Wednesday, 12 September 2018

WEDNESDAY, 12 SEPTEMBER 2018

WEDNESDAY, 12 SEPTEMBER 2018

The Speaker took the Chair at 2 p.m.

PRAYERS

PRAYERS

SPEAKER: In recognition of the fact that it’s Hindi Language Week, I’ve asked Kanwaljit Singh Bakshi to say the prayer in Hindi.

KANWALJIT SINGH BAKSHI (National): Hey Parmatma, hum aapke aashirvaadon ke liye aapka koti koti dhanyavaad karte hain.

Sabhi prakaar ke niji swarthon ko swayam se door karke hum aadarniya maharani ke shaasan ko swikaar karte hue ye nivedan karte hain ki woh hamaare charcha karne ko disha-nirdesh dein taaki hum iss sansad ka maamle ka sanchalan samajhdaari, insaaf, karuna aur vidhi se New Zealand ke kalyan, tatha yahan ki shanti banaaye rakhne ke liye kar sakei. Amen.

Oral Questions

Questions to Ministers

Housing, Rental—Minimum Standards

1. DAVID SEYMOUR (Leader—ACT) to the Minister of Housing and Urban Development: Does he believe that the residential property market, as currently regulated, leads to excessive profits for landlords?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): Although steep rent rises have hurt low-income renters in many cases in recent years, in general I do not believe that the Residential Tenancies Act 1986 leads to excessive profits for landlords. I do, however, consider that the Act does not strike the right balance between landlords and tenants. That’s why we’ve announced proposals to strike a new balance between providing tenants with more secure tenure and allowing them to make their house a home, while protecting the rights and interests of landlords.

David Seymour: If landlords are not making excessive profits, then who will pay the costs of the new standards the Minister intends to regulate for the upkeep of rented homes?

Hon PHIL TWYFORD: Well, I would expect that the cost of meeting the new standards, like those that are set out in the draft standards for the Healthy Homes Guarantee Act—like, for instance, putting in a heat pump or some insulation or draught-stopping or drainage—will be dealt with in exactly the same way as landlords do currently, as when the house needs painting or the roof needs replacing or the piles need fixing.

David Seymour: So is the Minister saying that landlords are not making excessive profit, tenants are hurt by steep rent increases, and, now, new costs will be put into the renting of property and that will somehow be paid for by magic?

Hon PHIL TWYFORD: No, that’s not at all what I said. I said that in some cases, in some regional housing markets, low-income renters have been hurt in recent years by rising rents, primarily caused by a lack of housing supply. But I would say that our Government is unapologetic about the fact that we are modernising the standards for rental properties, because in our view it’s long past time that this country was sending 40,000 kids to hospital every year with infectious diseases, mostly because they’re living in rental properties that are cold and damp.

David Seymour: I raise a point of order, Mr Speaker. My question was tight and asked who will pay the cost of improvements to homes. I don’t believe the Minister even tried to address that basic kernel of who pays the cost.

SPEAKER: I think he did.

Paul Eagle: What changes is the Government proposing to how the residential property market is regulated?

Hon PHIL TWYFORD: Our tenancy laws are antiquated. They don’t reflect the fact that renting is now a long-term reality for many, many families. The Government is proposing changes that will strike a fairer balance between providing tenants with security of tenure and allowing them to make their house a home while protecting the rights and interests of landlords. We know that the vast majority of landlords take good care of their properties and treat their tenants fairly. Those people will see no real change from the Government’s reforms. However, the current law is so weak that it permits a small number of exploitative people to rent out unhealthy, dangerous houses and charge exorbitant rents. Our reforms will clean up the rental market, and that’s good for the vast majority of landlords and their tenants.

Prime Minister—Refugee Quota, Starting-out Wages, and Employment Relations Amendment Bill

2. Hon SIMON BRIDGES (Leader of the Opposition) to the Prime Minister: Does she stand by all her Government’s statements and actions?

Rt Hon JACINDA ARDERN (Prime Minister): Kia ora koutou e Te Whare. Yes.

Hon Simon Bridges: Is it her Government’s policy to increase the refugee quota to 1,500 or is that simply a “personal commitment” of Iain Lees-Galloway, as she described it?

Rt Hon JACINDA ARDERN: As I’ve described to this House many, many times before, the policies of this coalition Government are contained in the confidence and supply agreement, the coalition document, and the Speech from the Throne. All other policies go through a Cabinet process.

Hon Simon Bridges: So is it her Government’s policy to increase the refugee quota of 1,500 or is that simply a personal commitment of Iain Lees-Galloway?

Rt Hon JACINDA ARDERN: As I’ve said many times before, all policies of this Government are contained in the confidence and supply agreement, the coalition document, the Speech from the Throne. All other policies go through a Cabinet process.

Hon Simon Bridges: Will the Government abolish starting-out wages by October 2018?

Rt Hon JACINDA ARDERN: A third time. Look, it’s clear that we have established policy between this coalition Government that’s set out in the public domain. Everything else goes through a Cabinet process. Now, I know the member continues to be jealous that he is not on this side of the House in the position to make the changes that this Government has made, and that we have achieved in one year more than that Government achieved in nine, but we stick to a process.

Hon Simon Bridges: So when Iain Lees-Galloway said in December in a ministerial press statement that the Government will abolish starting-out wages by October 2018, was that just a personal commitment?

Rt Hon JACINDA ARDERN: Again, every policy we go through goes through a process. Now, the member on that side of the House seems to refuse to accept that it is possible to have three different parties with three different views, who are still able to increase wages for New Zealanders; deliver benefits for low-income families to the tune of, on average, $75 a week; make substantial changes in investment into transport in our regions; make $1 billion worth of investment into our regions—

SPEAKER: Order! [Interruption] Order! I do want to warn the Prime Minister that when I stand and call for order, she sits.

Hon Simon Bridges: Can we no longer believe ministerial press statements unless they’re signed off by Mr Peters?

Rt Hon JACINDA ARDERN: No—ridiculous.

Hon Simon Bridges: Does she stand by her Government’s policy to create multi-employer collective agreements (MECAs), which has been through Cabinet, and would, for example, force a business in Timaru to have the same pay rates as one in Auckland, or is that another of Iain Lees-Galloway’s personal commitments?

Rt Hon JACINDA ARDERN: Actually, the member is demonstrating a lack of knowledge around the policy that’s in that bill. It is possible, as that legislation stands, for variable rates to be included in MECAs. So the member clearly does not understand the bill.

Hon Simon Bridges: Does Iain Lees-Galloway’s Employment Relations Amendment Bill, which has been through Cabinet, have the full support of all parties in the coalition, or is that another personal commitment by the Minister?

