Wednesday, 1 August 2018

WEDNESDAY, 1 AUGUST 2018

WEDNESDAY, 1 AUGUST 2018

The Speaker took the Chair at 2 p.m.

Karakia.

Oral Questions

Questions to Ministers

Job Creation and Unemployment—Unemployment Rate and Wages

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): Yes.

Hon Simon Bridges: Is he concerned, in his last day as Prime Minister, that unemployment is rising, with an extra 4,000 people unemployed in the latest figures?

Rt Hon WINSTON PETERS: The facts are that this country has the third-highest level of employment in the 35-country OECD—the third-highest level—and on the examination of the previous Government’s record, they never got below, in all those years, 4.8. We’re at 4.5.

Hon Simon Bridges: Is he concerned that job creation under his Government has more than halved, from 10,000 new jobs a month to 4,000 now?

Rt Hon WINSTON PETERS: The reality is that we have a record high rate of employment among Māori; a record high rate of employment amongst women; a serious drop in the “neets”, or the young people not in education, employment, or training; and Treasury predicts that we’ll be steady on about 4.5 or 4.4 percent.

Hon Simon Bridges: What effect does he think the changes to the overseas investment rules will have on the job markets and job creation?

Rt Hon WINSTON PETERS: The very effect that it’s having now—none. The only job that seems to be at risk in this country is over there.

Hon Simon Bridges: What effect does he think the Government’s industrial law changes will have on the jobs market and unemployment?

Rt Hon WINSTON PETERS: The effect that the industrial relations in this country are going to be a case where the once-neglected working people of this country are going to get a fair go. That’s why they’re lining up in their hundreds of thousands at this present time. They know that we need strategic leadership in business and in the unions, but the Government will do its job to bring them together.

Hon Simon Bridges: What effect does he think that banning oil and gas exploration, increased taxes, over 130 working groups and inquiries, and softening up the obligations on people to work will have on job creation and unemployment?

Rt Hon WINSTON PETERS: That statement, to quote Geoffrey Palmer, is false and it’s malicious and it’s not true.

Hon Simon Bridges: Which part?

Rt Hon WINSTON PETERS: The part about banning oil and gas exploration—he’s been told over and over again in this House that it’s not true. They know it’s not true, and being the number one grumpy in this country won’t help.

SPEAKER: Order! Order! The Acting Prime Minister has just indicated that the Leader of the Opposition has deliberately misled the House. He cannot do that. He will withdraw and apologise.

Rt Hon WINSTON PETERS: I withdraw and apologise. I know—

SPEAKER: No, no, that’s the end of it, thank you.

Hon Simon Bridges: Is he concerned that wages aren’t keeping up with inflation, even before there was a 25 percent a litre fuel tax increase that has come into force on 1 July?

Rt Hon WINSTON PETERS: Every economist all the way to the IMF has pointed to the fact that wages are on the rise in New Zealand, but responsibly so—responsibly so. We cannot catch up with our Australian friends in terms of average earnings down $149 a week, on average. We can’t catch the Aussies up with the pathway that they recommend: low wages, mass immigration, and people being degraded.

Hon Grant Robertson: Can the Prime Minister confirm that today’s employment data confirms that wages grew in June, with private sector wage rates up 2.1 percent annually, and that the quarterly employment survey data for average total weekly earnings increased 3.3 percent from a year ago?

Rt Hon WINSTON PETERS: I am very happy to say that that’s a fact.

Hon Simon Bridges: Does the Prime Minister not accept that wage growth has been lower and slower than inflation?

Rt Hon WINSTON PETERS: I’ve got no idea where that member’s been, but every other observer in this country, and also his backers, have been complaining about wage rises, and now he says they’re down. He should make up his mind, please.

Hon Simon Bridges: When he said yesterday, “This Government has a tranche of explosive policies that will see a rapid turn-around in our country’s economy”, what policies was he talking about?

Rt Hon WINSTON PETERS: They are the policies we’ve already announced and the policies that are coming, from a very reformative Government.

Hon Simon Bridges: Give me one.

Rt Hon WINSTON PETERS: Give you one? Well, $1 billion a year for infrastructure in the provinces, in the regions. For the first time for a long time, a Government understands that the regions and the farm- and machine-hands of our country are great wealth creators. That’s one for a start—how many more does he want?

Hon Simon Bridges: Does he believe Kiwi families are getting ahead under this Government, when unemployment is going up, job creation is falling, and wages aren’t keeping up with the cost of living, all as a result of Government policies?

Rt Hon WINSTON PETERS: Since 1 July this year, over a million families are being improved, a million people are being helped, and there is more progress to come. For example, one of the most stunning results has been the winter energy payment, which has captured the imagination of so many people out there. Whereas in the past they used to go without and freeze, they’ve got help now and it’s of significant benefit to them. Look everywhere else in the country and you will see that this business of being a grumpy is not going to be successful in politics, because New Zealanders know better.

Hon Amy Adams: The economy’s slowing.

Rt Hon WINSTON PETERS: And one last thing, Ms Adams, and it’s this: why are we rising in the polls if what you say is right?

Hon Simon Bridges: In his last day as Prime Minister, what does he say to the—

SPEAKER: Order! The member will resume his seat. The member will ask questions without prefaces, which he, I think, knows are almost certainly not correct.

Hon Simon Bridges: What does he say to the 4,000 people who are now on the dole queue and weren’t just a month or two ago?

Rt Hon WINSTON PETERS: Well, that would have been not 4,000—under his administration about 25,000 more, because here are the figures for the last nine to 10 years. But can I just say, on the last day, which he mentioned, I fully expect a delegation to come to my office this evening before I go, but duty calls.

SPEAKER: Order! Once again, I very definitely and deliberately cut a part of the Leader of the Opposition’s question because it was out of order. The Acting Prime Minister should not reply to out of order questions.

International Students—Economic Impacts and Government Policies

2. Hon PAULA BENNETT (Deputy Leader—National) to the Minister of Education: Has he seen advice from Education New Zealand which estimates that the proposed changes to post-study work rights for international students could cost the economy $486 million a year, and how many jobs are projected to be lost within private training establishments as a result of these changes?

Hon CHRIS HIPKINS (Minister of Education): I was sent that initial advice from Education New Zealand on the proposed changes to post-study work rights for international students. It’s important to note the advice did not take into account international students choosing higher qualifications to study in New Zealand as a result of the changes. It was different from the advice presented by immigration officials, and it did not model for any different scenarios. I did ask, as a result of that, for more robust modelling to be done by both agencies, and we have now received that advice. Final decisions have not yet been made on any changes to post-study work rights.

Hon Paula Bennett: Has he seen the report from Aspire2 that the proposed changes could be a direct hit to the economy of between $1.1 billion and $1.4 billion and result in a loss of up to 1,000 jobs?

Hon CHRIS HIPKINS: Not only have I seen those reports, I have discussed them directly with Aspire2, who said to me that that was their black hat, doomsday scenario and they didn’t think the impact would be that bad. However, they did put forward serious concerns about the changes and a number of suggestions. I will consider those, and I will discuss those with my colleagues.

Hon Paula Bennett: I seek leave to table a letter that I received today, 1 August, from Aspire2 that outlines the very scenario that I’ve just given.

SPEAKER: Did—

Hon Paula Bennett: It’s a letter to me.

SPEAKER: A letter to the member. Is there any objection to the letter being tabled? There is no objection to the letter being tabled.

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

Simeon Brown: Is the Minister concerned about the submission of Independent Tertiary Education New Zealand, who have said that international students would go to other countries such as Canada, where they have a “clear idea of where they are heading”, and is he happy for Canadians to benefit from the $1.4 billion spend in Kiwis?

Hon CHRIS HIPKINS: I’m not responsible for what the Canadians decide to do, but what I would say is that the Government has not made any decisions at this point, and we are carefully considering the feedback that we have received. I do want to be clear that some of the modelling that is being put forward to support some of the claims that are being made about the impact of the changes is completely unrealistic. It assumes, in many cases, that everybody who might be eligible for post-study work rights now takes them up, and that is not true. It assumes that everybody who might no longer be eligible for post-study work rights would not come to New Zealand if we change those settings, and that is also highly, highly, highly unlikely to be true.

Simeon Brown: Has the Minister seen reports that his Government’s proposed changes could leave Manukau Institute of Technology (MIT) financially unviable and cause enrolments for private training establishments to fall by 90 percent, resulting in significant job losses and closure of a number of campuses?

Hon CHRIS HIPKINS: It is absolutely correct that a number of our polytechnics—in particular, the two large polytechnics in Auckland, MIT and Unitec—are very dependent on international students at the moment, and that is largely because of the running down of the polytech system under the previous Government.

Job Creation and Employment—Future of Work Forum

3. Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Finance: What progress has been made on establishing the tripartite Forum on the Future of Work?

Hon GRANT ROBERTSON (Minister of Finance): I’m pleased to say that the first Future of Work tripartite forum will take place tomorrow, here at Parliament. The forum brings together leaders representing business, workers, and the Government to collaborate and feed into both Government and private sector work programmes spread across four key themes for the future of work: technology, productivity, learning for life, and just transitions. This forum represents a major opportunity for all the key social partners in the economy to discuss how we can work together to meet the challenges and take the opportunities of a rapidly changing world of work.

Dr Duncan Webb: Why has the Government organised the forum?

Hon GRANT ROBERTSON: While in Opposition, I chaired the Future of Work Commission, which looked at how we would ensure New Zealanders prepared for and are able to adapt to the challenges and opportunities presented by the changing world of work. We all know that technological advances and forces such as automation, outsourcing, and globalisation are transforming our world and our economy. New Zealand will stay ahead of the challenges and opportunities of the future of work only if we bring together the expertise and knowledge of business, Government, and workers, and that is exactly what this forum will do.

Dr Duncan Webb: How does the Future of Work Forum fit into the Government’s wider economic strategy?

Hon GRANT ROBERTSON: This Government is transitioning to a modern economy where we work smarter, make better use of our resources, and ensure that everyone has an opportunity to participate and succeed. The forces of change that we face present us with an opportunity to achieve this vision, but we know that we can’t achieve this alone. Starting tomorrow, the forum will champion practical programmes to harness the potential of new technology and innovative ways of doing things, and educate and upskill our workforce to lift productivity and transition to an economy that is sustainable, inclusive, and productive, and not just reliant on population growth and housing speculation.

Economy—Business Confidence, Forecasts, and Unemployment

4. Hon AMY ADAMS (National—Selwyn) to the Minister of Finance: Does he have confidence in the Government’s management of the New Zealand economy?

Hon GRANT ROBERTSON (Minister of Finance): Yes, even more so today with the release of employment data that shows 94,000 more people employed in the June 2018 quarter compared to the June 2017 quarter; a fall in the rate of those young people not in employment, education, or training, from 12.4 percent to 10.9 percent; and the highest employment rates on record for Māori and women.

Hon Amy Adams: Does he take it as a signal of confidence in the Government’s economic management that the number of people unemployed has increased by 4,000 people in the last three months, the cost of living is increasing faster than wages, and job growth is half of what it was under the previous National Government?

Hon GRANT ROBERTSON: The number of people unemployed—the unemployment rate—has gone up from 4.4 to 4.5 percent. That puts it lower than what we inherited, at 4.8 percent, from the previous Government. And I repeat, there are 94,000 more people employed in the June quarter compared to June 2017. And I would say, in the year before that, June 2016 to June 2017, it was only 76,000. This Government is actually building the number of people in employment.

Hon Amy Adams: Does he take it as a signal of confidence in the Government’s economic management that former ANZ chief economist Cameron Bagrie has described the economy as being at “stall speed”, Infometrics have said it is clear that businesses are giving up hope on the economy, and a survey by Federated Farmers has reported a fivefold increase in pessimism over the last 12 months?

Hon GRANT ROBERTSON: The first of those people, Cameron Bagrie, also said today that it was necessary for us to shift to a more sustainable economy and a more productive one—away, I might say, from population growth and house price rises, echoing John Key’s comments from the weekend—and what Cameron Bagrie said was that it will take time for other parts of the economy to step up. We’re getting on with the job of actually supporting those other parts of the economy to step up, rather than sitting on the side lines grumpily carping.

Hon Amy Adams: Does he take it as a signal of confidence in the Government’s economic management that senior economists are now talking about our economy probably growing at around only 1.5 percent, compared to Treasury’s forecast of 3 percent—a drop that would cost the Government billions of dollars in revenue?

Hon GRANT ROBERTSON: The consensus forecasts that came out this month show a 3 percent growth over the forecast period. The IMF supports that, the Reserve Bank supports that, and Treasury supports that. The member might want to talk the New Zealand economy down, but, actually, we are in a transition period. The economy is continuing to grow in a sustainable way.

Hon Amy Adams: So when he said in the House yesterday and today that the Government is transitioning the economy, did he, in fact, mean that the Government is transitioning us from a high-growth economy with falling unemployment and wages rising at twice the rate of inflation to, in fact, a low-growth economy with more people on the unemployment benefit and the cost of living increasing faster than wages?

Hon GRANT ROBERTSON: Absolutely not. What I meant was that we were going to transition away from an economy that even the member’s former leader is now acknowledging was built on population growth and housing speculation. That’s not sustainable. What is sustainable is actually investing a billion dollars a year in our regions, giving a billion dollars’ worth of research and development support, creating a Green Investment Fund, and getting alongside the business community to grow long-term, sustainable jobs. I’m proud that this Government is finally facing up to issues that were ignored for nine years.

Schools—Industrial Action, Teachers' Salaries, and Workload

5. Hon NIKKI KAYE (National—Auckland Central) to the Minister of Education: Does he agree with the Prime Minister regarding teacher strikes, who said “if we had more money we would have put it up there”, and what would be the salary increase for primary teachers if the Government had not prioritised free tertiary fees and instead put that funding into teacher salaries?

Hon CHRIS HIPKINS (Minister of Education): Yes, the Acting Prime Minister is a man of great wisdom and foresight, who speaks with great exactitude. To put the current offer into context, over the last eight years teachers received an increase in their base salary rates of 1.2 percent a year on average. What the current offer on the table from the Ministry of Education equates to is an increase in base salary rates of 2.4 percent a year on average—double what they received under the last Government, despite current inflation being lower than it was on average over those last eight years, of course partly because of the spike in GST. With regard to the second part of the question, this Government has no intention of returning to the elitist attitude that only those who can afford to pay for tertiary education should be able to participate in it.

SPEAKER: Order! The member will now address the second part of the question.

Hon CHRIS HIPKINS: With regard to the second part of the question, it would be almost impossible to make that calculation.

SPEAKER: I was Minister of Education, I think, when the member was at school, and it’s probably my fault that the maths are like that.

Hon Nikki Kaye: Isn’t it true that the primary teacher salary package proposal could be paid for twice over if it weren’t for him prioritising tertiary students instead of teachers?

Hon CHRIS HIPKINS: I want to be very clear here that the current Government paid for the fees-free policy by cancelling the tax cuts that were going to be put in place by the previous National Government. So the assertion by the member opposite that if we hadn’t done that the money would be available for primary teacher salaries is completely wrong.

Jo Luxton: Does the coalition Government intend to reverse the fees-free policy?

Hon CHRIS HIPKINS: To be abundantly clear, the coalition Government has no intention of reversing the fees-free policy. All three parties in the Government have signed up to it and are committed to it. It’s very unclear what the alternative is, because none of the members opposite will say what they are going to do.

Hon Nikki Kaye: Does he agree with NZEI Te Riu Roa that the offer of just 12 minutes of time extra a week to work individually with children or plan and assess learning is not good enough, and why is he not considering smaller class sizes to reduce teacher workload and help resolve the strikes?

Hon CHRIS HIPKINS: I agree with many of the concerns being put forward by NZEI Te Riu Roa, including the fact that we have a teacher supply challenge ahead of us because there was a 40 percent reduction in the number of people training to be teachers under the last National Government. I also agree with the concerns put forward by the NZEI about teacher workload, and that was one of the drivers behind the scrapping of national standards—a decision this Government made because they led to a massive increase in teacher workload, with no discernible increase in student achievement as a result of that.

Hon Nikki Kaye: Does he agree with the Acting Prime Minister, who said in relation to primary teacher strikes, “striking and putting a whole lot of parents and children at enormous difficulty is not the best idea.”, and has he asked the Acting Prime Minister to give him some of the hundreds of millions he’s spending on diplomats instead of teachers?

Hon CHRIS HIPKINS: That’s a ridiculous question. The Government is going into the bargaining with primary teachers in good faith. Mediation is taking place this week. I do note, once again, that what they are being offered by this Government is twice the average increase they received under the previous Government. We value the work of teachers. We know we’ve got a lot of work to do in this area, but I note that we cannot undo nine years of damage in nine months.

Hon Nikki Kaye: What specific support package has he put in place to help working parents who may have no ability to look after their children if a school closes their doors?

Hon CHRIS HIPKINS: I’m not going to speculate on the strike action at this point. Mediation is under way this week. I hope that that mediation will lead to a positive outcome. The Government does not want teachers to take strike action, and we’ll certainly be working to avoid that.

Fire and Emergency—International Assistance

6. DARROCH BALL (NZ First) to the Minister of Internal Affairs: What plans does the Government have to assist with international firefighting efforts?

Hon TRACEY MARTIN (Minister of Internal Affairs): At the weekend, Fire and Emergency New Zealand received a formal request from the United States to assist it to combat the wildfires ranging across the north and north-west of the United States. Later this week, Thursday or Friday, a team of up to 40 New Zealand fire personnel will head for the US as part of the Anzac team. Team members will spend up to seven weeks in the US and after being inducted at Boise, Idaho are likely to deploy to northern parts of California. The request illustrates the high regard in which our fire personnel are held internationally.

Darroch Ball: Is the Minister aware of any other requests?

Hon TRACEY MARTIN: Overnight, we received a formal request from Canada to assist with the growing number of wildfires in Ontario, British Columbia, and the Yukon Territory. A New Zealand liaison officer is heading to Canada this afternoon to work through the detail of the request, and we aim to have a team headed for Canada early next week. The Canadian deployment will also be a joint exercise with Australia. Since 2000, we have participated in 20 overseas deployments to the US, Canada, and Australia. With climate change, we anticipate more such requests in the years ahead.

Darroch Ball: What benefit is there for New Zealand in these deployments?

Hon TRACEY MARTIN: They provide great development opportunities for our personnel, they come at no financial cost to us—the countries to which we deploy meet the costs—and they build our international relations. Because the assistance is provided through a reciprocal agreement, we know that the US, Canada, and Australia will come to our assistance if we need help. Deployments like this give us invaluable expertise managing large wildfires.

Electoral (Integrity) Amendment Bill—Statements

7. Hon Dr NICK SMITH (National—Nelson) to the Minister of Justice: Does he agree with the reported statement by Rt Hon Winston Peters yesterday on the Electoral (Integrity) Amendment Bill that if MPs were allowed to party-hop that would destroy the democratic fundamentals of society, and his previous statement that “Members of Parliament have to be free to follow their conscience. They were elected to represent their constituents, not to swear an oath of blind allegiance to a political party”?

Hon ANDREW LITTLE (Minister of Justice): Yes and yes, because the Electoral (Integrity) Amendment Bill will maintain the principle that it is voters who decide the make-up of Parliament, and it does not compromise an MP’s obligation to represent their constituents.

Hon Dr Nick Smith: How can the statement be true that if MPs were allowed to party hop it would destroy the democratic fundamentals of society, when the New Zealand Labour Party was founded by members changing party midway through our 19th Parliament and the New Zealand National Party was founded by members changing party midway through our 26th Parliament, and when these two parties have actually been fundamental to our democracy and society’s success over the past 80 years?

Hon ANDREW LITTLE: This Government is very firmly placed in the 21st century and what is needed for good governance of the country today, and acts consistently with the fundamental principle of MMP, which it is that the electorate decides the make-up of Parliament, not individual MPs.

Hon Dr Nick Smith: How can the statement be true that if MPs were allowed to party hop it would destroy the democratic foundations of society, when that has been the law since 2005 and there have been minimal changes in party affiliation since then and absolutely no evidence of our democracy being destroyed?

Hon ANDREW LITTLE: The objective of the Electoral (Integrity) Amendment Bill is to affirm the fundamental principle of MMP, which is that the proportionality of party representation in Parliament is fundamental, it’s a decision of the electorate, and it should not be interfered with by individual decisions of individual MPs.

Hon Dr Nick Smith: How can the statement be true that if MPs were allowed to party hop it would destroy the democratic fundamentals of society, when the Rt Hon Winston Churchill is recognised as one of the greatest parliamentarians of modern times but whom party hopped twice, including over the policy of appeasement towards Nazi Germany?

Hon ANDREW LITTLE: We are genuinely entering the realms of absurdity when the fundamental principle of MMP is somehow now being sort of compared to the actions of the Rt Hon Winston Churchill—a totally different set of constitutional arrangements and a totally different situation. I go back to the basic principle of the Electoral (Integrity) Amendment Bill, which is that it is the role of the electorate, of voters, to make the decision on the make-up of Parliament, rather than individual MPs arrogating to themselves the pious privilege of deciding what parties should be represented by what numbers in Parliament.

Hon Dr Nick Smith: Does he agree that the democratic fundamentals of society would be destroyed if MPs were allowed to party hop, and, if so, where is the evidence of democracy being destroyed when Rod Donald and Jeanette Fitzsimons party hopped from the Alliance Party to the Green Party in 1998?

Hon ANDREW LITTLE: The basic principle of MMP is that it is for the electorate to decide the share of each party’s vote in Parliament. That is why it is called mixed member proportional representation. It is diametrically opposed to that principle to allow individuals MPs, on a whim, to decide they’re no longer part of the party under whose banner they entered Parliament, therefore destroying proportionality of party representation, therefore undermining that principle of MMP. That is what the Electoral (Integrity) Amendment Bill seeks to affirm.

Rt Hon Winston Peters: If democratic destruction is what’s at issue here and it is too collective with the formation of parties, is it not a fact that the ROC Party, Māori Party, Mana Wahine, Mauri Pacific, United Party, and the United Future party all went down by their association with National?

SPEAKER: No responsibility.

Hon Dr Nick Smith: Does he agree with today’s statement by Dr Bryce Edwards of Victoria University that the bill itself is bad enough for democracy but the process surrounding the bill has also been a blow against democracy, especially with the Green Party misleading the public on their crucial U-turn in supporting the legislation?

Hon ANDREW LITTLE: No.

Police—Deputy Commissioner of Police, Inquiry into the Appointment Process

8. CHRIS BISHOP (National—Hutt South) to the Minister of Internal Affairs: Does she have confidence in Pauline Kingi leading the independent enquiry into the process around the appointment of Mr Wally Haumaha as Deputy Commissioner of Police?

Hon TRACEY MARTIN (Minister of Internal Affairs): In light of Dr Kingi’s credentials, the information provided to me by the Department of Internal Affairs, her work history, and her signed declaration that she had no conflict or perceived conflict, then yes. However, it is with regret that I have to inform the House that Dr Pauline Kingi advised the Government just before I came to the House that she is going to stand down from the inquiry into the appointment process for a Deputy Commissioner of Police. Ever since she was appointed to the role, she has been the subject of political attack. Those have been attacks on her integrity, attacks on her reputation, and even attacks on her legal qualification. Dr Kingi has a 28-year career in public service as both a community member and senior public servant, and as a lawyer. She was asked to perform a public duty, and yet became the subject of an undue and unwarranted criticism. The Government has accepted her resignation and will commence the process to find a replacement.

Chris Bishop: Will she now assure the House that the Government will run a credible and independent inquiry that is not run by someone who has endorsed the subject of the inquiry 23 times on LinkedIn?

Hon TRACEY MARTIN: Can I draw the member’s attention to the Auditor-General’s description of conflict: “2.38 Questions of judgement and degree also arise when considering friends and other associates. However, in our view it is unrealistic to expect the member or official to have absolutely no connection with or knowledge of the person concerned. New Zealand is a small and interconnected society. So, for example, we consider that simply being acquainted with [a person], or having worked with them, or having had official dealings with them, will not usually create any problem.” Can I also remind the member that the process by which Dr Kingi was selected as the chair of the inquiry is the process that was created by the National Government in 2009 and amended by the National Government in 2013.

Chris Bishop: How has she let herself and the Government get into a position where they appointed to lead an independent inquiry someone who has close connections to the subject of the inquiry and who has endorsed him 23 times on LinkedIn?

Hon TRACEY MARTIN: I actually take issue with the member around “close connections” and I would actually ask the member to prove that.

Hon Simon Bridges: Then why’s she gone?

SPEAKER: Order!

Hon TRACEY MARTIN: I ask the member to prove it—[Interruption]

SPEAKER: Order!

Hon TRACEY MARTIN: —and I also draw the member’s attention to the fact that LinkedIn—

Hon Simon Bridges: Why did you sack her?

SPEAKER: Order! The member will resume her seat. I’ve, I think, three times asked—by calling order—the Leader of the Opposition to, effectively, tone down the volume, and now we have an out-of-order interjection, as well. This is an important matter. It’s someone’s reputation—or two people’s reputations at least are involved, and I think the House owes it in these circumstances to be able to hear the Minister, and with that sort of yelling people won’t. I just remind—I think for the fourth time in the last two days—the Leader of the Opposition to cease interjecting involving me.

Hon TRACEY MARTIN: So just with regard to LinkedIn, again, advice has been received from the Cabinet Office and from—

Hon Gerry Brownlee: Why did the Government sack her?

Hon TRACEY MARTIN: Ms Kingi resigned because of disgusting accusations by the Opposition that impinged on her integrity, based on a LinkedIn profile, which is a social media account that has been shown, and advice has been received, does not—[Interruption]

SPEAKER: Order! I cannot—I’m very close to the member and I cannot hear her, mainly, I think, because Opposition members barracking is coming through my mikes.

Hon Gerry Brownlee: We’re doing you a favour.

SPEAKER: No, no—I’m first of all going to have the shadow Leader of the House—

Hon Gerry Brownlee: I withdraw and apologise.

SPEAKER: Right. Tracey Martin—she was partway through the answer and I didn’t hear the end of it.

Rt Hon Winston Peters: Should people who have offered to fill a public office be the subject of vituperation, defamatory statements and comments, and have their integrity challenged purely for a venal political purpose?

Hon TRACEY MARTIN: In my opinion, no.

Chris Bishop: Did the Minister ask Pauline Kingi to resign as chair of the inquiry or did she resign voluntarily?

Hon TRACEY MARTIN: I have not had any opportunity to have any conversations with Ms Kingi. All interactions with Ms Kingi have been dealt with by the Department of Internal Affairs.

Chris Bishop: Will she now order an inquiry into the appointment process around the chair of the independent inquiry leading an independent inquiry into the appointment of Mr Wally Haumaha as Deputy Commissioner of Police?

Hon TRACEY MARTIN: As the member might know, no single member can make a decision about an inquiry. That would be something that would have to be taken to Cabinet, and all of Cabinet would have to make a decision.

Research and Development—Public Consultation on Tax Credit

9. Dr DEBORAH RUSSELL (Labour—New Lynn) to the Minister of Research, Science and Innovation: What progress has been made on the implementation of a Research and Development tax incentive?

Hon Dr MEGAN WOODS (Minister of Research, Science and Innovation): Submissions on the Government’s research and development (R & D) tax credit closed on 1 July this year. We received 214 submissions from businesses and other stakeholders, and I’d like to thank everybody who took the time to share their knowledge and experiences with us. We’ve listened with an open mind about how to make the R & D tax incentive a world-class, open, and efficient system to finally increase New Zealand’s investment in research and development. Since submissions closed, the Government has been working hard to further develop the policy based on the feedback we’ve received. Legislation will be introduced in October this year so the R & D tax incentive can be in place by 1 April 2019. Eligible businesses paying tax will be able to benefit from this policy from that date.

Dr Deborah Russell: What were the main themes in the submissions?

Hon Dr MEGAN WOODS: During the consultation period, we received invaluable technical feedback on how the tax credit could be used to further incentivise research and development. Among other issues, submitters agreed with measures to ensure the scheme was transparent and included mechanisms to control expenditure. That was a particular area that was received positively. There were also suggestions for how to expand the proposed definition in the New Zealand context, and this is something we’re continuing to consider closely. Another theme identified in the document was the challenges of pre-profit businesses and the need to recognise additional encouragement into R & D. The submitters agreed with the measures put out in the consultation document and we’re committed to further work in this area. This invaluable feedback has been crucial in the discussions we’re now having about the final design—

SPEAKER: Order! The member’s gone well beyond the question.

Dr Deborah Russell: Does the Minister anticipate that changes will be made to the design of the tax credit as a result of the consultation process?

Hon Dr MEGAN WOODS: No final decisions have been made, but, as I said earlier, we’ve listened and engaged in an open-minded consultation process. We’re confident that the final design will receive wide support. We’re committed to achieving our ambitious target—

SPEAKER: Order! The member will resume her seat.

Prisons—Contraband

10. Hon DAVID BENNETT (National—Hamilton East) to the Minister of Corrections: What advice has he sought, if any, in relation to footage posted on YouTube which appears to be of Mongrel Mob gang members using tattooing equipment on one another at Rimutaka Prison?

Hon KELVIN DAVIS (Minister of Corrections): I have been advised by the Department of Corrections that Rimutaka Prison staff have moved quickly to identify prisoners in the online video. The site emergency response team undertook a search operation and a cellphone was recovered quickly and is being forensically examined. I expect that the prisoners identified will be held to account for their behaviour. I also appreciate images of prisoners available online will be of particular concern to the victims of offending; corrections are asking YouTube to have the content removed.

Hon David Bennett: Does he think corrections officers are smuggling in the equipment being used to tattoo prisoners and the phones being used to post their tattooing online?

Hon KELVIN DAVIS: When I was in Opposition I found it unacceptable for corrections officers to smuggle in contraband. Nothing has changed now that I am in Government. I have high expectations of their behaviour. I have no tolerance for corrections officers who are found to be abusing their position in prisons. They endanger themselves and their peers.

Hon David Bennett: Is it true that when allegations are made that corrections officers are smuggling contraband into prisons, and these allegations are made through the proper channels, the people who make those allegations are fobbed off by corrections, as the Minister’s previously said?

Hon KELVIN DAVIS: I just want to repeat the last answer that I gave. If you want me to repeat it word for word I can, but the fact of the matter is it is unacceptable for any corrections officers to smuggle contraband in. They endanger themselves and they endanger their peers. I expect corrections to deal with any corrections officers that are found to be smuggling contraband into prisons, and deal with it swiftly.

Greg O’Connor: What steps has he taken to address the number of prisoners giving or receiving a tattoo in prison?

Hon KELVIN DAVIS: The Corrections Amendment Bill will make it a disciplinary offence for a prisoner to tattoo another prisoner, or consent to receive a tattoo from another prisoner, or to tattoo themselves. I’ve also asked the corrections to look into a national tattoo removal strategy. Some tattoos, in particular gang patches, can have an impact on the ability for some prisoners to transition back into communities. If we want people to have the best chance in leading a better life after prison, then we need to take steps like removing gang patches to help them successfully transition back into communities.

Hon David Bennett: Has he taken any action regarding prison officers who have allegedly been bringing contraband into prisons that he said in the past he knew the names of and that had been given to him?

Hon KELVIN DAVIS: I have no responsibility for the actions that occurred under the previous Government.

Hon David Bennett: Does he still believe corrections takes a view that protecting its reputation is more important than the safety and transparency of the prison system, as he has said in the past?

Hon KELVIN DAVIS: No, not under my watch.

Mining on Conservation Land—Government Policy

11. SARAH DOWIE (National—Invercargill) to the Minister of Conservation: Is it still Government policy that there will be no new mining on conservation land?

Hon EUGENIE SAGE (Minister of Conservation): Kia orana. Minister Woods and I are making good progress on how to implement the Government’s policy of no new mines on conservation land.

Sarah Dowie: Why, if it is Government policy that no new mining is to occur on conservation land, has she allowed access for prospecting in Mount Richmond Forest Park, the Howard conservation area, Victoria Forest Park, and the Rock and Pillar Conservation Area if there is no intention to approve mining activity on successful prospects?

