Tuesday, 24 July 2018

TUESDAY, 24 JULY 2018

TUESDAY, 24 JULY 2018

The Speaker took the Chair at 2 p.m.

Prayers.

Ministerial Statements

Armed Forces’ Public Service—Nurses Used During Industrial Dispute

Hon RON MARK (Minister of Defence): I wish to make a ministerial statement under Standing Order 356 in relation to the use of the armed forces to perform a public service in connection with an industrial dispute. I’m required under section 9 of the Defence Act 1990 to inform the House that this authority has been given and the reasons for giving it, and to table it at the House at the first opportunity.

Following a request from the Minister of Health for New Zealand Defence Force assistance in the event of industrial action by nurses, I approved under section 9 of the Defence Act 1990 the provision of a small detachment of up to 20 regular force nurses able to perform general nursing duties if required in accordance with the priorities as provided by the Ministry of Health. This modest provision was made to assist the overall effort by the Ministry of Health and district health boards to maintain life-preserving services and continuity of care at locations across New Zealand in the event of industrial action on 12 July 2018. Written approval for this action was provided by me to the Chief of Defence Force on 10 July, and I will table a copy of this letter today.

On 12 July, 17 New Zealand Defence Force nurses undertook nursing duties at five Ministry of Health priority locations across New Zealand, to support the provision of life-preserving services agreed to between the district health boards and the New Zealand Nurses Organisation. One nurse in Taupō, two nurses in Palmerston North, two nurses in Invercargill, six nurses in Canterbury, and six nurses in the Waikato. Fifteen of the nurses worked in emergency departments while two of the nurses worked in Waikato intensive care. I commend the Defence Force for being able to move quickly and provide high-quality support.

This effort reinforces the wide range of other tasks the Defence Force performs for our communities and underlines their dedication and professionalism. Thank you, Mr Speaker.

Hon MICHAEL WOODHOUSE (National): I want to begin by expressing my party’s admiration for all our Defence Force personnel, both regular and reservists, who serve our country with distinction and have done for generations—often in very dangerous places. And our medical staff have done so as well, in places as far flung as the former Yugoslavia, Somalia, East Timor, and Afghanistan, and they have provided excellent care, both to their own forces and to the local community. I suggest it wasn’t the expectation of those fine men and women of the Defence Force medical teams that they be delivering life-preserving services in New Zealand, in our hospitals. Indeed, the stated goal of the New Zealand Defence Health is to be “tasked with ‘maintaining, improving, and restoring the health of the defence force’ in order to maintain the operational effectiveness of the [New Zealand Defence Force]. … The NZDF medical officer will be expected to provide this care to NZDF personnel, as required on land, at sea, or in the air.”

So while the Minister of Defence has provided us with a statement on the deployment under section 9 of the Defence Act as he is required, quite frankly, this revelation that we have only just found out about this morning raises far more questions than the Minister has answered. Indeed, this is unprecedented. Only three times—three times—in the last 70 years has section 9 or its predecessor Act been invoked: firstly, the 1951 waterfront workers’ strike; in 1993, and in 2001—the second and third of those were in corrections facilities following industrial action.

It would never have been envisaged that Defence Force medical personnel be deployed to our own hospitals to provide life-preserving services to New Zealanders in peacetime. And the Minister of Health assured us that everything was being done to make arrangements, so I would ask this—this is the fundamental question: what happened in the breakdown of the relationship between the Government and the New Zealand Nurses Organisation that life-preserving services from the 27,000 nurses in this country could not have been arranged, that led to the need for the Government to invoke section 9?

I wonder if the Minister of Defence actually scrutinised what this request really meant for Defence Force personnel. It just shows quite how ham-fisted the industrial relations management of the nurses’ industrial dispute has become. When we’re calling in the army to man our hospitals, to staff our hospitals, during an industrial dispute, it behoves this Government to settle this action and, actually, to be a little bit more upfront with New Zealanders about what they’re doing and when. It has been nearly a fortnight since that strike and we only find out today that we had Defence Force personnel propping up our health services. And the dispute remains unsettled. I’m sure the Minister of Defence is very, very concerned to avoid having to take this extraordinary action again, and it falls to the Government and it falls to the Minister of Health to sort this thing out quickly.

Rt Hon WINSTON PETERS (Acting Prime Minister): I seek leave to table a document evidencing when the armed forces employed personnel in an industrial dispute—namely, National’s Warren Cooper in 1993, in the prison system strike.

SPEAKER: What is the document?

Rt Hon WINSTON PETERS: It’s the Hansard.

SPEAKER: Are there any further comments to be made?

Hon Dr DAVID CLARK (Minister of Health): Can I echo the comments of the Minister of Defence and thank the Defence Force for supplying 17 nurses to work in district health boards (DHBs) during the nurses’ strike. I also want to thank the individual Defence Force nurses who undertook these duties. The Defence Force also supplied, of course, medical support during the Christchurch—

SPEAKER: Can the member talk into the mike, and can the people who are looking at them make sure that they’re turned on, please?

Hon Dr DAVID CLARK: I apologise, Mr Speaker; I have a quiet voice. I’ll start again.

Can I please echo the comments of the Minister of Defence and thank the Defence Force for supplying 17 nurses to work in DHBs during the nurses’ strike. I also want to thank the individual Defence Force nurses who undertook these duties. Of course, the Defence Force was also involved in the Christchurch earthquake, where they supplied medical personnel to help out with that effort. We are always grateful for their support.

As this was the first industrial action by nurses in a generation, it was prudent to do all that we could to ensure our hospitals had enough nurses in place for the duration of the strike. It was for that reason that, as Minister of Health, I requested support from the Defence Force. Their contribution was part of a much larger effort to ensure patient safety remained a priority during 24 hours of strike action.

With that in mind, I’d also like to take this opportunity to pay tribute to the constructive way the New Zealand Nurses Organisation and district health boards worked together to make sure life-preserving services—

SPEAKER: Order! It’s a narrow debate.

Hon Dr DAVID CLARK: It’s a reflection on the professionalism and dedication of all involved that despite the disruption caused by industrial action, our hospitals continued to provide quality emergency care. It’s not my place to comment in detail at this stage on the ongoing process, though I remain hopeful a deal can be found and we will not need to call on the Defence Force for further support. Ultimately, we all want our hospitals to be sustainable, safe working environments. That is certainly what this Government is committed to and it is nothing less than our nurses and the patients they care for deserve.

Points of Order

Ministerial Statements—Procedure

Hon GERRY BROWNLEE (National—Ilam): I raise a point of order, Mr Speaker. I bring it up now, before we start question time. Look, we just saw a ministerial statement read in the House, a statement read by a Minister of the Government—a Cabinet Minister—to the House, which was then replied to by the Opposition, and then there was a further comment from another Minister in the same Government to the same ministerial statement. Is that something new for the House, or something that is just for today, or something we can look forward to in the future?

SPEAKER: I think it’s something which has happened regularly since MMP, which has involved Governments of more than one party. It is very clear that each party leader has the ability to respond. I assume, in this particular case, Mr Bridges delegated his to Mr Woodhouse, and no one from the Labour Party had spoken before Dr Clark.

Hon GERRY BROWNLEE (National—Ilam): I raise a point of order, Mr Speaker.

SPEAKER: A new point of order? Because we’ve dealt with that one.

Hon GERRY BROWNLEE: It’s just pointing out that, in fact, this situation hasn’t arisen before, because other times when it has occurred—when parties supporting a Government have contributed to a ministerial statement—they have not sat in Cabinet alongside those other Ministers.

SPEAKER: And?

Hon GERRY BROWNLEE: Well, is it new or not?

SPEAKER: I think people—[Interruption] Order! I just want to make it clear that the Standing Orders are very clear, and that is that the leader of each party speaks, or someone who’s delegated to do so by them. That’s not a new Standing Order; it’s been around for a very long time.

Oral Questions

Questions to Ministers

Beneficiaries—Obligations

1. Hon SIMON BRIDGES (Leader of the Opposition) to the Prime Minister: Does he stand by all his Government’s policies and actions?

Rt Hon WINSTON PETERS (Acting Prime Minister): In their specific context, particularly when I said that the women’s and men’s Rugby Sevens should be congratulated for their fantastic victory over the last weekend. In that context, definitely yes.

Hon Simon Bridges: Does he think there should continue to be mutual obligations on beneficiaries to be looking for work or working towards training for work?

Rt Hon WINSTON PETERS: The difference between this Government and the former Government is that we believe that people need to be assisted back into work, and they shouldn’t be forced to starve and freeze whilst they’re getting the employment that should have been set up for them nine years ago.

Hon Simon Bridges: So should there be obligations on beneficiaries to be looking for work?

Rt Hon WINSTON PETERS: Those obligations already exist. That’s why we have the lowest unemployment since that member can remember.

Hon Simon Bridges: Should people on the job seeker benefit be drug-free and continue to be drug-free while they’re looking for, or in, employment? [Interruption]

SPEAKER: Order! There were two Ministers then who interjected, and it’s no good looking behind you. I’ll make a decision and communicate it.

Rt Hon WINSTON PETERS: In an ideal world, of course that member’s right, but our job is to take people who have fallen by the wayside, pick them up again, and put them back into the workforce.

Hon Simon Bridges: Does that involve consequences for beneficiaries repeatedly failing to comply with obligations to work, or not being drug-free while, again, looking for work?

Rt Hon WINSTON PETERS: That member will know, if he was familiar with our social welfare system, that there are already consequences and that the Ministry of Social Development ensures that that happens all the time.

Hon Members: The Government’s taking them away.

Rt Hon WINSTON PETERS: No, they have not taken it all away. If that member wasn’t so dislocated from reality, he’d know that.

Hon Simon Bridges: How can he say they’re not taking away—the Government, that is—the sanctions, when the jobseeker benefit’s up some 4,000, when the sanctions being applied are down 20-something percent, when the Government Minister’s making it incredibly clear that there’ll need to be two opinions before sanctions are applied and formally telling Work and Income they shouldn’t be applying sanctions, and he’s got a working group out that’s mandated to get rid of the sanctions?

Rt Hon WINSTON PETERS: It’s very difficult to actually answer that diatribe because it had so many elements to it.

Hon Simon Bridges: Let me be very simple for the Prime Minister: how does he—

SPEAKER: Order! The member will start with a question.

Hon Simon Bridges: How does the Prime Minister explain that the number of benefits are up relatively significantly and the sanctions are down pretty significantly?

Rt Hon WINSTON PETERS: Benefit numbers were up 3,000 from the all-time high figure under the global financial crisis that that member had under his control, and after nine years had gone up by 3,000. Those are the facts.

Hon Simon Bridges: Does he agree with Jan Logie that eight out of 277,000 beneficiaries being suspended each day for breaches of obligation is too many?

Rt Hon WINSTON PETERS: In an ideal world, of course I’d agree with that member. The reality is, we haven’t given up. We haven’t given up on the kind of economic and social utopia that we’re organising at this point in time. We don’t take that dismal puritanical view of the roadshow that went around the country filling up telephone booths and calling it a worldwide campaign.

Hon Simon Bridges: Does he agree with Jan Logie, who said that applying obligations to beneficiaries are “not the actions of a decent and compassionate government”, or does he actually believe that obligations are a compassionate tool to help people into work, which will improve their life outcomes?

Rt Hon WINSTON PETERS: I could say that it’s been a long time since I’ve heard the neoliberal experiment being described as a compassionate tool to help the poor. This is a new one for us.

Hon Simon Bridges: So it’s quite clear, is it, that he does not support sanctions, that he thinks beneficiaries should be able to languish on the dole queue?

Rt Hon WINSTON PETERS: Which of the two questions would the member like me to answer?

SPEAKER: Well, I couldn’t find one amongst that.

Hon Simon Bridges: How can he stand here and defend the policies of Labour and the Greens to soften obligations, remove sanctions, and put more people on welfare, when he clearly doesn’t believe in it himself, and his colleagues have actively advocated getting the “nephs” off the couch with sanctions?

Rt Hon WINSTON PETERS: Because the programme that we have advocated, as a Government, about getting the “nephs” off the couch is about providing the work for them in the first place. You can’t get them off the couch if there’s no place to go and work at—that’s the difference. And I’m going to be concerned about Jacinda Ardern calling me shortly and saying I’d better stay here—this job looks too easy.

Hon Simon Bridges: Will the Prime Minister give a straight question—

Hon Member: Straight answer.

Hon Simon Bridges: —a straight answer—to whether or not his Government is going soft on sanctions and allowing beneficiaries to languish on the dole queue?

Rt Hon WINSTON PETERS: Repeating a misnomer does not give it any validity. The reality is all of my colleagues and all of these members over here are dedicated to finding more real work and First World wages for New Zealand citizens. And the “First Citizen of the Provinces” has been all around the country opening up opportunities for that to happen. If you’re going to get people off the couch and get them out of the pool room and every other place in town, you have to have work for them, and work we will have.

Economy—Forecasts

2. Hon AMY ADAMS (National—Selwyn) to the Minister of Finance: Has he seen GDP forecasts from Infometrics predicting growth of “roughly 2 percent per year between now and 2021”, which is “more than 1 percent lower than Treasury’s economic forecast”; if so, what effect would GDP growth 1 percent lower than Treasury forecasts have on future Government surpluses?

Hon GRANT ROBERTSON (Minister of Finance): I have seen reports of those forecasts, just as I have seen other reports on the economy released recently, including one from Westpac economists who said they expect growth of about 3 percent. In answer to the second part of the question, it is not the rate of economic growth that will decide future Government surpluses; it’s the priorities and spending decisions of Governments.

Hon Amy Adams: Is he prepared to acknowledge any concern at all that all respectable economists and commentators, including Infometrics, ANZ, and the New Zealand Institute of Economic Research, amongst others, are now talking down our economic future under this Government’s low-growth, anti-business policies, and we are now, once more—

SPEAKER: Order!

Hon Amy Adams: —net losers.

SPEAKER: Order! Order!

Hon GRANT ROBERTSON: Mr Speaker—

SPEAKER: No. The member cannot make that sort of assertion as part of a question. Start again.

Hon Amy Adams: Is he prepared to acknowledge any concern at all that our economy now shows all the signs of slowing down considerably?

Hon GRANT ROBERTSON: I’m prepared to acknowledge that some business sentiment is negative, but the consensus forecast—for example, the one published by FocusEconomics this month—shows growth of about 3 percent is expected.

Hon Amy Adams: So is he seriously trying to claim that the policies of this Government, like union-friendly industrial relations changes, significantly higher labour costs, more strike action, banning oil and gas exploration, turning away foreign investment, and many others are going to have no effect on businesses or jobs, nor are causative of these lower GDP forecasts?

Hon GRANT ROBERTSON: I repeat: the consensus forecast is around 3 percent growth, which is what Treasury were expecting. And I wonder if the member had taken the opportunity to read further into the Infometrics report, where they actually said, “We do not believe current business confidence levels signal a major contraction in business investment.” So the report she’s quoting actually doesn’t back up her argument.

Hon Amy Adams: Would he agree with the proposition that the most effective way to be able to afford essential Government services like higher nurses salaries and more infrastructure is to actually see the economy grow?

Hon GRANT ROBERTSON: Yes. Economic growth is very important, which is why the consensus forecast that shows 3 percent growth will give our Government the ability to continue to invest in the areas that the previous Government failed to do so.

Hon Amy Adams: In light of that answer, how can he be so dismissive of the numerous economic forecasts which are now coming out, showing that our GDP growth is slowing, which will make it harder to pay for essential services like salaries and infrastructure?

Hon GRANT ROBERTSON: I repeat what I said earlier: there are a number of different forecasts. The consensus forecast released by FocusEconomics this month says 3 percent growth is what we can expect.

Hon Amy Adams: So is the real reason he won’t find more money for the nurses and he’s had to deploy the Defence Force to staff our hospitals that Treasury officials have in fact told him that GDP expectations are lower, and the reality is that he knows he has promised far more than he can afford.

Hon GRANT ROBERTSON: I reject the premises in that question, and, in fact, this Government has doubled the amount of money available for nurses because we recognise that over the last nine years the health system was underfunded. Nurses were undervalued. We’re doing something about it.

Economy—Innovation, Productivity, and Reports

3. Dr DEBORAH RUSSELL (Labour—New Lynn) to the Minister of Finance: What recent reports has he seen on the New Zealand economy?

Hon GRANT ROBERTSON (Minister of Finance): I have seen several reports recently which suggest the fundamentals of the New Zealand economy remain strong. ASB commented this week that the trade-weighted index will remain supported by New Zealand’s solid economic outlook, strong export prices, and our historically high terms of trade. Westpac economists said this week they expect growth near 3 percent over the next year and that this growth will be supported by fiscal policy, and that the slight softening of growth in recent quarters has been linked to moderation in the housing market. This represents a transition away from a reliance on housing speculation and towards the productive side of the economy.

Dr Deborah Russell: What recent reports and commentary has he seen on the importance of a more productive economy?

Hon GRANT ROBERTSON: The 2018 Global Innovation Index was released recently, detailing how innovative activity drives economic and human development. The 2018 report was based on data primarily from 2017 and 2016. It is disappointing to see that New Zealand’s innovation ranking has dropped in the most recent report to the 22nd most innovative economy in the world, from the 13th in 2012. Liam Dann, in the New Zealand Herald, commented that this is a “damning indictment of the last Government’s efforts to promote innovation in the economy.”, partly due to its cancellation of the previous Labour-led Government’s R & D tax credit policy.

Dr Deborah Russell: How will the coalition Government’s plan help to turn this around and support the New Zealand economy to be more innovative and productive?

Hon GRANT ROBERTSON: The Government’s economic plan includes policies to get our R & D investment to 2 percent of GDP, from our current position below the OECD average. This includes an R & D tax incentive that will give businesses certainty and encourage them to innovate, instead of having to spend time and money dealing with the bureaucratic costs of the previous Government’s R & D policy. This coalition Government’s plan will unlock the growth potential of the productive side of our economy, including in the regions, so that we can transition to a more productive, sustainable, and inclusive growth path.

David Seymour: Does the Minister believe introducing a capital gains tax (CGT) could help transition the economy to be more productive?

Hon GRANT ROBERTSON: There’s no doubt that we need to see more investment in the productive side of our economy and away from the speculative side of our economy. Issues around whether or not a CGT will be released are part of the consideration of the Tax Working Group.

David Seymour: Does the Minister favour introducing a capital gains tax?

Hon GRANT ROBERTSON: I will wait to see the outcomes of the Tax Working Group, but what I can say is that I favour more investment in New Zealand going towards the productive side of the economy and less of a focus on celebrating economic growth that’s driven by population increase and people selling houses to each other, which is what we saw for the last nine years.

KiwiBuild—Buying off the Plans

4. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: Has he been advised of the quantum of risk that the Crown is taking through its Buying off the Plans initiative; if so, what is the quantum of risk?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): The types and amount of risk the Crown may take through the Buying off the Plans initiative were assessed as part of the business case I took to Cabinet. In terms of the amount of risk, that will depend on the particular contractual arrangements between each developer and the Crown.

Hon Judith Collins: Once the Crown has committed to a KiwiBuild Buying off the Plans purchase from a developer, will the Crown take all of the risk if the housing market falls, and, if not, in what proportion will that risk be taken?

Hon PHIL TWYFORD: Well, the nature of the risk-sharing arrangement in the Buying off the Plans initiative centres on the underwriting, or Buying off the Plans itself. In that case—in the case of an underwrite—if the developer is unable to sell the property at an agreed price, then the Crown will step in and buy that property at an agreed price and then onsell it to young Kiwi families.

Hon Judith Collins: If the construction risks such as a rise in construction costs lie with the developer, who will take on the risk if the houses are not completed by the developer?

Hon PHIL TWYFORD: That risk is one that is shared by the developer and KiwiBuild, and it will be dealt with through the contractual negotiations.

Hon Judith Collins: If the developer becomes insolvent during the process of building the KiwiBuild houses, will the Crown meet the mortgage debts of the developer, and what is the limit of liability in relation to each development that he is prepared to take?

Hon PHIL TWYFORD: I don’t have that precise detail in front of me, but if the member wants to put down a written question, I’ll be very happy to do my best to answer it.

Hon Judith Collins: If Hawkins Construction and other formerly major and credible developers have gone into liquidation this year, then what assurance can he give New Zealanders that other developers will not leave the New Zealand taxpayer liable for meeting the costs of unmet guarantees in half-built houses?

Hon PHIL TWYFORD: What I would say to that is that risk is an inherent part of the development process. The whole idea behind KiwiBuild is that the Government will prudently share the risk with developers in order to build the kinds of modest, affordable starter homes that the market has absolutely failed to deliver to young Kiwi first-home buyers. That is the nature of the risk-sharing arrangement that lies at the heart of KiwiBuild.

Marja Lubeck: What are the risks of not undertaking the Buying off the Plans KiwiBuild programme?

Hon PHIL TWYFORD: The main risk is that we will continue to see residential developments across New Zealand stall because developers struggle to find finance on acceptable terms. These developments will not be built, will be completed more slowly, and will contain bigger, more expensive homes because that’s where the biggest profit margin lies. This would mean that we would not increase the supply of modern starter homes for young families. This Government is committed to building affordable homes so that we can restore the Kiwi Dream of affordable homeownership.

Transport—Fuel Tax

5. JAMI-LEE ROSS (National—Botany) to the Minister of Transport: Does he stand by all his statements and actions?

Hon PHIL TWYFORD (Minister of Transport): Yes, when described and reported accurately.

Jami-Lee Ross: Does he stand by his answer to written question No. 13789, where he outlined that New Zealanders will be paying more than $1 billion in new fuel taxes over the next three years?

Hon PHIL TWYFORD: Yes.

Jami-Lee Ross: What advice did he receive from the Ministry of Transport on the impact on the cost of living of charging New Zealanders an extra $1 billion in new fuel taxes over the next three years?

Hon PHIL TWYFORD: The Ministry of Transport agreed with the modelling that was done by the Ministry of Business, Innovation and Employment, which said that as a result of the full roll-out of three years of consecutive fuel excise duty increases and the Auckland regional fuel tax, the average family in Auckland will pay, typically, $5 extra per week.

Jami-Lee Ross: Did he take into account, before he announced a billion dollars in new fuel taxes, that fuel prices had already increased, on average, by 20c a litre since he took office?

Hon PHIL TWYFORD: Well, I take my cue on this from an earlier Government that increased fuel taxes in 2015, after petrol prices had gone up by 40c a litre between January and June 2015. The Government then increased excise tax in July, as that decision had no impact on the economy, and petrol prices later fell as international fuel prices moderated. I think Simon Bridges is a very good role model here.

Jami-Lee Ross: Can he confirm that after this 20c a litre price movement, his fuel tax increases and regional fuel taxes will mean that his Government is responsible for Kiwis paying over 40c a litre more for petrol than what they were paying a year ago?

Hon PHIL TWYFORD: No, I don’t believe that this Government or any previous Government is responsible for international commodity prices and their volatile fluctuations.

KiwiBuild—Māngere Development

6. ANAHILA KANONGATA’A-SUISUIKI (Labour) to the Minister of Housing and Urban Development: What progress, if any, has he made towards the Government’s target of building 1,000 affordable KiwiBuild homes in 2018/19, 5,000 in 2019/20, and 10,000 in 2020/21?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): The Government has announced that it will transform Māngere with an ambitious programme to build 10,000 new homes for Kiwi families. Under our plan, 2,700 worn-out State houses will be replaced by 10,000 new homes, made up of 3,000 new State houses, up to 3,500 new KiwiBuild affordable homes, and 3,500 homes sold on the open market. The first stage of the development is under way; 35 State houses are being demolished, to be replaced by 66 more State houses and 100 other homes, at least half of which will be KiwiBuild. The first KiwiBuild and affordable homes in this development will be completed towards the end of 2019 and early 2020.

Anahila Kanongata’a-Suisuiki: How will the Government ensure the local residents are able to rent or buy homes in the completed Māngere development?

Hon PHIL TWYFORD: I am determined that the local community will benefit from this redevelopment and not be priced out of the new homes. HLC is working hard to keep the prices of KiwiBuild homes as low as possible. We’re also working on long-term rent and shared-equity options. And, for KiwiBuild, we’ll be using priority ballots to ensure that local residents get the first shot at owning their own home, in their own community.

Anahila Kanongata’a-Suisuiki: How does the Māngere development fit within the Government’s plans for large-scale urban development?

Hon PHIL TWYFORD: The Māngere development is the first fully integrated transport and housing development. HLC and the KiwiBuild unit are working closely with the New Zealand Transport Agency - led light rail project to ensure that these two projects make Māngere an even better place to live. Integrating transport and housing is how we invest in the infrastructure to get ahead of growth. Māngere joins Unitec, Northcote, and Tāmaki as the initial large-scale developments, where this Government is building modern starter homes for young Kiwi families.

Anahila Kanongata’a-Suisuiki: What interest has there been in the KiwiBuild scheme and these large-scale developments?

Hon PHIL TWYFORD: Well, over 35,000 Kiwis have registered their interest in KiwiBuild. For aspiring homeowners, the next step is to start the qualification process in order to be ready to enter the ballot on their chosen KiwiBuild properties as they go on sale in the coming months and years.

Regional Economic Development—Mining on Conservation Land

7. Hon PAUL GOLDSMITH (National) to the Minister for Regional Economic Development: Does he stand by his statement, “the extractive sector will not be written out of any script of regional development that I or the party I belong to are a part of”?

Hon SHANE JONES (Minister for Regional Economic Development) Within the context in which the remarks were given, absolutely.

Hon Paul Goldsmith: Does he believe there should be new mines on the Department of Conservation’s (DOC’s) stewardship land?

Hon SHANE JONES: When I made those remarks—the member ought to bear in mind that words have meaning, and all of my words have thoughts behind them; after all, in the absence of thoughts, as Shakespeare said, your words never get to heaven. We are currently undergoing a process of categorising land that is known as stewardship land, and, as that process unfolds, as the former parliamentary commissioner advised, we will assign appropriate values to those lands. As that process reaches some conclusion on stewardship land, at that point I will be in a better position to know as to what proportion should be dedicated to economic development and what proportion to preservation.

Hon Paul Goldsmith: How can he say, as he was quoted by the New Zealand Herald, that “The extractive sector will not be written out of any script of regional development that I or the party I belong to are a part of”, if he is not prepared to clearly state that there should be the possibility of a new mine on low-value lands on the DOC estate—which, by the way, comprise 85 percent of the land on the West Coast?

Hon SHANE JONES: I am well aware, having returned from the West Coast as something of a hero after a brief visit there—[Interruption]. The audience realised that although I spoke at Shantytown, my vision, unlike the last regime, bears no shanty resemblance or resonances for that part of the country. As I said, the mining sector is already part of the political economy of that part of the country. The statutory decisions lie with other Ministers, but the quality of my advocacy will continue, because unlike that member, I am a lion in the regions, I am a lion in the House, but I am not a wimp when I go back to Epsom.

Hon Paul Goldsmith: Will he be a hero and resign as Minister if the Government he is part of bans new mining on stewardship land?

Hon SHANE JONES: As I said, I can remind the member that I’ve had a go at resigning before. That is not in the immediate future of anyone that I know on this side of the House. We will undertake a process which actually stretches back to 1987. We will move forward on some of the sentiments articulated in an earlier report from the parliamentary commissioner and ensure that stewardship land is robustly categorised. The actual formal and legal decisions lie with other Ministers, but, rest assured, the Coast and New Zealand in general will hear a clear voice from myself reminding everyone of the importance of the extractive sector.

Hon Paul Goldsmith: What message was he sending, and to whom, when he said to the New Zealand Herald: “Stewardship land has been lying around since Rogernomics times and any changes to stewardship land will be a change of policy agreed to by the entire Government.”—was it to the Prime Minister who announced in the Speech from the Throne that there will be no new mining on conservation land under this Government, and stewardship land is part of the conservation estate, or was it somebody else?

Hon SHANE JONES: The full quote referred to the fact that, just as the provincial fund is not some joystick belonging to just my good self—so all of us; we bring our perspectives forward. And as my colleague said in a recent interview, these are decisions of such large import they will embrace all of the perspectives that lead to a sustainable future for the regions of New Zealand.

Census 2018—Participation

8. Hon Dr NICK SMITH (National—Nelson) to the Minister of Statistics: Does he stand by his statements regarding Census 2018 that “I am very confident that we will get to everyone”, and “this census looks to be more successful than previous censuses”, when it had more than 400,000 people not counted?

Hon JAMES SHAW (Minister of Statistics): Yes, in the context in which they were made. On 6 March, census day, I expressed my confidence based on advice from Statistics New Zealand that they were working very hard to get to everyone that they were aiming to get to on census day. On 12 April, when I said, “this census looks to be more successful than previous censuses” in answer to a question in the House from Dr Jian Yang, the National Party statistics spokesperson, I was referring to online response rates and other targets, which, at that point, Statistics New Zealand advised me they were on track to meet or exceed. The assertion that there are more than 400,000 people who haven’t been counted is Dr Smith’s extrapolation and is not a number from Statistics New Zealand nor one that I have confidence in. The final number will only be known once the post-census reconciliation is complete and published in March next year.

Hon Dr Nick Smith: Does he agree with Professor Lumley of Auckland University’s Department of Statistics that the lowest turnout rate in more than 50 years, for Census 2018, was “very serious”, and the statement by Acting Prime Minister Winston Peters that the census result was “very disappointing”?

Hon JAMES SHAW: It is important that New Zealanders have confidence in our national statistics agency and in the census. While the response rate to this census does appear to be lower than hoped for, based on initial and partial information, Statistics New Zealand will make use of reliable Government data to fill in the gaps. This method is called imputation and has been used to fill data gaps since 2001, in line with international best practice. The imputation methodology has been discussed with a group of international census specialists, including members of the US Census Bureau and the UK’s Office for National Statistics. The peer review will continue as the methodology develops.

It is important to note that the imputation methodology was a core part of the census modernisation programme that was agreed to in the 2014 National Government Cabinet, of which Dr Smith was a part. To express a lack of confidence in the output of that process months before it is complete would be to express a lack of confidence in the decision which he was a part of. Given that Dr Smith has been a member of this House for the last six censuses, I would assume he would know better.

Hon Dr Nick Smith: How would the Minister describe the performance of this census with the previous five he’s referred to, with a 90 percent return rate, when in 2013, 97.6 percent was the net coverage rate; in 2006, it achieved 98 percent, in 2001, 97.8 percent, and in 1996, 98.4 percent; and why does he not agree with statistical experts that say that this census was a shambles?

Hon JAMES SHAW: Dr Smith is confusing his statistics. There is a difference between the coverage rate and the response rate. The methodology changed after the 2006 census, and the only comparable data to this year’s census is the previous one. The full and partial response rate for the previous census was 90.5 percent. The 90 percent figure that he’s currently quoting is an interim figure of full and partial responses for this year’s census, which we won’t know the completed number for until after the reconciliation is complete in March of next year.

Hon Dr Nick Smith: Does he agree with former Labour Party president Mike Williams when he said this year’s census was “an industrial strength fiasco” and that the flawed data should be “dumped and the census done again properly”?

Hon JAMES SHAW: Absolutely not. No, Mr Williams is completely wrong. As Dr Smith would know, having been a member of the Cabinet that signed off on the census methodology here, this year’s census is called a digital-first, with mail second. Previously, we were using mail first, digital second. We have used supplementary information since 2001. The strategy for census transformation, which his Government signed off on, and of which this census is a part, is part of a road map for using more imputation in the future. Dr Smith ought to know that, because he signed off on it.

Hon Dr Nick Smith: Does he believe he did everything possible, as Minister of Statistics, to ensure Census 2018 was successful, when he did not issue a single press release encouraging participation, as compared to the 14 issued by previous Minister Maurice Williamson in Census 2013; when he chose to be touring the Pacific during the crucial census week; and when he dismissed the widespread concerns from members from this side of the House and the media, when we raised them, about this year’s conduct?

Hon JAMES SHAW: Again, Dr Smith really ought to know better, especially given that he’s the spokesperson for State services and should understand that there is actually legal separation between the Minister and the agency. And, not only that, when I did go out doing promotional activities for this year’s census, I wasn’t even allowed to touch the census papers because of the fear of it looking like I was interfering with the census. So the idea that the Minister can somehow interfere in the census process, the way that he is implying, would be a breach of the law, and, once again, Dr Smith ought to know better. If he has any further questions, perhaps he could direct some of them to his colleague Dr Jian Yang, who is actually the National Party’s statistics spokesperson and who in the 512 written questions he has asked about statistics this year, 129 were about the census, and I’m pretty sure many of those will answer the kinds of questions that Dr Smith is unable to answer for himself, given his extensive experience.

Provincial Growth Fund—Announcements and Media Reports

9. MARK PATTERSON (NZ First) to the Minister for Regional Economic Development: What recent media reports has he seen regarding the Provincial Growth Fund?

Hon SHANE JONES (Minister for Regional Economic Development): The Leader of the Opposition warbled yesterday. He described the fund, in a very harsh and cruel manner, as beads, blankets, and trinkets to the regions. I’m not entirely sure if that was reflective of a certain audience he had in front of him, but I think what that did was diminish the status of the regions, and there’s some small prospect that, given a bead is a small piece of plastic with a hole in it, he was talking about himself.

Mark Patterson: Did he agree with the Leader of the Opposition, when—

Hon David Bennett: No, no, no. You can’t ask that question.

Mark Patterson: —he admitted in that interview that regional development would not be a spending priority for a Government he led?

SPEAKER: Order! Order! Can I say to David Bennett that he knows very little about Standing Orders, and his interjections have just lost the recently awarded questions to his side.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. How does the Minister have responsibility, and doesn’t that question, effectively, fly in the face of your veto on the Government using questions to attack the Opposition?

SPEAKER: No. In this particular case, it was a very straight question: does he agree with the Leader of the Opposition? I mean, that’s a very reasonable question.

Hon SHANE JONES: It is troubling to the provinces, and, indeed, to myself, that the Leader of the Opposition has announced that regional development would not be a priority, which might explain why so many members on the other side of the House are so actively advocating that I continue in this vein.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. My case in point here is that no such announcement has been made by the Leader of the Opposition. So, if you think about what the question was, there is no way that that particular response from Mr Jones could be considered inside Standing Orders.

SPEAKER: Well, the fact that an answer may be inaccurate is something that I cannot always pass judgment on, and I’m not prepared to. The quality of the answer—I think it’s very much dependent on one’s viewpoint, or the direction one is coming from. And, in this case, if the member disagrees or if the member’s side disagrees, then they should further question the Minister; or, if they believe that he is deliberately misleading the House, then there is other action that can be taken.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. We’re trying very hard to stay within the dictates of some of the initiatives that you’ve brought to the House since you’ve taken that seat. One of them that has been quite strong, and was particularly reinforced a few weeks back, was that the Government should not use its own questions to gratuitously attack the Opposition. That was nothing less than a gratuitous attack on the Opposition. If it wasn’t that, then it was a Minister being grossly reckless with the truth.

SPEAKER: Well, I’m not certain that there’s anything in there that I’m being asked to rule on.

Mark Patterson: Which Provincial Growth Fund (PGF) projects have involved the distribution of beads, blankets, and trinkets to the regions?

Hon SHANE JONES: It’s unfortunate that that residual language, based on the association of the last regime with the Māori Party, has subsisted in the narrative of the Leader of the Opposition.

SPEAKER: OK. Order! That’s enough. Thank you.

Hon Paul Goldsmith: Has he seen a report on Stuff on 29 June saying National’s Paul Goldsmith “slammed Jones for backtracking on his promises, being ‘deliberately tricky’ and refusing to be held to account.”, and, if so, what is his excuse for such shameful behaviour?

SPEAKER: Order! I’m just trying to work out whether I just completely rule it out or I give the member another shot. I’ll give him another shot because I’m generous.

Hon Paul Goldsmith: I’m very happy to have another shot. Has he seen a report on Stuff on 29 June that says National’s Paul Goldsmith “slammed Jones for backtracking on his promises, being ‘deliberately tricky’ and refusing to be held to account.”?

Hon SHANE JONES: Speaking as the regional development Minister, there has never been an incident where Goldsmith has slammed the Minister.

Mark Patterson: What recent PGF announcements has the Government actually made?

Hon SHANE JONES: During the past week, the “provincial champion” was invited to Murihiku—that’s in the deep South, Otago, in an area grossly neglected over the last nine years—and Te Tai Poutini, the West Coast, where, in Hokitika, Westport, Greymouth, busts are being created of my good self. We have allocated funding to ensure that the necessary feasibility study goes ahead to strengthen KiwiRail services into that region, and that is a boost of the tourism—something that will please my ministerial colleagues; and, in addition to that, a sum of money to ensure that the ports—further evidence of neglected infrastructure in the recent past—are repaired. And I’m very confident, along with input from industry and elements of the local government community, I will continue to deliver fiscal lucre and goodwill to that particular part of the country.

Health Services—Use of Defence Personnel During Nurses’ Industrial Action

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

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

Hon Michael Woodhouse: Why did he not inform the New Zealand public that Defence Force medical personnel were being deployed to New Zealand hospitals on 12 July under section 9 of the Defence Act?

Hon Dr DAVID CLARK: The public have been informed.

Hon Michael Woodhouse: I raise a point of order, Mr Speaker. My question was: why did he not inform the New Zealand public?

SPEAKER: I heard it, and because we have had a look at this, the Minister could have replied that it’s not his responsibility. I think he has answered the question.

Hon Michael Woodhouse: Speaking to that point of order, there is a difference between the responsibility to inform this House under ministerial statement and the moral responsibility to inform the New Zealand public of what’s going on in its health service.

SPEAKER: Well, if the member wants to continue down that line, he can ask further supplementaries.

Hon Michael Woodhouse: Does he not believe it appropriate as Minister of Health for him to have informed the New Zealand public of what arrangements were in place on 12 July in our hospitals, including the deployment of New Zealand Defence Force medical personnel?