Rt Hon JACINDA ARDERN: If I could reference a quote made by the Deputy Prime Minister when a journalist speculated in this regard—his response was they’d been interviewing their typewriter.

Hon Simon Bridges: Was the Deputy Prime Minister correct yesterday when he stated that the Employment Relations Amendment Bill was a “work in progress”, and, if so, what changes to the bill is her Government considering?

Rt Hon JACINDA ARDERN: As I have outlined many, many times before, we utilise the Cabinet process to agree everything that this Government declares and puts before this House.

Hon Simon Bridges: It’s a simple question: are changes afoot to the Employment Relations Amendment Bill?

Rt Hon JACINDA ARDERN: My response is that Cabinet determines any changes to legislation.

Hon Simon Bridges: Is the reality that she’s confused about the progress of Iain Lees-Galloway’s bill, when Winston Peters says employment law changes are a “work in progress” and Clayton Mitchell says New Zealand First are proud to be supporting the bill?

Rt Hon JACINDA ARDERN: The only one that’s confused is the member asking the question.

Hon Simon Bridges: Does anything Iain Lees-Galloway say have the support of the Government, or has he simply gone rogue?

Rt Hon JACINDA ARDERN: We support the Minister in his work fully.

Hon Simon Bridges: I’ll go to the real Prime Minister tomorrow.

SPEAKER: Order! Order! If the member wants to ask another question, he stands up.

Fiscal Strategy—Settings and Framework

3. Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Finance: What actions, if any, has he taken to enhance New Zealand’s fiscal settings and framework?

Hon GRANT ROBERTSON (Minister of Finance): Today, I announced our plan to update and enhance a key part of the Government’s financial framework. In particular, this means embedding a well-being focus into the Public Finance Act. The proposed changes would require New Zealand Governments to set out well-being objectives alongside fiscal objectives that will guide budget decisions, and would also require Treasury to report on the well-being indicators, alongside traditional economic and fiscal indicators. Thirty years on from the establishment of both the State Sector Act and the Public Finance Act, it is past time for us to modernise these pieces of legislation to reflect not just fiscal accountability, but also ensure that the Government takes an approach that takes into account the overall well-being of all New Zealanders.

Dr Duncan Webb: What other actions has the Government taken to enhance New Zealand’s fiscal settings?

Hon GRANT ROBERTSON: Today, we have also released more details on the Government’s planned independent fiscal institution as foreshadowed at Budget time. This institution would monitor the Government’s adherence to its Budget responsibility rules and provide political parties with the opportunity for independent costings of their policies. This type of institution is common across the world, including in 26 OECD countries. It would add to the quality of debate in New Zealand by providing an independent, authoritative voice on matters that affect public finances.

Dr Duncan Webb: Why are these changes necessary?

Hon GRANT ROBERTSON: The primary goal of this Government is to enhance the well-being and living standards of all New Zealanders. The changes we are proposing put this goal at the heart of how Governments make fiscal decisions whilst also strengthening a responsible approach to fiscal management as required under the Public Finance Act. These changes are part of the Government’s wider modernisation of our institutional framework, including reforms of the State Sector Act and the Reserve Bank, and these will ensure our economy and its systems are fit for purpose for the 21st century.

Economy—Growth and Costs for Businesses

4. Hon AMY ADAMS (National—Selwyn) to the Minister of Finance: Does he stand by all of the Government’s statements and actions in relation to the New Zealand economy?

Hon GRANT ROBERTSON (Minister of Finance): Āe, in the context in which they were made and undertaken.

Hon Amy Adams: Does he stand by his answer in the House yesterday, when asked about the economy now being forecast to be $2.2 billion smaller than projected in the Budget, that “The economy is still growing”, and does that mean he’s not concerned about the missed opportunities that lower growth represents for New Zealanders?

Hon GRANT ROBERTSON: I am always looking for opportunities to increase sustainable growth in New Zealand. But I cannot put it better than how Craig Hudson, the managing director of Xero, put it today when he said, “Truckometer and consumer spending numbers are out and both look good. It’s time to stop focussing on business sentiment surveys and focus on real data. Xero’s July numbers show cash flow is better and employment numbers are up.” On this side of the House, we’re focused on real data.

Hon Amy Adams: Does he not understand that even if the economy is still growing, if it’s growing more slowly than it should be, that means fewer opportunities for New Zealanders?

Hon GRANT ROBERTSON: We need sustainable and productive economic growth. The member well knows that the trend around GDP began declining at the beginning of 2017.

Hon Amy Adams: So we just need growth, Grant.

Hon GRANT ROBERTSON: Well, the member says we just need growth. That was the problem of the last nine years—that that Government thought having growth rates of 3.5 percent but the world’s worst homelessness was OK. We don’t think that on this side of the House.

Hon Amy Adams: So when he says he doesn’t want to have an economy that’s reliant on population growth, was he aware that GDP per person, which of course removes the population growth component, averaged more than 1.6 percent a year under the previous Government but actually declined in the last quarter?

Hon GRANT ROBERTSON: The member will need to look at the last few years of the previous Government to see where the trend began on that. But I repeat: if we continued with the previous Government’s approach of relying on population growth, relying on an overheated housing market, then we won’t have the standard of living we need for New Zealanders into the middle part of the 21st century. There are two options here: drift along like the previous Government did or actually do something about making sure our economy is fit for purpose. We’re getting on with the latter.

Hon Amy Adams: Is he aware that costs for businesses as measured by the producer price index (PPI) have gone up 3.4 percent a year under this Government compared to just 1.2 percent per annum under the previous Government; and, if so, is he concerned that those higher costs are going to be passed on as a higher cost of living for New Zealanders?

Hon GRANT ROBERTSON: It’s true that in the June 2018 quarter, producer input prices were up 1 percent, which is similar to the rise in output prices of 0.9 percent in the same quarter—

Hon Amy Adams: It’s not what we’re talking about. Look at the PPI.

Hon GRANT ROBERTSON: No, but that’s exactly what the PPI is. This compares to an increase of 1.5 percent in import prices in the June quarter last year, when output prices rose 1.3 percent.

Hon Amy Adams: So is it fair to say, then, that when he talks about transitioning the New Zealand economy, he’s really talking about transitioning us to lower growth, higher costs, and lowered standard of living?

