’ll be wider than just Auckland. But anyone who primarily resides in that region that has an established regional fuel tax scheme under the provisions of Subpart 3 of the Land Transport Management Act—the ones that have already gone through—would be “eligible for an additional annual payment equal to the average cost … a person is projected to pay under a regional fuel tax in their region.”

I submit this to the committee because I think it’s important that we recognise, accurately and appropriately, the impact on those people who can least afford to pay a regional fuel tax. Now, it’s imperfect. We can’t always identify perfectly the people that would be hit hardest by a regional fuel tax or the people who would find it the hardest to pay a regional fuel tax because of their personal circumstances, but we do have a relatively crude measure available to us, and that’s those that receive a benefit or receive a payment under the provisions of the Social Security Act.

They are broad, I know, and there are many New Zealanders—tens of thousands, if not hundreds of thousands of New Zealanders—that do receive a payment under the provisions of the Social Security Act. But I think the committee should carefully consider this amendment because it is very clear and very well understood—and, I think, even admitted by the Minister and his officials—that the people who would find it hardest to pay a regional fuel tax are those that are living at the lower end of the socio-economic spectrum. In fact, the Minister, when he’s answered questions in the House around cost of living issues, has, in fact, identified the fact that the Government has made changes to the Social Security Act and also made changes to benefit levels which would compensate those who would struggle paying a regional fuel tax. They point to the Families Package that they have.

I submit to you that this particular amendment, in fact, adds on to that, and it says even further that we as a committee wish the Parliament, when it considers the third reading, to include in this bill particular provisions that would make further amendments to the Social Security Act. If the people who are receiving a benefit payment under the Social Security Act are receiving such a payment, they’re the ones that are in need of greater assistance. The bill, in its entirety, would allow greater costs to be imposed on people.

There is strong evidence that was presented at the select committee that those that are living in high-deprivation areas, probably in areas that have a high number of people receiving a payment under the Social Security Act, are the people that—and there’s strong evidence that was put forward by Sam Warburton. I don’t think it was modelled very much, if at all, by the ministry, but there were other submitters that put forward particular arguments that they would be hit the hardest.

But there were also arguments put forward by a particular submitter, and I do talk about Sam Warburton’s submission—[Bell rung] Thank you for the additional call; sorry, everyone else. I do talk particularly to the submission of Sam Warburton because he’s a transport economist. He previously worked for the Ministry of Transport, and he has put a lot of emphasis in his personal and professional life into modelling how taxation in the transport sector impacts on people. He was very clear in his submission that regional fuel taxes—and, indeed, fuel taxes in general—are regressive and that those regressive taxes hurt people living in high deprivation the most. It’s only reasonable that when we’re considering a bill around implementing a regional fuel tax, we make available to us the ability in Part 2 to consider additional policy changes and additional measures by making further changes to other pieces of legislation.

The Minister himself has stood in this House in question time and said, “There are means to compensate people for a regional fuel tax.” I argue that the regional fuel tax is so damaging to people and so bad for people living under a proposed regional fuel tax scheme that we should do more. I, in fact, don’t think it should be in place at all. In fact, I think there are other ways in which transport infrastructure can be funded—we have canvassed those—but if this is going to go ahead, and if there are going to be changes made to legislation which allow regional fuel tax schemes to be implemented, then we should be doing everything we can to highlight the fact that this tax will hurt people that are at the lowest end and that need assistance more from the State.

The Social Security Act is there for that very purpose. The Social Security Act is there because it says in a piece of legislation there are people that are living in particular situations where they need assistance from the State. The Social Security Act is there because it says there are people who, by virtue of the circumstance they are in or by virtue of decisions they may have made in their life, have ended up in a position where they need assistance. Well, it’s not just individuals in their own personal circumstance that are now being put into a position where additional costs are being put on to them; it’s actually the Parliament that’s about to legislate to allow further costs to be put in place. And if we’re going to do that, if we’re going to allow—and this side disagrees with it, but if the Parliament’s going to allow greater taxation powers, it has to be coupled with an acknowledgment that there’s a need to make other measures available to people to compensate them for these issues.

We’ve had a lot of debate in the Parliament through question time about the cost that would be imposed on people, and the Government comes up with averages and they make it sound like it’s a small amount of money because it’s the cost of a cup of coffee. I’d say to the committee that it’s probably unlikely that people receiving a payment under the Social Security Act are the Ponsonby dwellers that are sipping lattes every single day, several times a day, but they’re the people that actually struggle the most, and they’re the people that probably can’t afford a cup of coffee. But we do know through the evidence that was put forward in the select committee that the people that are living furthest away from the CBD, the people that have the least fuel-efficient cars, the people that can’t afford to buy electric vehicles, and the people that can’t afford alternatives means of travel because they have to travel long distances to get to work, are not going to be paying the cost of a cup of coffee. They’re not going to be paying a small amount of money. They’re probably going to be paying hundreds of dollars a year, and their families—if they have two fuel-inefficient cars travelling long distances—will be paying several hundred dollars a year.

Our officials, our staff, have calculated that’s probably around about $700 a year. I know the Minister disagrees with that, but at least in the way in which this is worded, it would allow for an average cost to persons to be calculated. Now, it would be accurate—it would be real-world information. It wouldn’t be anything that the Government’s spin-doctored or we’ve spin-doctored; it would be real information that the ministry would have to come up with to make a calculation under a proposed amendment to the Social Security Act to compensate these people.

We must acknowledge that this bill puts in place additional costs on people. We must acknowledge that this is a regressive tax. We must acknowledge that we’re hurting the cost of living for many New Zealanders out there. We must acknowledge that there should be changes made to legislation to allow it to happen.

I see the Minister is signalling he’d like to take a call. We’re looking forward to him taking a call saying why he doesn’t agree with this—I assume he doesn’t agree with this; I hope he actually agrees with this—but it’s important that we address cost of living issues. It’s important the Minister answers these important questions. We’re looking forward to that.

Hon PHIL TWYFORD (Minister of Transport): There have been some very curious contributions from the Opposition benches, but, in the spirit of this committee stage, let me respond to one or two of them. Parmjeet Parmar would like taxation to be a voluntary thing, an optional thing. While I embrace the importance of the spirit of voluntarism in our society, frankly, I’m surprised that the National Party wants to make the payment of taxes an optional thing—but there we go.

Stuart Smith proposes that a cost-benefit analysis be required for every regional council, reporting on the expenditure of the funds raised by a regional fuel tax. I say to Mr Smith that every significant piece of transport expenditure is subjected to a cost-benefit analysis of some kind. In fact, in line with our Government policy statement, our Government is getting under way with a complete revamp of the entire system of measuring the economic value of transport projects.

Scott Simpson had a very unusual proposal: basically, requiring councils to have a referendum before a regional fuel tax could be put in place. This is a very odd suggestion, because councils can raise their budgets and raise rates to support those budgets any year that they like. They don’t have to have a referendum to do that, but they have to go through the requirements of the Local Government Act, as Lawrence Yule well knows—the onerous consultation requirements of the Local Government Act—and they have to explain to their citizens, they have to put a proposal in front of them, they have to, basically, invite public submissions, and then they have to report back to their ratepayers and tell them exactly what they’re going to do. But nowhere in the whole system of local government are councils required to hold a referendum to get the agreement from their citizens for the raising of additional revenue, so this would be a very, very unusual inconsistency in the system of local government.

Matt King proposes an amendment to the Search and Surveillance Act, because Mr King apparently believes that it’s OK to defraud a system of taxation for a month, but you have to have been defrauding the system for 12 months before you can be subject to the enforcement provisions in this bill. I thought that after nine years in this Parliament, I knew the National Party; clearly, I don’t.

Finally, let me respond to Jami-Lee Ross’ contribution in this debate. He wants to amend the Social Security Act to allow a reimbursement of any expenditure on a regional fuel tax—an equivalent amount to be refunded through the social security system. I say to Mr Ross, where was this concern for low-income families facing regressive taxes? Where was this heartfelt concern when the former National Government raised the goods and services tax, having promised—

Matt King: Yeah, but it was tax-neutral—it was tax-neutral.

Hon PHIL TWYFORD: Well, they say it was tax-neutral, but actually it took money out of the pockets of working New Zealanders and gave it to people at the top end. It was not tax-neutral for working New Zealanders. In fact, it was very tax-negative for the big end of town that the National Party has the habit of looking after.

So I also say to Jami-Lee Ross, if he’s so concerned about regressive taxes, where was this concern when the former National Government raised the petrol excise duty and road-user charges by 17c plus GST—17c plus GST—six times in nine years? Now, the last time I checked, the petrol excise was a regressive tax, but I don’t recall hearing a single speech in this House—[Time expired]

IAN McKELVIE (National—Rangitīkei): Goodness me! Thank you, Mr Chair—something of a surprise! I just about had a heart attack getting up, so it was lucky you did call me. It’s a great pleasure to take a call on Part 2 of the Land Transport Management (Regional Fuel Tax) Amendment Bill. I have, I suppose, the privilege of actually proposing an amendment as well, and that amendment would alter clause 10(5), inserting a new subclause 6). In fact, after subclause (5), you’d insert a new subclause (6), which would add a new subsection, and that subsection would say, “Any proposal for a regional fuel tax scheme under the provisions of subpart 3 of the Land Transport Management Act must incorporate, to the best ability possible, the contents of the infrastructure strategy.” So that is a very constructive piece of alteration to the legislation and it would add to what I think the legislation should have contained in the first place, which was a direct reference the regional land transport plans in each regional council area, which would’ve actually been a very simple way of ensuring that the fuel tax adhered to the plans that those regions had.

This is a crock, this piece of legislation. It’s almost like a death by a thousand cuts. It’s like third time lucky, in effect, because this is the third time in my young memory that we’ve had a regional fuel tax introduced to Parliament. Of course, for that to apply, it really needs to apply to the amendment that I introduced to the committee a moment ago, and, if it doesn’t, then it makes it very difficult for regional councils to implement this type of legislation. It is, in my view, not at all practical, and just recently we’ve seen the Rangitīkei District Council putting their hands up wishing to charge a regional fuel tax. Of course, Rangitīkei District Council gets all their money from Wellington people going skiing on a Friday night and coming home on a Sunday night, because that’s where the regional fuel tax would come from as they travelled through the district to the mountain. Of course, given Rangitīkei River runs right next to the boundary, they would fill up in Sanson on their way up and Sanson on the way back and avoid paying the regional fuel tax, which would be somewhat ironic, Mr Chair—of course, in your instance, that contains your very own home.

Earlier in the night, my colleagues were talking about roads of national significance and the issues that the former Labour Minister Ken Shirley raised, and it occurred to me that that great Labour Minister of transport Harry Duynhoven would have a fair bit to say about this piece of legislation as well, especially given he comes from that great city in the west where they will no longer have fuel to fill up with, anyway, and that will be quite an interesting challenge for them.

So I think that the planning around how we get to the point of a community understanding what the regional fuel tax is going to provide for that district or for that region is quite challenging. I think it’s important that it is attached to the planning that’s gone on in those regions where it’s applicable, and, as I said earlier, that’s the Rangitīkei District Council wanting to impose a regional fuel tax. They’re part of a seven-district regional council, so it would be really interesting for a regional council to pull together a tax that deals with one small piece of that area, so I think that’s quite challenging in itself.

So, Mr Chair—or Madam Chair; it’s changed—I think that this whole piece of legislation is going to be extremely difficult to administer equitably. We’ve seen very clearly in the past that it doesn’t work, and I don’t know why we would try to insert or, I guess, come with a “third time lucky” proposition to reinsert a regional fuel tax again. There was reference made by the Minister only a minute ago to the way the last Government dealt with fuel tax, and, of course, it is quite an important part of how we fund our road transport system. I think it’s logical that it should be rationally applied across the country, and then allocated on a regional basis where the Government thinks it’s necessary. It would have been a much better way of doing it than this. This is hugely untidy, and whilst I must stick to Part 2, I’d very much like to have got on to where the farmers are going to get to with their challenges with the diesel tax as it comes on in a very different form than it’s ever come before, and it’s going to mean a huge administrative cost.

Hon AMY ADAMS (National—Selwyn): I am pleased to take a call on this Part 2, but in particular I wanted to speak to one of the amendments on the Table that hasn’t previously had attention this evening, and that is a very good amendment in the name of my colleague Hamish Walker, the MP for Queenstown, who has made a very sensible suggestion that I think the Minister should pay serious consideration to, which is adding to the provisions currently in Part 2, which, obviously, are amendments to various pieces of legislation. As we know, they go through the transport legislation, the Local Government Act, and the Search and Surveillance Act—which I want to come back to. But also, in this amendment we are suggesting an amendment after the existing clause 11 to add a new clause 12, which would suggest an amendment which isn’t currently in the legislation, amending the Road User Charges Act.

It does seem to me, in reading this legislation, that there has been an omission to consider the interplay between this piece of legislation and the Road User Charges Act. If you look at that road-user charges (RUC) legislation, then it’s very clear that in section 53(2) of that Act you have quite a number of provisions that an assessor for road-user charges should take into account in considering whether to make an assessment for the collection of road-user charges. I won’t run through them all, but, as the Clerk can imagine, there are quite a number of provisions in that legislation and it’s quite clear that a road-user charges assessor should turn their minds to a full range of considerations in deciding whether it’s appropriate to make an assessment for road-user charges.

What this legislation fails to do, though, is to consider the interplay between that framework and this framework, and I think Hamish Walker is absolutely right when he suggested it’s quite appropriate to add into this framework a subsequent amendment to section 53 of the Road User Charges Act, which would be a new section 53(2)(g) suggesting that where there is a regional fuel tax scheme in place in the region where the RUC vehicle is primarily used, that should be another factor which is considered by the RUC assessor. It is appropriate that when we’re going to be adding in yet another cost on motorists in the system, we have to think about the interplay between that one and existing frameworks. In this case, in the particular amendment that I wanted to address, because it hasn’t been discussed in this committee stage—and I’m aware, actually, that there are a number of amendments, important amendments, still to be discussed in this committee stage.

This is an important one. Look, it may not be the core of the National Party’s opposition to this bill, which is absolutely around the imposition of an unwarranted, unheralded, unannounced, new tax on the regions of New Zealand that simply won’t address the issues that the Government claims it will—that is obviously at the core of our opposition and a number of us spoke very strongly against that in Part 1—but in this Part 2, we have to turn our minds to the operation of this framework if, in fact, it does become law. It seems quite clear to me that, reading through the existing provisions in Part 2 and the various consequential amendments, there has been an omission to think about the interplay with the road-user charges framework, and my colleague Hamish Walker has come up with a very good suggestion.

It shouldn’t actually fall on members of this House to fix a Minister’s legislation, but, frankly, I expect very little else from this particular Minister. He’s not known as a Minister of competence in delivering everything he does, and it seems to me that in this bill we see yet another example where the operationalising of the words is failing, and it falls now to members of the National Party to find the omissions—the lacunas—in this legislation, and here is a lacuna relating to the Road User Charges Act where there is no direction so far in the legislation as to how it fits in with this regional fuel tax scheme. This is a very simple amendment that I would like to see the Government take up, very clearly outlining that the road-user charges assessor can make that change.

But there is another matter that I did want to discuss on Part 2, which is the amendment that is in the legislation to the Search and Surveillance Act. Now how many of our constituents, hearing that they’d face a 25 percent extra charge on their petrol per litre—11.5c of which comes from this regional fuel tax—know that it comes with an amendment to the Search and Surveillance Act allowing assessors to search their vehicles if there’s any suggestion of non-compliance with the Act? But in this legislation, we see an amendment to the Search and Surveillance Act. This is how serious this Government is about taking more tax off you—they’re adding an amendment to the Search and Surveillance Act which allows an enforcement officer to obtain and execute a search warrant for evidence.

So you may think it’s just a matter of pulling up to the pump and the pain of paying a little bit more at the pump, but, no, it goes beyond that. You actually now have—thanks to Minister Phil Twyford and the Labour Government—a fuel tax that allows enforcement officers to stop you, to execute a search warrant, and to search your vehicle for evidence of offences under the Land Transport Act. Now I don’t remember seeing any of that in the press release the Minister put out, and I would like to hear from this Minister exactly why it is and in what circumstances there could possibly be a need for an enforcement officer to search a vehicle for evidence of non-compliance with payment of the regional fuel tax. I think that is a very extensive power that deserves more time and debate in this House.

As member who’s been in this House now for nearly 10 years, I have heard numerous debates where Labour and the Greens, particularly, railed against the Search and Surveillance Act and the overreach of powers of the State. Well, I look forward to Green members taking a call in defence of why a regional fuel tax bill needs powers under the Search and Surveillance Act for searching vehicles, for executing search warrants, and for exposing drivers to that unreasonable extension of powers of the State. The Minister has made no explanation as to why that’s warranted. It is an important matter. It does deserve the time of the committee. The Minister is, not surprisingly, silent on it. Well, National Party members on this side find the gaps in his legislation, find the unworkable holes, and seek to fill them, even in a piece of legislation we don’t support, because we do want legislation of this House to be workable.

It does show the importance of good quality, careful scrutiny of these consequential amendments to pieces of legislation, because buried in what could be seen as the detritus of a bill—buried in what could be seen as the unimportant little consequential amendments—are some very significant powers, and I’ve heard nothing from the Government in this debate as to why there is no linkage into the road-user charges framework. I’ve heard nothing from the Government as to how the two would fit together—

CHAIRPERSON (Poto Williams): Order! Order! I just want to caution the member regarding repetition. Those arguments were made in your first call. Thank you.

Hon AMY ADAMS: Thank you. That’s right. Just to finish that point, I’ve heard nothing from the Government around why that search and surveillance power needs to be in here.

So I think there are a number of matters that have been raised so far in this Part 2 debate. I’m aware that there are a number of similar matters to be raised. I would invite the Minister to explain to us why those two deficiencies exist, and I’m very much looking forward to hearing his answer.

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Chair. I’m pleased to take a call in this debate on the Land Transport Management (Regional Fuel Tax) Amendment Bill and I want to cover a number of matters in this first call that I intend to take in this Part 2 debate.

I want to start with some comments that the Minister raised in his contribution which really bring in some new elements to this debate. Given that the Minister has raised a number of issues around equity, I want to use that to extend one of the arguments on this side of the House in terms of a number of the amendments. One of them I’ll speak to very specifically, but there are other amendments. I think there are 14 or 15 amendments that haven’t been addressed at all yet, so I will come to a contribution on that in another call. But I wanted to just come back to the Minister’s comments about equity, because as my colleagues have quite rightly said before this—and, in particular, Jami-Lee Ross in his contribution—we’ve actually got two significant issues of inequity.

I raise this because the Minister raised it in his contribution, and in his contribution he specifically asked why it was that when the previous Government increased the goods and services tax, we did not make some of the changes to, for example, the Social Security Act. What the Minister failed to raise in his contribution, which is why I want to bring it to the attention of the committee—because when the Minister spoke in his contribution in the committee of the whole House, he talked about issues that are broader than this particular part of the bill. So I just want to address the issues he’s raised around equity.

So when the changes were made to increase the goods and services tax, at the same time there were changes to reduce the amount of income tax that those on lower incomes were having to pay. So the equity issue that the Minister has raised in this debate on Part 2—actually, he’s argued against the point that he was trying to make. He’s actually argued in favour of my colleague Jami-Lee Ross’ amendment, which basically says there should be compensation for those on lower incomes if you are increasing a tax called a regional fuel tax. There should be an offset for those on lower incomes.

The offset proposed by my colleague Jami-Lee Ross is one of supporting individuals in low-income households through the Social Security Act, and this is something I’m particularly interested in, being the National spokesperson on social development. This piece of legislation will have an impact—a disproportionate impact—on low-income households. The comments the Minister himself made in his comments on Part 2, which is the focus of this debate, were about equity. Well, I put to you that this bill that’s before us creates inequities that don’t exist today. The passage of this legislation, as proposed by this Government, will disadvantage low-income households.

There’s another equity issue that I want to raise—and I raise it because the Minister raised issues of equity and fairness—and that is the original intent of the regional fuel tax being about Auckland and the fact that what we have seen now is other regions introducing it. So you have the inequity—a double inequity—of a low-income family in Auckland that is paying more than a low-income family in another part of the country. So we have two inequities that the Minister and this Government have introduced. That is why I wanted to speak on Jami-Lee Ross’ amendment which basically allows, through the Social Security Act—and in some ways you could argue that the Government has a bit of a precedent in things like the winter energy payment, which is also for a significant cost to a household. There is a direct compensation for superannuitants and for low-income families of $700 a year, and it’s interesting that $700 a year is pretty much the same amount that the calculations have been—that this regional fuel tax will have. So I want to ask the Minister—[Time expired]

NUK KORAKO (National): Taku mihi ki a koe e Te Kaiwhakahaere. Huri noa i Te Whare nei, kia pai tō tātou Matariki. Nō reira e mihi atu ki a koutou katoa.

[Thank you, Madam Chair. I wish everyone here in this House best wishes for Matariki. Greetings to one and all.]

E Te Kaiwhakahaere, thank you for giving me this opportunity. I was getting a bit of a complex. I thought I was under there and you couldn’t see me, but, anyway, kia ora. I just want to say this is the first opportunity that I have had to speak on the Land Transport Management (Regional Fuel Tax) Amendment Bill, and also it’s the first time, particularly, that I’ve been able to introduce an amendment.

So my amendment seeks to amend the Local Government Act 2002, and this adds a new section 81(3) after section 81(2). What it does is that it actually introduces section 81(3), “Consultation with Iwi Prior to any Regional Fuel Tax Proposal”. What it says is that “Before a territorial authority seeks to submit a proposal on a regional fuel tax scheme under Subpart 3 of the Land Transport Management Act 2003, the Council must open consultation with the local Iwi(s) of the region.” I have actually heard this evening that word “consultation”, and I’ve heard that word “consultation” a number of times.

While we actually have been talking about this particular bill, at no point in this debate has anyone had a kōrero about Māori, or, in particular, the six Auckland iwi. In fact, there is not one mention in this bill around consultation with Auckland iwi. In a lot of ways, that there is a travesty, because when you look at the representation within this bill, at the moment there is none. When we think of the six Tāmaki iwi that make up the Auckland area, there are actually over 30 marae, and this large natural grouping accounts for over 150,000 of those members of those marae.

So I want to ask the Minister in the chair—and also, what about the Māori MPs on the other side of the Chamber there? You are part of, historically, the largest Māori caucus—

Kiritapu Allan: That’s right.

NUK KORAKO: —to be ever in this Parliament. That’s right, but where have you been? Where have you been? Why is there no consultation proposal in this particular bill? So why would you not consult with the Treaty partners? Why would you not consult with mana whenua?

CHAIRPERSON (Poto Williams): Order! Order! Not me.

NUK KORAKO: Why would you not consult with representatives of the most disaffected groups, who will suffer under this fuel tax? Why would you not consult with them?

CHAIRPERSON (Poto Williams): Order! I just need to remind the member not to refer to the Chair. Thank you.

NUK KORAKO: Kia ora. So looking at this particular disaffected group, they are actually part of these iwi; they are part of these marae. These are the blue-collar workers, these are the shift workers, these are the marae members, these are the marae workers, and these are the volunteers that actually are going to be affected by this particular fuel tax. So when you look at an example, why would you not follow a piece of legislation called the Resource Legislation Amendment Act, in which, when we look at it, iwi are actually consulted very early in the process, and they’re also consulted right at the end of the process so that they’re not shut out? So why would you not actually put, as my amendment is stating, an amendment in here, in this amendment—[Time expired]

CLAYTON MITCHELL (Whip—NZ First): I move, That the question be now put.

KANWALJIT SINGH BAKSHI (National): Thank you, Madam Chair. You are very kind. You have given me the opportunity to talk about my tabled amendment. Through you, I would like to request that the Minister consider this amendment, because the veterans have not been mentioned at all, and this is very important for the veterans. My amendment amends clause 12 to the Veterans’ Support Act 2014, and, after section 15(1)(i), inserts “(j) Whether the veteran lives in a region where a Regional Fuel Tax scheme is in place.”