Hon Dr DAVID CLARK: My key priority in the lead-up to the nurses’ strike was making sure that safe staffing was in place, and indeed it was. I want to thank the personnel from the defence forces who assisted with that, I want to thank the New Zealand Nurses Organisation (NZNO), and I want to thank the district health boards (DHBs) who all worked constructively together to ensure that there were safe staffing arrangements in place around the country. I take my hat off to them.

Hon Michael Woodhouse: What were the circumstances that led the Government to conclude that the NZNO alone could not provide all life-preserving services as required by the Employment Relations Act?

Hon Dr DAVID CLARK: I contacted the Minister of Defence in advance to ensure that there was a contingency in place. The nurses organisation and the DHBs worked together to make sure that all the rosters were filled for safe staffing requirements, and that was done.

Hon Michael Woodhouse: I raise a point of order, Mr Speaker. My question was not about the process that followed after the conclusion that the NZNO couldn’t provide those services; it was: what were the circumstances that led to that process being necessary in the first place?

SPEAKER: Ask the question again.

Hon Michael Woodhouse: What were the circumstances that led the Government to conclude that the NZNO alone could not provide all life-preserving services, as required by the Employment Relations Act?

Hon Dr DAVID CLARK: The NZNO worked constructively with the DHBs and, obviously, with Defence Force personnel to make sure all of the rosters were filled. They clearly had some rosters that they didn’t believe were going to be filled when they requested the additional assistance. All of them were. So safe staffing was the priority; that was achieved.

Hon Michael Woodhouse: Does he accept that when NZNO representatives have reiterated that a revised offer would require more money to be ratified, his continued statements that there is no more money are inflammatory and unhelpful?

Hon Dr DAVID CLARK: No.

Police—Liquor Licensing of Clubs and Resources

11. CHRIS BISHOP (National—Hutt South) to the Minister of Police: Is he satisfied Police are using their resources effectively to target crime prevention; if not, why not?

Hon STUART NASH (Minister of Police): Yes, I support our police 100 percent. I wish that member would also.

Chris Bishop: Ha, ha! Is it a good use of police resources to oppose liquor licence applications for Wellington bowling clubs, which in the case of the Whitby Bowling Club has not had a single liquor licence issue in 40 years?

Hon STUART NASH: That is actually an operational matter and, as that member would know, I actually have no ability to direct police in the use of their resources. But what I would say, as I understand it, Wellington police are working better to understand the reason why some clubs are seeking licences that in some instances run for 17 hours, from 8 a.m. in the morning to 1 a.m. the next morning for seven days a week—that’s all.

Chris Bishop: Is it correct that police have research that shows licensed clubs accounted for virtually zero issues over a five-year period in the Wellington district; and don’t the police have better things to do than shake down bowls clubs, bridge clubs, and tennis clubs?

Hon STUART NASH: Police are not shaking down bowls clubs, whatever clubs, and tennis clubs.

Virginia Andersen: What is the Minister doing to ensure the New Zealand Police service is resourced effectively?

Hon STUART NASH: It is this Government’s priority to ensure that police are fully resourced, especially when one considers there were 72 fewer officers at the end of financial year 2018 compared to the same time in 2012. We are correcting this. We provided an additional $300 million in Budget 2018 to start the process of delivering 1,800 more front-line officers and 485 back-office staff over three years.

Chris Bishop: What does he say to Newtown Bowling Club secretary, Lorraine Brennan, who said “We need the police to advise us, not bully us.” and prominent Wellington resident Paul Eagle, who said “Rather than targeting clubs or making them feel like easy targets, they should be looking to have a wider conversation with sports clubs.” [Interruption]

SPEAKER: Order! Order! The member is going to resume his seat. Mr Bishop’s going to ask the question, and he or his team have three additional supplementaries because of the interjections.

Chris Bishop: What does he say to Newtown Bowling Club secretary, Lorraine Brennan, who said “We need the police to advise us not bully us.” and prominent Wellington resident Paul Eagle, who said “Rather than targeting clubs”—ha, ha, excuse me—“or making them feel like easy targets, they should be looking to have a wider conversation with sports clubs.”?

Hon STUART NASH: I agree with the member from Ōhāriu when he said there were two sides to every story, and police are actually in the process of talking with and consulting with these bowling clubs in the first place.

Chris Bishop: What steps, if any, is he taking to stop police wasting resources opposing licences for well-known places of ill repute like the Wellington Bridge Club, the Island Bay Tennis and Squash Club, and the Whitby Bowling Club, and can he confirm to the House that the next on his target list is not happy hours at rest homes? [Interruption]

SPEAKER: Before I call the member—because we’ve had exactly the same offence from the Opposition, the extra supplementaries are now withdrawn.

Hon STUART NASH: I would assume that the people from the Whitby Bowling Club would be horrified to hear that member call them a place of ill repute.

Housing—Warmer Kiwi Homes Programme

12. PAUL EAGLE (Labour—Rongotai) to the Minister of Energy and Resources: What recent initiatives has she announced that will help keep Kiwis warm and healthy, and make it more affordable to heat their homes?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): On 1 July I had the pleasure of launching the Government’s Warmer Kiwi Homes insulation and heating programme, in Christchurch. While there I visited the first home to be insulated and met many of the people who will benefit from having a warmer home. This is possible because of the Government’s allocation of $142.5 million to the Warmer Kiwi Homes programme in Budget 2018. Our new programme will cover 67 percent of the cost of fit out, and we expect that over the next four years 52,000 families will benefit. This compares to the previous Government’s scheme that only covered 25 percent of the cost per fit out. This means that thousands of Kiwi families will have warmer homes and lower electricity bills, reducing the cost of living for those most in need.

Paul Eagle: What response has she received about this programme?

Hon Dr MEGAN WOODS: I’ve received positive feedback on how much of a difference a programme like this will make for Kiwis. There have been numerous positive media reports on Warmer Kiwi Homes, with Age Concern Canterbury calling the shift in funding to two-thirds of the cost of insulation a game-changer, making the cost of insulation manageable for a lot more people. Pam Wootton-Peters, whose house was the first to receive insulation under the programme, said it was like living in a different home. Bev and Wattie Meadowcroft also relayed to me at the launch that they wouldn’t have to sit outside to keep warm, as it was often warmer outside their home than inside before their insulation. The Energy Efficiency and Conservation Authority has also informed me there’s been a surge of interest in the new programme via the website traffic and through their call centre and service providers.

Paul Eagle: How does this work link with the Families Package and the Healthy Homes Guarantee Act?

Hon Dr MEGAN WOODS: This is all part of a Government plan to give New Zealanders warmer, drier homes. The Warmer Kiwi Homes programme, the Healthy Homes Guarantee Act, and the winter energy payment, part of the Families Package, are all part of a suite of measures this Government has introduced as part of its commitment to warm, healthy housing.

Urgent Debates Declined

Census 2018—Data Release Delay and Participation Rate

SPEAKER: I have received a letter from the Hon Dr Nick Smith seeking to debate, under Standing Order 389, the delay in the release of census data and the participation rate in the census. This is a case of recent occurrence; the announcement that the release of census data would be delayed was made during the recent adjournment period. The census is a matter for which there is ministerial responsibility. The test for whether a particular case requires the immediate attention of the House is a high one. The fact that the matter can be raised in a general debate such as the Estimates debate is a relevant factor—Speaker’s ruling 199/2. Dr Smith seeks to debate what occurred as well as future actions. These are matters that could be debated in the examination of Vote Statistics. In light of that fact, I’m not convinced that the matter is urgent enough to warrant setting aside the business of the House today. The application is therefore declined.

Sittings of the House

Sittings of the House

Hon CHRIS HIPKINS (Leader of the House): I move, That the sitting of the House today be extended into tomorrow morning for further consideration in committee of the Social Security Legislation Rewrite Bill, consideration in committee of the Military Justice Legislation Amendment Bill, the second reading of the Statutes Amendment Bill (No 2), and the interrupted debate on the second reading of the Courts Matters Bill and the Tribunals Powers and Procedures Legislation Bill.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Motion agreed to.

Estimates Debate

In Committee

CHAIRPERSON (Hon Anne Tolley): The House is in Committee for consideration of the Appropriation (2018/19 Estimates) Bill. The Standing Orders provide for 11 hours of debate on the Estimates, divided into 10 separate debates, covering the sectors set out in the Estimates of Appropriations for 2018-19. Each debate will be led by a call from the chairperson of the select committee nominated by the Government as the major committee reporting on the sector. Other calls will be allocated to parties on a proportional basis and may be taken as parties see fit during the 10 sector debates.

At the end of each debate, the question will be put that the votes in each sector stand part of the schedules. The time taken on each question is in the hands of members, depending on the parties’ use of the allocation of calls. However, this debate expires after 11 hours. The Estimates debate should be relevant to the Government’s current spending plans as contained in the Estimates of Appropriations. All of the votes are available for debate. A compendium of the reports of select committees on the votes is available on the Table.

Hon Gerry Brownlee: I raise a point of order, Madam Chairperson. I’ve just listened very carefully to your explanation of what may be debated, particularly your extolling the Chamber to be somewhat forward looking when it comes to examining the Estimates. I’d simply ask how that aligns with the Speaker’s decision this afternoon not to have the House discuss what has been a financial failure: Census 2018. Does that, in fact, mean that some of the questions that should be asked of the Government and answered by the Minister cannot be posed in this Estimates debate?

CHAIRPERSON (Hon Anne Tolley): Speaking in response to that, no, I think the Speaker was very clear that all of that may well be discussed in the Estimates debate concerning Vote Statistics. Those questions can be asked of the Minister retrospectively. We come first to the votes in the economic development and infrastructure sector, B.5, Volume 1. The question is that Vote Business, Science, and Innovation and Vote Transport stand part of the schedules.

Economic Development and Infrastructure Sector

JONATHAN YOUNG (Chairperson of the Economic Development, Science and Innovation Committee): Thank you, Madam Chair. I’m very pleased to stand and speak on the Estimates for Vote Business, Science and Innovation. We looked at the Commerce and Consumer Affairs, Communications, Economic Development, Energy and Resources, Infrastructure, Regional Economic Development, and Research, Science and Innovation appropriations—all up, around $2.2 billion dollars’ worth of taxpayer funds being utilised.

During that time we had a number of Ministers come and appear before us and present their views and also answer questions. It is no surprise that I might just focus in right now on the area of Energy and Resources. We had the Hon Megan Woods come and present to us on that particular area, as well as Research, Science and Innovation.

Members of the Economic Development, Science and Innovation Committee questioned the Minister, particularly around the Government’s decision around banning new offshore exploration permits. This occurred, of course, on 12 April. The Prime Minister announced that it would not issue further permits for offshore and oil exploration, and usually this would be the role of Minister of Energy. A number of members questioned the Minister on this. We were very interested to hear her view, and also I was interested to understand different aspects of energy security and the part that this plays in making energy affordable and also secure for New Zealand homes, hospitals, schools, businesses, and industries.

The Crown Minerals Act requires the Minister of Energy to promote exploration with a significant purpose of reducing sovereign risk in order that investors will have confidence to invest. The Prime Minister and the Minister of Energy have, in my view, done exactly the opposite and there has been a chilling of investment and a chilling of confidence. This was one of the concerns that the committee has had, as well as the Opposition and no doubt many people throughout the country.

The decision was a surprise here and abroad, especially since the Prime Minister said on 19 March—what I’m pointing out, and this is regarding the block offer that is very much part of the regime that the Minister Megan Woods is responsible for. The Prime Minister said, “What I’m pointing out is that every Government around this time of the year actively considers how it will manage block offers and that’s what we’re doing and that’s going to take weeks, maybe months.” It was only a few short weeks later that the announcement was made, and to say that it was signalled is probably a stretch. In fact, the Minister at the Estimates hearing did say—and she finally acknowledged—that the Government had not consulted the industry, but she did say its intentions had been signalled. You would have to say that that was a surprise to just about everybody in the industry. And you know, I think it’s important—

CHAIRPERSON (Hon Anne Tolley): Order! I’d just like to remind the member that he is chair of the select committee reporting on the select committee’s views during the appropriations considerations.

JONATHAN YOUNG: Yes, indeed, and even though I do refer to some aspects of the past, they were the context by which questions were asked of the Minister.

CHAIRPERSON (Hon Anne Tolley): You just need to tie them back into your select committee.

JONATHAN YOUNG: Indeed—indeed. So, we looked at this particular area. We looked at sources and security of electricity supply. This is very important for New Zealanders. I’m sure the Minister would agree to this as well. That’s one of her responsibilities: to ensure that there is security of supply, as she reiterated to us regarding the electricity price review—that making electricity prices fairer for people and affordable is very important as well.

I was concerned to hear that, in terms of the Government’s target for 100 percent renewable generation, even though there was this decision made on 12 April, there is a need, stated by MBIE and also by the Minister, to have a forward reliance on gas. Therefore, the question was asked, in terms of enabling this hydrocarbon industry to be accepted in the future, what would it require? I proposed a question, and the question was simply this: if they could become a net zero carbon industry through different technologies and through afforestation—forests that perhaps they even own or lease themselves—would this industry that is so essential to New Zealand’s energy security be an acceptable industry to the Government? The answer was no. I am confounded by that answer, and I think that was one of the big surprises that I came to hear in that hearing, because we do have a battle against emissions, not an industry.

Hon PAUL GOLDSMITH (National): Thank you, Madam Chair. I want to talk about the allocation of $1 billion for regional economic development. Everybody here in this Parliament is concerned to see that the regions of New Zealand—the wonderful regions of New Zealand—get their chance to prosper and to continue to prosper, as they have over the past few years. We’ve seen boom times right around New Zealand over the last few years, partly as a result of the good quality Government that we had previously. We see record low levels of unemployment, good growth in most areas, and real opportunities for young people and old people to get ahead.

Now, we’ve seen this Government allocate $1 billion a year for the next three years to the Provincial Growth Fund. I was perhaps unkind to refer to the Minister responsible, Shane Jones, as being deliberately tricky about the figures in question time because he said, when talking about the $1 billion for the fund—of course, a quarter of that $1 billion was existing money that they’ve rolled over from such things that the previous Government had done, such as tourism infrastructure funds and many other elements that were fed through to help the regions deal, particularly, with the pressures of the tourism industry. Then, of course, another quarter of the $1 billion is actually over the next 10 years—it’s not next year at all; it’s about planting trees over the next 10 years. So the Minister has been deliberately tricky with the figures. But, nevertheless, there is still a large amount of money being put into this fund.

As I go around the countryside talking to mayors and economic development groups and businesses around the country, if there’s money on offer, of course people are keen to get some of it. And so we encourage people to get cracking and make the most of it. But what we worry about is that in their enthusiasm to shovel the money out the door as quickly as possible, there will well be plenty of poor-quality spending. And so that’s why we’re working hard to keep a close eye on the Minister and make sure that there is some clear, objective rationale for the decisions that are made on which projects to fund.

What we’ve seen and what we discussed during the Estimates hearing was the gross regional bias that has developed. About 37 percent so far has gone to Northland; 1 percent has gone to the entire South Island so far. There have been a couple of announcements in the last week that might have got it up to 2 percent. When the Minister was asked about that, he gave three excuses: firstly, to the winner goes to the booty; secondly, to the victor goes the spoils; and, thirdly, when pressed, he said, “Well, that’s the way the cookie crumbles.” He doesn’t take the job seriously, and he should when this sort of money is involved.

In terms of getting information out, it’s been like getting blood out of a stone in trying to get some detail about the projects that have been funded. So we’ll be pushing hard there to ensure that there is good probity and that the principles of the fund are followed up—one of the principles being that we should not socialise the losses and privatise the gains. And when we look at some of the projects that have been funded, recently the chair and trustee of Ngati Hine Forestry Trust made it quite clear there would be substantial financial gains to the beneficiaries of that project, for example. And we’d be very keen for the Minister to explain that.

Meantime—the broader point is that everybody is in favour of strong economic development for the regions, but economic development is about more than just feasibility studies and a few projects. It’s much broader. It’s about how the Government goes about its work. It’s about investing in infrastructure and roads. And so it’s a bit odd for a Government to be talking about pouring money into the regions but, at the same time, taking much more out of the regions in terms of regional roads.

Taking away the road north from Tauranga to Katikati is not going to help the regional development in that area. Taking away the four-lane highway to Whangarei is not going to help Northland in any way, shape, or form. Taking the money away from the road from Ōtaki to Levin is not going to help the region there to prosper. And so they give with one hand and they take away a lot more with the other.

Meantime, private sector investment in the regions is drying up as people keep their hands in their pockets because of the uncertainty that this Government is creating around industrial relations policy, around foreign investment, and around tax policy. Who’s going to invest in a new business if you don’t know whether you’re going to have to pay a capital gains tax in the next couple of years? That uncertainty is making it much more difficult for people to invest. And then, fundamentally, there’s uncertainty around the way that the Government goes around making its decisions, as seen through that oil and gas decision, which will have a massive effect on Taranaki and was based on no advice and no Cabinet decision. While we hope that good value is got out of this $1 billion fund, we don’t have much hope.

PAUL EAGLE (Labour—Rongotai): Thank you, Madam Chair, for allowing me to take this call—the first from the Government. It’s a real privilege to be able to do this on behalf of the coalition Government. Can I just acknowledge the members of the Economic Development, Science and Innovation Committee for their hard work. We spent every single minute with our ministerial colleagues taking them through their paces. I don’t know whether to applaud the chair or not. There were certainly times when the theatrics were on full display, but, none the less, it was an admirable attempt by the Opposition members on the select committee to do their job and to have their say.

I want to just also cover the areas that the appropriations outline or express, and that’s economic development itself. Can I just applaud this Government’s vision for a productive, sustainable, and inclusive economy. It also included energy and resources, and the Minister for that portfolio certainly gave a robust and convincing display when questioned.

I also want to quickly, I guess, rebut or just give another side to the Minister for Infrastructure and for Regional Economic Development. We’ve heard from one of the select committee members, Paul Goldsmith, about his view on what went on, and can I just say that there was no deliberate trickiness in the Minister’s answering of questions—rather, a fulsome high-vis approach to the questions that were asked. And those will remember, unfortunately, the Minister had somehow borrowed a high-vis jacket of a train driver called Shane and came to the appropriations wearing it. But it was a high-vis performance, as such, because when I had the privilege of talking to mayors and those working in economic development agencies last week at the Local Government New Zealand conference there was nothing but praise for the fund. In fact, they offered to—and I haven’t talked to the Minister yet—help in the probity issues and to distribute the funding more quickly and better, in terms of the local processes that they have in place. So that offer is there.

I guess there is no question in my mind about probity issues; rather, it is that this fund is so popular that the regions are gearing up and, you know, we don’t want to take the first cab off the rank for applications. Rather, there is a criterion there, and it’s really important to deliver and respond to any probity issues so that the process is thorough. The officials have taken into account that those projects meet criteria, hence the delay. I think the Minister gave a very serious presentation about what was happening in the Provincial Growth Fund. Look, probably to just complete the statement made that it was possibly to “socialise losses and privatise gains”, that is something that this Government has been well aware of for the previous nine years, to say, “Look, let’s hope that it’s anything but.”, and I think our track record will speak for itself.

The rest of the committee—certainly, we covered research, science, and innovation, and tourism. Look, despite what you may have seen, I think the team from the coalition Government did an outstanding job.

I want to just reflect back to the vision for economic development. I know that when you look at what the vision looks like, it’s about an improved quality of life, and I know that no one will argue with that. Better standards of living—no one will argue with that. But this vision is about setting the pathway for a 30-year journey. I think the Ministers certainly outlined their contributions to those visions admirably and put those in place, and I think you will see some great work ahead.

DEPUTY SPEAKER: I just remind members not to bring the Chair into the debate.

ALASTAIR SCOTT (National—Wairarapa): Thank you, Madam Chair. Well, we’ve just heard five minutes of pretty much nothing—nothing concrete, nothing that one can say “This is what the Government is doing for the regions.”, other than highlighting the fact that the Minister for Regional Economic Development, with his billion-dollar slush fund, wears a high-vis vest. Well, how many jobs is that going to create in the regions? How many people are going to come off the couch because the Minister wears a high-vis vest in the regions? Not one.

But what is happening is, quite rightly—Paul Eagle, the previous speaker, mentioned the Local Government New Zealand conference—that local governments are unfortunate in that they believe that there’s enough money for all to fulfil their wildest dreams and ambitions for their own districts. But, unfortunately, that’s just not going to be the case. There have been thousands and thousands of hours spent through the local communities putting proposals together for the Minister to sign off on. But we know that there’s a billion dollars, and we also know that a billion dollars does not go very far, except when one can take $5 billion out of the regions—except for the roading network fund that the Opposition had in place—when they can tax regions through regional tax.

When they can increase petrol tax by 20c a litre, then there is some money available to be dollied out in a lolly scramble fashion to try and win votes. That’s the end of it. There’s going to be no real, underlying infrastructure—because that’s what we’re here to talk about. There are no infrastructure projects labelled with that Provincial Growth Fund.

In fact, in my electorate and in Rangitīkei, on the other side of the Manawatū Gorge, one of the projects has been postponed because these guys cannot afford to deliver the stuff that they said they were going to do. Their priorities are mixed up. They’re focused on free tertiary education. I know we’re not on education, but it demonstrates the priorities that that Government has overriding the infrastructure demands and needs of the regions.

I’d like to talk, and I’d really encourage Minister Twyford to talk to Minister Hipkins and others, particularly Minister Robertson—and I echo some of the words that Mr Twyford said in the select committee. He is a very strong advocate—a very strong advocate—of public-private partnerships (PPPs). Minister Twyford said that there is money in the system and there is money available and that we need to use this money to build, own, and operate the Auckland light rail—build, own, and operate. That’s a PPP. It’s not just a partial PPP—it’s not just a build and hand over. It’s not a build and own but not operate; it’s a build, own, and operate model that Mr Twyford was very supportive of in the select committee Estimates hearing for the Auckland light rail project.

So my question to the Government is: what’s the difference between that infrastructure project and, let’s say, Dunedin Hospital? Why can the Government not see that using PPPs is—as Mr Twyford quite articulately said in the select committee—an excellent way to use the private sector capital for the benefit of the taxpayer?

Now, I just implore Mr Twyford to keep talking that way and to talk to Mr Hipkins, because Mr Hipkins is not interested in carrying on PPPs in the education sector. He’s knocked a bunch of them on the head, despite the fact that we have a number of them around the country.

The Government’s still talking about PPPs for Waikeria Prison. That’s good—keep talking. The Government doesn’t necessarily have to build, own, and operate. It could just build and own. It could just build and hand over.

But please, Mr Twyford, keep talking to your colleagues, because that is a key tool to enable and build greater infrastructure in this country for the benefit of the users of that infrastructure and also for those who are paying for that infrastructure—i.e., the taxpayers. So a lot of those guys across won’t agree with Mr Twyford and they won’t agree with me, but, for once, Mr Twyford and I can agree on one thing.

Hon Dr MEGAN WOODS (Minister of Research, Science and Innovation): Thank you, Madam Chair. It’s my pleasure to take a call on this Vote Business, Science and Innovation, which covers off nine portfolios. There are a number of Ministers that are working very hard within this cluster of portfolios to come up with a plan to transform New Zealand’s economy—a plan that will take us into the 21st century and is future looking and is making sure that we are putting in place a plan to make sure that we are well set up for the future.

I’d like to address some of the issues that were brought up by the chair of the Economic Development, Science and Innovation Committee, and I would like to mention the members of that select committee and the hard work that they did put in over the course of the hearings. I remember how much work goes in for some members who are preparing for those Estimates hearings, so I’d like to congratulate those members for that.

The chair of the select committee brought up some concerns that were canvassed at select committee around the oil and gas decision. For example, he brought up the questions that we discussed about the security of supply—one of the three central tenets of any energy system that a responsible Minister has to be looking out for, along with sustainability and affordability. I was able to reassure members of the committee that with 100,000 square kilometres of New Zealand’s offshore area under exploration permit and able to be converted into mining permits, we certainly have enough there for this very long-term transition we are about to undertake.

It was also brought up at select committee the—I think it was described as a chilling of confidence and investment in New Zealand through the decision. Well, I’d like to reassure some of the Opposition members of that committee, who were a bit worried, that over the last couple of weeks we’ve seen some substantive decisions around investment in New Zealand that show that industry understands what a long-term transition we are undertaking.

We have, of course, seen Methanex renew its gas contract out to 2029, and, significantly, we’ve seen Todd Energy invest $100 million in a peaking plant, which shows that they understand this is a multi-decade transition—one that this Government has the courage to face. We understand that fossil fuels are not our long-term future, and we have to be putting in place the plan to ensure that our people and our communities are looked after. And that’s where my work here intersects with that of my colleague who has also been discussed in this debate, the Hon Shane Jones.

Minister Jones is in charge of a once-in-a-generation effort to get some things moving in our regions. This is a Government that has committed a billion dollars a year of investment in neglected parts of New Zealand, and part of that ties in with the work that we are doing in Taranaki with the Just Transitions Summit plan. This is a Government that is not content to let communities squander and, in 20, 30, 40 years’ time, wake up one morning and realise they’re living in a Welsh mining town. It is our Government’s responsibility to make sure that we are planning for the long-term future. And it is exactly that premise that is driving Minister Jones’ work as he goes around the country. I would never presume to speak for Minister Jones. I’m nowhere near as erudite or as loquacious as my colleague; so I will leave it for him to talk more about the regional development fund.

What I would like to stress is that these portfolios that come under this vote all come together with a group of Ministers who are putting together a plan to transform New Zealand—a plan where we can have a future where people have opportunities, where there are jobs, where we don’t have neglect, where we have investment. And that brings me to another of the portfolio responsibilities that I have under this appropriation, which is research, science, and innovation. And I was very pleased to be able to speak to members of the committee about the very substantial billion-dollar commitment that this Government has made to research, science, and innovation. We have seen, just in the last couple of days, that, under the last Government’s settings, we slipped down the innovation rankings globally. That is not something that we as a Government are content to do. We know that innovation lies at the heart of the transformations that we want to see for this country, and that is why we have made a substantial investment in this area. We need to be making sure that we have well-paid jobs all around our country, in our regions, for the betterment of our country.

JAMI-LEE ROSS (National—Botany): Thank you very much. I’d like to speak to Vote Transport under this economic sector. I’d like to talk about the issues that were raised at the Transport and Infrastructure Committee when we heard from the Minister of Transport. We had the Associate Minister Julie Anne Genter there. I’m not sure where Shane Jones was; he was probably off doing something else on that day. At that select committee hearing we discussed, quite extensively, the funding of transport in New Zealand.

This side of the House is deeply disappointed with the way in which the Government is funding and taxing New Zealanders, by billions of dollars, over the new few years—in extra fuel taxes, extra road-user charges, and extra regional fuel taxes. These are taxes which we don’t believe New Zealanders need to be paying, but this Government is so hell-bent on doing anything they can to get light rail into Auckland that they’re taxing New Zealanders around the country for the privilege of subsidising light rail in Auckland.

Today, in question time, I asked the Minister questions about his extra fuel taxes. It turns out that the Government, by their own numbers, are extracting an extra billion dollars in extra fuel taxes from New Zealanders over the next three years. That funding is going towards, particularly, subsidising trams in Auckland. At the same time that the Government is doing that, they’re ripping $5 billion from the regions around the country. We discussed this in the select committee, because, on this side of the House, we were reflecting concerns expressed by New Zealanders up and down the country, who are seeing roading projects—important economic development opportunities—being lost because of the policies of this Government. I know that there are members opposite who actually care about regions like Northland, who care about regions like the Bay of Plenty and Tauranga. Those MPs opposite that purport to care about those regions should actually be the ones out there flying the flag for these important economic development opportunities.

When one talks to people up in Northland, the number one economic opportunity that they talk about is a four-lane carriageway from Northland to Auckland—the number one economic opportunity, which has been slashed by this Government. There are also a number of projects around the country that are being re-evaluated, unashamedly, by the Government. There are lives that are being lost on the road between Tauranga and Katikati—a project which was shovel ready; it was at the procurement stage, and it got ripped from the community right when it was about to get started.

At the same time that this Government is ripping $5 billion from the regions, taxing people more, they’re also giving councils up and down the country the ability to raise extra taxes through regional fuel taxes. I look forward to being on the campaign trail with those members opposite in a couple of years’ time and reminding New Zealanders that the policies this Government is implementing will see many more taxes going into place. It’s not just Auckland—at the select committee we did discuss the Auckland regional fuel tax, and the fact that the Minister’s letting the council off the hook with extra funding, but those fuel taxes are going everywhere around the country fairly soon.

A particular area we did focus on in the select committee was the light rail scheme. I asked the Minister what the benefit to cost ratio was for light rail in Auckland. The Minister simply doesn’t know what the benefit to cost ratio is for light rail in Auckland. Despite the fact that they’ve committed to $6 billion worth of light rail in Auckland, they don’t know what the benefit to cost ratio is. But, more importantly, they’re actually getting the New Zealand Transport Agency (NZTA) to change the modelling and change the analysis to fit the project particularly. Let’s get this clear: the Government doesn’t know what the benefit to cost ratio will be for $6 billion worth of light rail, or trams, in Auckland. They’re changing the way in which NZTA models the data and assesses the projects just to make it fit for that project. At the same time, they’re taxing New Zealanders by an extra billion dollars, through extra fuel excises and road-user charges, and Aucklanders will be paying even more.

We know, based on the cost of fuel and how it’s already gone up by 20c a litre under this Government—and Phil Twyford’s extra taxes, which amount to another 25c a litre—that New Zealanders will be paying 40c to 45c more a litre by the end of this term than they were paying a year ago. That’s 40c a litre that this Government is taxing people, putting petrol prices up, and seeing cost escalations under their policies.

I don’t believe this Government’s got it right on transport. I don’t believe New Zealanders should have to fund Auckland’s trams, and I don’t believe New Zealanders should have to put up with the great weight going on top of the cost of living because of this Government. They are costing New Zealanders in the pocket. They’re making poor policy, and we oppose it.

JAMIE STRANGE (Labour): Thank you, Madam Chair, for the opportunity to speak after the gentleman who shares two-thirds of my name. I would just like to clarify a few things. I’d like to address a few things. The member opposite talked about the Auckland fuel tax. Now, I’m sure Tim Macindoe would agree with me—why should Hamiltonians pay for Auckland’s infrastructure? Yes, Auckland has some challenges up there, but why should we pay for their infrastructure? And that’s exactly why the Minister has put in the Auckland fuel tax—in order to pay for many of the projects that the National members will, quite possibly, look to take credit for when they are rolled out. But they key point is there—it is around user-pays.

The member opposite mentioned around 10 four-laning roading projects that he says this Government have canned. Well, the reality is that those projects were never funded. Yes, they were talked about during an election campaign, but there was never money put aside for them. Effectively, they were pipedreams.

And I’ll just mention one more thing before I move on to others, and that’s the light rail up in Auckland. The member talked about light rail, effectively, not really being something that people would want or something that would be useful. Well, the New Zealand Superannuation Fund have expressed interest in investing in light rail. The super fund—a very credible fund; a very important fund for our nation—have expressed interest in supporting light rail. Now, they only express interest in projects that are solid, in projects that will make a difference, and in projects that are well costed and that have a good business case. So I’d just like to mention just a couple of things there.

The Minister Megan Woods talked about the tech sector. And I’d just like to highlight, for a moment, the wonderful things that are happening in Hamilton, in terms of the tech sector. We have got a thriving sector, primarily based around Waikato Innovation Park, which is a wonderful facility where start-ups can come and—

CHAIRPERSON (Hon Anne Tolley): I’d just remind the member that you’re actually talking about the Estimates, right? It’s not a general debate about your electorate.

JAMIE STRANGE: Sorry, Madam Chair. I got a little bit broad there.

I am proud of the fact that this Government is investing in the regions and investing in infrastructure in our regions. We have got an infrastructure deficit in our country; we’ve got a lot of ageing infrastructure. You only have to talk to any council in New Zealand and they’ll talk about bridges, they’ll talk about roads, and they’ll talk about other key aspects around water and other things that are suffering. So we’ve got a Government here which is taking a long-term view on infrastructure. It’s not a view of, “Let’s just throw a bit of money here, throw a bit of money there.” No, we have got a plan around dealing with the ageing infrastructure, and in particular the infrastructure in our regions.

I’m proud that we’ve got a Minister for Regional Economic Development who is absolutely passionate about our regions. As someone who was born in the regions, someone who was born down in Nelson and primarily lived around the Waikato region, I’m absolutely passionate about investing in our regions. A lot of people in the regions have been sucked into the cities, and the regions have been suffering, and I’m proud that this coalition Government will be investing $3 billion over three years in our regions. It’s around economic growth in our regions, and it’s around opportunity in our regions.

I’d just like to finish, in my last minute and a half, by moving back to transport. I was very pleased to read in the Government Policy Statement on Land Transport, that the Minister is taking a multimodal view of transport. So he’ll be looking at roading, he’ll be looking at rail, he’ll be looking at coastal shipping, he’ll be looking at safety, and he’ll be looking at cycling and walking—a multimodal approach. For example, rail is an area that certainly needs a lot of investment, and at the Transport and Infrastructure Committee we had the CEO of KiwiRail present to us and say, “We need more investment in rail.”, and this Government, as outlined in that Government Policy Statement, and as outlined in Vote Transport, will be investing more in rail.

The National Land Transport Fund is administered through the New Zealand Transport Agency (NZTA), and the NZTA now have the opportunity to invest that money in rail, rather than just roading, and so we’re going to see more investment in rail. We’ve already seen it around the rail track around Gisborne there, and we’re going to see it right across the country—that investment in rail. We’re going to see investment in coastal shipping. We’re going to see investment in regional roads.

Just to close, I reiterate the fact that this is about multimodal transport, and that’s absolutely vital. Rather than the obsession with pork-barrel, four-laning, we’re going to see a multimodal approach. Thank you, Madam Chair.

CHAIRPERSON (Hon Anne Tolley): Just as help for members debating, if you look at Speakers’ rulings 127/3 to 127/7, 127/3 is a very good Speaker’s ruling, dating back to 1935, that suggests that, “The discussion must be fastened on to some item in the Estimates, and if that cannot be done, generally speaking, the discussion is irrelevant and therefore out of order.”

Dr PARMJEET PARMAR (National): Thank you, Madam Chair. I’ll take this opportunity to focus on research, science, and innovation. We have heard again and again that there is around one billion dollars for R & D tax credit policy—policy that is still going through the development phase. We also heard that there is a total of $1.2 billion for research, science, and innovation appropriation in 2018-19. If we look at this amount of $1 billion that is allocated for R & D tax credit policy, there is only around $200 million for the rest of research, science, and innovation.

Another thing to note, which was brought to the Minister’s attention during the Estimates hearing, is that this amount that is allocated for research, science, and innovation is not substantially or unusually larger than what we have seen in past Budgets. If we look at the past Budget—that is, the 2017-18 appropriations—it was around $1.1 billion, and in the 2018-19 Budget, it’s $1.2 billion. So it’s not that the Minister has been able to get a substantially larger amount for research, science, and innovation.

One thing to note here is that the Minister is taking a big chunk of money out from growth funds from next year and is putting that towards R & D tax credit policy; so this $1 billion is not actually new money towards research, science, and innovation. During the select committee process during the Estimates hearing, another interesting thing to note was that the Minister had not done any homework about the Estimates hearing, and that is the same for the R & D tax credit policy, as we can see in the proposed document. But I can fully understand that the Minister has no choice about R & D tax credit policy, because that is a Labour Party policy, and, yes, she is the Minister, but she has no choice; she has to go ahead and implement the R & D tax credit policy in some form. But, for the Estimates hearing, she had a choice, because, for every question that was asked, she kept giving speech-like long answers, beating around the bush to fill up the time.

A simple question was asked, which was: “How much of this $1 billion that is allocated towards research and development tax credit policy will go towards existing business research and development?” She said she could not give that answer; so she could not tell us how much of this $1 billion would go towards existing business R & D. Let me put this the other way around: if she is unable to tell us how much of this will go towards existing business R & D, how can she assure us that this will add to New Zealand’s business R & D? There is no assurance that this R & D tax credit policy will add to New Zealand’s business R & D.

The next question was about how this is going to be monitored, because we know that, in other countries, like in Australia, we have seen people using creative accounting skills to claim R & D tax credits. The Minister said there would be a penalty-based regime through the IRD. Was there any money allocated from this appropriation for the IRD? No, there is no money allocated for the IRD to go out and monitor compliance. So this is going to be another layer for businesses to make sure they’re compliant with and that they understand what research and development means according to the legislation. So they would have to check the definition and make sure they’re complying, and the IRD will have another layer of going out and monitoring these businesses.

Then, as a person who is very passionate about small and medium businesses, the next question was about whether R & D tax credit policy will help small and medium businesses. Will it help high-tech, high-growth industries that keep investing and reinvesting so that they can grow in the first few years? The Minister had to admit that there is nothing for high-growth, high-tech industries that do not have any tax-liable income. So, yes, they need to have tax-liable income, which means they need investment. They will have to go out and find some money to invest in their business. Once they have tax-liable income, they can come and claim this R & D tax credit.

Any business that is spending less than $100,000 will have to get their research done through an approved supplier. The Minister could not give that answer; she needed help from an official, and that’s fine, but how can we give more importance to research that is done by an approved supplier than research done by the business company directly? So this is another layer of administration that is going to be added on to businesses, to go out and find an approved provider of research, so that if they have tax-liable income, they can claim R & D tax credits. So it’s a joke. This policy will not add to our business R & D. Clearly, there is no assurance of this policy—[Time expired]

CLAYTON MITCHELL (NZ First): Thank you, Madam Chair. I thank the previous speaker, Parmjeet Parmar, who I do enjoy the company of in the Economic Development, Science and Innovation Committee. We actually do have a very good select committee, I have to say. I do enjoy going along to the Economic Development, Science and Innovation Committee. We have a bit of banter and we have some good robust discussion. But let me just put the member across the Chamber straight on a couple of issues.