Hon GRANT ROBERTSON: No, what it means is that I’m talking about a transition to an economy where we actually invest in 21st century transport systems, where we make sure that the people in our regions of New Zealand get a fair go, where we see wages lift, and we have a reason for New Zealanders to stay here in this country. The last Government decided that they were going to ignore all of those forward-looking things. We’re not, and I really do encourage the member to listen to what Craig Hudson had to say. In businesses around New Zealand they understand—they understand—that there is a good environment now to do business and employ people. The member should get alongside them.

KiwiBuild—Mount Roskill Development

5. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: Does he agree with all the reported statements of his Government on KiwiBuild?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): I stand by such statements, if correctly reported and in their context, including the statement from the Prime Minister that she is proud to lead a Government that is making housing more affordable.

Hon Judith Collins: Was the Mount Roskill development that he announced on Saturday the same project that started under National in October 2016, or is this a different project now because it’s been rebranded KiwiBuild?

Hon PHIL TWYFORD: It’s a different project because it’s got a light rail line running right through the middle of the community, and not only has this Government committed to building 10,000 new houses, but 2,400 of them are going to be affordable KiwiBuild houses for young families to live in.

Hon Judith Collins: Is $2 billion of capital allocation in Budget 2018 likely to be sufficient to “deliver 100,000 quality, affordable homes throughout New Zealand within a decade.”, or does he anticipate that more money will needed from future Budgets?

Hon PHIL TWYFORD: The answer’s yes, to the first part of the question.

Hon Judith Collins: Oh, so it will be sufficient—OK. Are the KiwiBuild projects that have been announced so far likely to deliver a profit to the Crown to be reinvested in future projects?

Hon PHIL TWYFORD: Well, the KiwiBuild homes that are going to be built in these large projects will be supported through the $2 billion recycling fund, but, actually, those large projects in general are expected to wash their face—that is, they are expected to break even over time.

Hon Judith Collins: Does he, then, agree with HLC—formerly Hobsonville Land Company—chief executive Chris Aiken, who said the cost of the Mount Roskill redevelopment project alone would be $4 billion, and that net cost “zeroes off to a break-even position”?

Hon PHIL TWYFORD: I agree with Chris Aiken. He’s an excellent, excellent public servant, and he’s right; that development will break even.

Hon Judith Collins: Is it correct that if KiwiBuild projects only break even, in order to deliver 100,000 homes with a budget of $2 billion, money will have to be recycled through the fund once every three months, and is this likely to occur?

Hon PHIL TWYFORD: Over the 10-year period, a high level of recycling of that fund will take place. We’re talking about investing and redeveloping an asset base that is worth billions of dollars. I know that the members opposite don’t think it’s possible to build affordable homes for New Zealanders. They don’t think it’s possible to build whole new communities, which is what we used to do in this country routinely a generation ago. It’s a shame that for nine years, they had so little ambition. That’s the reason we got into the housing crisis in the first place.

KiwiBuild—Targets and Mount Roskill Development

6. MICHAEL WOOD (Labour—Mt Roskill) to the Minister of Housing and Urban Development: What progress, if any, has been made towards the Government’s KiwiBuild homes targets?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): Well, it’s more good news from the Government. On Sunday, the Government announced another large-scale development—a transformational project to build 10,000 new homes for families in Mount Roskill. This development will include more than 2,400 modest, affordable KiwiBuild homes for first-home buyers, around 3,000 homes to be sold on the market, and more than 3,000 new warm, dry State houses. Building in Mount Roskill South has started already. In stage one, 80 new State homes will be built, with the first ready to move into by next year. Stage two will begin mid-next year and will see 90 worn out old State houses replaced with around 300 new homes, including 95—

SPEAKER: Order! Order! Thank you.

Michael Wood: How will the Government ensure that local residents are able to rent or buy homes in the completed Mount Roskill development?

Hon PHIL TWYFORD: I’m determined that the local community benefits from this redevelopment and are not simply priced out of the new homes. HLC are working to keep the prices of KiwiBuild homes as low as possible, and we’re working on long-term rent and shared-equity options. For KiwiBuild, we will be using priority ballots to ensure that local residents in Roskill have the first shot at owning their own home in their own community.

Michael Wood: How does the Mount Roskill development fit within the Government’s plans for large-scale urban development?

Hon PHIL TWYFORD: Well, this Mount Roskill development is the second fully integrated transport and housing development. HLC and the KiwiBuild unit are working closely with the New Zealand Transport Agency - led light rail project, to ensure that they are both fully integrated. Integrating transport and housing is how we invest in the infrastructure needed to get ahead of the growth. The Mount Roskill development joins Unitech, Northcote, and Māngere as initial large-scale developments, where this Government is building starter homes for young Kiwi families.

Michael Wood: What progress is being made on the Government’s immediate target of 1,000 KiwiBuild homes in 2018-19?

Hon PHIL TWYFORD: Well, on Monday, the Prime Minister also announced that the ballot had opened for the first 18 KiwiBuild homes at McLennan, and our Government is opening the door to families locked out of homeownership by building affordable starter homes where the market has failed. Another 12 properties are already under construction, and a further 58 of mainly three-bedroom homes will be built at McLennan. In the coming weeks, I’ll be announcing more KiwiBuild projects, and tomorrow our Government will be announcing the first homes to be built through the Buying off the Plans initiative.

Business Partnership Agenda—Minimum Wage Increase and Provincial Growth Fund

7. Hon PAUL GOLDSMITH (National) to the Minister of Finance: What components of the Business Partnership Agenda are designed to increase productivity and improve our economy’s international competitiveness?

Hon GRANT ROBERTSON (Minister of Finance): All of them.

Hon Paul Goldsmith: How will increasing the minimum wage by 27 percent in the next three years increase our international competitiveness?

Hon GRANT ROBERTSON: More productive businesses and more productive workers will improve our international competitiveness.

Hon Paul Goldsmith: So what is the process that leads to an increase in the minimum wage automatically leading to higher productivity?

Hon GRANT ROBERTSON: I wouldn’t say it’s automatic, but making sure that we lift the wages that New Zealanders get will mean that, firstly, they’ll be spending more money in the economy, which we know that those on the minimum wage do. The member needs to get alongside the businesses in New Zealand who are involving themselves in things like high performance engagement programmes, which, actually, lift both—[Interruption] Well, I’m glad to see the members opposite laughing at some of our largest companies improving their bottom line, improving the prospects of their workers, and lifting their wages. It’s possible to do all of them, Mr Goldsmith.

Hon Paul Goldsmith: What would he say to an exporter whose products require a lot of labour and who doesn’t believe he or she can remain in business while increasing their wages 27 percent?

Hon GRANT ROBERTSON: That is hypothetical. The exporters that I talk to are ambitious for New Zealand. They want to get alongside the Government with our plan to lift investment in research and development, to build the infrastructure that will support them, and to get the free-trade deals that those exporters want. I think the member needs to be more optimistic about our exporters’ prospects.