As we know, the veterans are those people who have either served in the military forces or fought a war, and they are the ones who have made sacrifices. We should consider very seriously that they should be exempted from the regional fuel tax. I know the Minister is listening to all the speeches and he has made the effort to respond to those concerns raised by different speakers. Here, I would also like to request New Zealand First, through Clayton Mitchell, who is the representative of New Zealand First right now in the Chamber, and, in particular, the Hon Ron Mark, who always considers himself to be the champion of veterans—this is the amendment which is directly going to affect them.

This amendment ensures that Veterans’ Affairs New Zealand, when deciding whether to provide or contribute to the cost of transport for dependent veterans, can take into account the cost of the regional fuel tax. This is very important, because we know that veterans have limited resources, and if this fuel tax adds to their living costs they are going to suffer. We know they come to different events, like they stand up for the people of this country from time to time—in calamities, in natural disasters—they come and contribute. This is why this amendment is very important for the veterans, and I hope that I will get the support from the opposite side to get it through this process.

We know that the veterans from different wars have come back to New Zealand and now are living here. Veterans from the Korean War, from Malaysia, from Afghanistan, from Iraq, and from many other parts of the world have come back and settled down and are living in our country. Their contribution—not only their contribution but, I think, the sacrifices made by their families from time to time—should be considered.

I hope that the Minister will give consideration to my amendment, which amends the Veterans’ Support Act 2014 and inserts a subparagraph in that after subparagraph 15(1)(i): “(j) Whether the veteran lives in a region where a Regional Fuel Tax scheme in place.” I hope this relief will go a long way for the veterans. I thank you for the opportunity.

BRETT HUDSON (National): Thank you, Madam Chair. Thank you very much for the call. I want to speak on my amendment on this part, one which is all targeted at improving public confidence in the applicability and administration of the regional fuel tax. I think there are some deficiencies there that this amendment would certainly help.

This is a very serious business, permitting regional councils, in effect, to levy a tax to apply on large-scale roading or transport infrastructure projects. It’s a big deal. What is more, it is a much bigger deal than the public were led to believe. As the Government was muttering and murmuring about this prospective tax, they were talking all about Auckland, but it turned out, as the bill was introduced, that this actually permits a regional authority in any part of New Zealand to apply to levy a regional fuel tax; they just can’t actually levy it until 1 January 2021.

So it’s a big deal. Because of that, I think it’s appropriate that we look to strengthen the public’s confidence that if regional councils get the tax, it will be applied correctly, it’ll be administered correctly, and any probity issues that could potentially appear could be caught, because this will not just be Auckland. In fact, it won’t even just be Auckland, Christchurch, and Wellington. The Minister Phil Twyford, last night in a contribution, claimed that National was scaremongering about a contagion and that this would spread like wildfire around the country. He said we were scaremongering.

CHAIRPERSON (Poto Williams): Order! Order! I just want to remind the member and remind members that there have been lots of repetition of arguments, so I want you to present new arguments in this debate.

BRETT HUDSON: I am, Madam Chair. I’m just seeking to establish why I think it is important.

CHAIRPERSON (Poto Williams): Right. We don’t need for the establishment of why; we just need the argument, thank you.

BRETT HUDSON: Very well, Madam Chair.

CHAIRPERSON (Poto Williams): We have all been listening to this debate for the last couple of sessions.

BRETT HUDSON: So my amendment requires that the Auditor-General, under the Public Audit Act 2001, must—must—undertake a performance audit “at least one year after the establishment of any regional fuel tax scheme under Subpart 3 of the Land Transport Management Act 2003,” on any of those 14 or more regions, those 14 that have already signalled that they want a piece of this.

The first part of the audit is, fundamentally, a performance audit. That’s the part which is ensuring that the relevant public entities are acting effectively and efficiently under the provisions of that Subpart 3. But it goes further: it also checks to ensure, under the audit, that the public entity is complying with all of its statutory obligations under that subpart. It goes further again, and this leads to, particularly, a cost-effectiveness or a cost efficiency. It also seeks to establish or identify “any act or omission of a public entity, in order to determine whether waste has resulted or may have resulted or may result in relation to [the] functions under subpart 3 of the Land Transport Management Act 2003:”.

Equally importantly—actually, I would argue, perhaps even more importantly—subclause (1)(d) of my amendment says, “any act or omission showing or appearing to show a lack of probity or financial prudence by a public entity or 1 or more of its members, office holders, and employees under subpart 3 of the Land Transport Management Act”. As the bill exists at the moment, it focuses in terms of its concern around the administration of the tax simply on determining an assessment of whether or not someone has avoided or evaded paying the tax. It doesn’t have a provision about the people who are actually administering the tax.

Now, it is true that the Minister could argue that they would already come under the ambit of the Public Audit Act 2001 as it stands. That is true, but my amendment goes further, in the extent that it requires that the Auditor-General may undertake that audit within one year. It also looks at the performance, including cost-effectiveness and cost efficiencies, and the probity and actions of the entity and its employees. This will strengthen public confidence in the bill, Minister. I recommend you take it up.

Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): I move, That the question be now put.

JO HAYES (National): Thank you, Madam Chair. I’m pleased because this is my very first contribution to the Land Transport Management (Regional Fuel Tax) Amendment Bill.

Chris Bishop: First of many.

JO HAYES: First of many—first of many. Thank you. My contribution focuses around clause 10(5) in Part 2, and it is the amendment in the name of Jami-Lee Ross. What it states is: “After new section 34B(1)(c) insert new 34B(1)(d); How the RFT scheme has impacted on the cost of living”. This is what the bill is saying regional councils of a regional fuel tax region, in its annual report, must report on.

So I’m asking the Minister to add subsection (d) on, and the reason being is that in Canterbury, we have a Canterbury well-being survey that’s done through the Canterbury public health sector. They, obviously, survey the people of Canterbury to find out how their well-being is going over a period of time. Now, I reckon that because of this regional fuel tax, this bill—and Christchurch City Council have announced that they will also want to implement a regional fuel tax in the city—is going to have a negative impact on all of those people that live in the area that I help to look after, in the electorate of Christchurch East. I think, when the Christchurch City Council move on this, there are going to be a lot of people that live in that electorate that are going to be severely disadvantaged from it.

Not only that; I have just received on my phone right now a media statement stating that the Christchurch City Council will be increasing rates, over a three-year period, to 17 percent. More money going out of people’s pockets, and that is not right. A regional fuel tax on top of an increase in rates is going to happen across this country, should this bill go ahead. Therefore, regional councils have a responsibility—they have a responsibility—to the well-being of the people in their regions to actually report on the impact of what a regional fuel tax will actually do to the well-being of those people.

When I look at it, I also look at the Māori and Pacific whānau, because we all know that in every region of this country, Māori and Pacific peoples are the ones, you will find, that are mainly on the lower-paid incomes. They are always in that area. They do move up, some move up, but the majority of them work in jobs that pay low wages—

CHAIRPERSON (Poto Williams): Order! Look, I’m sorry. I don’t mean to interrupt the member, but the issue of equity has been well traversed throughout this particular part. Does the member have other contributions and other arguments to make in her contribution?

JO HAYES: Well, actually, Madam Chair, I think it does need to be hammered in, because I don’t think that the people—

CHAIRPERSON (Poto Williams): Order! I’m asking the member to use other arguments. [Members seek call] No, the member is still speaking. I’m actually asking the member to continue her speech, but to use other arguments.

JO HAYES: So I will continue my speech.

ASSISTANT SPEAKER (Poto Williams): Thank you.

JO HAYES: Anyway, yes, I do have extra to contribute, because, in this bill, in new section 34B, it also says in subsection (1)(b) that the council is also required to report on how the revenue will be applied by the council. Now, where I live, in Christchurch East, the place is becoming like pothole city in all of the roading area going in through Burwood and all around that particular area. So, therefore, if this bill is to go ahead, I would like to see those potholes actually filled up and repaired, with not just a little bit of hot mix put in, but the whole thing done up properly, because if that’s what this bill is going to end up doing, then that is going to take away—and I can say that now: it is going to impact on the way that people get around the city. It actually does impact on the amount of fuel it costs to actually move around the city, and with the regional fuel tax, they’re going to have to pay more.

Lots and lots of people go flying past on Travis Road every morning and every night, and this is going to severely impact the number of people that are going to be able to afford to do that. Some people might say, “Oh, but they might end up biking.” Well, I don’t think so. I think that they are going to be severely hit, and it’s going to actually show in the way that their living standards will drop.

Also, new schools are coming in there as well, so—[Time expired]

CHAIRPERSON (Poto Williams): I think we’ll take one more.

Stuart Smith: Madam Chair, I’ve asked ever so politely.

CHAIRPERSON (Poto Williams): All right, then. Stuart Smith.

STUART SMITH (National—Kaikōura): Oh, thank you very much, Madam Chair. I want to address a clause that hasn’t been spoken to—that I’m aware of, anyway, and I think I’ve heard most of this debate—in new schedule 1AA in the schedule, new clause 4, “Additional amount to be paid before net revenue is paid to Auckland Council”. This is quite interesting. It says “if an RFT scheme is established for Auckland under section 65K before 1 January 2021, then, before paying any amount to the Auckland Council under section 65U, the Agency must pay to the Crown out of the revenue from the RFT scheme the amount of $1,000,000.”

Is this legislation for sale? It sounds like the work that’s gone into researching this piece of legislation—the Crown is seeking to recoup that investment in the initial take of the fuel tax. So what will be next? When the racing legislation, which will no doubt come out from the report that’s being done—and this might be of quite some interest to you, Mr Clayton Mitchell—comes in, will that also have a similar clause as this does? Because I think this is quite an insidious clause, and, you know, I think that it leaves Governments open for quite interesting accusations.

So I would like to ask the Minister in the chair, Phil Twyford, to please take a call and please tell me the origin of this particular clause, what that money is to cover, how it was calculated, and, you know, why that is in there. Is this something that the Government will continue with? So I’d like to put that to one side.

But I’d like to now turn to the matter of GST, and I think one clause of this that hasn’t been looked at—and I think Dr Smith talked about the Rt Hon Winston Peters making 200-odd statements about tax on a tax. I’d like to offer Mr Peters an option to save some honour from this—find a way out so he can actually not look as though he’s a bit tardy on his reputation—because there is a way around this, and I would submit that the way around this would be to calculate the GST on the cost of the retail price of the petrol—or the fuel—excluding excise and the fuel tax, and then add the excise and the fuel tax on top of the GST inclusive price of the retail fuel.

Now why that isn’t a tax on a tax—as I can see the cogs whirring in Mr Mitchell’s head there trying to figure that out—is because, Mr Mitchell, excise and a fuel tax are a flat charge, whereas a GST is a percentage of the price. So that’s how you get a tax on a tax, and I think that Mr Peters—I see you’re texting him now. I think it’d be a really good thing for him to come down to the Chamber, put a Supplementary Order Paper (SOP) in, and put this to rights, because, you know, it really is a serious slight on his reputation that he’s made these claims about tax on a tax—

CHAIRPERSON (Poto Williams): You cannot refer to a member who’s not present in the House.

STUART SMITH: OK. All right. But it would be a great thing, I think, if you could get an SOP to try and sort this tax on a tax out, because it is quite insidious. I think we see the same thing in the alcohol, with excise tax going on and then you get the multiplier. It extracts quite a significant greater income on that from GST, and that might be the aim. Maybe that is the aim of having GST on top of the excise-inclusive price rather than the exclusive price, but I think this is really bad governance. I can accept it’s been a long practice, and, you know, we’re as guilty as anyone else of that, but this is a wonderful opportunity to fix this anomaly in this legislation.

I can see—are you scribbling something down there, Mr Mitchell? I think that would be quite good to write that SOP now, and we could get that in and fix this piece of legislation, because I’m sure there’d be great support on this side of the Chamber. My colleagues would all join me in voting for that SOP to sort that anomaly out and get this bill in much better shape than it already is.

So, with that, I thank you, Madam Chair.

TODD MULLER (National—Bay of Plenty): Oh, thank you, Madam Chair. If I may just have a moment of celebration, actually, if the committee won’t mind, I had a little phone call this evening from my daughter, who was in her school and they were having an assembly on volunteer week, and they wanted two people from the whole school to front and be part of the presentation and get a gift at the end. Everyone had their hands up, and she said, “Dad, it’s a really tough feeling when you’ve got your hands up and you don’t get picked.”, and there’s a few, perhaps, who are feeling like that this evening.

However, I would, in all seriousness, like to talk about Part 2, obviously, and particularly the section relating to amendments to the Local Government Act. The thing that I would like to particularly explore this evening is the theme of transparency and accountability, which, clearly, as we note in the departmental report, was an area of some debate between the two sides of the House as this particular piece of legislation went through the select committee process.

Now, specifically, in clause 10 in Part 2, in new section 34B, is a section relating to additional information, which, in and of itself, I think is a reasonable start—a reasonable, limited effort by the Government to have some obligations on regional councils with respect to transparency and accountability in its particular design of the annual report and the components that the annual report of the regional council that is benefiting from a regional fuel tax must cover.

This evening I would like to particularly speak to my colleague Chris Penk’s amendment—which I don’t believe has had much discussion this evening—that relates specifically to proposed new section 34B(1)(d), which is an insert into what I believe, like I say, is that limited criteria on reporting as part of the broader transparency theme. This particular amendment requires that the “Reporting of all RFT schemes should be received by each local board in a region and consultation undertaken with that local board prior to the consultation on the annual report.”

Certainly, when I put my hand up to support this particular amendment, I was thinking specifically of the Bay of Plenty region and the myriad of local boards that are part of the local government governance arrangements in that council, and in the broader Bay of Plenty Regional Council. It’s very clear that the Bay of Plenty Regional Council is potentially one of those councils who see the opportunity, through the options that are enabled in this particular piece of legislation, to put a regional fuel tax in.

Now, the key point here is that a number of our local boards have had significant disconnect between regional council roading priorities, and through that there is a risk that if there wasn’t an opportunity or an obligation on the regional councils who are part of a regional fuel tax scheme to liaise back in a more specific way—as outlined by this amendment—to those local boards, I think there is an opportunity for that very local voice to not be part of the broader regional fuel tax framework. Bearing in mind that one of the components of this piece of legislation is to ensure that the needs of a particular local community with respect to regional roading infrastructure are met, I think that this is a particularly useful addition to what I think is a reasonable start.

I think if you look at new section 34B(1)(a) through to (c), in clause 10(5), there are some reasonable components there, and I acknowledge Minister Twyford for at least going some way to putting some accountability and transparency into this bill. But I think the particular amendment in the name of my colleague Chris Penk will go a further, significant step to ensuring that there is great connection between people in the local communities and the regional councils if they are part of a wider regional fuel tax scheme.

I have many other contributions that I’d love to make, but I’m conscious that others would like to contribute to this very important debate. Thank you, Madam Chair.

Hon PHIL TWYFORD (Minister of Housing and Urban Development): I move, That the committee report progress and sit again presently.

TIM VAN DE MOLEN (National—Waikato): I raise a point of order, Madam Chairperson. I just wanted to refer back to the earlier point of order raised by Mr Ross that was with regards to—

Hon Chris Hipkins: No, there’s a question before the House—there’s a question before the House. You’ve got to wait.

TIM VAN DE MOLEN: —thank you—the addition of other amendments in Part 2 covering Acts not included specifically under that. The Chair was going to come back to us with his consideration on that in this part, and so I’d be interested to hear whether or not—

CHAIRPERSON (Poto Williams): We’re still within the Part—[Interruption] Yes, I would just ask the member to resume his seat. The Minister actually had just put a question to the committee, so just a moment—will you just hold that.

A party vote was called for on the question, That the committee report progress and sit again presently.

Ayes 63

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

Noes 55

New Zealand National 55.

Motion agreed to.

House resumed.

The Chairperson reported progress on the Land Transport Management (Regional Fuel Tax) Amendment Bill and no progress on the Taxation (Neutralising Base Erosion and Profit Shifting) Bill.

Report adopted.

Urgency

Urgency

Hon CHRIS HIPKINS (Leader of the House): I move, That urgency be accorded to the committee stage and third reading of the Land Transport Management (Regional Fuel Tax) Amendment Bill and to the committee stage and third reading of the Taxation (Neutralising Base Erosion and Profit Shifting) Bill.

McGee says that “the use of urgency is expected to be confined to situations where an urgent approach is genuinely needed.” The passing of these two bills meets this criteria quite comfortably. The passing of the Land Transport Management (Regional Fuel Tax) Amendment Bill this week is essential so that the Order in Council in clause 5 under new section 65K of the Land Transport Management Act can be made in time to establish the Auckland regional fuel tax scheme from 1 July, as scheduled. A late delay in the start date would make that very difficult, if not impossible.

The Taxation (Neutralising Base Erosion and Profit Shifting) Bill must be assented by the end of this month to allow the commencement of most of its provisions on 1 July to apply in the income year that begins on that day. Any delay could create serious compliance issues for the IRD and for taxpayers. The bill has been supported by all parties at its first and second reading.

The scheduling of the remaining stages of these two bills this week was notified to all parties last Thursday, so there are no particular surprises here. The use of urgency today will prevent the disruption of the third readings of the Treaty settlement bills that are planned tomorrow and next Thursday, and it will stop the Government having to interrupt members’ day next Wednesday, which is an undertaking that I have given to members opposite—that we would avoid interrupting members’ days wherever possible.

Urgency will be used very rarely by this Government, as we showed last month when we became the first Government not to seek post-Budget urgency, and therefore I ask the House to support the motion.

A party vote was called for on the question, That urgency be accorded to the committee stage and third reading of the Land Transport Management (Regional Fuel Tax) Amendment Bill and to the committee stage and third reading of the Taxation (Neutralising Base Erosion and Profit Shifting) Bill.

Ayes 63

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

Noes 55

New Zealand National 55.

Motion agreed to.

Bills

Land Transport Management (Regional Fuel Tax) Amendment Bill

Instruction to Committee

JAMI-LEE ROSS (National—Botany): I raise a point of order, Madam Speaker. I sense you’re about to put the House back into committee. I wish to move an instruction. Would this be an appropriate time to do so?

DEPUTY SPEAKER: Yes, I’m prepared to hear it.

JAMI-LEE ROSS: I move, That it be an instruction to the committee of the whole House on the Land Transport Management (Regional Fuel Tax) Amendment Bill that all members wishing to speak that have already spoken in Part 2 have the ability to have a full four calls reset to zero so each member is able to restart their speaking number.

I move this instruction because I think it’s important, given the House has just—

Hon Chris Hipkins: Point of order.

DEPUTY SPEAKER: Well, this is a point of order.

Hon Chris Hipkins: No, he’s moved on to debating it, I assume.

DEPUTY SPEAKER: No, I still understand he’s taking a point of order. I will allow the member to speak to the point of order, of course.

JAMI-LEE ROSS: Well, Madam Chair, when one takes a point of order to let the member speaking—

DEPUTY SPEAKER: Madam Deputy Speaker.

JAMI-LEE ROSS: Madam Deputy Speaker—it’s been a long night. That’s why the Government’s taking urgency. When a member moves an instruction, a member does so by way of point of order, and I’m continuing with that. I have the ability, once I’ve moved an instruction, to debate that. I now wish to do so.

Hon CHRIS HIPKINS (Leader of the House): I raise a point of order, Madam Speaker. That is clearly out of order, as it’s an instruction to the presiding officers.

JAMI-LEE ROSS (National—Botany): Point of order.

DEPUTY SPEAKER: Are you speaking to the point of order or is this a different point of order? I had a point of order from the Hon Chris Hipkins. Are you speaking to that?

JAMI-LEE ROSS (National—Botany): I’m speaking to that. The House has the ability to issue an instruction to the committee on how it should consider speeches and how it should consider the debate. My instruction says to the committee that it is instructed, and the presiding officer within a committee is required to be bound by an instruction from the House as well. My instruction says that the committee should consider this bill as if members have a fresh opportunity to debate that and have their call number reset to zero. That is quite within the House’s right to do so.

DEPUTY SPEAKER: I’ve heard enough. I’m just going to get some advice. Under Standing Order 176, “(1) An instruction may be given to a committee of the whole House extending or restricting its powers in regard to consideration of the bill or other matter referred to it”, so the motion is in order. I will accept that motion. That is now debatable.

JAMI-LEE ROSS (National—Botany): Thank you, Madam Deputy Speaker. I debate this instruction, and I move this instruction very seriously. I do so because we’re in an extraordinary situation where the House has just resumed because the Minister in the chair moved that the progress be reported. Once progress was reported, the House was then put into urgency. That is the right of the Government, but when the House takes urgency, and when the Government takes such an extraordinary step as to—midway through a debate; midway through the consideration of a committee stage—

Hon Chris Hipkins: I raise a point of order, Madam Speaker. I was incorrect, and you are correct. However, Standing Order 176(6) states that where an instruction only relates to increasing the number of questions the committee is to debate, there is no debate on that motion.

JAMI-LEE ROSS: Speaking to that point of order, Madam Deputy Speaker. You have already ruled. You ruled that I am able to debate this. You ruled that this is a debatable motion. Notwithstanding the fact that Mr Hipkins has belatedly found something in the Standing Orders, you’ve made a ruling now. You have the right to make that ruling. I have the right to debate it because you’ve made that ruling.

DEPUTY SPEAKER: In fact, that is correct. I have made a ruling, and it is debatable, and the debate will continue.

Hon JAMES SHAW (Green): I raise a point of order, Madam Speaker.

DEPUTY SPEAKER: Are you questioning my ruling or is this a fresh point of order?

Hon JAMES SHAW: It’s in relation to the ability to debate. The clock hadn’t started, so I wasn’t sure how long the member was going to be able to debate for—whether it was five minutes or 10 minutes.

DEPUTY SPEAKER: Yes, it is 10 minutes.

JAMI-LEE ROSS (National—Botany): Thank you. I think this is the third attempt now to take this, and I think that just highlights for the members around that’ll be making a decision on how they wish to vote on this instruction that we have such an extraordinary night. I say it’s an extraordinary night, and it’s extraordinary move for me to move this instruction because we do have such an extraordinary situation.

The extraordinary situation we have, where we’ve just had the Government put the House into urgency, means that we are now in a position where we are having to take urgency on a matter that is to do with taxation, a matter that we weren’t expecting we would be in urgency under, and a situation where we, quite legitimately, as the Opposition, were using our ability to put up amendments, our ability to put up arguments, our ability to delay the passage of a piece of legislation that we believe is dangerous. We should now have more of an opportunity to put forward arguments, put forward amendments, and put forward very valid reasons why this bill should not progress—because the House has taken urgency, because midway through the process, because midway through the consideration of this bill, the Government’s had a complete change of tack and the Government’s had a complete change in situation, where they’re having to now take urgency on this. It wasn’t expected. They are in a position where they’re now embarrassed. They are in a position where they’ve had to do something that I haven’t seen in the seven years I’ve been here. We should have had the opportunity to have our calls reset to zero.

The reason I suggest this is because there’s an important principle in play when the House considers something in urgency, or when the committee considers something in urgency, because the normal rules around tight speeches, the normal rules around ensuring members are kept very tightly to the debating points, the rules around ensuring that our amendments are considered and not too broad—those rules get moved out quite a lot when we go into urgency. There’s very clear precedent that when the committee’s considering a bill under urgency, the parameters broaden considerably. The parameters broaden in such a way that the Opposition has more opportunity to put forward amendments, the Opposition has more opportunity to test in the committee whether or not we should be putting forward new parts, and the Opposition has the ability to try and go even further to delay the legislation, because the House has taken an extraordinary move to take urgency.

So if the Opposition has the ability to, under an urgent situation, broaden its parameters, broaden its debate, broaden the amendments that we may put forward, it’s only fair and reasonable that we have our call number reduced back to zero, because the situation we were operating under for many, many hours—and I accept we worked hard on that, and I accept the Government didn’t like it, and I accept we sent them into a position where they had to take urgency. But the fact that we were able to do that and the fact that we now have a situation where the House is in urgency, about to put the House into committee stage, we should have a fresh go.