Hon EUGENIE SAGE: The member might want to ask her colleague, former energy Minister Simon Bridges about that, as it appears that the previous administration was wanting to facilitate more extensive mining on high-value conservation lands across the board. That three-year moratorium on prospecting was something that the former Government put in place not to protect conservation land but to enable extensive aerial magnetic and geochemical surveys in order to identify the lands’ potential for mining. That three-year moratorium came to an end in July.

Sarah Dowie: Does she agree with conservation groups that Government actions in inviting new prospecting permits for these areas is evidence that the ban on new mining on conservation land is a charade?

Hon EUGENIE SAGE: The member should check the facts. That was a moratorium put in place by the Ministry of Business, Innovation and Employment (MBIE). The end of the moratorium on 8 July simply meant that it returned to the status quo. The grant of a prospecting or an exploration permit by MBIE does not guarantee access to the land—that’s the subject of a separate access arrangement application.

Sarah Dowie: When regional economic development Minister, Shane Jones, made the statement that stewardship areas can be taken out of the conservation estate to be mined, was that what the Government meant when it announced in the Speech from the Throne that there would be no new mining on conservation land?

Hon EUGENIE SAGE: Stewardship land is conservation land. On the West Coast, quite a large part of the million hectares of stewardship land is part of the South West New Zealand World Heritage Area. It is internationally significant. It is conservation land, and the whole status of stewardship land and mining on it is being considered as part of the development of the policy, which will go out for consultation in September, which the member will be able to make a submission on.

Sarah Dowie: Will she remain as Minister of Conservation if new mines are approved by the Government on any of today’s conservation estate?

Hon EUGENIE SAGE: Yes. I am very proud of the work that I’m doing as the Minister of Conservation and this Government’s commitment to backing nature with the increased investment in conservation after nine years of neglect by that former Government.

Tertiary Education—Micro-credentials

12. MARJA LUBECK (Labour) to the Minister of Education: What steps is the Government taking to ensure that New Zealand’s qualification system meets the needs of citizens and employers?

Hon CHRIS HIPKINS (Minister of Education): Good news: today, I announced that micro-credentials will be rolled out from the end of this month to give employers and people who want to keep learning more opportunities to access new skills quickly—

Hon Gerry Brownlee: Cowboy qualifications.

Hon CHRIS HIPKINS: There’s hope for you yet, Gerry. Micro-credentials are stand-alone education products that certify the achievement of a set of skills and knowledge required by industry—it’s going downhill for you, Gerry—at professional associations, iwi, or the community. They fit well with the coalition Government’s Future of Work programme, bringing together businesses and workers alongside Government to plan how we face the changing nature of work and industry training.

Marja Lubeck: What feedback has he had from industry about the micro-credentials announcement?

Hon CHRIS HIPKINS: Business New Zealand has welcomed the flexibility and innovation that micro-credentials will bring, saying, “This is a great new way of engaging with employees and responding to … employer skill demands”. The Building and Construction Industry Training Organisation has called it a “great step forward” and says that it’s “delighted” by the move, and the Primary Industry Training Organisation says that it will help them to “respond to pressing industry demands, including [things like] the eradication of … Mycoplasma bovis.”

Marja Lubeck: How are micro-credentials different from qualifications?

Hon CHRIS HIPKINS: Qualifications tend to be larger and take longer to complete. They’re normally 40 credits or more in size. Micro-credentials are more likely going to be in the 5- to 40-credit range. It’s also important to note that the way they are going to be approved and funded will be different, and that they are going to be developed very closely in association with business and industry to ensure they meet the real and pressing needs business and industry are indicating they have.

Rt Hon Winston Peters: Will the Minister or the Government be deterred by these constant attacks on this six-week programme from Gerry Brownlee, because of the fact that it’s actually longer in real terms than the tertiary education he had?

SPEAKER: No, no I think—[Interruption] No, no, I’m—I think that that was an out of order question. I also think that the right honourable gentleman knows that that was the case, and therefore he has been disorderly and will withdraw the question.

Rt Hon Winston Peters: I withdraw and apologise.

Points of Order

Leave to Publish Draft Select Committee Report—Electoral (Integrity) Amendment Bill

Hon Dr NICK SMITH (National—Nelson): I seek leave of the House for the draft Justice Committee report on the Electoral (Integrity) Amendment Bill to be published under the authority of the House under Standing Order 373.

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

Points of Order

Urgent Debates—Leave Sought

CHRIS BISHOP (National—Hutt South): I seek leave for the House to hold an urgent debate on the resignation of Pauline Kingi from the position of chair of the independent inquiry into the appointment of Wally Haumaha as Deputy Commissioner of Police, in light of the fact that this was brought to the House’s attention just moments ago in question time. There was no time, of course, to mount an urgent debate in the normal way to you through correspondence.

SPEAKER: Well, I think my understanding is the normal way of doing that is to get a letter to me. I have actually written such letters; I don’t think I’ve ever had one accepted during question time. But it is a matter of leave. I’m not going to make a habit of this because it will be disorderly, but in these circumstances I will put the question to the House. Is there any objection? There is objection.

While we’re on that matter, I want to make an apology to the House: I did not pick up the member’s spelling error in his question.

General Debate

General Debate

Hon CHRIS HIPKINS (Minister of Education): I move, That the House take note of miscellaneous business.

It is a great day to be part of this coalition Government, a Government that is positive, optimistic, and working together to provide strong and stable leadership for this country. I want to acknowledge particularly the Acting Prime Minister, the Rt Hon Winston Peters, and thank him for his leadership over the last six weeks. As I indicated earlier, he is a man of great wisdom and foresight, who has led this country—

Hon Grant Robertson: Seriously.

Hon CHRIS HIPKINS: —for the last 6 weeks in a seriously well manner. He speaks with great exactitude, and that is something that we are very proud of on this side of the House. I could understand, however, if the Acting Prime Minister was feeling a little deflated and disappointed by his experience over the last six weeks. He may well have been expecting to be put through his paces during the six weeks he was Acting Prime Minister, and instead he got Simon Bridges. So if he’s feeling a little disappointed, that’s fully understandable.

This is a Leader of the Opposition who was upstaged not once, not twice, not three times, but four times during his first National Party conference. First, he had John Key. You know you’re in trouble when they wheel out the last person, to remind you of how good they were. So he was upstaged by him, and then, of course, the great hope for the future: John Howard was the great hope for the future! Simon Bridges decided to demonstrate just how modern and progressive he is by wheeling out his hero, John Howard, to the National Party conference. Then, of course, he was upstaged by Mark Mitchell. “Mark who?” I think most of the country will be saying, but he was upstaged by Mark Mitchell during his conference, and then, of course, he was upstaged by the Prime Minister during that as well.

There is an insight into Simon Bridges’ modern and progressive thinking in some of the comments that he made. For example, he wanted to demonstrate how down he is with young people by talking about his online banking, which he lost the password to six months ago—so he still writes cheques. I didn’t even know that people were still issuing cheques, but Simon Bridges is still using them. Simon Bridges offers a Walkman solution in a smartphone world. But they did come up with what they think—they thought really hard and thought, “We need a bold new policy. I know! More teachers and smaller class sizes.” This was the bold new innovation from the party that tried to increase class sizes last time they were in Government.

As the Minister of Education, I thought, “This is good. This is going to be a good debate for us.” I look forward to getting into this debate, because I also value the role of teachers and want to see class sizes in New Zealand smaller. It’s a position I think all of the parties in Government have held for some time. So I looked up the details of the National Party’s policy announcement, because I was looking forward to the debate on this, and there weren’t any. I could not find any details.

So I listened to Simon Bridges’ interviews. I thought, “It’s all right. It will all become clear as to what it is that the National Party is promising.” So, first of all, what about how much it’s going to cost? How much would it cost for their policy? I thought that was a good place to start. This is an exact quote: “The hundreds ballpark, not billions. Whether that’s 300, 400 500, we’ve got to do the detailed work.” There’s nothing vague about this! There’s nothing vague, apparently, about the difference between $300 million, $400 million, and $500 million a year. The Minister of Finance, I think, would take a slightly different view on that particular assertion.

Then I wanted to know, well, how much smaller would the class sizes would actually be? How much smaller would the class sizes actually be? He isn’t sure—had to work that part out. But then he admitted in an interview that class sizes might not actually be any smaller.

So the grand gesture—the grand, big new idea from the National Party—had no detail. They don’t know how many more teachers they’re going to employ. They don’t know how big the change to class sizes will be, and they don’t know how much it’s going to cost.

What happened to the disciplined and focused National Party that used to be? It never would have happened under John Key, Bill English, and Steven Joyce—never would have happened—but this is the new Simon Bridges National Party. When they’re not being relentlessly negative, they come up with these vague ideas of something they might do one day in the future, but you’ll just have to trust them that they’re going to deliver on the promises they make. New Zealanders deserve better.

Hon NIKKI KAYE (National—Auckland Central): Can I also take a moment to acknowledge the Acting Prime Minister, because he has been incredibly successful in securing cash. The reason that the Minister of Education can’t actually promise class sizes is because Winston’s got the cash.

SPEAKER: Order!

Hon NIKKI KAYE: Winston got the regional—

SPEAKER: Order!

Hon NIKKI KAYE: It’s because the Acting Prime Minister got the cash. The Acting Prime Minister got the regional slush fund. The Acting Prime Minister has got hundreds of millions of dollars for diplomats, so the reason that the Minister of Education won’t answer the question as to whether there will be smaller class sizes is because he doesn’t have any money because Winston took the cash.

SPEAKER: Order! If the member breaches one more time—

Hon NIKKI KAYE: OK.

SPEAKER: —her speech will be terminated.

Hon NIKKI KAYE: The Acting Prime Minister has the cash.

Look, Chris Hipkins campaigned on a Valhalla, a heaven—a world of education where everything was free, where all modern buildings would be fixed, where 30,000 buildings would have huge investments, and where donations would be scrapped. He raised massive expectations, and what did he deliver? Nada—zero. Now the commitment around modern learning environments is a vision statement. When he went on Hilary Barry’s show and said “There will be no donations in the first Budget.”, it was there because the reality is that New Zealand First and the Greens are getting the cash in this Government, and it’s teachers who are missing out.

We know also what’s actually happening in the real world when Chris Hipkins says he’s doing a whole lot in education. The first cheque that he wrote out was to the students. That’s why we have parents who will be disrupted and we have teachers’ strikes—because $2.8 billion went to students, to buy their votes, instead of to teachers in New Zealand. To put that in perspective, it’s about double the primary teachers’ package. So the primary teachers’ package on the table that the Minister didn’t want to answer the questions on today—the reality is that he doesn’t want to walk in and tell those primary teachers that you could pay that package twice over because he’s spent it on students.

In the real world, this was a Minister—I don’t think there’s ever been a Labour education Minister that has seen the compulsory sector share of the vote in New Zealand decrease under his watch. Why has that happened? It’s happened because the money’s been spent on the students, or it’s been spent on regional slush funds.

We make no apologies. Under National, we absolutely prioritised education. You saw an $8 billion education vote go to $11 billion in the middle of the global financial crisis and with the Canterbury earthquakes, and we unashamedly are saying we now have other choices. National is being very clear: we do want to ensure that teachers are paid more and that we see reduced teacher-pupil ratios and smaller class sizes. We can do that because we have choices that we didn’t have before.

The reality is that when I look at what the Minister has to deliver, we know he can’t confirm there will be smaller class sizes. We know that there are strikes under way because there are more than 18 undelivered, broken promises. He didn’t fully cost his education promises. That’s why there’s a very clear contrast in this House between a party that focuses on the things that matter—resolving teacher shortages, reducing class sizes, paying teachers more—and a Government that came into power with false promises that are being broken and that basically is seeing cash go to his support partners to prop up that Government.

It is only National that can make credible promises in this area, because Chris Hipkins knows he’s run out of cash. He’s prioritised students instead of teachers, and it is National that is focused on the issues that matter in education.

Hon NANAIA MAHUTA (Minister for Māori Development): Kia orana e Te Vaa Tuatua. Look, I’m pleased to take a call because we have got the best Minister of Education, who has a vision for the future and who will make sure that the education system will work for every New Zealander—every child throughout the country. Do you know what? For far too long, over the last nine years under the previous administration, we were going down a track where it was all about testing and not about learning. We are scrapping national standards because we know—the information we were hearing back from our schools and our teachers—about all the time that is going into testing and not enough time going into ensuring that our young people in the classroom are learning.

But then we get this policy announcement about class sizes. Well, I remember that in around about 2014, a previous Minister of Education—one Hon Hekia Parata—talked about larger class sizes, not smaller class sizes. So it got me wondering: did Simon Bridges really mean smaller class sizes or smaller classrooms? It’s hard to tell—hard to tell. But I know that under an education system where the Hon Chris Hipkins is leading the way, we’re asking some serious questions about what is the future of education so that all New Zealanders thrive.

In fact, the whole issue around charter schools—and we stood on this issue going into the election. We didn’t believe that it was right to set up a different system of education where money could go to an organisation where you could privatise the benefits and not have the same types of expectations as we do have in the public education system: having qualified teachers, and a curriculum that you can rely on, that is universally taught, and that enables science, technology, engineering, and mathematics teaching, actually, but doesn’t create a tiered system where you could privatise the benefits. No, we needed a public education system that could work for all, and I’m really proud that not only did we campaign on this but we made good on our word to say that there will be a pathway for those schools who are prepared to operate under the public education system. There will be a bridge, and those schools will be approved.

The Minister’s made those decisions. He has led summits where educationists, teachers, and principals can all contribute to the future space of re-visioning an education system that works for all New Zealanders—all our kids—because right from early childhood education to tertiary, we need to do things very differently and to reorient the skills, the learning, and what is taught to our young people so that they can be ready for now and into the future. That’s the kind of education vision that will take this country forward. Why? Because we know that regional growth and development will matter.

Now, I want to come to the point about Māori participation in this Government. Yes, we are making a big thing about the way in which we contribute to this Government, because we know that the influence across every domain of well-being will be seen under this coalition Government, and we’re pleased about the contribution. In fact, just today, our Minister of Employment, the Hon Willie Jackson, has noted how, in some of the hardest spaces—vulnerable young people—we’ve seen a decrease in young Māori not engaged in education, employment, or training, and that’s so important because we need to find a way where young people can be more engaged with the employment outcomes in their areas. We are creating partnerships with the Mayors Taskforce for Jobs so that more of our young people can have a pathway and seek training and employment opportunities in their community without having necessarily to go to the largest centre.

In the Māori development space, I am really proud because housing is at the core of our development aspiration. When people have a secure place to live—a warm, healthy home—we know that the opportunities are so much greater. Under the mainframe of our housing aspiration, not only will we increase the State housing stock but we will continue to emphasise healthy rentals and also building papakāinga for our whānau so that they can have secure housing.

But wait, there’s more. We have a team of Māori within the Labour coalition Government who are contributing to a vision for education, for a better-functioning health system, for regional growth and development, and for developing Māori land so that it can contribute to the regional economy, to ensure that the very best of who we are as a nation, as a country, and how we represent ourselves in the export market highlights the very best of our identity as a people—our culture that we have here in New Zealand—so that New Zealand can continue to be seen as a country that punches well above its weight.

Dr PARMJEET PARMAR (National): I was so proud to see our leader, Simon Bridges, announce on the weekend at the National Party conference that we will bring partnership schools back. Yes, when we get elected in the next term, we will bring partnership schools back because we care about students getting the best possible opportunity to do well, especially Māori and Pasifika students. We know that Māori and Pasifika students are doing really well in partnership schools, and the member who just spoke before me, Nanaia Mahuta—yes, she is passionate about Māori employment; she should also get passionate about Māori education and support partnership schools.

I was also proud to see that, yes, we have focused on quality engagement in schools, quality of teaching, and quality teachers. Now, we are focused on smaller class sizes. That is to provide quality engagement between students and their teachers, which is very important. The Government has a very important role to play when it comes to education, because our children are our future, and, along with the Government, yes, of course teachers have their role to play, parents have their role to play, and students have their contribution to make as well.

I got a visit from a former resident of Mount Roskill a few years ago. I say “former” because she lived in Mount Roskill for several years, but because of a situation in her family, she needed housing help, and she has been put in an emergency house that is in South Auckland. This person has four children. She has now been in an emergency house for the last three months. So every morning what she does is bring her four children to Mount Roskill. Two children she drops at a primary school, then one at intermediate school, and the fourth one at one of the colleges in Mount Roskill. That’s the level of commitment I see from parents for their children when it comes to education.

When she was talking to me, she had tears in her eyes. This was because what she does after dropping her children at their respective schools is spend her time until 3 p.m. in her car because she can’t afford to go back to South Auckland and come back again at 3 o’clock to pick up her children. That is how hard it is for families, especially low-income families, under this Labour-led Government, and the regional fuel tax is hitting such families hard.

After picking up her four children, she takes them to their respective sports and extracurricular activities. By the time she gets home, it is 7 p.m. or 8 p.m. That is her life, and she cannot afford to drive back to her home before 3 o’clock because of the regional fuel tax.

I remember Minister Phil Twyford and Mayor Phil Goff saying that it’s equal to a coffee. The cost of this is going to be equal to a coffee? Yes, it might be easy for Minister Phil Twyford and easy for Mayor Phil Goff to grab coffees from cafes, but it’s not easy for ordinary people to grab coffees from cafes. Ordinary people go to cafes for coffee only on special occasions. That was the level of arrogance we saw from this Government, and also from Mayor Phil Goff. There is no consideration from this Government for low-income families.

A few weeks ago, I hosted a volunteers’ morning tea. This was to mark National Volunteer Week. There was an elderly gentleman there. He was so agitated. He said that for the first time, his daughter is saying that she is planning to move to Australia. This is the first time, he said, that they have been having this kind of conversation in their family. I can understand that because, as an immigrant myself, it’s not easy to leave your home country and start all over again, and I can understand the frustration that he had. This is because this Government doesn’t care about our children. This is because this Government doesn’t care about our future, but we, on this side—we do. And that’s why I am really proud of those announcements that we will bring back partnership schools, and also we will reduce class sizes.

Business confidence is important, because that is about the future that we can give to our children, and we have seen the same thing happening in the R & D sector. With the R & D tax credit policy, the only publicly available submission, which was from NZTech, expressed critical concerns. There were critical concerns from NZTech, which represents more than 800 organisations. What does that tell you? Thank you.

RINO TIRIKATENE (Labour—Te Tai Tonga): Tēnā koe. Kia orana, Mr Speaker. It is yet another great day to be part of this coalition Government with Labour and New Zealand First, with support from the Green Party. What a fantastic Government we are. I too want to add my congratulations to the Rt Hon Winston Peters, who’s been absolutely superb in his Acting Prime Minister role—the great hammerhead shark from Ngāti Wai. He has led from the front.

Contrast that, though, to the other side, and it’s not so impressive. I could rattle off a few little miniature ornamental fish which could characterise the Leader of the Opposition, because the National Opposition is drifting. They are lost in a sea of despair in Opposition. It’s almost sad to see how the once-mighty National Party are now taking on water. Their waka is very shaky. They are being battered by Tawhirimatea and they are taking on water, and what is their kaihautū leader doing? He’s doing nothing. He has no new ideas—no new ideas—and is just flashing around his cheque book. He does not know how to lead an Opposition, and it is very sad, but I do have some words of advice for Mr Bridges.

Kieran McAnulty: Stay! Please stay!

RINO TIRIKATENE: Yes, stay! Thank you, Mr McAnulty. But also my advice to Mr Bridges is “When you least expect it, expect it.”, because that is where Judith “Crusher” Collins is coming in. Judith “Crusher” Collins is out for his job—

SPEAKER: Order! Order! I warned members on this side to address people by their proper names, not colloquially.

RINO TIRIKATENE: Thank you, sir. We know that there’s a mutiny brewing in the ranks. There is a mutiny with the Hon Judith Collins, and we know who is in cahoots with her. We know “Poison Ivy”, the member for North Shore, Maggie Barry—oh. In advance, Mr Speaker, I withdraw and apologise. We know that there is a mutiny afoot. We know there is disarray in the ranks, and it’s very sad to see, but that’s what you get with an Opposition that is lost in a sea of despair, unlike this side, where we are a superfine-tuned, MMP, magnificent maritime waka of great America’s Cup - winning potential.

We are charging ahead—charging ahead. We have the strongest contingent of Māori MPs. We are putting Kiwi homebuyers before foreign buyers, we are building 100,000 new homes over 10 years, and we are putting more rangatahi into tertiary education. Just in my own patch of Otago Polytechnic, there is a 57 percent increase in enrolment, all down to the policies of this Government. It doesn’t stop there—we are racing ahead, as I said. Our Families Package is delivering millions of dollars’ worth of support to hard-working Māori parents, and this Government is putting its weight behind Te Reo Māori with our Minister of Māori Development, the Hon Nanaia Mahuta.

It’s sad. We know that under the last National Government, they were record-breakers. Under the last National Government—nine years of that Government—we became world leaders in homelessness, and that is shameful as a country. The unemployment rate for Māori doubled—it was double the rate across non-Māori under that last National Government. But I have good news. The figures just came out today: Māori unemployment is the lowest it’s ever been. More Māori are in work. That is to be celebrated, and I acknowledge the great work that is being done by our Ministers in racing our waka, racing ahead. We want everyone on board our waka because we want to keep everyone afoot, unlike the terribly lost and Gilligan’s Island - like lot over on the opposite side.

So we are racing ahead. We’ve got so much more to do. I’m really looking forward to playing my part within our coalition Government to achieve our agenda and keep on delivering for New Zealanders, because they are very proud of the way that we are working and uplifting everyone. Kia ora tātou.

CHRIS PENK (National—Helensville): Mr Speaker, thank you for the opportunity to stand and rise and take a call in this, the general debate. Like my colleagues, I would like to focus on the theme of education—in particular, the theme of broken promises. We heard at the time of the Budget that in relation to education, there hadn’t been broken promises so much as promises that had not yet been delivered. Promises that had not been delivered, but which, no doubt, in due course, will be at some stage—“The cheque’s in the post.”

We’ve heard, for example, about the subject of school donations. The Labour Party, among others now forming the Government, said that donations would not need to be paid by parents of students in relation to school, but it’s a broken promise, or, rather, a promise not yet delivered. The only relevance that donations have to Labour Party policy is that the union pays them to the Labour Party and they make the policy based on that.

SPEAKER: Order!

Hon Chris Hipkins: I raise a point of order, Mr Speaker. That’s a serious breach of Parliament’s rules—what the member has said. It’s not a trifling one. It’s actually a very serious allegation the member’s just made.

SPEAKER: It’s a new member and I think he won’t do it again.

CHRIS PENK: Mr Speaker, certainly I didn’t intend to—

SPEAKER: No, no. We’re going on now. We don’t go back when we do that.

CHRIS PENK: Understood. In relation to broken promises, it’s clear that the political will has been replaced by the ministerial “won’t”.

Ladies and gentlemen, the people of New Zealand really want the Government to focus on the things that actually matter to them. In education, ladies and gentlemen, this actually means doing the things that they said they would do: making good on the promises that they made, instead of breaking them. Getting the basics right means, for example—to choose a topic off the top of my head—class sizes. So it’s not good enough merely to talk about them or to talk about them in detail that’s been boasted about as a matter of policy. How about actually doing the things that the Government has said that they will do? Talk is cheap, and it’s only words that we’ve had so far.

In relation to class sizes, on a local parochial note, I note that in the north-west of Auckland, in the electorate of Helensville, class sizes are increasing, whereby schools are fit to burst. This has been an ongoing problem for many years, and it will continue for many years in the future if the Government does not listen to the pleas of the north-west to actually do something about investing in schools in that part of the world, matching the population growth.

Various Opposition candidates, as they then were, who are now on the Government side made all kinds of statements along those lines in the education campaign—excuse me, in the election campaign. That was a Freudian slip, because so much did focus on the subject of education. So much was said before the election and so little was done after the election that I challenge the Government—in particular, the Minister of Education—to make good on some of those promises and, indeed, to back up some of that rhetoric, to turn the political will into ministerial will, and to turn the talk into action and actually do something about that.

In particular—Mr Speaker, if you’ll indulge me one more moment on the subject of the local needs—I would encourage the Government to consider the fact that it takes quite some time to build, plan, and implement new schools. That work needs to be done now by the current Government, and they should not simply wait until the population increases such that they say “Well, now it’s time to start the process.”, by which time it will be too late. I would encourage the Government—and, again, as I say, the Minister himself, in particular—to take seriously the needs of that community as I have been relaying them, and, indeed, that community has been presenting to both sides of the House over many years to actually get on and do these things. These are the basics. These are the things that they must get right. These are the things, indeed, that they have promised and that they must start to deliver upon.

Finally, we hear a lot on the subject of payment of teacher’s salaries. Of course, it goes without saying—or, rather, it might go without saying, but I’ll say it for the purpose of avoiding any doubt—that all people in this country recognise that teachers do a wonderful job for our children and, therefore, for us as a society. We must support them but we must also, in thinking about paying them more, actually consider ways that the might best be achieved.

Now one of these ways is to allow a flexible education system, whereby if a school has the resources and is able to make those teacher payments higher than they would otherwise be, then that is something that should be embraced. In the case of charter schools—or partnership schools, as they are correctly known—this is something that’s already provided for. This is something that’s already available. This is something that’s being taken away. So the Government, far from delivering on its actual promise to make things better, is in fact, in that respect and, indeed, in many others, making things much worse.

SPEAKER: Before I call Ron Mark, I say to Jami-Lee Ross—the member could settle down, I think.

Hon RON MARK (Minister of Defence): Thank you, Mr Speaker. I want to start by congratulating the Rt Hon Winston Peters on his leadership over the last six weeks, a task that I know he was happy to take on board, and he’s completed it with the distinction that we always knew he would. It sort of rides on the back of his sterling performance when he was the Deputy Prime Minister and Treasurer between 1996 and 1998, when he became renowned internationally as the best Foreign Minister that New Zealand had ever had, and between 2005 and 2008—a reputation which has only been enhanced now by his return to that portfolio. But I know that he too, like the rest of the New Zealand First team and the coalition Government, is looking forward to welcoming back the Prime Minister because, actually, we’ve missed her. It’ll be good to have her back with the team, and also it’ll be good to be able to see the Rt Hon Winston Peters get back into that area of the portfolio that he loves and that he does so well at, which is foreign affairs.

I have to say, if there’s one thing about the National Party, it is that they are predictable. When you have an Opposition that is predictable, it’s like beating up someone who’s only got one arm. It’s like driving a Ferrari and racing someone who’s driving an 850cc Austin A30. Watching the Hon Simon Bridges doing battle and duelling with the Rt Hon Winston Peters is like watching a chihuahua that won’t let go of the bottom of your trousers. It’s like watching one of those rather bizarre young sheepdogs when you’re out in the hills and you’re watching a shepherd working the dogs, and there’s one young one that’s just all over the place. And what does he have to do? He has to hook its collar to the most experienced dog that he has so that when he whistles, the experienced dog leads and the little one learns and trails along until he finally gets it into its head.

In watching his performance, I understand why Mr Simon Bridges is worried about business confidence, because business is worried about him. If they’re looking for the reason for their flagging confidence, it’s that when they look at the Opposition benches, they say to themselves, “My God, these are the people that we gave all of that money to to win the election, and they’ve put this young man in charge and he’s simply not up to it.” Mr Mark Mitchell’s sitting there smiling. We know why Mr Mitchell is smiling: because he’s another one of those contenders who’s delighting at Simon Bridges’ failure to get any gravitas to win hearts and minds.

Most of the people I talk to in the Wairarapa who are National Party people—13,000 of them—agree on two points. They agree on two points. They agree that Alastair Scott is the worst representative they’ve ever, ever had ever, and, two, they’re saying that Mr Bridges isn’t cutting it, and they’re wondering how long the National Party caucus is going to allow him to continue to make them look silly.

See, there are two great myths out there in the ether. One is the myth that the National Party Government is the best manager of the economy. That is an absolute—well, the members protest, so let me give one little example. If the National Party was a great manager of economy, if they were efficient, if they were productive, if they were prudent, and if they were economic and effective, then please explain the cost-effectiveness of their election campaign. You see, the National Party spent $3.97 per vote compared to New Zealand First, who spent $2.92 per vote. So don’t go preaching to New Zealand First about fiscal prudence and economic management, because the National Party actually is a failure in that area.

Look at the mythical surpluses and this huge social deficit and, by the way, the other myth—the other myth is that the National Party is the best steward of the Defence Force. Well, that is wrong, and Mr Mitchell should stand up and apologise to the country for doing absolutely nothing—absolutely nothing. He wails and he whines and he worries, but I’ve not had one question from Mr Mitchell on the strategic defence policy, not one on the P-8 decision, and not one on defence since we announced that policy. This Government is hitting the hard questions and providing the answers.

CHRIS BISHOP (National—Hutt South): The House was witness this afternoon to an extraordinary event, where the Minister of Internal Affairs, Tracey Martin, came to the House and claimed that she had just been informed that Pauline Kingi had resigned from the position of chair of the independent inquiry into the appointment process of Mr Wally Haumaha as Deputy Commissioner of Police. I want to set out for the House the process—frankly, the debacle of a process—that has led to the point where, members, it appears we may need an independent inquiry into the appointment of Pauline Kingi, who was herself meant to be conducting an independent inquiry into the appointment process—

Nicola Willis: What a shambles.

CHRIS BISHOP: —behind Mr Wally Haumaha. My colleague Nicola Willis says “What a shambles.” and, indeed, that is the case.

Mr Haumaha was appointed on 28 May this year. The interesting thing about that appointment process was that the vacancy for deputy commissioner was advertised on 7 May and closed on 15 May—just eight days—and then a very quick appointment process was done. After that, later on, the news broke in the New Zealand Herald by Phil Kitchin and Jared Savage about comments made by Mr Haumaha to the Operation Austin inquiry in 2004. Many members in the House expressed some disturbance with these remarks. Immediately—the next day, 29 June—the Acting Prime Minister, Winston Peters, ordered that an inquiry be undertaken, and a few days later, at the post-Cabinet press conference, Tracey Martin was announced as being the Minister responsible for that inquiry as per the Inquiries Act.

Here we come to the first problem, which is that it is inappropriate for Tracey Martin, as a New Zealand First Minister, to be the lead Minister on an inquiry into someone who has ties to New Zealand First. I specifically do not say that he was a candidate, because Winston Peters has taken strenuous objection to the idea that he was the candidate for Rotorua in 2005, but I think it is fair to say that Mr Haumaha has ties to New Zealand First because he was certainly announced as the candidate in the Rotorua Daily Post.

Then, finally, after 3½ weeks, we had the terms of reference into the inquiry released. It is interesting that it took 3½ weeks to find someone to conduct the inquiry and 3½ weeks to finalise the terms of reference. Here we come to problem two. The terms of reference are manifestly inadequate. They do not deal with the question of what Mike Bush knew about Mr Haumaha’s remarks. Did he, in fact, know about the remarks that Mr Haumaha made to the Operation Austin inquiry? Secondly, what did Stuart Nash know? Did Mike Bush tell Stuart Nash about those remarks? More importantly, did he tell the Prime Minister about those remarks, because this is a statutory appointment? It’s the Prime Minister and Stuart Nash and Cabinet that sign off on this. Most importantly—and this question hangs over things still to this day—would Cabinet have made a different decision had they known about those remarks that Mr Haumaha made? So that’s the second problem.

Then we come to the independent inquiry and the news that broke earlier this week about Pauline Kingi and her connection to Wally Haumaha. I want to make it clear that this is not to besmirch the integrity of Pauline Kingi. I have never met Pauline Kingi, but it is manifestly clear from the public record that she has endorsed him 23 times. All of Wally Haumaha’s characteristics and attributes listed on LinkedIn—every single one of them—have been endorsed by Pauline Kingi. In return, Wally Haumaha has endorsed Pauline Kingi. There is a relationship, and that makes her inappropriate to lead an inquiry. It is odd that Tracey Martin defended her so robustly in the Parliament yesterday, and it is right and proper that Pauline Kingi realises that her appointment is inappropriate.

The Government must start again, realise the significance of this appointment and the inappropriateness of their previous appointee, start again, and find someone genuinely independent, and it must also ask itself how it got itself into a situation where, after 3½ weeks, Department of Internal Affairs staffers are seemingly unable to use Google to find the connections between the subject of the inquiry and the inquirer herself.