The first thing to do is, clearly, talk about Vote Economic Development. The R & D grants, or research and development grants, that are going to be allocated—up to $1 billion over the next four years—are a huge incentive. The member has just asked a question to the committee about what the Minister knows about what increases there are going to be. Well, let me tell you about a report that just came out on Radio New Zealand this morning, saying that, in the first quarter, the 26 percent of businesses that have been applying for grants has now, in the second quarter, gone to 50 percent. So they’ve nearly doubled already with the thought that research and development grants are actually going to be coming on.

Hon Kris Faafoi: It’s working.

CLAYTON MITCHELL: It’s definitely working. There’s your answer right there. Callaghan Innovation, although it was a fantastic model, set up to encourage businesses to put money into research and development, was a very slow, clunky, and prohibitive process that many businesses removed themselves from. This is a very clear, clean cut way to manage research and development and get better innovation to look at getting more capacity, capability, and better productivity from our added export value economy that we are building; and a great job of building it, this Government is doing, too.

Now, up to $100,000—the member makes a comment—and she’s right to say that if you’re not spending over $100,000, you will have to go through an accredited supplier. Well, there are six outlets currently in New Zealand which can take up that research, science, innovation, and development process for you, for you to get your 12.5 percent tax break. There are currently six. I see that as a massive opportunity. What about the innovation of setting up science and innovation projects around the country that can take on these small works and look at the grants that will be available to them as a business being set up to do this very thing, which is exactly what this $1 billion research and development fund is set up to do: to drive our economy and look at better ways of creating wealth opportunities and business export opportunities for New Zealand—box ticked; job well done.

I want to move on now and talk about the Provincial Growth Fund—we’ve got the Minister in the chair today, the Hon Shane Jones, who is the champion of the regions—and why this fund was actually set up and the great job that it is actually doing. We need to stimulate our economy. The rest of the world is talking doom and gloom, and talking about economies around the world that are looking at stalling, but if we don’t do more in our provinces and the regions of New Zealand, we’re going to be faced with exactly the same problem. The previous Government invested $11 million. Now, $11 million right up until this new coalition came along was a hell of a lot of money—probably more than they’d had previously for some time. But $11 billion is not going to cut it. The department was so small and underutilised and there really wasn’t much chance at all for any innovation coming out of the public sector to encourage driving our economy in the provinces. Now we have set up a $3 billion fund, with $1 billion per annum.

I’ve got a few of the announcements that we’ve really got here. So far, to date, we have got allocation spending for feasibility studies, first and foremost, and funding to help with projects such as roading, such as rail projects. Look at Gisborne, I think they got $5 million; Wairoa to Napier rail got $5 million; $811,000 was given for a feasibility study to unlock the potential of $350 million of tourism dollars, which we’re going to see a massive boom in over the next eight years with our economy. These are absolutely sensible approaches to it. But a billion dollars—I just want to go back to that figure; so far, $126 million, I believe, Minister, has been allocated to date, that has actually being announced, that has been given, and there are a lot more great, positive outcomes to come.

We’ve got roading projects. We’ve got rail projects. We’ve got forestry projects. We have got innovation and science projects. We have got a whole lot of things, and I’d recommend that the members get together and download this fantastic document so they can see. It’s funny how they quite often take the time to poo poo this Government for coming up with such a big, hairy audacious goal such as $3 billion going into our provinces. Now, all of a sudden, they’re saying, “Oh, please, sir. Please can my province have a little bit of that too, because under the previous nine years of the previous Government, we haven’t had the same sort of support?”

JAN LOGIE (Green): Thank you, Madam Chair. It’s a great pleasure to be able to stand and take a call on Vote Transport in this debate this afternoon and, for the first time, to be able to stand up and feel genuinely enthusiastic about the direction of the Government in the shaping and the support for our communities. Transport is one of those issues where sometimes we don’t recognise what a critical role it plays in our lives—that, actually, it shapes our towns and our cities and our ability to move around and get to where we want to go and how much time we have to spend with our families and do things we love, as well as being essential to the running of business.

For the last nine years, and the six that I’ve been in this House in Opposition, I’ve heard our debates and our discussions about transport all centred on this idea about these roads of national significance. Having lived in a community where one of those was imposed on us, cutting through a beautiful, beautiful part of the country—in which now the people in my community spend their time stuck in cars driving through that scar on our landscape—it is wonderful to see within this Government the direction of rebalancing and moving away from spending where it has been $11 billion—

Matt King: Let’s go back to the Amish days!

JAN LOGIE: —over the last few years on seven roads. And I’m hearing a member of the Opposition saying that what I’m obviously speaking about is going back to being Amish and using horses and carts. That’s the level of their discourse: it’s either $11 billion and seven roads or you’re back to horse and cart. Well, actually, I think I’ve got a slightly more modern view on public transport and transport than that.

Actually, what we are talking about is getting great public transport and supporting people to be able to live their lives and be healthy and well and get around easily. We know that how we’ll achieve that is through good public transport and rail and walking and cycling, as well as safe roads. So what this Government has done is several things. Part of it is rebalancing towards our regions. So we’ve heard from the Opposition, “What about this terrible ripping money out of regional communities?” Well, actually, it flies in the face of all of the evidence of this Government. What this Government is doing is putting money back into our local roads, our regional roads, rather than these tiny little vanity projects that the previous Government flew a flag for, which hardly affected anyone at all.

So what we are doing is now putting money into over half of the country. The transport movements happen on our regional roads, and nothing really was done, nor was money put, towards the safety on those roads to enable people to move around safely. This Government is changing that, and this Government is putting the investment into getting our major city moving as well. That is around enabling rail to be considered in the National Land Transport Fund and system, which is critical for our future. Rail is central to the future vision of transport. I heard a previous member of the Opposition talking about how the Government is obviously kind of doctoring the books by looking at changing the cost-benefit analysis and that’s really just to justify rail when it can’t be justified—I really, really wish they would catch up. Our communities, our public health experts, and our transport experts have been telling us for a really long time that we need to start recognising the value of things beyond just being able to move from here to there in the quickest possible way.

ANDREW FALLOON (National—Rangitata): Thank you, Madam Chair. I want to focus my comments this afternoon on the appearance of the regional economic development Minister, Shane Jones, at the Economic Development, Science and Innovation Committee. Wasn’t it an extraordinary appearance? What we saw wasn’t an open and upfront Minister willing to answer questions. What we saw instead was an hour of the Minister bluffing and blustering.

He started off talking about his so-called billion-dollar fund. He claimed that regional growth funding was increasing from $11 million to a billion dollars. Well, less than a minute later—less than a minute later—he had to backtrack on that myth; because it is a myth. He had to admit that it’s not $11 million and it’s not $1 billion; it’s going up from $228 million. A lot of the billion-dollar fund that he tries to talk about as new funding isn’t new funding at all. It is, in his own words, “re-designated money”—re-designated money. So it’s not $1 billion. He recycled the money from existing Government programmes in regional growth.

But more concerning than the make-up is how he’s spending it. We all accept that Northland needs assistance. Indeed, Northland was one of the five regions that the previous Government identified as needing help, and that was the genesis of the Regional Growth Programme. We did a lot of work through things like the QRC campus in Paihia and through things like the Kaikohe Growing Regional Opportunities through Work programme, which engaged young people to break the cycle of unemployment. But it can’t escape anyone’s attention that more than half of Shane Jones’ fund has gone to that one region of Northland alone.

Hon Scott Simpson: How much of it?

ANDREW FALLOON: More than half has gone to Shane Jones’ home region of Northland—coincidentally, the one region that he’s hanging his hopes on to save New Zealand First in the next election.

The troubling aspect of this “Shane Jones election fund” is that there’s nothing robust about it. Mr Jones has admitted that Northland has, in fact, only asked for $40 million, and they’ve received $60 million. They’ve actually received more provincial growth funding than they’ve asked for. I compare that to the entire South Island—the entire South Island—which, in Mr Jones’ own words, has asked for 15 percent of the fund. But how much have they received? How much have they received, Mr Jones? Two to three percent.

Hon Scott Simpson: How much?

ANDREW FALLOON: Two to 3 percent. And why is that? Well, Mr Jones was pretty upfront about that; he chose to attack the mayors. Mr Jones’ response was to attack every mayor in the South Island. He claimed they lack “the skills and advocacy of Far North Mayor John Carter.” Now, John Carter is a good mayor; I’ll give him that. But is he half a billion dollars better than every single mayor in the South Island? I would argue not. It’s an outrageous slur on every single mayor in the South Island, and Mr Jones should apologise.

Hon JUDITH COLLINS (National—Papakura): Thank you, Madam Chair. What an excellent choice, might I say? I was on the West Coast of the South Island on Sunday, as part of the 5,000 people who protested against the Government and their, effective, ban on so much of the mining that’s been going on for generations on the West Coast. Someone mentioned that Shane Jones had been there recently, and they were not saying that he was the “Hero of the West Coast”, as he described himself today in Parliament, but they did say, “Shane came and threw us a bit of money.” But what we were also there for was the opening of this major bridge halfway between Greymouth and Hokitika. That was, of course, all funded under a National-led Government and all built under a National-led Government. There was no Minister there other than the Hon Damien O’Connor, and there were a lot of placards mentioning his name, and none of them were flattering.

Unfortunately, Mr Jones wasn’t there. I thought he might have stayed for that. It would have been a good thing to have stayed for, but he was, obviously, otherwise detained; and Mr Phil Twyford, the Minister of Transport—because, of course, this debate is about transport as well—was otherwise detained as well. I was very happy to be there, along with Maureen Pugh and the Hon Paul Goldsmith, because we wanted to talk about regional development. We wanted to talk about transport, and we wanted to talk about what was actually important for the people of the West Coast. So there were 5,000 people, many of whom would have been Labour Party members or voters in the past, and they were very upset. Along with them, of course, were 1,000 trucks and lorries, which is a pretty impressive turnout, and all using oil and petrol, and things like that: the things that the Labour Party used to actually value but now no longer do. It’s good that the Hon Shane Jones is having a bit of a smile, because he also likes, I think, the oil and gas but, unfortunately, has been done over in this Government.

I listened before, to my detriment, to Jan Logie talking about roads—roads of national significance and how dreadful they all are. Well, having driven on these roads, they’re fantastic. That’s where roads should be going: roads that are actually safe by design, not safe by just hoping that everyone’s going to drive correctly and within the law, but roads that are safe by design. Not one death so far—and we’re touching wood as we say it—on the roads of national significance. Not one death. That is an amazing record, particularly when we consider that, on many of these roads, the speed limit is 110 kilometres an hour, and I’m sure people do even more than that. Incredibly safe, properly built roads; that’s where we should be—not goat tracks, as the Greens would have us have; not just sticking up a few chains between things and saying, “Well, that’ll do. Here’s $20 million; there, that’ll sort it.” No it won’t. It’s not going to sort out the Katikati to Tauranga road. It’s not actually going to help people’s lives be saved—actually, not just their lives, either; the incredible injuries that occur on roads through, in many cases, poor design, but also through not driving to the conditions and to the road design. These are the sorts of things that the Government should be looking at; not worrying about a tram going down Dominion Road from Auckland CBD through to the airport so that tourists and some others can have some fun time on it; not taking an hour for that tram to go from Auckland CBD to the airport, when you can actually get there at the moment using the Waterview tunnel—by the way, funded and built by National—in 20 minutes.

These are the sorts of decisions that a Government should be making, which should be looking at a country that should be growing, not going back into the past, not giving up on the fact that we are still a country of only 4.6 million people. Although, if you listen to the census that the Hon James Shaw is so proud of, he probably thinks we’re now about 3.3 million because he’s lost about a million people in the census. That’s where we should be going. We should be looking for growth, not for bringing our economy backwards. We should be going forward with our economy. It should be promoting people based on merit, not based on anything else. It should be looking after industries. It should be looking after regions such as the West Coast: an area that will, in fact, come back once National is back leading our Government; an area of the country that is the salt of the earth; that was the birthplace of the Labour Party and that will be its death. Thank you.

TAMATI COFFEY (Labour—Waiariki): Tēnā koe e te Tēpu; ā, rau rangatira mā, huri noa tēnā koutou, tēnā koutou, kia ora anō tātou katoa.

[Thank you, Madam Chair; to the illustrious gathering around the room, greetings, greetings, hello to one and all.]

I just want to touch quickly on transport as a part of this particular appropriation and just acknowledge some of the words—I was going to say “wise words”; debatable—from the previous contributor, Judith Collins, who talks quite a bit about the “roads of National Party significance” all around the country. There was a lot of investment in there. Well, she was right in saying that actually there was some significant investment in the eastern arterial in the Tauranga region. Many millions of dollars were spent on that particular stretch of roadway. Whilst, yes, to its credit, there haven’t been any fatalities on that particular road, let me say that, actually, the people of Tauranga are pretty disappointed, to be fair, because they’re being pinged, not just once but twice. So who are the real champions on that particular stretch of road? Well, it’s not actually the Government. While the Government might have stumped up, actually, it’s mums and dads from Tauranga that are actually paying the cost of that particular roadway. There are a lot of people that are quite angry that these toll roads are there. They’re having to stump up for them. Was it the answer to Tauranga’s transport woes? I say no.

In fact, Tauranga’s transport system is still incredibly clogged up, and anybody that has sat in the traffic around the various highways and motorways around there knows that and will absolutely support that, which is why I’m pleased to be supporting a Government who’s got a GPS which is centred around looking after the safety of our people out on our transport networks, but also looking for multimodal methods of transport. The people of Tauranga are looking forward to having other options out there—be it cycleways; be it a train system—so that they can move themselves around. That is definitely something that the people of Tauranga are looking forward to.

In terms of the Provincial Growth Fund, which I have great pleasure in actually shouting about when I head out there out on the hustings as I’ve been doing for the last couple of weeks of recess, the Provincial Growth Fund is widely heralded around the rohe of Waiariki, and I had great pleasure in seeing that today was the day that Minginui and Te Whāiti—very small forestry towns in the heart of the Bay of Plenty—thanks to the Provincial Growth fund, they actually have access to the internet; really, really simple things like that. Because of the Provincial Growth Fund, because of the investment that was made in the native plant nursery there, part of that agreement too was also that they were going to be able to have access to the internet, something that so many of us across New Zealand take for granted. But today, they may just be sitting there in their sheds and their garages in their humble little houses, from Te Whāiti, from Minginui, actually watching us online, because they can do that as of today. And I’m pleased that the Provincial Growth Fund has actually gone and announced that.

Speaking of that particular announcement, the investment of $5.8 million into that small community of Minginui for their native plant nursery is something that you just can’t underplay. Because of that significant investment, the nursery has been able to go from an operation which employs nine people to an operation that has the capacity to employ 90 people. And for what purpose: for actually growing trees, which is something that, as we understand fully as a country the impact of climate change, they’re only doing the work that we need them to be doing—to be growing the seedlings, growing these trees so that we can get them out there and help mitigate our country’s impact on the environment. So in terms of Minginui, the Provincial Growth Fund, which was much talked about in the Estimates hui, is very welcome.

And just before I go, I also want to acknowledge the investment that’s been put in to Rotorua as well, through this particular fund. A couple of projects have been invested in, to the tune of about $800,000, and all with the goal of expanding provincial New Zealand—looking to where the opportunities might be down on the lakefront, in the middle of the redwoods forests. That kind of investment will help the research into the actual bigger funding of the growth in the Rotorua region. So the Provincial Growth Fund is a great thing, and I have nothing but support for it.

MATT KING (National—Northland): It’s a pleasure to speak on the Vote Transport Estimates debate, and we had the pleasure of Minister Twyford’s presence during our select committee. He spoke about transport options and about supporting economic growth, safety, and resilience, and then he proceeded to tell us that he was canning the most safe, resilient, and biggest economic driver of growth in Northland—the road of national significance. Now, the spin doctors have obviously told him to use the word “gold-plated”—he loves using the words “gold-plated dual carriageways”. That’s what he likes to use.

He should talk about “gold-plated trams”. That’s last century’s technology. Trams are what you see in those black and white movies, the sped-up ones—those are where you see the trams, not in today’s world.

Hon Iain Lees-Galloway: Ha, ha! There we go.

MATT KING: Absolutely correct.

Hon Iain Lees-Galloway: Say it with a straight face, sunshine. Go on.

MATT KING: OK. So what he’s doing is he’s robbing Peter of thousands of millions of dollars to give Paul tens of millions of dollars. So you’ve taken billions of dollars out of the roading budget, and you’re giving back tens of millions.

I asked Minister Twyford about this very question. State Highway 1 in Northland—OK, we used to be known as a bit of a backwater a few years ago. In the last five years, we’ve grown out of this world! That road is not fit for purpose, that State Highway 1.

Jamie Strange: How many bridges you got?

MATT KING: Ha, ha! They’re not fit for purpose—not fit for purpose, right? There were 50 points in the Tai Tokerau Northland Economic Action Plan—50 drivers of growth. The number one priority identified in that action plan was the northern motorway, OK? It has widespread support from all of the community, all the mayors—pretty much everyone. It’s the number one priority for all the councils in Northland. Mayor Sheryl Mai, Mayor John Carter, Mayor Jason Smith, and Bill Shepherd, the Northland Regional Council chair, all travelled to Wellington and met with Minister Twyford for an hour and a half, pleading with him to spare the Northland motorway and build it. And you know what? They wasted their time. It fell on deaf ears. He basically said, “No way.”

I see from the Government’s new Government policy statement priorities: City Rail Link; Auckland Transport Alignment priorities; light rail Auckland; Auckland Transport Alignment Project funding; and rail. Those are the five; the sixth one—tail-end Charlie—finally, is “road safety and State Highway 1 initiatives”. So it’s all about rail and it’s all about Auckland.

Minister Twyford uses the term “review, re-evaluate”; I think he should just come up and be honest and say he means “cancel, slash, and burn”. This Government is pulling down a National Party initiative, which was the roads of national significance—they’re ripping them down. The rest of the developed world is building dual carriageways—that’s what the rest of the world is doing. Instead, we’re promised some extra passing lanes—and I’m referring to Northland here. Minister Twyford, in answer to a direct question from me, said we’re going to be getting extra passing lanes, maybe some barriers, maybe some rumble strips, and a couple of intersections. So the motorway that we were going to build from Whangarei to Northport—the busiest road in Northland—and they’re replacing it with a roundabout. That’s all we’re getting.

This Government is nearly one year in, and all we’ve got to show in Northland are these reflectorised little posts running down the busiest part of the road, just out south of Whangarei. And you know what’s happened? It’s been a total failure. They’re covered in road muck. The reflectorised strips are smashed all over the road. It’s a band-aid. Our State Highway—a makeover won’t cut it. We have to have a dual carriageway, engineered camber, and gradient suitable for trucks.

So Northland is getting stiffed by this Government, and it’s going to take a little bit more than Shane Jones’ slush fund to fix that. I didn’t want to mention his name because it’s been mentioned so many times, but it’s going to take a little bit more than Mr Shane Jones’ slush fund. Northlanders are unhappy, like the West Coasters, and like the people from Taranaki—poorly thought-out policy driven by idealism not realism.

There’s a $500,000 feasibility study for rail in Northland; I’ve offered to do it for a fraction of that price. I’ll knock out the report in half a day and then I’ll take Northland taxpayers out to lunch. Thank you.

Hon SHANE JONES (Minister for Regional Economic Development): Northland is a land of contrasts. In contrast to the very positive, uplifting, by and large humble “Provincial Champion”, we have heard from the current sitting member of Northland, who has delivered a hate speech to the region he purports to represent—“hate speech” in the sense of not acknowledging that the assistance spread around the regions has been driven by none other than the leadership of John Carter and Murray McCully. Oh, things were different in comparison and in contrast to the current member, but let me not be deflective.

There have been some unkind things said about the stewardship of the fund. The fund, as I reflected in the House, required the members of the Opposition to understand the Public Finance Act. Now, Mr Falloon may have worked for the ACT Party. He may have been a member of the ACT Party. He may have worked for Mr Joyce, but he has no understanding of the Public Finance Act. The Public Finance Act requires the steward of the fund to ensure that when investments of a capital nature are made, such as forestry, we account for a certain percentage of the investment’s life. And, wanting to cling faithfully to the dictates of the Public Finance Act, I answered in that fashion. It is not my fault that the members of the committee did not understand it.

Now, in respect of the other allocations around the motu—sure, the South Island, as reflective of a slightly chilly climb down in the South, is ordinarily a tad more conservative, but they are now fully engaged because they realise it is a once-in-a-lifetime shot, in the sense that this is a Government that has opened up the fiscal purse to address historical neglect. Now, some of that neglect is in the West Coast, but it can also be found further south, and the neglect will require not only some fiscal elixir but it will require us, where appropriate, to change the law. As befits a “Provincial Champion”, these perspectives have to be constantly brought to bear. It doesn’t mean that one voice carries the day on every given occasion, but it does mean that the provinces should have no fear in terms of a loud voice coherently articulating the concerns.

Let me carry on with some of the individual initiatives that have been stigmatised by the Leader of the Opposition. Go, I say to him, to Minginui and tell them that what they have received is beads, blankets, and trinkets. That is the very place where his colleague the former Minister of Treaty settlements described the living conditions as hideous. I think it’s a very low day when the Leader of the Opposition seeks to appeal for the diminishing number of voters of Colin Craig’s old party. He will not prosper with that type of stigmatisation, that type of demonisation. In fact, the real demon sits several seats along from him, and as the caucus politics grow more feverish he will learn that that is the demon that will possess him, and he will not be leading that party into the next election. But I must not digress too far.

The other matter that I think it’s important that we cover is that forestry as a portion of the fund is an overdue investment into an area that has not only been neglected but will be sorely needed in the regions—not only for climate change, and other speakers will cover climate change—but to revitalise and bring land back into a higher level of productivity. Now, you may think that these matters don’t have a certain level of media sex appeal, but I have found that they are inordinately of great interest to the media, and you can rely on the first citizen of the provinces to continue to do what the other side of the House is refusing to do: be consistent, strong advocates. I think it was very cruel of Mr Falloon to deprecate his own former parliamentary colleagues. I can’t be held to account for the fact that the National provincial advocates of that time are inordinately more effective, more informed, and more collaborative. Thank you very much.

A party vote was called for on the question, That Vote Business, Science and Innovation and Vote Transport be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Votes agreed to.

Education and Workforce Sector

CHAIRPERSON (Poto Williams): Members, we come now to the votes in the education and workforce sector, B.5, volume 2. The question is that Vote Education, Vote Education Review Office, Vote Labour Market, Vote Pike River Re-entry, and Vote Tertiary Education stand part of the schedules.

Dr PARMJEET PARMAR (Chairperson of the Education and Workforce Committee): Thank you, Madam Chair, for this opportunity. It’s a real privilege to chair the Education and Workforce Committee. I would like to start by saying that during the Estimates process it’s expected that when the Minister comes for the Estimates hearing, the Minister provides an overview of his portfolio, overview of the budget, and also the expectations that the Minister has from that budget.

It was really interesting when for Vote Education the Hon Chris Hipkins came for the Estimates hearing. His overview was just literally two minutes, and, given that that overview was just two minutes, that says it all given the education portfolio is a huge portfolio. In the last term, we know that the education portfolio was split because we had a different Minister for tertiary education, but this time we have one Minister looking after early childhood education, school education, and also tertiary education. It could be because the tertiary education fees-free policy has taken up all the budget and space.

So I would like to start from early childhood education. For early childhood education we saw there is an increase of allocation of 5.5 percent from the previous year. All this money is not to meet increasing demand in the early childhood education sector. We have seen that the early childhood education sector—

Kieran McAnulty: I raise a point of order, Madam Chairperson.

CHAIRPERSON (Poto Williams): Thank you very much. I understand the question that you’re going to ask and I am going to ask the member—as chair of this committee, it is your role to summarise the report back from the committee; it is not to make political statements. Your role in this particular debate is very clear. It’s over to other members of your caucus to make other statements, but your role is very specific about the report back from the committee on this particular Estimate. Thank you.

Dr PARMJEET PARMAR: Thank you, Madam Chair. I’ll try my best to do that. So what we noted was there is an increase of allocation of 5.5 percent in early childhood education from the previous year, and all this money is not to meet increasing demand for early childhood education centres. The Minister also mentioned that home-based early childhood education centres are increasing. The percentage of students attending early childhood education is at 9 percent. The Minister expressed his view to review home-based early childhood education sectors to see that they are providing quality care to all attendees and that is a good thing, and we want to see that actually all early childhood education centres are providing quality care.

But on the other hand we note that the Education Review Office funding has gone down by $90,000 from the previous year. This is for the Education Review Office to review early childhood education centres. So that funding has gone down and also in Budget 2018 we noted that there is no funding allocated for all fully qualified early childhood education teachers. So, yes, on one side the Minister wants to review early childhood education centres, especially the home-based early childhood education centres, but on the other hand there is no funding allocated to see that they are all fully qualified.

Kieran McAnulty: I raise a point of order, Madam Chairperson. I do believe that the member is now trifling with you. That is a direct opposite approach to the direction that you just gave her. Questioning the Minister—saying on the one hand he wants to do this and wants to do the other—is not following the clear direction that you just gave that member not two minutes ago.

CHAIRPERSON (Poto Williams): I thank the member. I do want to reiterate this is about a report back of the committee. Does the member understand what her role is in this?

Dr PARMJEET PARMAR: Yes, so talking about early childhood education—

Dr Duncan Webb: Can you try not reading your speech? Say it from the heart.

Dr PARMJEET PARMAR: Let me do what I’m supposed to do here. I don’t need help from members on the other side. I know they’re very keen on defending their Minister and what is happening in the education portfolio.

CHAIRPERSON (Poto Williams): Order! Order! I ask the member again. Your role is very specific as the chair of the committee to report back from the committee. Do you understand what your role is in this debate? Thank you. I ask the member to continue with her contribution.

Dr PARMJEET PARMAR: In early childhood education, that was the summary of what we heard.

The next issue that was discussed was the increasing school roll that is affecting school property. We saw that in Budget 2018 there was an increase of 2 percent compared to the last year’s Budget, and this appropriation includes supporting and advising schools on property issues and managing new and existing property. The Minister did acknowledge that the previous Government’s funding for school property in 2016 was helpful in alleviating the pressure that is there because of the increase in population. We noted that the funding for property maintenance is business as usual and is expected from all Governments to look after the property maintenance. We have around 2,500 schools all around the country.

The Canterbury school rebuild was also discussed. Budget 2018 provides around an additional $10.5 million for the Christchurch schools rebuild programme. The Minister was asked to explain this funding, noting his public comments about a hole left in the rebuild budget. Overcrowding in schools was another issue that was discussed in the Estimates hearing process. Government party members remain concerned about—[Time expired]

JAN TINETTI (Labour): Thank you, Madam Chair. I’m delighted to stand here today to talk about the Estimates that were presented to the Education and Workforce Committee, but I would really like to focus my time here this afternoon on Vote Education. It’s really heartening to be part of a team that is looking at a positive and forward-thinking approach towards education. The lack of foresight and planning and the ad hoc approach by the previous Government left major holes in the education sector, that left a number of people working within that sector feeling very dispirited, and it’s good to see now that we are prioritising a way forward and a way out of those holes, and really looking positively and doing forward thinking around where we’re heading in the education sector.

One of the areas that we’ve put a lot of funding into—and we heard the Minister of Education talk about this in his presentation in the Estimates debate—is in the learning support services. I don’t think there is anyone in this committee who wouldn’t have heard, when they go round schools and early childhood centres, how hard it is to deal with children who have additional learning needs, because of the lack of resourcing that has been available to them and how that has diminished over time. It is heartening, and really exciting, to see that this Government is putting so much resourcing into the learning support area—over $43 million. Now, it’s easy to roll those figures off the tongue, but what that means is extra learning support services to over 7,500 additional children—7,500 additional children are going to get additional learning support services. That is significant.

Only yesterday, I was in early childhood centres and schools that actually thanked me for being part of the team who are delivering those services to children. They are excited, but they also know that that is only the beginning. They know we have had to prioritise. They know that there is still a way to go, and we know that, too. It can’t be an overnight fix. We know that we have to do a lot more in this space, but we really, really had to show that we were making a commitment.

One of the aspects that is really exciting that came in the Minister’s Estimates hearing was that we heard about how the ministry has begun the learning support update. We know that this isn’t just about putting more money in, because when you’ve got a system that’s completely broken—because nothing’s been done, or very little’s been done, over time—you’re actually not going to fix it by just keeping on putting that money in. We know that we have to rethink, and the Minister talked about how that work is being led by the Hon Tracey Martin in her Associate Minister of Education role. He’s confident that over time we will see significant progress being made towards the fantastic findings that came out of the November 2016 Education and Science Committee report findings in the areas of dyslexia, dyspraxia, and autism spectrum disorders. That is so exciting in those areas to think that we will be the Government that will be able to make the significant progress and an absolute difference for those children.

It’s exciting to hear about the review of the New Zealand education system, and as part of that the review of the NCEA and the commitment to removing national standards. I heard that so much yesterday. In fact, I went to a school where they said, “We asked our parents if they wanted us to continue reporting with national standards, so we put a survey out to those parents.” This is a big intermediate school. Over 90 percent of parents came back and said, “No way. We want you to actually report on the progress of our children. Reporting on national standards told us nothing.” And the teachers said to me yesterday, and have continually said to me over time, “Thank you—thank you for having faith in us and knowing that we know our learners and that we know the progressions and where they’re going to.” It’s exciting work that’s going ahead. There is so much to talk about, so much that came through that Estimates hearing, and it’s so exciting to see the way forward that we are heading in. Thank you.

Hon NIKKI KAYE (National—Auckland Central): Look, I’m very pleased to speak in this debate. Firstly, though, can I just acknowledge that this Estimates debate and the discussion around Vote Education demonstrate, in my view, the epic failure that is the Hon Chris Hipkins. He has failed to succeed. In the middle of the global financial recession, with the Canterbury earthquakes, National took the Vote Education from $8 billion to $11 billion, and what we saw in this Budget was actually a reduction in overall funding for the compulsory sector from 13.2 percent of the Budget to 12.8 percent. What is incredible is at a time when you had loads of extra cash, Chris Hipkins completely failed to get the compulsory sector a larger chunk of the pie. That’s the first point that I’d like to make.

The second point is this is a Budget of broken promises. We have added up at least 18 areas of broken promises. We saw the Minister on national television say to Hilary Barry, “I am not only going to scrap donations, but I’m going to do it in this first Budget.” Where is it, Mr Hipkins? It isn’t here, and that is a long line of broken promises by this Minister.

You can see in the report back from the Education and Workforce Committee, again, a situation where Labour members want to rewrite history. Well, let’s give you a little bit of history on school property. Actually, under a National Government we went from $3.5 billion of expenditure under the previous Labour Government to $5.5 billion of expenditure. We fixed a whole lot of issues around leaky buildings and invested in growth. But, again, this is a Minister that talked a massive game during the campaign, and what happened? He got exactly the same amount of property funding that we had at a time when we had a global financial recession and Canterbury earthquakes.

Also, the other thing that was not in there was an adequate package around Auckland growth. I know because I put forward a Cabinet paper last year saying there needed to be additional funds in Auckland. He failed in the area of school infrastructure. We also know, in the area of partnership schools, what is telling is what is not in the Budget, in terms of supporting these schools around transitions and transparency in terms of compensation payments. We also know that what’s not in the Budget is additional teacher pay. So we have the situation where the Budget is about $2.8 billion for students, but why do we have teachers out there striking? Because they know that Chris Hipkins failed the primary and secondary sector in this Budget? He hasn’t put—there is no obvious sign there—a whole lot of cash aside for teacher pay. That’s why parents are going to be disrupted—

Jamie Strange: What’s your plan?

Hon NIKKI KAYE: —and the answer actually is, Jamie, that under a National Government we did increase, on average, teacher pay by 17 percent. The reality is we did that with the backdrop of a global financial recession and the Canterbury earthquakes, and this is a Minister that is so incompetent that he’s seen the compulsory and secondary sector budgets shrink compared to other areas, and we now have a situation, just like the health situation, where we’ve got planned strikes. So it’s a Budget of broken promises. It’s a Budget that is about a lack of priority for teachers, because we can see the $2.8 billion that’s been put aside for students, and it’s also a Budget about ideology. We can see that in the sense that he is supporting the scrapping of partnership schools—again, not enough transparency around that.

But what is also telling is what is not in this Budget. A litany of broken promises—and a classic example of this, which I know my colleague will talk about, is in the early childhood education area, where, again, we were promised 100 percent qualified and a band in the Budget that would be provided. Where was it? It’s not there. We were promised around school-leavers’ toolkits $170 million. Where is it? $1.7 million—one percent of what was promised. In terms of teacher supply, we were all promised $40 million of initiatives and that all teacher supply issues would be resolved. What happened? He spent two-thirds of that. So at a time when there’s possibly more than 20 percent more cash, the education compulsory and secondary sector budget’s shrunk, and this Minister has delivered a litany of broken promises. The reality is, why? Because he’s given the money to students.

JO LUXTON (Labour): Thank you, Madam Chair. I’m really pleased to take a call in the Appropriation (2018/19 Estimates) Bill debate this afternoon. I just have to say—in stark contrast to the previous speaker’s comments around the Hon Chris Hipkins being a failure—this very afternoon I had a conversation with a principal of a primary school in Ashburton and he said to me, “If you see Chris Hipkins, please tell him that he is a legend here in Ashburton.” They are so thrilled with the extra money that they are going to be receiving, and they are absolutely rapt.

And as far as the Minister failing to get a decent chunk of the pie—I am sorry, but when the system in so far as education and health and all those areas is so broken and in such disarray, there is no way that you can fix these sorts of things in one Budget. So I’ll end that particular part there, but I also wanted to just acknowledge the work of the Education and Workforce Committee, because, as you can see, we all have quite strong opinions and strong personalities, but it was a good process going through the Estimates and hearing from the appropriate Ministers.

I want to focus my speech today—or part of the debate today—on Vote Education. I am so, so pleased to be part of a Government that is actually recognising the importance of investing in education, and, in particular, early childhood education. As an early childhood teacher, I have seen the feeling of disheartenment from early childhood teachers and centres since 2008 when every year our funding was cut by stealth. I am excited to see there is a 5.5 percent increase in funding for early childhood centres, and that includes 1.6 percent in relation to inflation. That’s going to benefit 4,100 providers in the sector and 200,000 children, from 2019. As an early childhood educator, we are working with our youngest, most vulnerable, most impressionable children, and it is so important that we invest in them at such an early age.

The previous speaker, Nikki Kaye, mentioned the fact that there was nothing in this particular Budget around having funding for 100 percent qualified teachers. Well, as I said to that member previously, when there’s such disarray you can’t fix everything in one Budget, but the Government is committed to applying funding towards that before the end of this term. And when referring to other things mentioned by the previous speaker, they were things from the Labour Party manifesto, so when you form a coalition Government there are some negotiations that happen. So you can’t bring that into the argument, because that’s not applicable—it’s not applicable.

I also want to talk about home-based education. Nine percent of our enrolments for early childhood education are in the space of home-based education. We know that the delivery of education and different quality around that is quite diverse amongst home-based education, so it’s really pleasing to see that we are going to have a review around that. It is becoming quite a popular option for families with young children to put their children into home-based education and to have that home-type environment in which to learn.

Teacher supply is another really big issue in this education space. I visited various schools and they all say the same thing: it is so hard to get teachers when there are vacancies within their schools. So I’m really pleased to see that this Government is going to be addressing that by, first of all, fully funding the courses that primary teachers are required to undergo—the teacher refresher course when they’ve been out of the system for over 6 years. That’s been a huge barrier to some people coming back—whether they’ve gone and had children or gone to do a career or something else such as travelling overseas. It’s been a huge barrier for them to have to come up with the cost of covering that expense. So I’m really proud of what this Government’s doing in this space—in education—and what the Minister has brought to us in so far as the Budget this year. Thank you.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Chair. It’s a pleasure to take a call in this Estimates debate, and I particularly want to refer to pages 67 and 71 of the Education and Workforce Committee’s report, Vote Labour Market. Earlier today, I had the privilege of receiving a petition from trustees of the Coromandel Rescue Helicopter Trust. They’d travelled from Whitianga, in my electorate, to the steps of Parliament to present their petition, signed by over 8,500 people. They did so because they’re concerned about the lack of Coromandel and Whitianga facilities being included in a current tender for New Zealand’s air ambulance services.

Now, we questioned the Minister on this very issue at the Estimates hearing, and I have to say that he gave an utterly unconvincing account of himself in terms of his attempt to fudge the very real question that Coromandel people and the hundreds of thousands of people that visit the Coromandel every year want answered, which is why the existing funded facilities that currently operate out of Whitianga and cover the peninsula and the Hauraki Gulf and through down into the Waikato were excluded from the current tender document.

As I said at select committee, at the Estimates hearing, the Minister acknowledged that $3.7 million had been allocated to improve New Zealand’s air ambulance services, but, for some inexplicable reason, this service that the constituents and visitors to my electorate rely on has been excluded—but not only in my electorate; in the electorate of Taupō, in Te Ānau, and in Rotorua similar exclusions have occurred. And so we wait with bated breath for the outcome of this tender exercise, knowing that if a decision is made to exclude existing services, lives on the Coromandel will be lost. It’s simply inexcusable for this Government not to participate in a way that gives the people in my electorate the confidence that they need. When the Minister was speaking in select committee on this Estimates, as I said, he gave an utterly unconvincing answer and wasn’t able to give the assurances that the people of the Coromandel or visitors to the Coromandel seek to achieve.

I want to just also raise the matter of the Government’s intended changes to the industrial relations legislation environment in New Zealand. Business confidence, of course, continues to sink through the floor, and notwithstanding the Minister’s scatty response to business and its campaign to draw the public’s attention and to draw the attention of businesses to these Draconian, backward-looking 1970s changes, when we asked questions at select committee about the changes, the Minister was unable to give anything remotely confident in terms of assurances that business costs wouldn’t increase, that flexibility wouldn’t decrease, that prices wouldn’t increase, and that jobs wouldn’t be lost.