We should have a fresh go because the rules of engagement have changed. We should have a fresh go because the way in which the committee now has to consider the bill and the way in which we all operate as members of Parliament—the playing field’s changed. So if the playing field’s changed, if the Government’s now in a position where they’ve been embarrassed into taking urgency because the opposition to a regional fuel tax is so strong that the Opposition has utilised its full might and muscle to delay the legislation and they’re now having to take urgency, we deserve a good, proper go to do so under urgency in those circumstances.

Madam Deputy Speaker, I know that you were listening to the debate a lot, both in your office and when you were presiding as the Chair in the committee. You will know, Madam Deputy Speaker, that we were working hard to ensure we kept our debate tight, and we were working hard to ensure we had new amendments that were legitimate. You know that we were working exceptionally hard to debate this properly. We were doing what Oppositions do.

Oppositions have the right in the Parliament to delay legislation. Oppositions have the right in the Parliament to stand up and express a view on behalf of New Zealanders about why a dangerous piece of legislation shouldn’t proceed. Oppositions have long held the ability to delay a Government and to impede their legislative programme. That’s what we’ve done. That’s what we’ve managed to do. That’s what we’ve managed to force the Government into—an embarrassing situation. But because they’ve taken an extraordinary step—and I say it’s an extraordinary step because we didn’t expect it. I say it’s an extraordinary step because it was never signalled. I say it’s an extraordinary step because the Government—the Leader of the House has never at any point in time that I’ve seen in the media said, “Hey, we’re going to be taking urgency on this piece of legislation.” We deserve a full go. We deserve the full set of calls.

So I ask that the House give serious consideration to this instruction. I ask that the Government, in fact, allow us a full go. OK, they’ve taken urgency now. They’re going to lose their select committees tomorrow. I don’t know if there’s any—

Chris Bishop: Kelvin Davis?

JAMI-LEE ROSS: —oh, Kelvin Davis is on tomorrow. I don’t know if there are any committees that are going to be doing Estimates hearings, but those opportunities have been lost, and I know the Government wouldn’t do that unless they felt strongly that this has to happen. So I say to the House: if this is such an issue where the Government feels so strongly that it wants to take urgency.

Hon Member: Repetition.

JAMI-LEE ROSS: I’m allowed to be repetitious. They have just put the House into urgency. It’s an extraordinary step, and it wasn’t expected. So I say: if this is going to proceed, then the House needs to give consideration to this instruction so that we get a fair whack at it, so we get a fair opportunity to speak to the bill afresh, so we can put new amendments up, and so we can ensure that this gets a full debate.

Hon CHRIS HIPKINS (Leader of the House): I move, That the motion be amended to delete all the words after “That” and replace them with “That it be an instruction to the committee that the remaining questions on the Land Transport Management (Regional Fuel Tax) Amendment Bill be put without further debate.”

It is an interesting approach for the Opposition to take to put this motion before the House. It does suggest that the majority of the House be empowered to instruct the Chair as to how they should exercise their discretion. That has been ruled within order, and therefore it is within order for the House to instruct the Chair not to take any further calls on that matter, which, of course, will bring the debate to a much faster conclusion, and it will be a much more satisfactory outcome from the Government’s perspective.

I’d encourage the Opposition to consider, when they decide to encourage the rules of the House to be changed, the ultimate precedent value that that creates and where that may well land up, because, ultimately, the power will remain with the majority in the House in those situations. So I welcome the fact that the House is now being given the opportunity to instruct the committee as to how many speeches there should be on the remaining stages of the Land Transport Management (Regional Fuel Tax) Amendment Bill, and I believe that this is a very sound amendment that will ensure that the integrity of the House is preserved.

CHRIS BISHOP (National—Hutt South): Well, thank you very much, Madam Assistant Speaker. What an extraordinary time we are in. I just want to be clear, for members in the House, newer members—well, they’re not here, but newer members from New Zealand First and from the Greens—and for the members of the public who are interested. I know in Auckland they’re particularly interested in this debate. I just want to be clear for the House about what the Leader of the House has moved. What he has moved: firstly, that the House will go into urgency on two taxation bills—and we’ll come to that point because it’s very important—but the amendment to the motion means that the debate on the committee stage of the bill will be completely cut off.

This is an extraordinary abuse of Government power and, frankly, I am surprised that the Leader of the House has resorted to something like this. I actually am genuinely surprised, because I was a staffer and an MP in Parliament when Chris Hipkins railed against the use of urgency—it was despotic, it was dictatorial, and it was the Government using its majority to override the minority and free and fair debate. So I am just staggered that we are in here in the House tonight debating an urgency motion, essentially, on the cusp of the lifting of the House at 10 o’clock at night on a Wednesday, and we’re going to start again tomorrow morning because the Government is so incompetent that they can’t organise their Order Paper properly.

I want to make three points about why my good colleague Jami-Lee Ross’ motion should be supported, and, of course, the point of the motion is to allow members who have spoken already to continue to speak on the committee stages of the regional fuel tax legislation. The first point I want to make is that these are bills dealing with taxation. I make that point very seriously. The whole structure of our constitution rests on the idea that the Government governs with the consent of Parliament, and the appropriate mechanism for testing whether or not the Government enjoys the confidence of the House is confidence motions. Now, obviously, the Speech from the Throne—that’s the very first test of whether or not a Government enjoys the confidence of the House. The Governor-General stands up and reads out what the Government’s written—what the Prime Minister’s written, or a staffer for the Prime Minister.

So that’s the first test. But then the secondary test is what happens when we have the Budgets, the imprest supply bills, the Supplementary Estimates bills, and, of course, the appropriation bills, like we’ve just finished—I think we’re still actually debating that at the moment—and, of course, those are confidence motions. What that means is the Government is able to tax money, take money from New Zealanders, and spend it on their behalf in the way that the Government decides to do—that’s the whole point. The Government lays out the reams of documents—and members on this side have enjoyed going through those over the last few weeks—and they put it before the House and the Minister of Finance goes around and hands out the Budget documents. Then the Parliament and the select committees—and the Finance and Expenditure Committee lead this—go through and make sure that the Government is actually spending the money on the right things. They test that.

So taxation is of critical constitutional importance. These are not ordinary bills. These are not bills that are just everyday, run-of-the-mill legislation bills—the Military Justice Legislation Amendment Bill, which I think’s meant to be on the Order Paper for tomorrow, which I was looking forward to debating, but it turns out it’ll probably be debated in a couple of weeks’ time, once we’ve finally finished the Land Transport Management (Regional Fuel Tax) Amendment Bill. But taxation bills have a special place in our constitutional and legislative framework because it is the biggest power the State enjoys—or one of the biggest powers the State enjoys. The power to lock someone up and the power to prosecute and charge is an important one, but the power to, with the barrel of a gun, expropriate money from people in what would otherwise be theft—right? In the ordinary course of events, taking money from someone is theft, but we legislate to legalise that, to allow that to happen—and no one’s arguing taxation is theft. I’m not making that point, but I’m making the point that in our constitutional framework the power to tax is exceptional and important.

We are dealing—I mean, it’s not just the regional fuel tax. This was the Taxation (Neutralising Base Erosion and Profit Shifting) Bill. Taking one look at it—there’s a large number of sections to it. I remember when this was first introduced to the Finance and Expenditure Committee, that I sit on. This deals with extraordinarily important matters to do with multinational companies, to do with the way that they organise their financial affairs, and what the Leader of the House has essentially done is said, not just in relation to the regional fuel tax bill, but the Taxation (Neutralising Base Erosion and Profit Shifting) Bill—“No more debate.” In fact, we haven’t even started the debate on that.

Hon Chris Hipkins: No, that’s not what the amendment was.

CHRIS BISHOP: Oh, you’re not amending that. OK, it’s just the regional fuel tax. Well, the point still remains that this will be going through under urgency and the first point is that taxation is extremely important for the House to pay cognisance to, and therefore it’s important that we have a wider debate.

The second point I want to make as to why this motion should be supported is that we on this side of the House have organised ourselves around the idea of no urgency. This was never advised by the Government until now. This has been sprung on us, literally on the cusp of the House rising on a Wednesday night. There are members not here and members who will be here next week who have organised themselves around speaking on this bill, and they will have their opportunity to speak on the regional fuel tax bill cut off by what the Government is doing.

Look, frankly, there are members around the country who want a chance to come down here and move amendments and speak on the bill. This is not a bill that’s just limited to Auckland, as has been widely canvassed. There are regional councils lining up around the country. In fact, it’d be easier to completely rename it, because there’s not a council in the country that doesn’t want the opportunity—or it seems like there’s not a council in the country—to levy more taxation on the hard-working members of those regional councils. So the point is that members here have organised ourselves to give ourselves the ability to speak at a particular time, and the Government, by the stint of this extraordinarily arrogant and contemptuous action, has turned up—

Jami-Lee Ross: It’s vindictive.

CHRIS BISHOP: It’s vindictive. My colleague Jami-Lee Ross says it’s vindictive. It is completely vindictive. Through sheer ineptitude, through sheer incompetence, and through an arrogance that is worryingly frequent and common for this Government, we find ourselves at the dead of night, basically, stuck into urgency. No more select committees tomorrow. We had Kelvin Davis up tomorrow morning. I mean, frankly, we were really looking forward to having Kelvin Davis up for the Estimates, but now we will no longer. So that’s the second point.

The third point is that committees of the whole have traditionally had a wider scope when considering bills under urgency.

Sitting suspended from 10 p.m. to 9 a.m. (Thursday)

WEDNESDAY, 20 JUNE 2018

(continued on Thursday, 21 June 2018)

Bills

Land Transport Management (Regional Fuel Tax) Amendment Bill

Instruction to Committee

Debate resumed from 20 June.

SPEAKER: Last night, when the instruction to the committee was moved, the question should have been proposed. So the question now is that the motion be agreed to and the Hon Chris Hipkins’ amendment to it be agreed to.

When the House was suspended last night, we were debating the instruction to the committee of the whole House and the amendment proposed to it. Chris Bishop has the call and has one minute and 51 seconds remaining if he so wishes.

Hon CHRIS HIPKINS (Leader of the House): I raise a point of order, Mr Speaker. I’m sorry to interrupt the member who was speaking. I have reflected very carefully on where the House got to last night and on both of the questions currently before the House, and I do not believe it is in the best interests of the House for this to continue. I therefore seek leave to withdraw my amendment to the motion that is currently before the House.

SPEAKER: Is there any objection to that? There appears to be none.

Hon Dr NICK SMITH (National—Nelson): I raise a point of order, Mr Speaker. I welcome the move by the Leader of the House to withdraw the motion. The motion that was moved—the amendment last night—was an absolute affront—

SPEAKER: Order! [Interruption] No. The member will resume his seat. The member has not referred to a point of order. [Interruption] The member cannot take a point of order while I’m on my feet. Whether or not I agree with him—and I do agree with him—that both these motions are an affront to the House, and that motion would certainly not have had my support, I do want to make it clear that that motion can now not be debated. The only motion that can be debated currently is the one in the name of Jami-Lee Ross, and I will not have points of order which purport to reflect on a motion now no longer before the House. And I want to warn the Hon Dr Nick Smith that the consequences will be serious.

Hon Dr NICK SMITH (National—Nelson): I’ve been a member of this House for 27 years, and I should be able to raise a serious point of order without being—

SPEAKER: The member will resume his seat. [Interruption] The member will resume his seat. And the member is absolutely right; if the member had raised a serious point of order, he would have been heard. He didn’t. He abused the process. He referred to a motion no longer before the House and did not have a point of order on that.

Hon Dr Nick Smith: Point of order, Mr Speaker.

SPEAKER: The member will resume his seat. I’m going to warn the member now that if he takes a point of order that is not within order, then the consequences for his party today will be serious.

Hon Dr NICK SMITH (National—Nelson): I raise a point of order, Mr Speaker. That point is completely understood, and I do ask you to give me a moment to explain my point of order, because it’s a serious one and it is one that welcomes the comments that you have made in resuming the Chair in the House this morning. The unfortunate precedent, though, that has been established is that the motion to give an instruction to the committee was accepted by the Speaker last night. That has created—even though the motion has been withdrawn—an unfortunate precedent. What I am seeking from you, Mr Speaker, under Standing Order 176 is a ruling that the motion that was moved was not within the Standing Orders, and the reason—

SPEAKER: Well, the member will now resume his seat. The motion was accepted by the Speaker last night. If it had been a matter that had been accepted by the Chair, in the Chair, then it would be appropriate for me to rule on that. The Speaker in this Chair last night made a decision; that decision is final and is not appealable to me. There might be some cause to reflect on it, and it could well be a matter that the Standing Orders Committee, either in the short term or the longer term, has a look at, probably along with the motion that is currently before the House. And I just want to say to Dr Nick Smith that he is sailing very, very close to the wind. He is the father of the House. He does know that one cannot appeal the rulings of an acting Speaker to the Speaker.

Debate interrupted.

Motions

Prime Minister—Best Wishes for Impending Birth

Hon PAULA BENNETT (Deputy Leader—National): I seek leave to move a motion without notice or debate wishing the Prime Minister and Clarke Gayford well with the impending birth of their child today.

SPEAKER: Is there any objection to that? There appears to be none.

Hon PAULA BENNETT: Thank you, Mr Speaker. I move, That the House wish the Prime Minister and Clarke Gayford well with the impending birth of their child today.

It is unique circumstances that the country itself finds itself in today, and it is a really, really big time for both the Prime Minister and for Mr Gayford. I know certainly the whole House and the whole country is sitting on the edge of their seat, and I just wanted to put on record that we wish her and this baby the best of health, a speedy and, hopefully, really pleasant birth—as good as they can be. I know this is an exceptional day for them, and we certainly just want to really wish them both—and the whole three of them, we hope—all the best for today.

Hon Chris Hipkins: Mr Speaker?

SPEAKER: Well, I’m going to be a little bit liberal now, because we’ve just accepted a motion without debate.

Hon Chris Hipkins: Well, the motion was just debated.

SPEAKER: No. That was the motion, actually. I’m sure the House—there’s a bit of fairy dust around us and if the member wants to respond—

Hon CHRIS HIPKINS (Minister of Education): I’ll be very brief in speaking on behalf of the Labour Party to this motion to also add our best wishes to the Prime Minister, which, of course, have already been passed on in person. It’s a very unusual situation, I think, that the Prime Minister finds herself in, where the international media is staking out the hospital, waiting for the outcome of this particular delivery. There aren’t many people that face that when they are giving birth, and so I think that adds an added dimension of pressure to the Prime Minister at a time when she’s probably got more than enough pressure to cope with as she goes through this process. But I think the whole House wishes her all the very best. It is world leading for New Zealand, and I think we are all very proud of her.

Motion agreed to.

Bills

Land Transport Management (Regional Fuel Tax) Amendment Bill

Instruction to Committee

Debate resumed.

CHRIS BISHOP (National—Hutt South): Thank you very much, Mr Speaker. When I was speaking last night in my contribution on the motion moved by Mr Jami-Lee Ross to, essentially, reset the counter to zero for members speaking in the committee stage of the Land Transport Management (Regional Fuel Tax) Amendment Bill, I’d made three remarks—or I was coming to the third remark. The first point I want to just quickly recapitulate for the House is the very important point—

SPEAKER: I’m just going to warn the member—we had a slight problem with the clocks, so he hasn’t got quite as long as it appears.

CHRIS BISHOP: OK. The first very important point I made was around taxation, and I talked about the constitutional importance of taxation in this House as a means of testing the confidence of the House in the Government and the paramount importance of taxation bills because of the power the State gives to itself in regard to its citizens. What we’re dealing with here are two bills to do with taxation: regional fuel tax, apparently only to Auckland but potentially further around the country, but also very important rules around multinational tax, base erosion and profit shifting—something that has concerned many members of the House on both sides of it. I think that means we need to debate the bills thoroughly, particularly because we are in a very unusual situation of urgency having been moved at 9.35 p.m., right on the cusp of the House lifting.

The second point I made was in relation to that unusual use of the urgency. Usually, urgency is advertised in advance. There’s a couple of days’ notice given, every member knows exactly what bill is about to be debated, arrangements are made so have that question time can happen and maybe Estimates can happen, and select committees can sit—

SPEAKER: The member’s time has expired.

Hon MICHAEL WOODHOUSE (National): There were certainly a number of things that I had expected to be doing this Thursday morning; speaking in the House on this motion certainly wasn’t one of them—and, certainly, not under urgency. This is a robust House, a debating chamber where there are decisions made on the fly, in the heat of the moment, trusting one’s instincts, and a decision was made last night that meant I expected to come to the House and decry this day as a day where there may be the birth of the Prime Minister’s baby but the death of democracy. Without wanting to overly broaden the debate back into a decision that’s already been made—

SPEAKER: Can I just warn the member the Chamber clocks are going up, not down. It might feel the other way.

Hon MICHAEL WOODHOUSE: That’s fine, thank you very much. I want to acknowledge the importance of reflection and the considered decisions that can be made by this House. We are the architects of our own destiny, and we shouldn’t be above recognising, looking back in the cool light of the morning, that sometimes we may make decisions that don’t do this House justice. I think it’s a credit to this place that we are robustly but respectfully able to reflect on and change our positions, and I certainly want to acknowledge that.

There has been comment, though, about this motion as somehow analogous to the one that is no longer before us, the amendment. There is a compare and contrast situation, I think, between an attempt to broaden free speech with an attempt to curtail it, and I don’t agree that this motion has any of the elements of curtailment that others previously considered would have. Indeed, the circumstances that led Mr Ross to move this motion on instructing the committee to have more time to consider were for those colleagues—particularly, of mine—who feel passionately about the taxation representation principle that underpins a working democracy and the ability to be able to stand and represent one’s constituents and say, “We need to scrutinise this.”

We have a set time limit for the first, second, and third readings, and we have a robust select committee process, but the committee of the whole House is the machine in which we are able to deconstruct and analyse a bill, part by part, clause by clause. It is true that some of that analysis in this House has, by any measure, not been that intelligent, and I want to acknowledge the significant improvements that have taken place in the last couple of years to require Ministers to answer good technical questions but also the quid pro quo—that is, it is incumbent on members to technically analyse a bill. I think that is a significant improvement on the committee process.

What Mr Ross is doing, though, which I think has merit, and the House should really consider this, is being proposed against the backdrop of something that may also be unprecedented. That is the taking of urgency in the middle of the committee of the whole House, where there was an honest belief—it may well not be but it’s certainly unusual, Mr Hipkins, I think you’ll agree—and where there is a lot of work that is required to deconstruct and analyse the bill and a number of members who may not have been in the position at the time that the committee stage started to be able to do that.

We found ourselves in a situation last night where that opportunity was curtailed and rushed, and I don’t think it’s unreasonable for the House to consider this instruction so that those who are—and there are many of them—passionate about the provisions of this bill and how it can be improved for their constituents are able to re-state, re-litigate, re-suggest, and suggest new Supplementary Order Papers that will enhance this bill.

Now, it’s a value judgment whether or not members on the other side or other members of the House, and the Chair, value the merit of that, but I’m long enough in this House to remember the Auckland super-city legislation. Never again will we, as a committee of the whole House, descend to the situation that we came to where 30,000 tabled amendments were set. That is not the brand of this House any more. But it is incumbent on all of us to make sure that regardless of the merits or the perceptions of the merits or otherwise of these amendments and the suggested changes that can be made to this bill, this is a tax bill. This is a bill that will, by far, lift the hand of the State into the pockets of the people of, firstly, Auckland, and then, certainly, the rest of New Zealand. It behoves this House to give every consideration and give every member the opportunity to be able to represent those people in this place, so that we can give that bill every scrutiny.

So it’s not an affront. I don’t believe that for a moment. We’re a unicameral House. We’re the only place legislation goes before the Governor-General gives her assent. We have a very scripted first, second, and third reading process, and we have, for administrative efficiency, structured the passage of legislation in a way that does reduce the ability for a bill to get scrutiny. This is the place to do it. Yes, it is a novel instruction; it may not in itself be unique. In fact, by agreement and by leave there have been other arrangements made where calls can be distributed to subject matter experts. That’s certainly been the case. It’s been a very efficient way to do it.

On this bill, I would consider all of the members who have put amendments on the Table to be experts in the representation of their constituents, and it is very, very important to me that we are able to go back to our constituencies and say “We did our best for those people.”, because this is a significant impost on them financially. The Government has laid out its reasons. It has tried to downplay the fact that in three short years, every single region in the country is going to be faced with the possibility of getting a fuel tax coming to a region near them, and I think it is appropriate that those members have every opportunity. If they have already made their points and they have more to make, who are we to say that is not a valid position? Well, actually, we are. This is the reason we’re debating that.

The Government, by a majority, may defeat this motion, but at least let’s have this conversation. They thought it urgent enough to go into the House at 9 o’clock this morning, setting aside every single select committee, every other piece of business that we would be doing, Ministers appearing before committees to explain the Budget that they hold in such high regard. But in higher regard is the need to tax Aucklanders and, in a few short years, the rest of New Zealand, so the Government has said this is important enough to set aside that business, and now it’s for us to decide whether it’s important enough to allow every member of this House to have the best opportunity to be able to represent their constituencies, and I urge all members to think very carefully before they cast their vote on this instruction motion. We will go back into committee and we will robustly scrutinise it, but we should not be rushed. This is the committee of the whole House. This is the engine room where good bills are scrutinised—sometimes bad bills get scrutinised as well, and they even get through.

Hon Scott Simpson: What role will the Greens play?

Hon MICHAEL WOODHOUSE: Well, we may well hear about that, Mr Simpson. But we hold ourselves up as one of the world’s great democracies, and I want to see us demonstrate it.

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put.

SPEAKER: Well, we have had a very simple question before us, we’ve had two eloquent speeches explaining the reasons for it, and I think the House is in a position to make a decision as to whether or not. If members feel that it’s not, they can vote against it.

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

Ayes 63

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

Noes 55

New Zealand National 55.

Motion agreed to.

A party vote was called for on the question, That it be an instruction to the committee of the whole House on the Land Transport Management (Regional Fuel Tax) Amendment Bill that all members wishing to speak that have already spoken in Part 2 have the ability to have a full four calls reset to zero so each member is able to restart their speaking number.

Ayes 55

New Zealand National 55.

Noes 63

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

Motion not agreed to.

Mr SPEAKER: Before I declare the House in committee again, I just want to make one comment to the House, and it is that there are a lot of amendments before the committee. I’ve had a quick look at some of them and have received advice on them. It has become clear that a significant number of those are not in order. The general practice has been, recently, to allow debate until such time as they are ruled out of order and to curtail debate at that point in time. My encouragement to the officers of the House is to rule out out-of-order amendments quickly in order for the House not to be misled or waste time having arguments about things on which it cannot have votes. It used to be the practice for them to be ruled out more or less immediately and for debate not to be held on it.

Hon MICHAEL WOODHOUSE (National): I raise a point of order, Mr Speaker. You have just made a very significant ruling, and I just want to clarify, if I may, whether or not this is a formal Speaker’s ruling that will be tabled in the documents, because we did have a situation, with an omnibus bill last year, where there were whole new parts put in, in the committee stage, that were, arguably, not within the scope of the bill. And, at that point, the question of whether they were in scope was very clearly indicated to the committee; that, regardless of that decision, they were, in fact, debatable, and the debate was prolonged. So I am seeking your ruling that that is now a new process, because that is quite a significant change.

SPEAKER: I’m going to make it very clear. From the point that a Chair of the committee rules that a particular amendment is out of scope or otherwise not allowed—and there can be a number of reasons why amendments can be ruled out—from that point on, it is not debatable.

Hon MICHAEL WOODHOUSE (National): I raise a point of order, Mr Speaker. Just a small clarification: that means then that, at that point, the Supplementary Order Paper (SOP) is not voted on?

SPEAKER: It never is. If an SOP is ruled out of order, it is never voted on.

In Committee

Debate resumed.