Hon Paul Goldsmith: Is he concerned that the Provincial Growth Fund, which he hopes will be a driver in productivity, has so far devoted less than 1.5 percent of its funds to the entire South Island, and, if so, is it fair to conclude that the Government is not focused on South Island productivity?

Hon GRANT ROBERTSON: Absolutely not. As somebody who grew up in South Dunedin, I can tell you that this Government has got a laser-like focus on all of the regions of New Zealand. And, indeed, Mr Shane Jones, the provincial champion, has been touring both the North and the South Island to some acclaim all over the provinces of New Zealand, and I have great confidence in him that we will see the fruits of the Provincial Growth Fund spread widely—I hesitate to use the word “seed”; the fruits, anyway—across the sector.

Digital Services—Appointment Process for Chief Technology Officer

8. Hon Dr NICK SMITH (National—Nelson) to the Minister of State Services: Has the process for appointing the Government’s Chief Technology Officer been consistent with the commitment “to be the most open, most transparent Government that New Zealand has ever had”?

Hon CHRIS HIPKINS (Minister of State Services): No.

Hon Dr Nick Smith: Was Derek Handley offered the appointment?

Hon CHRIS HIPKINS: I don’t believe it’s in the interests of natural justice or the public interest to comment on the process while it is still a live process.

Hon Dr Nick Smith: Was the successful candidate for the Government’s chief technical officer advised at or around 14 August, in light of his answer to written question No. 17144 that unsuccessful candidates were advised on that date?

Hon CHRIS HIPKINS: As I indicated in my previous supplementary answer, while it is a live process, I don’t believe it is in the interests of natural justice or the public interest to comment further.

Hon Dr Nick Smith: Are there further undisclosed emails through former Minister Clare Curran’s private Gmail account in respect of the appointment of the Government’s Chief Technology Officer?

Hon CHRIS HIPKINS: My understanding is that all of Clare Curran’s Gmails that relate to this issue are being archived—handed over for archiving—so they are part of the public record. Therefore, they are subject to the Official Information Act, and, therefore, they will be fully captured and disclosed, if required, under the relevant processes.

Hon Dr Nick Smith: I raise a point of order, Mr Speaker. My question was a very direct one: are there further emails that were not disclosed of by Clare Curran in respect of the appointment of the Government’s chief technical officer? The Minister did not address that.

Hon CHRIS HIPKINS: I’m happy to address it—

SPEAKER: Speaking to the point of order—

Hon CHRIS HIPKINS: I’m happy to address it further, Mr Speaker.

SPEAKER: Well, the member can.

Hon CHRIS HIPKINS: I think it was inherent in my answer that in the archiving process, of course, any further emails to those already disclosed will be identified.

Hon Dr Nick Smith: Has the Minister directly asked former Minister Clare Curran whether there are further undisclosed emails through her private Gmail account in regard to the appointment of the Government’s Chief Technology Officer?

Hon CHRIS HIPKINS: I’ve not personally had that conversation, but I do understand that conversation has been held within the Government.

Hon Dr Nick Smith: Who has specifically had the discussion with former Minister Clare Curran on what private emails exist in respect of the appointment of the Government’s Chief Technology Officer?

Hon CHRIS HIPKINS: I think it’s been held relatively publicly, but I also understand that the Prime Minister and the Prime Minister’s office have had conversations along those lines with Clare Curran.

Hon Dr Nick Smith: Does the Minister accept that the process of appointment has been so tainted, by the secret emails and meetings by the former Minister and with the comments from the industry, that the appointment is now so tainted that it cannot have credibility and that the Government needs to start the appointment process all over again and try to get it right third time round?

Hon CHRIS HIPKINS: Consistent with my earlier supplementary question answers, I don’t believe it’s in the public interest to comment on that matter while there is a live process.

Education—Learning Support and Direct Access Pathway

9. JAMIE STRANGE (Labour) to the Associate Minister of Education: What actions, if any, has the Government taken to provide more options for children and young people with complex and challenging learning-support needs and their families?

Hon Tracey Martin: Mr Speaker.

SPEAKER: The Hon Tracey—

Hon Tracey Martin: Martin.

SPEAKER: Martin—sorry.

Hon TRACEY MARTIN (Associate Minister of Education): Kia ora, thank you.

SPEAKER: I was going to call you Tracey Nelson. I don’t know why.

Hon TRACEY MARTIN: It’s all right. Other speakers have called me other things too.

SPEAKER: Yes, so have I.

Hon TRACEY MARTIN: On 23 August, the Minister of Education and I announced a new direct access pathway for students with complex learning-support needs to attend residential schools. This will mean that more children and young people will be able to enrol in Government-funded places at our three residential special schools: Halswell, Salisbury, and Westbridge. We are delivering on a commitment to ensure that our young people can access the support they believe provides the best option to participate in and progress their learning.

Jamie Strange: How does the new direct access pathway make it easier for children and young people to apply to enrol in residential schools?

Hon TRACEY MARTIN: Previously, access to a residential special school was via the Intensive Wraparound Service. The direct access pathway will allow children and young people to be assessed by independent regional panels—as they are for the Intensive Wraparound Service—to enrol at the school without having to be accepted into the Intensive Wraparound Service first. Families are able to put in their enrolment applications now, with the new pathway commencing in term 4. Residential schools and parents have been asking for some years to establish another enrolment pathway for young people with complex needs to go into residential schools. We made this commitment, and we are pleased to have been able to deliver on it.

Prime Minister—Contact with Minister of Government Digital Services and Minister of Customs

10. Hon PAULA BENNETT (Deputy Leader—National) to the Prime Minister: Does she stand by all her statements and actions?

Rt Hon JACINDA ARDERN (Prime Minister): Tēnā koutou e Te Whare. Yes.

Hon Paula Bennett: Has the Prime Minister asked Clare Curran whether there are more emails between her and Derek Handley?

Rt Hon JACINDA ARDERN: As I believe I advised yesterday, I have had the assurance from Minister Curran’s office that she will be ensuring that all relevant correspondence across all forums are appropriately archived. Those will then be able to be accessed.

Hon Paula Bennett: Has the Prime Minister had any conversations, emails, or texts with Derek Handley?

Rt Hon JACINDA ARDERN: I have in the past had correspondence with Mr Handley. It’s on the public record that I’ve known him for a number of years.

Hon Paula Bennett: Will the Prime Minister publicly disclose those conversations, emails, or texts?