Of particular concern are issues relating to proposed changes to collective bargaining. Clauses 9 and 11 of the new Employment Relations Amendment Bill require a collective agreement to be agreed, and clause 13 repeals the ability of employers to opt out of a bargaining for a multi-employer collective agreement. Now, on the face of it, that appears to be utterly inconsistent with the stance of article 4 of the Right to Organise and Collective Bargaining Convention, 1949 (No. 98), also known as C098. The bill’s provision offends the specific provision in that convention that collective bargaining should be voluntary by nature. But it gets worse. The Government also appears to have been wrongly advised, in terms of the proper meaning of C098, in regard to proposals to introduce fair-pay agreements. Again, when questioned, the Minister wasn’t able to provide answers. I suspect that the Government has been wrongly advised, has received poor advice on this matter, and, ultimately, these things will play out as that legislation works through the House.

This Government has made some appalling mistakes. The Minister wasn’t able to account for himself. He gave an embarrassing presentation at the Estimates hearing and he needs to improve.

MARK PATTERSON (NZ First): It’s my pleasure to rise and speak on this Estimate debate on behalf of New Zealand First, and I too would like to address the Vote Labour Market presentation. But I would like to set the record straight for that previous speaker, Scott Simpson. I would actually commend Minister Lees-Galloway on his strong grasp of his portfolio and the quality of his presentation to the Education and Workforce Committee. And what a fascinating space this is. This Employment Relations Amendment Bill that we have currently before the House is a major piece of legislation. It has ramifications that are important across the economy and it affects almost every household in the country, and it’s absolutely imperative that we land this in the right place.

New Zealand First find ourselves absolutely in the middle of this debate. We are a centrist party. We do have a centrist policy platform, and we understand the need to balance employer and employee relationships. In fact, the Rt Hon Winston Peters, our Acting Prime Minister, 25 years ago, almost to the day, split away from the National Party in his disbelief in their following the fourth Labour Government’s neoliberal economic experiment and the trickle-down theory that the Leader of the Opposition still appears to believe in.

Of course, he’s been right, and so many things he said over the years have played out. Of course, we see that the top 10 percent now own a hugely disproportionate part of the wealth and, obscenely, the top 0.5 percent own a quite high proportion of that as well. Things that we used to take for granted, like homeownership, are now something of a luxury to many and only a pipedream to far too many.

We as a coalition Government aspire to First World wages and working conditions, and New Zealand First has been instrumental in a first step in that policy platform, pushing and being successful and winning a $20 minimum wage by 2020. We want to go further with that, of course. We want to have a living wage being the norm, to reinstate the egalitarian society of which we were once so proud. So we absolutely support the intent of the Minister and the coalition Government in advancing the interests of working people, where a fair day’s work has the dignity of a fair day’s pay.

But New Zealand First also recognise the importance of employers. Employers are not just Fonterra or Fletcher’s; they could be a book store in Gore, a pub in Whakatāne, or, indeed, a farmer in Lawrence. And if anyone actually knows of a farm manager, could you come and see me later on—I’m hiring. We absolutely understand that those people risk their own capital, and we’re pleased to see the Minister informed us of the Tax Working Group’s proposals to look at tax breaks for small and medium sized enterprises to offset some of the $20 minimum wage and what that may be doing to the bottom line of some of our smaller businesses. But we have been instrumental in retaining the right for the 90-day trial for businesses with under 20 employees, which is actually 97 percent of businesses. We do think that it is a mechanism that allows employers to take a punt on those that may be marginalised in society.

We do note also that we need to retain flexibility. This is a dynamic time. Technology is changing, and lots of disruptive things are coming along, so we need to have flexibility within our employment relations. Indeed, the Labour Party’s own Future of Work, work that they did in the previous Parliament, demonstrated that.

So we are absolutely in the middle of this debate. As I say, we realise that we need some balance in this—that the pendulum has swung too far one way. We want to bring it back, but not at the expense of negating employment opportunities. Of course, we need to do much more if we’re going to lift our productivity. We need to add value to our primary exports. We’ve done things like the R & D tax credits and, of course, our Provincial Growth Fund—things that will build our economy so it does support higher wages. But we do commend the Minister on his performance, and we support the intent of what he’s trying to do. We do look forward to working with him to land this legislation in a great place.

SIMEON BROWN (National—Pakuranga): Thank you very much, Mr Chairman. It’s a privilege to take a call on the Estimates debate. Opposite, we just had a history, Mark Patterson, of the last 25 years of the “Winston First Party”, stuck in the past. As he moved through his speech, we started to get into the future, and then he started talking about the 90-day trials and the concessions that he’s managed to get. I’m not sure whether his colleagues in the Green Party quite share his enthusiasm, but it’s great to see that he’s managed to get at least one concession in his time here in the House.

I’d like to touch on a few things in the Estimates debate, touching on the education report. In summary, what we see here is division, ideology, and broken promises, along with some wrong priorities. We see the Minister, Chris Hipkins, taking an ideological approach to education matters. You just need to go so far as to see what he’s doing with partnership schools: closing them down with a lack of consultation and riling up different parts of our community rather than sorting out these issues and working with people. And, look, these are some of the schools which are achieving some of the best results—

Hon Willie Jackson: They’re very happy.

SIMEON BROWN: —and we’ve been hearing the submissions from these schools.

And I note the Hon Willie Jackson on the other side of the House, and I know how much he supports these schools. It’s time for him to take some leadership and stand up for some of the schools, which he has supported so much in the past. And I look forward to the leadership from him and the Māori caucus in the Labour Party to do that.

We also see that this Government is taking an ideological approach to school property. It’s OK to build a road with a public-private partnership, but it’s not OK to build a school. And the Minister failed to answer questions as to why, other than that it’s an ideological approach to education—continually, continually, continually. Public-private partnerships give schools and give communities the opportunity to build new assets, to develop them, and to have better learning environments for the future, but that has been scrapped by this Government and scrapped by a Minister who is taking an ideological approach.

We have to remember that, under National, for nine years, we spent $5.5 billion in education infrastructure; under the previous Government: $3.5 billion. We increased education investment every single year because we know that it matters. That was through the global financial crisis; that was through the Christchurch earthquake rebuild. The National Government invested record amounts in education infrastructure across New Zealand.

Now, I’d like to touch a little bit on some of the wrong priorities of this Government, and you don’t have to go far to see what’s happened in the tertiary education portfolio area, where you’ve had billions of dollars being put into free fees for students. But how many additional students are we seeing? Zero. There’s been no new students going to our universities, going into tertiary education, despite hundreds of millions of dollars—billions of dollars—going into free fees for students. New Zealanders see what this is. They see it as an election promise designed to get votes without incentives, without requirements on students and those who are the recipients of that money, with the wrong incentives in place, and that’s constantly the feedback that we are getting out there.

And we see there are sectors which now want pay rises—nurses, teachers, and midwives—which rightfully deserve that, but the money has already been spent on free fees for students in order to gain their support at the polling booth.

We also have broken promises. I’d like to touch briefly on the broken promise around school donations—well, they call it a delayed promise: a promise which they will expect. It says on page 60 of the report “We heard that the Minister expects the Budget bid to be accepted before the end of [this] parliamentary term. The majority of us are alarmed at how schools became increasingly dependent [on school] donations … and welcome the Minister’s commitment … ending donations during [this term]”. Well, he promised that at the election. He said that would happen this year. So how can we accept this as a commitment that anything will happen before the next election, or is he going to go into another election with the same promise trying to ask for votes? Well, I can tell you—parents out there will not be fooled twice by this Minister. They will not be fooled by a bribe taking away school donations, because he’s failed to do it. He said very clearly what he would do, and he failed to keep his word in this Budget.

Across the education sector we see the wrong priorities. We have ideological decisions and we have broken promises, and the New Zealand public can see that very clearly. Thank you very much.

JAMIE STRANGE (Labour): Thank you for the opportunity to talk about Vote Education around the Estimates. We’ve heard from the Opposition about this sort of last nine years of utopia in education—how everything was so wonderful—but we inherited an absolute mess, with all due respect. We inherited challenges around a rundown education system and burnt-out teachers who wanted to get back to teaching but were in this state of constant assessment and reassessment and reassessment, we had students where their classrooms were having to be set up in the library of the school because they didn’t have enough classrooms, and we’ve had years of underachievement, and that’s why we have frustrated teachers, and we understand that.

In this Budget, we have started to address some of these issues. I am very proud of this Budget, and I’d like to acknowledge the Minister of Education, who has been listening to the sector and has begun to make some of these key changes.

Some of these key changes—the first one I’d like to talk about is school property. In my area of New Zealand, around Hamilton, it’s a growth area, and there are challenges around roll growth and around overcrowding. But the Minister has recognised this and has invested $1.82 million around school property—a 2 percent increase. So we’ve started addressing that issue. We’re listening and we understand.

The second one is around removing charter schools. As a coalition Government, we understand the need for a diverse education system, and charter schools can continue to operate within the designated character model. Within a designated character model, the schools will have registered teachers, and the schools will be a part of our world-class education system.

Another aspect—and my colleague touched on it before—is about learning support. I’d like to give a big shout-out to all of those teachers who work in the learning support area. They do a wonderful job. They have a big heart for kids, and we will support them by investing in an extra 1,000 Ongoing and Reviewable Resourcing Scheme (ORRS) students. So ORRS students are students who have high learning needs, and we’re going to invest in this area.

We’re going to review the education system because we recognise there are a few challenges with NCEA. It’s a model that has been with us for a number of years, and there are some very good aspects to it, but we’re going to have a look at it. And we’re going to review Tomorrow’s Schools. So we’re a Government that’s here to listen, and principals and teachers know that we’re listening.

Simeon Brown: Listen to partnership schools.

JAMIE STRANGE: They have not been listened to for nine years, Simeon—nine years, Mr Brown. They have not been listened to, but we have a Government who will listen to the education sector, and we are.

We’re going to increase funding to early childhood education (ECE)—the first funding increase in this area for many years. The first five years of a person’s life are absolutely vital, and if we get that right—if we get the first five years right—it will set them up for lifelong learning. The increase in ECE has certainly been well received. I was at an ECE centre in Taupō last week. We’ve got a number of wonderful centres, but they need the support, and we will provide that support for them.

First year fees free for tertiary students—first year fees free—and two years for apprenticeships, and I’d like to focus on the apprenticeship aspect because we have a shortage of tradespeople in New Zealand. We’ve got an ambitious goal—which we’re working well towards—to build 100,000 houses, and we’re going to need tradespeople. So the first two years of an apprenticeship will be free, and that’s to incentivise people to get into the trades. We’re not just talking about school-leavers. We’re talking about people who may be in their 30s or 40s and who are supporting a family on a low income who want to better themselves. We’re providing the opportunity for them to have the skills and to have the access to education that we need.

We’re removing national standards. As a teacher during the last regime, this constantly came up: why do we have national standards? Why do we have national standards—and this was one of the key reasons that I stood for Parliament, because national standards narrows the curriculum. But this Government is committed to a broad curriculum.

This Government is committed to valuing a diverse range of learning needs. I could go on for hours, but I’m going to leave it there, and I’m going to say well done to our Minister of Education.

DENISE LEE (National—Maungakiekie): Thank you, Mr Chair, for the opportunity to speak. I would like to speak on the topic of the School Leavers’ Toolkit. I had the opportunity to ask the Minister of Education during the Estimates hearings around this particular policy, and what we discovered was a practical idea that’s been put forward. It’s a school-leavers’ tool kit that’s being considered for every single school-leaver, equipping them with practical things like a driver’s licence, workplace competency, and financial literacy.

Now, we’re all about practicality. This is a good idea, and it apparently replaces the careers education pilot, which had a budget of $5.8 million over four years, and those four years had been earmarked very clearly. So what have we got here when it comes to this Government’s particular policy for school-leavers and their practical tool kit? Well, what we have got is a costed-out policy in the Labour Party’s manifesto for $175 million, and they did take the time to cost it out over four years: $25 million in the first, $50 million in the second, $50 million in the third, and $50 million in the fourth.

So now, fast-forward to the actual Budget and where, literally, the rubber hits the road—the money hits the road—what do we have here for the School Leavers’ Toolkit? Well, we’ve got $1.7 million in the first year, and that’s it—nothing in the second or the third or the fourth year. Again, it was supposed to be replacing the $5.9 million career pilot scheme; $1.7 million in the first year is less than 1 percent of what they promised they would do—less than 1 percent.

Not only is this money a fraction of what was promised; it’s not actually even going towards the tool kit itself. It’s going to be spent on exploration, on prep work, and on a little bit of design. How is this transferring your election policy into reality? It’s not even going to go to the tool kit itself. Surely, during their time heading into this policy, they could have figured out where this thing is going to go.

Now, the Minister did say something in response to this particular question. He said that the three coalition parties couldn’t agree on the delivery of the tool kit. So that’s, really, again, where the rubber hits this particular road. The proposal can’t be delivered because they can’t sort out the difference in their views, and it’s a perfect way—is it not?—to describe not only this issue but also the entire Budget and this entire coalition Government. All three heads are pulling in three different directions, and that’s why they can’t deliver on their promises.

Now, if you need some more examples from this particular debate on Vote Education that we’re having, I’ll give you three more. Where’s the funding for all fully qualified early childhood education teachers? We’re not seeing that. How about funding for ending school donations? We’re not seeing that, either. One more example: ensuring that all school buildings are modern learning environments. These aren’t plucked out of thin air. These are promises that aren’t being delivered, and we’re seeing that very clearly, in black and white terms, as we’ve journeyed as a select committee through the Estimates, and now here we are, having a debate.

All three members of the coalition have their hands in the cookie jar, and what we’re seeing is a very big bunch of mishmashed priorities. It’s not good for the education future of this country. Thank you.

NICOLA WILLIS (National): I rise to speak on the Estimates for Vote Education, Vote Education Review Office, and Vote Tertiary Education. Now, these appropriations, which we examined at the Education and Workforce Committee, have some good things in them. There’s some additional funding for learning support for students in need. There’s additional funding for property for our schools. There are things in here that members on this side of the House support. But the question then isn’t “What is in this that we support?”; the question is “What is missing?”

The thing that’s really, really upsetting to the sector that supports some of the policies that were promised is that they’re not here. After years of rhetoric, of promises, of big talk, so many promises have not been delivered. Instead, what we’ve had is a Minister who has done many things to explain why he can’t deliver on his promises. One of them is “I’ve got the whole sector under review”. Thirteen different reviews in education, and we’re invited to imagine that this isn’t some sort of delay tactic. Then we had the explanation that it was a bit of surprise that there are some demographic pressures, that the population is growing and that more education services might be required and the Government might be required to fund it. Then we’ve got the excuse that there are coalition partners and, somehow, the coalition partners have stopped these promises from being delivered.

The thing is, in the end, when you’re a politician and you get up and you promise things on the campaign trail, it’s your responsibility to deliver on them. And this Labour Party, which Chris Hipkins is a member of, was incredibly specific about one of its promises, and that promise was that they would introduce additional funding so that all teachers in early childhood centres were 100 percent qualified. And so specific were they about this. The National Party was sensible enough to say, “Well, we’re not sure you’ve costed that. We’re not sure that you’ve actually allowed for the fact that that’s going to cost a bit. We’re not sure that you’re really sure of the commitment you’re making.” So Labour said, “No, no, no—don’t worry; we’ve got it all sorted. Here it is. It’s in our fiscal plan.” Remember this document—you may not be familiar with it any more, members opposite. It was something that your finance spokesperson said was a Bible and that it was going to show your integrity.

Well, in this fiscal plan, I want to draw your attention to the line that says, “Increased funds for 100% qualified ECE centres.” And then it’s got the Budget year “2018/19”—that’s the one to which these appropriations relate—and it says that there will be $33 million provided. So then we go to the appropriations and we say, “Is that $33 million there?” No; it’s not.

So we ask ourselves: why isn’t it there? Well, we know that some things did get an awful lot of funding, didn’t they? There was $2.8 billion found for free fees for tertiary students, for example. So if you were the Early Childhood Council, or if you were the New Zealand Educational Institute (NZEI), and you were saying, “Actually, ECE needs a lot more attention.”—that’s what they said after this Budget, Mr Hipkins—or if you were saying that this Budget forces down quality, it would be fair to say that, actually, tertiary students were prioritised over children in this Budget by Labour. The funding for them was more of a priority. The pledges made to them were more of a priority than the pledges made to early childhood education.

And so what we can do when we look through these appropriations is we can have a sense of what the priorities really are—not what the rhetoric is but what is actually there in the black and white, in the money that will be delivered. And I was really interested, at a recent early childhood education conference, when the Minister got up and he said not only was he “hopeful” that 100 percent qualified would be delivered in the next Budget but maybe it would be in the Budget after that. And I say to the members opposite: have a conscience about the promises that you made up and down the country, the pledges you signed, the NZEI that you promised you would be delivering on things to. You were quite happy to sign it, but now, in the actual reality of Government, having to make priorities, that is not the priority that you are making.

So then we say: if it wasn’t this year, and it might be next year or it might be the year after that, then are these appropriations that can be said to be delivering on what the Government said it would do? And the answer is very clear: no, they can’t. And I’ve only talked about 100 percent qualified teachers, let alone the lower teacher to child ratios, the lower group sizes, and the general lifting of quality that were promised. We will judge you on your actions and your numbers, not on your words.

Hon CHRIS HIPKINS (Minister of Education): It is very, very exciting to take this call on Vote Education and to discuss the very positive and optimistic view of education that this Government has. I am very excited about the fact that we are working hard in this Government to ensure that all young New Zealanders can discover their potential and have it fulfilled through a world-class, public education system that is well supported and well resourced to do the job that we expect of it—one where teachers are valued and respected; one where young New Zealanders have their voice heard in the decision-making processes that affect them. And what do we get from the members opposite? The relentless negativity of the Simon Bridges National Party.

I made two lists while listening to this debate. I made a list of all the relentless negativity and verbiage that didn’t need to be responded to, and all of the coherent and well-presented arguments that I should make a genuine attempt to respond to. One of those lists is longer than the other. In fact, the second list doesn’t have anything on it, because the members opposite haven’t raised one single coherent argument that deserves to be responded to. Not one new idea has been presented by the Opposition, who are 100 percent focused on the rear-view mirror. But I will run through a few points that were made.

Parmjeet Parmar was the first member of an Opposition ever to complain that a Minister didn’t speak for long enough in their introductory remarks at a select committee. She then went on to complain that the Education Review Office has had their budget decreased by $90,000 a year. That’s because there was an earthquake and they were given some extra funding to relocate their offices following the earthquake. Unless the Opposition now think we should have earthquakes every year and fund those things every year, I’m not quite sure what her argument is there.

Nikki Kaye described me as “an epic failure” for not getting a large enough share of the Budget pie. I would simply point out that this is the largest increase in Vote Education in over a decade. If that makes me an epic failure, I’m not sure what kind of aspersions she is casting upon herself and her other predecessors in the last National Government, who all secured smaller increases in education funding than I managed to do in the first Budget. I would point out that it is also the largest increase in early childhood education funding in over a decade. So when Nicola Willis says that we weren’t valuing early childhood education enough, despite giving them the largest increase in funding that they’ve had in a decade, I think that maybe she should reflect on the track record of the previous National Government, who not only didn’t increase early childhood funding but cut it. They cut it. And the 100 percent qualified rate for early childhood teachers that we have committed to restoring was cut by the previous Government. On a per child basis, funding for early childhood education was cut by the previous National Government, and where were these now lions arguing for early childhood education increases in funding when they did that? They were completely invisible.

Nicola Willis was right, though, when she said that the Budget documents reflect this Government’s priorities. The two biggest increases in education spending in this year’s Budget were early childhood education funding, and funding to support children with special needs. And I make no apology for that—the biggest increase in funding for kids with special needs in over a decade. It’s time we prioritised those most vulnerable kids in our education system and actually gave them the inclusive education system that they have been promised for a long time but haven’t actually had. And I’ll tell you what: it’s not enough. We’ve got a lot more to do, because, for over a decade—for over a decade—the last National Government failed to adequately fund the education system to keep up with population growth, to keep up with the increasing number of kids with special needs, to keep up with the fact that our education infrastructure is ageing and creaking and needs to be replaced.

Nikki Kaye pointed out, in her contribution, that teachers are striking because we have failed in Budget 2018—the biggest increase in funding. Now, let’s just point out the obvious factor here. The obvious factor here was that nothing on Budget day changed the predicament of teachers in a negative sense; in fact, all of the salaries that teachers are paid now were negotiated under the previous Government. And I’ll tell you what: I’m not going to get into the bargaining of that, but I would point out that the offer that’s on the table now—this is a matter of public record—is significantly higher than what they were offered under the previous Government. We know that we’ve got a lot more work to do. We’ve got a big mess to clean up, and we are going to do it. We’re positive and optimistic about the future of our education system.

MARJA LUBECK (Labour): Thank you, Mr Chair. Look, that’s going to be a very hard act to follow. It’s obvious, from the Minister of Education’s speech before, that this Budget makes the investments where they are needed, and we are building the foundations for the future. But I am happy to take this call and speak for just a few minutes in this Estimates debate. I’d like to focus on the Vote Labour Market.

Now, this won’t be any surprise to the member for the Coromandel, the Hon Scott Simpson, because we’ve had a few of these encounters before, but I completely disagree with what he had to say in his assessment of our meeting with the honourable Minister Iain Lees-Galloway. The member for the Coromandel mentioned the word “fudging” when he talked about the answer that our Education and Workforce Committee received about the redesign of the air ambulance services. In fact, the Minister very eloquently explained to us the process of this ageing helicopter fleet needing to be replaced, because it’s predominantly single-engine and, therefore, cannot fly over any urban areas, and that comes with obvious problems. The Minister also explained that it was inappropriate for him, as a Minister, to interfere with, basically, what is a commercial tendering process. He explained that it was up to the individual trusts to engage with the process, so perhaps the member Scott Simpson wasn’t entirely listening when the Minister explained that.

The other member that wasn’t listening when there were issues explained was Nicola Willis. I’ll say it again—it’s been said many times—that it’s important to distinguish, as the Minister said on page 13 of the verbatim record of this meeting, between a Labour manifesto and a Government of three parties.

Nicola Willis: Oh, that’s a great excuse!

MARJA LUBECK: I don’t know what’s funny about that, but maybe, at some stage, that will get through to the Opposition. [Interruption] No, perhaps not.

Now, I would like to also talk about the numbers, because I have to say that the report given by the chair of our committee was a little bit light on the figures that were supposed to be given to the House. So the appropriations sought for Vote Labour Market in 2018/2019 are just over $2 billion. That is, in fact, a 6.8 percent increase on the 2017/2018 estimated actual spending. Across the portfolios, Budget 2018 has appropriated $194 million in operating funding for 2018/2019 through the 2021/2022 financial years, $28 million in operating funding largely for cost pressures in the 2017/2018 financial year, and $20 million in capital funding.

Now, we had two Ministers presenting to our quite new committee, and these Ministers—Minister Hipkins and Minister Lees-Galloway—really impressed our committee. They were obviously very well briefed on their portfolios and they didn’t have to defer many questions to the officials, so I would like to commend both Ministers—Hipkins and Lees-Galloway—for their respective performances. We heard about the challenges they identified and what they are proposing to do to ensure that we overcome these challenges, and, personally, I find it a lot more reassuring than the messages we heard from the Opposition when they were in Government, basically telling us that everything was hunky-dory; we should just keep going like we were going and nothing needed to change.

Now, the economic forecast shows that we have a modern, productive, sustainable economy under this Government’s plan. Growth is forecast to average at 3 percent in the next few years. We are forecast to deliver more jobs and address the cost of living for Kiwi families. We are ensuring that workers are paid fairly. Under the current labour market conditions, wages should be increasing, but that’s not happening, and, in fact, we see a declining share of economic growth going to working people. So what we’ve done is we’re putting the minimum wage up, and we’re also making the workplace fairer by restoring core employment rights and strengthening collective bargaining through the bill that’s currently going through our committee, the Employment Relations Amendment Bill.

We are also lifting the capability and capacity of the labour inspectorate over the next three years, and the Minister explained that the plan is to double the size of the labour inspectorate by the end of this term. This will help with ensuring that vulnerable workers are receiving their minimum rights. It will also ensure that the majority of employers—who are, in fact, acting legally—can compete in a fair market. We have seen that this is not the case at the moment. Very clearly as an example is the current Wellington bus situation, where employers have to tender for contracts, and therefore we see this race to the bottom. So, therefore, I support this bill.

A party vote was called for on the question, That Vote Education, Vote Education Review Office, Vote Labour Market, Vote Pike River Re-entry, and Vote Tertiary Education be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Votes agreed to.

Environment Sector

CHAIRPERSON (Adrian Rurawhe): Members, we come now to the votes in the environment sector, B.5, volume 3. The question is that Vote Conservation, Vote Environment, and Vote Parliamentary Commissioner for the Environment stand part of the schedules.

Dr Deborah Russell (Chairperson of the Environment Committee): I rise to present the reports from the environment sector. Those are the reports on the Department of Conservation, the Ministry for the Environment, and the Parliamentary Commissioner for the Environment, all of which were heard in the Estimates briefings by the Environment Committee. It is largely a congenial committee, and very collegial, and I think that shows in our reports.

I turn first to Vote Conservation, where there has been an exciting advance in what has happened under this coalition Government. Under this new coalition Government, we have a significant increase in Vote Conservation, of about $43.1 million. That’s a huge advance in funding, and it speaks to a difference in the way that conservation is funded. It speaks to rebuilding the Department of Conservation, to rebuilding capacity there so that it is fit and ready to meet any challenges that arise.

There are some interesting things in this vote. In particular, there is a $76 million contingency fund to fund biodiversity initiatives. The exact initiatives have yet to be determined; that is, in part, because of the resourcing needed within the Department of Conservation for those initiatives. The capacity to administer that fund has to be rebuilt, and that is under way.

Some of the concerns that have been raised in conservation are to do with funding, and we are introducing some new measures for funding conservation—in particular, a tourism levy, where we are asking international visitors to pay a levy as they come into our country. Some of that money will go to tourism, but some of it will also go to conservation, and that is an important initiative. And, in quite a good measure, I think, we are asking tourists who walk our Great Walks—particularly the more popular walks—to pay a higher fee than domestic visitors to those Great Walks. We are asking those tourists to fund the infrastructure, to fund those Great Walks so that they will continue to be there for New Zealanders in the future. So I think it’s a very promising start to our term in office when it comes to conservation.

In Vote Environment, funding has decreased, which might ordinarily be a cause for alarm, except that most of that decrease is due to a change in the emissions trading scheme. So that is where the largest decrease comes from, and that, of course, points to some of the critical concerns in Vote Environment. I think there are two large concerns in Vote Environment: the first is around fresh water, and the other one is around climate change. We know that people in New Zealand are very concerned about fresh water, and we know that we need to do some extraordinary work on nutrient load in our waterways, particularly arising from farming. As part of the work being done in that space, we are allocating extra money to OVERSEER. That’s a tool that farmers can use to assess nutrient load, but it needs to be effective, it needs to be good to use, and we’re putting our money where our mouth is and funding it properly.

When it comes to climate change, climate change has been spoken of as the moral issue of our time. We will be devoting considerable effort to climate change. The Minister for Climate Change has put in place a process to develop a zero-carbon bill; he is consulting on it at the moment. He also told us that he might continue to accept international credits in our emissions trading scheme. You will know that this has been a concern in the past, or we know this has been a concern. There are some conditions around the use of the international credits: that they are genuine, that they would maintain progression to a net zero carbon unit, that they make economic sense, and that they would assist in increasing the domestic carbon price. So that work is being done on the emissions trading scheme.

I move very briefly to the Parliamentary Commissioner for the Environment (PCE). As a committee, we were concerned about the PCE’s independence. We were given strong reassurance that the Parliamentary Commissioner for the Environment would continue to be an independent voice for the environment, reporting to our Parliament through several reports each year. That independent voice is critical beyond politics, beyond partisan views, simply advocating for and reporting on behalf of the environment. I commend these reports.

SARAH DOWIE (National—Invercargill): Look, thank you, Mr Chair, for the opportunity to take a call in this Appropriation (2018/19 Estimates) Bill, and as the lead for conservation on this side of the House, that will be the focus of my contribution here. Of course, as we are aware, this is an opportunity for the new Minister of Conservation, Eugenie Sage, to spell out her vision for conservation and the conservation effort in New Zealand moving forward, and how she will enable the Department of Conservation to engage the community and lead them to involve themselves in a conservation ethic that will bring about a betterment for New Zealand.

Quite frankly, I was disappointed with a Minister that while she was a member in Opposition had all of the answers. She was very quick to tell us how to run the Department of Conservation and how to run our conservation initiatives, but yet in the chair at the hearing she had no answers and, quite frankly, was wedded to an ideology that would take the Department of Conservation back to the 1980s—to the bad old days where the State would do everything—and she would not engage community. In the hearing, she was quite clear about her reluctance to involve business, to involve community, and to involve people in a conservation initiative. One of the things that she said was that she was reluctant to garner support from business, to garner support of extra funding into initiatives, because she wanted to keep these businesses at arm’s length, and she was somewhat dubious about the influence that they would have on her officials.

Well, first of all, I have faith in the officials at the Department of Conservation that they will not be swayed as to a conservation ethic and what is the right thing to do with respect to protecting and conserving an environment. But the other thing is that when you can bring business and partners on board, not only do you get a financial return but you get that engagement where they can build trust and where they can bring stakeholders from a range of varying backgrounds together to push forward conservation benefits. That is true in one example with respect to Fonterra and their Living Water initiative, and particularly in my area with respect to Waituna Lagoon, which is a Ramsar Convention site. There is an ability to bring together farmers, to bring together conservationists, to bring together a range of different people—birdwatchers, fishers, or whoever is in the area together—and build that trust, to look at a wetland and recognise its beauty and its conservation value, and to work together around a table to create a set of common goals to bring forward conservation in that area.

My question with respect to this is: how far will the new Minister take this? Will this continue—this abhorrence to involving the community in the likes of Predator Free 2050? Predator Free 2050 is based on the fact that we need our community to engage in the eradication of our pests and to involve themselves in conservation at community level, at the grassroots. So is she going to sabotage that initiative by turning away people that want to get involved in conservation? And, even further, does this anti-partnership model stem to even other departments with partnerships such as the Department of Corrections, where we take offenders and rehabilitate them through conservation efforts to build kākāpōriums, to plant and nurture plants and then replant them and restore certain landscapes? How far will she take us backwards with not involving people on the ground in conservation?

Conservation should not be a polarising issue. Conservation is owned—and everybody in New Zealand has a passion for conservation. We have an innate sense of connection to our natural environment and, at all costs, a connection with community should be cherished.

ANGIE WARREN-CLARK (Labour): Thank you, Mr Chair. It’s a great pleasure to stand and to have a conversation across the floor in regard to the appropriations. Just in response to the member Sarah Dowie, in regard to Vote Conservation: I am very excited about what is happening in the conservation space—very excited.

Hon Scott Simpson: Say it like you mean it. Say it with some passion.

ANGIE WARREN-CLARK: Very, very excited! How’s that? So $181 million in the next four years—$181 million—that is the largest increase in the Department of Conservation’s (DOC’s) budget since 2002. We are backing nature. I’m just going to read some facts: $81 million to boost landscape-scale predator control; $76 million for DOC biodiversity initiatives across land, fresh water, and marine ecosystems; $16.2 million for DOC to strengthen core capacity—that means more people on the ground working with those volunteers out there in the community, working alongside those volunteers—$5.5 million to enable better visitor management, because we have more visitors coming to this country than we have people living here now; and $2.6 million to fund the better protection of the unique landscape and biodiversity of the Mackenzie Basin, which has been neglected by the past Government. But I’m not here to talk about just that; I’m here to talk about climate change.

Climate change is, in fact, the most serious issue, I believe, that we are facing, and I am pleased to hear the member Sarah Dowie talk about partnerships, because we surely need the party across the benches to be in partnership with us around climate change. Climate change is a serious issue. I come from Tauranga. My city will be devastated if we continue to allow climate change to exist. We need, across this House, to act, and I believe that we have put together a wonderful, forward-thinking, brave plan in order to fix the issue. So we are taking the environment and the protection of our environment as a priority.

We have truly shown that the safeguarding of our systems of nature is really important. Our goal is to improve the living standards and well-being of every person in this country. The environment appropriation represents 18 percent of the vote—$147 million. This is a Government which has put its money where its mouth is. We have three priorities for the environment: climate change, fresh water, and urban development. These three things are really important. Do the members here recall, as children, swimming in fresh water? Swimming in lakes? I certainly do recall that. Wadeable rivers and lakes is not a standard we aspire to on the side of the House. We are keen and will work across all of Government in order to fix this. We will not stand for any further degradation of our water, and it will be swimmable within a generation. That is what we want to do. We will fund that. We’ve put $42 million towards that. We haven’t changed the standards of what clean water means; we’ve actually committed to making a change.

In my very short amount of time—I obviously got a bit passionate about that.

Hon Dr David Clark: And excited!

ANGIE WARREN-CLARK: And excited—and excited! I would just like to say that climate change is crucial to us all across this House. We invite the members across the House to come with us around zero carbon and climate change. We invite you all—all of us here—because we don’t have a Planet B. Thank you.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Mr Chair. It’s good to take a call in this Estimates debate on Vote Environment. I particularly want to refer to pages 91 and 92 of the report back from the Environment Committee, because the committee had an opportunity at Estimates to hear from the Minister. He’s a busy Minister. He’s got a very large and complicated range of portfolios. So the committee was disappointed that the committee’s invitation extended to the two Associate Ministers, the Hon Nanaia Mahuta and the Hon Eugenie Sage, to attend the committee hearings was declined. That was disappointing because these are Associate Ministers that actually have quite large delegations.

The principal Minister, David Parker, has chosen to delegate very significant parts of the environment portfolio to his Associate Ministers. There’s nothing wrong with that, but what is wrong with that is that the Associate Ministers should have adopted the process that occurred in years past, when Associate Ministers did attend Estimates hearings and answer questions about their delegated financial responsibilities—the areas for which they have financial accountability in this Budget—and they were missing in action. What was particularly odd was that one of them, the Hon Eugenie Sage, appeared only a few minutes after the hearing at the conservation hearing. So she was clearly very busy prepping for her conservation role rather than putting emphasis on the environment role.

That’s really what I want to concentrate on, because this is a Government that—and we noticed it with the last speaker—seem to have lost their enthusiasm for the environment. They’ve lost their direction, they’ve lost their focus, and they’ve lost their passion. They didn’t have any. Their speakers in this debate—in fact, they don’t even talk about the environment any more because they’ve found that it’s harder than they thought. These were Ministers who in Opposition had all the answers. I well remember the Hon Eugenie Sage used to come to select committees and she would just lay down the law and say, “All you need to do is this, this, this, and this, and everything will be perfect, everything will be simple.” What do we have now? A Minister who is probably the most inefficient, in terms of producing any results, of the entire Government administration. A Minister who had all the answers in Opposition is now stuck like a possum in headlights—like a possum in headlights—who has been bereft of ideas and bereft of policy, and, suddenly, all her good ideas seem to have evaporated before her very eyes.

Frankly, it’s an embarrassment. It’s an embarrassment to her party, which nobody hears about these days, and it’s a deeper embarrassment to the coalition Government because, clearly, there are frictions afoot that abound between the coalition partners. We saw it when we asked questions at Estimates about the proposed levy on bottled water, for instance. There were very few answers. In fact, the Minister confessed to the committee that, actually, he’s no longer prioritising a tax on bottled water, and he told the committee that he was prioritising emissions pricing over water pricing. So that’s a concession of defeat, because he understands that to do what was suggested in the Speech from the Throne actually amounts to foreshore and seabed mark 2. He knows that, and the coalition Government knows that, and it’s an utter humiliation for them in terms of their policy initiatives.

But it’s in the area of waste and plastics that they have been particularly slow. China made a decision more than a year ago to cease taking the world’s rubbish for recycling, and this Government has done absolutely nothing. In an electorate like mine, plastic is stockpiling at the old Carter Holt Harvey site at Kōpū, just out of Thames. The Minister has said on a number of occasions she wants to introduce a ban on single-use plastic bags—nothing is happening. She was on the television over the weekend and no comments were made—nothing’s forthcoming. In fact, she wants to have another consultation. So the Minister had all the answers in Opposition and now, suddenly, is stuck like a possum in headlights.

This is a Government that came to office with what New Zealand voters and the public could have expected was some kind of passion, some kind of zeal, for the environment. They now seem to have been really just completely sidetracked on it. They don’t have any vision. They haven’t got any plan. They just seem to be bereft of ideas, and nothing was clearer in the Estimates hearings.

Hon EUGENIE SAGE (Minister of Conservation): Mr Simpson spent two minutes of his time grumbling about the fact that I didn’t turn up at the Environment Committee. That, again, shows how bereft the National Party is of ideas. All they have done in this debate today is criticise, criticise, criticise. Negative National—negative National.

This Government has a plan for a sustainable, inclusive, and productive economy. This Budget is about backing nature in the conservation space, because nature is at the heart of our success as a country, both in the primary sector and in the tourism sector—our biggest export industry. So this Budget did in conservation what National utterly, utterly failed to do over the last decade. It put in the biggest increase in conservation funding since 2002—the biggest increase in the last 16 years. And the bulk of that—$81 million, as Angie Warren-Clark noted—is going toward landscape-scale predator control in order to ensure that our native species can thrive.

Now, Ms Dowie talked about conservation being something across the parties, and yet she spent all of her time in attack mode too. What I said at select committee—and it’s a pity Ms Dowie didn’t talk to the former Minister of Conservation, the National Party Minister, about his National Parks and Conservation Foundation. Denis Marshall was the founding chair of that foundation. It was set up to provide an independent agency for corporates wanting to donate to conservation to give their donations to the foundation, and to hold that at arm’s length. Under this Government, unlike under National, we want independent Crown agencies not at the behest of the corporates. Yes, there are partnerships with business, but when businesses are giving donations, you want to ensure that the policy function of the department is robust and is independent. So take a lesson, Ms Dowie, from a former National Minister, Denis Marshall, in setting up that foundation.