TAMATI COFFEY (Labour—Waiariki): Tēnā koe te Māngai o tēnei Whare kōrero, ki a rātou kua wehe atu ki te pō, puta noa i te motu, haere, haere, haere atu rā. I te 31 tau ki muri i whakamanahia te Pire Reo Māori, arā ko te Māori Language Act 1987. Ā ko te hua o tēnei pire, i kīia he mana tō Te Reo Māori, he mana anō hoki tō te tangata e kōrero ana i tēnei reo ātaahua rawa atu. I whakamanahia tēnei reo i raro i te maru o te kāwanatanga o tērā wā. Mai rā anō kua whakapau werawera te tini me te mano ki te whakarauora i tō tātou nei reo, nō reira rau rangatira mā tēnei te mihi maioha ki a koutou.

[Greetings to the Speaker of this House of debate, to those who have departed to the place of the spirits, throughout the country, go, go, rest in peace. Thirty-one years ago, the Māori Language Bill was passed—namely the Māori Language Act 1987. The result of this bill is that the Māori language has legal effect, and that the people who speak this incredibly beautiful language also have status. This language was recognised under the auspices of the Government of that time. Ever since, many people have expended much effort to revive our language; therefore, my esteemed leaders, this is an appreciative acknowledgment of you all.]

Thirty-one years ago, Māori language became an official language of New Zealand. Although it was 31 years ago, we are still pushing for a very official status of our reo. It doesn’t come easily, but we are champions for it now, and it’s time—31 years later—for us to remember those whose shoulders we stand on, as they too were pioneers in this field. It’s at a time like this that I want to cast minds back to the time of Koro Wētere’s tangihanga and how far we’ve come because of the moves that he made here in this very House.

Koro Wētere answered in Te Reo Māori in this House of Representatives and he was ruled out of order. Now, today, Te Reo Māori is not only spoken but also sung right here in the debating chamber. At times, it’s also expected to be sung too. I wait ambitiously for the time to arrive—maybe not in my lifetime, but some time in the future—when the majority of members of Parliament in this House are apt enough to be able to stand and speak in both languages: the language of our tupuna, and also English as well.

We acknowledge those people who have gone before us. We are not complacent, however. We owe it to those champions of Te Reo Māori from those days but also to those ones today who continue to grow Te Reo Māori and also invest in our nation’s reo journey. It’s with that said that I would like to absolutely shout about the moves that this Government is committed to in terms of making Te Reo Māori something that we can integrate into our daily lives, starting with early learning and starting with our schools. That goal has been set by this Government as being 2025.

Having Te Reo Māori interspersed into our schools and early learning and to our primary schools—I’ve canvassed this issue widely throughout my electorate, and when we talked about it, it was often talked about as in compulsory Te Reo Māori in schools. I was pulled up by one of the kuia at one of the marae I went to out in the backblocks of Te Waimana. She said to me, “Stop calling it compulsory. Our language is a taonga, it’s to be respected. We never want to think that we’re shoving it down anybody’s throat. As we move forward as a country, I’d like to think that you had a bit more respect for it, and, actually, just put it into our schools. Treasure it for the treasure that it absolutely is.”

Based on that, this year’s Budget was the start of the Government’s work towards this. We are giving $16 million over four years to two reo Māori initiatives, with the first one being Te Ahu o Te Reo Māori, which will support teachers to deliver Te Reo Māori in the classrooms. It will support all teachers: those already teaching Te Reo and those who have the potential but may not have the confidence right now.

The aim of the second initiative, which is Te Kawa Matakura, is to develop a programme and qualification for secondary students who exhibit excellence in Te Ao Māori, and, more specifically, mātauranga Māori—Te Reo me ōna tikanga.

Recently, I heard our Minister—Minister Davis—talking about a bilingual Aotearoa. It reminded me of a couple of kaimahi that I’ve got, and I will spend the next 50 seconds talking about them. One of them is very fluent in Te Reo Māori—me ōna tikanga, and I got great pleasure when at a recent marae hui, the koroua asked me who she was. I managed to say, “She is Ngāti Pākehā.” She’s somebody that goes to hui regularly and goes to tangihanga. She’s immersed herself in Te Ao Māori, and ahakoa he Pākehā tana toto, he ngākau Māori tāna.

[She’s immersed herself in the Māori world, and although her blood is Pākehā, her heart is Māori.]

So she’s one person down one end of the spectrum.

The other one that I’d like to talk to you about is my kaimahi back in Rotorua who has just started on her Te Reo Māori journey. She looks forward to every Monday because she gets to go to her Te Reo Māori class, which she’s put off for so long. It is a treasure, and I will always be a champion for it. Kia ora.

NICOLA WILLIS (National): Tēnā koe, Mr Speaker. I want to confess. Some days I temporarily put aside my parliamentary duties so I can drop my kids off at school and pick them up. It’s a juggle. I don’t always do it elegantly. With four to squeeze in the back seat, it’s true that occasionally one drifts from the group. But when I do this dropping off at school and picking up from school, I have the opportunity to chat with teachers and to chat with mums and dads about what matters to them, and my kids love it.

Let me tell you that a fortnight from now, those very same mums and dads will be scrambling. They will be scrambling because for the first time since 1994, teachers will be on strike. Those parents will be scrambling because their kids will be having a day off school. They’ll be scrambling for childcare. Some will have to take time off work. Others will have to pull a favour from grandma. Others will have to spend the money that was meant for new shoes on a babysitter. And those parents will be stressed out, but they won’t blame teachers for their stress—they appreciate the hard work that teachers do for their children and the efforts they put in. I’ll tell you who they’ll blame for their predicament. They will blame this Labour Government. They will blame this Labour Government for not sorting out the pay arrangements for teachers.

They expect this Government to have its priorities straight, and they are very sceptical when Labour says there’s no money for teachers. And sceptical they should be, because we just saw this very same Government shed billions on free fees for tertiary students and, as Nikki Kaye pointed out today, that sum alone would pay for the teacher pay claim twice over. They have watched this Government shed money on more diplomats and a play fund for its coalition partner. So we can forgive the parents of New Zealand when they say, “Why hasn’t this Government got its priorities straight and sorted out this teacher pay claim?”

The parents I speak to don’t actually ask for much. They didn’t ask for a grand education hui, bringing together every man and his dog—they didn’t ask for that. Their priorities are simple. What they say to the National MPs who listen to them—to people like me—is that they want their kids to go to school without teachers striking. They want to see teachers paid more. They want teachers to be treated as the respected professionals they are. They’d like smaller class sizes so that their son or daughter can get just a little bit more attention. They want smaller class sizes so that their child’s teacher has a more manageable workload and can do their best teaching every day. They would like to be able to send their child to a day care or a kindy without worrying about the quality of the care that they will get. They’d like to know the Government is investing in the Education Review Office so it can do a better job of checking centres are following the rules and caring properly for the well-being of children.

To the mums and dads of New Zealand, I say that National is listening. We understand your priorities, and they will be our priorities in our education policy, because we know that you’re not asking for what Chris Hipkins is serving. You’re not asking for a grand education vision statement to unite them all.

Parents are not asking for multiple reviews with reference groups, advisory committees, and focus groups. No, they are not. But is Mr Hipkins listening? It may come as a surprise to him, but most parents don’t want to go to Auckland or Christchurch for the day for a hui. They don’t want to have to get a babysitter so that they can go to a seminar on the big questions in NCEA. They want to get on with parenting, and they want their simple priorities listened to.

Now, while I’m on my feet, it’s important that I take this opportunity to address the issue of Victoria University. Mr Hipkins went there. I went there. I’m a proud alumnus, and I think many members of this House are. I value that university for the experiences it gave me, for the husband I found there, and for the debating club I debated for. That name “Victoria University of Wellington” resonates for me and it resonates for thousands of students and former students and Wellingtonians, and yet that university is proposing to bin that name, and to throw away the 120 years of history, of heritage, that goes with that name, because some branding experts have said that they’ve got a better idea.

Well, I put it on the record today that the Minister of Education must reject that bid. When the decision comes to him to sign off on a change to the name of Victoria University, he must be on the side of valuing the past and the heritage it represents and maintaining the good name of Vic—Victoria University of Wellington.

KIRITAPU ALLAN (Labour): Tēnā koe, e te Māngai, māku e tū ana ki te tautoko i te wero, te kōrero a taku tungāne a Tamati i tēnei ahiahi. I tēnei rā he tino whaka—

[Greetings, Mr Speaker, I stand to support the challenge, the speech of my brother Tamati this afternoon. On this day a very—]

SPEAKER: Tamati—Tamati Coffey.

KIRITAPU ALLAN: Tamati Coffey, taku tino hoa, te mema o Paremata mō te rohe o Waiariki, he tangata tino kaha mō tō tātou nei iwi Māori o Te Waiariki. Heoi anō, he rā tino whakahirahira ki a mātou ngā iwi Māori, otirā, a tātou ngā iwi o Aotearoa mō tēnei tau e 31 te whakamana o te pire, ki te whakamana a tō tātou nei reo. Nō reira ki a koe e te rangatira, otirā kei a koe e hoa, tēnei te mihi.

[Tamati Coffey, a great friend, the member of Parliament for the Waiariki electorate, a person of much strength for our Māori people from Te Waiariki. And so this is a most important day for us the Māori people; in fact, for all peoples of New Zealand for this year is 31 years since the passing of the bill to make our language official. Therefore, to you my esteemed leader, to you my friend, I acknowledge you.]

It is an auspicious day, but before I get to the fantastic accomplishments of our history on this day, 1 August, I just quickly want to cast my attention across the aisle, because we’ve heard some shambolic speeches this afternoon, and I think you only get that kind of tone of woe and sorrow and confusion and frustration in a party that is still wallowing over a decision that happened about 10 months ago, when they failed to make this side of the House. They failed to secure the benches of power. They’ve done that because they forgot that in an MMP environment, you got to make some mates.

But they’ve come off the back of their wee conference that they had in the weekend, when they wheeled out some people from 2008. Most people in the modern generation have no clue who they are. The poor old Leader of the Opposition over there—and I hear those knives sharpening. I know that they’re coming for his back. “Don’t worry. We’re running a campaign.”—hashtag the Hon Simon Bridges.

But look, his big platform was education and so in they come in today. They charge because it’s the general debate. They come in charging and, gosh, they sent in their big hitters. Gee, they sent in their big hitters: Parmjeet Parmar, then they turned to Chris Penk. Gee, by the time they got to Christopher Bishop, they couldn’t be bothered. They flagged it, they changed tack, and even they couldn’t find the steam to keep going to bolster their own party leader’s bastion—plank—which was bringing back the Labour Party’s 2014 education policy.

But enough about them, because today is an auspicious day: 31 years ago in this very House, tō tātou nei reo rangatira, Te Reo Māori [our esteemed language, Te Reo Māori] was made an official language in this House. One year ago, Jacinda Ardern took over the reins, the helm, of our party, and today we get to farewell the Rt Hon Winston Peters from the fantastic job that he has done at the helm of our country for the past six weeks.

Look, last night I had to sit in this House and listen to—like I said, they’re in a bit of a time of sorrow, so we’ve got to forgive them for that. But our comrades across the aisle, they were so sad and down and out, and when it came to the appropriation debate about Vote Māori, all they could do was sledge my colleagues over this side of the House. So it’s incumbent upon me on this day, and I want to acknowledge my colleagues who sit in the Māori seats. I want to start with the Hon Kelvin Davis. On this day last year, he too stepped into the role as deputy leader of our party. He has been a champion for the people of Te Tai Tokerau. He sits there are the helm, he is third in charge of our country, and we are proud of the work that he’s doing in transforming the corrections system. We are proud of his work that he’s doing at the helm of Crown-Māori relations.

In Tāmaki Makaurau, the Hon Peeni Henare. The eloquence that that man has in tō tātou nei reo rangatira [our esteemed language] and in English, and with a passion for our kids, our youth, and the work he’s doing in Whānau Ora. I want to commend him.

Of course, we turn to our queen, the Hon Nanaia Mahuta—the first ever wahine Māori to hold the role of Minister for Māori Development. It is a privilege to stand behind her right now. I know she’ll be going red-pink in the cheek. The first woman to wear a moko kauae in this House—a champion—and there are so many others. Nō reira, I love my team and I want to thank you for your time, and thank our team for being blooming awesome.

DAN BIDOIS (National—Northcote): I can see the Labour Party brought out the big guns today in Kiri Allan, Ron Mark, and Rino Tirikatene.

This Government overpromised in education and it has failed to deliver. They talked a big game about caring for teachers and for the betterment of our children, but their actions do not reflect their aspirations or their rhetoric. They talked about improving teachers’ pay, reducing class sizes, and addressing teacher skill shortages and workload management, but the feedback from the people in Northcote and the schools that I’ve heard from is that they’ve done nothing, zilch, diddly-squat—next to diddly-squat. The results are that I fear for our future. I fear that our kids will not reach their potential, that our education system will fall behind, and that we will not, ultimately, have an economy fit for purpose and increasing the standards of living that we all want for our country.

The National Party backs these communities and our teachers and our students. We’re an aspirational party who believes in the power of education to transform lives. If your kid can’t succeed in the mainstream education system, we back community approaches where your child can and will succeed, and that is what partnership schools are all about.

Let me tell you about partnership schools. We’ve got 10 or 11, and they have a unique approach where they’re bulk funded and there’s flexibility in the curriculum and the way it’s delivered. We’ve got one just outside my electorate called Vanguard Military School, but most recently, on Monday, I was privileged to attend the South Auckland Middle School with my leader and, hopefully, Prime Minister in 2020, Simon Bridges, and the Hon Nikki Kaye. Alwyn and the team out in this middle school are doing fantastic things and getting great outcomes for over 150 students in areas like math, education, and science and technology, and these kids were not achieving well in mainstream education.

There is demand for schools like these, where the roll of this particular school, in particular, is well oversubscribed. Parents want to send their kids to these schools.

These are the kinds of schools that we want to roll out to improve the engagement of our Māori and Pasifika and those who have not succeeded in education. One of those is me. I left school at 15 years of age with no qualifications—nothing but a sense of my own destiny and a belief that my own life would be a hell of a lot better than in mainstream education. Had one of these schools been around, maybe I would have stayed in longer. Maybe I would have been able to go on further in my life than what I have done.

So why is this Government continuing to bash partnership schools, and not continuing with these? It can’t be because they’re not achieving great things for our kids, because we’ve proven that they are. It can’t be for cost reasons, because they’re actually a hell of a lot cheaper than for kids in the mainstream. There can be only one reason: ideology. Labour don’t like it when the State isn’t providing education. They don’t believe in communities and private enterprise, who know their area and their kids a hell of a lot better than this Government bureaucracy can ever do. In fact, Labour thinks it knows the best pathway to success, and that is why they’re getting rid of charter schools.

I just want to say that if re-elected in 2020, our leader, Simon Bridges, is committed to reinstating the partnership model. Unlike this Government, we back communities and these kids, and we’re not prepared to let these kids and their potential be squandered.

National is committed to ensuring that every Kiwi kid has the opportunity to succeed and to do their very best in life. That is why I am very much a proud member of the National Party, and why we’re working hard to bring partnership models back. Thank you.

The debate having concluded, the motion lapsed.

Estimates Debate

In Committee

Debate resumed from 31 July.

Social Services and Community Sector (continued)

CHAIRPERSON (Adrian Rurawhe): Members, we come first to the Estimates debate. There are 23 minutes remaining in the debate. When we were last considering the bill, the committee was debating the social services and community sector. The question is that Vote Arts, Culture and Heritage, Vote Building and Housing, Vote Oranga Tamariki, Vote Pacific Peoples, Vote Social Development, Vote Social Housing, Vote Sport and Recreation, and Vote Women stand part of the schedule.

DAN BIDOIS (National—Northcote): Thank you, Mr Chair. It’s a great privilege to be back here, and I’m going to continue on this theme of education, because what we expressed in the Social Services and Community Committee—

Chlöe Swarbrick: This isn’t the education debate.

DAN BIDOIS: —what we expressed in the—let me finish, please—what we expressed in the select committee was that we haven’t thought around the investment in schools around these intensified housing developments. Now, I want to talk about one development in particular in my area, called the Northcote Development. We’ve got some KiwiBuild homes—we’ve got about 400 KiwiBuild homes—going on in this area, but unfortunately there’s no planning for schools around this intensification area. So what we’ve got is that the Government’s made an announcement on Onepoto College in my electorate, which is fantastic news, but unfortunately that investment in itself is not going to be enough for the extra uplift in residents that are coming into the intensification area because of these developments.

So we expressed in the Estimates discussion with the Minister that they need to actually put some pressure on Auckland Council to make sure that this council is taking into account the investment in schooling that is required in these housing developments, and we urge the Minister to make sure that Auckland Council reviews its unitary plan in order to make sure that these housing developments go ahead. So that is, in a nutshell, what we’ve talked about with respect to education. It dovetails quite nicely into our previous debate, where, quite frankly, this Government has failed to achieve in education. Thank you.

Hon PAUL GOLDSMITH (National): Thank you, Mr Chair. It’s my pleasure to take a call as we look at the arts, culture, and heritage Estimates for this Budget. Now, they came in with a hiss and a roar, with Jacinda Ardern as Prime Minister and Minister for Arts, Culture and Heritage, and we had high expectations that she would channel vast resources into this area. It turns out that the primary investment in this area in the Budget is an extra $25 million for the bureaucrats at the Ministry for Culture and Heritage. So that’s how they see things: a bit more money for the ministry in order to do their work in Wellington, but not much in terms of the broader arts community, which, in many ways, continues to struggle.

The National Party has been a strong, strong defender of arts, culture, and heritage in this country. It was the National Party that brought about many of the great cultural institutions over the decades; I think of the New Zealand Symphony Orchestra and many others. Primarily, I see the role of Government as being about improving the living standards of New Zealanders. That’s why we focus so heavily on the economy and producing jobs and growth for New Zealanders. But an equally important part of what Government is about, in my view, is preserving and enhancing what is special about this country—about New Zealand—that we’re all so lucky to be born into and to share.

People often think of the quality of our environment as something special to be preserved, and indeed it is. I also think the traditions that we have around low corruption and the rule of law and high trust in our society are equally important things that we should preserve. We were talking to that—about the Auditor-General—this morning in our select committee. But also, I think one of those most precious things is the unique cultural and historical and artistic body of work and communities that we’ve built up in this country. In this remote part of the world, we have developed our own artistic traditions, whether it’s in poetry, with James K Baxter, or in the arts—in so many areas: in music and in film. All these areas are something that we should be very proud of, and are proud of. It’s important that we continue to make an investment in the arts and that we see that we get good results from it.

But it is worth pointing out, of course, that many of the areas of the arts are in themselves successful business areas that create real wealth for New Zealand. I had a lot to do with them as Minister of Commerce and Consumer Affairs in the intellectual property area, dealing with WeCreate, and that organisation is trying to build up New Zealanders’ understanding of the importance of intellectual property and the impact that it has—the way that those groups, whether it’s in film or gaming or design, as well as the many musicians that we have exporting all around the world, are successful in how they’re doing it. What an important part of the economy the creative sector is.

I suppose the only point is that they, like everybody else, are affected by the very great uncertainty that this Government is bringing into the operation of the New Zealand economy. Certainly, there is so much uncertainty around basic tax policy, around industrial relations, and I’m worried about the impact that that will have in the industrial relations setting, particularly in some of the film opportunities coming up for New Zealand. I’m worried about immigration and the sheer difficulty of getting access to workers in so many areas, and I think of the fashion industry at the moment, which is going so well in so many areas but is still struggling to find workers.

What they’ve done in foreign investment is, basically, tell foreigners to clear off and that they’re not welcome. I think of the contribution of some people who have come to New Zealand—I think of Julian Robertson, for example; he came from the US, bought land in New Zealand, and made a massive contribution to the arts in New Zealand, particularly by bequeathing a number of wonderful Picassos to the Auckland Art Gallery. Those sorts of people are being told to shove off—“We don’t want you coming to New Zealand.”—and it’s a very negative message, and one that I think this Government should reconsider because it has large flow-on effects right throughout the community.

Mentioning the Auckland Art Gallery, I would have thought that institution, which is being starved by Mayor Phil Goff and the Auckland Council and is a jewel in the crown of the New Zealand arts community, is something that this Government would do well to support better. Thank you very much.

MARAMA DAVIDSON (Co-Leader—Green): Tēna kotou kātoatoa ‘ī teia Whare ‘ē te au mēma Pāramani, tēna kotou kātoatoa.

[Greetings to all members of Parliament in this House, greetings to you all.]

I couldn’t find my notes but I happened to be able to remember that Cook Islands greeting celebrating our Cook Islands Language Week.

The situation of housing was left in a right mess by the previous National Government. That was not OK—that was not OK—and it harmed people, it harmed families, it harmed children, it harmed our kaumātua and pakeke. It is going to be harmful for a long time for many people—that that was left in a mess—and that is not OK. I am proud that, on this side of the Chamber, we can at least even say the words “housing crisis”, because if you do not admit upfront and meet head-on what the actual problem is, then you will not be committed to solving the issues at hand. Certainly, we need big-picture housing reform.

I am going to be outlining why I am pleased with the positive steps that have been taken by Minister Phil Twyford in the Vote Estimates already, just in this time—in this short time—that we have been a part of this MMP Government. Just yesterday in my office—what I’d like to do is give the story of those real people who have been harmed by this housing crisis, and then go through the parts of the housing Vote budget that I am really pleased about—I had a young mum and her young child on my couch, here on the Parliament precinct. She has written about the challenges of just finding a home—that’s all she wants; it’s pretty simple, but it’s pretty fundamental. Just wanting to find a home for her and her young child. Just wanting to do what pretty much every parent wants to do: provide their whānau with—being able to put their roots down in a community, be able to establish connections and relationships in that community and become part of it and contribute to it. She has been facing discrimination as a single, young, Māori mum. She has been having to face unaffordable homes to rent that are in a pretty shoddy condition too.

This is not even anywhere near the extreme end of what is happening for people, for New Zealanders. Discrimination, lack of affordable housing in good condition—it has an impact on people’s everyday lives. So I was pleased, of course, and not too surprised to see the Minister Phil Twyford confirm that we will be restoring the strong public housing sector that the previous Government neglected, and that played a major role in shoving us down the road in the situation of housing. I was pleased and not surprised to see that Housing New Zealand will be taking a lead in building warm, dry homes, because our homes are also making people sick, every year, sending children to hospital for illnesses that are caused and directly related to poor housing in this country in 2018. It harmed people and is still harming people. I was pleased to see a massive bump for the Housing First approach, which has been shown to be effective in ending homelessness. And I will be even prouder when we can continue to make sure, given that Māori and Pasifika are way over-represented in homelessness, that those Housing First providers will maintain an appropriate response for the very people who are disproportionately represented on our streets and in poor housing conditions.

I wanted to use this time to give a massive shout-out to the very community providers, all through the country, who have been stepping up to fill the gaps of the neglect from the National Government, who have been taking up the problems that should have been solved here, at this level. They’ve been stepping up to do that, those community providers, including iwi. I would love to ensure that we see continual support and funding. Thank you.

MAUREEN PUGH (National): Kia orana e Te Vaa Tuatua. Thank you, Mr Chair. I stand to speak to this Estimates debate in the social services and community sector this afternoon. My focus today will be on the area of disability issues. The Minister appeared before the Social Services and Community Committee last month—the month before, actually, on 20 June—and we covered off a wide range of votes on that day, including disability issues. Over the last few years, New Zealand has made huge and very important progress, internationally and nationally, in the way that we manage, treat, and think about our disabled people, and how disabled people actually live in this country.

We are a country that’s been at the forefront of some of the changes in relation to disability issues. For example, we were instrumental in passing the United Nations Convention on the Rights of Persons with Disabilities.

Now, it would be remiss of me if I did not pay tribute to the former Minister, the Hon Nicky Wagner, for her innovation in this area and her absolute passion for wanting the very best for people with disabilities to enrich their lives in whatever way they could—initiatives like Enabling Good Lives, where more choice and control was given back to those who knew exactly what services and support they needed so they could go out and purchase the services that they wanted. During the Estimates hearing, we actually heard the Minister say that she recognised that this programme does provide huge opportunities for disabled people.

There was also the initiative that was enacted for the new design of the high-level parts of the disability sector and system. Alongside the Minister, her team worked very closely on it for several months. Another major success came with Project 300, and I recall this project and the enthusiasm with which it was debated here and talked about. It had a goal of achieving 300 workplace positions for people with disabilities. Well, that programme was so successful that 584 disabled employees were matched with employers. That project led to another rollout in the Bay of Plenty called EmployAbility, and it helped those employers build strong teams and stronger communities by assisting those people with health conditions and disabilities into employment in that area. This is now a nationwide programme, and it is rolled out to individual communities and is tailor-made for them.

Now, there is a great role model for us to look up to in this field, and the person’s name there is Robert Martin. I’ve mentioned Robert in this House before, and I think he’s a living example of what can happen when a person with disabilities is given support and opportunity. Robert sits as a member of the United Nations, and he represents New Zealand in Geneva, and I think that’s an outstanding achievement. So it’s heartening to see in the Estimates that support for Robert to continue working in his role at the United Nations is funded in these Estimates.

Only 25.2 percent of disabled people are currently participating in the labour force, compared to 72.6 percent. There are 1.1 million people in this country that have some form of disability; so it is not an insignificant number of people, and every one of them deserves a fair go. Now, we know that there’s already a lot of support and advocacy that is done for people with disabilities, but it’s important that we do continue to innovate and invest, because there is absolutely no downside if we do so.

So it was with huge disappointment that we see in the Estimates that this Government, a Government that thinks it owns the franchise on compassion, that talks a big game—but then, talk is cheap—in actual fact, decreased the funding for disability assistance. The tragedy of that is that there is no signal in the Estimates for any new initiatives over the next four years, and so the question has to be: for the last nine years, what on earth have they been doing? The answer is, obviously, nothing. What’s worse is that for each of the next four years, the amount of the investment going into disability assistance is lower every year than it was under a National-led Government. Now, it’s an insult to the sector and another example of where real compassion sits.

Hon CHRIS HIPKINS (Minister of Education): The memo’s clearly gone around on the other side. As we come into this final part of the debate on the Estimates, when we’re talking about housing, the memo went around to the other side: don’t talk about the houses. Don’t talk about housing. Whatever you do, don’t mention housing. And why might that be? Why might it be that they’re so reluctant to talk about housing? Well, could it be that, after nine years of National, there were 6,000 fewer State houses? That could have something to do with it—1,500 fewer public houses under National, and record homelessness.

So when it comes to talking about compassion—which we just heard about from one of the members speaking opposite, Maureen Pugh—how is it compassionate for a Government, after nine years, to preside over and be proud of a legacy that saw record homelessness in New Zealand? That will be one of the most symbolic parts of the last National Government’s legacy to New Zealand. When they write the history of that National-led Government, housing—the lack of housing, the growing level of homelessness, the lack of affordable housing—will be one of the most defining legacies of that previous National Government. It is no wonder they don’t want to talk about it.

So what are we doing about it? Fair question: 6,400 new State houses over the next four years. In four years, we will build more State houses than the last National Government sold off in nine, because we know that we need more State and social houses. We will over-deliver on the promise that we made to New Zealanders around building more State houses. That is something to be proud of.

We’re discussing Vote Social Development under this particular part of the Estimates debate, and it’s important to remember that one of our first moves as a Government was to provide a huge boost to the families in New Zealand that needed extra money the most. The winter energy payment will provide huge support and relief to some of the New Zealanders who now live on the lowest incomes, because we know that they need the help. We think that’s a much better spend than the untargeted tax cuts that were being proposed by the previous Government. But one that I am particularly proud of—and it’s covered in the Vote Social Development Estimates—is the Best Start tax credit, introduced by this Government to ensure that families with newborn babies get extra support in that critical first year of a child’s life. That is something that we are incredibly proud of on this side of the House—a big boost to Working for Families to ensure that work pays.

The National Party, over the last few weeks, have been doing what they like to do, which is to beat up on beneficiaries, have a good crack at beneficiaries. When the polls start going down, have a good whack at beneficiaries—we’ve seen that in the last few weeks as their polling continues to slip. But how about this: how about instead of constantly beating up on beneficiaries, the National Party applied their thinking, put a bit of thinking into it, and thought about how you actually make work pay. How is it that we can support people to get into work, to get into meaningful work, and make sure that they’re not worse off when they get into work? That’s what we’re doing on this side of the House, and the big boost that we have put into place for Working for Families helps to deliver on that. The extra support for the accommodation supplement helps to deliver on that. We want to make sure that New Zealanders are well supported in making the decision to get into the labour market, to get into jobs, and to contribute to the New Zealand economy.

On the other side, all they want to do is beat up on beneficiaries—sell all the State houses, beat up on the beneficiaries, lock people up when things go wrong. They have no positive vision for the future, after nine years—after nine years. This Government has done more in nine months to provide extra support to the most vulnerable New Zealanders than that Government managed in nine years. They were focused on creating more vulnerable New Zealanders; we are focused on providing the support where we know that it is needed. So it’s not surprising they don’t want to talk about their legacy in housing, because it will define their Government. It was disgraceful, and it will define their Government. Fewer social houses, less affordable housing—that’s not going to be the legacy of this Government. We’re going to turn that around.

CHAIRPERSON (Adrian Rurawhe): There’s about one minute left in this debate. I call Jan Logie.

JAN LOGIE (Green): Thank you, Mr Chair. I wanted to talk about two things—I’m not sure if I’ll manage it in a minute—welfare and domestic violence; two things close to my heart. So I’ll start with domestic violence. We heard a lot from the Opposition recently about how much they did in Government. They just neglected to mention a few things they did that weren’t so great and that they failed to do in addressing family violence, and a really, really critical thing was they neglected to fund our women’s refuges—

Matt Doocey: I raise a point of order, Mr Chairperson. I’d like to seek leave of the committee that Jan Logie be given a 5-minute call.

CHAIRPERSON (Adrian Rurawhe): I’m sorry but the Business Committee decision, along with Appendix A of the Standing Orders, means that cannot happen.

JAN LOGIE: I’d like to thank the member for the spirit of that, though. They didn’t fund our women’s refuges. For nine years, there was no increase to their core funding. They actually cut staff at a time when there was increased demand and more reporting—terrible.

CHAIRPERSON (Adrian Rurawhe): I apologise to the member for interrupting her, but members, the time for this debate has now expired.

A party vote was called for on the question, That Vote Arts, Culture and Heritage, Vote Building and Housing, Vote Oranga Tamariki, Vote Pacific Peoples, Vote Social Development, Vote Social Housing, Vote Sport and Recreation, and Vote Women be agreed to.

Ayes 63

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

Noes 57

New Zealand National 56; ACT New Zealand 1.

Votes agreed to.

Clauses 1 to 10 and schedules 1 to 5

A party vote was called for on the question, That clauses 1 to 10 and schedules 1 to 5 be agreed to.

Ayes 63

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

Noes 57

New Zealand National 56; ACT New Zealand 1.

Clauses 1 to 10 and schedules 1 to 5 agreed to.

Bill to be reported without amendment presently.

Bills

Overseas Investment Amendment Bill

In Committee

Part 1 Sensitive land

Hon AMY ADAMS (National—Selwyn): Thank you, Mr Chairman, and I’m looking forward to an extensive debate on this important and, frankly, appalling piece of legislation that’s in front of the committee. There are a number of very serious concerns on this side of the House, and as we work our way through the debate on Part 1, I can tell the committee that we have quite a large number of amendments that my colleagues and I have been working on to try and rescue, frankly, this bill from the state it will return to the House in.

This amendment to the Overseas Investment Act broadly came about because the Government had a view that it was overseas buyers of residential property that was the whole of the housing problem in New Zealand and that it was as simple as getting rid of those terrible buyers with Chinese-sounding surnames, and if we simply stopped all those Chinese-sounding buyers from buying houses, as Mr Twyford said—in an appalling show of stereotyping and nationalistic fervour, without any evidence at all—then the problem would be solved. Well, the problem that the Government has, of course, is that the data just doesn’t back that up. In fact, we know that the non-citizen, non-resident buyers of residential property in New Zealand sits at around 2.8 percent, and when you net off the number of sellers, foreign sellers, of residential property, it barely cracks much over 1 percent. This is not the issue with housing affordability in New Zealand.