Rt Hon JACINDA ARDERN: I am subject to the Official Information Act, as everyone else in this House is.

Hon Paula Bennett: When Meka Whaitiri told her she did not assault her staff member, did she believe her?

Rt Hon JACINDA ARDERN: As I said in the House yesterday, this is a contested allegation. That is why it’s being investigated by Ministerial Services.

Hon Paula Bennett: Can her Ministers have confidence in her to take them at their word and not question whether they are telling the truth and then get Ministerial Services to investigate them?

Rt Hon JACINDA ARDERN: As I have advised this House recently, when I contacted Minister Whaitiri, she wanted this process to be transparent and open. She has been fully cooperating, and Ministerial Services, as is rightly so, is undertaking an investigation in a transparent way.

Hon Paula Bennett: When she said in the House yesterday that “no personal grievances have been lodged against Meka Whaitiri since becoming a Minister.”, is she aware of any other staffing issues in Meka Whaitiri’s office where Ministerial Services have been involved?

Rt Hon JACINDA ARDERN: I advised what my office had been advised in relation to personal grievances. We are otherwise investigating this specific allegation via Ministerial Services.

SPEAKER: Question No. 11—Jonathan Young—

Hon Simon Bridges: Shifty.

Energy Market—Electricity Pricing

JONATHAN YOUNG (National—New Plymouth): My question is to the Minister of—

SPEAKER: Order! The member will resume his seat. The Leader of the Opposition will stand, withdraw, and apologise.

Hon Simon Bridges: I withdraw and apologise.

11. JONATHAN YOUNG (National—New Plymouth) to the Minister of Energy and Resources: Does she stand by all her statements and actions?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): Yes.

Jonathan Young: After saying New Zealanders deserve affordable electricity, will she guarantee that electricity price rises will be lower in the next three years than they have been in the last three years?

Hon Dr MEGAN WOODS: This Government was proud yesterday to release the first phase of a report in a two-part process. This outlined the issues that we have to deal with, and that identified in the report that we have a two-tier electricity market developing in this country. I note that the member who asked the question doesn’t think there’s anything wrong, but on this side of the House, when we think there are 103,000 households who are defined as being in energy hardship, we do see there is a problem. That is why phase two of the process will be examining those remedies.

SPEAKER: Question No. 12—[Interruption] No, the Opposition’s supplementaries have been used—

Jonathan Young: I raise a point of order, Mr Speaker. I don’t think that the question was addressed and answered.

SPEAKER: Ask it again.

Jonathan Young: Will she guarantee that electricity price rises will be lower in the next three years than they have been in the last three years?

Hon Dr MEGAN WOODS: As I have previously answered the member, what was released yesterday was phase one of a two-part review that we are doing on electricity prices. That member does not think it is a problem that 103,000 households are defined as being in energy hardship. This is a Government that does see that as a problem. We are embarking on phase two. We will be looking for remedies. What I can guarantee that member is we will not bury our heads in the sand and think that there isn’t a problem.

SPEAKER: That was a very good answer for a different question. The member will have another crack.

Hon Dr MEGAN WOODS: Phase two of the report will be looking at remedies. What I can guarantee that member is that this is a Government that is committed to seeing those 103,000 households who are in energy hardship offered some release. We will be looking for remedies, and in terms of guarantees, I invite that member to submit his ideas into phase two of the review.

Jonathan Young: Thank you. Does she agree with the Electricity Price Review chair’s comments yesterday that the sharing of costs may need to be reallocated, and if so, how should they be reallocated?

Hon Dr MEGAN WOODS: I again point the member to the fact that this is phase one of a two-part review. I absolutely agree with the chair of the Electricity Price Review, Miriam Dean, who has done a wonderful job and produced a very accessible document, that these are questions that we need to think about. What we have seen since the 1990s is a 79 percent increase in electricity prices for households. That has not been matched by business or industry, and that is a conversation that we need to have from here.

Education—Support for Te Reo Māori in Schools

12. MARAMA DAVIDSON (Co-Leader—Green) to the Associate Minister of Education (Māori Education): He aha ngā hīkoitanga e takahia ana e ia ki te whakatairanga i Te Reo i roto i ngā kura, ā, me te neke whakamua atu i te wāteatanga whānui o Te Reo i ngā kōeke tau katoa?

[What steps is he taking to promote the Māori language in schools and move forward the universal availability of it at all year levels?]

Hon KELVIN DAVIS (Associate Minister of Education (Māori Education)): Kua whakatakotohia e Te Kāwanatanga tōna whāinga matua kia whakaurua Te Reo Māori ki roto i ngā akoranga kōhungahunga me ngā kura tae atu ki te tau 10 i mua i te paunga o te tau 2025; kia whai wāhi ai ngā tāngata katoa o Aotearoa ki te ako, ki te whakamahi, ki te kōrero i Te Reo Māori. Hei whakatūtuki i tēnei e, tuku āwhina mātau ki te rāngai whakaako mā te tautoko kaiako, mā te whakapiki haere i te mōhio me, te āhei o ngā kaiako ki Te Reo Māori, otirā, ki te ako anō hoki.

[The Government has set down its primary objective that the Māori language be included in courses for early childhood and schools right up to year 10 by the end of year 2025; that everyone in New Zealand participate in the learning, application, and speaking the Māori language. To fulfil this, we are providing assistance to schools and the educational sector by supporting teachers and increasing the understanding and ability of teachers to speak the Māori language but at the same time to teach it as well.]

Marama Davidson: Ka whakaae a ia ki te whāinga, kia ako ngā tamariki katoa i ngā kura o Aotearoa i Te Reo Māori?

[Does he agree with the objective that all children in New Zealand schools learn the Māori language?]

Hon KELVIN DAVIS: Āe, e tautoko ana ahau kia ako ngā tamariki katoa o Aotearoa i Te Reo Rangatira me, ngā kura puta noa i Te Motu. Ki te whakatutuki i tēnei whāinga, me tuku āwhina mātou ki ngā kura me, te rāngai whakaako, mā te tautoko i ngā kaiako, mā te whakapiki haere i te mōhio me te āhei o ngā kaiako ki Te Reo Māori, otirā, ki te ako anō hoki.

[Yes, I endorse that all New Zealand children and schools throughout the land learn the chiefly language, to fulfil this objective. We must provide assistance to schools and to the educational sector by supporting the teachers, by increasing the understanding and ability of teachers to speak Māori but at the same time, to teach it as well.]

Marama Davidson: Ka tautoko a ia i te whakaaro kia whakatakoto hia he wāhi mō te ako i Te Reo hei kaupapa matua kāore rānei?