The conservation budget has got a raft of initiatives which involve partnerships. I’ve been delighted to announce, in Taranaki, Towards a Predator-Free Taranaki—the partnership there with iwi and with hapū, the eight Taranaki iwi. It’s working with the council, working with Wild for Taranaki, the conservation groups, and the environmental groups up there to work outward from the maunga of Taranaki and control predators around the whole of the ring plain. Similarly, in Hawke’s Bay, we’re seeing a huge partnership with the regional council there—with iwi, with hapū, with landholders—to actually trap on private land, to increase the benefits that you get from the landscape scale the department is able to do on public land because of the increased funding that this Government has made available.

Regarding waste, the previous speaker, Mr Simpson, has totally opposed any increase in the waste levy. National failed to use that levy for all of the nine years that they were in Government, and yet local councils are calling for an expansion of the levy. This Government has a plan on waste. You can’t fix nine years of neglect in nine months, Mr Simpson. We have a plan. We are close to announcements on single-use plastic bags. There is a whole raft of work being done in responding to the National Sword initiative. That is an enormous opportunity for New Zealand not to send our waste to China, but to actually deal with it onshore to reduce the waste we generate here. We are seriously acting on waste, not like the last Government. We’re working with the sector. We are working with councils to reduce the waste that goes to landfill.

So the failure of the last Government to deal with waste—

Tim van de Molen: I raise a point of order, Mr Chairperson. Look, there have been multiple instances in this member’s speech where she’s referred to the previous Government’s expenditure. I would draw your attention to Speakers’ ruling 128/3, which confines this Estimates debate to current spending plans only, and previous performance is to be debated under the annual review debate. This is clearly not that.

Hon EUGENIE SAGE: I was simply providing context.

CHAIRPERSON (Adrian Rurawhe): Taihoa, I’m going to make a ruling. Members, they are debatable points, and members can compare to the records of previous years. So that’s quite appropriate.

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

Hon EUGENIE SAGE: This Government, with this Budget, is going to work to turn the predator crisis around. It was the National Government that had the ambition of Predator Free 2050, but they weren’t investing in conservation to do that. We know that when the department does large-scale predator control, it does get numbers down, and it does ensure that in areas like the Landsborough, bird numbers like the kākā, the parakeets, continue to increase. So this Government is backing nature. This Government is investing in conservation, unlike the former National Government.

Todd Muller: Madam Chair.

CHAIRPERSON (Hon Anne Tolley): Um—

Hon Members: Todd Muller.

CHAIRPERSON (Hon Anne Tolley): I call Todd Muller. Thank you.

Dr Duncan Webb: A new MP.

Kieran McAnulty: Yeah—maiden speech.

CHAIRPERSON (Hon Anne Tolley): It’s been a long week.

TODD MULLER (National—Bay of Plenty): I rise to give my maiden speech today—oh well, one can only improve. Thank you, Madam Chair. I’d like to spend a few moments reflecting on the contribution on climate change that we covered in the Vote Environment Estimates a few weeks ago. Not surprisingly, Minister James Shaw spent a fair amount of time talking about the Government’s intent with respect to the zero carbon bill, the target, and the consultation process. But there were some areas that we felt, from an Opposition perspective, belied the rhetoric and actually signalled some pretty poor judgment, and I do want to reflect on some of those observations this evening.

The first is that if you are determined in a bipartisan way to establish a climate commission that is above reproach, that is non-political, and that is evidence-based and informed by good data and good judgment, the very first thing you don’t do in establishing an interim climate committee to do the pre-work for that commission is to give them tasks that are entirely informed by your own political bias and prejudice. To ask that interim committee to prioritise the areas of renewable energy, taking it from 85 percent, as we currently are, through to 100 percent, and putting agriculture into the emissions trading scheme (ETS)—two word-for-word platforms from the Green Party manifesto 16 months ago—talks, in my view, to some pretty poor judgment. If you are serious about having an informed conversation at a climate committee around the sorts of areas that perhaps should have some focus as we move as a country across the decarbonisation journey, the discussion that we had in that select committee suggests that those two are not the two that you would prioritise.

The conversations that we had with the Minister tested why renewable transport wasn’t included in the interim climate committee’s considerations over the next 12 months, why forestry wasn’t, why land use change wasn’t, and the opportunity to actually reflect on what we could do differently to capture the carbon that is sequestered in this country—why was that not part of their interim climate commission? What about the opportunities for renewable industrial processes? Why was that not covered in the interim committee’s mandate?

This was a specific issue that we raised with the Minister, and, in particular, the question that I raised to him: why wouldn’t the merits of the extractive industries—oil and gas, and its future, particularly gas as a transitional fuel—not be considered by an interim commission? If you are truly serious about building a bipartisan platform on climate change—one that is evidence-based—you would task your best people to look at the questions which are material with respect to climate transition, not the two issues that your base in the Green Party are particularly enamoured with.

A particular one of the areas that we pursued specifically with the Minister was his particular belief that access to international markets and international units should be something that we approach, as a country, as a last resort. We tested thoroughly at the committee that that is poor, poor logic—that when you are looking at the exposure of our economy over the 2020s, and the 193 million tonnes of carbon dioxide that needs to be somehow removed from our emissions, the fact that this Government, and particularly this Minister, is so reticent in pursuing the opportunities for access to international units was disappointing, and particularly the very small number of 700,000 that, supposedly, is going to facilitate the access to these international units in the market. As a Budget, it was woefully inadequate in terms of delivering against that strategy. Thank you, Madam Chair.

JENNY MARCROFT (NZ First): Tēnā koe. Thank you, Madam Chair. It’s an honour to rise and speak on behalf of New Zealand First on this Appropriation (2018/19 Estimates) Bill. It’s a significant increase in funding that we’ve seen in Vote Conservation, and that is something to be very excited about. In fact, we heard that from this side of the Chamber earlier in this debate process, that it was exciting—no, it wasn’t exciting; it was very, very, very exciting. I’d like to just reiterate how exciting it is to have $181 million over the next four years—

Hon Member: Real money.

JENNY MARCROFT: —that’s real money—into conservation, to support the Department of Conservation (DOC) for a programme to restore capacity in the department; capacity that was lost under the previous regime. So I’d just like to acknowledge the Minister of Conservation, the “Minister of Good News Stories”, for this increase in the Budget.

National’s big initiative in the previous regime on the environment was, in fact, a bit of a Trumpian-style diversion tactic. As the whole country was waking up to the realisation that we have serious water-quality problems with our rivers, what did they do—what did they do?

CHAIRPERSON (Hon Anne Tolley): Order! the debate is actually about the Estimates—the Estimates—not what a previous Government did, but what this Government’s Estimates are.

JENNY MARCROFT: They launched the Predator Free 2050 programme—yes, Madam Chair. OK.

So we all know that the Predator Free 2050 programme is being extended by this Government, because we do understand that to take care and eliminate predators, there’s no point paying lip-service to it; in fact, we must throw real money at it and seriously combat these predators. In fact, we have super-sized the efforts that were made previously because this will make a real difference. And the Taranaki Mounga project will not only target pest eradication through Vote Conservation but, in fact, restore lost species back to the maunga.

We note that protecting our natural resources will ensure a future for not only our grandchildren but our grandchildren’s grandchildren—our mokopuna’s mokopuna. Conservation is about dealing with the issues that are unfolding now to ensure that we have a future—a healthy, flourishing future—for all of the future generations to enjoy.

There is no Planet B, and New Zealanders, we understand that—we understand and we have a deep fascination with nature. It’s part of our national psyche. It’s embedded in our DNA. We enter our nature’s stores from Te Rerenga Wairua—Cape Reinga—in the North to Bluff in the South, and all the regions, ngā hau e whā. We pride ourselves on our unique physical connection—in fact, our spiritual connection—with Papatūānuku, our world-renowned conservation estate.

We are very excited that, for me in the Rodney region, we have the Parry Kauri Park—this is a very small native forest of kauri trees—and we have our Kauri and Native Bushmen’s Association. For the last 30 years, they have been protecting our patch of native kauri forest. They have done such great work that we have no kauri dieback there. They have resourced this themselves.

We understand that kauri dieback is a microscopic, fungus-like pathogen that infects the roots of the kauri and kills the tree. This Vote Conservation will see $5.486 million in annual operating budget to be added back into DOC’s baseline. That’ll help manage the kauri dieback through into the future. Thankfully, now we have a new Government, we actually might still have time to save the kauri.

So let me reassure the committee that this Government understands the extent of the problem. We are very serious about committing all the resources that are required, and, just like Mycoplasma bovis, this Government has been left to deal with a problem that should never have grown to the extent that it has. But we do get it. We do understand that strong conservation and environmental values are the keystone to the New Zealand way of life, and we are prepared to protect that. We are putting our money where our mouth is.

Now, if we tarnish our environment and our conservation image, you know what? We will never get it back. So without strong conservation values, we will have no business, no livelihood, and no future. But we have good news. We have $181 million added into Vote Conservation, and that is something to celebrate.

ERICA STANFORD (National—East Coast Bays): Thank you, Madam Chair. I’m very pleased to take a call in the Estimates debate for the environment sector. I’m quite pleased actually—this is my first time going through all of this, and it was actually quite an exciting process because the environment is on all of our minds. We’ve got issues around a plastic waste crisis that’s happening at the moment. The Government raised our expectations around water quality, single-use plastics, and bottled water, so you’ve got a country whose expectations are raised. We’re all thinking about it, people in my electorate are thinking about it, and we put a lot of those questions around those areas to the Minister at select committee. Being my first Estimates hearing, I had assumed—wrongly so—that the Associate Ministers would turn up to the meetings, given that they were invited, and I’ll draw your attention to page 2 of the report where we made clear that they were invited but didn’t actually turn up.

The fact that Minister Sage, the Associate Minister with a delegation for waste, didn’t show up, frankly, is appalling. It’s appalling because we are facing possibly one of the biggest waste crises, potentially ever—certainly in my lifetime—around plastic. We know that China are no longer taking it. We know that it’s stockpiling around the country in warehouses that are bursting at the seams. We had some questions to ask the Minister around the appropriation and what her plans were, and we weren’t able to do that, and, frankly, that was appalling.

We didn’t get Minister Mahuta either. We did request that she turn up, and I know that she’s doing some work around Three Waters, which is something that I’m interested in and would have liked to ask her about, but, unfortunately, I didn’t get that chance. Again, other select committees did get their Associate Ministers, and I don’t understand why in this case we didn’t. Given that this was the greenest Budget ever, as proclaimed by the Government, one would have thought that these Ministers would have wanted to turn up to crow about all the fantastic things that they are doing and all of the appropriations, because it’s such a green Budget.

Now in my Budget speech I pulled that apart. [Interruption] Well, Vote Environment actually decreased 15 percent, and they can tell you about the reasons why that might have happened, but the point is it didn’t increase. So here we are with massive crises in waste. We’ve got raised expectations in water and single-use plastics and bottled water, and we’ve got a Budget that decreased by 15 percent. So this was our chance to sit down with Minister Parker and go through things line by line and ask him questions about what his plans were, given that it wasn’t at all clear from the Budget when we looked at it at first glance. So here we are with the Minister by himself—it wasn’t three out of three. We didn’t even get two out of three; we got one out of three, which is—

Todd Muller: Outrageous, actually.

ERICA STANFORD: It is. It’s outrageous and it’s pretty much par for the course for this failure of a Government.

But I’d like to bring the committee’s attention to some of the things that we asked the Minister. So we talked to him about the proposed levy for bottled water for export and, frankly, what he had to say was it wasn’t a priority for this Government. Given all of the rhetoric prior to the election around what they were going to do, and they had all the answers and they knew exactly what was going to happen and what all the solutions were, when the rubber hits the road, when we get him in front of us and we ask him “What are you going to do?”—nothing. Actually, all he did was give us a whole lot of excuses about why it couldn’t be done and why it wasn’t a priority. So here we are, seeing quite clearly what was promised before the election and all the hype and all the raised expectations, but here it is in black and white: they’re not going to do anything about it.

Then we went on to talk about plastic waste management—as I said earlier, possibly one of the most important areas right now that we need to be talking about. Minister Sage doesn’t turn up, so we have Minister Parker and what do we hear from him? Well, there are some discussions going on, Minister Sage is talking to councils about separating glass from plastic recycling, and they’re not considering a ban on single-use plastic bags at this stage—not putting anything in front of Cabinet. So, again, we see, prior to the election, all the answers; when we get him in front of us at select committee: nothing. They bat it down the road: “We’re thinking about it, maybe we’ll do it, maybe we won’t.” Well, they’ve been in power for 10 months, and we’ve got nothing.

Todd Muller: 10 long months.

ERICA STANFORD: 10 long months, and we’re sitting with the Minister in front of us and what is he doing about bottled water? Nothing. What is he doing about single-use plastics? Nothing. What is he doing about our waste crisis with packaging? Nothing. What a disgrace.

Hon RUTH DYSON (Labour—Port Hills): I have to say that that member, Erica Stanford, refers to herself in far more glowing terms than her colleagues refer to her and her contribution in Parliament.

I’m delighted to speak to this environment and conservation Estimates, and the reason that I’m pleased about it is that it is integral to our reputation as a country. We pride ourselves and have grown our reputation on our regard for the natural environment and natural capital.

That has been under threat for a long time, and I’m so pleased to see, as the member Jenny Marcroft referred to, the increase in conservation funding as just one of many examples throughout the vote that we’re considering at the moment where this coalition Government—the combination of Labour and New Zealand First and Greens—has made a real contribution to ensuring that our reputation is delivered on the ground, that it isn’t just talk about “100% Pure” but that it is actually delivered, and that we can have a country where we can swim in our rivers and not get sick. Unlike the former Minister for the Environment Nick Smith’s wadeable river standard, we are looking to improve the quality of water, and that work is reflected in this Budget.

I want to mention just a few of the key topics covered by this area. The first is climate change. I’ve been a member of GLOBE-NZ since it first started up. I want to acknowledge Stuart Smith as the current chair of GLOBE and say that I do think that in many regards that cross-party approach is a good one. It has to be entered into on the basis of a genuine commitment to work together to get agreed outcomes, not as a means of petty point-scoring. I think GLOBE has set an example of how that can be done, and I look forward to seeing others in this House as well.

I’ve mentioned the freshwater issue. I come from Canterbury, and we’re currently enduring—my colleague Matt Doocey will know as well—the torment of having chlorinated water because of contamination in our well heads. We hope that that taint in our water is gone soon and that we can return to our own pure water. It’s been a wake-up call for our region, and I think we’ve learnt the lessons, and I wish Hastings had learnt them earlier, actually. I admire our council for putting the health and well-being of our citizens first, but fancy having in New Zealand the situation where we have water that is not fit to drink, as they had in Hastings, and as we currently have in Canterbury.

I also want to acknowledge Minister Eugenie Sage in the waste management area. She’s put a lot of work and effort into thinking about how to deal with a challenge that has not been dealt with adequately anywhere in the world, and I look forward to seeing the outcome of some of that work.

I laughed at some of the National members saying, you know, “This isn’t all fixed in this first Budget.” Nine years in Government led by that party and not a single fix in the environment or Government or conservation spaces, but after less than a year, the National Party is demanding us to have fixed all the mess that they left behind. Well, we’re working on it, but it won’t be delivered in the first year—that’s for sure.

I want to acknowledge the members of the select committee who considered the Estimates before us. I think the Environment Committee works hard. I want to acknowledge all the Ministers and Associate Ministers who have worked so hard in this space, and I think we’ve got a good report to debate as a result of that.

Just in conclusion, I want to acknowledge the outgoing and the current Parliamentary Commissioners for the Environment. They’re also covered by this appropriation. They’re Officers of Parliament. They’re independent; they don’t have Ministers. But Dr Jan Wright and the Rt Hon Simon Upton—one of them previously and one of them more in the future—I think will do a great credit to that position as an Officer of Parliament. Jan Wright has issued some exceptional reports based on science, independent thinking, and robust debate. We can use those for good policy-making in this Parliament, and that’s where our policy should start from. I have confidence that the Rt Hon Simon Upton—despite his past!—will do an equal job as Dr Wright has, so I look forward to seeing further work in that space from him.

In conclusion, I think we’ve had an interesting debate. There’s a lot of common ground that we should be working on in the environment and conservation space, and I welcome National to join it.

Hon NANAIA MAHUTA (Associate Minister for the Environment): I, like other Government members, am really proud about Budget 2018, because it sends a signal of hope that we have a Government who has a plan for the environment and to protect our conservation estate. But more than that, our goal as a Government is to improve the well-being and living standards of all New Zealanders through the productive, sustainable, and inclusive growth of our country and its natural resources, but with environmental limits in mind.

I listened very carefully to the contribution that’s been made in this section, and I want to pick up a few things from a number of members: firstly, Sarah Dowie, who criticised the Minister of Conservation around her role and the job that she’s doing. I think she’s doing a very fine job. The nature of that criticism was that the Minister wasn’t working hard enough around partnerships, around ensuring that people were being engaged, and the like. Well, that’s simply not true. I’m really pleased that the Minister took the chance to stand up in the committee and point to some of the partnerships that will mean, in areas like Taranaki, an emphasis on predator control. Building in partnerships with the local community and iwi, we’re seeing real gains delivered on the ground. Similarly, working with regional council in the Hawke’s Bay and local stakeholders to ensure that the issues of pest eradication could be delivered in a way that was sustainable for that community—the Minister stood in the committee and pointed to that issue, and I think the criticism of her not turning up to a select committee was a little bit churlish—a little bit churlish—because she’s doing the work on the ground.

More importantly, a number of issues that were raised in relation to her portfolio were in the area of waste. Now, what I know is that Minister Sage has delegated responsibilities for the issues of waste and resource efficiency, and is working with the Ministry for the Environment to achieve better implementation of the Waste Minimisation Act. We know that more can be done here, but, more importantly, the work that she’s doing to reduce waste to landfill I think will see, over time, a real effort being made across regions and within communities so that we can better utilise waste as a resource. She is also talking about a circular economy. Now, she is not short of work—that’s for sure—but she is definitely making a huge impact.

We also heard similar issues around climate change from Todd Muller. Now, many of the issues that Todd raised were actually the subject of the zero-carbon bill that’s being consulted on, and those consultations came to a conclusion on the 19th of this month. Minister Shaw has canvassed a range of issues through that consultation, and already the select committee will be receiving a huge number of submissions on all the issues in terms of how emissions across various sectors, and the subsequent cost benefits, will be impacted on by introducing the three options that are proposed in the zero-carbon bill.

I know that Minister Parker, who is working very hard on freshwater issues, would want to further highlight that when we say “swimmable”, we mean swimmable—not wadeable; not anything less than swimmable. His effort to ensure that we will be working hard around the water-quality issues, around nutrient limits, will be a significant step forward to assure all New Zealanders that no matter where they are, they can go to their local river, waterway, or stream and swim in their local taonga, and that’s a really important aspect of where the Government sees the contribution of its efforts.

Now, for my own part, I’m responsible for indigenous biodiversity and a national policy statement (NPS). We have a collaborative working group who will be presenting a draft on that NPS. It’s the first time that we’ve had a working group work in such a way, and we will consult on that draft strategy for indigenous biodiversity, because we know that the biggest challenge will be to encourage and incentivise private land owners towards doing more to protect our indigenous biodiversity. That is about collaboration, that is about partnership, and that is about working with private landowners to achieve a greater outcome. The way that this Government is working will show hope that we have a vision and a plan to ensure that our environment is protected and that we have economic growth, but not at the cost of our environmental principles.

A party vote was called for on the question, That Vote Conservation, Vote Environment, and Vote Parliamentary Commissioner for the Environment be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Votes agreed to.

External Sector

CHAIRPERSON (Hon Anne Tolley): Members, we come now to the votes in the external sector, B.5, volume 4. The question is that Vote Customs, Vote Defence, Vote Defence Force, Vote Foreign Affairs and Trade, and Vote Official Development Assistance stand part of the schedules.

SIMON O’CONNOR (Chairperson of the Foreign Affairs, Defence and Trade Committee): Thank you, Madam Chair. Look, I’m very pleased to take a call in this discussion about the external sector as the chair of the Foreign Affairs, Defence and Trade Committee, and can I, in beginning, acknowledge all the members of that committee, but also the Ministers. As the chair of this committee, I will leave aside most of the politics, and just sort of touch on some of the key elements that—

CHAIRPERSON (Hon Anne Tolley): All of it, preferably.

SIMON O’CONNOR: Oh, you never know, you’ve got to have a flick. Five minutes for five estimates—the first we’ll touch on is Vote Foreign Affairs and Trade, over $549 million. A lot of the discussion that occurred initially was around the spend for new embassies, particularly querying why Stockholm was chosen. I’m sure it is a lovely city; maybe I’m biased, I’d love to go and visit it, but the committee did spend quite a bit of time discussing Stockholm. In the discussion of the Estimates then we moved into questions around, of all things, actually, Israel—in particular, asking why New Zealand did not have representation there in Israel; we’re aware that it’s in Ankara, and the Minister spoke to that, but there were questions around that—and also querying the Minister whether Jerusalem would be a place of choice, seeing it is the capital of that country.

There was also quite a bit of time questioning the Minister because of previous statements he had made around whether he and the new Cabinet would rescind UN Resolution 2334—something I personally have called for. That has been declined. I think sadly, and a number of us on the committee noted that, although not all, and there was some confusion by members as to why the New Zealand Government had also gone on and sponsored another unbalanced resolution in the UN, which I think is disappointing.

Questions were raised of the Minister, more in the written part, around why a pro-Hezbollah protest was allowed to occur in Auckland. This has raised a number of questions for members on the committee, particularly around when the debates on free speech are occurring at the moment.

Finally, one of the elements around Israel—again it became quite a notable part—was recent support, implicit, by the Ministry of Foreign Affairs and Trade (MFAT) of the Boycott, Divestment and Sanctions group, an anti-Israeli group. There were questions of why that was allowed to happen from MFAT. It was both, I suppose, worrying and confusing to the committee, firstly, that the ministry advocates a two-State solution but was implicitly supporting a group that does not—in fact, wants no Israel. The other was really a wider question in the foreign affairs space: would our ministry of foreign affairs be supporting groups that said that we shouldn’t trade with China or India? I suspect the answer is no. So there’s more questions there.

We did raise in foreign affairs the whole question of trade with Russia, and, to round it out as well, how we are placed for APEC in 2021. It was good to hear from the Minister. I think the realistic assessment is that more money will be needed.

We also touched on development assistance. Obviously the Government’s big push has been around more money into the Pacific. The committee was interested, basically, at how the Pacific could absorb that.

Vote Defence and Vote Defence Force, that’s $314 million and $3.4 billion respectively. Look, one of the big issues for the committee in discussing with the Minister was really, in a sense, the gap between what is desired and what can be funded. I think that was actually quite a constructive conversation there.

Look, I’m very happy to say in the Chamber I’m pleased that since the Estimates hearing the Government has found funding for the P-8A Poseidons. I think that’s a really good decision. But the committee was also continuing to question, particularly in the aviation space, the place of the Singaporean F-15s and Singaporean troops to come down to Ōhākea, the context being with the move to ban foreign buyers that’s having some potential influence on our relationship with Singapore. So that was good to raise those. But I think, particularly in defence, the committee’s going to be interested to see with all the desire for spending across naval, air force, and army what will be prioritised first in what’s always a limited budget.

The final but not least area is Vote Customs, $230.63 million, as the Minister in the chair, Meka Whaitiri, will know. I should declare I am the National spokesperson in this area but I don’t intend to politic it, as I said. Look, it was good to see that more money is being spent to disrupt drug smuggling. The committee was interested to see how that exactly is going to fare. There were some questions that with the increase of funding we didn’t at that point see in some of the documents a requisite change in the performance targets. In other words, they were static, but a good conversation was had there. Finally, around the whole border levies, I think there’s about a $13 million surplus at the moment; just keen to understand how that goes in the future.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Chair. It’s a pleasure to speak on this Estimates hearing. It’s a little disappointing to hear Mr O’Connor talk about the position in respect of UN Resolution 2334, a resolution that was, of course, sponsored by the New Zealand Government whilst the National Government was in power. That resolution, in fact, was very clearly a resolution which pointed out the barriers to peace, and it’s one which the Minister, at the hearing, was very happy to defend, because it’s quite appropriate that New Zealand takes its place on the international stage in pointing out that settlements in the West Bank, in the occupied territories, in breach of international law, are an obstacle to peace in that part of the world and an obstacle to the two-State solution, which this Government supports.

However, turning to the wider question, what was very clear in this hearing was that the Ministry of Foreign Affairs and Trade needs considerably more funds to rebuild the capacity so that New Zealand can take its place on the international stage. In fact, one of the things that the Minister said—and it is in the Estimates book here at page 115—is that we’ve got a whole lot of work to do. In fact, he said, and he’s quoted, “we’ve got to do a whole lot more than another hundred.” There he’s speaking to the 100 staff that we need to recruit to return our Foreign Service, our diplomatic corps, to the kind of status it needs to represent us internationally before it was gutted by the previous Government.

When we look around ourselves on the international stage, it’s very clear that we must take our place in a world of great uncertainty. The National Party has continually taken pot-shots at this Government for putting money into foreign affairs and for opening new embassies, but what has been shown in recent times is that the move to increase our presence in Europe is prescient.

It is absolutely timely that we go to Stockholm, we open an embassy there, and we absolutely put our best foot forward in terms of trade, because we’ve got to negotiate an agreement with the European Union, and also in terms of ensuring that we have a rules-based framework for everything that goes on, because at the moment we stand on the precipice of chaos in terms of international relations, and New Zealand would be worse off for that. So it is absolutely right that we have funding here to recruit 50 new diplomats and over time we need many, many more so that we can go out and make sure that when we are negotiating, when we are taking our place in the world, we do it under international law and not under the law of the jungle that some other nations, perhaps, would have us answer to.

So in terms of this additional spending, it’s entirely appropriate. It is worth stating that we must turn our eyes north to what China is doing in the Pacific. We must recognise that the traditional places of power are shifting and we need to be aware of that. So we do need to absolutely have a strong presence in the Pacific, and that is what we are going to do.

Further, in terms of our trade interests, we’ve got to ensure that we have great negotiators out there, senior negotiators—and there is a gap in the Ministry of Foreign Affairs and Trade at the moment there. So we need to recruit those and recruit them well, because we need to negotiate those further trade deals. As we see with the United Kingdom as well, we’ve got to engage with the United Kingdom. That’s something we’ve got to do at the highest level, something that is happening now, and something that we are behind the eight ball on because of the weakening of our diplomats, of our foreign corps, of our diplomatic service.

So what was good to hear was that the Minister is committed to strengthening the Foreign Service so that we can get out there and take our place in the world. Thank you, Madam Chair.

Hon TIM MACINDOE (National—Hamilton West): Thank you, Madam Chair. Ordinarily, the Minister of Foreign Affair’s appearance at this year’s Estimates hearing before the Foreign Affairs, Defence, and Trade Committee would’ve been considered the worst of the season by any Minister, but the tourism Minister managed to take that title from him. Nevertheless the rambling, cantankerous, and unconvincing presentation and answers to questions by Mr Peters when he presented as the Minister of Foreign Affairs was the worst performance I have heard at that sort of event in my 10 years in this House. He appeared unfamiliar with the text of his own introductory remarks, which he delivered in a halting and at times incoherent fashion, and he quickly became abusive when he was asked legitimate questions on important topics for which he should have been better prepared.

Although he has spent 25 years pretending to put New Zealanders first, he took a long time arguing that a New Zealand landlord whose only mistake had been to let her property to a foreign diplomat, could not expect to be paid the considerable sum that she is owed in unpaid rent because the diplomat was protected by immunity. When my colleague the Hon Todd McClay pointed out that there are exceptions to that policy, his response was, effectively, “Too bad, that’s the way it is.” He then told us that “I used to charge $500 an hour for this sort of advice but I’m giving it to you for free.”

Hon Christopher Finlayson: What—as a conveyancer in Howick and a failed Russell McVeagh lawyer?

Hon TIM MACINDOE: Ha, ha! You’re probably quite right, Mr Finlayson—and I’m sure that the landlord was really deeply touched by his humility and understanding.

I wasn’t surprised that he chose to abuse me and my National colleagues, as my line of questioning was asking him to explain his many flip-flops and inconsistent positions on policy matters, but it was notable that he also managed either obliquely or overtly to insult all of our nation’s teachers, Senator Penny Wong of Australia, Fonterra, and, frankly, the intelligence of everyone who was witnessing his performance.

Although in May, following the release of a compelling report, Mr Peters accepted the international condemnation of Russia that surrounded the downing of Malaysia Airlines flight MH17 in July 2014, which saw 298 innocent people killed, he did not resile from his statement during a TV3 interview two months earlier that there was no evidence of Russian involvement in that atrocity. Rather than admit that he had been wrong in March, which caused New Zealand international embarrassment at the time, as Senator Penny Wong had pointed out from the other side of the Tasman, Mr Peters was instead dismissive of Senator Wong’s qualifications and refused to concede that his earlier statement had been so ill-informed.

In his opening remarks, Mr Peters spoke of the launch of New Zealand’s trade talks with the European Union, the New Zealand - China free-trade agreement upgrade, and the imminent ratification of the PACER-Plus agreement, but he made no mention of his enthusiasm for a trade deal with Russia, so I questioned him about that. And rather than explain why he had been so determined to see New Zealand resume negotiations towards a free-trade agreement with Russia, which only he could have been responsible for negotiating into the current Government’s coalition agreement, he chose to split hairs in that usual fashion that he adopts when he finds questions inconvenient. So I asked him again: what progress have he and the trade Minister made towards the resumption of free-trade negotiations with the Customs Union of which Russia is the dominant economy, and does he believe that our international allies and Five Eyes partners support such a stance at a time when there is so much concern about Russia’s foreign policy and involvement in issues such as the Salisbury Novichok incident, the downing of Malaysia Airlines MH17, the chemical weapons outrages perpetrated by Bashar al-Assad’s regime in Syria, Russia’s suspected interference in the United States 2016 presidential election, and so on?

I asked Mr Peters why the Government had changed its original press release on the Salisbury nerve attack, which he denied had happened, but I’m holding here a copy of the two versions, which quite clearly show that he misled the committee with that answer.

Given the recent publicity about the deluded and obnoxious individuals who were banned recently from using an Auckland Council venue to promote their intentionally offensive attitudes, it’s interesting to note that just a few weeks ago supporters of the Hezbollah terrorist organisation were permitted to hold a rally to promote their anti-Semitic and anti-democratic views at that most public of Auckland Council venues, Aotea Square, and no one in the Government or the council expressed any concern about that at all.

My colleague Chris Penk, the member for Helensville, asked him a sincere and respectful supplementary question to my questions on that, to which Mr Peters replied, “Don’t get into a shit fight you can’t win, son.” Even by Mr Peters’ standards, that was a puerile response, and I wonder what message he intended to send to the many New Zealanders and foreign observers who share the concern that Mr Penk and I, and many others, have on that issue. I never cease to wonder at the fact that Parliament’s oldest current member is also its most childish.

LOUISA WALL (Labour—Manurewa): Tēnā koe, Madam Chair. By my recollection of our Estimates hearing, and having Minister Winston Peters attend, it was one where, actually, he needs huge congratulations. If we look at Vote Foreign Affairs and Trade, he has secured $549.59 million, which is an increase of 15 percent under that portfolio. Now, people may quibble about what he intends to spend it on, but, actually, from my perspective, it’s a very good increase and it should be acknowledged.

In Vote Official Development Assistance, which I am particularly interested in, that total is $768.39 million, and, over the next three years, from Budget 2018 it’s going to see a 28 percent increase in official development assistance. Where will that money be spent? Actually, it will be spent predominantly—60 percent of it—in the Pacific. So for the Minister to be belittled in such a way by the previous speaker, Tim Macindoe, I find incredibly infuriating when the priority and focus of this reinvestment is on the Pacific.

He talked a lot about the Pacific reset—how we’re going to invest this money. And we’re going to invest this money in mutually beneficial and sustainable development in the Pacific region. And why are we going to do that? Because we are changing the relationship that we have as a country with the Pacific. We now know that to be successful we need partnerships, we need collaborations, and we need to support Pacific leadership development. And to what end—to what end? Actually, the focus is going to be on attaining the sustainable development goals.

And two issues that were highlighted at our select committee, the Foreign Affairs, Defence and Trade Committee, were, actually, domestic violence and malnutrition. So if people think those are joke areas, I find that incredibly offensive because the levels of domestic violence—not only in the Pacific but, actually, here in our own country—are abhorrent. So the reality of the work of the Minister of Foreign Affairs is to provide the resources so we can address these critical issues.

What is the other critical issue that we will invest in? It’s actually the challenges of climate change. And that is going to be incredibly challenging, especially when we have countries like Nauru that potentially may not exist anymore. So we’re needing to invest in partnerships and collaborations that have the technology to ensure that that country continues to have a land mass. Without a land mass, how can you be a sovereign country? Again, this isn’t an issue that we should quibble at.

The other issue is our support within that climate change challenge for climate change refugees. And I actually think the Pacific reset—the focus of our Ministry of Foreign Affairs and Trade in working on addressing those types of issues—are things that we should actually celebrate and focus on.

One of the major issues that we talked about was this concept of tied aid, and I do find that incredibly interesting, because there now is an emerging discussion about whether we should have some expected outcomes for the aid that we give to developing countries. Should we, for example, insist that they sign up to the Convention on the Elimination of All Forms of Discrimination Against Women? Should we insist that they sign up to the different conventions and regulations around civil and political rights and social and cultural rights, and that, actually, issues like homosexual law reform are addressed in these Pacific countries?

What the Minister said was that he’s considering it. And so that is an interesting development in terms of the relationship that we see we have with the Pacific, because it is one of tuakana-tēina. I want to use that word, because my colleague Aupito Su’a William Sio uses that all the time. But what it also highlights is that, more and more, the interests of our Pacific brothers and sisters and us as a country have become more intertwined. And it has become more intertwined because many more of us—and I can speak as a resident of South Auckland—are actually marrying and having children together. So there is no separate Māori identity or Pasifika identity; there’s actually a merged identify. And what I see from this reprioritisation of our Minister of Foreign Affairs and Trade is a realisation of that and a focus on that, and also a commitment to enhance that relationship going forward. Kia ora.

CHRIS PENK (National—Helensville): Thank you, Madam Chair. It’s a pleasure to rise and speak about the Estimates hearing that was conducted by the Foreign Affairs, Defence and Trade Committee. Various other members of the committee have already spoken to that, and it’s with some pleasure that I am allowed now to recount some of the extraordinary moments in that hearing by the Minister of Foreign Affairs.

However, just to take a step back, it was an interesting time in international relations. The eyes of the world were on Singapore, where the question of peace on the North Korean peninsula was being contemplated with much interest. We were discussing with the Minister of Foreign Affairs whether he thought that an accord could be reached between President Trump and, of course, the North Korean president, Kim Jong-un. It’s hard to know what to say about a strange little man wearing clothes from another era, who’s difficult for speakers of the English language to understand, and who’s deeply isolationist in outlook. But, anyway, enough about Winston Peters—and, indeed, enough about North Korea as well.

Other aspects of the hearing considered the question of the Trans-Pacific Partnership in the context of trade more generally. We didn’t dwell too deeply on the fact that submissions on the Trans-Pacific Partnership had a very general tenor of disappointment with Government parties—with the exception of the Green Party, I have to confess, whose position at least has been consistent on that matter—disappointment with the Labour members and disappointment with the New Zealand First members. The number of times the word “flip-flop” was used made me feel as though their position had gone from economic vandalism to economic jandal-ism, and so it was that we had interesting times in the committee with that, but we also had some uninteresting times.

We had some very uninteresting times when the Minister’s comments were somewhat banal in nature. I quote, for example, from the transcript of that exchange, when Mr Peters started by telling us that “we are living in times that are witnessing serious global challenges and global opportunities.”, as though at any time in history that has not been the case. The Minister of Foreign Affairs has seen a lot more of history than most of us, and for him not to have realised that that is always the case—that there are serious opportunities and serious challenges—seemed to me, as I say, banal at the absolute best.

Hon Christopher Finlayson: What time of the day was this meeting?

CHRIS PENK: The time of the meeting, Mr Finlayson, was rather too early for the Minister—I think that’s perhaps as much as I should say—or perhaps it was too late for him. It was difficult to ascertain his condition, but—

CHAIRPERSON (Hon Anne Tolley): Move on.

CHRIS PENK: —suffice it to say—

CHAIRPERSON (Hon Anne Tolley): Order!

CHRIS PENK: —that in relation to his comments at the hearing, comments were made along the lines that “New Zealand needs highly competent and capable people on and offshore”, and of course he is right to acknowledge the competence of his ministry, but a bit of capability and a bit of competence in the ministerial chair would also be rather welcome.

We heard from the Minister, similarly, that the upcoming APEC conference would represent a great opportunity for the country. Mr Peters noted that there would be some “18,000 to 20,000 visitors to these shores”, many from Asia, representing 18,000 to 20,000 new opportunities for him to insult visitors to this country.

I was particularly interested in the Minister’s comments that the ministry has worked to negotiate free-trade agreements, and, of course, he is right in that respect. It would have been easier for them to conduct such work, I suppose, if he had not been actively working against them—and, indeed, the sensible people of New Zealand who support such agreements—while he was in Opposition before conducting those flip-flops that I mentioned earlier.

Finally, I just can’t resist adding a note about Mr Peters’ criticism that there is, effectively, not enough spending on foreign affairs matters. He noted, presumably in relation to GDP figures, that we spend at the level of 0.28 percent, as opposed to 0.4 percent, as many other countries do. If there is a person who has had more opportunity than most—and, indeed, more opportunity than all—in the last quarter of a century to do something about that, it would be Mr Peters himself. I encourage him to do so.