The very simple way of describing the solution required to make housing more affordable is to build more houses. It’s not rocket science. You don’t simply stop demand for New Zealand houses. You don’t simply come along and say “Well, let’s just stop anyone wanting to buy a house in New Zealand.”, and worry about those 1 or 2 percent that New Zealand First likes to get their dog whistle out and shout about. Actually, the challenge is to grow housing supply in New Zealand, and here’s the thing: much of the capital that comes into New Zealand to grow the housing market comes from overseas. A lot of the capital that New Zealand developers are relying on to build houses is foreign capital.

And what has this Government done as their solution to address home building in New Zealand? They’ve put up a big “No foreigners welcome here” sign in the foreign capital market. They’ve made it very clear to the rest of the world that New Zealand is closed for business—New Zealand doesn’t want foreign money coming in and building new houses. We don’t want foreigners coming and setting up their business here. We want, frankly, to go back to this little closed-off, isolated, blinkered 1970s view of the world, which we know New Zealand First still believe were the good old days.

Well, on this side of the House, we do believe that New Zealand should be open and facing the world, and we understand that it’s foreign investment that has been a big part of driving the wealth and prosperity of New Zealand. And we certainly don’t want to say to those foreign capital markets “Don’t come in here. Don’t support building. Don’t support the growing of the housing supply.”, and that is what this bill does. It is a ridiculous dog’s breakfast of a bill.

All the way through the select committee, my colleagues and I on the Finance and Expenditure Committee would put to officials sensible questions about how it works and how it is going to apply in practice, and the only thing they could tell us was “Well, that’s what the Government’s told us to do.”—no understanding, no practical implementation. They themselves knew, I think, that it didn’t make sense. The only advice they could give us when we asked them “How’s this going to work in practice? What modelling have you done on the effect of this?” was a blank look and a somewhat embarrassed “Well, that’s what the Government has told us to do.”

No thinking, no analysis, no advice, and no impact; just a dogged, blind determination to stick to their predetermined position that foreigners are the cause of the entire problem in New Zealand. Who cares that it will stop house building in New Zealand, or that it will reduce the number of houses being built? Who cares that we’re going to set up a big “Go away, rest of the world” sign on the front of our economy, as long as Mr Parker and the Labour Party can stick to their absolutely head in the sand view that this will somehow magic away all of the problems?

The bill simply doesn’t work. We saw a change made at the select committee that allowed a certain number of properties to be sold off the plan in large-scale apartment developments, but you’ve got the strange situation where foreigners can now own these units and foreigners can live in these units as long as it’s not the unit that the foreigner bought. So this bill—which, apparently, is going to address the evil of foreigners owing property in New Zealand, which, apparently, is behind all of the concern—is still going to allow foreigners to come in, buy large numbers of apartments, live in large numbers of apartments, and yet somehow it’s all fixed. So we have a bill that simply does not even follow its own mantra. It doesn’t work, will not make a difference, and, in fact, will make housing worse.

I want to talk about the change to the bill brought into the select committee through the Minister’s Supplementary Order Paper 19 to introduce what’s called profits à prendre into the legislation. I know there are a number of lawyers in the committee, including the Minister, but for those who aren’t, a profit à prendre, in its most simple explanation, is simply the legal right to use the land and to take the commercial returns from it without owning the land. It’s most commonly seen in things like forestry rights, but, actually, it is used in a number of areas. So the Minister’s explanation is that we need to include profits à prendre in the legislation in case in the future any future Government would want to. But, again, there is no analysis whatsoever of the economic impact of bringing in profits à prendre beyond the forestry sector.

It is an unbelievably disjointed approach, so that while forestry—who we know very well has a number of strong supporters in particular coalition partners in this Government—is brought in, we then had officials tying themselves up in knots, doing everything they could to make sure that the forestry interests would be not at all inconvenienced by this change. So, in fact, now, a profit à prendre in the forestry space doesn’t even need to come under this legislation until it’s 1,000 hectares. But for anyone else, any other poor sop trying to make their living in this country from the land, well: “You’re in at 5 hectares.” Again, we asked officials, “Why is there a 5-hectare limit for things like viticulture, horticulture, kiwifruit, wine? What’s the analysis that justifies that?” The answer: “There is none. There is no analysis. It’s just what the Government told us to do.”

So you very quickly got a clear sense that this Government will look after certain people and certain interests, but in terms of concerning themselves with the economic impact and the economic rationale, or even taking the time to understand the economic rationale, they couldn’t be bothered. They couldn’t be bothered getting it right. As long as the forestry sector was happy, then this Government was happy, and not only have we seen in this legislation the most remarkable acrobatics to ensure that forestry is protected by the number of hectares limit that now applies but we’ve seen pathways that apply only to forestry.

Forestry owners now, while they might technically be brought into the legislation, can go along and get a pre-approval off a checklist. So if they rock up with a checklist and say, “Well, we’re going to buy some land. I’m not sure where and I’m not sure how much, but don’t worry, we’ll have it in forestry.”, that’s OK. But every other owner of land in this country, whether they’re setting up a vineyard, as I say, or planting kiwifruit—if they wanted to use the same process: “Oh no, no, no. That’s not available.” They have to go through the full counterfactual assessment. They have to go through all of the hoops and expense and cost and delay of a full Overseas Investment Office process for no good reason other than that Mr Parker thinks, “Future Governments might want to have that, so we’d better chuck it in.”

Never mind that we might completely scuttle some of those primary sector industries. I mean, why would you care? This Government clearly is not that worried about scuttling large parts of our economy. What’s a couple more sectors on the bonfire? I mean, we’re already talking about large-scale destruction of much of the primary sector. We’ve seen the oil and gas sector completely haemorrhage. We’re seeing them now rip the guts out of the building and construction sector, which is why the construction sector numbers are so low. We’re seeing unemployment rates up today. Why not chuck another sector on the bonfire? Who cares about viticulture? Otherwise, why would they not get some analysis? Why would they not even ask the question, “How is this going to affect any of these sectors?”

The Government simply doesn’t care, and that is the tragedy of this legislation. It is poorly thought through, it is ideology gone mad, it is head in the sand adherence to bumper sticker slogans that they’ve been running for nine years without understanding them, and now New Zealand is going to pay the price. This is appalling legislation. Not only will it not do what it claims to do; it will make the situation worse.

It is yet another example of a Government that hasn’t done the work, that doesn’t understand the ramifications of what they’re doing, and that hasn’t taken the time to ask for the analysis of what they’re doing, and they certainly haven’t been prepared to listen to the very valid concerns of a number of those sectors who came before the select committee and said, “This is a problem.” There are certainly some areas where they’ve been very careful to look after particular interests—and that’s something we’ll be exploring a lot more as this debate goes on—but this is very bad law.

Hon Dr NICK SMITH (National—Nelson): For the past four years, this Parliament has been subject to a campaign that says that it is foreign buyers that have been at the core of New Zealand’s housing challenges. We had the disgraceful Chinese-sounding names debacle. That made me truly ashamed to be a New Zealander.

Michael Wood: Many more things you should be ashamed of.

Hon Dr NICK SMITH: I hear a member who’s interjecting, like Michael Wood, who claims to stand on a platform of diversity, who is more than happy to target his Chinese constituents for a bit of cheap politics. Now let’s go back to the claim—

Michael Wood: I raise a point of order, Mr Chairperson. I take exception to the remark that was just made—that I target my Chinese constituents for political gain—and I would ask that that remark be withdrawn.

CHAIRPERSON (Adrian Rurawhe): I’m going to take some advice on this. I think members are on very thin ice, making those kinds of remarks—[Hon Dr Nick Smith stands] I’ll just finish. There were—I didn’t quite hear the comments, but I just want to warn Opposition members as well. Making accusations around racism is not acceptable. I think we all should think carefully before we speak, and I call back the Hon Dr Nick Smith.

Hon Dr NICK SMITH: Mr Chair, I still invite Mr Michael Wood to apologise to the Chinese community for the disgraceful campaign that was run by Labour members in which they claimed that 40 percent—

Hon Carmel Sepuloni: I raise a point of order, Mr Chairperson. You gave a very gracious ruling and warned the Opposition. He has continued to go down the track that you warned against, and I take offence on behalf of my colleague.

Hon Dr NICK SMITH: Speaking to the point of order, Mr Chair, you would have been in the House when I was subjected, as the then Minister, to the claims that were made by Labour at the time that 40 percent of house sales in Auckland were to Chinese—

Hon Carmel Sepuloni: This is irrelevant.

Hon Dr NICK SMITH: —ethnic people. Oh, it’s very relevant, and this is the core—

CHAIRPERSON (Adrian Rurawhe): Order! Everyone settle down, OK? A couple of things: points of order are taken in silence; speaking to points of order is also done in silence. The Chair is the sole judge of that. I’m listening carefully to everyone’s contribution. I’m listening really carefully. I’m going to make a ruling. I think I’ve heard enough. I’m going to go back to the original point that I made, and members need to be very careful. Dr Nick Smith, I do ask—you have stated now, twice, what you have said. I think that is enough, and I’d like you to come back to this part of the bill.

Hon Dr NICK SMITH: The origin of this part of the bill was a campaign by Mr Phil Twyford in which he claimed that 40 percent of house sales were to people with Chinese-sounding names, and my colleague would note the offence that was taken at the time, very widely, by the Chinese community to that campaign. My concern is the vast gulf between those claims by Labour—the now Government—and the reality, because we collected very detailed data. For every single transaction for the last four years, we know the tax residency of every one of those house buyers. I want to make the comparison between the facts and Labour’s claim, because I’m here to base it on evidence-based decision-making.

Now, what the evidence—and I’ll read the exact numbers. In the course of 200,000 land sales in the last year, 2,672 were purchased by people of overseas residence, and 2,658 were sold by people of overseas residence. So in the entire year of 200,000 land sales, there was a shift in overseas ownership of a net 14 houses. Now, when members opposite described it as a tsunami—a tsunami—of Chinese, I do not accept that the change of ownership of 14 houses in one year is anything like a tsunami. I will say it again: members opposite owe an apology to the Chinese community for that unwarranted attack on them.

But it gets even more interesting when we ask the question in that reliable data as to how many of them there are and where they came from. Do you know what the largest group of overseas investment in property is? It’s those bloody Australians! Is there anything in this bill that changes the investment in New Zealand property by Australians? Well, I would love a member to describe—maybe the Chairman will—why it is OK for an Australian to speculate in New Zealand property—

CHAIRPERSON (Adrian Rurawhe): Order! Do not bring the Chair into the debate.

Hon Dr NICK SMITH: What moral superiority does an Australian have in the New Zealand housing market over those that may be from the UK, the United States, Japan, China, or any other country?

But here’s the part that’s got me truly gobsmacked. For the last two or three years, Labour members have said that that data was a nonsense. I stood up in the House and would have answered at least 20 questions from Labour members saying the data that is prepared and collected by Land Information New Zealand was inaccurate. So I choked on my Kornies—I choked on my Kornies—when I heard a statement from Mr Twyford: “The data is now reliable.”—the same data is now reliable and can be relied upon. That is truly shameful, and yet that is the foundation of the law change that we are being asked to make in classifying all residential land as sensitive. [Member trips and falls off step] My colleague Amy Adams—

Hon Member: Are you all right, Barbara?

Hon Dr NICK SMITH: She’s fine. Farming type—very tough! My colleague Amy Adams made the point that if you are serious about improving New Zealand’s housing supply issues, then the key thing is to get more houses built. So if you look at the last five years—

Darroch Ball: That’s a bit rich.

Hon Dr NICK SMITH: Well, let’s have the numbers. Let’s have the numbers. The number of houses being built when Labour left Government was 13,000 per year, and, do you know, that number grew by 15 percent per year every single year for the last six years of our Government. It grew from 13,000 a year to 31,000 a year. And here’s the remarkable part: there is not a period in New Zealand history when the growth in new home construction has been as long or as strong. There’s never been a period like those five years. And members opposite—I simply ask the member from New Zealand First, well, when was it stronger?

Mark Patterson: What was the population growth?

Hon Dr NICK SMITH: Wow! I’m fascinated that the member from New Zealand First asked a cheeky question—

Rt Hon David Carter: What’s his name?

Hon Dr NICK SMITH: Look, sorry, I don’t know the member’s name. He hasn’t contributed much. I’ve been on at him to take a call. But here’s the question I put to him: New Zealand First campaigned on reducing New Zealand’s net immigration to 10,000. They’ve been in Government for nine months. What have they done?

Stuart Smith: Nothing.

Hon Dr NICK SMITH: Absolutely nothing. I would ask the member who’s interjected: what have you done? The silence is absolutely deafening. This is a member who will poke his head up, but when it comes to actually doing what he told electors he would do, he has not delivered on that.

So we have had a very strong record of new construction in housing. That growth is continuing—200,000 homes are projected to be built over the next six years—and here’s the tragedy: the provisions in this bill over the past six months have raised significant uncertainty to the point where, actually, it has slowed the level of investment in new home construction. The very thing that will make the material difference for Kiwi families, whether they’re renting or they’re buying, has been compromised by the provisions that are in this part. The Government has failed in that its policy has been about bumper stickers and not about the substantive policy that will make a material difference for New Zealanders.

The very last point I make is that if this were the answer, Australia wouldn’t have the same housing issues that we have. The reality is that this is not the answer to the housing challenges that New Zealand faces.

Hon DAVID PARKER (Minister for Economic Development): When the Labour - New Zealand First - Green Government took over nine months ago, we inherited a country with the highest rate of homelessness in the OECD.

Stuart Smith: That’s rubbish.

Hon DAVID PARKER: No, it’s not rubbish. That is correct. I was embarrassed to have to admit that when I was at a meeting at the OECD recently, and I was ashamed that in a country as wealthy as New Zealand, I come from a country that has got the highest rate of homelessness in the OECD. We’ve also got the lowest rate of homeownership since the 1950s, and it continued to go down every year—

Hon Dr Nick Smith: That’s just not true.

Hon DAVID PARKER: —and in the last year—it is correct. Dr Smith, the former Minister of Housing, is denying that we’ve got the lowest rate of homeownership since the 1950s. In addition to that, the multiple of price to income is the highest it has been in New Zealand since I was born, and I am 58 years old. Despite all of that, the last Government could not admit that we had a housing crisis, despite the fact that it seems like Simon Bridges might now admit that New Zealand faces a housing crisis. Despite that, the National Party, in Opposition, opposes every measure that we do to address the problem that we have inherited. Whether it’s supply initiatives like KiwiBuild, whether it’s changes that we propose to the Resource Management Act—you watch; they’ll oppose those too—or whether it’s measures to control overseas ownership of New Zealand land assets, the National Party will oppose it, and today is a case in point.

There is some urgency for the passage of this legislation brought about by the Comprehensive and Progressive Trans-Pacific Partnership agreement (CPTPP). The CPTPP is an agreement which includes—

Hon Members: TPP.

Hon DAVID PARKER: These people on my left—you know, anything bigger than three words and they can’t string it together: the Comprehensive and Progressive Trans-Pacific Partnership agreement. They will understand one day that that agreement includes a provision that prevents the New Zealand Government, after that agreement comes into force, from adding new classes of investment that fall within the screening regime of what the New Zealand Government can control in respective inward investment. The effect of that was that if New Zealand was to sign up to CPTPP—as the current Government has chosen to do—but didn’t fix the holes in the New Zealand screening regime, then the ability to include new classes of asset to be screened would be lost. Not only would it be lost in respect of CPTPP countries; it would be lost in respect of earlier countries that we have free-trade agreements with that have got most favoured nation clauses in their agreements, including the agreement with China.

Now, when I say the word “China”, you can bet that the National Party will accuse me of racism. Interestingly, the New Zealand – China free-trade agreement includes a provision that allows China to ban New Zealand buyers of their homes. And, in fact—

Hon Judith Collins: And who signed that?

Hon DAVID PARKER: The Labour Government signed that—the Labour Government signed it—and that agreement with China allows New Zealand to ban Chinese buyers of New Zealand properties. Indeed, since that agreement was signed, the Chinese Government has, wisely, chosen to ban New Zealand buyers of residential property in some of their major cities, because they recognise that those housing markets should be for the benefit of Chinese citizens, not New Zealanders buying in China.

Now, because the provisions of that particular part of CPTPP were locked down by the prior National Government’s negotiation of those terms, we couldn’t change the clause which says you can’t introduce new classes of screening after it comes into effect. But what we could do was change those investment classes before it comes into effect. We had to signal that before we signed up to it, and we did. We have to legislate for those new asset classes before it comes into effect, or else the New Zealand Government, effectively, loses the power to introduce new classes of screening for ever.

The two classes of screening that are covered by this bill are residential homes, which are not currently screened in the overseas screening regime but will be under this bill, and a certain class of forestry asset called forest registration rights. Now, I want to deal with forest registration rights, because the Hon Amy Adams is just wrong in respect of her analysis here. Any freehold or leasehold forest can be purchased through a forest registration right. A forest registration right can cover a freehold forest or a leasehold forest. A forest registration right can exist for multiple rotations, so if you had three rotations, that’s 90 years of control of forestry land through a forest registration right. A five-year lease of that same forest is already covered by the screening regime. It is nonsense to pretend that you have a screening regime in respect of forestry assets if you do not include forest registration rights, because it becomes a completely ineffective regime because you can buy the same asset via a forest registration right. That is why we are including forest registration rights.

Now, it is also true that the New Zealand forest industry—particularly the forest ownership industry—is heavily reliant on foreign direct investment. It’s about 70 percent foreign-owned at the moment, and we want to plant more trees. We need more foreign direct investment in order to plant more trees.

Hon Amy Adams: So you want trees but you don’t want houses? Brilliant. Trees but not houses—that’s just brilliant, Mr Parker.

Hon DAVID PARKER: Well, actually—she says, “Trees but not overseas investment in houses.” We do see a difference; the National Party might not see a difference. The National Party should already understand that there are differences between different classes of investment under the Overseas Investment Act, but, in truth, we need more foreign direct investment in forests. It is also true, though, that a future Government might think, “Wow, if foreign direct investment got to 90 percent of our forests, might we want to intervene?” I would suggest that it would be irresponsible of this Parliament not to pass this legislation to give a future Government the sovereign right to intervene to control foreign investment in forestry. You can have too much of a good thing, and if we had not introduced this legislation, in effect, a future Government would not have the sovereign space to do that, because CPTPP would stop it doing that, and it would also flow into earlier agreements pursuant to most favoured nation clauses.

Can I say something about what was said in respect of the number of houses that were sold. I’m sure this will come up again, but the latest data showed 20 percent of central Auckland houses were sold to foreign buyers—

Hon Judith Collins: Not houses; apartments.

Hon DAVID PARKER: —excluding houses that were sold to corporate vehicles, because they don’t count the corporate purchases yet—20 percent. The Hon Judith Collins says that’s apartments. Yes, it is partly apartments, but it’s not wholly apartments.

Twenty percent must be moving the market. It must move the market—it must be affecting the marginal transaction. We don’t know by how much. We know that that 20 percent is less than it used to be. When the market was really hot, and the National Party refused to move against this, the market going to foreign buyers in Auckland was much higher than the 20 percent that it is now. We don’t know the actual percentage—we never will—but we know it was higher than that. Indeed, North & South had an issue last week that recorded that as a consequence of China closing down its outward capital flows, the flows into the Auckland property market decreased—effectively, proof that although you might disagree whether it was 40 percent or 30 percent, there’s no doubt that it was higher than the 20 percent now, and it was significant.

I used to rail against foreign farm sales when I had responsibility for that portfolio in Opposition, and I would complain about US purchases. No one accused me of racism. I would complain about French purchases and English purchases and German purchases, and no one would complain about racism. I complained about Crafer farms being sold to Chinese buyers, and I was accused of racism. It was exactly the same argument—exactly the same policy issue. It’s a very easy issue to try and rark up racism around, as the National Party tries to do, but, actually, the underlying theory here is that New Zealand land assets should be sold on a New Zealand market. If you’ve got the right to live here permanently, you’ve got the right to buy here.

Why do we exempt Australia? It’s because they exempt us. We’ve got the right to live there; they’ve got the right to live here. We’ve got the right to buy there, even though they’ve got a foreign buyer ban on residential as well, and we’ve got the same thing.

The National Party are completely wrong here. They’re on the side of foreign buyers who don’t pay tax here, don’t live here, but who outbid New Zealanders.

ASSISTANT SPEAKER (Adrian Rurawhe): I call the Hon Judith Collins.

Hon JUDITH COLLINS (National—Papakura): Good choice, Mr Chair, might I say. It’s great to take a call after that contribution from the Minister in the chair, the Hon David Parker—

Hon Amy Adams: It would make you look very good.

Hon JUDITH COLLINS: Yes, well, it certainly is a land of opportunity for looking good following David Parker, I would have thought. One of the problems that he’s discussed—and I’m going to talk about this because he’s raised it—is the properties sold and bought in Auckland’s central business district by foreign buyers. He’s used it as evidence of all these foreign buyers buying, and he has, rightly, referred to the fact that I have called out and interjected that most of those are apartments—and, of course, they are.

For those who don’t live in Auckland or don’t travel to the Auckland CBD, it’s very hard to find a house in the central business district—there are a couple in Parnell, but not that many—but there are an awful lot of apartments. That is actually where we would’ve thought we needed people to come in, with capital, to help the developers get enough pre-sales so that they can get their apartments built. What’s actually happened in New Zealand in the last few months is that all new apartment building developments have essentially stopped, not got off the ground if they hadn’t started, and even some of those that have started have now stopped. The reason for that is not because New Zealanders don’t buy apartments, but actually because New Zealanders generally don’t buy apartments off the plans.

In New Zealand we need to have overseas capital, overseas buyers to come in and buy off the plans. That has now been recognised, after many submissions to the Finance and Expenditure Committee, and the Government is now making an exemption for foreign people to come in and buy apartments off the plans in the areas where they want them to. So they’re buying off the plans, but, unfortunately, they can’t live in them. That means we can have the ridiculous situation where one person can buy an apartment, rent it out to their foreign friend, and that foreign friend can buy an apartment and rent it out to the first foreign person. They can’t actually live in their own one, but they can live in their neighbour’s one.

The whole thing is a complete mess. It marks the low-water mark of the Labour Party’s policy machine, because this policy was actually built on a Chinese-sounding name survey that the Labour Party’s Phil Twyford and his staff member Rob Salmond ran in their last year in Opposition. They ran that campaign to build up hatred against foreign people, and particularly Chinese. They did not run a campaign against Indian-sounding names. There were no Lithuanians picked out. There was nobody else—

Hon Member: Irish—lots of Irish.

Hon JUDITH COLLINS: Lots of Irish—oh yes. They never looked for the Irish, but they did choose the Chinese-sounding names. Anybody with a name like Young or Lee—Denise Lee, for instance. My colleague Denise Lee was suddenly marked as a Chinese-sounding name. That is a level of discrimination that was applied by a major party in New Zealand.

Let’s have a look at what has actually occurred since then. Well, a lot of people are no longer buying in New Zealand, which is why now, suddenly, the welcome mat has gone out to foreigners to come and buy off the plans, in apartment blocks—which, by the way, they are not really buying at the moment, because they got the message that they’re not wanted, and there’s no development in these.

The secret to Auckland and Queenstown and these “a lot of people want to live there” areas is that we need to have apartments. We can’t have apartment blocks without people buying off the plans, and we can’t all sit around and wait and hope that somebody is going to come and do that. So we’ve got a situation now where we’ve got fewer apartments being built than we did last year and we’ve got fewer people having the opportunities that buying an apartment for their first home can give them than we did last year, and that is actually all down to a policy that said, “We don’t want these foreigners.”

Remember the “30 percent of houses being sold to foreigners” nonsense that we had? In fact, the answer that we gave last year, when this was raised, was 3 percent. Those were the statistics given to us by the ministries and the officials. Strangely enough, they’re exactly the same numbers being given this year by the officials. We’ve got people like the Hon David Parker clinging to the hope that 20 percent of houses—“houses”, he said—in Auckland’s CBD are being sold to foreigners, when he really meant mostly apartments, actually, and from one foreign person, often, to another foreign person—that this was occurring.

So we’ve got a policy that is built around, probably, the poll rating that Andrew Little got as leader when the Labour Party was 23 percent in the polls. It was actually a policy bred from desperation. What they could’ve been doing instead would’ve been helping the National Government, as we were then, to bring about some of the changes that we wanted to make around planning and urban development. Instead they would not support us on anything—would not support us on anything.

It’s a real joke to listen today to the Hon David Parker talk about that misnamed thing—what was it? CPTPPP? Something like that. That’s the Trans-Pacific Partnership agreement (TPPA) rebranded with “Comprehensive and Progressive”. For goodness’ sake! This was a man who was marching in the streets last year against the TPPA. He was a man who, along with the Hon Phil Twyford, was—yes, guess what?—marching in the streets, holding up a banner against it. Today, we’re being told, “Well, we have to do this now, because we’ve signed up to it and we all agree with it.” So that is the level of debate within the Labour Party that has brought them to this place. It’s not a strong position.

It’s worse than that. We’ve been told today by the Hon David Parker that no one accused him of being racist against Americans, or French, or anybody else. But, actually, no one went looking for French names, did they? No one went looking for American names—whatever that might mean. No one went looking for Lithuanian names. No one went looking for Polish names. No one went looking for Indian names. No one went looking for any of that, but they did go looking for Chinese names, and you’d have to wonder why. You’d have to wonder why. I don’t believe for a moment—the funny thing is, of course, the other exemption he wants is for Singaporeans. Well, there won’t be any Chinese-sounding names there, will there!

I have to say I just thought that was one of the biggest jokes of all—and why Singaporeans? Well, apparently it’s in some deal. We heard today, “Well, the thing is, you see, there was this free-trade agreement with China which allows Chinese to buy homes in New Zealand.” Well, who signed that? Which was the Government in charge? Oh, I know, it was a Labour - New Zealand First Government.

Hon Members: Oh!

Hon JUDITH COLLINS: Oh, it was. It was. It was. Who negotiated it? A Labour - New Zealand First Government? Who was the Minister of Foreign Affairs at the time? Oh, no, no, no. The Rt Hon Winston Peters.

Hon Members: Oh!

Hon JUDITH COLLINS: Oh, it was indeedy. Now, what does this tell us?

Jamie Strange: Very good Minister. Excellent Minister.

Hon JUDITH COLLINS: Do we think for a moment that there is—what was that, Mr Strange?

Jamie Strange: I say he’s a very good Minister, Winston Peters.

Hon JUDITH COLLINS: Sorry? I think he’s loving it. He’s loving it, because at least he’s not to fault. He wasn’t here—it wasn’t his fault. But where was the Hon David Parker in all this? Was he a trade Minister or something at the time, was he? Was he? Was he?

Hon David Parker: I was in Cabinet.

Hon JUDITH COLLINS: No, no—he was in Canberra, he said.

Hon David Parker: No, I was in Cabinet.

Hon JUDITH COLLINS: Oh, he was in what?

Hon David Parker: I was in Cabinet. I take responsibility.

Hon JUDITH COLLINS: He was in Cabinet. He was responsible. Well, isn’t that lovely? He was in Cabinet.

So we’ve got a piece of legislation here which is—and I actually don’t particularly care about New Zealand First’s position on this, because we all know New Zealand First’s position. It’s the Labour Party’s one, and the Green Party’s position—

Hon Amy Adams: Bereft.

Hon JUDITH COLLINS: Bereft of any principle. This is—if it’s the triumph that the Minister would like it to be—simply of pragmatism, policy, and politics over principle—it is a piece of legislation that is, in fact, the low-water mark for the Labour Party. They once were a major party. When they are part of a Government, they are the major part. They should not be. They should be, in fact, the same size as New Zealand First, because that is the level of thought that’s gone into this.

Hon DAVID PARKER (Minister for Trade and Export Growth): I’ll just take a brief call to correct the misunderstanding that the Hon Judith Collins showed in that contribution. In fact, the Labour-negotiated New Zealand – China free-trade agreement allows New Zealand to ban foreign buyers from China of New Zealand residential property and allows them to ban New Zealand buyers of homes in China, and they’ve done so.

The point I was making was a different one, which is that because of the clause that the National Party negotiated in what was then the Trans-Pacific Partnership (TPP) and what became the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the prohibition on new investment classes to be screened, like residential land that is found in CPTPP—formerly TPP—flows through to China. Now, that might be too complex for the Hon Judith Collins, but she’s got it completely the wrong way round, despite having been in the Cabinet that theoretically was keeping an eye on the provisions of the CPTPP.

Dr JIAN YANG (National): I’m very pleased. Actually, I was not prepared to make a speech. I came down all the way to support the Hon Nick Smith when he was giving a speech, because it appears the other side is still trying to deny this Chinese-sounding names fiasco. Over two years ago, I was in the House actually demanding Labour apologise for the Chinese-sounding names fiasco, and today we still have not heard that apology. Now, I feel this is hard to believe, because they are still trying to say that this is not discrimination. Well, it depends on us. It depends on the Chinese to feel or to say whether this is discriminatory or not. When that Chinese-sounding names fiasco happened, the Chinese community all over New Zealand felt that that was extremely discriminatory.

Now, we have had a Chinese community here since the 1860s. Now, we’ve been here for generations. Those people who have been here for generations still feel that this kind of approach—the Chinese-sounding names approach—really deeply hurt them. They believe they have been part of New Zealand society, but that this major party would adopt that kind of approach is hard to believe. That is why we demanded the Labour Party apologise for that particular approach, but today we can see they still do not really apologise. Of course, they no longer use these Chinese-sounding names—they understand that was wrong.

I want to emphasise that while Chinese people buy properties, at the same time they build properties. If we look at Auckland now, a large percentage—my colleague Andrew Bayly would be able to tell you the percentage. It’s about 30 percent, I was told. About 30 percent of the development market in Auckland is done by the Chinese community, so it’s very important for us to recognise that Chinese people in New Zealand also contribute to the development of this property market. So it is important for us to recognise in New Zealand that the Chinese community has been here for generations. At the same time, they are not only buying properties; they are also building properties. They are now a major force in contributing to the property market.

You know what? The KiwiBuild project under the current Government—Minister Twyford has been wooing the Chinese developers because, obviously, the Government needs the Chinese developers, the builders, and also the money to somehow sustain this KiwiBuild project. Now, if we are serious about this equal or fair approach, then you should recognise that the Chinese-sounding names fiasco is indeed not acceptable, not only because we have been here for generations but also because many people here—like me—have been here for decades. So if we go to an auction room and see a Chinese face, people say, “Oh, this is a foreigner.” It’s a kind of unfair treatment to all those who have been here for many, many years.

Another point I want to mention is that the Hon Minister Parker mentioned the Chinese Government banned foreign buyers. The fact is that in China, all land belongs to the Government. Even the Chinese themselves do not own the private land. So this is not discriminatory against foreigners. Even Chinese citizens can’t own the land; they can own the property. So this is the Chinese situation. People often say, “Oh, the Chinese Government bans foreign buyers.” This is not true. It is not true, actually. If you are working in China, you can buy properties. Like all Chinese, they can’t buy land because it’s all leased for 70 years or even longer. They can’t own the land. This is the Chinese situation; it’s unlike in New Zealand. You can’t privately own land.

So I would say that very often you give this kind of information, which seems to be true because it fits into your perception, and it might help you in trying to explain your policy here in New Zealand, but, actually, that is not the situation. So I would still demand the Labour Government—the Labour Party—apologise for its Chinese-sounding names fiasco.

MICHAEL WOOD (Labour—Mt Roskill): Thank you, Madam Chair. I’m very pleased to take a call on Part 1 of the Overseas Investment Amendment Bill.