[Does he support the thought that a provision be set down for the language to be taught as a primary subject or not?]

Hon KELVIN DAVIS: Kei Te Marautanga o Aotearoa kē Te Reo Māori e noho ana, ā, ko te tūmanako me poipoia kia tipu, kia ea ai, ā, kia pakari ai ngā kaiako, ngā kaimahi o ngā kura ki te whakamahi i Te Reo Māori ki ngā take me ngā karaihe katoa o te kura.

[The Māori language is sitting instead in the New Zealand Curriculum, and the hope was that it be nurtured so it grows and fulfilled so that teachers and staff of schools are sturdy in applying the Māori language to issues and all classes of the school.]

Marama Davidson: Ka whakapikia rānei te rahinga o ngā karahipi hautūtanga i roto i ngā kaiako Reo Māori hou, ka whāia rānei he rahinga rite, he whakatairanga pai ake rānei i roto i ngā karahipi?

[Will the quantity of leadership scholarships in new Māori language teachers be increased or will a like quantity or a better promotion in the scholarships be pursued?]

Hon KELVIN DAVIS: E mōhio ana tātou, me nui kē atu te nama o ngā kaiako Reo Māori i ngā kura Māori i ngā kura auraki hoki. I whakawhiwhia e tēnei Kāwanatanga i tērā tau tētahi hau mā rima o taua miriona taara me tētahi hau mā tekau mā rima i te tau nei, kia piki ai ngā tekiona kore kaiako, pērā i aua hunga e ako ana i Te Reo Māori ki ērā, i te Kura Māori. He takahitanga tuatahi ēnei ki te whakatutuki i ō tātou wawata, kia ako ai ngā tauira katoa i Te Reo Māori i ngā kura engari, me ahu whakamua Te Kāwanatanga nei ki te rapu hohenga mō tātou ki te mahi kia piki ake ai te nama o ngā tāngata e uru atu ana ki te umanga whakaakoranga, hei kaiako Reo Māori. Ā, he mahi e haere whakamua ana.

[We know that the number of Māori language teachers at Māori and also mainstream schools must be much more. This Government last year granted a fifth of that million dollars and a fifteenth this year to increase sections without teachers, like those teaching the Māori language to those at kura Māori. These are initial steps to achieve our aspirations so that all students learn Māori at schools, but this Government must move forward to seek out actions for us to perform to increase the number of people entering the teaching profession as Māori language teachers. It is a work in progress.]

Marama Davidson: Ka oati a ia ki te whakatairanga, ki te tūtaki, ki te matapaki i tētahi wānanga Reo Māori mō taua hunga e pīrangi ana ki te mutu mai hei kaiako?

[Will he promise to promote and meet and discuss a Māori language forum for those who want to be teachers?]

Hon KELVIN DAVIS: Ko tetahi o ngā mahi o Te Kāwanatanga nei, he whakatakoto rautaki rāngai whakaako, arā, te Education Workforce Strategy, ā, ko ētahi o ngā pātai e pātaingia anai, me aha tātou kia kaha ake ai ngā kura kaiako, kia whakapakari ai rātou i ō rātou Reo.

[One of the tasks of this Government is to set down a teaching strategy sector, namely, the Education Workforce Strategy, and some of the questions being posed relate to what can we do so that school teachers are more resolute and that they perfect their Māori language.]

Marama Davidson: Ka pīrangi a ia ki te hara mai ki tō mātou hui taumata mō ngā mātanga mātauranga, ngā mema Māori hoki, kia matapakihia tonutia tēnei kaupapa, nau mai?

[Does he want to come to our summit conference on specialist skills in education, and Māori members too, where this initiative is to be discussed thoroughly; do come?]

Hon KELVIN DAVIS: Āe, āe e Te Māngai, āe! Ā, kia kaha hoki ngā tāngata katoa o Aotearoa, kia tukuna ō rātou whakaaro ki Te Maihi Karauna, tēnā te kaupapa nui o Te Maihi Kārauna, te rautaki a Te Kāwanatanga hei tautoko i Te Reo Māori, hoi anō, ko tētahi o āna whāinga, kia kotahi miriona tātau o Aotearoa e kōrero Māori ana, ā, tōna paku matatau nei, i mua i te paunga o te tau 2040. Kai te marae nui o Te Motu nei, tēnei rautaki e kōrerotia ana, āe, e mea ana mātou ki Aotearoa whānui, me tono whakaaro mai. Mōhio ana mātou kei te hiahiatia Te Reo Māori, nā reira, me kaha ki te whakaea i tērā hiahia.

[Yes, yes, Mr Speaker, yes! And so all persons of New Zealand must be resolute as well in regards to submitting their thoughts about Te Maihi Karauna, that great policy, the strategy of the Government that supports the Māori language, and, accordingly, one of its objectives is that one million of us of in New Zealand are speaking Māori, with a small proportion of these becoming fluent by the end of the year 2040. This strategy is being spoken on the great courtyard of the nation; yes we are saying to New Zealand at large, send in a thought. We know that the Māori language is wanted, so work hard to fulfil that desire.]

Hon Shane Jones: Ā taku pātai, mehemea he pūtea rānei kei Te Minita hei muru i te nama kia tae mai tetahi māhita ki te kura i Te Rōpū Nāhinara me pēhea te whakahua tika i Te Reo Māori?

[And so my question, does the Minister have a fund or not that will wipe out an invoice for a tutor to come here to educate the National Party on how the Māori language should be pronounced correctly?]

Hon KELVIN DAVIS: Ā, e aroha atu ana e Te Māngai o Te Whare, ā, korekau he paku pūtea hei āwhina i a rātou nā te hōhonutanga o te hiahia o ngā koretaketanga o tērā taha o Te Whare ki te kōrero i Te Reo Māori.

[I sympathise, Mr Speaker; there isn’t a bit of funding to help them because of the depth of the ineptitude of that side of the House to speak the Māori language.]

SPEAKER: I think we might’ve had a polite interpretation there.

General Debate

General Debate

Hon KELVIN DAVIS (Minister for Crown/Māori Relations): I move, That the House take note of miscellaneous business.

Tēnā koe e Te Māngai, Te Whare. Tuatahi, māku hei tīmata taku kōrero, e tika ana kei roto i tō tātou reo rangatira kia poroporoaki i ō tātou tini mate. I reira au inanahi rā i te ātaahua o Waikare, arā kei waenga i te hapū o Te Kapotai. I reira e tangihia ana, e poroporoaki ana i te pāpā o tō tātou hoa mahi, arā a Willow-Jean Prime; arā ko Barry tōna ingoa. Nā reira e tika ana kia tuku kupu maioha ki a ia i te rā nei, kua tukuna atu ia ki te kōpū o te whenua, kia takoto ki te taha o tōna whaea. Nō reira, e te whanaunga, e te hoa Barry, haere, haere. Ka tae atu koe ki te okiokinga. Nā reira, rātou ki a rātou te hunga wairua; ka hoki mai ki a tātou, huri rauna i tēnei Whare, ki te hunga ora.