Hon RON MARK (Minister of Defence): Thank you, Madam Chair. It’s indeed a privilege and a pleasure to be able to rise on behalf of New Zealand First, and, in particular, to speak on Vote Foreign Affairs and Trade, in this debate, on behalf of the Acting Prime Minister and Minister of Foreign Affairs, the Rt Hon Winston Peters. I have to say, given the rather churlish nature of some of the speeches that I’ve just heard across the floor, that if I was to ever dare to offer any defence for the Minister of Foreign Affairs, it would probably be something along the lines of this: one tends to rise to the level of one’s opposition. I guess on the rugby field, we’ve all played the odd game like that, where we’ve played to the level of our opposition, and I guess that’s true of politics right now.

There are times when you see an Opposition that demonstrates such a puerile, disingenuous, and churlish attitude to such a serious portfolio—foreign affairs—to deliver this barrage of speeches that we’ve just been subjected to, and I really am disappointed by Mr Penk’s speech, because—

CHAIRPERSON (Hon Anne Tolley): Come to the Estimates, please.

Hon RON MARK: —I expected more of him. I am just answering those particular points, Madam Chair. I think what stands out in this Vote Foreign Affairs and Trade is that this Government, under the leadership of the Rt Hon Winston Peters in foreign affairs, is attempting to address the failings of the last nine years in nine flat months, and we over on this side of the House think that we have more than done that with more than $714 million extra that has been allocated, over and above, over the next four years, into particularly Official Development Assistance, $150 million put into operating funding over four years, and $40 million put into capital. It’s been quite interesting to hear the counterarguments coming from the Opposition, who once championed the need for free-trade agreements, better international relationships, striking quality deals with trading partners, and breaking into new grounds where there are no trade agreements right now, and yet in one fell swoop, in less than nine months, this Government is addressing that by opening new embassies.

The astonishing thing is that rather than hearing the proponents of free trade, prosperity, and international relations applauding this budgetary allocation and applauding the decision of our Minister of Foreign Affairs to break new ground and to reopen embassies to reconnect with Europe in search of, of all things, a free-trade agreement with the EU. Now, we would have thought that a mature Opposition who was pro-business, pro-prosperity, pro - economic development, and pro - free trade would have lauded and applauded everything that the Minister of Foreign Affairs is doing in that very space. To hear from the Opposition that the serious global challenges that we face in strategic defence policy are no different today than what they were 10, 20 years ago is astonishing—astonishingly ignorant—because we only have to look at what is happening in the Pacific and we can see the reality as to why we needed a reset policy.

We cannot sit here and complain and moan and wonder and worry about non-traditional actors and what they may or may not be doing in the Pacific Island States and about the parlous state of some of our Pacific Island communities and still sit here and do nothing. Well, this Government’s not about doing nothing; this Government’s about doing something, and a Pacific reset is about doing something for our Pacific Island community of nations that we support—many of whom have citizens living in our country—and ensuring that we enhance the security of those nations, both in terms of physical security and in terms of social security and in terms of their ability to service and support their own communities.

This is a Budget in foreign affairs that we are enormously proud of and that we are very, very keen and happy to debate anywhere on the hustings come 2020; let me assure you of that.

I notice with deep sadness that there are no more speeches coming from that side, particularly on defence. I want to, as the Minister of Defence—because the Opposition, for some reason, seems to have gone very quiet on that area—just recap on some of the points of concern raised by the Opposition, on which I attempted to placate them in my presentation at the Foreign Affairs, Defence and Trade Committee on Vote Defence Force.

So let’s talk about Vote Defence Force—and, maybe, the things that they don’t want to talk about—now. The first thing that stood out was a big question about what are we doing, and what we heard repeatedly from the Opposition was about what was not going to be in the Estimates. In fact, we had the Hon Mark Mitchell telling everybody and suggesting—no, saying—at the select committee that this Government, being a Labour - New Zealand First coalition Government with the Greens in support, was going to cut defence spending. Well, that didn’t happen, did it?

In fact, we increased defence expenditure to Vote Defence Force by $324.1 million. There were questions around capability and serious—

Hon Ruth Dyson: That’s a lot.

Hon RON MARK: It’s a lot of money, actually, for a Government that, apparently, was going to cut defence expenditure. Then there were serious questions about whether or not we would make a decision around the P3 Orion replacement.

I did say, in that select committee, “Put your cell phones on flight mode, buckle up, put your tray up, sit back, hold on; it’s coming.” Well, we have announced what I knew we would be announcing, and that is that this Government has made the decision to purchase four P-8 Poseidons, and it’s interesting that I have heard not a mutter, not a murmur, not a sound, nor a syllable from the other side, as they, obviously, had to swallow everything that they had said up until this point in time.

We have not been slow or tardy. In the eight short months, we have made massive progress in defence. The Strategic Defence Policy Statement 2018 is out there. The P-8 decision—the replacement for the P3s—has been announced. We are buying four, plus all of the support gear, plus a simulator. We have even gone so far as to announce that we are going to bring forward the complementary capability that that Government talked about but did nothing about. Now, that’s about the usage of satellites, the use of small manned aircraft, and the use of—what’s the third aspect? Satellites, small aircraft, and I’ll come to the other bit. We’re bringing that forward, and you will see more progress on that very, very soon.

The review of defence procurement policy? Done, dusted. Baseline funding? Increased. Limited service volunteer screening? Budgets increased, project doubled. Veterans Affairs? An extra $1.1 million into grants over the next four years for the Royal New Zealand Returned Services Association and No Duff Charitable Trust. We have completed the report on the warrant of fitness check on the 2014 Act. We’ve completed the rehabilitation strategy. We have reviewed the procurement processes, and we are moving fast on some other capabilities, which you will hear more about very soon. In terms of the capability plan review, that’s been kicked off this month, and we hope to complete that before the end of this year.

I have actually had returned servicemen and uniformed members of the Defence Force say this to me, and I’m immensely proud that this Government is able to claim it: they have seen more action from this Government in defence policy in the last eight months than they saw out of the previous Government in nine long years. And I didn’t even mention the frigate systems upgrade project; the King Air replacement project—the $150 million over ten years. Done and dusted, signed off, completed by this Government. And, in fact, there is not an area of the defence forces that we have not touched. All of these areas, by contrast, were too hard, too big, and too difficult for the last Government, and that’s why they kicked the can all the way down the road, made not one decision and left it to us. Well, the good news is that we’re up to it. We’re up for it, and we will continue to look after the men and women in our Defence Force in a way that the previous Government never ever dreamt of.

Hon MEKA WHAITIRI (Minister of Customs): Thank you very much, Madam Chair. I am pleased to report to the committee, through the Appropriation (2018/19 Estimates) Bill the fine work that Te Mana Ārai o Aoteroa, the New Zealand Customs Service does in terms of both protecting and promoting New Zealand through world-class border management.

I want, first of all, to acknowledge the mammoth effort that the select committee went through—five votes in one day. Some might say it was a calculated option that I got there as the No. 5 vote, because there was a bit of tiredness in the select committee. But I do want to acknowledge that they gave the Customs vote a very, very thorough examination. So I want to acknowledge the work of the select committee.

Getting the balance right over our border, in terms of ensuring that we are keeping out illicit drugs from the harm that it causes in our society, we’re, at the same time, ensuring that both people and goods—legitimate people and goods—transfer across our borders in a seamless way. And that’s why I’m really proud to say that this coalition Government, in their grand wisdom, decided to allocate another $58.5 million to the New Zealand Customs Service. And I just want to acknowledge and share with the committee what we can expect with this extra investment from an organisation whose four strategic intentions are: protecting our borders by eliminating risk, ensuring that New Zealand trade flows efficiently across our borders, streamlining experiences for travellers across our borders, and, of course, that we collect all due revenues on behalf of the Crown.

So what is this $58.1 million going to get this country, in terms of investment into the Customs Service? Well, over four years, $54.2 million is going to go on enhancing customs’ capability to protect our communities by disrupting the international drug-smuggling networks as early as possible in the supply chain. Customs will add an additional 127 staff over the next four years, both here and overseas. The funding will build onshore capability through increased border operations staff numbers across the country while also increasing maritime, detector dog, intelligence, and investigation teams.

Dedicated intelligence and investigation positions in New Zealand will contribute to our international engagement and operations both directly and through generating leads and information to provide to overseas partners—permanent customs funding for customs’ offshore posts in Hong Kong and the international targeting centre in Washington DC, plus new posts for the Americas and South-east Asia. So investing in staff as well as ensuring that we have got the tools and equipment through front-line work on additional equipment such as mobile X-ray vans, vehicles, and kennels for our additional dogs. We’re also ensuring, by running a full trial on the secure trade lane between New Zealand and Australia, that our export and trade facility is also enhanced so that we’re making sure that our neighbouring partner—and we are working quite closely with them to ensure that that happens.

I also just want to briefly touch on the Maritime Powers Extension Bill. Cabinet agreed, in February 2018, to give customs the extra power to stop, board, and search ships involved in any drug-smuggling. The Maritime Powers Extension Bill will give effect to these decisions by extending customs’ existing maritime powers and subsequent amendments to the Misuse of Drugs Act. I am proud to be the Minister of Customs that continuously improves our border management in terms of illicit drugs coming into this country, by eliminating harm, but we also want to ensure that travellers who see New Zealand as a destination of visit can come and go from our country in a seamless manner. I want to acknowledge the hard work and effort of all customs officers throughout Aotearoa New Zealand, but also to acknowledge our international post people who are also working with our Five Eyes nation countries to ensure that our borders are maintained, the safety of our borders is uppermost in the way that we portray ourselves—as a country that we want people to come and do business in and visit—but we also want to make sure that we are protecting ourselves at our border. Kia ora tātou.

A party vote was called for on the question, That Vote Customs, Vote Defence, Vote Defence Force, Vote Foreign Affairs and Trade, and Vote Official Development Assistance be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Votes agreed to.

Finance and Government Administration Sector

CHAIRPERSON (Hon Anne Tolley): Members, we come now to the votes in the finance and Government administration sector, B.5, volume 5. The question is that Vote Audit, Vote Communications Security and Intelligence, Vote Finance, Vote Internal Affairs, Vote Office of the Clerk, Vote Ombudsmen, Vote Parliamentary Service, Vote Prime Minister and Cabinet, Vote Revenue, Vote Security Intelligence, Vote State Services, and Vote Statistics stand part of the schedules.

Michael Wood (Chairperson of the Finance and Expenditure Committee): Thank you, Madam Chair. Can I just begin my contribution by acknowledging the members of the three select committees who have contributed to the Estimates reports in the finance and Government administration sector. Those would be the Governance and Administration Committee, chaired by Brett Hudson; the Intelligence and Security Committee, chaired by the Rt Hon Winston Peters; and the members of the Finance and Expenditure Committee, which I understand is being chaired very well these days.

Hon Ruth Dyson: Name him.

MICHAEL WOOD: That would be undignified, Ruth Dyson. I want to touch on a number of the key votes that came up in the hearings that contributed toward these reports, starting with Vote Finance.

We had a good examination of the Estimates with the Minister Grant Robertson. Just starting off with the appropriations in Vote Finance, one of the notable sets of numbers that came before us is that there’s been a reasonably significant increase in the appropriation to Vote Finance, increasing from something like $5.1 billion to $6 billion in the 2018-19 year, and we had some good discussion about the reasons for that. There were, obviously, some overs and unders, but the two main drivers of that were, firstly, the Government’s renewed commitment to contributing to the New Zealand Superannuation Fund, which is an additional $1 billion of appropriation which comes through this vote; and, secondly, increased capital spending to support the anchor projects in the Christchurch rebuild.

We had quite a good interchange on the committee, just getting to grips with where that additional spending was. There was a bit of a lack of clarity about whether the additional $300 million Christchurch accelerator fund was new spending or whether it was, perhaps, a different name for old spending, and we confirmed, through a conversation with the Minister, that that was $300 million of new spending that would be coming in, additional to the cost-sharing agreement that’s supporting other capital rebuild in Christchurch.

Moving on to some of the other key features that came through in this vote—bearing in mind that the Finance and Expenditure Committee, at the same time, also examines the Fiscal Strategy Report and the Budget Economic and Fiscal Update (BEFU), which is presented by the Secretary to the Treasury. The key numbers in there, which I think will be of interest to the House, were that we have a projection of 3 percent growth over the next few years. That’s Treasury’s estimate of the growth track, and they reported—and this is reflected in the select committee’s report—that that’s been largely underpinned by a combination of private spending, increased Government spending, and also increases in residential and business investment.

There was a good discussion with the Minister about how he envisages that we can uphold that growth rate into the future, and what the Minister identified—and, again, this is reflected in the report—is that his intention is that there is a shift toward supporting growth through higher labour productivity rather than population growth. The BEFU—which, again, is produced by Treasury and is part of this report—reported that the fiscals are looking strong. They noted a growth in revenue coming across all of the key parts of the tax base.

I just want to jump over here to the Vote Revenue hearing at this point, which we, obviously, had with Minister Nash. Some of the key highlights there were the intention to introduce the research and development tax credit. That’s going to be an additional billion dollars in forgone revenue over the last four years, but he reported that the intention of that is that stimulates some of that higher labour productivity I referred to before. In terms of the work that’s going on in the BEPS—that’s the base erosion and profit shifting area—the projections that we got through there, in the hearings, are that we can, potentially, expect about $200 million of extra revenue coming in through making those multinational corporations pay their fair share.

Really interestingly, we had quite a good conversation with Minister Nash about the IRD’s Business Transformation project. He reported that we’re now seeing 86 percent of taxpayers doing their returns online. The good thing about Business Transformation, in terms of the Estimates, is that we’re getting much, much tighter reporting. We recently had the legislation go through that means we’re shifting to pay-day reporting. What the Minister discussed with us in the hearings is that this means—and this was in response to questioning—that we are actually, effectively, going to get to the point of abolishing secondary tax by 1 April 2019, in the forthcoming financial year, because, effectively, people will be able to get tailored tax rates and automatic refunds.

The thing I just want to finish on is across two of the reports in this sector—that is the Vote Finance report but also the Vote State Services report. We did hear from Ministers about the wish to have far more linked up activity between our Government departments over the coming year, to really work toward supporting the well-being of all New Zealanders, because, in the end, every single dollar that we spend through these Estimates is about supporting the well-being of our fellow men and women in this country. Thank you, Madam Chair.

ANDREW BAYLY (National—Hunua): Thank you, Madam Chair. It’s a pleasure to be talking on this Estimates debate, the finance and Government administration sector. When you turn your mind back to the occasion where the leader of New Zealand First stood in the Legislative Council Chamber and announced that he was going to go with Labour, thereby anointing the Rt Hon Jacinda Ardern as the Prime Minister, it was intriguing that he spent much of that speech talking about the impending doom of the economy. Many of us thought it was actually an irresponsible stance to take, but, after some reflection, I think the point of that speech and that introduction, in anointing this Labour - New Zealand First coalition, was that if you can influence something, you can actually set about achieving that outcome. Unfortunately, the Labour - New Zealand First coalition seems intent on achieving the outcome that Mr Winston Peters spoke of, about a declining economy.

So the travesty about this is that when this Government came into power, it was one that inherited large surpluses that had been ground out after years of managing an economy during very difficult times, and we were just starting to see the benefits that all New Zealanders had helped to achieve. We had seen a capital expenditure programme that was really starting to bite and a huge programme that was going to take us forward. We were seeing an economy that was generating 10,000 new jobs every month, and we saw a country with relatively modest debt levels of just over 24 percent to GDP. So that was what they inherited, with a global outlook that was improving, with New Zealand at the leading edge of economies around the world.

And where have we got to now? Well, in only a matter of months, we’ve seen that this Government has set about reducing, through their actions, the number of new jobs created. So we were at 10,000 jobs a month; now we’re at 4,000 jobs, which means those many New Zealanders who want to get a good job, want to get paid a decent wage, have less opportunity to be able to do that. We now see GDP rates below where they were before. We were at the leading edge, over 3 percent of the OECD; now it’s below. My prediction is the finance Minister will see us down below 2.5 percent before the end of this year.

We’re going to see debt levels decrease. They already have, as a result of some flow-through, but they will increase under this Government in the short term. So why is that going to occur? Well, we’ve seen the $1 billion—the billion bucks—that was given to Winston Peters to spend on the cushions and curtains of a new diplomatic post overseas. We’ve seen the $3 billion given to Mr Shane Jones to go and spend what he might do, around New Zealand, often with little business case support. Then we’ve seen the $6 billion for transport jobs and projects ripped out of the regions, diverted into a couple of trams in Auckland, principally with some safety improvements. That’s the travesty, the impact that it’s going to have on regional rural New Zealand. You know, if you said, “Oh, well, let’s go and take some of that money and spend it on investment, and good investment.”, then you’d have more of an argument, but, unfortunately, we don’t, because a lot of that money is also going to go to tertiary education.

So we’re going to see debt levels go up by $10 billion over the next three or four years, and, on top of that, the other $6 billion that’s going to go into off-balance-sheet items. In effect, there’s going to be $16 billion in more debt put on by that Minister looking across from the other side of this Chamber, who is going to put it on this economy in the near term, which, of course, we’re going to have to pay, as the New Zealand Government, in the form of interest, and, over time, repay it.

And so we’re seeing less money go into health spending than we put in the 2017 Budget, less money going—[Bell rung]—to education, Mr Chair. Although, I will note some money went into the Ongoing Resourcing Scheme funding.

CHAIRPERSON (Adrian Rurawhe): Are you seeking the call?

ANDREW BAYLY: But we have—

CHAIRPERSON (Adrian Rurawhe): Are you seek—

ANDREW BAYLY: Why are we now—

CHAIRPERSON (Adrian Rurawhe): Order! Are you seeking the call?

ANDREW BAYLY: I am seeking the call.

CHAIRPERSON (Adrian Rurawhe): OK. I call Andrew Bayly.

ANDREW BAYLY: Thank you. But what we’re seeing is the declining confidence in New Zealand, and that is a travesty. And why is that? Labour reforms—labour reforms—cutting across businesses. We’re seeing reducing immigration, but where are we going to see it? People don’t know. People don’t know. Are we going to see it in our skilled category? Outside of Auckland, if you say that you’re going to reduce good skilled immigrants to New Zealand, you are going to impact on the way businesses are going to be able to operate. Then we’re going to see the welcome mat for foreign investment coming into New Zealand pulled, and we’ve already put that sign out.

And, of course, what I think we are going to see is the decline in housing, and already we’re going to see it, because, unfortunately, I think Mr Twyford is meeting a market where the well-resourced developers are now stopping because they see too much risk in this economy. They see too much risk with this Labour - New Zealand First - Greens coalition. They are the ones who are stopping now. The proposition that the Government’s going to sidle up to those developers in financial difficulty and work with them—I can imagine it: “We’re from the Government. We’re here to help.”; those famous words. That’s why I think Mr Twyford’s running into trouble, and, unfortunately, this economy is running into headwinds, and it’s sad to witness in only a few short months.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Mr Chair. Well, that was the “Hoola from Hunua”. What a lot of rubbish—loud rubbish, I’ll give him that.

CHAIRPERSON (Adrian Rurawhe): Order! No nicknames. Proper names, OK? Kia ora.

Dr DUNCAN WEBB: Thank you, Mr Chair. That was a lot of hot air from the member from Hunua, Mr Andrew Bayly. I must say that it was highly inaccurate as well, and in that it’s deeply disappointing, as he well knows, because he sat on the committee opposite me and heard those figures monthly and quarterly. Employment is higher; unemployment is lower than it has ever been. So to say that jobs are falling is simply wrong, and I am disappointed in the member in scaremongering in that way. To say that less has been spent on health is simply false. Whilst the National Government didn’t settle the claim of the care workers and we have had to make up for their dilatoriness in that respect—that’s not proper accounting. The fact of the matter is there’s more being spent on health now than there ever has been. And do you know what? The fact of the matter is we’re not scaring off foreign investment; what we’re doing is we’re setting our house in order. We are saying that investment in residential houses in New Zealand is for New Zealanders, and at the very same time, as the member well knows, we are making sure that investment into forestry in New Zealand is encouraged and engendered, and that’s a great thing.

So, look, after all that hot air what I want to do is turn to some of the great things that we’re doing. I just do want to say one thing for Christchurch because we did look at Vote Prime Minister and Cabinet, where the budget for the Earthquake Commission inquiry is coming from, and I know that the people of Christchurch are impatient for this, and one of the reason this hasn’t happened yet is because of this very debate—that we need to pass this legislation and this appropriation so that this can happen. But it’s very clear that it will happen. The appropriation is there, over $2 million for that inquiry—an inquiry that is desperately needed because things have gone wrong there, and we need to know what, and for the people of Wellington and the rest of New Zealand, we need to make sure that that very important entity is in shape. So that inquiry is happening. The appropriations are there. The Department of Prime Minister and Cabinet are managing the process of appointment, and I was very heartened to hear that.

One of the other great joys of the select committee was the Estimates for Vote Revenue, which might seem unusual, but in fact what it does show is how important revenue gathering is. I was very heartened to see that there is effort, there are funds, there are resources being put into making sure that everyone pays their fair share of tax, including, in fact, funds to make sure that debts that haven’t been paid, where assessments have been made but there hasn’t been the resources within IRD to go back and collect those funds—that the resources are there now. That is expected to reap $183 million in additional revenue, and I’m very glad to see that.

Of course, we know about GST collection in offshore retailers; that’s a great initiative. It’s one that’s had a bit of a rocky road in Australia, with the Amazon reaction, but I’m very confident that the Minister of Revenue is managing that well and that, in fact, we will see not only proper revenue gathering for offshore sales in terms of GST but equal treatment for our retailers. I think that’s very important, because we don’t want someone to be getting things tax-free offshore and giving offshore retailers the edge over our own domestic retailers, who are doing the decent thing and paying their GST on time and appropriately.

As has been mentioned already, I must mention the removal of secondary tax. This is really important, because what we do know is that people who pay secondary tax are frequently low-income people who are having to work more than one job. There are two really good things here—firstly, it means that people will get their entire after-tax pay in their pocket at the right time, and the second thing is this: the tax agents out there who are making easy money on the churn of tax returns won’t be making that money any more, because the tax system will make them redundant. That’s in fact a good thing. What is means is that people will simply get their pay and they won’t have to pay for getting their tax return done. So to the Minister of Revenue: well done for one of many great initiatives.

Hon AMY ADAMS (National—Selwyn): Thank you, Mr Chair. I’m happy to take a call this evening in the Estimates debate for this year, as we review, particularly, the finance and Government administration sector of the Estimates. I don’t think there’d be any great discussion or debate around the House that when you are fortunate enough to hold the Treasury benches and when you are fortunate to have the role Mr Robertson has as the finance Minister, you’ve got a couple of core responsibilities that the country looks to you for. The first of those is to ensure that you make the most of the assets and the income of the Government for the well-being of New Zealand. The second, I would argue, is that you have a role to ensure that you’re providing a platform for the economy to continue to grow well into the future. I have to say that looking at this first lot of Estimates from this new Government, this first Budget for Mr Robertson, it is a fail grade on both of those headings.

We are seeing from this finance Minister, who’s talked up his fiscal responsibility and tried desperately to paint himself as some sort of fiscally cautious finance Minister who the business sector has nothing to fear from, that despite having inherited a very strong and very well-performing economy, growing surpluses—in fact, even bigger than was anticipated certainly pre-election and even post-election—and money coming in all over the place, and yet we are seeing, already, more taxes, more debt, broken promises, and a slowing economy. That’s the message, isn’t it: more tax, more debt, a slowing economy, and broken promises. That’s what this finance Minister is delivering to New Zealand so far.

Even though the Government wants to brush over this and say, “Oh, well, you can’t really read too much into that.”, over the next 15 years Mr Robertson is planning to run cash deficits in 14 of them. For 14 of the next 15 years, the Budget documents show us, this Government is intending to spend more than they earn in residual cash terms. Now, that is not fiscally prudent. That is why we’re going to see Crown debt continue to rise in nominal terms despite a strong economy—despite a strong economy. So my question to Mr Robertson is if you’re borrowing money in the good times, if you’re racking up debt when there are big surpluses, when times are good, when there isn’t a fiscal shock, is the Government simply conceding defeat that debt will always go up? I think that is a low set of aspirations for this economy.

If you look at how the Government is setting those fiscal conditions for our strong economy—well, I just heard the speaker who resumed his seat trying to discredit Andrew Bayly for talking about the decreasing rate of jobs. Actually, Mr Bayly is absolutely right. When you look at the number of new jobs being created, it has more than halved under this Government from what we saw under the last years of our Government: 10,000 new jobs a month created under the National Government; so far, under this Government, 4,200 a month—less than half the rate of new job creation. Is that any surprise when you have a Government that is so dismissive, so unconcerned about how many jobs there are in the economy? They wiped out the oil and gas exploration sector—8,000 jobs; $2.5 billion—without Mr Robertson even bothering to get Treasury advice on how that might affect the economy.

This is not good economic management. It is not good economic management to be putting up the cost of living on New Zealanders, particularly some of our poorest New Zealanders. When you’re ramping up fuel taxes, when you are ramping up energy costs over time, when you are ramping up the cost of the rental market, all of that flows through to the cost of living. Petrol prices don’t just affect New Zealanders at the pump; it affects them in the cost of every good that is transported across New Zealand—every piece of food, every piece of furniture, everything that they acquire. The cost of living is going up; job creation numbers are going down; the economy is slowing; we have more taxes already and more coming; and we have an economy that is showing very clear signs of slowing growth. What do we hear from the Government? “Well, all of the experts are wrong. They don’t know what they’re talking about. Business doesn’t know what it’s talking about. Only we in the Labour Party know anything about these things. Everyone else is wrong. We’re not interested in what they’ve got to say. We’re right. We don’t want to talk to anyone.” That sort of hubris, that sort of—

Brett Hudson: Arrogance!

Hon AMY ADAMS: —arrogance and dismissiveness will break this economy.

Hon GRANT ROBERTSON (Minister of Finance): Mr Chair, thank you very much. It’s a pleasure to take a call on the Estimates in this space, particularly, for my case, on Vote Finance. The thing I want to do is project a more positive image of New Zealand than what we have heard for the last five minutes. For the last couple of weeks, in the recess, I’ve been going around the country, talking about the very matters that are contained in the Vote Finance Estimates: the Budget that we have put forward and the economic outlook for New Zealand. I’ve got news for the Opposition. Out there, in the provinces of New Zealand, in Christchurch and Auckland—

Brett Hudson: Confidence is low.

Hon GRANT ROBERTSON: —Blenheim, Hamilton, and, Queenstown, confidence is high, Mr Hudson, because businesses are getting on with the job, as opposed to the negative, backward-looking approach that we’ve heard from the Opposition tonight. When I was in Hamilton and Cambridge talking to the business people of the Waikato, they were excited. In Cambridge, they were saying, “Unemployment there is 3 percent—3 percent in Cambridge at the moment.” I recognise that for many employers finding skilled staff remains the big challenge that they’ve got in an environment like that. We need to work hard, and the Government is working hard, on investing in skills and training and making sure educational opportunities are available—apprenticeships, workplace training—and we’re doing that, but at the same time businesses are getting on with the job and they are very, very pleased with what they are able to do. We want to work with them, and we are working with those businesses to ensure that that carries on and is spread right around the country.

It’s really important to remember that among the doom and gloom scenarios that the National Party is determined to put in front of New Zealanders, the consensus economic forecast released this month by FocusEconomics tells us we have 3 percent growth on average. That’s good. That’s solid growth. We want to keep that trend going. What we don’t need is the negative approach and the lack of positive, forward-looking, 21st century solutions for the economy that come from the National Party. On our side of the fence, we’re focused on a more productive economy, a more sustainable economy, and a more inclusive economy.

I just want to pick out two points that came from the Finance and Expenditure Committee and I thank them for the work that they did in assessing the Estimates. The first of those is around—and it was a point made just now by Amy Adams—the impact of the Government’s decision to end new offshore oil and gas permits off the Taranaki area, and, indeed, around the rest of the country. Ms Adams just told us that that has lost 8,000 jobs. That is completely untrue, because no current permit is affected whatsoever. There will be no change in that number of jobs whatsoever today from what there was before that announcement was made.

It is that kind of exaggeration and scaremongering that does no credit to the National Opposition. They will be judged for that, because that decision was about actually having a plan for an economy for the middle part of the 21st century—a sustainable economy: one where we transition away from an economy that relies solely on raw commodities, solely on selling houses to one another, and on population increases; and shifts to an economy where we support and protect the environment, where we invest in clean energy, just as we’re doing through the Green Investment Fund in this Budget, and where we invest properly in the regions of this country, just as we’re doing through the Provincial Growth Fund. That’s what a modern economy looks like. It is one where we’re focused on making sure that our productivity and our sustainability work together, and where we look forward rather than in the rear-vision mirror as the National Party would like to do.

The last thing I want to talk about in my contribution is around what will come next in terms of Vote Finance, and that is the well-being Budget and the use of the Living Standards Framework. That’s how we’ll really create a modern 21st century economy—by looking at our success across the board, not just at narrow measures. GDP’s a good measure of activity in the economy, but it does not tell us about the overall success of New Zealanders. We need to measure our success against a range of indicators, from the way in which we live as individuals, as communities, and how we protect the environment. Next year’s Budget will be a world first in looking at well-being and overall lifting of living standards. That’s the kind of forward-looking, positive thing that we can do, not the carping and negativity that we constantly hear from the National Party, and are about to hear right now.

Hon JUDITH COLLINS (National—Papakura): After that contribution from the member who’s just resumed his seat, Grant Robertson, I could say something nice about that.

Hon Member: Well, you could.

Hon JUDITH COLLINS: I could. And I will try. The only thing nice I could say is that it reminded me of all the humility of Michael Cullen, but none of the talent. So I can’t. I mean I’m not going to lie. And I think that’s actually the kindest thing I could say—and also none of the humour, frankly, because humour requires wit.

As for these Estimates, I think one of the most concerning things is that so much of the Government’s books and plans require the economy to continue to grow and for people to continue to make sufficient profit in their businesses that they are paying taxes. That is actually a requirement for all of the fiscal outlook that we’re looking at in the Estimates documents. We see that there should be extra growth: $9.9 billion in growth and a source for deductions in the next few years; extra growth and revenue in GST; extra growth, a $3.5 billion increase in corporate tax due to expected growth in corporate profits. Not a lot of detail as to where those profits are going to be made, how they’re going to be made, and why they should be made, given that the increase in cost to business, and, also, the increase in the cost of living for people who are on salary and wages is going to continue to increase.

It’s pretty clear to those of us who have now seen the results of some of the extra taxes put on, particularly in the Auckland region around fuel tax, that the cost of living for New Zealanders is going to rise under this Government. That means, actually, that people will effectively be getting either a tax increase—you could look at it like that—or they will be getting a wage cut, because their wages will not go as far as they did last year. That is one of the big concerns that I have for people in New Zealand who are saying, “Oh, look, we were being told that the economy’s going to grow, that there’s going to be more of this and more of that.” Well, tell that to the 140 workers that The Warehouse has just said are going to be made redundant. Tell that to those people. Tell that to the people who are not going to get opportunities because business confidence is low.

We’ve just heard Grant Robertson saying that business confidence was really high in Cambridge. Well, I’m sorry, that’s not what I’m hearing everywhere. What I’m hearing on all the surveys and what I’m hearing from business owners is that they are really worried about the way in which this Government is spending their money, and that this Government is looking to tax them more.

This Tax Working Group is going to come up with a capital gains tax. It’s going to come up with taxes that some of our people have not even thought about because what they’re doing is looking for every single way that they can to get every scrap of money out of people that they can. That really does concern me because what it means is, with most businesses in New Zealand being small business, those businesses who are actually now experiencing a lack of confidence—that they delay or they stop taking decisions to employ staff.

The people who are going to be the most hurt by this are the people who are the most vulnerable staff. So the people without experience, the people with a lot of experience, the people who are having to do two jobs, or the people with disabilities—they are the people who are going to be the most hurt by decisions that make employers stop and think and say, “Can I take a risk on this employment, or can I afford this person next year?” Those are the people who will be most hurt.

I’m very pleased that unemployment is low. It was low last year too, after nine years of a National-led Government. It was much lower than it was when we came into Government, but, also, interest rates were low last year. They were low last year, and they were low for the last five or six years. In 2008, they were 11 percent for house loans; now they’re about 5 to 6 percent—that’s the difference, and a lot of that has got to do with how much money Government borrows and Government spends.

This Government is on a pathway to higher interest rates for ordinary Kiwis who have bought their first home. This Government is the Government that will actually make business harder for people and harder for employers to take on more staff. This is the Government that is putting up the cost of living, and which will continue to rise, particularly around things like electricity that they’ve been big lions about in Opposition. But I think we’ve got electricity prices going up next year, and it’ll be the fault of this Government.

Hon STUART NASH (Minister of Revenue): Thank you very much, Mr Chair. That was a most interesting speech from the last member, the Hon Judith Collins. Certainly, as a former Minister of Revenue, she made a whole lot of assumptions which then she drew into a whole lot of conclusions which are just simply not true.

What we did do is we’ve set up the Tax Working Group. This was not a tax working group based on Labour Party membership; these were the smartest brains in the country on tax, and what we did is we asked them: please have a look at the tax system and see if it meets the test around integrity; see if it meets the test around balance and around fairness. Hopefully revenue-neutral—this is not about raising a whole lot of money; this is not about screwing New Zealanders. In fact, it’s quite the opposite: this is about seeing if, in fact, the fairness and the integrity and the balance of the tax system is working in a way it should in the 21st century.

Now, if Ms Collins knows something that I don’t, then it would be great to hear it, but, certainly, we haven’t had any reports back from the Tax Working Group around what they are thinking. So for a former revenue Minister to hypothecate—well, no, to hypothesize, I should say; talking in tax terms!—on what might come out and therefore what may happen is just simply incorrect.

And I would have thought—I would have thought—that that Government would be keen to understand, be keen to know that the system is one of integrity, is one where it’s balanced, but, most importantly, is one that is fair for all New Zealanders. That’s what we all want—a tax system that’s working for everyone. So we are looking forward—as the Minister of Revenue, I am really looking forward to seeing what the Tax Working Group comes up with.

In terms of revenue, there has been a lot of work going on. We’ve passed the base erosion and profit shifting (BEPS) bill. This is one—again, when I talk about fairness—that ensures that multinationals are paying their fair share of tax. There is no one who will disagree with that. We all believe that multinationals should pay their fair share of tax; the BEPS bill has been passed.

We’re talking about R & D tax credits. Budget 2018 sought about a billion dollars to ensure that productivity in this country increases, and how do we do this? By giving those who have the ability to really drive productivity—the small to medium enterprises that the last member was running down. We believe that if you enable and empower the small to medium businesses to invest in R & D, then you will grow productivity in this country enormously. We’re not about picking winners; we’re saying to companies that if they want to engage in research and development, if they really want to take charge and drive research and development in a way that’s going to lift productivity, then we’re going to back you. We’re right behind you. A billion dollars we’re putting into this, and the Liam Dann article in the press over the weekend actually said something needs to be done, because what the last Government did in the last nine years certainly didn’t work.

What we’ve also done is we’ve said we want everyone to pay their fair share, not just multinationals, so we’ve allocated another $31.3 million to the IRD so they can go after people who aren’t paying their tax. And an interesting stat: there are about 100,000 overdue business tax returns. Everyone should be paying their fair share. We don’t think anyone should be paying more than they should or less, just your fair share, so we’ve given the IRD money to go after those who actually aren’t complying—most important.

I suppose one of the most important things that’s happening in Inland Revenue at the moment is Business Transformation. This is the largest State sector project on the go at the moment, at about $1.8 billion, and it’s brilliant. It is changing the way that New Zealanders will interact with Inland Revenue. And, you know, it is not without risks—at the moment, they are running two systems in parallel—but what it will do and what it is doing is making it easier for New Zealanders to comply with their tax obligations; making it easier for New Zealanders to actually interact with Inland Revenue.

Stage 2 is being rolled out. Stage 3 is in planning. Stage 3 will actually ensure that New Zealanders do not have to pay secondary tax. Stage 3 will ensure that, in fact, refunds will be delivered in a timely manner so New Zealanders don’t have to always go to IRD or be proactive. Inland Revenue is going to be proactive around the way that they deal with New Zealanders. It is transformational. Thank you very much.

Hon JACQUI DEAN (National—Waitaki): Thank you, Mr Chair. It’s a pleasure to get up and make a contribution to the finance and Government administration sector. I just want to make a comment around the contribution made by the Minister who’s just resumed his seat, Stuart Nash, around the R & D tax credit. I’d invite him to take a call and explain to the committee how those small businesses, particularly start-up businesses, of which 50 percent at some time during the course of the month go into debit—so they go into the red, generally about the time when they have to pay their accounts and they are waiting for their debtors to pay them—are ever going to fund R & D research. How are they ever going to do that? If the very reality of small business in New Zealand is that what small business needs is access to good-quality capital to grow their businesses, how is an R & D tax credit ever going to be of any use to them?

So is it the case, then, that Labour are looking after the big end of town of business, who, perhaps, arguably don’t necessarily need R & D tax credits? It’s just a question I ask, and the reflection, I would say, to do with that is that maybe they’re not as well connected to the business community as they think they are. And that, perhaps, is also borne out by the fact that as business confidence is tanking, the Government seems to be taking on this “Pollyanna-ish” attitude that “All is well, all is well. Don’t worry about the business confidence surveys. You’re being too negative.”

Well, the business confidence surveys, one after the other, after the other, after the other, are tanking. I’d like to see some acknowledgment from the Government that all those business surveys aren’t as wrong as they seem to think they are. Regrettably—regrettably—we will find out in due course, won’t we, as the cost of living just keeps increasing; our GDP keeps decreasing; and our economy slows, as it is already doing. Unfortunately for the people of New Zealand, we will find out in due course.