Probably, like many members of this House, I’m a great fan of the high comedy of Monty Python’s. One of my favourite films is Monty Python and the Holy Grail. It’s in that vein that I want to thank a previous speaker, the Hon Nick Smith, for his very worthy impression of the Black Knight. Members of the House might recall the Black Knight, who, as his arms and legs are being cut off, simply brushes it off. So as we know in this House, under the tenure of that Minister as Minister of Housing, New Zealand reached the highest level of homelessness in the OECD. What did the Black Knight say? “’Tis but a scratch.” We know that under his watch, we reached the lowest level of homeownership in New Zealand since the 1950s. What did he say? “It’s only a flesh wound.” We know that under his watch as Minister of Housing, the average price of a house for Kiwis in Auckland reached $1 million. The Black Knight—Nick Smith—says, “It’s all OK. Come back and have a fight about it.”

We remember that Minister saying in a piece in the New Zealand Herald that he was going to fix the crisis by finding Crown land to build houses on. We later found out that much of that Crown land was actually a cemetery. It was actually a cemetery. The ultimate Black Knight—the former Minister of housing, the Hon Dr Nick Smith—is fighting the battles of the past, pretending still, in 2018, that there is not a housing crisis to solve in this country.

That was followed on by a much, much better speech from the Hon Judith Collins. For most of her comments, she was still fighting the battles of the past and was not particularly focused on the bill, but it was noticeable the intense support she was getting from the benches behind her—support that’s been lacking when other front-benchers from the National Party have been speaking today, I might note.

This bill is an important bill. It is an important bill because decent, affordable housing is important to New Zealanders. That is what this bill is about. It is about the fundamental value that we have in this country—and, certainly, we have in this coalition Government—that every single person in our country should have the right to decent, safe, warm, affordable housing and that Kiwis who work hard, Kiwis who save a bit of money, Kiwis who have a dream to own their own home should be able to do so in 2018. Yet, as we know, that dream has been slipping away from so many people.

We know that that is a complex issue. It can only be dealt with—and I acknowledge the Hon Judith Collins for making this point—by increasing supply. Of course, that did not happen on the previous Government’s watch. We have a 40,000-home shortfall in Auckland City alone, so it is laughable to hear the claim that that Government adequately dealt with the supply problem.

But, as anyone who knows anything at all about economics knows, price is a function of both supply and demand, so it is very important in this respect, when we have a housing crisis, when we have homes approaching $1 million in many suburbs like my community—working-class Mount Roskill. Young kids in my community, whether they’re Kiwi Indians, Kiwi Chinese, Kiwi Filipinos, or Kiwi Pacific kids, are facing $1 million to buy a basic house in my community, in my constituency of Mt Roskill, and that locks them out. We believe, in this coalition Government, that that New Zealand housing market should be shaped by the ability of New Zealanders to buy their own homes, and should not have mountains of capital flowing into the country, artificially pumping up the price of those homes. It doesn’t matter where it comes from from around the globe. If you have an imbalance of demand with mountains of capital coming in, it is going to contribute to increased prices, particularly when supply is so tight.

If we go back to those figures, the figure across all of Auckland that we received earlier this year is that approximately 7 percent—on the narrowest-possible definition of home sales—goes to overseas buyers. That’s the narrowest-possible definition—it excludes purchases that may have come through a company, it excludes purchases that may have come through a trust, and it excludes purchases where there may have been a couple, perhaps, and there was a mixed visa - holder situation. But let’s say it’s only 7 percent. The point about markets is that when supply is constrained, if you have an additional marginal 7 percent coming in on top of that, it does have an impact on price. It’s not the only impact. It’s not the only thing we need to do to make housing more affordable—

Andrew Bayly: Can you point me to the financial analysis of that?

MICHAEL WOOD: —but it does make a difference. And I challenge Mr Bayly to address that point if he thinks I’m wrong on that. If he thinks I’m wrong on that, I challenge him to address that argument in his comments when he gets up and speaks.

I want to acknowledge the members of the Finance and Expenditure Committee who did work on this bill. It was a tricky bill and it was a complex bill, and there are real political differences that were involved, but, actually, the members of the committee across the Chamber—and can I acknowledge on the Opposition benches in the Chamber at the moment Andrew Bayly, the Rt Hon David Carter, and Lawrence Yule, who were part of the consideration of this bill at select committee, despite the differences. The Hon Amy Adams, I think, came in later on in the consideration of the bill. Those members were constructive and engaging in terms of the select committee in its consideration of the bill. I do believe that we came out of that select committee process with a better bill than when we went in.

So, just speaking specifically to Part 1, Part 1 is a relatively narrow part, but in Part 1 we actually deal with, I guess, the crux of the bill, which is bringing residential housing into the definition of sensitive land. One really important thing to remember in this debate is that, actually, we have an existing Overseas Investment Office process around sensitive land. Many of the rules and many of the definitions that have, in fact, already been brought up in debate are rules and definitions that are already in the principal Act. What we are simply doing in this bill is bringing residential property within the ambit.

There’s a very good reason for that, and this is a question and, I guess, a challenge for speakers who might follow on. If we consider farmland to be sensitive and if we consider important environmental areas to be sensitive, then why would we not consider the thing that is possibly the most precious and important thing for the health and well-being of many of our fellow New Zealanders—that is, decent housing—to also be a sensitive investment that we would screen in the same way that we screen those other sensitive categories of land? That is the fundamental contention of this bill—that that land is sensitive land. We should be careful about how we manage it, and it is entirely appropriate to make sure that it is managed and sold for the benefit of people who live in New Zealand.

There’s one very specific change that the select committee made to Part 1—and this is Part 1, clause 4(1), where, through the course of considerations, it was very, very important, in respect of the definition of land that is captured, that we were quite specific about that. We needed to be really tight about that; we didn’t want there to be too much contention about that when it came to the screening regime. So, through the select committee process, we have tightened that definition to be land that is defined as residential land or lifestyle land on the district valuation rolls. That’s a fairly objective categorisation of the land that will be captured under this bill, and I think that was quite an important little improvement that was made to the bill through the select committee process.

I want to finish my comments by just returning to the core purpose of this bill. The core purpose of this bill is to ensure that we have a New Zealand housing market that meets the needs of New Zealanders and that is largely shaped by the ability of New Zealanders to buy housing, not a New Zealand housing market that is shaped by mountains of offshore capital that pumps up prices beyond the ability of Kiwis, whatever their community, whatever their background, whatever their ethnicity—

Hon Amy Adams: It’s simply not borne out by the data, and the member knows it.

MICHAEL WOOD: —to achieve that Kiwi Dream of owning their own home. The member opposite, the member from Selwyn, says it’s not supported by the data—the data which that Government had to be brought dragging and screaming to actually produce, because for years and years, in amongst resisting any admission that there was a housing crisis, they refused to collect data. Their head was buried so far in the sand that they actually refused to collect the data until a couple of years ago, when the intense political pressure built up, and, as I outlined earlier on, we have the data this year, which shows that at the very narrowest-possible definition in Auckland City, which has suffered most intensely from the housing crisis, 7 percent of purchases—at the most narrow definition—come from offshore. That, at the marginal end, does have an impact on house prices. That will have an impact on prices in any kind of market, and I challenge any member opposite to explain to me how that would not possibly be the case.

This is a good bill. It is one piece of the jigsaw puzzle, in terms of resolving this housing crisis. We’re resolving this housing crisis on the supply side by stopping the sell-off of State homes, by investing in 100,000 affordable KiwiBuild starter homes over the next 10 years. We’re resolving the housing crisis by dealing with demand and supply, by making houses about homes and not about an investment vehicle for the wealthy to get even wealthier. This bill is a part of that, and I’m very proud of it.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. Thank you indeed. I’d like to turn the debate to the profits à prendre. I’d have to say, during the Estimates debate, I actually asked Ministers, including the one in the chair, Eugenie Sage, about why profits à prendre didn’t include other industries—the carve-out for the forestry industry. I didn’t get a satisfactory answer. In fact, from the Minister of Agriculture, the answer was that “Well, we’d hope the wine industry got a greater return per hectare than forestry.” There is no basis on that, so I’ve got a series of questions I would like to ask the Minister.

What papers went to Cabinet including profits à prendre in the Overseas Investment Amendment Bill? I’d like the answer to that. I’d like to know those papers. What analysis was done of foreign investment in other industries such as viticulture that utilise profits à prendre? What analysis of foreign investment in forestry and other industries comparing to forestry about foreign investment was done to help make those decisions to have a carve-out of forestry and not other industries? I’d really appreciate that answer.

I’d like to inform the committee what the benefits of foreign investment by way of profits à prendre actually bring. The wine industry in 2000 had exports of $100 million. In June, exports from the wine industry cracked $1.7 billion. That increase in exports was totally driven by access to market, and that was much helped by foreign investment. So profits à prendre are able to be utilised by way of a foreign wine company getting access to New Zealand land and planting grapes on that and then being able to build their market. Why is that more important than just leaving it to the local market? Well, unless anyone’s got out there and worn a bit of shoe leather out on the streets—and I’m looking around the Chamber and I don’t think I’ve seen anyone else across the Chamber out on the streets in foreign countries trying to sell goods—you require access to market. It is hard work and it requires those routes to market. That is what foreign investment brings.

Those foreign companies often have links into distribution companies in other countries, which they may well own shares in, and those distribution companies, one thing they want is surety of supply. How do you get surety of supply? You control the value chain—that’s how you get it. Or you at least have a shareholding and a stake in every step through the value chain in order for you to guarantee supply to ensure that you’re at the head of the queue, so that that wine—in the case of wine—finds its way into the market at a good price and on time.

Now, I don’t see in the forestry example, an industry that’s already 72 percent foreign-owned—what is the special case about forestry? I’ve asked the Minister in the chair for some answers to questions which might help inform the committee about what that decision-making process was, but I fail to see how there is a special case there. It is a heavily foreign-owned industry as it is. They say they want more trees planted. Well, you know, that’s great. We do, but we want quality investments in there. We don’t need access to market in the same way through forestry. I agree we need heavy investment in forestry, but what’s different from that to other New Zealand industries?

Horticulture: you could easily make the same case for apples and for the apple industry. You could make the same case for a number of industries. How do we reach further up the value chain? We do that by having investments through the value chain, and unless you get out there and walk around the markets and try and sell stuff around the world, then I would find it very difficult to explain it to members across the Chamber who haven’t had that experience to really understand how markets work in the international market place.

We have in the wine industry a fantastic example of an industry that takes a primary product—a grape. It processes it, adds value to it, puts it into a wine bottle, and actually achieves a higher market price in the world than other countries. If you take champagne out of the equation, it is the highest-selling industry in the world.

Rt Hon DAVID CARTER (National): Thank you, Madam Chair. It’s a pleasure to take part in this debate as we discuss the Overseas Investment Amendment Bill, because I was one of those that sat on the Finance and Expenditure Committee throughout the hearings. The first point I’d make is I don’t think in my parliamentary career I’ve seen a more shambolic process for a piece of legislation, and if my parliamentary colleagues want proof of it, pick up the bill and have a look at how it’s had to be changed as it’s gone through the select committee process.

You heard the chair of the select committee, Michael Wood, arguing with some passion a minute ago that this is about fixing the housing crisis. The evidence that came before the select committee is that it’ll do exactly the opposite. Most of the big apartment blocks being built in Auckland currently are done with overseas investment. Mr Wood shakes his head. That’s how out of touch that member is with his own city. Even the Minister realised that he had made a mistake, because we’ve had to change it through the select committee process to allow foreign investments into apartments, because otherwise they weren’t going to succeed. We heard submissioners, promoters, and developers of apartments come before us and say, “The only way we get this up and running is to get some pre-sales. Many of those pre-sales are to overseas investors. Once we’ve got the pre-sales, we’re in a position to go to a bank and finance the whole project.”

Many of those overseas buyers don’t hold the apartment for long. It’s about increasing supply, and even the Government ultimately recognised that as it went through the select committee process. They’ve had to come up with some basis of amendment to allow this apartment development to continue with overseas investment, and now we’ve got the nonsense whereby the bigger apartment blocks can allow the investor to buy one apartment provided he or she doesn’t live in it.

I don’t think I’ve ever seen a more shambolic process in my time in Parliament, and what you’ve got to realise is what’s driving it. It’s a socialist point of view—

Michael Wood: Well, that’s true.

Rt Hon DAVID CARTER: —and Mr Wood accepts that—where “Property owners are deemed to be wealthy, and therefore we’ll do what we can”—this is the Labour Government’s attitude—“to hit them. Let’s hit the rich.” It’s a real envy piece of legislation, and it will do nothing—nothing at all to increase housing supply.

Then you look at the reports we’ve had from the officials, and I want to say I’ve never seen a bigger bevvy of officials either in the Chamber tonight for the committee stage or—if you want to go and have a look members, go and have a look—in the offices in the lobby. They’re full of officials. They’re here because they know they might be called on to fix shambolic amendments—the need to try to fix this legislation.

But the first point I want to make is in the report they gave to us, they said 28 submitters were generally in favour of the legislation. I think it’s higher than that. Nearly every submitter came to us and said, “We’re in favour of this legislation. We can understand what you’re trying to do, provided you exempt us.”—provided you exempt us. So we have the telcos: “Yeah, this is good legislation, but just make sure you carve out the telcos.” We had the retirement village sector saying, “We understand what you’re trying to do. You don’t like foreigners, so let’s stop them investing, but carve us out.” We had Progressive Enterprises, a supermarket chain, saying, “Carve us out.”

And then we had the doozy of them all: a particular iwi in Northland. It came along with a developer—Te Ārai developments limited—and suddenly there was a realisation that this was a Northland-based iwi that we were led to believe in the select committee was a large owner of land, and they would not be in a position to reap the benefits of a zoning change they’d got. They presented their case, and suddenly they became eligible for an exemption that was ruled on personally by Mr Michael Wood, the chair of the select committee. Thank God we’ve realised it’s a private benefit—probably not to the iwi, but to the developers backing the iwi—and it’s now been ruled out and cannot go any further.

Mr Parker took a contribution and talked about the necessity of bringing this legislation forward now that we’ve signed the Trans-Pacific Partnership (TPP)—now that we’ve agreed to go with the TPP. He talked about the semantics of adding two particular letters before “TPP”, so then we can proceed to pass this legislation. Mr Parker protested on the streets against the TPP whilst he was in Opposition. I do admire that he’s prepared to change his mind and recognise the value of TPP, and we’re now progressing with it, but that is no justification for presenting legislation that is as bad as this before the committee.

The ones I do feel sorry for are some of the people with relatively expensive lifestyle blocks who are going to find their values are substantially decreased—probably halved—by this legislation. There are people who have built around Queenstown on some of those lifestyle blocks quite—[Time expired]

Hon EUGENIE SAGE (Minister for Land Information): Kia orana, Madam Chair, thank you. Just to respond to some of the comments that Mr Stuart Smith was making: why carve out forestry? Well, Mr Smith should be well aware that forestry is our third-largest export product earner, behind dairy and meat, and it contributed 3 percent of New Zealand’s GDP. Why carve out forestry? Because this Government, through the billion trees project, is serious about doing something about climate change.

The inaction by the past Government, its failure to really seriously engage with the issue, means that we need to catch up. If anyone’s been watching the international news, seeing the wildfires in California—we need to get serious. A billion trees sequestering that carbon is critical to meeting our Paris commitments. We need that additional investment from overseas companies in terms of expanding forestry in New Zealand. They will also, through their investments in land, be able to increase the amount of wood that’s processed domestically, creating more jobs. This Government has a plan for a sustainable, inclusive, and productive economy, and forestry is a key part of that.

There is already a screening regime for forestry, so what the Government did with the bill was listen to the concerns of industry, and—responding to the Rt Hon David Carter’s point—one would expect a bill to change in select committee, to be responsive to the concerns of submitters, because that is what the select committee process is all about. I commend the chair, Michael Wood, for the way in which he managed that process to ensure that the bill is the best it can be, responding to submitters.

Responding to the Rt Hon David Carter’s comments again, this bill was done quickly—as the Minister has made very clear—because of the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPPA). If the Government had not introduced the bill when it did, we would have lost the opportunity to actually ensure that we have a housing market in New Zealand that promotes affordability—that reduces the speculation by overseas buyers so that houses are more affordable for New Zealanders. The last Government failed to recognise that, and it was made clear in question time today that, finally, Mr English is recognising that the boom in immigration, the increased pressure that the overseas buyers were putting on housing, was contributing to the bubble.

This bill is about dealing with that. This bill is about ensuring that we meet the billion trees commitment, that we have a coherent, effective, and simple regime for screening overseas investment, that we build on the existing regime in the Overseas Investment Act for screening sensitive land, that it is coherent, and that we ensure that forestry can make that commitment to being part of our climate change commitments.

Why did we deal with profits à prendre, Mr Smith? We dealt with that because otherwise it was creating a significant loophole—the fact that these contractual agreements could, effectively, be the same, almost, as controlling and owning the land. So the simpler pathways have been developed in response to submissions. The bill builds on the existing regime in the Act. It’s been introduced at the time it was so that we are not prevented from controlling speculation in the housing market by overseas buyers as a result of the CPTPPA, because this Government cares about ensuring that housing is affordable.

HAMISH WALKER (National—Clutha-Southland): Madam Chair, thank you very much. If what Minister Sage just said is true—if they were responding to submitters in the Finance and Expenditure Committee—why have I got over 20 submissions here from Queenstown, all opposing this horrible piece of legislation? They want an exemption for Queenstown, and we’ll go through them and figure out why that is.

This bill was rushed through with no thought given, and it has many negative unintended consequences. This is going to do far more harm to the region than good. This Government knows best, and prefers to tell people how to run their lives—a nanny State Government. Then they have ignored submitters from Queenstown, including Mayor Jim Boult, who wrote a very thorough submission. This will hurt the Queenstown economy, and let’s listen to a few of these.

The first one is from a Graeme Todd. He’s been a lawyer down there for four decades. He has “grave fears” that this bill will hurt New Zealand’s reputation “not only as a … place to reside (permanently or [temporarily]) but as a place to [emigrate] … and [to] our [reputation] as a leading world and open economy”, that nothing will be achieved through this bill, and that it at best could be called political posturing. In his 36 years “[I] have never”—never—“acted for an overseas purchaser [who seeks] to speculate in the New Zealand … property market.”

Let’s go to the next person: Jamie Kirk, who moved back to Queenstown 10 years ago with his partner. They had major concerns around housing affordability. “We both work [in] the construction industry and as a direct result of … legislation … have … had a number of overseas persons cancel projects” in Queenstown and around New Zealand. If this bill is passed, “it will have … huge impact on [our] local economy, which will … flow on … [to] the entire country …”. “Restricting all overseas ownership within [Queenstown Lakes District Council] will have catastrophic effects on … local economy”. Housing affordability differs greatly across New Zealand: “it is not a … one stop fix.” Luxury home buyers are not purchasing homes that would otherwise have been “for regular working families to purchase.”

He goes on to mention what will happen if this bill’s passed, including losing high-end, skilled construction staff, who will go offshore and ply their trades elsewhere. Often they bring decades of experience in sustainable and innovative building techniques, methods, and materials not commonly used in New Zealand.

They also talk about an American couple—Camp Glenorchy. They’ve spent over $40 million buying this piece of land, developing it—it’s one of the first carbon zero accommodation blocks in the country. And this “rich prick” American couple—

CHAIRPERSON (Poto Williams): Order! Order!

HAMISH WALKER: —are going to donate it all—[Interruption] You called them that—

CHAIRPERSON (Poto Williams): Order!

HAMISH WALKER: —but they are going to—

CHAIRPERSON (Poto Williams): Order! I shouldn’t have to shout to get the member to come to order. Now, I have taken offence at something that you’ve said. I’d like you to stand, withdraw, and apologise.

HAMISH WALKER: I stand, withdraw, and apologise.

CHAIRPERSON (Poto Williams): Before you get into your—

Rt Hon David Carter: First said in this House by Michael Cullen.

CHAIRPERSON (Poto Williams): I’m actually still ruling. Before you resume your contribution, I was letting you run on. However, your contribution is probably more relevant to Part 2 than it is to Part 1, so I ask you to come back to Part 1.

HAMISH WALKER: Sorry, Madam Chair. I just want to talk about Queenstown Lakes District Council’s contribution. They have asked that this bill not proceed, as it will not improve housing affordability but make it worse, and it will be at the expense of significant economic and social value provided by overseas buyers. A delay in proceedings is needed to enable research and assessment of consequences, because quite clearly they haven’t been considered—the negative consequences that will follow this bill.

Sir Eion Edgar—he actually came and presented to the Finance and Expenditure Committee—said this bill “will be detrimental to NZ’s international reputation and greatly restrict overseas parties” huge benefit to New Zealand. He talked about one buyer who bought five stations between Queenstown and Wānaka for around $60 million and then spent another $50 million restoring these properties to their original state, and then they gifted 90 percent of the land to the Queen Elizabeth the Second National Trust for the benefit of and for use by all New Zealanders. They also maintained these estates at a cost of $3 million to $5 million a year—that’s a total gift of over $100 million. He also goes on to say that when he asks for money for events like the Queenstown Winter Games and the Queenstown Trails Trust, these are the first people to put their hands in their pockets and donate.

David Cole, chair of the housing trust in Queenstown for nine years—he was a board member of the national community housing organisation; very familiar with affordable housing issues in New Zealand—believes the current bill is nothing more than an empty gesture that in its present form will do more harm than good. I asked the Minister to please consider a carve-out for Queenstown. We really need these people, and they have proved over the years they’re making a huge contribution to New Zealand.

MARK PATTERSON (NZ First): It’s an absolute pleasure to stand on behalf of New Zealand First to talk to Part 1 of this Overseas Investment Amendment Bill. What I’ve heard from over the other side of the Chamber is an absolute exercise in denial. It’s the old dead cat strategy, I think it was—wasn’t that the Crosby/Textor dead cat? We’ve heard all sorts of stuff about the wine industry and whatever. This is about affordability of housing for New Zealanders.

This Government is absolutely united with our confidence and supply partners, the Greens, on this issue of foreign ownership. We have seen the outcome of what the policies of the previous Government have been, and they have been a market failure. As Mr Wood pointed out, we have million-dollar houses in Auckland. It’s interesting to hear Mr Walker get up and talk about Queenstown, where there are also million-dollar houses. The only people that he could quote were people like Graeme Todd and Sir Eion Edgar, at the top end of town—the big end of town. There was the Rt Hon David Carter talking about the poor lifestyle block holders on the outskirts of Queenstown. We’re here to talk about the policemen, the nurses, the schoolteachers, the meatworkers—the everyday people.

Let’s talk about Queenstown, because it just so happens that the Minister of Housing and Urban Development, Mr Twyford, has made a recent announcement with the Queenstown Lakes District Council—$52 million—and that is going to build 1,850 houses on Quail Rise in Frankton Flats. That’s what this Government—this egalitarian Government—is doing. We’re not looking after the big end of town; we’re looking after the workers and the good, ordinary Kiwis.

Of course, the National Party have got previous on this. Farmland: 465,000 hectares of farmland transferred into foreign ownership in 2016—an absolute shame, selling out the young New Zealand farmers trying to get through and get their foot on the property ladder. We’ve seen the outcome, now we’re scrambling as a Government to try to get access through Hunter Valley Station. Again, the aforementioned Mr Todd, who brokered that deal for Matt Lauer—we’re having to deal with him now, and potentially having to get access to our conservation estate that we’ve sold off the access to.

This is a ticking time bomb. What happened to the National Party of Sir Keith Holyoake and his famous property-owning democracy? We now have property ownership in that important 45- to 55-year-old bracket at 59 percent and falling. This is an absolute ticking time bomb. Those people, who we would ordinarily expect that by the time they reach pension age, they would have freeholded their own house—they don’t even own a house, and time’s running out. That’s why we’ve got to spend $2 billion a year on accommodation supplements.

The whole thing is unravelling. It is market failure, and we’re addressing that. There are ways to do this. This is not the only answer, but demand is a part of the answer.

We’re also dealing, of course, with supply. Again, Minister Twyford: 100,000 houses over 10 years. Of course we are dealing with immigration, Dr Smith, and we can see that trending steadily downwards. Just to the Supplementary Order Paper and, of course, the forestry carve-out, Mr Stuart Smith went on, “Why haven’t we got the wine industry in there? Why haven’t we got”—well, I can tell you why that is. You ask Paula Bennett, when she was swanning over to Paris to swan on the international stage and sign that Paris Agreement, what were they going to do? They didn’t have a plan at all. This Government has a plan—a billion-tree plan; a nation-building strategy. That is what we’re doing. We’re taking responsibility.

Yes, this is a desperate time; we need to take a desperate measure. This is what we’ve had to do. We’ve had to get a carve-out as we seek to address this incredibly important issue of our time, as Minister Sage has alluded to. So I’m proud that we’re standing up for ordinary New Zealanders. I’m proud we’re standing up for our international commitments. I really commend this amendment to the committee.

Hon AMY ADAMS (National—Selwyn): Thank you, Madam Chair. I do want to take another call on this Part 1 of the Overseas Investment Amendment Bill to respond to some of the nonsense we’ve heard from across the aisle about the creation of this issue of the lack of housing supply. If you listen to the other side, they would have you believe—not you, Madam Chair, of course; they would have this House believe—that the whole issue magically started in the last nine years. Well, I want to inject a little bit of fact into this debate.

If anybody wants to dispute this, have a look at the Statistics New Zealand website. The Statistics New Zealand website is a bit inconvenient for the Government—they don’t want to hear it—but let’s look at the reality here. Housebuilding started to plummet in New Zealand in 2003, and fell to the lowest levels for many, many decades in 2008, when we took office. In 2003, housebuilding plummeted—it’s like a straight-line decline—down to the very lows of when we took office. If you look at that Statistics New Zealand graph—and the Government won’t, because actual information gets in the way of their ideology—it collapsed under the last Labour Government. It completely collapsed.

Under the National Government, that rate of housebuilding picked up from the cellar and went right back up strongly. It was the National Government that recovered housebuilding in this country, and if it hadn’t been for those lost years under Labour, when they were asleep at the helm, as they are now with the economy—they did nothing to address the complete collapse in housebuilding—we wouldn’t have a shortage of housing now. National recovered the sector, and, frankly, it is the work already of this Government to destroy the funding for house construction in this country that is, once again, creating a problem of insufficient houses being built. So look at the numbers. That’s all I would say to this committee or anyone listening to the debate: look at the numbers from Statistics New Zealand.

The collapse in housebuilding started under the last Labour Government. It was recovered strongly under the National Government, and already we’re seeing and hearing from developers that it is because of the changes in this bill that they now can’t get financing for their developments. I was talking to developers just last week, actually, who said to me that they have been building hundreds of affordable properties in Auckland—New Zealand developers, not some nasty foreigners. New Zealand developers, but, yes, their financing comes from offshore. Because of this bill, they have now lost funding for a number of developments they had planned. Now, some of those developments are going to be rebadged as KiwiBuild, and Phil Twyford will pretend that somehow he’s adding to the pipeline—he is not. It is picking up a few of the lost developments because of this legislation. So not only did Labour break the housing market last time they were in Government, not only have they completely failed to recognise how hard it has been to get that sector going again; they’re straight in and doing it again.

We’ve just heard from the last speaker that, actually, this is causing the pressures on the accommodation supplement. Well, I’ll tell you what doesn’t help the pressures on the accommodation supplement: driving landlords out of the market head over tail. Landlords are saying, “Under this lot, there is no reason we would own a property.” Costs are going up, rents are going up—that is all on New Zealanders, and it’s on the poorest New Zealanders. So it’s not about looking after the top end of town. You make houses more expensive, you make rents more expensive, you stop the funding of developments, and it is people on the lowest wages who miss out.

So I couldn’t sit here and listen to people in this debate saying that the need for this bill was because of the last nine years. There is no need for this bill, first of all. There is no need for it. But let’s be really clear: if there is a shortage of houses in Auckland at the moment—and there is, and I acknowledge that—that is because they were absolutely derelict in their duty the last time they were in Government, and they’re showing already the same signs of a rampant and total disregard for any sort of economic analysis, any understanding, and any willingness to listen to advice, to listen to the people who came to the Finance and Expenditure Committee. Whether it’s in housing, whether it’s in viticulture, or whether it’s in the profit à prendre space, not once did they front up with any evidence that this will address the problem they’re talking about.

Everybody who came to the select committee, as my colleagues have said, made it clear they didn’t want any part of it. They could sort of say to the Government, “Oh, well, good on you—nice that you’re trying, but please carve us out, because this will destroy us.” Well, this is exactly the sort of economic vandalism we are seeing from this Government: have a good bumper sticker, virtue-signal something that sounds good in the polls, and have total disregard for whether it works.

CHAIRPERSON (Poto Williams): I call the Hon Gerry Brownlee.

Hon Gerry Brownlee: Sorry?

CHAIRPERSON (Poto Williams): I call you.

Hon GERRY BROWNLEE (National—Ilam): Oh, it’s me. Thank you very much, Madam Chair. Well, of course, following on from the Hon Amy Adams’ very, very excellent history of why we are in this situation, it’s interesting to note that, while you can have New Zealand First members, Labour Party members, and Green Party members standing up today saying this is the great saviour for New Zealand ownership of land, it fails to recognise that it allows foreign capital to come in, foreign investors to come in—we might use the word “speculators”, but they can’t bring themselves to do it—allows those people to come in, build all sorts of housing projects with no problem whatsoever. It’s right there in the bill—that’s allowed. They just can’t own them. Or, worse than that—my apologies; I’m wrong—they can own them, but they can’t live in them. They can own them, but they can’t live in them. So what we’ve got here is a bill that is just a complete charade when it comes to actually doing something that it is claiming to do.

The worst thing is it denies the history of this country. Going back as far as we like in European settlement, there has been huge foreign investment in this country. What happened in that pre-1840 period? Trading was carried out and it was foreign capital that allowed trading interests then to establish in New Zealand, including Māori. Post-1840, the establishment of a European-style Government here—massive amounts of British capital and other Commonwealth capital coming into this country to build the main streets of New Zealand. It’s only into the 1970s that you start to see some of that ownership transferring in a greater bulk back to New Zealanders, but those New Zealanders were often financing those purchases with foreign capital.

One of the things that this bill tries to deny is that New Zealand is a country that has to trade in an international environment. We enjoy a lifestyle in this country far in excess of what a domestic economy here might be able to provide for us, and we enjoy that because we are free to engage in trading activities with other countries. Some of that requires that there will be some foreign investment in New Zealand property. Now, it’s OK for the Government, apparently, to carve out some of their friends when it comes to a big property investment. It’s OK for the Government to say, “Well, if it’s forestry, that’s OK because that suits our billion-tree pipe dream, and it’s OK for us to invite foreigners to come in here, build houses, but never own them.” And they’ll come in their droves, apparently. Well, no one goes to a place they’re not welcome. The problem will be that we are going to see an even further tightening of available capital for the sort of work that’s required to not only keep our economy going but also deal with some of the housing needs that this country currently has.

I’m fascinated by my friend over there, Mark Patterson, from down south—I’m told he’s a very competent farmer, very capable farmer—getting concerned that it was only the top end of town, apparently, that we were talking about over here. Well, let’s ask ourselves a question here: if people have come into this country and they’ve spent an enormous amount of money in this country building these flash homes, and they have the $7 million to $15 million value or even more on them, how many buyers are there going to be for those properties? What we’re really seeing here is some sort of early 1900s breakup of estates carried out by Governments. I just think it actually sends a very poor signal to New Zealanders who want to invest in property—a very poor signal. There are not thousands of these properties. There are not even, possibly, hundreds in that category. They’re few and they’re far between. Stopping them being sold to other foreigners and more capital coming into New Zealand for more expenditure in the New Zealand economy makes absolutely no sense whatsoever, and pandering to the prejudice that some people have against foreigners coming to this country is utterly ridiculous.

Let’s make it very clear: foreign capital has done a huge amount to expand the conservation estate in this country and to start protecting New Zealand’s conservation values. To close all that off and say, “No, we’re not going to have it.” with this rubbish bill is a tragedy.

ANDREW BAYLY (National—Hunua): Madam Chair, thank you. I thought I would start by talking about some of the rebuttal I’ve heard tonight, before I want to actually deal with some of the issues of what’s actually in this bill. The first thing I want to just refer to is that speech by Mr Mark Patterson, who implied that National is not worried about these things, hasn’t done anything about—

Hon Member: That’s right.

ANDREW BAYLY: That is not right.

Mark Patterson: Yes, it is.