E harikoa ana ahau kia rongo ai Te Reo Māori e kōrerohia ana kei roto i tēnei Whare; ko tēnei Te Wiki o Te Reo Māori. Nā reira he mea tika kia kōrero ai tātou i Te Reo, kia rongo ai te hōhonutanga, te whānuitanga o ngā take e wānangahia ai i roto i Te Reo Māori. He mea pai tēnā. Engari ko tōku pōuritanga ko Te Reo o—ko te wiki, kotahi noa iho te wā ka rongohia e te nuinga o te Whare. Ko mātou e mōhio ana ki Te Reo Māori, he mea pai rawa atu kia kōrero, ā i ngā wā katoa e taea ana, horekau mō te wiki kotahi. Nā reira ko te Whare nei e taea ana kia whakapakari ai ō tātou pūkenga i roto i Te Reo Māori kia rongo ai i ngā wā katoa.

Engari ka kite ahau ētahi wahanga. Ka rongo hoki ahau ētahi o ngā kōhumuhumu nō tērā taha, ngā kōrero whakahāwea, whakaparahako, whakaiti i a mātou e kōrero ana. Tāku e mea atu ana, ehara tēnā tika ana i te mea ko Te Reo Māori Te Reo tuatahi o tēnei motu. I te ūnga mai o ngā waka tupuna ki konei ki roto o Aotearoa, ko Te Reo tuatahi muri atu i Te Reo o ngā manu me ngā tātarakihi ko Te Reo Māori. Horekau Te Reo Māori Te Reo tuarua o tēnei Whare, o tēnei motu.

Nā reira ko ngā whakapae o tērā taha ka huri mātou ki Te Reo Māori hei karo atu i ngā pātai, hei karo atu i ngā kōrero o te Whare—ehara tēnā e tika ana, he mea whakaiti tērā kia pā atu i te hiahia ki te kōrero i Te Reo Māori kei roto i tēnei Whare. E pai ana mā rātou kia whakahē i te kiko o ngā kōrero engari horekau e tika ana kia whakahē i te mahitanga o Te Reo Māori kei roto tēnei Whare.

Ko pōuri ahau kia rongo ai tētahi kōrero o tētahi Minita o mua mō ngā take Tiriti, e whakahāwea ana ko te roa o te wā e mahi ana ahau i te Crown/Māori relations, tērā kaupapa nōku. Hei tāna, e rima miniti noa iho tāna hei tuhituhingia i te, i taua take. Nā reira ko ia tētahi tauira o te whakaparahako o, a tērā taha ki ngā take Māori. E tika ana māku hei puta noa ki te motu whānui kia rongo ai ngā hiahia, ngā moemoeā o te ao Māori e pā ana ki tēnei take. Nā reira kia rongo ai tētahi Minita mō, o mua mō ngā take Tiriti e mea ana ka taea e ia te mahi taua mahi, a mahi i roto i te rima miniti, he mea whakaiti tēnā i te ao Māori.

Nā reira, kāore tēnei Kāwanatanga i te hiahia kia mahi anō aua hē o tērā taha. Ko tō mātou hiahia kia whakahōnoretia ngā tāngata whenua, kia mahi tahi i a rātou, kia mōhio ai tātou, kia ea ai mātou ngā raruraru e pāngia nei ki te ao Māori. E mōhio ana tātou kei raro iho te ao Māori i ngā tatauranga o Te Kāwanatanga, nō reira tō mātou hiahia kia mahi, kia hāpaitia te ao Māori kia ōrite te mana kei roto i ngā take o te motu ki tō te mana, kei tō te oranga o te ao Pākehā.

Nā reira, e tika ana tātou kia kōrero ai Te Reo i tēnei wiki, engari me pēhea te wiki whai muri ake i tēnei, me pēhea te wiki muri atu i tērā wiki? He mea tika mā tātou kia kōrerotia i Te Reo Māori i ngā wā katoa, kia rongo ai te hōhonutanga, te whānuitanga, te ātaahuatanga o tō tātou taonga Te Reo Māori. Kia ora.

[Greetings, Mr Speaker, and to the House. Firstly, to begin my speech, it is only right to be in our esteemed language to farewell our many deceased. I was there yesterday in the beautiful valley of Waikare, namely amidst the subtribe of Te Kapotai. There, the father of our colleague Willow-Jean Prime was being mourned and farewelled; his name was Barry. Thus it is appropriate to address respectful words to him today, he who has been returned to the womb of the earth, to lie beside his mother. So, my kinsman, my friend Barry, rest in peace. You will arrive at the resting place. Consequently, the spirits remain with the spirits; returning now to us, right around this House, to the living.

I am happy to hear the Māori language being spoken in this House; this is Māori Language Week. Thus it is apt that we speak in the Māori language, to hear the depth and the breadth of the issues we are debating in the Māori language. That is a good thing. However, my sadness is the language of—the week, there is only one time it is heard by most of the House. Those of us who know the Māori language, it is a great thing to speak, and at all possible opportunities, not just for one week. Therefore, this House is able to strengthen our skills in the Māori language so it can be heard at all times.

However, I see some burdens. I also hear some of the gossip from the Opposition, saying things which are derogatory, condescending, and belittling towards those of us who are speaking. What I have to say is that is not right, because the Māori language is the first language of this country. On the arrival of the ancestral canoes to New Zealand, the first language other than that of the birds and the cicadas was the Māori language. The Māori language is not the second language of this House, of this country.

Therefore, the accusations of the Opposition that we turn to the Māori language to avoid the questions, to avoid the discussions of the House—that is not correct, and it is belittling to apply that to the desire to speak in the Māori language in this House. It is fine for them to object to the substance of what is said but it is not right to object to the use of the Māori language within this House.

I am sad to hear an account from a certain past Minister of Treaty matters, criticising the amount of time I am spending on my Crown/Māori relations work, that responsibility of mine. According to him, he would need only five minutes to write about that topic. Thus he is an example of the disparagement by the Opposition towards Māori issues. It is only right for me to travel around the country at large to hear the needs and aspirations of the Māori world pertaining to this topic. That’s why, to hear a previous Minister for Treaty matters saying that he could do that work, and do it in five minutes, that is belittling to the Māori world.