Part 2 Amendments to other Acts (continued)

Hon TIM MACINDOE (National—Hamilton West): I raise a point of order, Madam Chairperson. You will be aware of the ruling that the Speaker gave immediately prior to putting the House into committee. As you can see, almost every member of the Opposition is here, and I am advised that a large number of members of the Opposition have tabled amendments. We are now in a position where the vast majority of us do not know whether the amendments, or maybe many amendments, in our names will be debated, and I wonder whether, before you call, you’re able to indicate to some of us whether our amendments have been deemed to be out of scope and are unable to be debated, because knowing whether or not we’re preparing to speak on our own tabled amendments or perhaps in support of those of our colleagues is going to make a significant difference to the way in which we approach this debate.

The CHAIRPERSON (Hon Anne Tolley): I thank the member for that. I understand the dilemma. What I suggest we do, while we organise this, is that someone take the call, and then I will make sure that we are able to inform those whose amendments are out of order.

LAWRENCE YULE (National—Tukituki): I’m happy to take a call in relation to a tabled amendment I lodged yesterday on Part 2. As I said to the honourable Minister Phil Twyford last evening, it’s all very well in theory to think this is going to work, but, actually, there are some realities that I want to point out to the Minister and this committee.

Under the regional fuel tax legislation the key responsibility at a local level is the regional council, but, under the provision of who’s funding the work, it won’t be the regional council; it’ll be the territorial authorities in places other than unitary areas. So in places like mine, if we were ever to have a regional fuel tax in Hawke’s Bay, the costs of the projects will actually be jointly funded between the local authority, the New Zealand Transport Agency (NZTA), or even the regional fuel tax itself.

Now, I want to point out to this committee that, actually, regional councils have a very different role than delivering transport solutions other than in public transport. Regional councils largely look after air and water and the management of those, and in many cases they also have a significant provision about passenger transport, and they also host and generally organise the regional transport committees and the regional priorities. But they do not fund the work. They have a facilitation role, and they manage the public transport committees. So while there is a trade off in terms of what the regional council might do in this space, the biggest trade-offs, actually, are, in money terms, from the territorial authorities—how they spend their money on this project versus that project. And if they know that a regional fuel tax is going to partially fund, there is a big temptation amongst local authorities to shift money into that where they can actually get regional fuel tax money as well.

What I’m seeking to do is put a new clause, under a tabled amendment in my name, which would say that after clause 10(5) there is a clause 10(6), and that would require that the regional council of a regional fuel tax region in its long-term plan must report on the following things: the revenue from a regional fuel tax, how this revenue was applied, and progress with respect to that programme supported by the regional fuel tax.

And, just to make it very clear to this committee, the long-term plan is the biggest consultative document that a local authority will do in a three-year period. In fact, outside of that three-year period it can, if it wishes, not do any other form of consultation. So once every three years—once every three years—it must, by the Local Government Act 2002 section 82, consult with its community. And what we’re saying in this tabled amendment, and what I’m asking the Minister to think about, is actually making it very transparent in that document that while the regional council is the facilitator of the process, the territorial authorities are the funders, and they’re going to use their resources—even in a coordinated way, and often with NZTA—to look at projects together. I say that because, simply, without doing that, most members of the public, apart from the first period in the 10-year period, will not have any visibility about what the regional fuel tax is doing and what projects it’s going to fund.

So I say to the Minister, I think this is a simple solution to try and force the regional council, using the public consultative process in the long-term plans, to make a difference that will matter. Regional councils—in my experience in the last six years, anyway—have got way better at consulting with the community. So they consult with the community about land and water measures and about public transport, and I think it would be a great measure for this amendment to be added into the mix so that they can formally consult and report on as part of the long-term plan.

Hon JUDITH COLLINS (National—Papakura): Thank you, Madam Chair. This is the first call that I’m taking in this debate. Coming to Part 2 of the Land Transport Management (Regional Fuel Tax) Amendment Bill, I want to focus very much on clause 7(3), where it says in here, in new section 5(6BB) that there will be a new part of the Act where “(a) any amount of regional fuel tax … that is paid is treated as being consideration for a supply of services in the course or furtherance of a taxable activity carried on by the New Zealand Transport Agency, as agent for and on behalf of the local authority responsible for the [regional fuel tax]”.

What that means, in plain English, is that the regional fuel tax that New Zealanders are going to be required to pay is itself now going to be treated as a service—goods and service—under the GST Act. This means that GST, at 15 percent, is now going to be added to the amount of regional fuel tax.

That is a tax on a tax, and that is actually something that I know members in this House, particularly the New Zealand First Party, have railed against time and time again—

Hon Scott Simpson: Relentlessly.

Hon JUDITH COLLINS: —relentlessly, for years, against a tax on a tax.

Hon Chris Hipkins: As did your colleagues last night, repeatedly.

Hon JUDITH COLLINS: We have seen referenda from all over the country, repeatedly, as Mr Chris Hipkins has said—although I think he may wish to be a little quiet today, given his mea culpa, and I think—

Hon Scott Simpson: He’s been humiliated.

Hon JUDITH COLLINS: He’s actually been humiliated, and having been humiliated by himself makes it even worse. So New Zealand First has railed for years—and who here on this side of the Chamber has heard them do it; haven’t we all heard them; they have—against a tax on a tax. When I look at this, I think, “My goodness, things have changed.” Where is the New Zealand First Party on this issue? Where is the Rt Hon Winston Peters, now Acting Prime Minister, who could stop this—who could stop this—because he is actually now running Cabinet and the Government. He could stop this tax on a tax. Where is he on this issue?

Hon Scott Simpson: Silent.

Hon JUDITH COLLINS: He is silent. He’s a lion in Opposition and he is a lamb in Government, as is the New Zealand First Party. Why are they all looking down? Is it because they cannot face the truth?

Fletcher Tabuteau: You’re boring me.

Hon JUDITH COLLINS: Is it because they cannot face the truth? And Fletcher Tabuteau, who is an unknown to most of New Zealand—let me help him with his profile. He, an unknown—a virtual unknown and novice, and, apparently, the right-hand person to the Rt Hon Winston Peters—

Chris Bishop: That’s right—the next leader.

Hon JUDITH COLLINS: The next leader—the next leader. He says it’s all too boring. He said that today. Now, a tax on a tax, Mr Tabuteau—I’ve got a feeling this is going to come back to haunt you. So this is a tax on a tax, where we have a Government that doesn’t want to debate the issues and has had to put the House into urgency on a bill that they knew they had for a long time, rushing this through without representation.

A hallmark of any liberal democracy is that we have representation on taxation and we have taxation by consent of the people. Who is consenting to regional fuel tax? I can tell the committee: New Zealand First is consenting to regional fuel tax, the New Zealand Labour Party is consenting to regional fuel tax, and the Green Party are consenting to regional fuel tax. The people are not consenting to regional fuel tax, and that’s why the National Party is here today, because we will not agree with something like this, where 70 percent of the people have said that they do not agree. They want us to defend their right not to pay this tax on a tax.

CHAIRPERSON (Hon Anne Tolley): OK, if I just take a moment and I will notify the committee of the amendments I am ruling out of order. Before I do that, I just remind speakers that they’re starting to get quite repetitive, and that means that that could bring the debate to a close.

So I am ruling out of order Lawrence Yule’s amendment inserting new clause 10 as outside the scope of the bill. Denise Lee’s amendment inserting new clause 12, amending the Charities Act, is outside the scope of the bill. Denise Lee’s amendment inserting new clause 12, amending the Education Act 1989, is out of order because the subject of the rebate to which it relates has been dealt with already under Part 1. Chris Penk’s amendment inserting new clause 12, amending the Local Government Act 2002 is outside the scope of this bill. Hamish Walker’s amendment inserting new clause 12, amending road-user charges, is outside the scope of the bill. Jami-Lee Ross’s amendment inserting new clause 12 is out of order as benefit and other similar payments are outside the scope of the bill. Kanwaljit Singh Bakshi’s amendment amending the Veterans’ Support Act is also outside the scope of the bill. Dr Parmjeet Parmar’s amendment inserting new clause 12, amending the Road User Charges Act, is outside the scope of the bill.

CHRIS PENK (National—Helensville): Thank you, Madam Chair. It’s a pleasure to rise and speak to a tabled amendment that has not been ruled out yet, in relation, specifically, to the Land Transport Management (Regional Fuel Tax) Amendment Bill. My amendment relates to Part 2, of course, in this part of the debate, and it, specifically, would seek to insert a new paragraph in new section 34B(1) in clause 10(5). The wording of the text I’ll speak to and then, obviously, I’ll outline the reasons that I am proposing such an amendment to the committee: “(d) Reporting of all RFT Schemes should be received by each local board in a region and consultation undertaken with that local board prior to the consultation on the annual report.”

The reasons that I have proposed this amendment, first, relate to the fact that reporting will be required by the insertion of this amendment. Reporting is inherent to the nature of a regional fuel tax (RFT) scheme because it is an accountability mechanism to the extent that the bill even requires accountability in the first place. The people of a region who will be subject to a regional fuel tax must have the ability to know that the projects that have been used to justify the imposition of such a tax are being undertaken. The reporting element is a fundamental feature, therefore, and that is the reason that I am suggesting it by way of this amendment, specifically in relation to local boards. That is the matter now that I wish to turn to.

Local boards, it seems to me, are the most appropriate level of local government for such reporting to be made. The reason is that a regional fuel tax is, by very definition, applicable to an entire region, and a region can be a large geographical area, whereas a local board area is, of course, as one would expect, a much smaller area and therefore more responsive to the needs of the local people. Again, to increase the transparency and the accountability of the projects aligning with the taxation that has justified it, it is appropriate that local board members should be accountable to their people who have voted them in, in that very direct fashion.

The next point that I wish to make in relation to my amendment is the fact that it would be in an annual report that such consultation and reporting would be made. An annual report is, of course, sufficiently regular—once a year, as the name implies—that progress of projects would be monitored carefully and on a continuous and, indeed, continual basis up until the point at which those projects are completed. If, in accordance with the mechanism set out in the regional fuel tax, a project is used to justify the introduction of a fuel tax, it makes sense that the progress of that project be reported back regularly—not less than once a year, I would suggest—by way of annual report.

My final point in relation to this amendment, in the time that remains to me, is the fact that such reporting would be mandatory. This is the reason that I have chosen the words “should be”, as in “Reporting of all RFT Schemes should be received by [a] local board”. Arguably, I could have been stronger in my language, perhaps, and used something like “must”, “shall”, “in every case be required to”, and so on. However, I think it is clear enough to say that the reporting “should be” received, and the point of that, of course, at the risk of stating the obvious, is that it is to be required that such reporting take place. If we leave it at the option of the local board or, indeed, any other level of local government to make such reporting or not, then the people of the region who are subject to a regional fuel tax can have no assurance and no guarantee that such reporting would be made.

As a related note, as I understand it, such a mechanism would, in turn, require that the Office of the Auditor-General be able to have oversight of such reporting, and the accountability mechanism, therefore, would be—[Time expired]

SIMEON BROWN (National—Pakuranga): Thank you very much, Madam Chair. It’s a pleasure to take another call—well, actually, my first call in Part 2 of the Land Transport Management (Regional Fuel Tax) Amendment Bill. I thought I would also speak in favour of the amendment in the name of Chris Penk, which he’s just been speaking to. I thought I could bring to the committee some experience, having sat on a local board, and support the good work that he is doing by bringing this amendment to the committee.

I just want to commend Chris Penk as the new member of Parliament for Helensville for doing such a good deed, because the people—and he represents a number of local boards in Auckland and all of those local boards wish to be seen as co-governors in the Auckland Council. I think what would be fair to say from my experience being on a local board in Auckland is that too often local boards are seen as second-class governors, and they need to be more empowered. This proposed new section 34B(1)(d) inserted by clause 10(5) would give more power and would give more influence to local boards across Auckland.

There are a number of reasons why I’d like to speak in support of this. I think, firstly, the reporting is an important part—going to local boards—because local boards represent the people, they represent constituents, and they need to know that the tax being paid by the people that they’re representing is having an impact in the local area. And I think what we see with the regional fuel tax which is being proposed by Auckland Council is, yes, they’ve tried to spread the benefits out across Auckland, but local boards need to know that each year progress is being made and what that progress will be, so that they can be part of that conversation, not just be recipients of information after the fact or just see what’s being talked about at the governing body table.

Local boards are players. They have decision-making power. They have budgets which they can also put towards transport projects—and I understand in the long-term plan that budget has been doubled for local boards in Auckland. So they are actually significant players when it comes to local transport in their areas. So they need to be part of this process each and every year along the way.

I think the other very significant word which has been included in this new section which has been proposed by my colleague Chris Penk is the work “prior”. It says, “Reporting of all RFT Schemes should be received by each local board in a region and consultation undertaken with that local board prior to the consultation on the annual report.” Now, I think that word “prior” is a critically important word in the context of Auckland Council, because, from my experience, local boards get told things after the fact. They get told them later, and what they need to be is engaged in the process earlier.

I am speaking very strongly in favour of this because local boards need to be seen as co-governors in Auckland Council. The Local Government Act sees them as playing a very important part in representing their local community and developing their local community, and this is another way in which we can improve this legislation if it was to pass—and, you know, on this side of the Chamber, we don’t support this legislation, but I think this is a very sound amendment.

I’d like the Minister, actually, to take it very seriously, as someone who is a member representing a seat in Auckland and who has local board members which he would meet with regularly and who would understand some of the issues and challenges that they face. I think they would have a very strong view on this, and I would like to hear the Minister outline his views on this clause and—I hope he would support it, and it would be great if he did, but, if not—why he doesn’t support it. I think local boards and local board members, of which I think there are 170 of them in Auckland, would deserve the right to have the Minister explain to them exactly why they should be left till after the report comes out—why they should find out after the annual report comes out and not be engaged in the process of actually making that annual report and what impact it will have on their local communities.

So I think this is a really important amendment. I commend again the member for putting it forward. I think there’s a range of amendments being put forward which make small but significant and sensible changes to this legislation to help improve it and which are actually, I think, well thought through. So, once again, thank you very much to the member Chris Penk for putting this forward, and I very much look forward to the Minister answering my questions and explaining his thoughts on this issue. Thank you.

ANDREW BAYLY (National—Hunua): I want to talk about an amendment to clause 10 which is an amendment from my good colleague from Kaikōura, Mr Stuart Smith, who represents that excellent electorate down there, which I understand is just slightly larger than the State of Israel. So, of course, very relevant because Kaikōura’s got a lot of roading projects down there, and, of course, this is what we’re talking about: fuel tax.

What the proposal actually is about is that after clause 10(5), we want to amend new section 34B of the Local Government Act, which is about the issue of cost-benefit analysis. It states in new section 34B(1)(d), “the cost benefit analysis that the Council has undertaken in relation to where the revenue [is] spent.”

The reason why I want to focus on that is that we all know that if we’re spending great dollops of money on roading and infrastructure projects, so-called being driven from this fuel tax that’s being raised—by the Auckland Council initially, but, of course, we know it’s going to ripple around New Zealand—where is that money going to be spent and how is it going to be spent? The big question—even if we go to Auckland, where this fuel tax is going to be put in place on 1 July, in only a matter of a few days, we know that their options are: do we spend it on public transport, do we spend it on roads, do we spend it on rail, do we spend it on cycleways, do we spend it on safety improvements, or do we spend it on ferries? And I note, in the recent press announcement just yesterday, that there is virtually nothing allocated to ferries in Auckland—a shame in my personal view.

And I think the allocated efficiency of how you spend money is really, really important, and that is really what benefit-cost analysis is about. And we know that it is about allocated efficiency, and we know about the Pareto factor—don’t we?—which is a very important part of a cost-benefit analysis. And I just don’t think there is enough thought about those sorts of issues.

So one of the things is I think, you know, there’s always a choice about where you spend your money and where we spend all this money that’s so-called going to be raised by this fuel tax in Auckland. So one of the things is: how do you align that money that’s been ripped from the heart of people’s wallets into appropriate projects?

And I think one of the important things—I think if you don’t have a disciplined approach around benefit-cost analysis of that money, what you do is you end up with very sloppy expenditure. I can quote you, for example, in my electorate alone the Redoubt Road - Mill Road proposal. The Government love to say that they’re doing the Mill Road extension, which is an entire motorway from Manukau down round Papakura and re-joining between Drury and Ramarama; unfortunately, that is not the case. All they’re doing is the first bit, Redoubt Road, which, of course, was what Auckland Council wanted to do all along.

And so what they’re doing is they’re spending not the $1 billion that the National Party agreed to do before the election but only $500 million. And they’re going to do Redoubt Road, and then they’re going to upgrade a couple of intersections. And what I don’t think the cost-benefit analysis does enough is actually look at all the benefits.

So normally you do a cost-benefit analysis on the entire project, but, if you’re only doing part of the project, that means that you do not actually get all of the benefits. And I think, in many cases, some of the expenditure being proposed in the ATAP—Auckland Transport Alignment Project—does not have a proper analysis around all the benefits as if the projects were completed in full.

And that, of course, brings me to the Living Standards Framework that Treasury has been proposing—and, in fact, we’ve been debating it over the last couple of days. What are the benefits? Should it only be a financial benefit? Should it only be an economic benefit? Or should we be applying the Living Standards Framework that the Secretary to the Treasury has been proposing—you know, social capital, human capital, and environmental capital? I think all of those, but I think the most crucial point is that when this money is being used, it should be put through a proper cost-benefit analysis and should be subject to a disciplined approach.

Hon PHIL TWYFORD (Minister of Transport): Thank you, Madam Chair. It’s deeply moving to hear a member of this committee, like Andrew Bayly, obviously moved to a great degree by the cost-benefit analysis. I’m very pleased to see this new adherence and commitment to sturdy cost-benefit analysis from a party who, during the last Government, committed about $13 billion worth of motorway expenditure without a cost-benefit analysis being done at all.

I want to reassure Andrew Bayly that the transport projects that will be funded by this regional fuel tax will all—any significant expenditure will be dealt with with a cost-benefit analysis, because that’s the way the New Zealand Transport Agency does its work. So there’s no need to require mandatory cost-benefit reporting as part of this regional fuel tax bill, because virtually every significant item is subject to the cost-benefit analysis.

I also want to respond to the member Chris Penk, who has proposed by way of an amendment that there be mandatory reporting to local boards, but this is a kind of—if I can suggest—random, nit-picking imposition of added consultation. Just for argument’s sake, imagine the fourth term of the Ardern-Peters Government, a long time in the future. Some other regional council around New Zealand may be considered for a regional fuel tax, and that regional council may not have local boards, because most regional councils do not have local boards in their areas. Some have community boards. There’s nothing about community boards in this amendment. Many regional councils don’t have local boards or community boards. They have neither. If the member knew much about the extensive consultation requirements that are already placed on councils and their community boards and local boards, he would know that this kind of random imposition of more bureaucracy is simply not needed.

Hon TIM MACINDOE (National—Hamilton West): May I say, I have no idea why the Minister in the chair, Phil Twyford, took that call, because I hoped that he was about to answer some very legitimate questions that colleagues on this side of the House have been asking about Part 2 and, instead, all we got was an arrogant and, frankly, insulting put down of my colleague Andrew Bayly, followed by an unbelievably condescending remark to one of the newer but very intelligent members on this side of the House Chris Penk. He has not answered anything.

Madam Chair Tolley, could I nevertheless thank you for the considered ruling that you gave us, which is appreciated on this side of the Chamber because, without it, we would have been struggling to marshal our forces for the next hour or so. So I do appreciate that.

But let’s be under no mistake. As we consider Part 2, we are in uncharted territory here, and, therefore, I think it is incumbent on the Government, and particularly the Minister in the chair, to give considered and dignified responses to the very legitimate amendments that are being put forward. Because it’s palpably obvious to anybody listening that we on this side of the House do not like this bill and firmly reject Part 2, but we are, through our amendments, attempting to help to improve it, and it is up to him, surely, to take those points on board and to respond to them.

Now, when I was last speaking on this part, I was beginning to quote from Mr Ken Shirley who is, of course, the Chief Executive of the Road Transport Forum. And I was making the point that under Part 2 of this bill, his concerns about the implications on local government need to be taken very seriously indeed. He’d made the point that it came as no surprise to learn that 14 councils around the country are seeking a regional fuel tax.

And when I was interrupted I was going to go on and quote from him the following: “With a number of councils obviously seeking this option it is likely to result in unintended consequences such as forcing transport operators and fuel retailers out of certain regions to avoid the tax. That is, of course, if price spreading doesn’t just make a mockery out of the whole concept anyway.” And so I am asking the Minister in the chair to respond to the concerns of Mr Shirley, who is, after all, a former Labour MP, presumably reasonably sympathetic toward some of the goals of the current Government, and to say whether he believes Mr Shirley is wrong and, if he believes he’s wrong: why is he wrong and what is it about this bill that can satisfy him? Mr Shirley is an expert in this area, and we are entitled to an answer.

I’m also deeply unimpressed that the Minister in the chair has still not given an answer—at least while I’ve been in the Chamber, and I’ve been here for much of this debate—to the legitimate query that I have raised as to whether there is a drafting error. It’s on page 27 of the bill under Part 2, clause 7, in new section 5(6BB)(a) to the Goods and Services Tax Act. I’ve read it out a couple of times before, and it refers to the “furtherance of a taxable activity carried on by the New Zealand Transport Agency,”. And my query is whether that wording is wrong.

The Minister has not yet answered that. To refuse to do that I would suggest is both arrogant and treating this House, while we’re in committee, with contempt, and I’m asking him to stand up and take a call and tell us.

I now want to turn to the amendments to the Local Government Act 2002, which are outlined in clause 10 of Part 2, and that’s on page 28 of the bill. I’ve already referred to the first part of clause 10, where it is proposed to insert a new section 34B, but under paragraph (b) of subsection (1) there—I haven’t got on to this one yet—“how that revenue was applied by the council, including to which projects and for what purposes (for example, capital expenditures, debt repayment, operational expenditures);”.

And my question to the Minister is: why is this clause so wide, and how can its provisions possibly be justified? I haven’t heard a single explanation yet of why this very wide clause has been included. I’m asking the Minister to stand up to answer all of the questions that have been put to him by members on this side of the House; to respond in an intelligent and honest fashion to the way in which the amendments that we’ve put forward have been argued; if he disputes them, to explain that clearly; to answer the questions that I have put forward in this particular part; and to understand that Part 2 of this bill—while it was originally thought that Part 1 was the meaty bit—actually contains a considerable amount of material that needs the considered attention of this committee. I can see that I’m running out of time.

TIM VAN DE MOLEN (National—Waikato): Thank you, Madam Chair. It’s a pleasure to rise and take another call on Part 2 of the Land Transport Management (Regional Fuel Tax) Amendment Bill, and to address the second of my proposed amendments, which, fortunately, was not ruled out and has not yet been debated in this part. What I am proposing here is to amend clause 7(3) and insert a new subclause 6BB(c) to “Amendments to Goods and Services Tax Act 1985”.

Now, as we’ve already heard from the Hon Judith Collins, what we’re proposing here, actually, has been to put GST on top of a fuel tax—therefore a tax on a tax—and we have heard vigorous opposition to that from numerous Government members in the past. It’s actually been interesting to note, since joining this House, how quickly the Government parties have been prepared to go back and change their stance on a number of areas they previously advocated for so passionately, so strongly, and how they now change their minds in that regard.

With regards to this amendment, what we’re actually seeing here is a proposal to amend the Goods and Services Tax Act, and we’ve already heard that the regional fuel tax is now considered to be a supply of services and, therefore, taxable, and therefore a tax on a tax. Now, I’m surprised at the arrogance of this Government—that they have not made any efforts whatsoever to address this or any number of other top quality amendments that we’ve seen presented from the Opposition benches throughout the debate on this part. I’ve been here for the duration of the debate on Part 2, across, now, several days, and it amazes me that we are yet to see a single member from the Government benches rise and take a call on this part. It is simply outrageous and a clear sign of arrogance that they have no interest whatsoever in debating the content of this part and in trying to get a better solution for all Aucklanders, in this case, and subsequently for all New Zealanders once this is expanded to many other areas.