ANDREW BAYLY: That is not right, Mr Patterson, and I’d like to draw your attention to things that we actually did when we were in power, which is that we implemented a thing to stop foreign buyers coming into the country and just wholesale buying up property by making sure that they were required to get an IRD number. We also introduced the two-year brightline test. We also introduced withholding tax on foreigners, and we beefed up IRD to chase property people to make sure they’re paying their taxes. So this assertion that we’re not concerned about this issue is wrong.

But the thing that we did which is different from this bill tonight is that we were measured, calculated, in the response that we wanted to do. I just found the response from the Minister in the chair talking about the ability for foreigners to come into this country and buy great swathes of forestry land because we need their investment to continue to promote forestry and also meet our billion-trees target—which I just find perverse, because, to me, that strikes at the absolute contradiction of this bill. On one side, we’ve got a Minister saying, “Let’s allow an industry 72 percent owned by foreigners to buy more—to buy up to 100 percent.” It allows them to come and buy a thousand hectares every year without any need to go and get approval, and yet on the other side we’re saying, “We can’t allow you guys to buy houses.”, even though we know only 3 percent a year are sold to foreigners. I can’t understand that logic, and that is the thing about this bill. I’ve got to say, I’ve heard all the submissions—213—

CHAIRPERSON (Poto Williams): I apologise to the member; the time has come for me to leave the Chair for the dinner break.

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

ANDREW BAYLY: Thank you, Mr Assistant Chair. I was cut off in my prime, I thought, just before the dinner break. I had been talking about the illogicality of this bill, about the issue of why we want to promote more foreign ownership in the forestry industry, which is already 72 percent owned by foreigners, and we think we should allow 100 percent. Yet, on the other side, in the housing sector, we’ve only got three percent of houses being sold to foreigners, but that is the issue. I can’t understand that.

But where I was just moving on to was we heard 213 submissions in the Finance and Expenditure Committee. I’ve got to say as a member of that committee I actually felt quite embarrassed. I did. I felt quite embarrassed because there was just this avalanche of submitters who came in and just hammered our committee. A lot of the members held their heads in shame. So what they did, what happened—

Rt Hon David Carter: So did the staff. So did the officials.

ANDREW BAYLY: That’s right. Unfortunately, they had to, Mr Carter. What happened was that we then saw a proliferation of minor changes as each of these submitters came in and worked the issue through and showed how illogical, how wrong, this piece of legislation was.

So just to deal with a bit of fact, the definition of an overseas person in the Act is defined as someone who’s been living in New Zealand for 12 months, or a person present for at least the last 183 days, or a New Zealand tax resident, and that all sounds very good. So if you’re not one of those people and you’re a foreigner, in effect, you need to apply for a consent to be involved in buying a house. You may avoid what’s called the counterfactual process or test. A counterfactual is normally an Overseas Investment Office (OIO) requirement that, if you are a foreigner and you’re buying a piece of land or a business, what you do must be more than the best New Zealander would do with that same asset. So, to avoid that test, which is actually quite a strong test, you have to demonstrate that you’ve got a commitment to live in New Zealand, that you’re developing the land to create “increased housing”—is the term—provided you sell that development once you get to a completion, or you use the land for non-residential purposes, which may, of course, have a component where it has a house on it.

So that’s all very well but my first two observations around that carve-out are that the Government is happy for a foreigner to land bank for future houses in New Zealand. That’s what this legislation means. It means they are prepared to allow foreigners to come in here and land bank good New Zealand land for the purpose of eventually building houses on it. Of course, most people who are involved in the building industry know that’s where you make your money, and buying that land before it’s rezoned and taking it through to a process where you can sell those sections.

The second observation I’d make is that if you’re a foreigner—

Mark Patterson: Selling off those Pukekohe soils.

ANDREW BAYLY: We’ve got huge problems in Pukekohe. If you’re a foreigner and you buy an existing business, the way to get around this is to make sure it’s got a house on it. If you’ve got a house on it, you will get approval, and then you can then spend your $20 million doing the house up. That’s the only way to get around this bill.

But there are ways of getting around it. So if we were really trying to stop this—and these are wealthy people; these are the people that Mr Mark Patterson was slating off before, earlier in the speech, saying how we shouldn’t have these wealthy people coming into New Zealand, which I just find absurd—this is the way that they will get around it. So I’m not sure this carve-out actually works.

So what did we do? What were the damage limitation rules that were introduced into the bill? Well, the first change is that, in order to promote foreigners building new properties or houses, there’s a dispensation for those who build 20 or more houses, and you’d be able to get a consent to sell 60 percent of those houses to foreigners. Of course, that was in recognition of the blindingly obvious: that, in many cases, New Zealanders need to be able to sell houses to a range of investors to be able to get the project off the line, and that banks require presales. Of course, suddenly there’s a recognition by the Government that we should make a dispensation. But, of course, it means that you can sell 60 percent to overseas investors and these buyers will not be required to on sell but they will not be able to live in them and, therefore, be able to rent them. I’ll come back to this. That’s a buyer category.

In terms of the developer itself, who may be doing the apartment build or terrace house development, there would be no requirement for them; so they could come in, buy the land, sit on it for five years, build the terraced home or the apartments, and then not sell provided there’s a shared-equity basis or rent-to-buy or rental. See, it all sounds very good. But this is the rub—this is the rub. If you’re going to get around that rule, what you will do is you will be that foreigner who comes in and land banks, builds the houses, and then you will rent it out. You will rent it out to your daughter or son or son-in-law on a term not less than five years but just under five years, and you will be able to use that property. So actually the rules don’t work. That’s the issue I have with the rules. If you’re going to try and carve something out, make the rules work. These rules do not apply and will not apply. I think people’ll find a hole in them, unfortunately.

Then, of course, there’s the issue around hotels. There’s a similar arrangement where you can take part of a hotel but, of course, you can retain that as long as you don’t use it more than 30 days a year. But, of course, all this raises the issue around the OIO compliance. We heard from the committee officials that at the moment, I think, the OIO processes about 150 applications a year and under this arrangement they believe they will need to process about 4,000—4,000 of these. How are they going to ensure that the person who built the apartments, who rented it to their daughter, how will they go back in five years’ time and check it, or in seven years’ time—and work its way through? So I think that’s a really significant issue, and I don’t think that practicality of this whole thing—again, it makes the Act unworkable. I think that’s a crucial deficiency in this Act.

I think the other thing was around the issue of residential housing providers. I want to return to this—hopefully, I’ll get another call at some point—because that is also part of a way of creating new housing stock in New Zealand. Residential housing providers like Ryman Healthcare, Metlifecare—under the rules, they are precluded because they’ve got more than 25 percent foreign ownership. I think those are issues, again, if you’re trying to promote housing in New Zealand. We’ve actually carved them out of this arrangement. I can’t understand how this bill works and what the intent of it is.

Hon DAVID PARKER (Minister for Trade and Export Growth): I want to talk to a number of amendments that have been tabled by National Party members, which are all identical except as to the district and amount that they apply to. The National Party members are bringing forward amendments to clause 4(1), which adds a new paragraph (c) to that clause of the bill, which reads “excludes land from the definition of”—

Hon Amy Adams: It’s all Part 2.

Hon DAVID PARKER: No, this is section 4, Part 1.

Hon Amy Adams: Of schedule 3?

Hon DAVID PARKER: No, it’s not. It’s clause 4 of the bill. These various amendments exclude land with a quotable value above various amounts within various district boundaries. They’re all identical except that they have a different council and a different amount.

I want to talk about the Queenstown one, because, I’ve got to say, there is nothing more illustrative of the bankrupt values held by the National Party than what they’re doing in respect of Queenstown. Queenstown has the least affordable housing in New Zealand—in New Zealand. People who work in Queenstown can’t afford to live there. They commute from Cromwell. They commute from Kingston. As a consequence of the inability to employ New Zealand staff, more than any other part of New Zealand, it is reliant on an immigrant workforce. They’re willing to put up with 12 to a house, 20 to a house, to live for a couple of months in Queenstown as party town. They’re willing to put up with that. Of course, New Zealanders aren’t willing to do that. So what’s the problem there?

Housing is so expensive; so what’s the answer from the National Party? They say that we should give an exemption not just for wealthy people but for the wealthiest of the wealthy—the people who can afford to buy a house worth more than $2.5 million. That’s what Hamish Walker’s proposed amendment does. It shows his true colours: not here for New Zealanders; not here for the people who work here, who pay tax in New Zealand, who lend their shoulder to the wheel of the New Zealand economy, who raise families here, who volunteer at the fire brigade, who belong to the sports club, and who do the volunteer work through the Lions club—no. Those people can be written off by Hamish Walker. Hamish Walker, I think you should take a look at yourself. The people in Queenstown—

Hamish Walker: Well, why did they all submit against it?

Hon DAVID PARKER: Yeah, I know some of your friends, they say, “Oh well, this is terrible. What will happen to the construction industry?” Well, what will happen to the construction industry is that instead of building houses that are worth more than $2.5 million, they’ll build affordable houses, and they’ll make money building affordable houses. Is that such a bad thing for Queenstown? It would be a great thing for Queenstown—really, you know.

So who is the National Party proposing to exempt? People who don’t have work here, people who don’t pay tax here, and people who don’t visit here very often. They’ll build a $2.5 million house, it’ll be occupied for a few weeks a year, and that effort could have been put into building affordable homes that New Zealanders could live in.

Now, not only does that offend me; the other side of the transaction offends me, too. In respect of those prime sites in Queenstown or the Bay of Islands, I want the most successful New Zealanders to build them and to live in them and to own them. I don’t want them to be outbid by someone who avoids tax overseas. We’ve got this concentration of wealth happening around the world. Piketty proved it. We all know it. The Panama Papers proved it. Some of these people don’t pay tax anywhere. They’re the owners of the multinationals who don’t pay tax in New Zealand or anywhere else, and what does the National Party want to do? They’re the people they want to govern for. They don’t want to govern for ordinary New Zealanders who work, who pay tax, and who raise their families. They are there for the foreign buyers who don’t pay tax in New Zealand.

If they want to come here and live here permanently and pay tax here, they can buy here. Those people would normally be able to get a visa to come and live in New Zealand, and if they do that, from the day they arrive, they can buy a house. Indeed, they could actually get approval on the basis that they’re coming to live here permanently. But no, the National Party wants to give a special exemption for the wealthiest people in the world—who don’t pay tax anywhere, often—to come and outbid New Zealanders for what is ours.

It is the birthright of New Zealanders to live in a home that they own and to buy our property. It’s not the birthright of a foreigner.

IAN McKELVIE (National—Rangitīkei): Thank you, Mr Chair. I’m quite surprised to get a call—

Rt Hon David Carter: Wind him up, Ian.

IAN McKELVIE: Well, no. I’m not going to do that at all. I think, from the last speech we just heard, if you inverted that and directly attributed it to the forestry industry, that is exactly what this bill is doing: it’s allowing the richest people in the world to come into New Zealand, rape and plunder our land, and take the profits home without paying tax, which is exactly what Minister David Parker was talking about a minute ago.

But I want to talk about a couple of other things with respect to the forestry industry and the clauses in this bill that I think are particularly concerning to New Zealand, and that is that there is this great potential for this to lead to land aggregation. There’s also great potential for this to preclude the use of classes 2, 3, and 4 land, which is way beyond the requirements of forestry, from being used for other things. I think that is a tragedy for New Zealand’s future. It also leads to depopulation, and if we run the risk of aggregating land and planting trees all over it, it will lead to depopulation of provincial New Zealand, which is also not altogether in our favour, and I’ll explain that again in a minute.

It is quite possible to manage the tree-planting and achieve the target of the “Minister of Millions” in a much better manner than this bill proposes. I think, if we looked at this and took some time over it—I don’t have an issue with people buying land and planting trees; I think it’s very useful. The issue I’ve got is that this bill enables them to buy land carte blanche, in effect. They could even buy grape land, for that matter, and plant it in trees, if you think about it in the extreme, and there’s nothing to stop that from happening in this bill. So I think that putting these clauses into the bill around forestry land is extremely dangerous for the future of New Zealand.

We’ve seen, throughout our history, land use change frequently, actually—sometimes for the better, sometimes for the worse. If we plant trees on this land, other than if you looked at some of the land after Cyclone Bola in the Gisborne area, which was de-treed after being subsidised into trees—and it’s quite possible that that will happen again in this case, because that’s the way, I guess, land use happens. So I think there’s some risk with the land aggregation and the way that this land could then be used for trees and no longer be of any use for anything else. It will threaten our rural populations, it will threaten the very best of our land, and I don’t think that’s in New Zealand’s long-term future. So that’s the first issue I wanted to touch on. It concerns me greatly, and I think there are already models in New Zealand where the type of land use can be influenced by the way it’s able to be planted and whatever. This bill doesn’t allow for that, because, effectively, it enables those purchasers to buy land en masse.

I want to talk about another issue which is a little bit the same. Michael Wood, in his contribution earlier on, talked about there being a shortfall of 40,000 houses in Auckland. Well, I’ll lay odds that, in 10 years’ time, there will still be a shortfall of 40,000 houses in Auckland, and there are two reasons for that. One is that the issue isn’t, in my view, foreign buyers. The issue is the settings that the Resource Management Act and the Auckland Plan have put on the use of land and the way we need to build houses in that area. When you think about the Pukekohe potato land, effectively, they’re replanting it in houses, and I suppose that, if you took that to the extreme, you could liken it very much to the potato famine in Ireland. Some of you will be old enough to remember that—I am—and I mean that’s the sort of thing that this kind of thing creates.

The reason I am raising these issues is because, I think, throughout our history and throughout all the history of democracy in the world, we’ve seen Governments with intention put legislation in place which has come up with perverse results. I think there’s a very good chance that this legislation is going to lead to perverse results, both, as I mentioned earlier, in the use of land for trees and where we get to with that, and certainly, I think, given that the settings aren’t right around building houses, we’re encouraging people to build out and not up, effectively. Whether we like it or not, wherever we live, we just cannot keep on building out in the world, because there will not be enough sustainable and decent land or good class of land left to provide the food that we require. I think that if you look at the Pukekohe area—and I don’t want to pinch my friend Andrew Bayly’s electorate and use it as a shocking example—that’s very challenging for New Zealand, and it could happen throughout New Zealand.

So I guess my concerns about this bill relate primarily to land use and where it gets to in the future as a result of the legislation that we pass in this time. So that’s my contribution to the debate.

Hon DAVID PARKER (Minister for Trade and Export Growth): Could I take the opportunity to respond to those comments by Mr McKelvie, which I thank him for. I agree that future Governments need the power to control excessive levels of overseas investment in forestry, and that’s what this bill does. Indeed, if this bill is not passed, because any forest and any land to be used for forest can be acquired as a forest registration right, it can be vacant land sold as a forest registration right—

Hon Amy Adams: So they’d have exempted it all out. You’ve made it unworkable.

Hon DAVID PARKER: No. Amy Adams, you’re absolutely—

Hon Amy Adams: 1,000 hectares—is it not 1,000 hectares?

Hon DAVID PARKER: No, you’re absolutely wrong. I’m surprised that after having sat through at least half of the select—

Hon Amy Adams: Well, which part’s wrong? Is it not 1,000 hectares?

Hon DAVID PARKER: If the member had sat through and listened to her select committee and read her papers properly, she would understand that if this bill is not passed—

Hon Amy Adams: Is it not 1,000 hectares? Are you saying I’m wrong?

Hon DAVID PARKER: If this bill is not passed—listen, please—then New Zealand loses for ever the right to control overseas purchases of forest land purchased as forest registration rights. Every freehold forest, every leasehold forest, every piece of land to be planted as a forest can alternatively be sold as a forest registration right for multiple rotations for 90-plus years, and at the moment, that is not within the screening regime.

So I accept Mr McKelvie’s concerns. I accept that it is possible that foreign direct investment in forestry can go so far, but the logical mistake that has been made by the National Party is that, unless this bill is passed, that is the status quo under the existing law, and New Zealand loses for ever. If we don’t fix this before the Comprehensive and Progressive Agreement for Trans-Pacific Partnership comes into effect, New Zealand loses for ever the right to control foreign ownership of forests, because every forest in New Zealand—every one of them—can be transacted as a forest registration right, and they are not currently covered by the screening regime.

In respect of the points that Mr McKelvie makes in respect of urban land markets, we agree: this is not the be all and end all of curing the housing crisis. We agree there are land supply issues in Auckland. The answer to that does not lie in this legislation; it lies in other legislation and policy measures that the Government are proceeding with.

Rt Hon DAVID CARTER (National): Thank you very much, Mr Chairman. The first point I want to make is in relation to the comment earlier by the Minister the Hon David Parker and asks him why he dismisses the Queenstown example advanced by Hamish Walker when 25 submitters came from the Queenstown area to present to the Finance and Expenditure Committee and, in common, they all said, “There is a housing affordability issue in Queenstown, and this measure being advanced in this bill will only make it worse.” We heard that from owners of land, we heard that from developers, we heard that from carpenters—we all agree that Queenstown has got an affordability issue. Do something that’s positive about it, Minister. Don’t advance legislation that’s going to make the problem worse, and don’t ignore 25 submitters. Now, I know the Minister has a history. He actually came into this Parliament as the member for Otago. I think it was 2002 to 2005, from memory. He knows the very people who made these submissions, and tonight he just rejects them with an arrogance that doesn’t normally come to Ministers in only nine months of Government.

The reason I wanted to take another call is that I was outraged to hear Mark Patterson’s contribution earlier. And I am looking forward to when that Hansard is published, and I’m going to make sure Hamish Walker and Jacqui Dean send it as wide as they can around Clutha-Southland and the South Otago area, because that member will never come back into Parliament with that speech. What a socialist position from a person who claims he represents the New Zealand primary sector. Throughout his speech, he decried people who make money, he decried people who make a profit, and he said we should all be equal in this world. It was almost communist in its delivery. I thought it was a frightful, frightful contribution, completely anti - foreign investment. How does that member think our primary industry was ever established in this country? How does he think the processes came and arrived from England if it wasn’t for foreign investment? I thought that member had some possibility, but I think he’s now got 2½ or two years left in this place before his constituents down in that part of the world realise that he’s not for farmers at all; he’s completely a socialist.

The other thing I wanted to talk about was the issue about the sudden change of attack and the introduction of a Supplementary Order Paper (SOP) around forestry. And I can just imagine what happened in Cabinet as the forest report slipped from the select committee back to the Cabinet members and they realised what a mess they’d made with the first piece of legislation put into this House. You have the Hon Shane Jones, who claims he’s the champion of the provinces, advancing a scheme to plant a billion trees a year, and as this was put into Parliament, as it was introduced by the Hon David Parker, it would have stopped foreign investment in that industry completely. And it’s already 74 percent foreign-owned. So they had to scrape together a saviour SOP, which has now made an exemption for forestry of up to 1,000 hectares. And I say to Mr Parker: if you’re doing it for forestry, why is that the only industry that’s important? What about horticulture? It earns more money than forestry, and they’re under the regime now of not greater than 5 hectares.

You can just imagine the argument between Shane Jones, Winston Peters, and David Parker around the Cabinet table when they realised what a disaster this original legislation was. And we see that right through the whole submission process, when every submitter almost to a tee came before the select committee and said, “We understand what the Government’s trying to do, but the effect of this legislation is so bad it will do exactly the opposite.” And I just cannot believe the arrogance of particularly the Minister in the Chair—well, I suppose, having known him for as long as I have, I can—but I would have thought some of the other Ministers would realise the effect of this legislation. Mr Parker’s opposed foreign investment, not only in land ownership in this country; he’s opposed foreign investment, he’s opposed anybody who claims to make a credible life for themselves and becomes wealthy, and he’s opposed that throughout his parliamentary career.

Hon EUGENIE SAGE (Green): Kia orana, Mr Chair. Thank you. The Rt Hon David Carter is better than that, and I am really surprised to hear the tenor of that speech. The fact, Mr Carter, is that this Government has a fundamentally different approach to overseas ownership of land and housing in New Zealand, because it is a privilege, if you’re an overseas person, to own land here. That is why one of the first things this Government did was to change the ministerial directive so that it did apply to all land over 5 hectares, not just to very large farms.

In terms of the Queenstown issue, I’ve been really surprised by the National members, particularly Mr Walker, and their putting up the arguments of those who have access to a lot of income and wealth that Queenstown should somehow be in a different position from everywhere else. This Government wants the legislation to apply consistently across New Zealand, because if you had an exemption for Queenstown, that would drive overseas speculation there, and if anyone’s been to Queenstown lately, they would realise that the pressures on housing there are significant. It is very difficult for average households to afford housing there. You won’t make it worse by putting in this law. What this bill does is ensure that we don’t have the luxury housing market, which you’ve got around Queenstown, contributing to driving up prices further, contributing to soaking up demand for builders, for residential construction materials, as it would if you made an exemption, as Mr Walker is suggesting.

We recognise that land price pressures are one of the major drivers of housing price increase, but if you’re going to allow land in the Queenstown area to be used for the development of luxury housing, to be owned by overseas interests, that’s going to contribute to driving up price increases in housing. If you exempt the luxury homes around Queenstown, that will also drive up prices, and it will increase the demand in that luxury market. So it doesn’t make sense for Mr Walker to be arguing that Queenstown should be exempt. It was self-serving by the submitters who put that—that their particular region should be exempt. And it’s also a nonsense just to suggest that the regime should apply to Auckland. There are other areas where there are housing pressures. We want a consistent regime across New Zealand.

So, Mr Carter, your comments calling into question the integrity of Ministers, who are putting in place a regime now because otherwise, as Minister Parker said, we lose the opportunity to get this law in place before the Comprehensive and Progressive Trans-Pacific Partnership agreement comes into effect—National, in Government, was quite happy to have extensive overseas ownership. It’s quite happy to have speculation in the housing market driven up by overseas ownership. This Government has a different vision. It’s a privilege to own land in New Zealand if you’re based overseas, and we want to ensure that housing is affordable. That’s why this bill is going ahead. That’s why it’s consistent across New Zealand, and it hasn’t got the special exemptions that some members in the Opposition are arguing for.

LAWRENCE YULE (National—Tukituki): Mr Chair, thank you for the call. I just want to come back to the real, basic premise of this. This is my first example of ideology to the fore, backed with very few facts and a perception that there is a problem, stirred up in an election campaign, and lo and behold we find out there isn’t actually that big a problem. Worse than that, we were told it was under urgency because of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. Actually, now, nearly a year later, we are still going through the stages of this, when at the time it was heard under urgency—very short time frame for submissions, all the rest of it.

I do dislike what the Minister said in relation to my colleague Hamish Walker, because I sat in those select committee meetings, and I listened to the Mayor of Queenstown and 25 other people from down there who said, actually, they wanted an exemption for a certain value of property, to make sure that international owners could come in and invest in New Zealand and Queenstown. It flows on from around the 90 percent of submitters who were opposed to this bill, and, in many cases, we actually rewrote a whole series of things to pacify them. It was like some profound invention that we found out; that the Auckland property market and the apartment market needed offshore funding, foreign investment, to actually even build the houses in the first place. When we first found out about that, it was like, “Really?” It was like this Government didn’t understand the capital flows that were required in a risky business like apartment building.

As my colleagues the Hon Judith Collins, the Hon Amy Adams, and the Hon Nick Smith have said, we were building, on average, around 31,000 houses a year—a massive increase on what that was previously. In my view, this is all around perception. While the Government may have created a perception that there was a problem, I actually think we have completely underestimated the signal we have sent to the rest of the world and the investment community internationally.

I go back to my own province and I think of—and some of you will have been to this place—Elephant Hill. It’s a winery on the coast—

Hon Member: It’s a very nice place!

LAWRENCE YULE: It’s beautiful. That started because a German man found out that a small business in Hastings looked after and transformed Jaguar cars. He got one done; he got another done. He then came to New Zealand; he invested in Elephant Hill, bought a beautiful residence. His family came to live there, as did all his employees. It’s been a wonderful development, as has Julian Robertson’s investment in Hawke’s Bay, as has the Craggy Range family in Hawke’s Bay.

Now, it’s like—and all of you would have faced this; I ask you to reflect on your own personal life—when you get an invitation to a function or something down the road, and it says, “To just you and no partner.”, or “No wife.”, or “No spouse.” Sometimes you reflect on that. If you get asked to a party down the road and they say, “Please, just you come and don’t bring your wife.”, you don’t feel too good about it. The perception we’re sending to the rest of the world is, “We want your cash, we want your money, but actually you can’t buy a house here. We don’t want you to live here. You can’t buy a house.” And, actually, just like the oil and gas decision, that has a chilling effect on the international investment community.

I actually am proud to be part of the National Party and this side of the House that supports foreign investment, that supports all the very good things that go with that, and I am somewhat distracted and dismayed at the ideology that came out of the Minister’s comments about the people in Queenstown and how they were all being impacted on. What my colleague Hamish Walker has done and said—and I support it—is that for a certain value of household, a valuable house commodity, there should be an exemption so that foreign buyers can purchase them and they’re not competing with Kiwi purchasers. I actually support that in my own case, because in all the examples I’ve given, family members and staff have come from those foreign investment entities and they are living in our community. We are now saying, “Invest, but, by the way, you can’t buy a house.”, and I think that is extremely damaging to New Zealand’s reputation.

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

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

Ayes 63

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

Noes 57

New Zealand National 56; ACT New Zealand 1.

Motion agreed to.

The question was put that the amendments set out on Supplementary Order Paper 52 in the name of the Hon David Parker to Part 1 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 57

New Zealand National 56; ACT New Zealand 1.

Amendments agreed to.

CHAIRPERSON (Adrian Rurawhe): Members, there are 39 amendments proposing changes to the definition of “residential land” to exclude land of various values and in various districts. These amendments are so similar in substance that I think I must test the will of the committee, putting the question on a random selection of these very similar amendments.

The question was put that the following amendment in the name of Hamish Walker to clause 4 be agreed to:

in paragraph (a) of the definition of residential land in section 6(1) in clause 4(1), insert the following subparagraph:

(i) for the purposes of this Act, residential land excludes land with a QV value above $2.5 million within the Queenstown Lakes District boundaries as set out in Local Government Act 2002

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.

CHAIRPERSON (Adrian Rurawhe): As a result of that vote, the following tabled amendments are out of order: Stuart Smith’s tabled amendment to clause 4(1) amending section 6(1), excluding residential land within the Marlborough District Council boundaries, Stuart Smith’s tabled amendment excluding land within Kaikōura District Council boundaries, Stuart Smith’s tabled amendment excluding land within the Hurunui District Council boundaries.

Lawrence Yule’s tabled amendment to clause 4(1) amending section 6(1).

Ian McKelvie’s tabled amendment excluding land with the Rangitīkei District Council, Ian McKelvie’s tabled amendment excluding land within the Ruapehu District Council, Ian McKelvie’s tabled amendment excluding land within the Manawatū District Council.

The Hon Jacqui Dean’s tabled amendments excluding land within the Waitaki District Council, the Hon Jacqui Dean’s tabled amendments excluding certain land within the Waimate District Council, the Hon Jacqui Dean’s tabled amendments excluding land within the Mackenzie District Council, the Hon Jacqui Dean’s tabled amendments excluding land within the Central Otago District Council.

Barbara Kuriger’s tabled amendment excluding land within the Stratford District Council, Barbara Kuriger’s tabled amendment excluding land within the South Taranaki District Council boundaries, Barbara Kuriger’s tabled amendment excluding land within the Waitomo District Council boundaries, Barbara Kuriger’s tabled amendment excluding land within the Ōtorohanga District Council boundaries.

Sarah Dowie’s tabled amendment excluding land within the Invercargill City Council boundaries.

The Hon Nathan Guy’s tabled amendment excluding land within the Kāpiti Coast District Council boundaries, the Hon Nathan Guy’s tabled amendment excluding certain land within the Horowhenua District Council boundary.

Andrew Falloon’s tabled amendment excluding land within the Timaru District Council boundaries, Andrew Falloon’s tabled amendment excluding certain land within the Ashburton District Council.

Maureen Pugh’s tabled amendment excluding land within the Tasman District Council boundaries, Maureen Pugh’s tabled amendment excluding land within the Buller District Council boundaries, Maureen Pugh’s tabled amendment excluding land within the Westland District Council boundaries, Maureen Pugh’s tabled amendment excluding land within the Grey District Council boundaries.

The Hon Louise Upston’s tabled amendment excluding land within the Waipā District Council boundaries, the Hon Louise Upston’s tabled amendment excluding land within the Taupō District Council, the Hon Louise Upston’s tabled amendment excluding land within the South Waikato District Council boundaries.

Jonathan Young’s tabled amendment excluding land within the New Plymouth District Council boundaries.

Tim van de Molen’s tabled amendment excluding land within the Matamata-Piako District Council boundaries, Tim van de Molen’s tabled amendment excluding land within the Waikato District Council boundaries.

The Hon Nicky Wagner’s tabled amendment excluding land within the Christchurch City Council boundaries.

Todd Muller’s tabled amendment excluding land within the Tauranga City Council boundaries.

Hamish Walker’s tabled amendment excluding land within the Clutha District Council boundaries.

Todd Muller’s tabled amendment excluding land within the Gore District Council boundaries, and Matt King’s tabled amendment excluding certain land within the Far North District Council boundaries, as well as Todd Muller’s tabled amendment excluding certain land within the Western Bay of Plenty District Council boundaries.

Lawrence Yule’s tabled amendment excluding certain land within the Tararua District Council boundaries.

Brett Hudson’s amendment excluding certain land within the Western Bay of Plenty District Council.

Rt Hon DAVID CARTER (National): I raise a point of order, Mr Chairperson. Mr Chairman, I wondered whether you would give me some assistance by referring to Standing Orders—Standing Orders not Speakers’ rulings—as to how you’ve conducted these amendments. What you ruled was that the first amendment, associated with Queenstown, was in order. Now you are concluding that every other amendment for every other geographical position in New Zealand is not to be put to this committee to vote on because the Queenstown amendment was lost. I say to you, sir, that what you’re saying is New Zealand is, effectively, homogenous—that every part of New Zealand is exactly the same. So if you could help me—I didn’t want to interrupt you as you proceeded through negating those amendments, but if you could take me to the Standing Orders that are relevant, I would certainly appreciate it.

CHAIRPERSON (Adrian Rurawhe): I thank the right honourable member. I would refer the committee to Standing Order 307, and in particular 307(4): “The chairperson, at his or her discretion, may put a single question on a group of amendments if—(a) the amendments stand in the name of the same member: (b) the amendments lend themselves to being grouped on account of their content or subject-matter, or because they form a single alternative proposition: [or] (c) grouping of the amendments is necessary to enable the committee’s effective consideration of the bill.”

Rt Hon David Carter: Mr Chair—

CHAIRPERSON (Adrian Rurawhe): I’ll just finish. That’s the Standing Order that I have applied in this instance.

Hon GERRY BROWNLEE (National—Ilam): I raise a point of order, Mr Chairperson. It’s very important that Standing Orders are appropriately interpreted. The genesis of this particular Standing Order comes from a bill that was in the House in the late 1990s, early 2000s, that related to the Employment Contracts Act changes. In that case, there were a large number of amendments that were—my apologies; it was late 1999 and it was the Accident Compensation Act—on the Table at the time that affected the commencement date. It was a ruling by the then Speaker, once he was recalled to the House, that a date, no matter what it was, could not be voted on again if a later date had been accepted by the House.

Now, the difference here is that we’re not talking about a date, we’re not talking about a number, and we’re not talking about a commencement day on which the bill comes into enforcement; we’re talking about various geographic areas in New Zealand. The members who have put up their tabled amendments believe that the residents of those areas would be benefited by their exclusion from the Act. Now, we already know that the Government has sought to exclude certain projects from the Act, so it can’t be unreasonable for the committee to wish to exclude certain areas of the country from the Act. To simply read them all out and say, “Well, they are now excluded.”, I think is an absolute abuse of the provisions that are laid down in the Standing Order, and, in fact, any interpretation of the Speakers’ rulings, and I think it would require a new Speaker’s ruling.