The other feature of this debate which I found really interesting is the pride with which Government members and Ministers say, “I’ve got more money.” We heard it from the Minister of Defence: “I’ve got more money.”, he said. “I’ve bought some more planes.”, he said. Well, he might have got the money but it is not his money and that is something that this Government has very quickly forgotten. It’s not their money. It is taxpayer money and how are they going to get that? I know, they are going to tax people more. So it’s the same old Labour Government we’ve come to know: more tax, more spend; more tax, more spend.

Meanwhile, there’s a bit of a starve going on in some of the votes that are just quietly tucked away in this Estimates document. I refer to Vote Internal Affairs, where it is noted that “The department has initiated a Stewardship and Organisational Sustainability Programme to prioritise its spending and identify trade-offs necessary to address [certain] pressures.” What? What the? I thought that this was a Government that was going to spend more and support the agencies of Government and New Zealand—except when it comes to the Department of Internal Affairs. And why does that matter? It is because one of those points where cost pressures are being felt is that one thing that Internal Affairs can do to boost profitability and sustainability and growth: RealMe. But it’s starving RealMe. What’s RealMe? It’s an ID which will make life a whole lot easier for individuals and businesses in New Zealand. What are they doing? They are quietly starving Internal Affairs. So I just have a view that this Government speaks out of both sides of its mouth.

Just finally in my last few seconds, what is it with the cancellation of the parliamentary accommodation strategy? What is it where we have forgone $3.5 million because the Speaker of the House changed his mind about a very good, very long-running programme around the redevelopment of the parliamentary precincts? It was $3.5 million—gosh, this Government is absolutely washing in cash if it can afford to make that kind of financial decision.

Dr DEBORAH RUSSELL (Labour—New Lynn): Mr Chair, thank you. I appreciate getting the call on this. I wish to direct the attention of the committee to page 123 of the reports of the select committees—

Michael Wood: I don’t think they know where that is.

Dr DEBORAH RUSSELL: I don’t think they do know where it is, or if they’ve actually read it. They can’t have read it because they have clearly not taken on board this critical sentence: “The BEFU states that the fiscal outlook is ‘strong’ over its forecast period.” The fiscal outlook is strong—remember that word “strong”.

In terms of fiscal outlook, people say “What’s this word ‘fiscal’? What does it mean?” Roughly, it talks about the cash flow of the Government. Roughly, it talks about the tax revenue of the Government—what’s coming in. And we know, if you just read a little bit further, that there’ll be $9.9 billion growth in source deductions—that’s deductions from wages and salaries. There’s going to be $5.7 billion extra in GST revenue, there’s going to be $3.5 billion extra in corporate tax. But we haven’t changed the tax rates.

Where that is coming from is from growth in the economy. It is from the salary and wages of New Zealanders going up. It is from turnover in goods and services going up. That is why GST goes up. It is from business profits going up. That is why we are getting those increases in tax revenue—because this is a strong and growing economy with GDP forecast to grow at 3 percent over the forecast period. So the doom and gloom coming from the negative Opposition benches is just a put-on. When you read what’s actually in the reports, we are doing well, we are tending this economy well, we are in a strong financial position.

Now the previous speaker, Jacqui Dean, raised the point that this money doesn’t come out of nowhere. It is, in fact, taxpayers’ money. I put it that in fact on this side of the House we are using that money as responsibly as we can. We are doing our best to be prudent and to use the money that comes to us from taxpayers to grow the economy and to strengthen New Zealand. So what are we doing? Well, amongst other things, we are paying down debt, and in fact over time we will get debt reduced to 20 percent of GDP.

Now, the Opposition spokesperson for finance has some quibble about nominal debt, but any competent finance spokesperson would know that the standard figure that we use for measuring Government debt is not nominal debt but debt as a percentage of GDP. It is an extraordinary thing for her to do to focus on nominal debt. Surely she should focus on the standard figure that standard economists use—that is, debt as a percentage of GDP, and we will have it paid down to 20 percent of GDP. Now, that is low by international standards, it is low by standards in the OECD, and we’ve had calls coming into us—people saying, “You should borrow more.” But we are a responsible Government. We know that New Zealand is a small country, that we are exposed to more risks than larger countries and larger economies are, that we must be prudent to ensure that, as happened the last time when a financial crisis hit, we could actually withstand it. And it is thanks to the prudence of Michael Cullen that we were able to withstand the global financial crisis.

And let’s talk about some of the other sorts of risks that we can face. If you look at page 125 of this report, you’ll see that this Government has had the prudence to set aside money to deal with Mycoplasma bovis sensibly, carefully, devoting resources to it. That’s exactly the kind of prudent management we need to engage in with taxpayers’ money. You will see that we have made provisions for pay increases for nurses and teachers, because for nine long years of the National Government they were starved. Now, we won’t be able to fix that up in one hit, but this Government is making prudent accommodations—gardening the economy to ensure that we can pay our critical workers a decent wage. We are committed to doing that.

So what you see on this side of the House is a Government that is taking its responsibility seriously, a Government that cares about all New Zealanders, a Government that is devoting its resources to investigating some of the critical issues like child poverty, devoting money to try to fix some of those problems. We will not talk this down in negative doom and gloom. We look at our strong financial position, and we believe we can do it.

BRETT HUDSON (National): Thank you, Mr Chair. Just before I get on to talking about the reports from the Governance and Administration Committee in this sector, I’d just like to help the member who was wondering why it was that personal tax receipts might be rising in the period ahead. Well, I’d just like to remind her that the reason there might be a bit more personal income tax coming into the Government’s books over the next few months is because they legislated away the tax relief that the National Government put in place for hard-working Kiwis. Not only did they legislate that away but they’ve already imposed additional taxes on those people through things such as the regional fuel tax, so that, Dr Russell, helps to explain why the books might be looking a little bit better for a short period of time.

But moving on to our reports, a number of my colleagues on this side have spoken about what this Government is doing with the surpluses it has inherited. The spending choices they are making, such as the $2.8 billion on fees-free to only deliver 900 fewer students—900 fewer students—than would have been achieved if they hadn’t spent that $2.8 billion at all; the $3 billion on the Provincial Growth Fund, which seems to be dispensed at Mr Jones’ largesse; a billion dollars to the Rt Hon Winston Peters in his foreign affairs portfolio—and that is flowing through, I would argue, in what we heard in our Estimates hearings in the Governance and Administration Committee.

Firstly, for instance, as my colleague the Hon Jacqui Dean pointed out, the Department of Internal Affairs, a department that touches the lives of all New Zealanders multiple times in their lives, appeared before us and confirmed that they see themselves as struggling—struggling in their baselines to meet the commitments of their services. They are struggling, for instance, in passports, to be able to recoup through the passport charges sufficient charges to meet the increasing costs over the coming years, and with no relief or extra funding from the Government to offset that or, indeed, other parts of the portfolio of services that they deliver.

That is a symptom, one could argue—certainly the public may see it as a symptom—of a lack of funds to fund the machinery of government because of the spending choices the Government has made in other areas. That is a point that my colleagues have impressed upon the committee tonight, and I am saying I think we heard it show through very strongly in the Estimates hearings that we conducted.

Another one was the State Services Commission, and this is remarkable for a couple of things. One is that they are clearly being charged with doing more, or taking even a greater leadership role, but they have not had additional funding to help support them to do that—yet again a sign that the Government has placed its priorities elsewhere and does not have the funds left over to actually fund its agencies in their core services, or indeed the initiatives it’s tasking them with undertaking. But it was interesting, actually, for another point, one would argue, because the State Services Commissioner came to talk to us about a change—or the Minister talked to us about a change, moving from focusing on outputs to outcomes, which is remarkable, because I recall that for nine years under a National-led Government it was all about outcomes, not outputs, and certainly not inputs.

He also talked about a joined-up Government—remarkable again, because for nine years the National-led Government talked about breaking down the silos. It talked about clustering agencies in common areas of responsibility, such as the justice cluster, which included the Ministry of Justice, police, and corrections. It also included, to a degree, education and the social welfare department, as well. So that’s hardly a new idea, but at least one could commend this Government in one small way for at least not getting rid of that very sound idea.

The public might very well look at that and say, “If only they’d adopted the same rational thinking with respect to better services targets and, indeed, to health targets.”—then they might actually appraise the work of the Government in these first few months somewhat differently. But certainly the State Services Commission, in doing that role, has not been given any greater funding to achieve its desired outcomes.

The area that did achieve a bit more funding and was under the Internal Affairs vote is racing, but even in racing, where they’ve got a few million dollars for good-looking horses, all the Government is actually doing, we were told, is undertaking a review. More talk, not much in the way of action, but the Government has spent a lot of money—the surpluses that the National Government left them.

WILLOW-JEAN PRIME (Labour): Tuatahi, e mihi ana mō tēnei rima meneti kua hōmai ki ahau ki te kōrero e pā ana ki te taha pūtea mō te tau e heke mai nei. E rua ngā wāhanga e hiahia ana ahau ki te kōrero.

Tuatahi, i raro i te Pōti Pūtea, arā te hanga i tēnei kaupapa mō te Anga Paerewa Oranga arā te Living Standards Framework, me ngā haupū rawa, rawa ahu moni, rawa ō-kiko, rawa ā-tangata, ā-pāpori, ā-tūroa anō hoki. Ko tēnei mea he titiro whānui ki ngā mahi a te kāwanatanga. Ehara i te titiro whāiti ana ki te taha pūtea noa iho. E titiro whānui ana mātou ki ngā mea kua tutuki i te kāwanatanga i roto i te tau. Nā, i haramai te Minita mō te Taha Pūtea ki te kōrero ki tō mātou komiti, arā te Komiti mō te Taha Pūtea e pā ana ki tēnei mahi.

Kua mea atu ia ki tana tari, arā ki te Treasury, ki te whakahoro ake, te whakatere ake i tēnei mahi kia puta, tōna tikanga, tōna hiahia, kia puta te tahua pūtea tuatahi mō tēnei haupū rawa e whā ā tērā tau, ā te tau e heke mai nei. Nō reira he mea nui tērā, he tuatahitanga anō hoki tērā.

Tuarua, e hiahia ana ahau ki te tahuri atu ki tētahi atu o ngā kaupapa i raro i te Tari o te Pirimia me tana rōpū whāiti, arā, o te Cabinet. Ko tētahi o ngā kaupapa i raro i taua tari mō te kōti o te pirimia me tana rōpū whāiti ko tēnei mahi mō te whakaheke i te noho pōharatanga o ngā tamariki i roto i Aotearoa nei.

Nā kua kite i roto i tēnei o ngā pukapuka e whakapuare ana tētahi rōpū hou i raro i taua tari; ko tētahi rōpū mahi, arā ko te Child Poverty Unit e mahi ngātahi ana me te Child Wellbeing Unit, ā, kua hoatu tētahi moni hou ki tērā o ngā rōpū kei raro i taua tari; tata ki te rua miriona tāra mō te tau e heke mai nei; i ngā tau e whā, tata ki te waru miriona tāra ki te whakatutuki i tēnei o ngā mahi. He mea nui tēnei. He mahi hou tēnei. He tuatahitanga tēnei. E titiro ana te kāwanatanga ki tēnei mea te noho pōharatanga o ngā tamariki i roto i Aotearoa nei; e titiro ana ki ngā mahi kia heke iho ngā nama o ngā tamariki e noho ana i roto i te pōharatanga.

Nā i pātai atu ki tana tari mehemea ka mahi ngātahi tana tari me te tari o te Minita o Te Oranga Tamariki, hei ko tā rātou; āe ka mahi ngātahi ēnei o ngā mahi engari he āhua whāiti te titiro o te Tari o te Oranga Tamariki mō ērā o ngā tamariki kei a rātou ētahi o ngā raruraru, he rerekē ki tēnei mea te noho i roto i te pōharatanga, nō reira he mahi anō tā te Oranga Tamariki, te Tari o te Oranga Tamariki ki tēnei o ngā rōpū hou kātahi anō ka whakatū.

Nō reira, tōna tikanga ka whakahoki mai te kōrero mai i te komiti o te Social Services and Community Committee e pā ana ki te pire o te whakaheke i te noho pōharatanga o ngā tamariki ā te Oketopa i tēnei tau tonu. Mā tēnā ka hanga i tētahi rautaki hei whakatutuki i ngā wawata o tēnei kāwanatanga e pā ana ki tēnei mahi nunui.

[Greetings, Mr Chair. Firstly, I do appreciate the five minutes that I have been given to discuss the Budget for the coming year. There are two parts that I would like to discuss.

The first, under Vote Finance, is the formulation of the Living Standards Framework and the approach to capital—variously financial, natural, physical, human, social, and environmental. This is a broad approach to the work of the Government. We are not taking a narrow view that focuses solely on money. We are taking a more wide-ranging view of the Government’s achievements this year. The Minister of Finance came to speak about this work to our committee, namely the Finance and Expenditure Committee.

He instructed his office of Treasury to expedite work in this area so that, all things going according to plan, the first Budget based on these four capitals will be introduced next year. That is a big achievement and an important first.

Secondly, I would like to focus on work being done by the Prime Minister’s office and her Cabinet. One of the key pieces of work being undertaken by the office of the Prime Minister and her Cabinet is the reduction of child poverty in New Zealand.

We have already seen in this report that a new group is being established under that office; a working group, namely the child poverty unit, is working alongside the child well-being unit. This new group will receive new funding. Almost $2 million has been allocated for the coming year—over four years, almost $8 million will be dedicated to implementing this work. This is important. This is new. This is a first. The Government continues to tackle child poverty here in New Zealand and is looking at how to reduce the number of children living in poverty.

I asked her office if they would be working alongside the office of the Minister for Children and they agreed that there would be collaboration but that the Ministry for Children has a particular focus on children who need special support, which is a little different to children living in poverty, so the Ministry for Children does have its own area of work which is different from that of the newly established groups.

It is expected that the Social Services and Community Committee will deliver its findings to inform the bill to reduce child poverty, by October this year. We can then form a strategy to achieve the goals of this most important area of work.]

Dr JIAN YANG (National): Now I will focus on Vote Statistics. It is now clear that Census 2018 has counted only 90 percent of the population and we have missed out over 400,000 people. This is the lowest response rate in 50 years—50 years. The data of over 400,000 people is missing; that is equivalent to the population of Christchurch. So this will have huge implications. But, first of all, it will have implications for the Budget in the coming year because Statistics New Zealand will have to do more work and spend more to make up the shortcomings of the census.

I’m not really surprised by this particular announcement from Statistics New Zealand, simply because I have seen numerous signs of Census 2018 heading towards a disaster. Now, there are many issues there—firstly, the access code. Many people did not receive the access code, although they made repeated efforts request their access code. And also many people in rural areas did not receive the census papers simply because they are living in rural areas and sometimes they do not even have a letterbox. Also, the helpline was not particularly helpful. It was a very frustrating, extremely difficult experience, very hard to get through. Many of my colleagues had tried that. Also, people with disabilities—they did not get enough support. They were not able to complete their census form online.

Then we have commercial accommodations, problems with commercial accommodations, namely those non-private dwellings. In Northland, for example, 822 non-private dwellings had ordered census material but by 12 March, six days after census day, 263 of them still had not received any information, any material. So all these signs indicate that this year’s census was really problematic. It turned out it is, indeed, a shambles.

All along, statistics Minister the Hon James Shaw has been very confident that this census would be a great success, right? All along. On 12 April, I asked Mr Shaw in this Chamber, “How will these many problems affect the integrity and accuracy of the 2018 census?” Minister Shaw replied, “They won’t. We are actually on track to deliver the census exactly according to the plan.” He even claimed that “Census completion rates are never 100 percent; it’s in the high 90s, and it looks like this census will be on track, as with historical trends.”—right? But the truth is that by that time Statistics New Zealand had become clearly aware that there was an issue of low response rates. They made that a priority issue to deal with. So that was actually the case. Then, on 13 June at the Estimates hearing, Minister Shaw continued to assure us, to emphasise, the census was a success. But less than one month later Statistics New Zealand published a low-key press release confirming that only 90 percent of the population were counted in the census. That is really disgraceful. This is really a shambles. There are huge implications for our democracy because our democracy is based on equal representation. Our funding is based on equitable distribution, and the census will not be able to deliver that. Thank you.

A party vote was called for on the question, That Vote Audit, Vote Communications Security and Intelligence, Vote Finance, Vote Internal Affairs, Vote Office of the Clerk, Vote Ombudsmen, Vote Parliamentary Service, Vote Prime Minister and Cabinet, Vote Revenue, Vote Security Intelligence, Vote State Services, and Vote Statistics be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Votes agreed to.

Health Sector

CHAIRPERSON (Adrian Rurawhe): Members, we come now to the vote in the health sector, B.5, volume 6. The question is that Vote Health stand part of the schedules.

Louisa Wall (Chairperson of the Health Committee): Tēnā koe, Mr Chair. It is my pleasure to lead the Estimates debate for Vote Health as the chair of the Health Committee. I have a few things I want to emphasise, and I will start with the Budget appropriation, which sits at $18.225 billion and represents a 10.2 percent increase in the estimated actual expenditure in the 2017-18 years. This was because of three main components: $549 million in non-departmental output expense for policy initiatives for district health boards (DHBs); a $750 million investment in policy initiatives through capital investments, and I’ll talk a bit more about that later; and it also represents $100 million for additional deficit support for district health boards.

The Minister was very clear when he presented to the Health Committee about his focus areas, and I do want to emphasise these. They are equity of outcomes in the areas of primary care, prevention, and mental health, and he was also very focused on providing public health services. He emphasised during his session with us the challenges, and those challenges have been about hospitals and facilities not being fit for purpose. What did that actually look like? Well, it was discovered that buildings that service our families, children, and communities in South Auckland were full of rot and dangerous mould that could make people sick. And why was this? I want to quote directly from our select committee report: “The Minister maintains that challenges in the sector can be attributed to the constrained funding environment in previous years.” So within this context the Minister was reviewing the health and disability services to consider whether the current system, facilities, and approaches are fit for purpose.

I particularly want to highlight an area—I’ll call it “of contention”—that the committee had to deal with, and it was actually in the review of the National Oracle Solution procurement system. There were some issues about what the system was doing, but, just for context, it is actually used by DHBs to manage how goods and services are sourced, ordered, delivered, stored, used, and paid for, and it’s jointly managed by NZ Health Partnerships and all 20 DHBs. The review will—and this is listed in our report—assess how the process has run, it will confirm any issues, and it will also look at whether to approve additional investment by DHBs and the long-term viability of the project. It’s fair to say that this was an incredibly robust part of the Estimates process. Some of the issues that were discussed during that particular engagement with the Minister were around conflict of interest, it was around what the review sought, and it was whether the review would ascertain if the National Oracle Solution procurement system was fit for purpose.

The other area I’d like to emphasise was the Minister’s particular focus on mental health and addiction services, and I want to put on the table that there was acknowledgment of the work that our colleague Matt Doocey is undertaking in this area, and we know that he is incredibly interested in working with the Government and, hopefully, on the inquiry into mental health and addiction that is due back in October 2018. Other work that is being conducted, in addition to this inquiry, focuses on the Mana Ake programme in Canterbury, nurses in schools, and also integrated therapies for 18- to 25-year-olds. So it is fair to say that the issue of mental health and addiction services and the challenges that we face as a country were another area that was hugely discussed, debated, and focused on, and I think it’s fair to say that the reason that they are is because we seem to have a whole range of unmet needs. We have major challenges in this area, so, obviously, as a committee we look forward to the report that we will receive in October.

Hon MICHAEL WOODHOUSE (National): Thank you, Mr Chair. It was very interesting for the Health Committee to confirm that Vote Health 2018 had the widest gap between the reality and the rhetoric, and we’ve heard plenty of rhetoric over the last few months about how there was this $8 billion funding shortfall thanks to the previous Government. If that was the case, then one would have expected at least some attempt to close the gap between where Labour said funding should have been and where funding was, and the most deeply disappointing factor of Budget 2018 is that not only did that not occur but we went backwards.

I’ve heard the Minister of Health say that this is the highest investment in health in 10 years. Well, actually, it’s the highest investment in health in history, because health always goes up. But the Minister, again, was trying to spin a line that, somehow, for 10 years there had been neglect, and here he comes in, a white knight, to save things. And, oh, were that the case, but, actually, what the committee heard was that nothing could be further from the truth. Instead of the $3.9 billion appropriation that we had in Budget 2017, this year we got a gross increase of $3.2 billion. But that was before the dividend was taken out by the savings that they claim they were going to make in Pharmac, in which case the net investment in health was only $3 billion—and we’ll get to that.

I’m sure Mr Doocey will get to the issue of mental health and the missing $100 million, but the best example of the rhetoric and the reality is in the district health board funding that Louisa Wall just mentioned as being $549 million. She described it as new policies. Actually, that’s the money that’s needed just to keep the lights on. When the previous National Government, in Budget 2017, appropriated $439 million for that purpose, the Minister, in his Opposition role, said that it wasn’t nearly enough. The minimum required to keep the lights on in 2017 was, in his view, $650 million.

So, 12 months later, with inflation, with fantastic books, and with a legacy of a strong economy, the opportunity was there for Dr Clark to appropriate $650 million plus interest, plus inflation—whatever was required to keep the lights on. What was it? It was $549 million. By the Minister’s own measure, he failed to reach that by at least $111 million and inflation.

And that wasn’t the worst of it. To me, the worst and most disappointing aspect of Budget 2018 was on GP visits. The Government crows that somewhere in the region of 600,000 New Zealanders are going to pay less for their GP visits, except it wasn’t 600,000 that they campaigned on. It was 4.5 million—that every single New Zealander over the age of 13 was going to get a reduction in GP visits. It was unequivocal. The Minister and the Prime Minister went, in Opposition, in August last year, to Māngere, to an adoring crowd, and said, “We’re all going to get a discount.” Only, the reality bit—he wasn’t able to deliver. And he wasn’t able to deliver the $20 million in medicines for the rare disorders fund that he told—

Matt Doocey: That’s right—the cochlear implants.

Hon MICHAEL WOODHOUSE: —the New Zealand Organisation for Rare Disorders he was going to set up for them. Another broken promise. And I hear over my shoulder, because I can hear—just—but there are many New Zealanders who can’t, that cochlear implant funding is affected. Last year, the previous Government said, “Yep, we need to increase cochlear implant surgeries and we’re going to do it by 150 percent.” But do you know what that was going to cost? It was $6.5 million—1/2,800th of the vote—and this miserly Minister takes it away and does not appropriate it. He does not appropriate it.

And I think that is a crying shame, from a heartless Minister who talked about being compassionate, who talked down the great efforts that the previous Government made to improve the health of New Zealanders, and then pulled cochlear implant funding. Shame on this Government.

Dr LIZ CRAIG (Labour): Thank you, Mr Chairperson. It’s a pleasure to take a call, in the Estimates debate, on Vote Health. And I actually want to change tack a little bit and talk a little bit about health targets, and actually think about the smoke and mirrors of the previous Government and what this Budget is going to do to actually address the underlying things that have been happening in the health system. I think, for me, listening to some of that scaremongering that’s been happening over the last month, about how the health sector is going to implode if the ministry stops reporting the previous Government’s targets—but I think the problem with targets is that they can be used very well to focus the health sector’s attention on important issues.

CHAIRPERSON (Adrian Rurawhe): I apologise to the member for interrupting but it has come time for me to report progress.

Debate interrupted.

House resumed.

Progress reported.

Report adopted.

Sitting suspended from 9.56 p.m. to 9 a.m. (Wednesday)

TUESDAY, 24 JULY 2018

(continued on Wednesday, 25 July 2018)

Bills

Social Security Legislation Rewrite Bill

In Committee

Debate resumed.

Part 6 Administration (continued)

CHAIRPERSON (Poto Williams): When we were last considering this bill, we were debating Part 6. Matt King had the call and he has 4 minutes and 25 seconds remaining, should he wish to take it. I guess he doesn’t. Is anyone else wanting to take a call on Part 6?

The question was put that the amendment set out on Supplementary Order Paper 35 in the name of the Hon Louise Upston to the proposed amendments set out on Supplementary Order Paper 25 be agreed to.

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

Ayes 56

New Zealand National 56.

Noes 63

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

Amendment to the amendments not agreed to.

The question was put that the amendments set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to Part 6 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments agreed to.

The question was put that the following amendment in the name of Jo Hayes to clause 280 be agreed to:

in the heading to clause 280, after “Exception during epidemic”, insert “and disaster (man-made and act of god)”

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

Ayes 56

New Zealand National 56.

Noes 63

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

Amendment not agreed to.

The question was put that the amendments set out on Supplementary Order Paper 51 in the name of the Hon Carmel Sepuloni to the proposed amendments set out on Supplementary Order Paper 25 in her name be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments to amendments agreed to.

A party vote was called for on the question, That Part 6 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Part 6 as amended agreed to.

Part 7 Reviews and appeals

CHAIRPERSON (Poto Williams): This is the debate on clauses 369 to 394, and schedule 7, “Benefits review committees”; schedule 8, “Appeal authority”; and schedule 9, “Medical board”.

The question was put that the amendments set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to Part 7 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments agreed to.

A party vote was called for on the question, That Part 7 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Part 7 as amended agreed to.

Part 8 Other provisions

CHAIRPERSON (Poto Williams): The debate is on clauses 395 to 438, and schedule 10, “Consequential amendments”.

Hon LOUISE UPSTON (National—Taupō): Yet again we have seen a Supplementary Order Paper (SOP) tabled very late in the piece by the Minister for Social Development, and I would be expecting a very full explanation as to why this SOP has been dropped on the committee. As I’ve said in earlier contributions, a significant SOP, 500 pages, was tabled just before this committee stage commenced. So I will be expecting a full explanation from the Minister in the chair, Peeni Henare, as to SOP 49, and confirmation that there are absolutely zero policy changes in this, as that’s been the Minister’s line all along. And I’m waiting for that explanation.

CHAIRPERSON (Poto Williams): Any other members to take calls? Members, the question is that the Minister’s amendment set out on Supplementary Order Paper 25—[Interruption]—sorry. Apologies—[Interruption]—Order! Order! I’m actually conducting a vote here.

The question was put that the amendments set out on Supplementary Order Paper 49 in the name of the Hon Carmel Sepuloni to the proposed amendments set out on Supplementary Order Paper 25 in her name to Part 8 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments to the amendments agreed to.

The question was put that the amendments set out on Supplementary Order Paper 51 in the name of the Hon Carmel Sepuloni to the proposed amendments set out on Supplementary Order Paper 25 in her name to Part 8 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments to the amendments agreed to.

The question was put that the amendments as amended set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to Part 8 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments as amended agreed to.

A party vote was called for on the question, That Part 8 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Part 8 as amended agreed to.

Part 9 Residential care and disability support services

The question was put that amendments set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to Part 9 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments agreed to.

A party vote was called for on the question, That Part 9 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Part 9 as amended agreed to.

Part 10 Artificial Limb Service

A party vote was called for on the question, That Part 10 be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Part 10 agreed to.

Schedule 1

The question was put that the amendment set out on Supplementary Order Paper 51 in the name of the Hon Carmel Sepuloni to the proposed amendments set out on Supplementary Order Paper 25 in her name to schedule 1 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendment to the amendments agreed to.

The question was put that the amendments as amended set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to schedule 1 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments as amended agreed to.

A party vote was called for on the question, That schedule 1 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Schedule 1 as amended agreed to.

Schedule 2

The question was put that the amendment set out on Supplementary Order Paper 49 in the name of the Hon Carmel Sepuloni to the proposed amendments set out on Supplementary Order Paper 25 in her name to schedule 2 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendment to the amendments agreed to.

The question was put that the amendment set out on Supplementary Order Paper 51 in the name of the Hon Carmel Sepuloni to the proposed amendments set out on Supplementary Order Paper 25 in her name to schedule 2 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendment to the amendments agreed to.

The question was put that the amendments as amended set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to schedule 2 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments as amended agreed to.

A party vote was called for on the question, That schedule 2 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Schedule 2 as amended agreed to.

Schedule 3

The question was put that the amendments set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to schedule 3 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments agreed to.

A party vote was called for on the question, That schedule 3 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Schedule 3 as amended agreed to.

Schedule 4

The question was put that the amendments set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to schedule 4 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments agreed to.

A party vote was called for on the question, That schedule 4 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Schedule 4 as amended agreed to.

Schedule 5

The question was put that the amendments set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to schedule 5 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments agreed to.

A party vote was called for on the question, That schedule 5 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Schedule 5 as amended agreed to.

Schedule 6

The question was put that the amendments set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to schedule 6 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments agreed to.

A party vote was called for on the question, That schedule 6 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Schedule 6 as amended agreed to.

Schedule 7

The question was put that the amendment set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to schedule 7 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendment agreed to.

A party vote was called for on the question, That schedule 7 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Schedule 7 as amended agreed to.

Schedule 8

The question was put that the amendment set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to schedule 8 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendment agreed to.

A party vote was called for on the question, That schedule 8 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Schedule 8 as amended agreed to.

Schedule 9

The question was put that the amendment set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to schedule 9 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendment agreed to.

A party vote was called for on the question, That schedule 9 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Schedule 9 as amended agreed to.

Schedule 10

The question was put that the amendments set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to schedule 10 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments agreed to.

A party vote was called for on the question, That schedule 10 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Schedule 10 as amended agreed to.

Schedule 11

The question was put that the amendments set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to schedule 11 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments agreed to.

A party vote was called for on the question, That schedule 11 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Schedule 11 as amended agreed to.

Schedule 12

The question was put that the amendments set out on Supplementary Order Paper 49 in the name of the Hon Carmel Sepuloni to the proposed amendments set out on Supplementary Order Paper 25 in her name to schedule 12 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments to the amendments agreed to.

The question was put that the amendments set out on Supplementary Order Paper 51 in the name of the Hon Carmel Sepuloni to the proposed amendments set out on Supplementary Order Paper 25 in her name to schedule 12 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments to the amendments agreed to.

The question was put that the amendments as amended set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to schedule 12 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments as amended agreed to.

A party vote was called for on the question, That schedule 12 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Schedule 12 as amended agreed to.

Schedule 13

A party vote was called for on the question, That schedule 13 be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Schedule 13 agreed to.

Schedule 14

The question was put that the amendments set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to schedule 14 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments agreed to.

A party vote was called for on the question, That schedule 14 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Schedule 14 as amended agreed to.

Schedule 15

The question was put that the amendments set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to schedule 15 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments agreed to.

A party vote was called for on the question, That schedule 15 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Schedule 15 as amended agreed to.

Schedule 16

A party vote was called for on the question, That schedule 16 be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Schedule 16 agreed to.

Clauses 1 and 2

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Chair, for the opportunity to speak on the title and commencement of the Social Security Legislation Rewrite Bill. For those people who have just tuned in to this debate, social security legislation covers $25 billion worth of taxpayer spending each and every year—$25 billion. What we’ve seen is an absolute farce of a process by the Government, who have picked up a piece of legislation that was drafted by the previous Government, put a 500-page Supplementary Order Paper (SOP) on the Table within hours of the second reading being planned—no public consultation, no explanation in this House.

The National Party members have diligently tried to improve this legislation, and then, again, we’ve had further SOPs tabled by the Minister in charge of this legislation, Carmel Sepuloni, and a flat-out refusal by the Minister in the chair to answer any questions about SOPs that no member of public has sighted or had the opportunity to debate, and have also denied this House of Representatives—the people’s House—any explanation whatsoever on SOP 49. That is an absolutely outrageous abuse of process in this House.

I’m still staggered that we have a Minister that will refuse to answer basic questions on an SOP and whether or not there are policy changes, because the Minister has previously said, “No policy changes. No, none at all.”—and given no explanation at all. It’s quite disgraceful, and I think this is a sad day in this committee when this Labour-led Government won’t allow any scrutiny on a piece of legislation, the social security legislation, which is legislation that protects New Zealanders in their time of need—$25 billion of taxpayer money a year. It didn’t put the 501-page SOP out for consultation, wouldn’t refer the bill back to a select committee for consideration, and then, in this committee, flatly refuses to answer any questions about further SOPs that are tabled.

Now, members of the public should be absolutely outraged. Taxpayers work hard each and every day to provide a fair welfare system that supports people in need, and they have zero opportunity—zero opportunity—to have their say. Then, in this committee—the final opportunity to provide scrutiny on this legislation—a simple question was asked of the Minister in the chair, to provide answers, explanation, and detail about an SOP, and we got zero answers. I think that’s an absolute disgrace. I think it’s appalling for this House of Representatives. Actually, I don’t believe it can call itself a House of Representatives, because the Government of the day don’t believe in allowing the public the chance to have their say on the most significant area of spending that this Government makes decisions on on behalf of taxpayers.

So it is a disgrace. This is a process that’s just been appalling right from day one, where this Government has refused the opportunity for members of the public to have submissions, and then, having shut down that debate, won’t answer simple questions on an SOP that’s been tabled since this legislation’s been well under way. I think that is an absolute and outright disgrace and a sad day for this Parliament. Just yesterday, the Speaker of the House was talking about engagement and a parliamentary engagement strategy. Well, I suggest number one should be “Make sure that the public have their say on legislation where the spending is $25 billion a year.” It’s a bit of a no-brainer.

I want to go on to some of the other areas, because this is the debate on the title and commencement of a very substantial piece of legislation—legislation that was, basically, first drafted 50 years ago, and things have changed a lot since then. It’s not about welfare reform; this legislation is about bringing it into the aegis—so when a Parliament makes substantial changes to update legislation like this, it does require significant scrutiny. One of the areas that I want to bring to the public’s attention—because, as I mentioned earlier, they don’t have the opportunity to with this 501-page SOP and the three SOPs by the Minister that have followed, without any debate or any answer or explanation from the Minister in this committee. The Labour Party has preached about putting children at the heart of everything they do; at the core of their policy. Yet their first piece of legislation around social security—what does it do? It makes it harder for children in some of the most challenging and challenged circumstances to access support that they could’ve otherwise accessed.

So, yes, it’s the principle of social investment, which is about changing lives. Bill English’s work was about changing lives. Social investment, one of the principles that this Government has ripped out of this legislation, was about ensuring that those who need taxpayer support more than ever—we could focus on their needs; we could focus on what support they required and intervene earlier than before. That gives the opportunity to have the greatest impact on those lives. So the principles of social investment have been ripped out of this legislation, which is a huge lost opportunity.

But, more than that, the other changes that the Minister’s SOP—and I’m going to state this in the committee, because the public didn’t have the opportunity to see these changes and to provide their views on it. There are very practical changes that would make a difference in the lives of Kiwis who most need the Government’s support. Yet, what does this Government do? It removes them. So whether it’s decisions about unsupported children, whether it’s about simple, practical measures like shared care, the Government has decided not to make it easier for front-line staff to support those who need it most, which is quite a misfit, because this is supposedly—for those of you who are watching at home—the Government that purports to be a kinder Government and a more caring Government. What do they do? They make it harder for front-line staff in the Ministry of Social Development to support the people who need their support the most—kind of interesting.

It’s $25 billion that taxpayers provide to support people in need, and I don’t think there would be a taxpayer out there who doesn’t want to make sure that people who are struggling have easier access to their support. So it is a sad day in this Parliament. It’s a sad day for a Government completely missing an opportunity to do their best for children in need, to do their best for families in need, and an absolute outrage that members of the public don’t have the opportunity to participate in this process. And that the Minister sitting in the chair doesn’t even answer a simple question or provide any explanation of an SOP that’s been tabled in this committee with zero input from anyone. It’s a disgrace.

SIMON O’CONNOR (National—Tāmaki): Thank you, Madam Chair. Look, this has been a somewhat lengthy debate over a number of days, and it’s good that we’re up here now to, obviously, the title and commencement. But we haven’t, in effect, had enough debate, and the reason for that is, ultimately, twofold: one is that we have not, sadly, heard from the Ministers in the chair and, secondly, we’ve had a substantial 600-plus page Supplementary Order Paper (SOP) tabled at the last moment bringing about substantial changes—and as my colleague who has just resumed her seat noted, changes that have not gone through select committee, have not been engaged with by the general public, and, in effect, even as hard-working MPs, we haven’t had the full amount of time required to go through.

But in the time that we have had in the debate in the House and outside, there are a number of problems. Fundamentally, the first is this is no longer policy-neutral. Pretty much the only contributions we got from Ministers in the chair were waxing lyrical—or perhaps waxing boring—on the fact that this is policy-neutral, and it’s a case, unfortunately, of “the lady doth protest too much”. It’s the complete opposite of what’s being said. This is no longer policy-neutral, and it’s one of the key reasons that National is unable to support the bill. In fact, I’d better be clear: we could support the bill, but we cannot support the bill with SOP 25 dropped on it. So, for that reason, I suggest that the title should really be something like the “Social Security Legislation Rewrite and Last-Minute SOP Dropped on the Public Without Discussion Bill”.

I would suggest, too, that the commencement needs to be pushed at least a year out. So, basically, they’re suggesting at the moment via the SOP that it should be 26 November 2018. It should go at least to 2019, and there are two reasons for that. First and foremost, I think it remains an affront to the House and democratic process that the public hasn’t had their say. I think the Minister should take this last opportunity to actually seek the leave of the House or go to the Business Committee, go to the Speaker, and send this back into select committee to allow people to have their say. In fact, probably most of their friends—when I think of the poverty action groups and so forth, one of the things they always talk about is they want to talk and engage and have a discussion. They seem a little bit mute at the moment, which doesn’t fully surprise me. The Left often become mute when they get what they want and don’t want anyone else to speak, but, really, the public should have their say.

The second is, I’m not convinced that all these changes can be implemented in time. In fact, the original implementation was meant to be in July—in fact, a couple of weeks ago. We’ve obviously gone past that time because the House has not been able to agree on this legislation, and it’s been pushed out to 26 November. Again, that was done by SOP 25 weeks and weeks and weeks ago, and here we are, almost in August. So I think there’s a bit of a problem there. I can’t speak for the good people at the Ministry of Social Development, but with the changes that are being put through—the non - policy-neutral changes that are being put through—more time is required.