Hon Tim Macindoe: But they want to pass it under urgency.

TIM VAN DE MOLEN: Indeed, as Mr Macindoe points out, they are looking to pass this under urgency. Suddenly, they’ve been caught out and have realised that they are perhaps not able to meet their time line of 1 July, given that they have obviously poorly managed this process to date and are now trying to proceed through it quickly without any discussion on this. Also, we’ve heard from the Minister in the chair, the Hon Phil Twyford—he’s taken a call and that’s good—but, actually, we’d like to see him addressing in more detail the many points that have been raised now, not just today but in previous discussions last night too across the range of amendments that were proposed.

So this amendment in particular—“Amend clause 7(3) insert new 6BB(c) to the Goods and Services Tax Act 1985”—reads, “All Goods and Services Tax (GST) levied by the RFT [the regional fuel tax] must be allocated for expenditure in the Region within which it was raised.” So look, this is something that I feel the Government could well support. They’ve made numerous comments along these lines with other areas of GST that has been claimed or earned as revenue. For me, this is one area that I feel would be well supported, of course, by the applicant for any particular regional fuel tax, because they’re advocating for their specific projects and, therefore, would be desiring to have as much cash as possible to fund those particular projects.

We’ve seen now a massive array of councils around the country looking to put forward proposals in this instance. I’d also just like to quickly refer to my previous amendment, which would require anyone making such a submission to provide more detailed advance notice around their intentions on the particular projects they’re looking to support to give clarity to their ratepayer. What we’re seeing here, even in my electorate, in the Waikato, we’ve heard both the Waikato District Council and the Waikato Regional Council are now looking to advocate for their own opportunity to have a regional fuel tax to fund projects, quite probably projects that were outlined by the previous Government under the roads of national significance, which I would strongly encourage this Government to continue to support.

CHAIRPERSON (Hon Anne Tolley): I call Chris Penk. I’m sorry; I call Simeon Brown.

SIMEON BROWN (National—Pakuranga): Thank you very much, Madam Chair. I know I look quite similar, and I’m very fresh and new, just like Chris Penk.

Hon Judith Collins: And very talented and hard-working.

SIMEON BROWN: And equally hard-working, like the good member Christopher Penk, who’s working hard in Helensville, whereas I’m the good member for Pakuranga and I’m pleased to be able to stand here and represent the interests of the motorists in my electorate who will be punished by this tax—realising there should be no taxation without representation, and that’s a message I will continue to advocate for during my time in the House. I have just tabled a new amendment which seeks to address a point raised by the Hon Phil Twyford when he disagreed with the amendment in the name of Chris Penk which says that there would be reporting of all regional fuel tax schemes, to be received by each local board in the region, in consultation undertaken with that local board prior to the consultation on the annual report.

Now, the Minister took a call, and I was very pleased that he took a call, because I think this is a very worthy amendment and makes a lot of sense. It empowers local boards and has all of the reasons that I gave beforehand. But he made a very good point. He said that there are community boards as well, and other territorial local authorities, and, of course, local boards are really only in Auckland, which, of course, is a unitary authority under the Local Government Act, and local boards were given to ensure that local communities had a strong voice in Auckland and in its decision-making power. So of course community boards should also be added, but the point in this, which I think got missed by Mr Twyford, was that, of course, this tax is only meant to be for Auckland. So when Mr Penk put together this amendment, a very good amendment, he was thinking, “This is a Government which will keep its promises. This is a Government which is only going to be putting a regional fuel tax in for Auckland, because that’s what they campaigned for—so therefore you’d only need reporting for Auckland and therefore the legislation should only need to cover local boards.”

But, of course, we know that this doesn’t just allow regional fuel taxes for Auckland; this allows regional fuel taxes across New Zealand after 2021. And what do we call that? A broken promise. But it also means that this legislation needs to reflect what the Government’s true intent is. So I would like to take a moment to again explain why this is important—and it is important, and not just for local boards. If these regional fuel taxes are going to be put across all of New Zealand—and we know there’s about a dozen councils which have put their hands up and said, “Please tax us.” or “Please tax our motorists and our residents and ratepayers, who already pay a huge amount of money.”—“Please tax us.” Well, there are community boards there, which also deserve to be part of the local government decision-making process. They deserve to have their voice heard. They deserve to have that consultation prior to the annual report, and, again, that word “prior” was included in my amendment, because it’s important that our local boards and our community boards are not continued to be trampled over by this Government and by the senior leadership in that council and then just left there to deal with the pieces at the end of the day.

So the amendment says that it should be done prior. They should be part of the process before the annual report is produced, so they know that the money which has been taken off the people who vote for them, the people that they represent, is going into projects in their area and so they know what the progress of those proposals is, how it’s going, whether the construction is on time, whether it’s being delivered as it was said it was going to be delivered by the plan, whether there’s been a delay, why the delay is happening, and what the reason for it might be, so they can feed into that annual report.

Because we all know that projects take time, and often we see projects being delayed for a variety of reasons. Most of them, I would say, there are reasons why they happen, but local boards and community boards need to be part of that conversation. So I hope now that I’ve clarified the Minister’s concerns over that amendment in the name of Christopher Penk, and I hope that he will support my amendment in the name of Simeon Brown and that he will vote for it and support it so that all communities can have their say and be included. Thank you very much, Madam Chair.

Hon PHIL TWYFORD (Minister of Transport): Thank you, Madam Chair. I want to respond to a query that’s been raised a couple of times by the member Tim Macindoe about the use of the words “carried on” in the bill. There’s some cause, I think, for the member to have concern about the words “carried on” and I quote the Cambridge online dictionary, which refers to a number of meanings for “carried on”. It can mean “to behave in an uncontrolled, excited, or anxious way”. It can refer to “an old-fashioned informal reference to have a sexual relationship”. It can also mean “behaviour that shows you are annoyed, worried, not satisfied, or excited”—usually more than the situation deserves.

But I have sought advice from the Parliamentary Counsel Office about the drafting that led to the use of these words in the bill, and I’m informed they’ve checked and the phrase “taxable activity carried on” is used 29 times in existing legislation. The phrase “taxable activity carried out”, which I think was the alternative that the member referenced, is not used at all. There’s no record of it being used in existing legislation. So these words are, in fact, standard IRD drafting, and I hope that answers the member’s query.

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put.

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

Ayes 63

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

Noes 55

New Zealand National 55.

Motion agreed to.

CHAIRPERSON (Hon Anne Tolley): Bear with us for one minute. We just want to make sure we get all the amendments correct so that every amendment has the opportunity to be put and voted on.

The question was put that the following amendment in the name of Tim van de Molen to clause 7(3) be agreed to:

in new section 5(6BB), insert after paragraph (b) the following paragraph:

(c) All Goods and Services Tax (GST) levied by the RFT must be allocated for expenditure in the Region within which it was raised.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Jami-Lee Ross to clause 8 be agreed to:

delete clause 8.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Jami-Lee Ross to clause 9 be agreed to:

delete clause 9.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Jami-Lee Ross to clause 10 be agreed to:

delete clause 10.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Jami-Lee Ross to clause 11 be agreed to:

delete clause 11.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Nuk Korako to clause 10 be agreed to:

insert, after subclause (5), the following subclause:

(6) After section 81(2), insert:

(3) Consultation with Iwi Prior to any Regional Fuel Tax Proposal

Before a territorial authority seeks to submit a proposal on a regional fuel tax scheme under Subpart 3 of the Land Transport Management Act 2003, the Council must open consultation with the local Iwi(s) of the region.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Chris Penk to clause 10 be agreed to:

in new section 34B(1), insert after paragraph (c) the following paragraph:

(d) Reporting of all RFT Schemes should be received by each local board in a region and consultation undertaken with that local board prior to the consultation on the annual report.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Simeon Brown to clause 10 be agreed to:

in new section 34B(1), insert after paragraph (c) the following paragraph:

(d) Reporting of all RFT Schemes should be received by each local board or community board in a region and consultation undertaken with that local board or community board prior to the consultation on the annual report.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Jami-Lee Ross to clause 10 be agreed to:

in new section 34B(1), insert after paragraph (c) the following paragraph:

(d) How the RFT scheme has impacted on the cost of living.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Stuart Smith to clause 10 be agreed to:

in new section 34B(1), insert after paragraph (c) the following paragraph:

(d) the cost benefit analysis that the Council has undertaken in relation to where the revenue was spent.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Tim van de Molen to clause 10 be agreed to:

in new section 34B, insert after subsection (2) the following subsection:

(3) In conjunction with councils application for a Regional Fuel Tax councils must produce a report for ratepayers on their forecasted spending priorities in relation to the revenue obtained from the RFT and make this publically available.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Lawrence Yule to clause 10 be agreed to:

in new section 34B, insert after subsection (2) the following subsection:

(3) Regional Councils are required to write to all electors annually after their annual report to inform them on the progress of the RFT scheme in their region.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Lawrence Yule to clause 10 be agreed to:

insert, after subclause (5), the following subclause:

(6) In Schedule 10, after clause 17A insert:

17B Additional information: RFT schemes

(1) The regional council of an RFT region, in its long-term plan, must report on—

(a) The revenue from an RFT scheme paid to the council by the Agency; and

(b) How that revenue was applied by the council, including to which projects and for what purposes (for example, capital expenditures, debt repayment, operational expenditures);

(c) Progress with respect to the programme of capital projects supported by the RFT scheme.

(2) In this clause,—

(a) regional council, RFT region, and RFT scheme have the same meanings as in section 65A of the Land Transport Management Act 2003; and

(b) Agency has the same meaning as in section 5(1) of that Act.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Ian McKelvie to clause 10 be agreed to:

insert, after subclause (5), the following subclause:

(6) Add new subsection 101B(7):

(7) Any proposal for a regional fuel tax scheme under the provisions of subpart 3 of the Land Transport Management Act must incorporate, to the best ability possible, the contents of the infrastructure strategy.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Matt King to clause 11(2) be agreed to:

insert, after “Land Transport Management Act 2003”, “only if there shows a repeated and deliberate pattern of avoidance over 12 months”.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

DEPUTY SPEAKER: The Hon Scott Simpson’s amendment inserting new clause 12, amending the Local Electoral Act 2001, is out of order as the requirements for local authority referendums are outside the scope of the bill. Jami-Lee Ross’ amendment inserting new clause 12, amending the Social Security Act 1964, is out of order as benefit and other similar payments are outside the scope of this bill.

The question was put that the following amendment in the name of Brett Hudson to Part 2 be agreed to:

insert, after clause 11, the following subclause:

12 Amendment to the Public Audit Act 2001

(1) This section amends the Public Audit Act 2001.

(2) After section 16 insert new section 16A:

16A Regional Fuel Tax Scheme Audit

(1) The Auditor-General must, at least one year after the establishment of any regional fuel tax scheme under Subpart 3 of the Land Transport Management Act 2003, examine—

(a) the extent to which any public entity is complying with Subpart 3 and to what extent the relevant public entities are activing effectively and efficiently under the provision of that subpart

(b) a public entity’s compliance with its statutory obligations under subpart 3 of the Land Transport Management Act 2003:

(c) any act or omission of a public entity, in order to determine whether waste has resulted or may have resulted or may result in relation to functions under subpart 3 of the Land Transport Management Act 2003:

(d) any act or omission showing or appearing to show a lack of probity or financial prudence by a public entity or 1 or more of its members, office holders, and employees under subpart 3 of the Land Transport Management Act 2003.

(2) An audit under this section may relate to 1 or more public entities.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

A party vote was called for on the question, That Part 2 be agreed to.

Ayes 63

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

Noes 56

New Zealand National 55; ACT New Zealand 1.

Part 2 agreed to.

New Part 3 Commerce Commission Fuel Market Study

CHAIRPERSON (Hon Anne Tolley): I remind the committee that this is quite a narrow debate on a Commerce Commission fuel market study.

BRETT HUDSON (National): Thank you, Madam Chair. It’s a pleasure to, in fact, move this new part to the bill—“Part 3 — Commerce Commission Fuel Market Study”—a part that seeks not only to help the Government to provide a better level of oversight into the impacts of the regional fuel tax (RFT), if it goes ahead, but, more importantly, actually, to give New Zealand consumers and, indeed, New Zealand businesses greater confidence and certainty around the impacts of the regional fuel tax, not only in the regions—and there could be up to 14 of those, as news reports have indicated—where the regional fuel tax is in effect but, actually, on some of the behaviours and impacts outside of that immediate region. If we look at what will happen with the application of the fuel taxes, it will create some natural incentives, incentives that do not indicate any sort of wrong or nefarious behaviour but, simply, are people and businesses responding to a natural incentive when additional costs are placed—particularly in the area they live or conduct the centre of their operations.

For instance, for consumers, there is a natural incentive, if one lives or travels close enough to the border of the regional fuel tax area, to go a bit a further to go outside of that area and to therefore take advantage of fuel pricing which does not have the regional fuel tax applied to it, which, to a consumer who can’t claim GST, is 11.5c a litre. It is a significant amount of money for that consumer or consumers to seek to not have applied to them.

If we take Auckland as an example of this, because it is important to understand, I think, the context of normal behaviours today, outside of the regional fuel tax additional application. I met with a fuel company ahead of this going into the committee stage. Their information was that inside of the Auckland boundary, today—prior to this new tax—there are already variances across that region of up to 20c a litre. They know that people travel some distance to take advantage of them. So when those consumers are faced with a higher impost if they shop and buy their fuel within their region, their behaviour already exhibits that they will go to some lengths to get the cheapest possible price.

There is a natural incentive for Aucklanders—and other regional fuel tax area residents—to travel outside of their region to get cheaper fuel, but there’s also the incentives on fuel companies in a competitive market. Because, as I say, there’s already a spread in Auckland, for instance, of up to 20c a litre, no fuel company is going to want to be disadvantaged by having a local competitor discount their fuel—fuel that includes the tax—and then take market share off another local fuel company. So they have an incentive to still keep a competitive market, despite the fact that the cost of product in that market has risen by 10c a litre plus GST. So we will still see market movements inside an RFT area, and also not only within that area—particularly for independent operators and retailers—but outside of the area. Just outside of the border, there is a natural incentive for a small, independent retailer—obviously, because they don’t have to apply the tax—to discount their fuel even more, because they can then take advantage of consumers’ willingness to travel to keep their costs down. The ability to sell fuel that doesn’t include a regional fuel tax and, therefore, take volume off all of those other fuel companies that operate within the regional fuel tax area, and therefore should have that levy attached to their retail price—there are natural incentives.

Although the bill contains provisions that talk about monitoring and keeping a track on volumes and everyone reporting data back, what it doesn’t do is seek an in-depth look, taking into consideration those natural incentives and existing behaviours, all of which are legal and, indeed, part of a functioning, competitive market. The bill as it stands does not have the provision for those deep studies to truly understand if there are behaviours that are so abhorrent to the provisions and intention of the bill that they should be captured.

Firstly, it allows them, through competition studies, to ascertain the facts—the facts not only of the RFT area itself but of the implications of those actions and behaviours on areas, not only just outside the border of the RFT area but, indeed, how that fits into the broader New Zealand market. So such a study can, in much more detail and with a greater context, actually provide legitimate and real information to make an independent and more accurate assessment on what sorts of behaviours are happening within and without the RFT area, and to determine whether or not action can be taken under the existing provisions, or indeed if the Government of the day might then choose further legislative measures to address behaviours that perhaps are either unintended consequences or just unforeseen.

One of the assumptions that have come up, both in the rhetoric ahead of this stage and certainly in contributions across parts in this stage, is a concern that fuel companies will seek to not apply the tax impost in the RFT area because of competitive concerns, because they don’t want to lose market share. There’s actually another possibility, which I don’t think the Government has considered. It is just possible—and I’m certainly not passing any sort of legal judgment—I think it could be argued that if a fuel company sought to not apply the tax in an RFT area, they could be in breach of the offences clause in the bill in either avoiding paying RFT or evading paying RFT. But it’s not actually a deliberate act by a fuel company that is the only means for the effect, in terms of price, of the RFT to not be borne within the RFT area, but instead to be borne by consumers and businesses from outside the area. It is simply those competitive forces.

We’ll use Auckland as an example not only because it’s the first cab off the rank but because it is such a large market. Because it’s already a competitive market, you could look at it and go, “From 1 July, every fuel company and retailer is charging 10c a litre extra plus GST—11.5c a litre extra—because the law demands that.”, but all it takes is an operator, and particularly, I was told by the fuel company I spent some time with, it is more likely to be an independent retailer at the margin, not a large fuel company. All it takes is for either a fuel company or one of those retailers to make a significant discount to the price of the fuel in their outlet—done nothing about the tax; they’re still paying the tax. They are complying with the law: they are paying the 11.5c to the New Zealand Transport Agency under the provisions of the bill, but they simply choose to price it to consumers at a different rate. Should they do that, other companies and retailers in the area are almost certainly going to have to move to meet the market, because it is a competitive market, and to not move it will see those other companies lose share. That is simply not a good thing for their business models.

So we then end up in a situation where the margins are constrained, and possibly even negative, inside of area such as Auckland. They’re meeting their obligations on fuel tax with respect to the Government. The cost of their product has gone up and, as businesses, they have to make returns to their shareholders. So what will they do? They will apply a different price in different parts of New Zealand—parts of New Zealand that don’t have a regional tax applied to them. It is a completely legal and reasonable business model. It won’t meet the provisions of avoidance or evasion, in my view, under the bill, yet what will happen, in effect, is what has been talked about as price spreading.

At this point, you don’t necessarily have to focus on whether it is a deliberate attempt to shift the price or just the factor of a competitive market in action. The effect for consumers and businesses outside of the regional fuel tax area or areas is that they will bear an impost of the effect of the tax for an area that should be bearing it but won’t be bearing all of it. A competition study gives the Commerce Commission the authority and scope and power to be able to look into that, and to determine and to advise the Government so that the Government can know with some certainty whether there are unforeseen circumstances arising from the bill in action and then look to actions the Government might take to address that.

Hon JUDITH COLLINS (National—Papakura): Thank you, Madam Chair. This is an excellent new part that has been in the name of Brett Hudson. Speaking as the former Minister of Energy and Resources and, in fact, the Minister who, with the support of my colleagues, started the fuel price study of petrol and diesel prices last year, and that came back from a Ministry of Business, Innovation and Employment study, along with support from economists and other experts in the area. It came back with a finding that because some of the fuel companies, in fact, from memory, Mobil—actually, not from memory; I know it very well—and also the Gull people did not provide all the information they were supposed to and promised to do so, but BP did and Z Energy did.

What that was very clear about was that there was a great deal of concern that people—ordinary New Zealanders, who go and buy their petrol and their diesel—were right to be concerned. We were right to be concerned, and I acknowledge the Minister, the Hon Stuart Nash, who was the then Opposition spokesperson for the area, who first raised the issue with me and was supportive of the work that we did.

Since then, we’ve got a new Minister in the situation of energy and resources, and that’s the Hon Dr Megan Woods. Megan Woods has humped and talked about it and carried on, but she’s actually done nothing to bring about the changes that we in Government approved through Cabinet in about August last year, just before the three-month period came in for an election.

So this is a very genuine attempt by Brett Hudson to help out that Minister to actually get this issue dealt with—in a way that her amendments to the Commerce Act, clearly, are not moving anywhere—and this is a very sensible way to deal with it. The Minister who is in the chair, Phil Twyford, has previously stated that this is an issue that needs to be dealt with, so he actually had the chance to deal with it and he didn’t. His inability to deal with that has been picked up and assisted by Brett Hudson to try and get him out of this hole that the Government has got itself into.

So it’s now been, what, eight months of this particular Government. They talked a lot about the different energy prices around the country, the fuel prices. We know fully well that there is this thing called the Gull effect in the prices of petrol and diesel. We’ve heard of some very, very strange behaviours from some in the market. I recall that BP had some interesting comments about how they were putting up the prices in Ōtaki so that it was less obvious that places like Levin—where apparently there is a Gull station there—were being discounted because of the competition from Gull.

This is actually a very serious issue, and when we know that this regional fuel tax, which was only going to be for Auckland and which now is going to be able to be done for the whole of the country—that this is actually a way of dealing with a situation where New Zealanders who pay for their own petrol and diesel are right to say that there’s something very strange going on when they can go to one big-named petrol station in one town and in the next town it’s an entirely different price, and that price is very much based on whether or not there seems to be either a Gull station there or a Waitomo Group station or one of the other smaller independents.

So this is this Minister’s opportunity to get off his high horse, to listen to the Opposition, and to get up and speak in favour of this amendment, and this side of the House might actually increase its view of him. All we’ve heard so far from him has been sanctimony and, actually, put-downs of people who have generally tried to help his bill, so that’s his condescension writ large.

JAMI-LEE ROSS (National—Botany): Madam Deputy Chair, thank you very much for this opportunity. I wish to speak to both of the new Part 3s. I understand that it is a legitimate way of addressing this. There’s a new Part 3 in the name of my colleague Brett Hudson, which is seeking to insert a new Part 3 that is around the Commerce Commission fuel market study, which he has spoken to and the Hon Judith Collins has spoken to. Then I’d like to turn to the new Part 3 that I’ve proposed—the amendment in my name which also seeks to insert a new Part 3 to do with reviews. I think it’s timely that we do consider this, because this bill is proceeding, unfortunately, and how it is impacting on New Zealanders is what should be carefully considered.

The amendment in the name of Brett Hudson should actually be a very easy amendment for the Government to decide to support. The reason why it should be easy for the Government to decide to support this is because every time I’ve asked in the House questions of Phil Twyford, the Minister, around price spreading—every time I have asked questions around how petrol companies are responding to all of his new taxes of up to 25 cents a litre—his answer has been that they’re going to have new powers for the Commerce Commission to put in place fuel market studies to enable them to better understand the situation. According to the Government, the answer is to monitor this more. They think monitoring will lead to greater scrutiny, greater sunlight, as a form of disinfectant when it comes to price spreading, and they’re of the view, as a Government, that there should be powers there for the Commerce Commission to do so.

The problem is the bill that the Government has put forward regarding Commerce Commission fuel market studies will take quite some time to get through the legislative process. It won’t be in place on 1 July, which is very close—it’s not too far away. It will not be in force at the point at which the regional fuel tax for Auckland proceeds, on 1 July, and there will not actually be powers right at that point of time for the Commerce Commission to undertake studies around that.

I submit to the House that if we were all to unite on this issue of price spreading, and we were all to support the amendment in Brett Hudson’s name, then there would be the power immediately, from 1 July, for the Commerce Commission to start doing this work. And what better time for the Commerce Commission to start doing this important work, according to the Government—it is their solution to the issue. The work that the Government wants to do could commence immediately on 1 July if they were to support Brett Hudson’s amendment. So I have to say that I’m looking forward to what the Minster or Government members may wish to say on this amendment, because they have an opportunity, right now in the Parliament, to say to New Zealanders that they actually take the issue of price spreading seriously.

Why should they take the issue of price spreading seriously? It should be self-evident, but let’s just go through it a little bit. One of the biggest issues with a regional fuel tax—aside from the fact that we’re of the view it’s unnecessary—is that that there’s going to be fuel market behaviour which sees not just Aucklanders paying an Auckland regional fuel tax; it will be spread across the whole country. People in the South Island will be paying for the Auckland regional fuel tax. People in the South Island, people in Wellington, people in the Bay of Plenty, people in Waikato will be paying for the Auckland regional fuel tax. So if the Government’s solution is to have it monitored, here’s a way to do so. Why should we care, though, that it’s happening? We should care because if there’s going to be a regional fuel tax in Auckland, then Aucklanders should be paying the bill. We’re seeing, however, that fuel companies are already deciding to put up the price of fuel in other parts of the country. Many commentators have suggested that they’re doing so in anticipation of the regional fuel tax in Auckland coming into force.