Hon DAVID PARKER (Minister for Trade and Export Growth): With respect to the Hon Gerry Brownlee, I think the member confused two issues. Where a vote is taken on a particular amendment to a provision that, effectively, overrides later proposed amendments, the later proposed amendments are ruled out of order—that’s not the situation here. The other situation arose not from the Employment Contracts Act but as a consequence of a change to Standing Orders made after the Auckland City legislation, where the then Opposition delayed the process of the bill by a number of days by presenting a number of amendments, which were required to be voted on and that were virtually identical in substance, except a date or a locality changed in a similar way.

Now, what the Chairman has ruled on here—as I heard his ruling—is that in his view, according to Standing Orders, having dealt with the Hamish Walker amendment, all of the others were identical in form except for changing the number for the numeric threshold and the district to which it is applied. He has, in accordance with Standing Orders, found that those other ones are out of order.

CHAIRPERSON (Adrian Rurawhe): I’m going to rule on the first point of order.

Hon Gerry Brownlee: Well, there’ll be another one coming.

Rt Hon David Carter: Point of order. I want to make a further—

ADRIAN RURAWHE: Yeah, I’m hearing you both, gentlemen, but I’m going to rule on the first point of order, thank you. There is a way forward on this, and I think the Hon Gerry Brownlee mentioned that in wanting—or maybe asking—for a new Speaker’s ruling. I’ve applied the rules as I see them in this instance, and I believe that that Standing Order does apply in this case. The way forward, if the members wish to do so, would be to test my ruling with the Speaker.

Hon GERRY BROWNLEE (National—Ilam): Mr Chair, that’s probably the right thing to do. The difficulty for the House, of course, is that this original ruling in here was largely due to a series of amendments that were laid on the Table at the time by none other than the Rt Hon Trevor Mallard. However, I move, That we recall the Speaker.

Motion agreed to.

House resumed.

Speaker Recalled

CHAIRPERSON (Adrian Rurawhe): Mr Speaker, the House is in its consideration of the Overseas Investment Amendment Bill. On Part 1 we have 39 amendments. I’ve made a ruling under—

SPEAKER: I’m just going to ask the member to hold to for a second. I’m going to ask Willow-Jean Prime to come so I can whisper in her ear, please. We are going to start again. I apologise to the House.

CHAIRPERSON (Adrian Rurawhe): Mr Speaker, there are 39 amendments that the committee is considering. I have made a ruling under Standing Order 307(4) that upon—well, I’ll read what I’ve said: 39 amendments proposing changes to the definition of residential land to exclude land of various values and in various districts. These amendments are so similar in substance that I think I must test the will of the committee. I put the first amendment, which was not agreed to, and I subsequently ruled the following 38 out of order.

Rt Hon DAVID CARTER (National): I raise a point of order, Mr Speaker. I raised a point of order as the Chairman had finished his decision and we’d read out a number of amendments which, to him, were unacceptable. I do apologise for interrupting your evening, but I did that because I’ve never seen such a procedure in my time here. I asked for the Standing Order that was relevant, and Mr Chairman referred me to 307(4). I wanted to take a point of order before you were called, but at that stage he concluded the discussion.

But 307(4) said that “The [chairman], at his … discretion, may put a single question on a group of amendments if—(a) the amendments stand in the name of the same member:”—that does not apply in this case—“(b) the amendments lend themselves to being grouped on the account of their content or subject-matter, or because they form a single alternative proposition:”—that does not apply in this situation. And “(c) grouping of the amendments is necessary to enable the committee’s effective consideration of the bill.” I say to you that none of those three apply.

I know that he would be backing himself by Speaker’s ruling 117/2 by a former Speaker, Smith, and he argues that it could be done this way if the amendments are substantially the same in general—that they’re all the same. I say to you that the original amendment moved by my colleague Hamish Walker was to exclude Queenstown from the effect of the legislation. We had 25 submissions, from memory, effectively saying that Queenstown should be excluded for good reason. We had other submitters come to the Finance and Expenditure Committee arguing that their geographic region should be excluded for particular reasons that they argued quite passionately about.

What has happened here is that Mr Chairman has assumed, or concluded, that, geographically, we are homogenous; that all regions are the same. And I say to you that that is just not New Zealand. We are a diverse country. We have different issues in Auckland to what we have in Christchurch to what we have in Queenstown. I think, on this particular occasion, the committee stage of the House and the ability of the Opposition to move amendments which were not ruled out of order prior to the first result—it’s just not the way this committee should run. We have a right, we have the ability, we have a duty and a responsibility to put forward relevant amendments which were not ruled out of order. Then, on the passing of one particular amendment, to then say the rest are out of order, I think, is not right.

Hon DAVID PARKER (Minister for Trade and Export Growth): Speaking to the point of order, could I just correct one aspect of the Rt Hon David Carter’s submission to you. My recollection of what occurred is that the Chairman said, “There are a lot of similar amendments. I’m going to test the will of the House by putting one.” He put that one, and then, that one having been voted down, he listed the others that on that basis would be ruled out of order.

Dr DUNCAN WEBB (Labour—Christchurch Central): Just by way of clarification, the Rt Hon David Carter referred to Standing Order 307(4). It may indeed have been the rule that the Chair referred to, but I think that was by way of slip, because the relevant rule is, of course, 307(5): “Where [the] amendments … proposed [are] …, in the opinion of the chairperson, … the same in substance,” and the Chair made it very clear that that was the basis upon which he was ruling, and, here, it’s my submission that it’s very much the case.

SPEAKER: I thank the member for that comment. I don’t think that anyone could make that judgment that—

Rt Hon David Carter: I just want to make a comment on—

SPEAKER: The member might want to reply to the comment that the Hon David Parker’s made. I’m not—

Rt Hon David Carter: No, I just wanted to make a comment in regards to Dr Duncan Webb. I’m saying—

SPEAKER: No, no. I’ve indicated that the Chair indicated which of the Standing Orders he was referring to. The question I have, and either the Minister in charge of the bill or my predecessor might want to indicate to me—is it correct that there are, essentially, two sets of amendment, one of which goes to geographical region and the other group of which goes to value? Is that accurate?

Hon David Parker: Yes, and what’s happened is, as you’ll see from the form of them, there’s been a pre-prepared form which has left room for changing the dollar amount and changing the district.

SPEAKER: OK. And the one that has been dealt with has to do with geographical area?

Tim van de Molen: No, both the value and the geographical location were included.

SPEAKER: So they’re both in this—sorry, I do apologise to the House. I was momentarily distracted. I now have the areas and I think it’s fair to say this has not made it any easier for me to make a ruling.

The next question that I want to ask, because I obviously didn’t go to the select committee but the clear impression I got from reports from the select committee—media reports from the select committee rather than the report of the committee—was that the most submissions and the strongest submissions as to exclusion came from Queenstown. Is that a fair summary?

Dr Duncan Webb: If I can help, I was in the committee and that would be a fair summation.

SPEAKER: Is there anyone who dissents from that point of view?

Rt Hon David Carter: With respect, I don’t think that’s correct. There were a large number from Queenstown but I recall there were significant numbers from Auckland Central arguing for exemption. There was certainly quite a high profile case that you yourself have ruled on on a particular Northland iwi asking for an exemption, so they were widespread right across New Zealand. Just about every submitter who came to us said, “We agree with the bill but just make sure we’re excluded.”

Dr Deborah Russell: With respect to the Rt Hon David Carter, I think that’s not quite correct. In fact, the Queenstown ones were based around the values of the properties involved. The submissions around central Auckland were actually to do with building of apartment blocks and the like, so they were quite different in nature. In fact, the ones I recall being around the value of properties being built were substantially from Queenstown. That was the real focus of them.

SPEAKER: Right—I think I am ready to rule on this and I do apologise. I am often watching the House during the debate but I was distracted at the vital time tonight. The Chairman has been listening to the debate. It is, in the end, his judgment, as long as there’ve been a sufficient number of calls, as to whether the amendments are similar enough in order to be grouped. He’s heard the debate and he’s scrutinised the amendments.

The Hon Gerry Brownlee, in fact, may be able to help me, but I think it was the 2011 Standing Orders Committee that considered this area of work and there were decisions made at that time to, effectively, extend the debate and to reduce the voting time because that was the view of members—that it was better to debate issues and then, in the end, to have a quicker voting period. I’ve been informed that we’ve had 26 calls in this debate. That is, I think it’s fair to say, generous, and in my opinion I can see no reason to overturn the view of the Chair on this question. Therefore the House is once again in committee on the Overseas Investment Amendment Bill.

In Committee

Debate resumed.

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

Ayes 63

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

Noes 57

New Zealand National 56; ACT New Zealand 1.

Part 1 as amended agreed to.

Part 2 Amendments relating to consent and conditions regime for overseas investments in sensitive New Zealand assets

Hon GERRY BROWNLEE (National—Ilam): I think it’s an odd day for democracy in New Zealand when there can be a ruling that says that because 26 speeches have been made out of a possible 500, there has been enough of a voice exercised in this Parliament to take a vote.

CHAIRPERSON (Adrian Rurawhe): Order! It is inappropriate for the member to be criticising the ruling from the Speaker that has just been made. We are debating Part 2.

Hon David Bennett: It’s a bad ruling.

CHAIRPERSON (Adrian Rurawhe): The Hon David Bennett will stand, withdraw, and apologise.

Hon David Bennett: I withdraw and apologise. What for, Mr Chair?

CHAIRPERSON (Adrian Rurawhe): Well, if you sit down, I’ll tell you. When I’m on my feet, no one interrupts, and you did; that’s why you had to withdraw. So, as I was saying, we are on Part 2, and I will ask the Hon Gerry Brownlee to turn his attention to Part 2.

Hon GERRY BROWNLEE: We are on Part 2, and it’s not unreasonable to reflect that Part 1, a very important part of the bill, but not as important as Part 2, had only 26 contributions from members on this side of the Chamber.

CHAIRPERSON (Adrian Rurawhe): Order! When I stand, you sit down. We are on Part 2, not on Part 1. I’ve just made a ruling, and I would ask the member to make his speech relevant to Part 2.

Hon GERRY BROWNLEE: Well, Part 2 is the most important part of the bill, and I hope that the jackboot gets lifted a little bit so that all aspects of this part can be properly discussed by the committee. It’s terrible when you see people in the Chair fearful of what their caucus may think of them if they don’t follow some kind of party line on all of this. So I’ve got a couple of questions that I think are worth pursuing in this part.

Firstly, if this bill and all the signalling that’s gone on about its merit, all the signalling that’s gone on about its virtues and its values, were so important and so strong, why has the price of a KiwiBuild house in this country—remember there have been only 18 built so far; I look forward to another 99,800-odd to come. Why is it that the price of those houses has gone up so astronomically in the last nine months? Why has it gone from the $450,000 house that the Government promised New Zealanders to up to $680,000 for a three-bedroom house in Auckland? And, what’s worse, none of them are available on the market; so that price, as we speak, while this silly bill is going on, continues to spiral upwards.

What it is also an example of is that, when the tap gets turned off on capital, the price of the scarce capital remaining goes up. Worse, we’ve got a housing policy now that sees the housing Minister being the main financier of housing in New Zealand. Now, anybody knows the housing Minister would find that a little bit concerning, but that’s the situation we’re in because the Government has decided there is no longer a requirement—no longer an opportunity—for foreign capital to invest in housing in New Zealand, simply because there are some members in the Government’s coalition who are very jealous of those who have extremely expensive houses. So they punish everybody, all the way through. They have no idea that there is a small number—hundreds only—of houses in those multimillion-dollar categories. But the vast majority of people, who just want to get into a house, who want to buy something at a reasonable price, who would benefit from the low cost of capital to develop those houses, are going to suffer. And the evidence is in front of us: nine months of price escalation on KiwiBuild.

The other thing I’d like to ask is why it is that there is a provision in this bill for foreigners to come and invest here—quite the opposite of what I’ve said is happening, because it won’t happen, but the provision is there—but they can’t live in those houses? So the question is: can they own them? Because it’s got to be a great prospect now, doesn’t it? They’ve escalated the price of housing—[Time expired]

CHAIRPERSON (Adrian Rurawhe): I call Dr Deborah Russell.

Hon Gerry Brownlee: This’ll be an academic tome that drives us all to sleep.

Dr DEBORAH RUSSELL (Labour—New Lynn): Thank you—it’s a bit better than shouting. I suppose I’ve been finding a lot of the speeches quite puzzling so far this evening: speeches on Part 1 which addressed issues in Part 2, and now the speeches on Part 2 which are addressing issues to do with the bill as a whole. I wish to draw the attention of the committee to Part 2 of this bill, in particular activities that Part 2 is concerned with.

Now, we are fair and reasonable people on this side of the House.

Hon David Bennett: Yeah, right! You’re a communist.

Dr DEBORAH RUSSELL: We actually want to achieve a balance—

CHAIRPERSON (Adrian Rurawhe): Order! Sorry for interrupting the member. The Hon David Bennett, it is inappropriate to be interjecting while you’re wandering around the Chamber. Return to your seat and sit down.

Dr DEBORAH RUSSELL: Thank you, Mr Chair. We do actually want people to be able to come here from overseas, as always, and to be able to purchase property here, for a variety of reasons. Now, people who want to come and live here in New Zealand, who are ordinarily resident in New Zealand, of course they can buy property here. We want people to be able to come and live here, and we do actually want to enable the sorts of investment we want. What we don’t want is people not coming here, but nevertheless holding property here.

So what happened with Part 2 was we did have a number of people come to the Finance and Expenditure Committee and ask us for particular exemptions, and where they had good reason for those exemptions we looked for ways to achieve it. So, for example, we had a fascinating submission from the Waihī goldmine, where they happen to own some houses as a result of some of the consent conditions around their mining activities, and those houses happen to be incidental to their mining activity. So we’ve worked a way in so that where activities are incidental, in fact residential property can be owned. We’ve done exactly the same thing with respect to utilities companies—so Spark and other utilities companies—and we’ve tried to find a way that they can purchase land as needed without being caught up in the conditions of this bill, because we are keeping the bill focused on its real purpose: that is, who gets to own residential property in New Zealand.

So, looking at Part 2, and keeping the debate quite strictly on Part 2, I think we should thank the members of the committee, who worked quite hard on forming these exemptions. Even if they didn’t agree with the political purpose, they nevertheless worked hard on getting these particular exemptions right, and they helped us to get those consent pathways right for this bill, and that’s what we’re looking at in this particular part of the bill. Thank you to the members of the Opposition who nevertheless worked hard on this, and I’m looking forward to hearing what they say about Part 2 of the bill.

Hon JUDITH COLLINS (National—Papakura): Well, look, the member who’s resumed her seat, Deborah Russell, says that she wants to hear from the Opposition. That’s wonderful. Well, she’s going to get it! Well, let’s look at Part 2—and it’s always good to be given a lesson from a new member, isn’t it?

Hon Amy Adams: Patronising, isn’t it?

Hon JUDITH COLLINS: Oh, it’s wonderful! I love it!

Hon David Bennett: She won’t be here next time.

Hon JUDITH COLLINS: Well, look, she might as well make the most of her opportunities. I want to deal particularly with this provision of new section 16G in clause 11, which is “Conditions for consents relating to sensitive land that will be used for forestry activities”. It’s actually quite difficult to read in the bill, and I say that because most of the bill has been crossed out by the Finance and Expenditure Committee. You always know when you’ve got a dud bill: most of it’s crossed out and has had to be replaced at some stage, and it’s having to rely on the Finance and Expenditure Committee to correct it for the Minister. So I want to know what’s so special about forestry, as opposed to every other activity on land.

Hon Amy Adams: Well, that’s the question, isn’t it?

Hon JUDITH COLLINS: Well, that is the question. So what is so special? I want to know about blueberries. Blueberries are something which is incredibly good for us all. It’s a super-food. There are, basically, no calories in them. Everything about them’s good, and you can freeze them and do everything else to them, so what about blueberries?

Hon Member: You can’t import them.

Hon JUDITH COLLINS: And you can’t import them, I’m told. So what’s so special about pine trees that are probably going to end up being used for pulp paper stuff? What about that? What’s going to happen there?

Hon David Bennett: It’s going to be exported.

Hon JUDITH COLLINS: And they’re going to be exported. So what’s so special about this land that grows forests? What is it? What is the one thing? And I’d like to hear from the Minister about what in particular—what about viticulture? Why isn’t that exempt? What about kiwifruit? Why isn’t that exempt? Why is every other industry around land, including housing, suddenly sensitive? What is it? And you have to wonder: has it got something to do with a little deal between New Zealand First and Labour?

Hon Amy Adams: Price of power.

Hon JUDITH COLLINS: Is that the price of power? And what is it that the Greens are agreeing to this for? Would that be, what, the price of a bauble or three? No, four, because there’s four of them, aren’t there—four Ministers. So it’s the price of a BMW, basically, you could say, and a VIP car. That would have to be it. So let’s find out from Mr Parker, in the chair, what is so special, because what about the rest of New Zealand?

When we talk about the “benefit to New Zealand” test—I recall just this evening listening to my colleague Lawrence Yule speaking about Elephant Hill, that excellent vineyard in Hawke’s Bay, with an excellent syrah, I have to say. If only it was larger, there could be more. And yet, you know, New Zealanders who didn’t start their life as New Zealanders—German—came to New Zealand, got themselves involved, bought this property, and made it from nothing, basically, and these are the people that David Parker and his ilk want to punish. So why is that? Why would they want to do that? Because New Zealand is actually built on immigrants. Whether people came in a waka, whether they came on an aeroplane, or whether they came on a ship, it’s built on immigrants, and so what’s so wrong with them?

And he might say, “Well, it’s not that, it’s just that they’re using New Zealand and they’re going off overseas.”, but hang on: the very exemption in this around being able to buy apartments off the plans in New Zealand and keep them, as long as you don’t actually live in them, encourages speculation and encourages overseas landlords. It encourages foreigners to own the properties, and New Zealanders to get to rent them. So what is the purpose of it? And, again, I say, what is the principle behind this?

The principle behind this is power—if that could ever be a principle. The principle behind this is that if you get your seat in Cabinet, then you can do this, and you can stay there, and New Zealand First gave it to them because of it. And the Greens, who have long lectured us about their principles with such sanctimony—oh, I can only just think of Metiria Turei when I say that; such sanctimony—have shown that the price for them is the BMW, and the BMW, for which they are happy to say, “Exempt forests, but nothing else—just exempt forests. Allow people to be foreign landlords in New Zealand for apartments, so New Zealanders can pay for them but not actually own them in that case, but just don’t let those foreigners want to stay here any time.”

Hon DAVID PARKER (Minister for Trade and Export Growth): I just want to correct an issue that the Hon Judith Collins has the wrong end of the stick on. Forest land is not exempt. Forest land is included. The problem with the existing screening regime was that forest registration rights were not within the regime. They are being now included in the regime—

Hon Member: Didn’t you have to make this point earlier?

Hon DAVID PARKER: —so that we have a common-sense approach across all forestry assets. It’s a similar point to one that was made in an earlier part of the debate in response to an earlier incorrect point by the Hon Judith Collins. So, just to be clear, forestry land is not exempt from overseas screening; it is actually made a coherent regime by including forest registration rights in addition to leasehold and freehold estates in forestry.

Hon GERRY BROWNLEE (National—Ilam): Well, that’s interesting that the Minister, David Parker, should just inform the committee that forestry is included in the tests, because, when you read the bill, you see that there are some specific exclusions for people who invest in forestry. It suddenly strikes me that, given 5 hectares is the threshold, all those people in Queenstown and other places where they’ve got these expensive homes—the few hundred throughout the country—they’ll be able to get their price back if they simply plant the near area in trees. The test will simply be that while there’s a residence there, the residence can be there to support the tree operation.

Everyone knows that the Greens have got a tree-hugging programme that’s been going on for years; so of course you’ve got to be close to your trees. Everyone knows that they require a whole lot of husbandry, a whole lot of pruning, and various other things. So there is one of the biggest loopholes that could possibly be seen inside the bill, and I’d like the Minister to tell us whether that’s correct or not. If someone spends an enormous fortune buying a multi-hundred hectare property with a magnificent home on it in the Queenstown district, but they’re only doing it as a residence to support a forestry operation, will that meet the test? According to the bill in front of us, going through those criteria, they would meet the test—pretty simple.

The other thing that I found a little bit fascinating is that it seems it’s possible for foreigners to come to New Zealand, make a commitment to live here, and become tax residents. First question: can people have dual residency? We know the answer to that is yes. Can they have dual tax status? We know the answer to that is yes. If they’re prepared to stay here for 186 days in each year and they want to invest in residential property, then they can become foreign landlords, in our country, to New Zealanders. So this bill, for all that it makes a claim to assist New Zealanders with the opportunity to buy property, simply creates specific opportunities for those with a lot of capital to come in here and continue doing what they’ve always done.

Kiritapu Allan: Different from the houses that are—

Hon GERRY BROWNLEE: So while the member over there, who’s been in the House for 5 minutes and doesn’t have a lot of experience of knowing what tricky Ministers do with bills, might want to mount a case in saying, “No, you’ve read it wrong.”, Madam Chair, as you know, eventually all of these bills, if they become Acts—and it appears that we’re under the jackboot to get it into an Act pretty quick—are interpreted by the court.

CHAIRPERSON (Hon Anne Tolley): Don’t bring me into it.

Hon GERRY BROWNLEE: No, no, I’m not bringing the Chair in; I’m simply pointing to the Chair’s sensibilities around these matters, and know full well that the Chair would understand there’s a degree of pressure going on here that we haven’t seen in the House for a period of time.

The question is: how will a court interpret an application, or a case that comes from, perhaps, a rejected application or otherwise? They’ll go to the legislation and they’ll start making the same conclusions that any reasonable person who reads it will make. I would like to hear from the Hon David Parker to tell us how it is that conditions for consent relating to sensitive land that will be used for forestry activities are going to exclude the sort of scheme that I have spoken of so far. How is it going to stop people who have large acreage—perhaps productive acreage; perhaps vineyards; perhaps beef farms or sheep farms; any amount of horticulture you might like to suggest—simply ripping it all out, planting it in trees, putting it on the market, and making it available to any foreigner who’s prepared to pay the price? Achieving what? Lost production, lost opportunity, probably lost jobs for New Zealanders, and, certainly, none of what is claimed in this bill.

As we’ve said—I’ve said it before and I was saying it when I got cut off last time—there’s still no explanation from the Government as to why, if this bill is so good and the signalling of it has been so good, the price of the yet-to-be-built KiwiBuild homes has gone up so astronomically, from $450,000 to $680,000.

Hon AMY ADAMS (National—Selwyn): Madam Chair, thank you very much. I’m very happy to take my first call on Part 2.

Hon Member: First of many.

Hon AMY ADAMS: It will be the first of many; I can assure the members of this committee. Part 2 largely deals with issues such as exemptions, processes and pathways, and the like. In respect of that, I want to look at the way in which exemptions are going to be granted, because one of the things that is clear about this legislation in the revised form, as it came from the Finance and Expenditure Committee, is there are any number of ways that the Government can still pick and choose the winners that they want to come in and say are OK. For all the rhetoric about those “nasty tax-dodging foreigners”, as the Minister described them, demonstrating his prejudices once more, they have created more carve-outs, where Ministers—without scrutiny, without transparency, who knows with what process—can pick and choose the foreigners who can come in and buy. Isn’t that interesting? Isn’t that interesting?

We’ll now have this new beast—with this bill—in the Overseas Investment Act called a “standing consent”. Let me tell members of this committee what a standing consent is. That is when a developer goes along to their Minister of choice and says, “Look, I’m a good bloke and I’m doing good things, and it should be all right for me to buy land, because I’m not one of those nasty ones; I’m a good one.” And the Minister says, “I agree, mate, that’s a good idea. Have a licence to go and buy the land you like over X number of years. Fill your boots, my son.” Now, how is that good process, where Ministers will be able to sign off and just wipe away all of this?

This rhetoric—we’ve been hearing so much about how it is outrageous and undermining the fabric of our society and is crucial. Well, guess what? Ministers can pick and choose anyone they like and say, “Oh, but not you, my friend. You can have a consent.” Isn’t it interesting? We’ve already seen the first example of that, haven’t we? I want to say to the Minister in the chair, David Parker, when he talked about how outrageous it was that exemptions could be created, as my colleague Hamish Walker has suggested, for high-value properties which might go to foreigners—that was outrageous, according to the Minister. Well, I’ve got two words for that Minister: Te Ārai.

What was Te Ārai? Te Ārai was an exemption that Michael Wood insisted had to be in the bill despite advice that it was absolutely appalling process, to the extent that the Speaker had to rule it out. That was an exemption to allow two very wealthy developers to sell multimillion-dollar sections to foreigners. They were quite clear about that. They were quite clear about that in the submission. It wasn’t hidden. And the advice to the Minister was that it wasn’t a Treaty issue; there wasn’t a necessity to do that. In fact, they recommended against it. What do we find when we get to the House? The Minister hadn’t even bothered to check whether there was iwi ownership? “Oh”, he tells us, “we have to protect iwis’ Treaty assets.”, when Treasury had told him that wasn’t right, Treasury had told him there was no legal obligation. Treasury advised him not to do it—and by the way, iwi didn’t even own most of that land. What it was was two wealthy developers selling high-end properties on a golf course in Northland to foreigners. That, according to this Minister, was fine. But if Hamish Walker wants to stand up for the people in his constituency, that exemption’s not OK. That is outrageous. It is arrogance, and it leaves me scared for how these processes will be given effect to.

I want to talk about listening, because the Minister in the chair has got up and said we’re not listening—if we would just agree with him, then we’d be listening. I want to tell you who’s not listening: it is this Government and this Minister. They’re not listening to the advice, they’re not listening to the submitters, and they’re certainly not listening to any sort of economic analysis. We’ve just had a debate around “benefit to New Zealand”—that clause is in the legislation, clause 16E. Well, I would say to this Government that you can’t treat New Zealand like a homogeneous whole. We understand, on this side of the Chamber, that regions are different, provinces are different, economies in different parts of the country differ, and there are different factors.

The fact that this Government thinks you can treat all of New Zealand as a homogeneous whole, and not recognise that, shows a couple of things. It shows how little-connected they are to the country, and it shows how few of them have electorate seats and talk to their communities. This is not about a homogenous treatment of New Zealand; this is the Government looking after the people they want to see prosper, and too bad for everyone else. This debate is going to come up again as we go through this part of the bill because, as members will know, there are a large number of amendments on the Table for the committee to debate, and members on this side of the Chamber will speak to each one of those.

Hon DAVID PARKER (Minister for Trade and Export Growth): Dealing with the Hon Amy Adams’ point about exemptions, the criteria for exemptions are set out in Part 3 of the bill, not Part 2.

Hon NATHAN GUY (National—Ōtaki): Thank you, Madam Chair, for the call. It’s been an interesting debate this afternoon and this evening, and I want to focus on Part 2 and really drill down into the detail, because it’s a very important part. Can I just say from the outset, as a bit of a scene-setter, this is a terrible bill. It’s going to have a major impact on investment in New Zealand and, in the particular area that I’m concerned about, its primary sector. We’ve had numerous contributions from the side of the House—very reasoned. Those in the Finance and Expenditure Committee that have heard from submitters that—

Simeon Brown: And listened.

Hon NATHAN GUY: Exactly—and listened. I’m not sure that we’ve heard from the Minister for Trade and Export Growth enough this afternoon and this evening that he has listened. Where is the economic analysis?

Hon Amy Adams: There is none.

Hon NATHAN GUY: Exactly—Amy Adams says, “There is none.” Where is the economic analysis of the impacts of this bill on the New Zealand economy? Zip, nada, nothing. Isn’t that woeful that there’s been no economic analysis done on what this piece of legislation, when it’s, potentially, passed, is going to do the New Zealand economy?

It’s really interesting: earlier on this afternoon, I heard from Mark Patterson, who is the list MP—people probably haven’t heard of him too much—from down south. He likes to portray himself as bit of a farmer, and what he’s lost sight of is that, about 18 months ago, he was a signed-up National Party member, but now he’s on the other side of the House talking about socialism.

CHAIRPERSON (Hon Anne Tolley): Talk to the bill—talk to the bill.

Hon NATHAN GUY: Now, that’s got them chatting away now. Look at him over there—he’s a little bit pink; he doesn’t know where to look, whether to look down or up, and he’s really embarrassed about that. But his speech was, I thought, terrible. It was woeful. It was socialism at its best, and what he forgot was that, in the campaign, his political party that he’s now embraced as his wider family, called New Zealand First—now in Government—

CHAIRPERSON (Hon Anne Tolley): Come to the bill—Part 2.

Hon NATHAN GUY: —they were rallying against the Overseas Investment Office and saying that things needed to be tightened up. Well, I say to Mark Patterson and to New Zealand First that, effectively, now there’s been a carve-out for forestry rights, up to 1,000 hectares—a bit of a sweetheart deal. We still haven’t heard from the Minister as to why this has been allowed, and he’ll stand up and say, “Oh, I’m protecting it.” Well, the reality is, why not go further? What about other parts of the primary sector? Why is there a sweetheart deal for forestry rights? I’ll tell you why—I’ll answer it for you, Minister—that’s because Shane Jones walked into the Cabinet room and said, “I’m not going to get my billion trees planted unless we let these foreign investors come in and plant trees.”

What is lost on Mark Patterson—and he got it big time at the Red Meat Sector Conference in Napier earlier this week, when people came up and kicked him in the shins and said, “Don’t you realise that this policy is going to harm rural communities and, in particular, the red meat sector?” Do you know why? Because these foreign investors will be allowed to come in and invest in run-down sheep farms in the back of beyond, sheep stations, and convert them into forestry—not own them but convert them into trees. Now, Mr Patterson got it in the neck at the Red Meat Sector Conference, and he is now conflicted, because he considers himself a friend of farmers down south, but the reality is, as David Carter said, when his Hansard speech is out there on social media in the next few hours, when it ripples through Clutha-Southland, they will get to see what Mark Patterson is all about.

But, importantly, back to the substance of Part 2, which is all about exemptions, carve-outs, and deals. What I want to know from the Minister is: why is it just forestry? Let’s pick an example. Pick a super-fruit like avocados. Dairy farms are being converted in Northland as we speak, and you would think that this Minister would be encouraging—because he doesn’t like cows, he’s worried about pollution, hates cow cockies. You’d think that he would be aware that horticulture production creates a lot more jobs—so-called better for the environment. He’s nodding his head; we’re all agreed on that. So you would think that if you’re going to have a carve-out for forestry, an exemption, why wouldn’t you have a carve-out for avocados? You know, they generate about $155 million of exports now—indeed, they are a super-fruit: high in potassium, higher than bananas; great for cholesterol; and high in fibre. They are a super-fruit. Why not give a carve-out for avocados? I could go on, but I won’t.

I want to come back to a very important point that I haven’t raised in the debate so far. I’m mindful of David Parker, the Minister. He’s sitting in this chair this evening as Associate Minister of Finance with oversight of the Overseas Investment Office and the Act. It’s really interesting that this bill is going to restrict foreign investment in New Zealand. I’ve talked about the primary sector, and what I haven’t alluded to is that it’s investment downstream and upstream. What I mean by upstream is the investment flows into market as well, because these foreign investors often have networks and relationships in market. But this bill is going to impact particularly on one country that I’m really aware of, our biggest export market, and that’s the country called China. Now, exports to China are worth, what, about $12 billion? This is going to send shockwaves through the Chinese community—it already has. I don’t want to get off message and be told to keep it constrained to Part 2, but remember back when Labour railed against Chinese-sounding surnames, and now they’re restricting foreign investment, and that’s been noted in China. Also, what’s been noted in China in recent times is the Government’s defence strategy position, their policy in the China southern seas.

Then, of course, we have a trade Minister—here’s a question for the Minister: has the Minister for trade visited China since he’s been in his position? This is a straight yes or no question. You would think that David Parker would know. I’m going to make it simpler for him: has David Parker visited China since he became a Minister in 2017? All you need to do is go like this or shake your head—it’s quite simple. I’m going to take the silence as a no—I’m going to take the silence as a no. So we have a Minister of trade, 10 months into a new Government—the largest export market for New Zealand and he hasn’t bothered to visit. I’ll tell you, here’s a factoid for David Parker: there’s been only one Minister that’s visited China 10 months in.

The reason I raise this important point is because, at some point down the track—and it may not be too far away—China will flex its muscles, and we will have product held up on the wharves in China. That is coming just around the corner, in my opinion. They have noticed that this Government doesn’t care about them—our largest export market—

Kiritapu Allan: Relevance.