Look, fundamentally, where the opposition has come around this is not just the lack of neutrality—which is what the intention of the rewrite bill was to do, to try and modernise various points of language—but it was to enable flexibility in the welfare system. The one example—and it’s only one of many—that we on this side particularly used is around the care of children. In effect, under the previous rewrite and before this SOP, Work and Income, in particular, had the flexibility to divide payments where necessary to those parents who are looking after children. It’s not the case with two parents and, let’s say, three or four children that all the children will be with one of the parents. That’s a really simple situation, and I suspect a case manager in Work and Income would be relieved when that situation comes up, because it’s very clear: if one parent’s looking after all the kids, all the entitlements go to that parent.

But we know that parenting these days is quite complex. I know that myself. You can no longer, because of this SOP and this proposed legislation, split the moneys. Now, that’s going to cause all sorts of strife, I would suggest, in so far as if the four kids are split between the two parents, only one gets it—I suspect probably the mum, which she might be happy about. But then, all of a sudden, how is the father going to access some of those funds? Is he going to have to negotiate with the mother? Is he or she going to have to engage lawyers? And the cost—it just all gets a little bit messy. So it’s just an example—just an example—of how this is not flexible, and I think a contradiction to the suggestions that have been put that this is about putting the child at the centre. Fundamentally, if that were the case, then elements, I would say, of this SOP would be rejected. But with that, I end my contribution, which is probably a great relief, hours and hours later, to the honourable member Kieran McAnulty.

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 56

New Zealand National 56.

Clause 1 agreed to.

The question was put that the amendments set out on Supplementary Order Paper 25 in the name of the Hon Carmel Sepuloni to clause 2 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Amendments agreed to.

A party vote was called for on the question, That clause 2 as amended be agreed to.

Ayes 63

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

Noes 56

New Zealand National 56.

Clause 2 as amended agreed to.

Hon PEENI HENARE (Associate Minister for Social Development) on behalf of the Minister for Social Development: I move, Supplementary Order Paper 26 dividing the bill.

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

Ayes 63

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

Noes 56

New Zealand National 56.

Motion agreed to.

Bill to be reported with amendment and divided into three bills presently.

Bills

Military Justice Legislation Amendment Bill

In Committee

Part 1 Amendments to Armed Forces Discipline Act 1971

Amendments set out on Supplementary Order Paper 37 in the name of the Hon Ron Mark to Part 1.

Amendments agreed to.

Part 1 as amended agreed to.

Part 2 Amendments to Court Martial Act 2007

CHAIRPERSON (Poto Williams): We come to Part 2—the debate on clauses 22 to 29 and schedule 2.

Part 2 agreed to.

Part 3 Amendments to Court Martial Appeals Act 1953

Hon MARK MITCHELL (National—Rodney): Thank you, Madam Chair. It’s a pleasure to be able to take a call on this, the Military Justice Legislation Amendment Bill. This is a very important bill. Can I acknowledge the Minister in the chair, the Hon Ron Mark, for his support in making sure that this bill remained in the House and saw a safe passage through the House.

I only intend to take a short call, but I think one of the points I really wanted to talk to was around victims’ rights, because we know our New Zealand Defence Force—whether it be army, air force, or navy—is quite a small family in terms of we’re not talking about big numbers; we’re talking about 5,000 or 6,000 people. So there’s often less than a degree of separation, and actually ensuring that victims are looked after and are given the rights and the care that they need through the process is actually, fundamentally, very important. So for the Military Justice Legislation Amendment Bill to be able to align and make sure that both the military justice system and our civilian criminal justice system are fully aligned, and, in particular, that victims are afforded the same rights and recognised as being treated the same in both systems, was a small part but a very important part of the overall legislation in terms of what this bill is trying to effect.

This bill will ensure that victims of specified offences have rights and protections in the military justice system that are equivalent to those that they would receive in the civilian system. The bill also repeals a provision of the Armed Forces Discipline Act 1971 that places the onus of proof for the defence, on a specific charge, on to the accused. This is very important too. Although, fundamentally, our court system should always operate in the sense that the prosecution has to be able to prove an accused person’s guilt beyond a reasonable doubt—that’s a cornerstone of our justice system—there are times too when, actually, in relation to specific charges, there is also an onus on the accused to be able to present a certain level of evidence in relation to certain cases.

So I’d just, finally, like to wrap up and say that, again, this is a very good bill. I’m very pleased and would like to acknowledge that the Minister has seen fit to continue to support it. It was a bill that was introduced in our last term, and I will just finish my contribution by highlighting again—and maybe the Minister will take a call on this—the importance of victims’ rights within this system as well. Thank you, Madam Chair.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Chair. As Mark Mitchell has noted, this Military Justice Legislation Amendment Bill has been in the House for some time. It is an important but not contentious piece of legislation. Part 3 amends the Court Martial Appeals Act in some important ways, and one of those important ways, with Supplementary Order Paper 37, of course, is dealing with fitness to stand trial. Fitness to stand trial is, of course, an important question, and we can see that one of those questions that is dealt with in the amendments to that Act is the order of the inquiries, because, if someone is found unfit to stand trial, then, clearly, that is a significant mark against them. Therefore, the fact of the matter is that the inquiry is, first, to be, under that Supplementary Order Paper, whether or not the factors giving rise to the offence exist. That’s a great improvement and, as we know, that is aligning it with the Courts Matters Bill, so that we know, before we start inquiring in trial, whether someone is fit to stand trial; we know what the facts of the offence are.

The other things that this does, which are really important in amending the Act, are to reinforce the rights of victims, and, essentially, to put victims in military justice on the same footing as those in the civilian sphere. That is very, very important indeed. Whilst it is the case that many victims of military offences are military personnel themselves, that’s not to belittle at all the trauma that may flow from that. There may, perhaps, have been a bit of a sense that in the military you need to harden up a bit. Well, that’s not the case. So these steps are very, very important. They sit alongside some other matters that were heard about in the Foreign Affairs, Defence and Trade Committee, including the Operation RESPECT programme which, of course, is aiming at reducing sexual violence, in particular, in the military and in the armed forces.

This is part of that programme to make sure that victims’ rights are respected, and that there is fairness and equality for military members, alongside their civilian peers, including knowing what’s going on when, for example, prisoners are released, they’re on bail, when they escape, or, indeed, if they die in custody so that there is a real sense—so that’s an excellent move, because the matter of principle is that in so far as it is possible, these two things should run in parallel. The other important change is onus of proof, because onus of proof in respect of a defence needs to be the same as in any other part of a criminal prosecution, and what this does is confirm that.

So in respect of this Part 3 amending the Act, we can see that it’s achieving that in respect of appeals as well. It’s absolutely right that it’s fair and in step with a civilian system. As I’ve said, it is an important piece of legislation, and it’s important to note that the submitters here—the National Council of Women of New Zealand, the New Zealand Law Society—were largely in support of it, with some technical observations. It is an excellent piece of legislation. I commend the Minister Mr Mark’s work and I commend this bill to the committee.

LOUISA WALL (Labour—Manurewa): Tēnā koe, Madam Chair. I actually wanted to make a contribution as a member of the Foreign Affairs, Defence and Trade Committee about Supplementary Order Paper 37 of my colleague the Hon Ron Mark, because, actually, the whole philosophy of military justice has been about discipline, and it’s also been about guilt, actually—the fact that you were charged meant you were guilty. So the philosophy has been completely flicked on its head. The alignment between our criminal justice system and our military justice system now says that, actually, you don’t have to be disciplined and follow the orders of somebody if it’s not right.

I want to focus on that, because I think the history of military justice has been about people doing what they’re being told to do, as opposed to being citizens. The alignment now between our military justice and our criminal justice system, in fact, says, within the sphere of justice, actually, you have rights of citizenship over and above your role as a person in the military. So within the military system, once you are charged, you’re guilty. In the criminal justice system, actually, you’re innocent until proven guilty. The relevance of the Supplementary Order Paper is, to be charged, now, are you actually mentally responsible for your actions? That should actually always be the first step in a criminal justice process. We should determine whether or not you had the capacity to take responsibility for your actions.

The only other piece of information I wanted to highlight to the committee was that there were no recommended changes to this piece of legislation at second reading, and, in fact, it has been as a response to the Courts Matters Bill—which is going through a parallel process in the Justice Committee—which has then led to the Minister of Defence presenting this Supplementary Order Paper to the House.

So, like everybody else, I commend the Supplementary Order Paper, and I look forward to the passage through this committee stage so we can have the third reading soon. Kia Ora.

Part 3 agreed to.

Schedule 1 agreed to.

Schedule 2 agreed to.

Schedule 3 agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

House resumed.

The Chairperson reported the Social Security Legislation Rewrite Bill with amendment, and that the committee had divided it into the Social Security Bill, the Residential Care and Disability Support Services Bill, and the Artificial Limb Service Bill, and reported the Military Justice Legislation Amendment Bill with amendment.

Report adopted.

Bills

Statutes Amendment Bill (No 2)

Second Reading

Hon AUPITO WILLIAM SIO (Associate Minister of Justice): I move, That the Statutes Amendment Bill (No 2) be now read a second time.

As the House will be aware, statutes amendment bills are legislative vehicles that make minor, technical, and non-controversial amendments to a number of Acts. These bills allow amendments to be made that would not usually receive sufficient priority to be progressed individually. This is achieved with the support of all parties in Parliament.

The bill as reported back amends 28 Acts administered by 11 different Government agencies. Each of the amendments in the bill has received unanimous cross-party support. This bill is a good demonstration of all parties working together. The bill was reported back by the Governance and Administration Committee on 28 May, and I want to thank the committee and the chair, the honourable member Brett Hudson, for the careful consideration of the bill by members of that committee.

The committee’s report recommended a number of changes to amendments in the bill as it was introduced. The committee also recommended including urgent amendments to the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. Finally, the committee received and considered one submission from an interested member of the public. This submission was to repeal redundant local Acts and private Acts. The committee did not recommend making any changes to the bill following the submission, and I support these recommendations.

I will now turn to detail some of the changes made to the bill. Possibly the most substantial change to the bill is the inclusion of new amendments to the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. The need for these amendments was identified after this bill was introduced to the House, and they are urgently required. I consulted all parties on these urgent amendments, and all parties supported their inclusion. The amendments ensure that the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 regime works for reporting entities structured as partnerships. As some of you may be aware, the regime was amended last year to progressively include lawyers, conveyancers, accountants, real estate agents, and high-value dealers. Many of these new sectors practise in partnerships, and lawyers and conveyancers will come into the regime from 1 July this year.

There are two key changes these amendments make, which are now included in the bill. The first change is to allow reporting entities structured as partnerships to appoint a partner as a compliance officer, irrespective of whether that reporting entity has employees. Without this amendment, a reporting entity could only appoint a partner as a compliance officer if the reporting entity did not have employees.

The second change is to clarify that a partnership is liable for the same penalties as bodies corporate for criminal offending or a civil liability act. As the partnership has the compliance obligations in the regime, it is common sense that the partnership also faces the consequences for failing to comply. This amendment clarifies how the regime will operate as these sectors come on board.

The other key change that I’d like to highlight is the inclusion of a new amendment to the Parole Act. The amendments to the Parole Act that were in the bill when it was introduced were aimed at ensuring that interim supervision orders are treated in the same way as extended supervision orders. All parties were consulted on these proposed amendments in 2016 and supported their inclusion. Interim supervision orders were established through a Supplementary Order Paper in 2014. They were developed to enable courts to impose electronic monitoring and intensive monitoring special conditions on an offender while an application for an extended supervision order is being considered. Due to the way interim supervision orders were created, a series of small legislative changes was required to ensure consistency between interim and extended supervision orders. Most of them were included in the bill as introduced. However, one further amendment was recently identified.

This amendment will allow arrest without warrant for breaches of interim supervision orders. Breaches of interim supervision orders are currently enforced as breaches of bail conditions, which allow for arrest without warrant. However, this approach does not necessarily allow corrections and police to seek arrest and act in a swift and timely manner proportionate to the risk these offenders pose. In addition, the power to arrest without warrant already exists for breaches of extended supervision orders. The committee has recommended that an additional amendment be included in the bill to also allow for arrest without warrant for breaches of an interim supervision order. I want to thank them for those recommendations.

The other changes that the committee recommended are important but relatively minor. For example, the committee has recommended changes to the Animal Welfare Act 1999 and the Biosecurity Act 1993 that will improve the clarity of those amendments. Other changes include removing the amendment to the Public Records Act 2005, as it is not considered necessary at this time. The committee has also recommended that an amendment to the Public Finance Act 1989 be removed to allow for it to be progressed through conservation legislation, which is currently under development. I endorse the recommendations of the committee.

In summary, this bill will provide much-needed changes to the statute book. While the amendments are technical and non-controversial in nature, they will ensure that New Zealand’s legislation operates efficiently and effectively. I look forward to the passage of this bill through its remaining stages, and to working constructively with all parties as other such bills are put together in the future. I commend this bill to the House.

Hon MARK MITCHELL (National—Rodney): Thank you, Madam Deputy Speaker. It’s a pleasure to take a call on this, the Statutes Amendment Bill (No 2). Can I acknowledge the Minister and the comments that he made in terms of the importance of having cross-party support and working together on a bill like this. It’s largely minor changes that are being made, but they are important ones in many cases. Can I also acknowledge Brett Hudson, who has taken the lead for us and has done an outstanding job in making sure that there is close attention to detail and that the work is done for this bill; so can I acknowledge him as well.

There are just two areas that I wanted to comment on. The Minister has already drawn our attention to one of them: the Parole Act 2002. I think this was a very good change because it did bring into alignment the treatment of interim supervision orders and also extended supervision orders. So with the insertion of that new clause, clause 60A, it now allows an arrest without warrant to be made for a breach of an interim supervision order. I think this has provided much-needed clarity. It’s now going to be much easier to be administered, and so I just congratulate the Governance and Administration Committee on the good work that was done around this piece of legislation.

Also, the Animal Welfare Act 1999—this is a really interesting one. This actually relates a lot to the work that the Department of Conservation do in their war against predators, and the fact that it wasn’t clear whether or not a trap—because often, now, they do use remote devices, in terms of being able to monitor and watch the traps that they set. They get indications when they might have captured the predator that they’re targeting or that they’re after, but it wasn’t clear in the legislation as to whether or not—because there is a requirement, within a 12-hour period of the sun rising, that they have to get out and they actually have to check that trap manually and physically, when, in fact, they might have had an electronic ability to be able to do that.

With the amendment that’s being made under the Animal Welfare Act, it means now that within 24 hours after an animal is captured, if the person monitors the trap with a reliable electronic monitoring system that promptly communicates details of any animal captured in the trap, then they are entitled to use and they can use that system to be able to monitor and make sure that those traps are actually checked regularly, rather—and you can understand the actual logistical challenge—than manually having to get out into vast areas of conservation land and trying to check these traps. So that was another very good amendment to one of these Acts.

I’m very happy to have taken a call in support of this bill. Thank you.

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): Thank you very much, Madam Deputy Speaker, for the opportunity to speak to the Statutes Amendment Bill (No 2). If anyone has tuned in this morning for a fierce debate about this bill, they’ll be bitterly disappointed, obviously, because of the technical and non-controversial manner in which these bills implement changes to legislation. In plain English, it’s a housekeeping exercise for the Parliament to make sure that any errors of a small nature that may have been put in legislation are cleaned up every so often as they are found, either by the Government or by officials or by people who are looking at the laws closely.

So I would like to take a concise and precise short call looking at two of the Acts which come under my purview as the Minister of Commerce and Consumer Affairs. The first one is extremely technical, and that is Part 6, which pertains to the Companies Act, where I am looking at sections 303 and 308, which are about creditors’ claims over companies that have gone into liquidation. If I go to the correct page here, it is, in essence, inserting a handful of words into section 303(2). After “penalties,” clause 20 is inserting “sentences of reparation, orders,”, which I believe—having read the section here this morning in the Act as it stands at the moment—will open up a lot more options for people who are looking to get redress from companies that have gone into liquidation, and there is a subsequent amendment to section 308 of the Companies Act as a result of the change to section 303.

The substantive change I wanted to speak to is in Part 8 of the statutes amendment bill before us today, and that is a very small amendment to the Credit Contracts and Consumer Finance Act (CCCFA) of 2003. That amends the cross-heading above section 9J and is simply deleting the words “disclosure of”, which might sound mundane, but I’d quite like to talk about section 9J because I was a member of the Commerce Committee when the previous Government amended the CCCFA.

I think the member Mark Mitchell, who spoke before me, was also a member of the Commerce Committee when we looked to change the CCCFA. Section 9J was one where I think—if I recall correctly—the New Zealand Bankers’ Association were quite motivated about making sure that they understood exactly where things were in terms of disclosure of standard loan arrangements, which had to be displayed prominently for the benefit of customers. The argument that was being made at the time by those who were concerned about section 9J was they would, essentially, have to plaster loan agreements on the walls of bank branches to make sure that they could adhere to section 9J. I guess we know in hindsight that that didn’t happen, but at the time there was a bit of concern about a number of the changes that the previous Government was making to the Credit Contracts and Consumer Finance Act.

They certainly didn’t make changes of this nature, which I think are certainly technical, and we’re kind of slightly amending that today and I don’t think there’s anything big in that. But I think, certainly at the time, they missed some amendments that we are now addressing as a result of the Government’s review of the CCCFA—and the harm that is still continuing to be done in our communities by predatory lending by the likes of mobile trucks—and, certainly, a clean-up of the CCCFA as it stands now to ensure that some of the work that I think certainly some of the members who might have been on that committee were keen to do but the higher-ups were not.

I’m talking about the likes of this Government being completely open and transparent about looking at measures to introduce interest rate caps, so that those vulnerable consumers who the previous Government failed to protect back in 2014 when it changed the CCCFA, and who have continued to be preyed upon by predatory lenders in our communities, have increased protection from those predatory lenders. That is something that should have happened five years ago, but it was not done by the previous Government, and since then, New Zealanders and those vulnerable consumers—such as my constituents, and spread around the country—have continued to be preyed upon by those predatory lenders.

So I make no apologies to those in the industry who have continued to fly in the face of the laws—and the lack of their boldness back in 2014 to protect New Zealanders from predatory lenders—that their days are numbered. As well as measures that we will take as a result of the Credit Contracts and Consumer Finance Act review, a lot of the work was done in terms of the forum last week, where community organisations, the Government, and the finance sector are coming together to ensure there are safe places for those vulnerable consumers to lend, and to increase the financial capability and the wisdom of financial decisions to be made by New Zealand families. Bringing those three parts of this triangle together will, in fact, help those people who are being preyed upon, and who were left by the previous Government to continue to be preyed upon by their lack of courage to amend the CCCFA in a way that made sure those in the most vulnerable parts of our country were protected.

So I’m proud that we are making that action and, obviously, I acknowledge the very minor change to section 9J in the CCCFA that is here today. But I add just a note of caution to those who are in the community who have taken shelter in the lack of change from the previous Government to the CCCFA to say that change is on the way, and the shelter will no longer be there.

BRETT HUDSON (National): Thank you, Madam Deputy Speaker. Well, it’s wonderful to take to my feet to actually speak on the Statutes Amendment Bill (No 2), which is perhaps something Kris Faafoi, the previous speaker, didn’t spend a lot of time on. But, given that he introduced a subject that isn’t completely germane to the bill, I will just respond. He said that there would be no contention on this bill. Well, Mr Faafoi doesn’t get to decide what we do and don’t debate in this House. I can tell you there is certainly some contention with his idea that the previous Government was somehow lacking in concern for vulnerable borrowers in the community. The Government of the day understood that there is a legitimate need for people to borrow in circumstances of their choosing and that their ability to get full disclosure of the nature of those loans was most important to ensuring that they could have the information they needed to know whether or not to enter into them.

But it would be wonderful to be able to endorse and support the moves that the Minister brings to the House. When he brings them to the House, it will be very interesting to scrutinise those to make sure that they don’t seek to introduce things that have unintended consequences, like setting interest rate caps in a manner that will force people into black market - type loan arrangements that will make people more vulnerable than they already are. Quite frankly, on this side of the House we’ve seen nothing from the Government that gives us any confidence in the work they’re doing. But to the point of this bill—

Hon Kris Faafoi: Ambitious for loan sharks.

BRETT HUDSON: —the Statutes Amendment Bill (No 2), which in itself—

DEPUTY SPEAKER: Order! Order! We’ve heard that a number of times. Now, can we come to the bill. You’ve had—

BRETT HUDSON: To the bill. In the provisions—

DEPUTY SPEAKER: You’re one-all. Let’s get on to the bill.

BRETT HUDSON: Thank you, Madam Deputy Speaker.

DEPUTY SPEAKER: It’s supposed to be one that we all agree with; non-confrontational—OK?

BRETT HUDSON: We can agree that the provisions of the bill we can support. It’s the fundamental nature of a statutes amendment bill that the changes are of a technical nature and non-controversial, even though the people debating them might behave somewhat differently.

In truth, in the Governance and Administration Committee, there was scrutiny of the bill that did not raise any great concerns. There were a couple of amendments that officials brought to the committee that the committee members were all able to agree with, and to report back to their parties and to maintain consensus across the House that these were the right things to do. For instance, one of those was around the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, where, in an odd situation, in a partnership without employees, there could be an issue having a compliance officer nominated because the Act requires the compliance officer to be an employee of the firm, and, of course, under a partnership with no employees, a partner is not considered an employee. So that was a very sound and well-thought-out amendment brought during the committee stage, which it’s very easy for members across the House to continue an agreement on.

My colleague Mr Mitchell raised the Animal Welfare Act 1999. I think it was actually quite illustrative that while laws are made for the day and in good conscience and with the best of foresight that members can apply at the time, things do change over time.

And so, for instance, as the Act has stood, there are some challenges about whether or not live-capture animal traps could be remotely monitored and meet the conditions under the Act as it stands. And these changes, through the Statutes Amendment Bill (No 2), will explicitly permit that. But, importantly, in doing so, the committee, through officials, was able to capture, no pun intended, that, actually, that also required a change to the legislation to remove the requirement to replace the words “details of any animals captured” with “the fact that an animal has been captured”. While with technology today we can remotely monitor that an animal may have been caught in a trap, it is perhaps somewhat more challenging for the technology today—at least, certainly cost effectively, if at all—to be able to provide the exact details of the animal which has been captured. But, of course, the fundamental and most important element of the remote monitoring is to know whether or not an officer should be sent out then to check that trap or whether indeed there is no point today, because no animal has been captured—so another example of a sound change that allows Parliament to come together, on a consensus, to address small matters across our legislative book to make changes that make sure that our legislation remains relevant for today and into the foreseeable part of the future. We, along with the other parties in this House, commend this bill to the House.

Hon RON MARK (Minister of Defence): Thank you, Madam Deputy Speaker. I rise to take a short call on behalf of my colleague Clayton Mitchell and New Zealand First, just to indicate that New Zealand First will, of course, be supporting this Statutes Amendment Bill (No 2).

It’s interesting; I learnt a long time ago, when I very first came to Parliament, that it’s sometimes quite fascinating to trawl through what are, clearly, amendments to legislation that the entire House considers to be technical and of a non-controversial nature. It is sometimes interesting to have a trawl through to see exactly what has been covered off by other members of one’s caucus who have spokesman roles and, indeed, by Ministers who have responsibilities for these various pieces of legislation that have been moved, generally, as we know, to tidy up, to fix loopholes, to tidy gaps, to clarify interpretation and law, and to make sure that unintended consequences and inaccuracies are dealt with.

And it’s really interesting, when you go through this particular bill, the broad range of topics that are covered—everything from the Animal Welfare Act to the Anti-Money Laundering and Countering Financing of Terrorism Act, the Biosecurity Act, the Care of Children Act, the Child Support Act, the Companies Act, the Coroners Act, the Credit Contracts and Consumer Finance Act, the Crown Proceedings Act, the District Court Act, the Domestic Violence Act, the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act, the Family Proceedings Act, the Films, Videos, and Publications Classification Act, the Government Superannuation Fund Act, the Housing Corporation Act—it pretty much covers the entire ambit for which the Government is responsible. I’m not sure, but probably the Minister of Defence is the only one who doesn’t have a statute amendment in here.

But, that said, within the Defence Force, we clearly have an interest in what is happening in the area of financing terrorism and countering the financing of terrorism. So I did have a quick scan at Part 1A, clauses 4A through to 4F, which cover off the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. And it’s clear, from that piece of legislation, that the Government, with the support of all parties in the House, is just tidying up what appears to be a small gap, a small loop, or, indeed, an area that needs clarifying, particularly in the area of where a partnership is involved.

The particular section that’s been amended is section 56, in clause 4B, and the new subsection of substance that I’m looking at is new subsection (5), which states, “Despite subsections (2) to (4), if a reporting entity is a partnership,—(a) the partnership may designate one of the partners as an AML/CFT compliance officer to administer and maintain its AML/CFT programme, irrespective of whether the partnership has or does not have employees; and”—and I guess that’s just a tidying up to make sure that people aren’t allowed to be left out because they simply do not have employees—“(b) the partnership so designated must report to another partner designated for the purpose of receiving those reports by the partnership.” That clearly puts the onus back on that company, back within that company, within the partnership, to make sure that they are compliant with the general thrust of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009—probably, a very good thing.

It is interesting to note there are adjustments in there for the Biosecurity Act—even, dare I say it, the old plumbers and gasfitters get a mention in here. I guess that every tradie throughout New Zealand has stopped work, downed tools, gone to their device, and pulled up the bill and is checking to see what the heck Parliament is doing to them under the Plumbers, Gasfitters, and Drainlayers Act 2006. I can just tell the guys, “Go back to your smoko. Carry on, chaps; it’s no biggie. It’s just a technical tidy-up in the legislation.” I just want to compliment all the Ministers for their diligence in bringing these small technical amendments to the House, and I look forward to making progress. Thank you very much, Madam Deputy Speaker.

Bill read a second time.

Bills

Courts Matters Bill

Tribunals Powers and Procedures Legislation Bill

Second Readings

Debate resumed from 3 July.

DEPUTY SPEAKER: When we were last debating this, Golriz Ghahraman had the floor, and she has 4 minutes remaining to speak should she wish to do so. Apparently, she does not. So I call Simeon Brown.

SIMEON BROWN (National—Pakuranga): Thank you very much, Madam Deputy Speaker. It’s a pleasure to take a very short call on the Courts Matters Bill and Tribunals Powers and Procedures Legislation Bill, which we were debating a short while ago in this House. National supports these bills through their second reading, and I just want to touch on a few of the elements of these bills. They are cognate bills, as we know, which we will be supporting. One of the key purposes that they do is they amend the Court Security Act 1999, and some of the key things that they do there is they extend the powers of court security officers to deny entry, to remove and detain people who possess illegal drugs or who act threateningly or abusively or who commit minor crimes on court premises.

I think this is an important part of these pieces of legislation, because it gives some clarity and it gives some particular powers to court security officers to exercise those powers when they are in the court, and it allows them to have the discretion not only when the court is in hearing but even when they’re not directed to take action against people who may come into the courts with different paraphernalia or with drugs, and to ensure that those matters are dealt with appropriately and quickly. It also just changes the definition of the court and clarifies what the court is and where they are able to exercise those powers.

I think these changes are important to ensure that we can allow the process of justice to run smoothly and for the courts to be respected and the role that they play in our society to be respected. So I think those changes, while small and technical, will make a big difference to ensure that they make a big difference to the way our courts operate. So I’m not going to spend much longer on these pieces of legislation. They do change a large number of other pieces of legislation. I understand one of my other colleagues will be touching on other changes that this legislation does make, and I commend these bills to the House. Thank you.

RAYMOND HUO (Labour): The Courts Matters Bill and the Tribunals Powers and Procedures Legislation Bill are deemed to be cognate bills due to their closely related nature, and as such they are treated as a single bill throughout the parliamentary process. The bills were referred to the Justice and Electoral Committee in the 51st Parliament, were reinstated in this the 52nd Parliament, and were referred to the Justice Committee in November 2017. The Justice Committee received and considered 16 submissions from interested groups and individuals on the Courts Matters Bill, and received and considered 34 submissions on the Tribunals Powers and Procedures Legislation Bill.

The purpose of the bills is to seek to contribute to modern, efficient, and effective court and tribunal systems. Matters concerning the general public, I believe, are largely in relation to the time frames for hearing and resolving matters. So this bill seeks to improve efficiency, effectiveness, and timeliness by simplifying and standardising statutory powers and procedures. I thank the officials and advisers for their hard work. They worked tirelessly to get the matters addressed. These bills are largely technically driven and, if I may say so, sometimes can be dry and tedious, but these matters, although minor, are very important. For instance, clause 6 would extend the definition of “court” to include any part of the building being used for services related to the courts, including the footpath between the building and the road, and therefore enable court security officers to deal with disruptive instances that continue on outside the court.

Other changes include changes to fines enforcement and criminal court procedures. This is particularly important as we are reversing the order of the two judicial inquiries, the fitness hearing and the involvement hearing, under the Criminal Procedure (Mentally Impaired Persons) Act 2003 so that victims and witnesses would not have to give evidence twice.

The most interesting part of the Tribunals Powers and Procedures Legislation Bill is probably in relation to the Human Rights Review Tribunal, and the submissions from its chair, Mr Rodger Haines QC, are very convincing. I thank Mr Haines for his contributions. Due to what Mr Haines described as artificial restrictions in the Human Rights Act 1993, a significant case backlog has developed over the past years. To illustrate the backlog and the frustration it has generated, we can simply have a look at the Stuff reports that people fighting for their human rights face a “beyond acceptable” wait of more than two or three years for justice after politicians and officials ignored repeated pleas for a law change to help clear the backlog. As Mr Rodger Haines said in his submission, for the past three or four years the workload of—now—five full-time decision makers has been carried by one person, namely the chairperson himself. Inevitably, a backlog of serious proportion is increasing year by year, and for most parties the tribunal has ceased to function. That sort of a backlog and other issues have been ignored over the last 3 or 4 years, and under this bill we will introduce the necessary amendments to clear the backlog. Thank you.

NICOLA WILLIS (National): I rise to speak on the Courts Matters Bill and the Tribunals Powers and Procedures Legislation Bill, which National supports. I want to speak particularly, in my contribution, about the Tribunal Powers and Procedures Legislation Bill, which forms part of this bill. Of course, the purpose of the legislation we are discussing today is to modernise and bring our courts up to speed with the 21st century, and tribunal processes, of course, are a very important part of how justice is served in our community, and improving their consistency and transparency and their efficiency is a very important part of how we ensure that people trying to access justice processes are able to do so in a timely manner.

The proposed changes should be commended because they will reduce the time that it takes to hear and resolve matters. They will ensure that tribunals can have more consistency in the way that they operate. In particular, it ensures that tribunals can continue to be the first option for the timely and specialist decision-making on particular matters of importance that can be required, and affirm the role of tribunals in providing a dispute resolution system that exists outside the court system.

It’s important that the bill simplifies and standardises the statutory powers, because what that means in practice is that for people who are party to a dispute, there is a clearer process to follow, they can put the matter behind them sooner, and they can get on with their lives sooner, which in the end is the purpose that we want justice to serve—it allows people to go on with their lives and to make good contributions to our community.

The bill improves some tribunals’ scope to hear cases, making them more accessible for dispute resolution, and in doing so it provides better consumer protection and redress. There are 21 tribunals that have legislation applying to them. Most of them were created on a case by case basis, so there’s currently a wide range of variance in their powers. Standardising provisions around the summoning of witnesses, the awarding of costs where a person has obstructed or unreasonably delayed proceedings, and standardising the processes around contempt so that disruptive people can be more easily removed from a hearing are all things that will allow tribunals to act more effectively. There are also updates, of course, to financial thresholds, and then there is a simplification removing the Birdlings Flat Land Titles Commissioner, which is not required any more, the Health Boards of Appeal, and the Maritime Appeal Authority.

All of these things are about updating and modernising our law so that it can operate well for people. A particular example, of course, can be found in Subpart 7 of Part 1, where there are specific efforts taken to reduce the workload of the Human Rights Review Tribunal, which, I’m sure members of this House would all be in agreement that it is a very important tribunal in terms of the role it plays in our justice system. This change specifically enables the appointment of one or more deputy chairpersons; authorises the returning of claims back to the Human Rights Commission for further work; allows for a joint hearing by chairpersons and deputy chairpersons for training purposes so that they can be part of learning how that tribunal works and can therefore be better prepared for the future; and, of course, allows for more efficiency by allowing a chairperson or deputy chairperson to consider alone, as opposed to part of a panel, matters that are coming before that tribunal.

In essence, National supports this bill because we see it as an important part of modernising legislation to bring courts and tribunals up to speed with the 21st century, improving consistency and transparency and efficiency to better reflect the needs of today, and ensuring that New Zealanders are better able to access justice and have it served to them in a more efficient manner. Thank you.

VIRGINIA ANDERSEN (Labour): Thank you very much for the opportunity to speak on the Courts Matters Bill and the Tribunals Powers and Procedures Legislation Bill. It’s really good to see that these two bills been put together as they are largely relating to the same areas in terms of trying to make our court system a modern and effective court and tribunal system.

There are two key areas that these bills are addressing. Firstly, it’s the time it takes to proceed through any tribunal or court process. There are still very long waiting times for people experiencing that, and so it is good to see that these bills are endeavouring to ensure that the system is running as fluidly as possible.

Secondly, these bills address security within courts and in tribunals. There have been a number of cases over recent years of either judges or juries or others within the courts having their security threatened, and so helping people feel safer within the courts and tribunal system is important. So overall, what these bills are endeavouring to do is not only improve the fluidity of our court system but also improve people’s experiences of the court system itself.

In the Justice Committee we received 16 submissions on the Courts Matters Bill and 34 submissions on the Tribunals Powers and Procedures Legislation Bill, and they were from a range of different areas, including the judiciary, private people, interest groups, and professional organisations. Before winding up, I’d like to briefly say thank you to officials who undertook a huge amount of work on these two bills. If you pick one of the bills up from the Table you will see that there is a substantive amount of work, and while they don’t look overly exciting, it is a large job indeed to make sure all the parts are aligned and that they are working effectively and work well together.

The last point that I will touch on is the key change that has been brought about to the Human Rights Review Tribunal, which has already briefly been mentioned. There’s been a significant backlog that has developed over the years. In fact, as of June, 135 active cases were in front of the Human Rights Review Tribunal. Previously, the last Government appointed a second chairperson for a period of 12 months to help with that backlog, but that was insufficient to address it. Of course, as we all know, justice delayed is in fact justice denied, so this bill takes the good action of the ability of having two more deputy chairs who have the same and equal power as the chairperson, who can conduct hearings simultaneously in order to work through that large backlog that has accrued over the years.

So that’s great to see and I am really happy to see all of the work and all of the submissions come together and to bring these two bills to the second reading point. I would like to commend both these bills to the House.

DEPUTY SPEAKER: I call Chris Bishop. [Interruption]

CHRIS BISHOP (National—Hutt South): Thanks very much.

Hon Members: Oh!

CHRIS BISHOP: What’s with the groans? Goodness me! I’m very pleased to take a call on this important bill—well, these two bills, actually, I should say. These bills were introduced in the last Parliament by the last Government, and it’s pleasing to see—

Nicola Willis: Very good Government it was.

CHRIS BISHOP: Very good Government it was; that’s exactly right, Nicola Willis. And it’s pleasing to see that the current Government is continuing with them.

Look, it’s really important with bills like this that there is a bit of cross-party support, because we all want an efficient and effective justice system. The last Government spent quite a bit of time going through, actually, some of the fundamental provisions that govern the way our court system works. We had the judicature modernisation legislation that went through. I remember considering that. That was the outcome of an extraordinary amount of work done by various Ministers—and also officials, we should acknowledge. This bill is not quite as big as the judicature modernisation project, but it is in the same vein of bills to tidy up and improve the operation of the courts.

I’ve been listening to the debate in my office, and members have been canvassing some of the important provisions that the bills have introduced. I just want to quickly mention one in my time in the House, and that’s the disputes tribunal monetary limit, which is updating that financial threshold from $15,000 to $30,000, which, you know, is basically a very small provision in one bill but is actually a really important provision because it is a doubling of the threshold. Over time, as inflation, essentially, increases the price of goods, you do need the law to keep pace with the increase in the price of goods so that things can come within the disputes tribunal. But it’s also a recognition that those lower-level non—well, it is adversarial in the sense that it’s a dispute, but the tribunals have a simple process that are easy for people to access, and that are not particularly costly in comparison to a traditional court process. It is really important that people can access things like the disputes tribunal, and I think the increase to $30,000 will see more people using tribunals, and that will ultimately be to the betterment of the disputes that the disputes tribunal deals with, which is actually an amazing number of disputes, and we are world leading in our provision of low-cost, simple access to justice for people, and the disputes tribunal is a big part of that.

I think, personally, there’s a case for allowing Cabinet or the Executive Council to move that monetary limit through regulation rather than having to legislate often to increase the limit. It’s not in this bill; maybe we’ll see it in another bill. I personally think that would be quite a good idea. It seems a bit silly that you have to go back and legislate the monetary amounts, but that’s just me.

Look, these are good bills. They have been through the Justice Committee. I had the pleasure of serving on that committee in the last Parliament but also this Parliament as well. We have considered the bills thoroughly and diligently. Just in closing, I do want to pay tribute to the officials from the Ministry of Justice who have worked on these bills. They are very large bills. They make a large number of very minor and very technical amendments. Officials have spent a lot of time on them. This has been the outcome of a multi-year process, and so to the Ministry of Justice officials, who I’m sure are watching with bated breath to see whether or not the bills pass, I just want to acknowledge the hard work that they’ve done on them. Thanks.

Bills read a second time.

The House adjourned at 10.57 a.m. (Wednesday)