I’m particularly interested in some of the wording that Mr Hudson has put into his amendment. The wording he’s put into his amendment gives the Commerce Commission quite some latitude to prepare a report around competition. I think it’s also interesting that he wants to give the Commerce Commission the ability to look at changes to the policies or practices of central or local government. That’s quite interesting, because it is local government which comes up with the proposals that will be funded in the regional fuel tax scheme. It’s a whole new way of local government doing things, and the benefit of having this information quite early is that we know that the intention of this Government is to allow other councils around the country to have regional fuel taxes in just a few short years. That will be quite a change to local government practices and, therefore, it’s helpful for the Commerce Commission to do this work.

The other point about that wording that I think is interesting is that we know that it’s not just a regional fuel tax that the Government is proposing; the total combined impact of fuel tax increases under this Government is up to 25c a litre when you include GST. So it’s important for the Commerce Commission to understand the changes and the issues that are in there and that are being impacted by Government policy around increases to fuel taxes.

I now wish to turn to the amendment that’s in my name. We’re also asking the committee, by way of this amendment, to support there being a review conducted by the Ministry of Transport and Treasury. This amendment, if successful, would provide a requirement for the Minister of Transport and the Minister of Finance to commission a report three years after the implementation of the regional fuel tax, to understand exactly how it is impacting New Zealanders. The very reason why I think this is important is because we learnt quite a bit through the bill, in terms of the views that individuals submitting had, about the impacts of the regional fuel tax.

We also learnt—and this came out at Estimates through the answers to the questions—that there was very little modelling done on the impact on New Zealanders. There was almost no modelling done on price spreading. In fact, the paragraphs around price spreading—now, I don’t blame the officials that work for the Minister, because they’ve had limited time to do a whole lot of work on this, but there’s limited information out there around price spreading. There’s limited information out there about how it would actually impact on those that are struggling the most in this country, from a cost of living perspective, and understanding about how they will be impacted. There was evidence provided by submitters that those living the furthest away from the CBD and those that have the least fuel-efficient vehicles are, typically, the people in this country who need assistance from the State the most. Typically, people in this country who are living in lower socio-economic circumstances will be impacted the most by this.

So I think it’s reasonable that Treasury and the Ministry of Transport do work on issues to do with cost of living, issues to do with congestion—and let’s just pause for a moment on congestion. We don’t actually believe that many of the projects that the Minister has seen put forward under this will solve the congestion issues for Auckland alone, but if there’s going to be an argument put forward that the regional fuel tax is the grand solution, the great panacea for Auckland—to tax people more and extract more money from their pockets—then let’s actually have some real information around congestion and get that work done.

I’m also interested to learn more about the public transport use and whether this regional fuel tax will actually see more public transport use come about in Auckland as a result of the regional fuel tax. There are also other elements to do with environmental impacts and to do with fuel consumption, and other issues to do with regional fuel taxes.

In this legislation, we should put in place issues to be considered seriously, given that so little work was done on this regional fuel tax. Given that so little work was done to understand the impacts, to understand how much this hurts New Zealanders—particularly in Auckland, where it will start; so little emphasis put on doing any work around price spreading—these two amendments are timely and they should be supported by the Government. There is nothing that the Government has to fear from having, firstly, work done that they’ve already proposed through another piece of legislation come into force immediately. If they’re so proud of their tax hikes, if they’re so proud of the work they’re doing to ram through under urgency legislation to put in place new taxes on Aucklanders, then they shouldn’t be afraid to front up and hear what Treasury and the Ministry of Transport would have to say about the impact of those regional fuel taxes.

Sure, under the amendment I’ve put forward, it would take three years for that report to be done. At least we would have a cycle of a local government election. There’d be an opportunity to consider how it’s being implemented—and, of course, these are infrastructure projects. So it does take some time for infrastructure projects to be implemented, but there’s nothing the Government should be afraid of when it comes to their taxes and how they’re impacting on New Zealanders, because they’re so gung-ho and so proud of everything they’re doing to increase taxes on New Zealanders at a time when, I say, it’s not actually necessary or desirable for New Zealanders.

Hon CHRIS HIPKINS (Leader of the House): I raise a point of order, Madam Chairperson. The members of the Opposition have now added a number of additional parts to the bill amending other Acts other than the primary Act being amended by the bill. The structure of the bill is such that amendments to other Acts were contained in Part 2. Therefore, the amendments either should have been proposed during the debate on Part 2 or, basically, should be ruled out, because the House has now debated and considered its desire to amend other Acts as a result of the changes made in Part 1 and has concluded its debate upon that. The ongoing nature of adding additional parts is alien to the structure of the bill, which is very clear. There are two parts to the bill. There is a part that has the principal amendments proposed to the Land Transport Act and a second part, which contains the consequential or other relevant amendments to other Acts, and both of those debates have now concluded.

JAMI-LEE ROSS (National—Botany): There’s a couple of points that I think are worthwhile considering when you decide on how to rule on this. The first point to consider is that the Government has taken a decision to put the House into urgency. We know that when urgency is accorded to a piece of legislation, there is wider latitude for the Opposition to put forward amendments, and we’re exercising that prerogative right now.

Secondly, though, if you were to rule, as the Minister is asking, that no amendments can come through as a new part if they amend another piece of legislation other than what is already contained in the bill, or that any other amendments that come through as a proposed new part that amend an additional piece of legislation must be contained in Part 2, then you would, in effect, be ruling that if the Government continues to structure bills as they’ve done so here, where there’s only ever two parts—one amending a principal Act and a second part amending every other possible Act that is consequential to the proposal in the bill—then you would, effectively, be ruling out in entirety the ability, ever, for the House to consider new parts. If the Government changes the way they structure bills, that would be different, but should the Government continue structuring bills like this, Madam Chair, your ruling would be very broad and would have, I believe, quite a dangerous impact in the long term for this House.

My third point in response is that we took some very careful advice from the Clerk in drafting these tabled amendments. The advice we received was that Part 2 was for amendments to other pieces of legislation that were related to how the regional fuel tax scheme would be implemented. These new proposed parts are not in relation to how the regional fuel tax would be implemented but, rather, are in relation to how it is subsequently reviewed or actions that could be taken—in this case, by the Commerce Commission—in response to the regional fuel tax already being in place. So it’s about subsequent decisions and subsequent issues arising after the fuel tax is in place. The amendments in Part 2 are around assisting the regional fuel tax to be implemented. Therefore, Madam Chair, I think you should rule these new parts should continue.

Hon DAVID BENNETT (National—Hamilton East): I’d just like to add to the comments made there that the member also had the opportunity in Part 2 to raise an issue like this if he felt that was an issue at that time. He did not do that and has passed that point now, and so we’re now into Part 3, and he’s had that opportunity already.

CHAIRPERSON (Hon Anne Tolley): I thank the members for their contributions. [Interruption] Could I just ask the clerks just to leave the Table for a minute, just while we’re dealing with this—thank you—so that I can see the Chamber. I am troubled by the point, actually, that the Hon David Bennett has made. The amendments were accepted by the Clerk’s Office and tabled yesterday, so the committee has had knowledge of those proposed amendments to the bill for quite some time, and it doesn’t seem right to me that just halfway through the debate, we suddenly get a different piece of advice from the Clerk’s Office. I am disturbed by that, because the committee is already debating Part 3.

I can’t find anything to help me in Speakers’ Rulings, but it indicates that the House has accepted that there is a debate on Part 3. So to curtail that debate and say “Well, it should have been done in Part 2. We’ve finished Part 2 so we move on.” seems, to me, to be out of order. So I’m going to rule that the two tabled amendments that we have for new Part 3 are acceptable—that they are relevant—and therefore, then, the further amendment to amend the new Part 3 is also in order.

Hon CHRIS HIPKINS (Leader of the House): This does have significant precedent value. Therefore, I move, That the Speaker be recalled to give a ruling on the matter.

CHAIRPERSON (Hon Anne Tolley): I’m happy to do that, but I just refer the member to Speakers’ rulings 74/1-3, particularly Speaker’s ruling 74/2, that says, “The Speaker may not interfere with the decision of the chairperson on a question of relevancy.”

Motion agreed to.

House resumed.

Speaker Recalled

CHAIRPERSON (Hon Anne Tolley): Mr Speaker, the committee has voted to recall you to the Chair. We’ve had five speeches on the new Part 3, and the Leader of the House has taken a point of order to have the new Part 3 tabled amendments ruled out of order. I’m disturbed by that motion because those tabled amendments have been accepted by the Clerk’s Office and have been on the table now since yesterday—they are not new—and we’ve had five speeches in the debate. I have ruled that those three tabled amendments are in order and that the debate would continue.

SPEAKER: Just checking that, by new Part 3, you are talking about the one in the name of Jami-Lee Ross, you’re talking about the—

CHAIRPERSON (Hon Anne Tolley): And Brett Hudson.

SPEAKER: Brett Hudson is the other one, and there’s a third one, which is an amendment to Brett Hudson’s one.

CHAIRPERSON (Hon Anne Tolley): Yes, that’s correct.

Hon CHRIS HIPKINS (Leader of the House): There are a number of issues here; the most significant of which is the way that the bill is structured. The bill is structured so that all of the principal amendments are contained in Part 1 and all of the subsequent amendments to different Acts are contained in Part 2. The practice of the House previously—I know because I tried when I was in the Opposition—has been that any additional Acts to be amended should be amended in the part of the bill that deals with that. So, in the case of other amendments that we put forward in Opposition—different additional parts—previous Chairs of committee have ruled that they should be dealt with in the debate on the part of the bill that deals with that. In this case, the committee has already completed its debate on the principal part of the bill, Part 1, and on the subsequent amendments, which were in Part 2, and therefore it is alien to the structure of the debate to allow the committee to continue to add more and more parts.

With regard to the point that the Chair of the committee made about the debate already being under way and already being ongoing, in fact, the House this very morning has already dealt with that issue. There were a number of amendments tabled yesterday and debated yesterday that have subsequently been ruled out this morning by the Chair of the committee. So it is not unprecedented, once a debate on a tabled amendment is under way, for it to be subsequently ruled out.

JAMI-LEE ROSS (National—Botany): Mr Speaker, thank you. The Minister has quite accurately identified how the bill has been structured. I agree that there would be high precedent value if the decision was made that he’s asking for, because the Government can choose to structure bills in that way, and if it were to continue structuring bills in that way, such a ruling from you would have the precedent that there would never be the ability for the committee to consider a new part to a bill, because if the argument is that Part 1 will always contain amendments to the principal Act to be amended and that Part 2 will contain amendments to every other Act—if the argument from Mr Hipkins is that you could never have another Act amended by a new Part 3, because it should have been done in Part 2—there’ll never be the ability for there to be a new Part 3 in the future.

Having said that, I have a second point worth considering, which is that when the committee was considering the Family Incomes Package some months ago—it was a similar bill, dealing with incomes and taxation, and it was considered under urgency as well—the committee did have a number of new parts to do with reviews, which were accepted and debated. Therefore, there is precedent that the committee can do that.

My third point is that, on advice from the Clerk’s Office, as we were structuring our tabled amendments and taking up our ability to put forward amendments, we were clearly advised that Part 2’s amendments that amend other pieces of legislation—Part 2 is written is such a way that those amendments to other pieces of legislation are there to assist with the implementation of a regional fuel tax scheme; the two amendments proposed by myself and Mr Hudson seek to have reviews of the situation with the regional fuel tax—are not to do with implementation of the regional fuel tax; they’re to do with how it is reviewed and how it is being implemented. Therefore, it is a new issue that should be considered as a new part.

Hon CHRIS HIPKINS (Leader of the House): I do appreciate the member’s frustration, and, in fact, this issue was specifically discussed in the last review of the Standing Orders, where a proposal was put forward by the then Opposition that any amendments to different Acts should be separate parts—that the ability to group changes to different Acts should not be allowed to be done in the way that it has been done, certainly for the entire time that I have been a member of this House. The Standing Orders Committee rejected that proposal, and, as a result, the ability of those in charge of bills to, basically, have one part or two parts—as they choose to—remains in place.

Therefore, what we are doing in this debate is no different to countless other bills that have passed through the House over the last decade that I’ve been a part of it, and in the way the debate has been approached, where all of the amendments to other Acts have been contained in a single part, Chairs have ruled that additional amendments to other Acts should be tabled and considered as part of that debate and not as part of additional debates. The risk that we run here is that, if we continue to allow amendments to be added ad nauseam to any bill, the House will never be able to pass any bill. In fact, other legislatures around the world do have that difficulty, and that, of course, is one of the things that the House has considered from time to time in the way it structures its debates.

Hon DAVID BENNETT (National—Hamilton East): I agree with what Jami-Lee Ross has said, and I just want to add another point, and that is that, in the debate on Part 2 of this bill, the member from the Government side did not raise any issue at that time, fully knowing that there were these amendments coming up in Part 3. A precedent within this House—and I know that you’re very keen to see it continue at question time—is that you raise issues at the time they are relevant. If there was going to be an issue that that member felt was relevant, Part 2 would have been the time to raise it. Doing it in Part 3, later, when we’re halfway through the debate, is simply not the case of raising an issue at the time when it is relevant.

JAMI-LEE ROSS (National—Botany): Mr Speaker, I simply wish to point out that I think the Minister, effectively, made my point, which was that if you were to rule that we cannot have these new Part 3s, then there would be precedent value, and what the Minister is, effectively, arguing is that we shouldn’t have any amendments inserting new parts if they’re going to introduce issues that could, in his view, have been held in Part 2. He’s made my very point. The second thing I wish to say, in response to Mr Hipkins, is that simply because the Standing Orders Committee did consider something and decided not to act—the fact that a committee decided not to act—is not a change to our Standing Orders and is not something that should be considered in this situation.

SPEAKER: Right. This is a complicated set of matters, and I might just deal with a couple of the latter points first. The fact that something has been looked at and considered by the Standing Orders Committee and the Standing Orders Committee has decided to stay with the status quo is, in fact, something which I will take into account, because it’s an indication of the view of the House and is important. In fact, if other suggestions put to the Standing Orders Committee last year had been accepted, the Government would not be allowed to have urgency in this situation.

On the question of raising matters immediately, this is not like a point of order for disorder or a question. This is a matter which is currently before the committee and at any stage while it is before the committee it can be raised, and the fact that things have been on the Table for a period of time and not been raised does not exclude members raising them.

It is not new to rule out an amendment on the grounds that it should have been raised in an earlier part. It’s something that my predecessor has done, or it has been done in the time of my predecessor, and one of the reasons that bills are grouped in parts—and I just want to say, you know, in brackets, that I actually think our arrangements for having things in parts in the way that we debate them is unfortunate.

I might sound like someone living badly in the past, but I think the quality of debate when bills were debated clause by clause and people actually debated the clauses that were important to them, and debated those ones well where they had positive suggestions, and we had better cross-floor discussion, using the proper role of the committee—and the role of the committee is that once the House has decided to proceed with the legislation, which is what the second reading has done, the House has accepted the principle of the legislation, and all we’re debating now is the details of how to do it. Previously, there were, I think, much better-quality debates because Opposition members got the opportunity to make positive suggestions. They could say, “Well, we don’t like this legislation, but it would work better this way.”, and it held the Ministers to account in a much better way.

While I’m on my feet saying how things should work, in Speakers’ Rulings there’s a very good Speaker’s ruling from one of the previous Assistant Speakers in the last Parliament on how Parliament should work during the committee stages. What that says is, effectively, if reasonable questions are asked, the Minister should answer them. That will not lengthen the debate; that will shorten the debate. My view is that if Ministers had done that, this debate would have finished on Tuesday, and we wouldn’t be here in this situation now.

So, having got that off my chest, I’ll now go to the essence of the matter, to reinforce the previous rulings that have been made that it is not new to rule out an amendment on the grounds it should have been raised in an earlier part. It has happened in the last Parliament, and for that reason, I have a suggestion, and that is that Mr Hudson’s new part and, presumably, the amendment to it, which should be part of Part 2—my suggestion is that the House grant leave to return to Part 2 for the purpose of voting on that part, on those two amendments. If a member wants to seek leave to do that, that will give the chance to the House to express its opinion on those, but I make it very clear that it will be for the purpose of voting. On Jami-Lee Ross’s amendment, it is my view that that is outside the scope of the bill. It brings matters into the bill which were not previously in the bill, and it is properly raised as an issue—as an amendment.

But I will say to the Government that I feel very strongly for my colleagues, because I think there probably have been three of them in the Chair during the period that these amendments have been sitting on the Table of the House. My view is that it’s the role of the Minister in the chair and the Leader of the House and the Government whips to constantly review the amendments that are on the Table and to bring them to the Chair’s attention as soon as possible—not days afterwards—in order to get their rulings and stop the House wasting its time, which has happened as a result of their tardiness.

So is a member prepared to seek leave for Mr Hudson’s amendment and the amendment to that to be voted on by the committee?

JAMI-LEE ROSS (National—Botany): I raise a point of order, Mr Speaker. Can I seek clarification. Firstly, are you saying that Mr Hudson’s amendment is otherwise out of order if for voting purposes it does not get included in Part 2?

SPEAKER: That’s right.

JAMI-LEE ROSS: And are you further saying we cannot debate the essence of Mr Hudson’s new Part 3?

SPEAKER: That’s right.

JAMI-LEE ROSS: Can I have a further clarification from you. In the drafting of amendments, we took extensive advice from the Clerk’s Office—

SPEAKER: The member—stop right now. One of the very strong principles of this House is that members take responsibility for their own amendments, and it is not the practice of good members to seek to put responsibility with other people for things which they’ve signed their name to. I say as a Minister I made a lot of errors that were as the result of advice but I always took responsibility for those, and I’m not having my staff blamed for members’ errors.

Hon DAVID BENNETT (National—Hamilton East): I raise a point of order, Mr Speaker. I’m just seeking clarification as well that you’re, basically, saying that a Government member can, at a later point, revisit an earlier part of a bill and ask for it to be reconsidered.

SPEAKER: No, no. The member will resume his seat. I am saying that any member now, if they want to have a vote on Mr Hudson’s amendment, can seek leave. The House can do anything by leave. There’s clearly an amendment there which would have been within scope if it had been addressed in the right way. It’s clearly something which some members feel quite strongly about, and all I’m suggesting is a way for the House to consider that by way of a vote, if they so wish, in order to have the House express an opinion on Mr Hudson’s amendment. I don’t know if—

Jami-Lee Ross: But we do that in committee?

SPEAKER: I think it’s probably proper to do it now to get it sorted, because otherwise I think the Chair would be obligated to just proceed to report back again, because there’d be nothing before the committee.

JAMI-LEE ROSS (National—Botany): I seek leave for Mr Hudson’s amendment to be voted on as a question under Part 2.

SPEAKER: Right, and the clear implication of that is that it will be a vote and not a debate. Is there any objection to that? There appears to be none.

In Committee

Debate resumed.

Part 2 Amendments to other Acts (continued)

The question was put that the following amendment in the name of Brett Hudson be agreed to:

After clause 12, insert new Part 3

Part 3 – Commerce Commission Fuel Market Study

9 Principal Act

This part amends the Commerce Act 1986

10 Purpose

To provide for powers for the Commerce Commission to undergo a competition study (market study) of a regional fuel market immediately following the establishment of a RFT scheme in a region.

11 New Part 3A

After Part 3, insert:

48 Interpretation

In this Part, unless the context otherwise requires,—

competition report means a report prepared by the Commission under section 51B

competition study means a study of any factors that may affect competition for the supply or acquisition of goods or services

department means a department of the public service specified in Schedule 1 of the State Sector Act 1988

organisation means any of the following:

(a) an organisation named in Part 2 of Schedule 1 of the Ombudsmen Act 1975:

(b) an organisation named in Schedule 1 of the Official Information Act 1982:

(c) the Auditor-General.

Regional Fuel Tax means any regional fuel tax or regional fuel tax scheme put in place under the Land Transport Management Act 2003

Regional Fuel Tax Region means any region of New Zealand that has a regional fuel tax scheme in place under the Land Transport Management Act 2003

49 Functions of Commission under thus Part

The functions of the Commission under this Act include carrying out competition studies, and preparing competition reports, under this Part.

50 Commission may carry out competition study

(1) The Commission must carry out a competition study of fuel markets in a regional fuel tax region no later than one year after a regional fuel tax scheme is established in that region;

(a) The Commission must carry out a competition study that assesses the regional fuel tax region in relation to the NZ fuel market

(b) Before carrying out a competition study, the Commission must, by notice in the Gazette, issue a statement of intention to carry out the study, which must—

prescribe the terms of reference for the study; and

specify the date by which the Commission will make the final competition report for the study publicly available.

(2) The study must assess whether price spreading behaviour is occurring in the RFT region

(3) A copy of the notice must be made publicly available.

(4) The Commission may amend the notice in the manner set out in subsections (1) to (3).

(5) The Commission may revoke the notice by further notice in the Gazette.

51A Competition study terms of reference

(1) The terms of reference for a competition study must—

(a) Examine the way in which regional fuel taxes influence the price of fuel in a regional fuel tax region and;

(b) Examine the impact of price spreading of a fuel tax and;

(c) Any other related area that the Commission deems necessary to examine in relation to regional fuel taxes

(2) The terms of reference may name any of the following that it intends to consult as part of the study:

(a) departments:

(b) organisation:

(c) persons:

(d) classes of persons.

(4) The Commission—

(a) must carry out the competition study in accordance with the terms of reference; and

(b) may exercise its discretion in relation to any ancillary matters that are related to, but not explicitly covered by, the terms of reference.

51B Preparation of competition report

(1) The Commission must prepare a competition report that records its findings from the competition study.

(2) The report may, without limitation, recommend 1 or more of the following:

(a) changes to legislation or other instruments:

(b) changes to the policies or practices of central or local government:

(c) changes to the policies or practices of a person or an organisation responsible for the oversight or regulation of a specified industry:

(d) changes to the amount or type of information made available by a person or an organisation in relation to a specified industry:

(e) that a person or an organisation research or monitor a specified matter:

(f) that persons within a specified industry change their behaviour.

51C Consultation on draft competition report

(1) Before a competition report is finalised, the Commission must—

(a) make a draft report publicly available; and

(b) allow a reasonable time for comments on the draft.

(2) In preparing its final report, the Commission must have regard to any comments received on the draft report within the time allowed.

51D Publication and status of competition report

(1) A final competition report must be made publicly available.

(2) To avoid doubt, a competition report is not a determination of the Commission.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

Schedule

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

Ayes 63

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

Noes 55

New Zealand National 55.

Schedule agreed to.

Clauses 1 and 2

JAMI-LEE ROSS (National—Botany): Thank you, Madam Chair. I rise to speak to an amendment—there’s a couple of amendments, actually; I’ve just put a couple more into the Table Office—in my name but also to say that, in principle, this side of the committee will be opposing the title and commencement of the bill, as one would expect, because we are opposed to this bill proceeding any further. We are also opposed to the bill’s timing because we do not believe there’s been sufficient work done around a whole range of issues that we’ve already discussed. The reason why I’ve put forward my amendment is because I think there are some circumstances in which the issue of a regional fuel tax being in existence should actually fall out of place and should actually have an automatic repeal inserted into the legislation. The reason why I’ve done that is because the price which people pay for fuel in this country, impacted by tax hikes that the Government is responsible for, is a matter that should be considered as to whether a regional fuel tax should proceed.

I have questioned the Minister multiple times in question time to ask him whether he would show some consideration to the cost of fuel that people are paying, and I’ve asked him whether he would consider abandoning his plans for new tax hikes if the cost of fuel got to $3 a litre. Consistently, the Minister has refused to make a decision on that or give me an answer, claiming that it’s a hypothetical. Well, it might be a hypothetical that the cost of fuel might get to $3 a litre, but it is a very real possibility out there and it’s a very real possibility that has been discussed in the media—and I’d say, actually, many New Zealanders are concerned about the price they will be paying at the petrol pump and are concerned about the cumulative impact of fuel price increases because the Government has made decisions to increase the cost of fuel because they’re putting up taxes.