CHAIRPERSON (Hon Anne Tolley): Actually, that’s for me—OK? That’s for me to decide.

Hon NATHAN GUY: —and this bill here goes further than anyone would expect. The Chinese community—the ambassador, the President, and high-ranking officials—have read this. They know what message this bill sends to them, and that is “We don’t want your investment here. We don’t care about you.” The Minister hasn’t visited China in 10 months in his job as Minister of trade.

I conclude by saying this is a terrible bill. We are going to feel the effects of this not only in the primary sector but across the New Zealand economy for a long time to come. There’s a carve-out deal for New Zealand First and Shane Jones to allow foreign investors to come in and create forestry rights up to a thousand hectares. Why would you give only forestry a special carve-out? Why not other areas? Stuart Smith, earlier on this afternoon, talked about viticulture. That’s obviously all going to go down the toilet as well. There’s going to be no rights for them. This bill is a terrible bill. I’m really disappointed in the Government. We are going to feel the impacts and effects of this bill for some time to come.

KIRITAPU ALLAN (Assistant Whip—Labour): I move, That the question be now put.

Hon DAVID BENNETT (National—Hamilton East): Thank you, Madam Chair. I’d just like to follow on from that last speech, from Nathan Guy. One of the exceptions in this bill actually relates to a thousand-hectare block. That is an unusual choice of land area that the Government of the day has chosen, because about 85 percent of New Zealand farms are below a thousand hectares—

Hon Gerry Brownlee: Oh, no, it doesn’t have to be continuous.

Hon DAVID BENNETT: I know—I know. You can choose a thousand each year.

Hon Gerry Brownlee: No. Aggregate.

Hon DAVID BENNETT: Yes. But the thousand-hectare exemption means that the best land in New Zealand will be available for overseas purchase. When you fly over some of the roughest parts of New Zealand, you may think, “Well, maybe some of that could be in forestry.” If you were really a supporter of the Greens and the New Zealand First policy you might think, “Well, some of that land—

CHAIRPERSON (Hon Anne Tolley): Could you look at me, and not say “you”.

Hon DAVID BENNETT: Some of that land could actually be very important forestry land. But the best land in New Zealand is, typically, in smaller blocks. Those smaller blocks now have a free-for-all for overseas investment.

Just take an example of a town like Wanganui. As you leave Wanganui, most of the farms are going to be less than a thousand hectares. It is only when you get out into the backblocks that you’re, potentially, going to get the bigger farms. So what we’re going to have is a whole lot of forestry around the town of Wanganui, and then, as you get out to the further, bigger blocks—the blocks which have some erosion and those things—it’s going to stay in grass. Does that help the river systems that the Greens are wanting to do? No, it does the opposite. Does that actually help the productive heart of New Zealand so that you can utilise land in the most successful way? No, it doesn’t. What does it do? All it means is that it gives a fast track for foreign investment in the best parts of New Zealand land. It actually achieves the opposite of what New Zealand First has been saying in this Parliament: that they want to stop foreigners owning land. It enables the best land to go to foreign ownership through giving them a fast track.

So I can’t understand why the Minister chose a thousand hectares. I’d love for him to explain that, because not only is there that thousand-hectare exclusion but you can divide that over two years. So a potential purchaser can do a thousand hectares this year and then a thousand hectares next year. So they can, potentially, cover all blocks of land if they want to and buy a 1,200 hectare block of land and do 600 hectares this first year and 600 hectares next year and evade the rules of this legislation.

This is bad lawmaking. It does not achieve its purposes, even if you believed in what the left had been saying about environmental purposes or any of those other things. Under this exemption in the bill, it actually achieves the opposite. It encourages foreign ownership of New Zealand’s best land. That cannot be the interests that the Government is seeking to achieve. I wonder why they have done that. I believe it is because they have no concept of land in New Zealand. They have no concept of farming. They’ve just picked out a number of a thousand hectares and made it an arbitrary number, not understanding what percentage of New Zealand farmland is actually incorporated in that and not understanding the quality of land that would be incorporated in that. Even if someone did believe the principles that the Government is speaking about, no way would that legislation enable a thousand-hectare exclusion for anything less than a thousand hectares.

So that is something I wish the Minister to actually explain: how he came to that conclusion of a thousand hectares and what it actually will mean in practice and reality. The answer is it will mean the best land in New Zealand has now got a free ride into overseas ownership and New Zealanders will be left with the rest.

Hon DAVID PARKER (Minister for Trade and Export Growth): I repeat an earlier point that’s been made repeatedly: unless forest registration rights are included in the regime, New Zealand has no future ability to control overseas investment in forest land. By including forest registration rights, New Zealand can now or in the future control overseas investment in forest land. At the moment we want more foreign direct investment in forest land. It is a sector that is reliant on overseas investment and we welcome more of it.

The inconsistency of the Opposition criticisms of this were shown by the last two speakers. The Hon Nathan Guy said that China would be upset because of the signal that we’re sending them in respect of forestry because somehow we were closing it down. Then the Hon David Bennett said that we were loosening it. In fact, what we’re doing is making for a coherent regime by including forest registration rights. We are loosening the overall rules that apply to the screening regime but those rules can be changed again in the future if we or another future Government want to tighten those rules. If we do not include forest registration rights now, we as a country, in practice, lose the ability to do so in the future.

The final point I would make, in respect of China being offended, is that China has their own controls on foreign buyers of their residential land assets and, indeed, they already apply them against New Zealanders in some of their larger cities.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. I’m going to change tack a little bit. I would like to speak to my tabled amendment, which is amending clause 12, which reads: “After clause 12(2), insert clause 12(3):”—which, in section 17(2), inserts section 17(2)(h)—“These factors should be considered in light of any other offers received, including international and domestic offers.”

Now, I urge the Minister in the chair to read this amendment, because it goes to the heart of some of the issues that he raises. I can give examples, from my electorate, of sales through the Overseas Investment Office, applying for approval to get through, putting the ad in the paper, receiving offers—in fact, in some cases, they had offers before it went on the market officially, anyway—and the Overseas Investment Office doesn’t consider those offers. How can you have a market test on whether you’re going to approve a foreign sale or not if you don’t—because, in fact, it has to be that price doesn’t come into it; it is about the net benefit to New Zealand. What’s the benefit to New Zealand from a sale to a foreign owner? It has to be better than the status quo. How do you test that unless you test what the other offers are? Yet, the Overseas Investment Office does not require the vendor to provide those other offers if there are any for consideration.

Surely, Madam Chair and, surely, Minister in the chair, Mr Parker, you should be reading this, because this would dramatically improve the current situation. It’s not good enough to say, “Oh, well, we’re going to have all these magic carve-outs here.” I mean, Te Ārai was just shameful. I really do think anyone, in a constitutional law sense, would be quite horrified by it. I think the Speaker was quite right to rule that out, but I’m surprised it came to that. How did it get to that? I think the Clerk came to the committee, and that was ignored. That’s quite a blot on the select committee chair’s record, really. Has that ever happened before in the—

Rt Hon David Carter: Never. Never.

STUART SMITH: I don’t think it’s ever, ever happened. I mean it’s a shameful thing. Those people sitting around that select committee table on the other side really have to have a good look at themselves, because what are you? Puppets? They’re not all New Zealand First MPs, surely? They don’t just do the North Korea dancing—you know, we clap loudly and smile all on cue, and make sure you do it quite vigorously, otherwise you get a political assassination! I mean, it’s just quite shameful to see that.

This amendment, Mr Parker, would make a significant difference to this bill. It is a massive change from where we’re sitting today. Have a look at it and consider it. You’re not even looking at it. Just grab it; have a look at it. I think it’s a very important step. I’m trying to be helpful here, and it’s just a shame that they’re not getting it.

Hon Amy Adams: “We’re from the Opposition and we’re here to help”.

STUART SMITH: Well, I am from the Opposition and here to help, but God knows they need it.

Anyway, I want to turn now to profit à prendre and viticulture—as the Hon Nathan Guy said, I mentioned that before—and how this bill has carved out some things and not others. I think that it’s quite a shocking indictment on this bill as well that they haven’t had a good look at it. I asked questions before—it was actually Eugenie Sage in the chair—which I still haven’t had answers to. What was the advice? On what basis were these decisions made, in these carve-outs in Part 2? What are they?

Hon Amy Adams: An economic analysis.

STUART SMITH: Well, an economic analysis would be great. It would be some basis at least for these decisions to be made. Normally, you go through a process. You have papers put up. You take advice, surely. It just seems to me that they have some sort of Ouija board or something, where they come up with these magical carve-outs.

Hon Amy Adams: Could New Zealand First tell us whether they do it?

STUART SMITH: Well, they don’t seem to make any sense. You know, there is a slippery slope—and it’s quite a long, gradual slope, I admit—to where there can be a perception of corruption, and I think we’re going dangerously close to this with this bill. It is the very thin end of the wedge here, and I think it’s quite a constitutionally slippery slope that we are going down, and I just really urge the Minister to think about it. He’s better than that. I know you’re trying to do the right thing, Mr Parker, but I think you have got yourself so far down the track that you really can’t back out, and I think that’s quite a shame.

Hon DAVID PARKER (Minister for Trade and Export Growth): I want to respond to Stuart Smith’s reference to his amendment, which I have read. I took advice from officials, who confirmed my understanding that as a consequence of the law which was clarified by the High Court decision in the Crafar farms case, the fact that a foreign buyer under the existing legislation might be willing to pay a higher price than a New Zealand buyer is not a criteria for consent.

Stuart Smith: I made that point.

Hon DAVID PARKER: Sorry, I heard you saying the opposite—I’m sorry. [Interruption] OK, I apologise. I didn’t mean to misrepresent you. We think that that position at law is correct, and we’re not proposing to change it by this bill. Therefore, we will be opposing your amendment.

Stuart Smith: But that wasn’t my point.

Hon DAVID PARKER: Well, I don’t understand, then, the reason as to why you say that these factors should be considered in light of the international offers, because that would be to, effectively, change the Crafar farm decision in a way that we would disagree with.

In respect of vineyards and pastoral farms, this legislation does not change the law. This legislation has no effect in that regard.

Hon Amy Adams: Yes, it does—profits à prendre.

Hon DAVID PARKER: No, it—oh, a profit à prendre.

Hon Amy Adams: That’s what we’re raising.

Hon DAVID PARKER: Well, profits à prendre—the reason profits à prendre are being included is that there have been a small number, but perhaps a growing number, of vineyard transactions that have been structured as the purchase of profits à prendre, rather than freehold or leasehold interests, and we thought that for reasons of regulatory consistency, they should be included in the regime.

MARK PATTERSON (NZ First): Thank you, Madam Chair. It’s great to have the opportunity to speak to Part 2 of the bill and I hope the Hon David Parker will feel free to circulate this around the good people of Clutha-Southland afterwards. I’m sure I’ll be carried shoulder high by the nurses and the schoolteachers and the good working people of New Zealand as they see us trying to take some measures to help their cause. I would also say—[Interruption] Well, I was called a communist. Maybe being a communist isn’t so bad. I suppose that is a step up on being the “angry hamburger guy” or, as Nick Smith said, “Who?”, but anyway, I am here to talk about the carve-out for forestry.

The ex-Minister Nathan Guy claimed to have seen my Part 1 speech, but, obviously, he did not, because he has totally misunderstood and misrepresented the main drivers of this clause. The reason we are having to take this step is that the National Party, “Paula Benefit”—sorry, Paula Bennett—and John Key liked swanning around on the international stage, signing us up, looking good in front of the great and the good overseas, and they came back with not one plan. In fact, no, that’s not true. They did have a plan. They were going to send $1.4 billion a year overseas to buy carbon credits, to outsource our responsibility, and guess what? A lot of those credits were shonky. They were proved to be shonky. We were paying good hard-working taxpayers’ money for fraudulent electronic transactions that did absolutely nothing.

CHAIRPERSON (Hon Anne Tolley): Part 2.

MARK PATTERSON: Part 2 of the bill—Part 2 of the bill. So that is why we have to take these measures in Part 2 of the bill.

Of course, there will be some effects to that. We may lose some farmland to forestry, but I’m sure Mr Bennett would not be converting his dairy farm to forestry. I mean, these people are savvy investors. They are not going to be putting pine trees where they could put avocados, but we may leave some of our land for sheep and beef. So I’m thinking maybe that’s true, but we need to go value, not volume, and we should not be scared of what that measure will take.

So this carve-out for the forestry in Part 2 is an absolutely necessary step for us to take to meet our international obligations. We will not shy away from that. The Minister will not shy away from that. These are the measures we’ve got to take, and we will take them. Thank you.

Rt Hon DAVID CARTER (National): Well, it’s a pleasure to make a contribution on Part 2, but the first thing I want to say is that that speech that I’ve just heard from Mr Patterson I won’t be circulating to anybody. It was completely incomprehensible. I have no idea what he said. The other thing I just wanted to comment on was the excellent contribution from the Hon Nathan Guy, when he—

Hon Members: The mike’s not on.

Rt Hon DAVID CARTER: No, it’s on. They can hear me. They can hear me. I was just going to make the point that the excellent contribution of Nathan Guy pointing out that the Minister of trade has not yet been to China—I know why. He’s been held back tidying up this mess since he introduced it into this House. He’ll go shortly, as soon as he gets this mess tidied up. But this part, Part 2, is the time when New Zealand First rolled Labour. The bill, as it was introduced—as I made the point earlier—stopped foreign investment and makes it very difficult to invest in any sector. Shane Jones and New Zealand First realised that. They huddled around the Cabinet table and they forced Mr Parker to introduce a Supplementary Order Paper (SOP) into this House making forestry come into the regime—making forestry come into the regime.

Not only did they do that, but they then made it easier, and I referred to something that no one else has talked about yet: the screening pathways for forestry. Under the existing legislation, there’s a benefit test that incorporates a counterfactual: if it remained in New Zealand ownership, what would the likely benefit be of this going into overseas—

Fletcher Tabuteau: All of Northland is foreign-owned forests.

Rt Hon DAVID CARTER: “The Professor” ought to listen to this; he might learn something. First, if it goes into overseas ownership, what is the benefit to New Zealand? It’s called the counterfactual test. It’s difficult, so what the Government’s done with this is, first of all, they’ve modified the benefit test and made that counterfactual analysis a lot easier. But the one that worries me more is for forestry and forestry alone. Shane Jones is smiling over there because he’s managed to get a special benefit test. A special benefit test takes out the counterfactual argument completely, and we said to the official, “So what is this special benefit test about?” and the answer was “We don’t know yet. We’re going to do it by regulation.”

So here we are, and Shane Jones is nodding his head because he knows this is all about the billion trees he’s promised to plant. The original bills would have scotched the idea of planting a billion trees, so up they’ve come, in the last minute, with a Supplementary Order Paper that poor old Mr Parker has got to sit in the chair tonight and stomach, because he never agreed with this—he never agreed with it. Shane Jones rolled David Parker. New Zealand First rolled Labour. They want to see a billion trees a year planted. They need more forestry. So we’ve now lightened the regime for forestry. We’ve given an exemption for up to 1,000 hectares per year. So what that means, Mr Jones, is that before we manage to kick this Government out by 2020, there’s, effectively, three opportunities. We’re talking about guys rorting the system to get 3,000 hectares done and dusted before the next National-led Government can change this legislation.

Having put in the exemption for 1,000 hectares, the next thing Shane Jones argued for, and successfully, was the special benefit test. And the officials can’t tell us what will be in the special benefit test, because it’s going to be done by regulation. So I say to members of this committee: if we don’t manage to stop the legislation passing through, keep an eye on that, because that will be another issue whereby I bet that Provincial Growth Fund—the slush fund—is used around the country, giving opportunity for easy investment by foreigners, easy investment—

Hon David Bennett: And getting paid for forestry credits.

Rt Hon DAVID CARTER: Yes. Absolutely. This is about the Hon Shane Jones rolling the Hon David Parker. It’s neat to watch, but that doesn’t make it right.

Hon SHANE JONES (Minister of Forestry): Madam Chair, although the hour is late, it required the appearance of the provincial champion.

Hon Members: Where is he?

Hon SHANE JONES: Let’s deal with a few facts—

Simon O’Connor: I raise a point of order, Madam Chairperson. I believe it’s unreasonable to make reference to a member who’s not in the House.

CHAIRPERSON (Hon Anne Tolley): That is not a point of order.

Hon SHANE JONES: I did preface that remark with “it is late in the evening”. Obviously, the tempers are short and the mentality is shallow on the other side of the Chamber, as reflected by those totally gratuitous remarks.

Number one: what a brilliant provision that strips red tape for a valuable industry. Now, Mr Parker needs to be congratulated in Part 2 for seizing an industry that was riddled with red tape, where forest owners and investors from overseas had given up hope as a consequence of being denied any opportunity to expand the sector, until our MMP coalition Government arrived. So up and down the country, investors who want the sector to grow for climate change purposes, people who value the sovereignty of New Zealand, are applauding Mr Parker for the efforts in Part 2.

Why have we brought forestry rights into this regime? Because, prior to that, they were totally unregulated. And, on the other side of the House, we do not share their zeal for selling the country out to the highest bidder. That’s the ideology of that side of the House. Our side of the House has stood up to ensure that forestry rights are now part of a regulatory regime, whilst at the same time sparing these important overseas investors the hassle of being entangled in red tape.

Now, it’s a curious coincidence that I happen to be the Minister of Forestry. That is just an act of serendipity, which has been applauded by all the forest owners up and down the country. This will ensure that the size of the sector expands—that the size of the lung of the country to absorb all the nasties associated with climate change is funded, where appropriate, by overseas investment. I’ve got no doubt whatsoever that the 1,000-hectare rule will ensure that this roadway to converting land away from negative purposes into growing trees will boost the target of a billion trees.

There is nothing nefarious, there is nothing nasty, there is nothing frightening here—all these half-baked notions that the dairy farms of Matamata are suddenly going to disappear into mānuka or pine tree; no, no. Those subsidies were offered by the other side of the House, not this side of the House. Those subsidies were offered as a consequence of the environment meeting all the costs of dairy farming, and I know there’s a lot of disappointment on the other side of the House that the dairy farms that they drove into being in the Mackenzie country can no longer be hocked off to foreigners. That game is over. There is only one exception, where our climate change credentials will be boosted, not by enabling further international ownership of our dairy farms, which is at the essence of what the other side of the House wants to do—we are going to drive forestry, through appropriate infusions of overseas investment, a refined ETS scheme; all those pleasures await you.

I absolutely claim credit for lobbying my senior colleague to ensure we strip red tape, create something of a primrose path, because 70-odd percent of the crop of exotic forests are already owned internationally. We stood down the members of the iwi leaders group, and said, “Yes, we’ll provide some slack: up to a thousand hectares. After that, the sovereign obligations on all New Zealanders must be imposed on hapū and iwi at the same time.” Now, we are very conscious of those Treaty obligations. That’s why, for those groups who have fewer than a thousand hectares, with an appropriate partner, they are going to join us in ensuring the billion-tree strategy is delivered. We are not going to acquiesce any longer with the wholesale sale and alienation, as the other House has done for the last nine years, of our valuable rural landscape. Those days are over.

Hon AMY ADAMS (National—Selwyn): Thank you, Madam Chair. I’ve been looking forward to taking another call in this part, because I do have two amendments on the Table, of quite different natures, that I haven’t yet had a chance to speak to. The first of those follows on, actually, quite nicely from what my colleagues and the last speaker, Shane Jones, have been discussing.

We heard from the Hon Shane Jones that this bill is about both protecting New Zealand and, at the same time, stripping away all the red tape. Well, which is it? Are we making it easier or are we making it harder? The answer, interestingly, is both, because if you happen to be forestry, this bill does everything it can to roll out the red carpet and say, “Come on in. Seventy-two percent foreign ownership isn’t enough for the New Zealand First Party. We won’t stop until it’s pretty much all foreign-owned. We’re going to do everything we can to make buying New Zealand land and forestry rights as easy as possible if you are a foreigner, because we don’t stand for red tape. Oh, but by the way, if you’re in any other sector, we want a lot more red tape.”

This is what has been wilfully misunderstood by the Minister in each of his responses to my colleagues’ contributions in this debate. This is around the introduction of profits à prendre—forestry rights for forestry, profits à prendre in other sectors—and why there is an entirely different set of rules for those profits à prendre from forestry than for any other use of land. That question has not been answered. Mr Parker has continued to try and assert we just don’t understand it. We do understand. Both are now in. Forestry, with the most lenient possible set of conditions—a pre-approval checklist, not the counterfactual, and a thousand hectares—

Hon David Bennett: Because they’re going to get paid under the ETS.

Hon AMY ADAMS: That’s exactly right. You get paid under the emissions trading scheme (ETS), as my colleague Mr Bennett says—but a thousand hectares per year before it even counts. Yet what my colleagues are raising is why it is a thousand hectares and no red tape for forestry, but suddenly viticulture, horticulture, avocados, kiwifruit, and pipfruit are all in the regime, and no explanation has been given for that point.

I want to make an important point that hasn’t been made, and that is this: at the moment, if a foreign buyer wants to come and acquire a kiwifruit orchard, let’s say, or a viticulture orchard, or any of these profits à prendre, currently they have to go through the Overseas Investment Office. Actually, National supports that. We’ve never pretended that there shouldn’t be a process to ensure we’re getting that balance right. Now, by bringing profits à prendre in, a foreign investor who might previously have taken a profit à prendre will now say, “Well, I may as well just own the land—same process, same cost. Why take a profit à prendre? I’ll just buy it.” There’s every chance we’re going to see foreign investment numbers go up, because those that are going to invest might as well own it outright. So rather than giving foreigners a pathway where they can invest in the production potential of our land without owning it, this Government has said, “No, no; you may as well just buy it outright.”, and that is ridiculous.

Now, I want to talk about my particular amendment in this space, first of all, and that is around the pipfruit sector. Very much like what my colleague Stuart Smith was talking about in viticulture and what Nathan Guy was talking about with avocados, pipfruit requires long-term investment and development of a block of land, and you want to know you’ve got a secure return. Now, when we come to vote on these amendments, this is really important, because, in this case, the Government themselves have said, “One sector is very different. One of these sectors is not like the others.” So I hope we don’t see a repeat of the sort of argument that they can all be voted on en bloc, because even the Government, in this legislation, has made the point that forestry is special, it has particular interests and rights, and it is very different. Well, if that’s the case, it is vital that each of these amendments is addressed very, very separately, recognising that very same logic.

Now, the second of the amendments that I have in my name relating to this part is an amendment—“4:45 p.m.” I think is the nomenclature we’re using to relate to them—which is around clause 4 of schedule 3. Now, this is an entirely different point. This is around one of the numerous carve-outs and botched quick repair jobs that the Finance and Expenditure Committee was asked to do to this appalling piece of legislation when the Government recognised that they did actually want to have some foreign capital coming into large-scale developments and created exemption certificates for off-the-plan sales.

Now, it was interesting, because Mr Parker, in the media, was quoted as saying, “Well, we’ve now amended it so that you can have foreign capital coming in and sales off the plan if you’re building a large-scale development.” The Minister, in the media, said that would apply to any development of 20 or more dwellings. The media questioned that with him—“Isn’t it just apartments?”—and he confirmed to them, “No, no; 20 or more dwellings.” Well, actually, Mr Parker, if you look in clause 4 of schedule 3, it makes it very clear that that is not the case.

What clause 4 of schedule 3 says is that those exemption certificates that enable a number of sales off the plans only in fact apply where there are 20 or more dwellings in each building—in each building. So, very clearly, it only applies to apartments. Now, I thought, OK, well, perhaps the select committee hasn’t properly interpreted what Mr Parker, the Minister in charge of the bill, actually wanted. So I have—very helpfully, I think—come up with an amendment that changes the bill to say what Mr Parker said it said, which is that, actually, it will enable sales off the plans to large developments.

Unlike the Government, I know, from Ms Collins and others on this side, that we do want to see the housing supply increased. So if Mr Parker is true to his media comments and wants to ensure that large-scale developments will still enable a number of sales off the plans, then I am sure he will want to support my tabled amendment, which just gives effect to that very wording and makes it clear that the clause applies in the construction of one or more buildings, as one development, where the total number of dwellings is at least 20—so not just 20 apartments in every building for it to qualify but at least a total of 20 new dwellings.

That would be a very small step in the right direction, and it would say, actually, the Government recognises that enabling a level of foreign buying off the plans helps the financing of large developments and will see more houses being built. That would be a good thing, and, as I’ve said, that’s certainly the way Mr Parker represented it to the media. I know that’s the case because I rang the journalist and said, “Well, hang on. I was on that select committee. It doesn’t talk about 20 or more dwellings; it talks about 20 or more apartments in an apartment complex.” And the journalist said to me, “No, no, no; I checked that with Mr Parker. He was very clear that it applies to stand-alone developments as well.” Well, that’s very interesting, I thought. But I’m happy to put it right and provide a tabled amendment to make sure the bill does say that.

So, Mr Parker, I’m looking forward to you supporting my tabled amendment that makes it clear that the sales-off-the-plans exemption certificate is going to be available to large-scale stand-alone developments, as you’ve told the media, or, if not, certainly taking a call and explaining why your media comments are different from the wording in the legislation.

But, in closing—in this particular call on this part of the legislation—it is worth referencing the fact that when we’re talking about this carve-out for forestry what we are talking about is the fact that there is a very different track for how a forestry profit à prendre is dealt with to a profit à prendre in any other sector. Now Shane Jones himself—the Hon Shane Jones—has just told this committee very clearly that to not have created that special pathway would have created all sorts of cumbersome red tape. Well, that’s absolutely right. But I want to hear from the Minister why viticulture, horticulture, avocado, kiwifruit, the pipfruit industry, blueberries, and a number of other very distinct industries don’t deserve the same consideration from this Government.

I certainly represent an area, as a number of my colleagues do, where those sectors fight very hard for their survival and their viability. They want the Government to recognise the impost of legislation and compliance cost, and given that the Government has said it can achieve all it wants to with future positioning for forestry with this light touch, why on earth is there such a negative prejudice towards other critical parts of our primary production industry?

It’s not because there is any particular analysis as to why it has to be one way for forestry and not for the rest, because none was sought—none was sought. If nothing else tells you the degree of dismissal, arrogance, and lack of concern from this Government to our primary sector—that, by the way, pays the bills in this country. If the Government cares about nothing else, it should care about the fact that these industries provide the revenue to build our schools and our hospitals and put police on our streets, and to fund cochlear implants. Maybe if they didn’t care so little about these industries and the compliance costs, and could stand up in this committee just once and explain why they don’t care as much about viticulture and horticulture and pipfruit and kiwifruit as they do about trees and tell the owners of those businesses, that would be good.

Hon DAVID PARKER (Minister for Trade and Export Growth): Responding to the questions from the Hon Amy Adams in respect of the exemptions for large developments that could be made up of dwellings that include single dwellings or multi-unit buildings, that provision is found at clause 20 of replacement schedule 2, which is headed “Exemption for large developments with shared equity, rent-to-buy, and rental arrangements”. The member will see that this can apply where collectively the buildings consist of 20 or more residential dwellings, so I think that deals with that point. In respect of the member’s—

Hon Amy Adams: That’s all I was asking about.

Hon DAVID PARKER: Well, that’s why we’ll be voting against your amendment to schedule 3—because it’s unnecessary.

In respect of the various amendments that have been brought forward for exemptions for activities less than 1,000 hectares, which are photocopied with different fruit types put in them, I would make the point, in addition to those that the Hon Shane Jones has already made, I don’t know of one strawberry farm of 1,000 hectares in New Zealand. I don’t know of one kiwifruit activity of 1,000 hectares. I don’t know of one cabbage farm of 1,000 hectares. I don’t know of one blueberry farm of 1,000 hectares. I don’t know one strawberry farm of a thousand hectares. There may be the occasional apple farm of up to a thousand hectares, and maybe there are in respect of viticulture, but they would be enormous operations in respect of those fields of endeavour in horticulture, and I would absolutely oppose there being such a high threshold for those activities.

In respect of the 5-hectare rule being applied in profit à prendre in horticulture, that 5-hectare limit was chosen because that’s the existing limit in respect of freehold and leaseholds in respect of those classes.

CHRIS PENK (National—Helensville): Thank you, Madam Chair, for the opportunity to speak on the Overseas Investment Amendment Bill, specifically the amendments in my name relating to a new clause 8A in the Schedule 3 inserted by Schedule 3—

Kieran McAnulty: Let me guess: raspberries.

CHRIS PENK: —of which there are two, in fact; one on the subject of strawberries. So Mr McAnulty’s guess was not too far wrong; he’s used to receiving raspberries, no doubt. But, in fact, it’s literal strawberries that I refer to, and, indeed, literal apples as well. Comparing strawberries and apples, I know, is not good practice, any more than comparing apples with oranges. But, nevertheless, in The Beatles theme of Apple Records and Strawberry Fields Forever, I’ll push on with my amendments.

I should prefix my remarks by noting that the Helensville electorate is so prominent in producing strawberries and apples that it’s almost a conflict of interest for me to be speaking to this subject in the Chamber tonight. I’m aiming to ensure that the debate on Part 2 is not fruitless—as many of my colleagues are, as well. So, if time allows, I will speak about the mechanics of how I see this amendment—in fact, times two—in my name playing out. But, before that, I would like to focus on the reason that I have put forward these amendments. There are a number of different reasons that this should be contemplated seriously by the Minister, and I encourage him to take a call and explain that he will, indeed, do so; or, in fact, if he’s not, the reason for that.

The reasons that I am putting forward these proposed amendments to the legislation include, first, employment. Employment in my area, and, indeed, throughout New Zealand, is a very important aspect of economic growth, and the Overseas Investment Amendment Bill should contemplate that very seriously as one of its primary aims.

Second. Appropriately, secondary business opportunities that will arise from allowing the exemption that my amendments put forward—in particular those who service the production, the growing, and the distribution, and so forth of strawberries and apples—will be encouraged by allowing such industry to flourish in a way that my exemption will allow.

Third: taxation. The income tax and GST opportunities that will arise from allowing this kind of activity—again, as I say, encouraged by the placement of this amendment—are such that the Government should take it seriously, particularly in an environment where business confidence is already falling. I don’t want to stray too far from this bill, particularly Part 2 thereof, which we’re currently debating, but suffice to say there is a broader context for encouraging the Government to take seriously initiatives that will, in fact, have a healthy effect on their books—no pun intended—and not a detrimental one, as we are seeing far too often in respect of other matters before the House.

Similarly, my fourth point is the encouragement of skills. It’s no mean feat to run a successful operation for strawberries, apples, or producing other produce—if you’ll allow the tautology at this time of night.

Fifth. A major benefit is the strawberries and apples themselves. I feel as though that’s almost so obvious that it barely needs saying. I’m reminded of the benefits of the space programme, once said to be the invention of Velcro, ballpoint pens, and, indeed, space shuttles. It’s such an obvious thing to have arisen from promoting strawberry and apple picking, like space shuttles as an aspect of the space programme. But let us not forget that the primary aim of such an amendment is to produce such wonderful products for the benefit of our nation.

Sixth, and finally, in relation to this particular amendment: investment. Investment will be allowed by this. This is exactly the kind of thing that should be encouraged by the Overseas Investment Amendment Bill. The clue’s in the name. It should do what it says on the tin and not discourage investment from overseas. So I’ll just briefly note that the way that my amendment intends to achieve all these worthy objects is by establishing an exemption whereby an apple activity or a strawberry activity—depending on which of the amendments one is looking at at the time—will be established where the activity will take place on less than 1,000 hectares.

And it sets out very clearly, first, that consent will not be required to the extent that that would result in—[Time expired]

Hon GERRY BROWNLEE (National—Ilam): There have been numerous questions raised in the committee this evening that, essentially, relate to section 16 of the bill. There have been numerous examples given by members on this side of the Chamber as to how it is possible to drive a bus through some of these provisions.

Debate interrupted.

House resumed.

The Chairperson reported the Appropriation (2018/19 Estimates) Bill without amendment and progress on the Overseas Investment Amendment Bill.

Report adopted.

The House adjourned at 9.56 p.m.