So my amendment inserts a new clause 3, which would see the whole regional fuel tax legislation fall out of force if, at any time, the average fuel price in New Zealand reaches $3 per litre, or if the average fuel price in a region that has an active regional fuel tax scheme reaches $3 per litre for fuel. We are concerned, on this side of the House, about how much people are having to pay. We are concerned, on this side of the House, about the cumulative impact of tax hikes and tax increases, which this Government, particularly, is responsible for. I know the Minister in the chair, Phil Twyford, if he does take a call, will stand up and say we were responsible for 17c a litre in nine years, but I think it’s quite significant when this Government’s proposing 25c a litre in a shorter period of time of only three years—17c in nine years, or 25c in three years. And so it’s right and proper that this committee considers the way in which this bill should proceed, if at all, when the price gets to a certain point.

We know that the House going through the legislative process of repealing a whole piece of legislation is time consuming. Now, of course, the Government could take urgency again and structure bills in ways that curtail debate; that would probably speed it up. But we should have an automatic repeal clause in there, and I argue that it’s quite valid, because to let this bill proceed without such a repeal clause is saying that the House simply trusts the Minister to make quality and proper decisions when the price of fuel gets to a certain point. I’ve asked multiple times if he’ll do that; he refuses to comment. I’ve asked multiple times if he will assist the people of New Zealand, who are paying his taxes—whether or not he will make decisions in the future to abandon fuel taxes. I accept that the way the legislation’s drafted, he would have the ability, by Order in Council, to recommend to the Governor-General, if he felt that a certain price that people were paying for fuel was too high, that the regional fuel tax scheme could be abandoned, but we’ve had no certainty, we’ve had no answers, we’ve had nothing from the Minister to give us some advice around how he would see himself making decisions under the quite extensive powers, actually, for a regional fuel tax that are in the bill.

A further reason for considering this new clause is that whilst, you know, fuel’s around $2.20 or $2.50, hypothetically, and a 10c increase might not take it close to $3, it’s a very real possibility that the price of fuel could get to $3 not just because of normal market activity—normal market activity that they don’t want the Commerce Commission looking at immediately; normal market activity may take it to $3 a litre—but, in fact, because, where there are extensive powers under regulation-making powers granted through other parts of the bill, where the Minister can have the regional fuel tax price at a much higher point than 10c a litre, where there’s no constraint on that, if the Minister was to exercise his power, which will be granted in this bill, to increase a regional fuel tax to 25c a litre, or 50c a litre, hypothetically, then we’d get to $3 a litre quite a lot faster. And so an automatic repeal provision in this bill would be right and just to protect New Zealanders. And I think New Zealanders do need protection from tax increases.

The very purpose of a House of Representatives is to represent the people that we are sent here to serve, and I think we would be letting them down if we were not to put up some arguments as to why the tax increases that the Minister wants to put in place—where, I believe, they have a dangerous impact on people, where, if the cost of fuel gets so high, families around this country will be struggling to pay fuel, then I believe it should be automatically repealed. I know the Government thinks that they’ve solved all the cost-of-living issues with the Families Package that’s been referred to previously, but, I have to say, if the Families Package proceeds but the cost of fuel gets to $3 a litre, the additional impact on New Zealanders would far outweigh the potential positive benefits of their Families Package. So this would be recognition that the cost of living and the price point which people pay for petrol are very important, and I ask the Government to consider this amendment. I ask them to show some humility around their plans for the regional fuel tax. I ask them to show some compassion, actually, for the cost of fuel to people in New Zealand.

Whilst the market may be a significant dictator of how fuel prices are implemented around the country, the Government does have a big part to play, because we know that a significant portion of the cost of fuel right now is taxes, and this legislation before us gives the Minister more power to put in place more taxes—not capped at 10c a litre but capped at whichever point the Minister so desires when he’s considering his powers under regulation.

I also have a number of amendments, which I hope have made their way to you, around changing the title of the bill, and I do think that, where the Government has decided that they want to, in a very gung-ho fashion, proceed with a regional fuel tax, they take full ownership of it. One of my suggested amendments is to rename this bill the “Land Transport Management (Twyford Tax) Bill”. And whilst some may think that’s frivolous, I know that Mr Twyford, the Minister in the chair, is exceptionally proud of what he’s doing. He’s exceptionally proud of the fact that he is hiking taxes on Aucklanders and exceptionally proud of the fact that he is the one that is bringing forward legislation that lets Phil Goff off the hook with regards to his own promises around finding savings and efficiencies in the council. If Mr Twyford feels so strongly about that, then I think we should do the right thing and name it after him, because when a man as proud as Phil Twyford brings such legislation to the House, which he thinks will be part of his future legacy, where he hikes taxes on Aucklanders so that the Auckland Council doesn’t have to pay for part of the cost of his future light-rail plans, which I don’t think are affordable or necessary, then let’s do the right and decent thing and name it after him. I’m sure the Hon Phil Twyford—

Simeon Brown: Immortalise his name. Immortalise his name.

Hon Maggie Barry: Epitaph!

JAMI-LEE ROSS: —would want his name immortalised in legislation. It’s not quite a statue. It’s not quite a plaque at the opening of his future light-rail project. It’s not quite a name on a building, but it’s a name on a piece of legislation—one that he’s proud of, one that he has so proudly shepherded through the House. And I say this is our gift to you, Phil Twyford: to name this Act of Parliament after you.

BRETT HUDSON (National): Thank you, Madam Chair. It’s a pleasure to speak on these final two clauses of the bill.

As my colleague Mr Ross pointed out at the beginning of his contribution, we don’t support the bill, so it’s very difficult, of course, to support the commencement clause at all, let alone as it stands. But I would make this point and, actually, make a call to the Minister in the chair, Phil Twyford. Why won’t the Minister be prepared to change this? There are very good reasons for adopting a change to the commencement clause. You see, the rhetoric and all of the talk, all of the press, around this bill before it landed in the House was it was all about a regional fuel tax for Auckland. As the Minister has pointed out in his own contributions over the course of this debate in the committee of the whole House, the Labour Party—so, the Minister in a previous capacity—had campaigned on a fuel tax for Auckland in the election campaign. But what they hadn’t campaigned on—and, in fact, what they hadn’t put into the public arena ahead of this bill being introduced—was that a regional fuel tax that could be applied in any region of New Zealand was coming.

So when the bill landed, New Zealand was suddenly faced with the prospect of a new tax outside of Auckland and, indeed, in any region in New Zealand, and they never saw that coming. The Government hadn’t signalled that. So you’ve got a new tax to be legislated for and approved in this parliamentary term, but it can’t be collected until 1 January 2021. That’s new to the public. They hadn’t had an opportunity to consider that in the election campaign—so when they made their decision over which party to support. So I think it is thoroughly appropriate that the Minister could now take the opportunity to amend the commencement clause such that no provision on this bill will take effect until 1 January 2021, because that gives New Zealanders ample opportunity to digest the truth and the facts of the matter around this bill and to make a decision at the next election as to whether or not they will support what my colleague has suggested be renamed the “Twyford Tax Bill”.

I think the Minister should do that because, in good conscience, that’s when the bill actually does what it says on the tin, which is not introduce new taxes. You then go through an election where people could have that information and make that decision. So I call on the Minister. He has it within his power right now to put a Government Supplementary Order Paper (SOP) in to change the commencement clause, and I call on him to do that and to change it to 1 January 2021.

I would like to offer my voice in support of Mr Ross’ proposed amendment to the title of the bill—that it should be named the “Land Transport Management (Twyford Tax) Amendment Bill 2018”. I also agree with his idea that Mr Twyford, given he’s so proud of the new taxes he’s going to place one in Auckland and also enable the application and approval thereof across any region in New Zealand prior to the next election, should have his name in lights, recorded for posterity, or any other view of the taxpayers and voters of New Zealand. He should have his name indelibly inked on the bill so that the public can always know that it was Phil Twyford, Minister Twyford, who told them that he wasn’t imposing a new tax, it was an Auckland regional fuel tax only, but actually introduced legislation that not only enabled a regional fuel tax to be debated but actually approved—approved—for any region in New Zealand ahead of the next election, and the fact that it can’t be levied until 2021 does not take away from the fact that this legislation allows for the absolute, concrete locking-in of fuel taxes for regions outside of Auckland.

The Minister could also perhaps take an opportunity to do his own Government SOP for a different bill name. I think it could validly be known as the “Land Transport Management Regional Fuel Tax - Distortion of Collection Thereof Amendment Bill.” The Minister has acknowledged in his contributions that it is regressive, it’ll hurt lower-income earners more. His response to that was that it’ll be good for them in the long run, which I argue is thoroughly patronising. But there have been a lot of contributions around how, either through deliberate intent or, more likely, through natural competitive forces in the competitive market, in Auckland in particular to begin with, the actual pricing—not the tax component—will be spread around communities across New Zealand so that, in effect—not illegally so, but in effect—the consumers and businesses outside of Auckland will end up paying, in effect, part of the regional tax price amount that should be applied to Auckland in the first instance. So I call upon the Minister to make an amendment to acknowledge that so the public can know.

CHRIS PENK (National—Helensville): Thank you very much, Madam Chair. I wish to speak on the title of this bill. I will firstly just reflect very quickly on the point made by Jami-Lee Ross that this memorialising of Mr Twyford’s name will not be a statue. It will none the less be a statute, the difference only being a ‘t”—and, of course, as oil is sometimes referred to as “Texas Tea”, maybe there is some appropriateness there. Another thought I had in relation to the title of the bill was that it could be something along the lines of “Fill Up, Phil Down”, so fill up your petrol and Phil will go down—whether that’s Phil Twyford of Phil Goff, I suppose, punters may make their choice as they see fit, certainly within the Auckland region. But, actually, having thought about those possibilities, I decided upon a different approach.

I thought the words “regional fuel tax” are, obviously, pretty integral to the bill, but the Government, surely, would not want to be associated with such a concept, and so I thought if we were to switch the letters of those words around, if we were to sort of mix it up somehow but still retain that character by way of an anagram, then we might come up with something at least as useful in understanding what this bill is about. So an anagram for “regional fuel tax” is a “regulation flex”, and it seems to me appropriate that we will have a mechanism for creating regulations, flexing the muscles of the Government to be able to tax New Zealanders in this way. Alternatively, we could have a “relegation flux” which could indicate the passage—I say that, perhaps euphemistically—of the “relegation” or perhaps “delegation”, if that were to have fitted, of the powers of the Government to those who will be setting in the future such schemes in place.

Other options allowed by my desire to mix things up a little bit in this way include also a “loafer exalting”. I rejected that, however, because it seemed to me that it might suggest that there was particular enjoyment being taken by the Minister, and it seems to me that a loafer is not a fair description of the Hon Phil Twyford. So I rejected that along with the similar, a “fouler exalting”, because that seems—

CHAIRPERSON (Poto Williams): Order! Could I just call the member to order. I know there is a little bit of levity that often accompanies the title and commencement phase of the committee stage. However, we are starting to stray outside of any sense of relevancy to the bill, so I would ask the member to come back to that, please.

CHRIS PENK: Thank you, Madam Chair. It’s a pleasure to speak in relation to the title and, more narrowly, perhaps, now in relation to the actual title as it currently sits and to just sort of analyse how that all fits together. The bill is a land transport management (regional fuel tax) bill. The word “land” to me implies—and I think most New Zealanders would read the ordinary, natural meaning of the word “land” to indicate that it would be about fuel for vehicles that travel by land, and yet we have learnt through the process of discussing the bill in relation to non-commercial ships, to which it will apply, and potentially other craft that do not travel on land as well, that, actually, it should not be the Land Transport Management Act only that is amended in this way.

Now, I’m not proposing that any other Acts be amended, because that would be more appropriate to a Part 2 debate. However, I wonder if some clarification could be given in the title of the bill to make it clear that the usual presumption is that a land transport management Act will actually continue to refer only to matters of land transport. Hence something along the lines of “Regional Fuel Tax in Relation to Land and Other Media or Domains” would perhaps be a useful way of setting out that distinction that is being made in this bill.

My final point relates to the word “regional” within that, and much has been said already about the fact that it is going to be on a regional basis. However, it’s worth setting out clearly, I think, in the title of the bill that there will be multiple regions, lest anyone be unclear.

KIERAN McANULTY (Junior Whip—Labour): I raise a point of order, Madam Chairperson. I purposely waited to the end of that speech, although I’m starting to regret that. I’d like you to consider Speakers’ rulings 114/6 and 115/1, in regard specifically to the motion that a Minister’s name be included in the title of this bill, I ask that you offer a ruling on whether these proposals are indeed in order.

CHAIRPERSON (Poto Williams): Thank you. I thank the member for his contribution. We have been considering that particular matter, and, as you would have guessed by my bringing the previous speaker, Chris Penk, back to relevancy, I have been considering whether including the name of the honourable Minister within the title of the bill, as proposed in the amendment by Jami-Lee Ross, is actually frivolous. I could rule it out of order in that case, or I could wait for the will of the committee to determine that at the end of the proceedings. In this case, I am looking to members to continue to be relevant, so in this case I am ruling that the will of the committee will prevail, and we will allow the amendment.

Hon JUDITH COLLINS (National—Papakura): Thank you, Madam Chair. Thank you. I wish to speak to my amendment around the title of this bill. Now, unlike under Mr McAnulty—I think I’ve said that right—I actually don’t see any problem at all with a Minister wanting to be fairly immortalised for posterity in the name of the bill. Actually, I take it back to that lovely American tradition where you have all these bills named after people and laws that are named after whatever. I also would say things like some of the laws that we have in New Zealand lack the punch—lack the punch—and I see it in actually stating what they’re all about.

So my amendment is that the bill be renamed to the “Land Transport Management and all of Regions Fuel Tax (Phil) Amendment Bill”. Why I say that is because the Phil in this case that I am referring to is a P-H-I-L Phil, not an F-I-L-L. But I love that. It’s the same thing. I think that this could be an excellent name, because that way when everybody around the country—not just Auckland, because this is actually not an Auckland bill; this is actually a bill that was promoted as an Auckland bill but is not an Auckland bill. It can relate to any region in the country. When people go around New Zealand and pay the extra money on their fuel tax and the GST on top of that fuel tax, they will want to say this is because of the “Phil Bill”. Whether it’s a Hon Phil Goff bill or a Hon Phil Twyford bill, it’s still the “Phil Bill”. I think that that’s so much better—

Hon Dr Nick Smith: Poetic justice.

Hon JUDITH COLLINS: I think it is poetic justice, yes—from the Hon Nick Smith—a very good idea from the Hon Nick Smith.

I think it’s the sort of thing where if you’re going to have—generally, nobody likes paying taxes. Well, no—everyone likes someone else to pay taxes. So when you go to fill up the car, it will be an “I’m filling up on the Phil Bill”. People in Papakura, in my electorate, who have to pay so much in fuel tax if they are travelling into the city or travelling to west Auckland or travelling to the North Shore or travelling further south, they will want to know who to thank for that regional fuel tax, because they certainly won’t be thanking the Hon Phil Goff for the Mill Road extension if it stops at Alfriston School. That is going to be funded by some of these taxes. They’re certainly not going to thank the Hon Phil Twyford if the Mill Road extension goes to Alfriston School, doesn’t go through to Papakura, doesn’t go through to Drury, and doesn’t open up the way through for all the developments that have been planned and which the Minister of Housing and Urban Development—also the Hon Phil Twyford—has been so busily promoting, which are, actually, just a bit too far away from the Mill Road extension to be of much use.

I think it’s important that we have bills that people can find when they’re looking for statutes—that’s the other thing. A lot of these bills that you put through, and Acts of Parliament, they’re so numerous and they have such generic and, really, no fun at all names—people can’t find them. Who’s going to know where to find a Land Transport Management (Regional Fuel Tax) Amendment Bill, because it will go into the main Act and it will just be swallowed. Much, much better, I think, in future, that we start thinking about giving these bills names that New Zealanders can find when they look in the legislation website to look for relevant legislation. Because that’s one of the hard things. I’m a lawyer—a very experienced one. It’s not so hard for me, but actually, we’re not here for me; we’re actually here for New Zealanders all over the country, and they should be able to know this is a “Phil Bill”.

SIMEON BROWN (National—Pakuranga): Thank you very much, Madam Chair. It’s a pleasure to take my first call on the land transport management title and commencement part of this piece of legislation. I just want to continue our discussion around the title of this piece of legislation. I’ve just put an amendment on the Table which I think is a very good one, and I think it’s one which the committee should take some time to consider. The proposal is that this Act should be called the “Land Transport Management (Let’s Tax This) Amendment Act 2018”, because, to be frank, this legislation and this regional fuel tax, which will eventually be a fuel tax across all of Auckland—as we know, it’s not going to be regional; it’ll be for the whole country—will have an impact on literally everything which people buy. I think of the people in my electorate in Pakuranga, who are working hard and they drive their children to school, they go to work, and every time they fill up their car they have to pay the regional fuel tax. They go to the shops, and the goods which arrive at the supermarket come on a truck, and that has to include the cost of the regional fuel tax. They go to a cafe, and at the cafe they get a coffee and there are some sandwiches or whatever they get, and the goods and services—wherever they go, this regional fuel tax will have an impact and have a cost on everything. As they will go along the road, as they go there, they will pay the regional fuel tax.

So the name of this legislation should reflect the impact, in my view, that it is going to have on literally everything that people purchase and the way that people get around and the journeys that people take. Also, I think it reflects quite nicely on how the Labour Government, or the coalition Government, should I say, with the three parties—their view of how taxation should just be made up and tax everything, and I think that’s a good slogan of how this Government’s approach to taxation has taken place, of just literally taxing everything.

I remember a promise that there would be no new taxes, and here we are in the first year of this Government with a tax which—yes, they said there’d be a tax for Aucklanders—

CHAIRPERSON (Poto Williams): Order! Repetition.

SIMEON BROWN: They said there’d be a tax for Aucklanders, but it’s a tax for the whole country. So that’s a suggestion, and I look forward to the will of the committee on that. I think there are a number of other names which this could be called—the “Broken Promise Act”, because it is a broken promise, and that goes back to the point I would just make, so I won’t reflect too much further on that because I already have made that point.

The “Travel to Hamilton to Get Your Fuel Tax Act”, because for the first three years, while Aucklanders will have—I know the member for the Waikato is here, and he loves Hamilton, and a lot of people in this House have good memories of that place. Some of them live here, some of them visit, but we know how great a place Hamilton is. But if you’re going to go there to get your tax, well, that’s what this legislation’s going to be doing for the next three years. So maybe that’s one way—but I guess you’d need to change the commencement if you were going to put that title in, because after 2021 we know that other regional councils are able to put in place these taxes. So maybe if that was the title that this committee was to agree to, maybe there should be some way to have the name of the Act changed over time. So the first three years it can be referred to as the “Go to Hamilton to Get Your Tax”, but once Hamilton’s got its tax, obviously you won’t be going to Hamilton because everyone will be paying across the country for their legislation.

There’s been a number of other names about fill up, Phil down, and I think those are also good to be thought about. I think the other thing which is—I mean, in those names is really the reflection that this tax is letting Auckland Council off the hook. It’s letting Auckland Council off the hook, and I’m not sure if there’s some way we can allow this legislation to reflect the fact that Phil Goff said that he would reduce savings by 3 to 4 percent, which is enough for this tax to not be necessary. If he’d kept to his promise to reduce costs and to find savings in Auckland Council, we know that this legislation would not have been required.

So I think this committee needs reflect upon that, reflect upon the fact that the Auckland Council, which this legislation will initially apply to—the mayor promised, and now we’re letting him off the hook by letting this legislation go through so that he can tax his constituents and tax my constituents to pay for a range of projects. Thank you.

KIERAN McANULTY (Junior Whip—Labour): I raise a point of order, Madam Chairperson. I seek your guidance specifically in relation to that previous speech and the proposal to change the title of the bill to make a political point. I refer you specifically to Speakers’ ruling 115/1(3) and the rulings of Chairpersons Braybrooke and Hartley, which give the example of the Tariff (Zero Duty Removal) Amendment Bill and changing that to make a political point. I put it to you that proposing to change the name of the title of this bill to one which is a clear reference to a political slogan from the last campaign would be in breach of that Speakers’ ruling.

CHAIRPERSON (Poto Williams): Thank you, and I thank the member Kieran McAnulty for his intervention. I’m not sure that it’s entirely helpful given my previous ruling; however, I will consider that. And, as I said, there are two options: whether we leave it to the will of the committee, or whether I make a ruling. I am strongly suggesting that we don’t continue to embark upon that journey. We are getting to the point where relevancy is being tested within this committee, in terms of the titles that are being suggested. So I’m making a strong suggestion to members of the committee in that regard.

KIERAN McANULTY (Junior Whip—Labour): I move, That the question be now put.

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

Ayes 63

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

Noes 55

New Zealand National 55.

Motion agreed to.

CHAIRPERSON (Poto Williams): The Jami-Lee Ross amendment changing the title to the Land Transport Management (Twyford Tax) Amendment Bill is out of order as not being a serious amendment.

The question was put that the following amendment in the name of Jami-Lee Ross to clause 1 be agreed to:

Clause 1

Replace Clause 1 with:

Land Transport Management (Not Just Auckland but Other Regions Fuel Tax) Amendment Bill

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

CHAIRPERSON (Poto Williams): Simeon Brown’s amendment changing the title to the “Land Transport Management (Twyford and Goff) Amendment Bill” is out of order as not being a serious amendment. Simeon Brown’s amendment changing the title to the “Land Transport Management (Let’s Tax This) Amendment Bill” is out of order as not being a serious amendment. Judith Collins’ amendment changing the title to the “Land Transport Management (Phil) Amendment Bill” is out of order as not being a serious amendment.

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

Ayes 63

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

Noes 55

New Zealand National 55.

Clause 1 agreed to.

Clause 2 agreed to.

The question was put that the following amendment in the name of Jami-Lee Ross be agreed to:

New Clause 3

(1) All of the sections of this Act fall out of force if, at any time, t

a. The average fuel price in New Zealand reaches $3 a litre.

b. The average fuel price in a region that has an active regional fuel tax scheme reaches $3 per litre of fuel.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

Bill to be reported with amendment presently.

Bills

Taxation (Neutralising Base Erosion and Profit Shifting) Bill

In Committee

Debate resumed from 14 June.

Part 2 Amendments to Tax Administration Act 1994 (continued)

BRETT HUDSON (National): Thank you, Madam Chair. It’s a pleasure to rise and speak on this bill. I think the bill has broad support across the House. I particularly want to talk about clauses 54 and 55, and I have some questions for the Minister. If we have a look at the departmental report and have a look at the submissions, I think submitters raised some very valid points, such as: “Taxpayers should not be exposed to criminal penalties for the acts/omissions of another group member over whom they have no control.” That was ASB, Corporate Taxpayers Group, EY, Russell McVeagh. And I do note that, in the departmental report, the officials said they agree. They agree with the submitters, and the recommendation was that the submissions be accepted.

There’s one in particular that I’d like to ask the Minister about, and that is, I think, the New Zealand Law Society, who raised an extremely good point in their submission. And theirs was that “it should be a defence under sections 143 and 143A that the member charged with the offence did not have the knowledge that the requested information was in the knowledge, possession or control of another member of the group.” Taking a look at those two sections in the Tax Administration Act, it is my read of that, Minister, that the offence is committed if the knowledge or possession is in the hands of that other member of the group. The person being charged, whether they have the knowledge or not as to whether someone else in, say, the multinational has the knowledge or possession of the information, is irrelevant. And that cuts across, therefore, still, in my view—it doesn’t take on board the submission from the New Zealand Law Society.

So I would like the Minister to stand and take a call and tell us, given the departmental report says that the submissions be accepted, how it is—given that the bill itself now just strikes out the provisions, the clauses that relate to 143 and 143A of the Tax Administration Act. So how is it, therefore—given the sections as they currently stand in the Tax Administration Act, where knowledge of the person actually being charged with the commission of the offence, knowledge of what the person elsewhere in the world in the group has or doesn’t have, isn’t actually part of, or doesn’t appear to be part of, the test or the concern as to whether or not an offence has been committed. So I look forward to the Minister—and I see the Minister turning to officials, looking to get some clarity around that—taking a call and just sharing with us how that has been addressed, because I do note that officials did say, in their report, that the submissions be accepted.

The other matter I’d just like to touch upon is clause 53, which is the same general matter but about civil penalties. And I’m particularly interested here in the rationale from the Minister as to why—and this is a submission from Westpac. Westpac said that “imposing a civil penalty liability that exceeds the available criminal sanctions is equally inappropriate—particularly if its intent is to avoid the need for Inland Revenue to bring civil proceedings.” And they note, “There are no equivalent civil proceedings in the Act relating to comparable failures;” That’s from Westpac. And there are; there are quite substantial differences in the amounts payable under the criminal versus civil penalties. Civil penalty has a maximum of $100,000. So, clearly, I imagine there was a reason for officials and for the Minister, therefore, in seeking to continue with a regime where the maximum civil penalty is quite substantially greater than the fine, at least, for the criminal offence. So unless the entity has pretty clear confidence that Inland Revenue aren’t going to charge them greater than the penalty they would otherwise incur, then perhaps that creates something of a disincentive to settle, effectively, out of court. So I would just like the Minister to comment on that.

I would sort of pre-empt that I don’t think trusting the Inland Revenue—while we all might do; we might have great faith in them as an entity—not to apply a penalty which others might see as a bit unfair—I don’t think that’s really where we could be on this. So I’d just like to hear from the Minister on those two areas: the part I raised around sections 143 and 143A around the criminal penalty, and also about how the civil penalty is higher, or can be higher, than the criminal penalty. I look forward to that, Minister.

Hon JUDITH COLLINS (National—Papakura): Thank you, Mr Chair. Can I acknowledge the excellent contribution from my colleague Brett Hudson. I think his questions are very good questions, and I’m sure that the Minister in the chair will want to answer those. But I want to just speak on this bill, because this is a bill that I started—and the Minister’s acknowledged that before, so it’s not a big thing. But it’s not as though it was all my work. Revenue worked so hard to make this all happen, but also I signed us up as a country, at the OECD, to the multilateral arrangements around tax and information collection that this bill is part of.

It addresses a situation, in Part 2 of the bill, very much around the fact that we now have big multinationals in the world who are, in many ways, much bigger, much more powerful, and far better-resourced than some countries, including ours. Those particular multinationals do shift their profits from one country to the other, but also they use their losses or their cost of business to put them in tax advantageous places. As was explained to me at the OECD, some of these big multinationals do in fact have entirely massive tax departments, and as a tax lawyer I found that very interesting. But also they have these big tax departments which are very much focused, as part of their business, on shifting the losses and the profits, depending on where they can pay the least tax.

Now, that works OK for them, and it works OK for their shareholders. But it does not work OK at all for the rest of the world that does not get to do that. By the way, the rest of the world’s paying for the roads and the schools and the law and order and all the things that help make places safe for people to undertake business in.

So I am someone who is very pro - this bill. I know that our party absolutely supports it, because we agreed to it before, when we were in Government, and started it. But I am also someone who thinks that we need to sometimes dial back our enthusiasm for all things collected internationally and shared, because we also need to be aware that, with the greatest and best of intentions, we can in fact empower a group as professional and responsible as our Inland Revenue Department people are—and I have great confidence in them, having been their Minister—but also understanding that what actually helps the Inland Revenue Department to remain a very well-respected department and well-thought-of department and trusted department is that they do not just have carte blanche to go and do anything that they particularly want to do. They have to keep to the law.

So I am just a little bit concerned, along with my colleagues, around the penalties, and particularly when there are multinationals that New Zealanders may be involved in in some way: law firms, accountants, other professionals, or even shareholders or whatever, and people who are directors, who are going to, under this legislation, bear—I think, in some ways—a disproportionate responsibility for the actions of others. One might say that, “Well, that’s their fault for being involved in these businesses.” But, actually, as a law professional, we also have a code of ethics that requires us to—as they say, people take the first cab off the rank. That means that law firms do not get the luxury of saying to a client, or someone presenting as a client, “I don’t like you much, so I’m not going to act for you.”

So I think we need to think about that, and I think the questions raised by my colleague Brett Hudson are incredibly valid. We do not want to have a situation where, rushing to agree with everything that we’ve signed up to before—rushing to agree to all the things that we share in terms of the intentions—we actually create a bigger problem a little bit further down the track.

So I think it is important: the issues raised by the law firm Russell McVeagh and others around this—that we don’t actually penalise our law professionals or our tax professionals or others who are working in these areas quite legitimately—that we don’t penalise them because of what’s being done overseas, where they have no control of it. That’s the thing with the law profession or the accountancy profession: you have your obligations, you certainly have your code of ethics, and what that doesn’t always allow you to do is to actually delve into all of the things that are going on elsewhere.

We need to be very careful that we don’t end with a situation where the penalty for members of a large multinational group failing to provide information under clause 53 of the bill becomes one that actually means that our very competent lawyers and other professionals have to say to overseas companies or multinationals—or even New Zealand companies—“I’m actually sorry. We can’t act for you. We can’t do anything for you. We can’t be part of this organisation. We can’t be a director. We can’t do whatever it is that we’d normally be able to do, because the penalties that could be imposed on us for actions over which we have no control are so onerous that, actually, we just can’t do it.” I think that actually creates quite a bit of a conflict for anybody who is in one of those professions around their ethical obligation to take on clients who turn up seeking assistance. So we just need to get some clarification from the Minister as to how that will in fact be undertaken.

I think we’ve also seen some pretty chilling—and I want to actually just raise this as an issue, because I think it’s a very good point. We’ve seen in the United States recently—and I don’t want to go into any details of people’s court cases—where some lawyers have been specifically targeted around their actions, or, actually, even the actions of their clients. That, I think, has a chilling effect, and should have a chilling effect, on all lawyers and professionals who are working in these very often very difficult ethical areas in the liberal democracies of which we form a part. I’m not saying that what happens in America necessarily affects us, but I certainly see that there is a certain culture of going after, if I can use that colloquial term, people connected to those in high places or those who are seen as being a legitimate target. So I really want to hear a bit more from the Minister about this. I’m sure he’ll give us some good assurances.

But it’s the sort of thing where I think that it’s good for Parliament to question just how this law will in fact, or could in fact—a very legitimate profession and one that we should actually protect ourselves, because it goes to the rule of law. When we can’t have lawyers and other professionals whose job and career and ethical obligations are around the protection of rights—if they cannot continue with their work free of fear that they will suddenly end up penalised for something they have no knowledge of and no control over—then we are going down a very, very slippery path.

I don’t want that to happen. I know it has never been the intention of this Parliament, but what I also know, as an experienced lawyer, is that the intention of Parliament is not necessarily what matters; it is the actions of Parliament that matter, and it’s what the law itself says. So I would like to hear from the Minister in the chair, Stuart Nash—and I’m sure he’ll want to address this—just to make sure what it is that we are talking about, how this will operate, and how professionals in this very important area will in fact be protected from undue bullying or pursuit by revenue and the Inland Revenue Department investigators.

Hon STUART NASH (Minister of Revenue): Let me start off by dealing with the penalties issue—well, I will deal with the penalties issue. First and foremost, to the last member, Judith Collins, who I have the utmost respect for and who did some fantastic work in this area, I acknowledge the fact that she went to the OECD and signed up to this and set New Zealand on the path to actually enhancing the integrity of our tax system, which is what we all want. It’s a little bit rich for her to share concerns over certain obligations to which she signed New Zealand up for, but one thing I will say to her and Mr Butler—

Hon Judith Collins: The Minister started so well and let himself down.

Hon STUART NASH: Ha, ha! I absolutely trust the Inland Revenue Department, first of all—[interruption]—to prosecute under the appropriate law, Mr Butler; so that will happen. There is no doubt about that. The second thing is that we know that Inland Revenue operates with huge integrity—we know that. We also know—and I can give you my utmost assurance—that Inland Revenue is not going to “go after” a large organisation or an individual just because they’re high profile or a tall poppy. They just haven’t got the time or the resources or the inclination, let alone this is not how they operate. They will only “go after” someone if they believe they have broken the law—and so they should—which is what this legislation is about.

Now, talking about clauses 54 and 55, well, it’s a little irrelevant, because what we actually did is we took criminal charges out of the bill. So they’ve been removed. Criminal penalties don’t apply anymore; so it was not necessary to amend these penalties.

The other thing I would say to the Hon Judith Collins is that we’re talking about failure to provide information, OK? So someone is going to get prosecuted if they fail to provide information that the Inland Revenue has requested, but the penalties that we’re talking about in the $100,000-range only apply to large multinational groups with global revenues of more than €750 million. So the former Minister, the Hon Judith Collins, talked about lawyers and accountants; well, if you’re lucky enough to have a client with global revenues of over €750 million, then the practice is probably doing really well, and you’re probably highly experienced and incredibly competent in a certain area of law. So we don’t think that, in this context, a civil penalty of up to $100,000 is excessive at all. In fact, you could mount an argument that it should perhaps be higher, but we won’t go there. So let me deal with this.

The second one is that civil penalties were introduced because we consider the existing penalty of $4,000—$4,000—is unlikely to be adequate when applied to failures of large multinationals to cooperate by providing information that the Inland Revenue has requested. So this is a big area. I hope I’ve dealt with those concerns, with regard to penalties and with regard to clauses that have been taken out, and with regard to the scale of the penalty, but, also, with regard to whom Inland Revenue may seek to prosecute. I just want to reiterate: Inland Revenue is not going to go after someone if they don’t think there is a very good case. Thank you very much.

LAWRENCE YULE (National—Tukituki): Thank you for the call. I’m pleased to support this bill and acknowledge the work of the Hon Judith Collins and the Hon Stuart Nash in getting to this point.

I’ve sat on the Finance and Expenditure Committee. It’s been a learning experience, a significantly complex piece of legislation, but we’re here, in urgency, to get it to the next stage. That being said, Mr Chair—and to the Minister in the chair, the Hon Stuart Nash—there is a suggestion I’d like to make for no other reason than I think we are potentially exposing ourselves unnecessarily to a whole lot of legal fights and a whole lot of lawyers’ interpretations. I specifically comment on clause 50, new section 17(1CB). In this section, there is a specific mention around how we can access information for multinationals in other jurisdictions. It says, “disregarding any law of a foreign country relating to secrecy of information,”.

Now, I worry that that is something we don’t need to say. It is something in the legislation that, particularly, points us to a fight that I’m not sure we will necessarily win. I say that on the advice of the submitters to the select committee, including ASB, BNZ, Chapman Tripp, Corporate Taxpayers Group, New Zealand Bankers’ Association, Russell McVeagh, Westpac, and Chartered Accountants Australia and New Zealand. They considered this a significant overreach in terms of what the powers are, or actually, more so, what is the reality of the situation. So I understand we’re trying to be able to reach into other countries and other entities of multinationals, but, in May, the OECD published figures that show there are 2,700 bilateral relationships already, and that continues to grow.

My point is that if we set amendments that are impossible to comply with and are not necessary, all we’re doing is offering a chink, a bureaucratic nightmare—or whatever word is you want to call it—to something that may not need to be there and would need to be tested in law anyway. While I’m not a lawyer—and I freely admit that—I do think taking on and telling a foreign country that this bill supersedes any other law related to that foreign country is a fight we might not want to have.

So the Inland Revenue Department does not consider it’s appropriate to allow multinational corporations to locate information overseas. I understand that, and I have some sympathy, actually, in our ability to go after multinationals. But I have put in a tabled amendment in my name which, specifically, seeks to remove the words “disregarding any law of a foreign country relating to … secrecy of”, in clause 50, new section 17(1CB). I do that because I think it’s superfluous. If I’m wrong, I’d encourage the Minister to show us, in this Chamber, what value it would, in fact, add to this piece of legislation.

I’m very supportive of this bill. It’s been a steep learning curve, as I’ve said, and I offer this point, in a way, to help future Parliaments and the New Zealand Government—and the Inland Revenue Department, actually—to make sure that we do not get caught up in some big multinational sort of activity and court case when, if you look at the OECD website that looks at this work, massive progress has been made. I suggest we keep going on that path rather than putting in what I regard as unnecessary, over-the-top sort of inflammatory comments in a clause, which I’m not convinced can actually be enacted anyway.

So I ask the Minister to take a call and, specifically, outline the reasons for that, and if he cannot, then I respectfully request that he consider my tabled amendment and make an amendment to this piece of legislation. Thank you.

Dr DUNCAN WEBB (Labour—Christchurch Central): I move, That the question be now put.

Hon PAUL GOLDSMITH (National): Thank you very much, Mr Chair. I wanted to focus a little bit on clause 52 and the country-by-country reports that are being requested. The idea here, of course, is to ensure that a New Zealand - headquartered multinational group with consolidated funds of €750 million in revenue for the previous year furnish the IRD with information on their global earnings. Now, it’s interesting, actually, in the briefings, that it’s been stated that this would apply to about 20 multinational groups. I’m a little bit pleased and surprised to learn that there are 20 such companies of scale in New Zealand, and maybe there are more. That probably is a reflection of the robust health of the economy that we’ve seen over the last nine years, and I do hope that that continues that way under this Government, where business confidence is falling.

I suppose the primary question I have to the Minister—well, before I get to that, the point of this is that by requiring that these multinational companies give information about the gross revenues and profits, income tax paid, income tax accrued, stated capital, accumulated earnings, number of employees, and tangible assets in each of the countries in which they operate, the idea is that then the IRD will share that information with other nations, not so that they can do their tax assessment directly—we’re not asking for that level of detail—but just to give them a broad idea so that they can have a clearer idea of the overall tax picture and make further inquiries if they need to in other countries.

So the primary question I have for the Minister is: how confident is he that New Zealand will get useful information on the many hundreds of multinational companies based elsewhere in the world who have operations in New Zealand, so that the information that we receive will be useful in our collecting of tax by multinationals that are not based in New Zealand but operate in New Zealand? So that’s the primary question: how confident are we that we will get useful information from other countries? I presume it’s only a certain number of countries that have signed up to this and that that would be a moving feast. I’d be keen to get an indication from the Minister as to what percentage of those companies, in terms of overall coverage, in terms of major companies operating in New Zealand which are subsidiaries of multinational companies in the rest of the world and that operate in New Zealand, will be covered by reciprocal relationships and reciprocal information that flows through this country-by-country reporting that we, obviously, expect other countries to be doing, as well as us.

I’d be interested to know the projected time line, I suppose, as to when we think we will start to get that sort of useful information from other countries, because we’re doing this. New Zealand has always been a good global citizen and been prepared to make our effort in order to ensure that there is good cross-country cooperation and understanding of how the taxation burden is met by multinational companies. So we’re doing this and we’re passing this law in the next few days, and it’s been largely a bipartisan law because we are keen to make sure it works. What I’m keen to understand is whether we are going to actually get useful information from other countries out of this that will help us; who they are; roughly, what the percentage of overall revenue for such companies will be covered by countries that are helping us in this area; and what the time frame is for our expected flow of information. I’d be very interested to hear from the Minister and to get a sense of that.

Hon DAVID BENNETT (National—Hamilton East): Thank you, Mr Chair. I just want to take a call in regard to clause 38 of the bill, and that is in regard to the new section HD 30, and that’s “Members of wholly-owned large multinational group”. This clause had a number of submissions on it, from ASB, the Corporate Taxpayers Group, New Zealand Bankers’ Association, PricewaterhouseCoopers—

CHAIRPERSON (Adrian Rurawhe): Order! Sorry to interrupt the member, but we are on Part 2, which is clauses 49 through to 53B.

Hon DAVID BENNETT: OK.

CHRIS PENK (National—Helensville): Thank you, Mr Chair. It’s with pleasure that I address Part 2 of the Taxation (Neutralising Base Erosion and Profit Shifting) Bill. Specifically, I wish to address clause 51 of the bill, which will insert new section 21BA into the parent Act.

I would like to outline the significance of this clause before I speak to some quite specific aspects of those provisions. The significance is really in the heavy powers that are going to be accorded to the commissioner in relation to requiring information from a large multinational group. In new section 21BA(1), we read, “This section applies if the Commissioner notifies”—noting that that’s a unilateral instigation of a process, as reflected by the fact that there’s an information demand and a requirement by the member to comply. So the language is very clearly setting out a situation in which the IRD, through its commissioner, has very large powers, and we don’t need to think too long and hard about overseas jurisdictions in which tax departments—or services, as they might be referred to in other countries—have used their powers in a way in which the citizens of that country would surely not approve. I would not suggest for a moment, Mr Chair, or indeed to the Minister in the chair, Phil Twyford, or to anyone else listening, that our own revenue service would apply powers in an ultra vires way, but, nevertheless, it’s important to bear that in mind when we consider exactly what powers we are going to give them to conduct lawfully in accordance with the statute book.

So, specifically, then, in relation to new subsection (1)(c), a point has been highlighted in submissions to the Finance and Expenditure Committee—and I note, in passing, that I was not a member of the select committee for very many of the times that the committee considered this bill. The phrase that has been met with some objection—or at least some concern, perhaps it’s not too far to say—by the New Zealand Law Society is the one that states: “whether or not in the knowledge, possession, or control of the member,”. The significance of that is that information that must be provided, as required by the commissioner, is not excluded on the basis that the member doesn’t have knowledge, possession, or control of that information. So that’s a pretty high threshold. The suggestion of the New Zealand Law Society—and it seems a sensible one to me, at least—is some slight stepping back from that absolute strict liability requirement so that good-faith measures to hold, possess, or have such knowledge could be applied. Alternatively, we might consider wording such as “best endeavours” or another similar type of approach.

In any case, bearing in mind that the onus is placed fairly and squarely on the taxpayer—namely, the member as defined—I think some slight mitigation of that pretty tough, stringent requirement could be in order. If the Minister is prepared to take a call to give some indication of whether he’ll contemplate that, then I will draft a Supplementary Order Paper along those lines—and I would be very happy to do so.

Heading to the next subsection, within that same section that I’d like to address, subsection (3), I note that a submission was made along similar lines by various submitters—but most compellingly, in my view, by PricewaterhouseCoopers—that the provisions excluding evidence are “too harsh”. Subsection (3) talks about a situation in which a member of a large multinational group might dispute a prosecution, imposition of a penalty, and so on, and, in doing so, the rules for the evidence being allowed or not, as then set out in subsection (4), are subject to a number of criteria. Each of those criteria is required in order for an exclusion to be set aside such that—[Time expired]

Hon STUART NASH (Minister of Revenue): Thank you very much, Mr Chair. Let me answer some of the questions that have been asked and see where we end up. First of all, to the Hon Judith Collins, I just want to reiterate an answer I gave earlier. You were concerned that New Zealand lawyers, etc., would not advise multinationals or take on multinationals as clients for fear of being hit with a $100,000 fine if they did something wrong or something occurred outside of their knowledge. I’m pleased to inform the member that, in fact, the civil penalties apply to members of large multinational groups, and it would not apply to their advisers. So, hopefully, that has answered that point.

Lawrence Yule brought up a point around secrecy. It is not an amendment that we can consider. In clause 50, there is reference to disregarding foreign secrecy laws, and this is consistent with existing information request provisions within the Tax Administration Act anyway.

The other thing I would also say is that most countries are repealing their secrecy laws to meet new standards for exchange of information. Keep it in mind we’re not going this alone; this is OECD-led. Everyone—every jurisdiction, every tax department—wants multinationals to pay their fair share. Let me give an example—and I know the committee was briefed on this—of where we may need to do what we’ve done in the bill. That is, for example, a tax haven—not that many large multinationals use tax havens, of course—may have a secrecy law that makes it illegal to provide certain information to a foreign Government. So that’s the reason why we’ve gone down that route. Most secrecy laws relate to bank secrecy, and so it would not prevent a multinational from providing IRD with information about their own tax position.

There is something I would like to say to Mr Penk, and that is: please do not compare New Zealand’s IRD to other jurisdictions, certainly those that may be considered in not the same light as New Zealand. We are known globally—we are renowned globally; we have a global reputation—for a fantastic tax system. The integrity of our tax system is very, very highly valued, and there are two former Ministers of Revenue here who understand that, who worked hard on that. The thing I would say is that one of the reasons—it’s not the only reason, but one of the reasons—is, obviously, a broad base - low rate but also the commissioner. The commissioner—in this case, the current commissioner—is a person of immense integrity, even though I am well aware that this bill will transcend her time—I’m assuming; who knows how long she will be there?

The thing about this bill—and I talked about this a lot when I was in Opposition—is there are the words “may” and “must”: when are we going to compel the commissioner to do this, or when is it up to the commissioner’s discretion to do this? I’m not prepared to accept an amendment that waters down the commissioner’s ability to go hard against multinationals, for two reasons. Yes, you are dead right; the onus is always on the taxpayer to provide information to IRD. It doesn’t matter if it’s your money or a large multinational. If someone has that information or not, that is still up to the taxpayer to find that information and furnish that to the commissioner, keeping in mind the commissioner—I sort of addressed this last week—just doesn’t have the time to go on fishing expeditions, and that would not enhance the integrity of our tax system in any way, shape, or form.

So what we are doing here is providing the commissioner powers to investigate or compel the taxpayer to provide information when there is evidence or when there is a very strong suspicion that, in fact, that taxpayer is not complying with the law. I think if we watered that down, then we would open a massive big loophole for a whole lot of corporate lawyers to march right on in and say, “Well, the commissioner had to use their discretion. We don’t know if the discretion was used appropriately.”, etc., etc. So I think compelling the commissioner to do this is actually the right thing to do to maintain the integrity of the Act, as well as the tax system. Thank you.

KIRITAPU ALLAN (Assistant Whip—Labour): I move, That the question be now put.

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

Ayes 63

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

Noes 55

New Zealand National 55.

Motion agreed to.

The question was put that the following amendment in the name of Lawrence Yule to clause 50 be agreed to:

amend new section 17(1CB) by deleting the words “disregarding any law of a foreign country relating to the secrecy of information”

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

Part 2 agreed to.

New Part 3 Parameters of Review

CHAIRPERSON (Adrian Rurawhe): I call Andrew Bayly.

ANDREW BAYLY (National—Hunua): Thank you very much.

Hon Chris Hipkins: I raise a point of order, Mr Chairperson. I’m sorry to interrupt Andrew Bayly. I do understand that he wants to speak on this. I would just like to point out to the committee that, if I don’t do this next bit, if I don’t get the call at this point, the House will not be able to end its urgency and question time will not be able to happen and the Treaty bill that we are going to be debating this afternoon will not be able to be debated. I’m not attempting to stop him speaking on this. As soon as the committee resumes its debate on this bill, in normal sitting time, he, I’m sure, will be seeking the call. I’m asking his indulgence to give me the call so that we can end the urgency right now and then we can come back and Parliament can finish its regular business for the day.

ANDREW BAYLY: Give him the call.

CHAIRPERSON (Adrian Rurawhe): The member has agreed. I call the Hon Chris Hipkins.

Hon CHRIS HIPKINS (Leader of the House): I move, That the committee report progress on the Taxation (Neutralising Base Erosion and Profit Shifting) Bill.

Hon MICHAEL WOODHOUSE (National): I raise a point of order, Mr Chairperson. Before that’s voted on, may I raise a point of order, because we’re in the committee; otherwise we’ll be out. I just want to clarify that Mr Bayly’s successful seeking of the call wouldn’t constitute one of his speeches in the committee stage.

CHAIRPERSON (Adrian Rurawhe): I think that just to be on the safe side—

Hon MICHAEL WOODHOUSE: In that case, I seek leave for the call not to be counted for the purpose of the committee stage count.

CHAIRPERSON (Adrian Rurawhe): Leave is sought for that purpose. Is there any objection? There appears to be none.

Motion agreed to.

House resumed.

The Chairperson reported the Land Transport Management (Regional Fuel Tax) Amendment Bill with amendment, and progress on the Taxation (Neutralising Base Erosion and Profit Shifting) Bill.

Report adopted.

The House adjourned at 12.51 p.m. (Thursday)