Accordingly, this Government does not wish to repeat those mistakes of the Opposition. Our desire is that the indigenous people be honoured, to work together with them, to understand, to resolve the problems affecting the Māori world. We know that the Māori world is down and under in Government statistics, therefore our desire is to work, to elevate the Māori world to gain the same status in issues of national consequence as the status, the well-being, of the Pākehā world.

Consequently, we are right to speak the language this week, but what about the following week, what about the week after that week? It is the right thing for us to do: to speak the Māori language at all times; to hear the depth, the breadth, the beauty of our treasure, the Māori language. Thank you.]

Hon GERRY BROWNLEE (National—Ilam): What a shambles the Government is in. What an absolute shambles the Government is in. Here we have them, on a day when they had called extraordinary hours for the sitting of the House—a time when the House could’ve sat between 9 o’clock this morning and 1 o’clock this afternoon to progress six bills that the Government had set down on the Order Paper. And what happened? Ministers responsible for bills failed to turn up to the House. Unbelievable. So an hour and a quarter before the House was scheduled to lift, the whole thing was shut down.

I often say that the House in politics, the Parliament in politics, is a bit like the heart. Everyone knows that if their heart’s not beating too well, they’re not well. Well, the heart of this Parliament is not beating well, and this Government is in very bad shape.

One of the problems, quite clearly, and quite evidently demonstrated in the last two days in this House, is that the right honourable gentleman over there still hasn’t stopped acting as Prime Minister. He has the veto on everything this Government does. We have an industrial relations law—which, by the way, is appalling for employment prospects in New Zealand, appalling for anyone who’s got an entrepreneurial spirit and might want to start a business. But anyway, it’s been through Cabinet, it’s been to the select committee, it’s coming back to Parliament, and the right honourable gentleman says, “Uh-oh. We may have made a mistake. Pull on the brakes, we’re no longer supporting it.” And that’s not just for this bill—it goes on and on and on.

So I can’t wait to see the news footage next week of the Prime Minister in New York, giving the grand speech to the General Assembly, talking about their ambitious plans for the relocation of Nauru refugees to New Zealand, and then qualifying it all by saying, “But only if Winston says we can.” [Interruption]

SPEAKER: I think there are some members who would like an early shower. If I have—[Interruption] I think that the shadow Deputy Leader of the House should lead by example.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The member on his feet has been around long enough to know the appropriate way to refer to other members of Parliament.

Hon David Bennett: It’s not a point of order.

Rt Hon Winston Peters: Now, “sir” will be a supplementary if he likes, but he cannot call me Winston. Thank you very much.

SPEAKER: Right, before the—I’d let it ride—

Hon GERRY BROWNLEE: Well, only—

SPEAKER: Order! The member will resume his seat. The member who interjected during the point of order will stand, withdraw, and apologise.

Hon David Bennett: I withdraw and apologise.

SPEAKER: No. Loud enough so the House can hear him.

Hon David Bennett: I withdraw and apologise.

Hon GERRY BROWNLEE: Well, perhaps I should break my flow, as it has been broken, simply to say that I meant nothing pejorative in the use of the first name. I was simply referring to it in terms much like people refer to RNZ or BNZ or any of those other institutions that are so well embedded into our society. In fact, I’m sure that at some point—

SPEAKER: Order! The member knows that he does not refer to points of order that have been dealt with.

Hon GERRY BROWNLEE: All right—so back to the shambolic Government and the utterly disgraceful mess that they’re in. So we just had the speaker before me, the Hon Kelvin Davis, the Minister for Crown/Māori Relations, talking about the new institution that’s being set up; a new department announced by the Prime Minister, with the well-known person Tītewhai Harawira sitting next to her in the Cabinet room last week. There is a brand new central agency that is going to be able to have a view on every single bill. One problem—one problem: when the Minister was asked last week “What is the role of the Minister for Crown/Māori Relations?”, he announced—10 months after taking the warrant, taking the salary, taking the car, taking the house, all the drama—that very shortly there’ll be an announcement about what he does. Now, if that’s not shambolic, you tell me what is. Do you know why there’s been no announcement? Because the right honourable gentleman hasn’t decided what that role is just yet.

So there they’ll be, at the UN, the two of them, side by side, holding hands, putting on the spectacle or the picture of a united Government, knowing full well that those hands are only locked by the shackle of the secret agreement that keeps getting referred to in the House but hasn’t been made public, and, of course, the general display that the Government knows what it’s doing. Well, I would ask a simple question: if the Government knows what it’s doing, that’s one thing, but if the Government doesn’t know where to be to do what it has to do, as was the case this morning, how can anyone believe they know what they’re doing?

Another example this week was the failure to turn up in the House by a Minister leading a bill on the Family and Whānau Violence Legislation Bill, who twice failed to get to the House, leaving it to other Ministers, telling us that they don’t really care about their policy. The virtue signalling is far better, and, frankly, look at the faces across the other side of the House. They are basking in their self-congratulations, at the fine words that they’re all uttering, but assured that that doesn’t make any difference.

JAN LOGIE (Green): E Te Mana Whakawā, tēnā koe. So I’ve heard that the world is coming to an end, that the sky is actually about to fall, or, if we are to really understate things, that this Government is about to destroy our economy with a Draconian retraction of employment rights, taking us right back to the 1970s, and that we’re all going to be forced to wear flares and get pet rocks! This Government apparently is so extreme. I can’t believe that this Government is not listening to the National Party and those businesses raising concerns about the destruction of their livelihoods and all of the jobs! Tea breaks for workers not in emergency services? Union access to worksites? Making it easier for people to join a collective contract? Improved ability to negotiate collectively? Removing the 90-day trial for businesses with over 20 staff? Goodness me! No wonder the sky is going to fall! Holy moly, this is out of control!

If I sound slightly sarcastic, it might be because I am being. All this legislation does is reinstate some of the statutory requirements that existed before the last Government removed them—ha, ha! This morning, to provide a bit of a balance to that narrative, I was watching, on RNZ, one of the suffrage documentaries by Kathleen Winter, sharing the experiences of some women working on the minimum wage in this country. They talked about working multiple jobs, struggling to pay the bills, seeing their kids for only a few hours a day and feeling as if they were being blamed personally when their kids got into trouble, even though they actually had no ability to be there for the kids when they needed them, because they were working three jobs just to have enough money to keep a roof over their heads.

One woman talked about her brother dying and her jumping in the car to go to his tangi and running out of petrol and having to return home because she didn’t have enough money, as a full-time worker, to be able to get to her own brother’s funeral. That is the reality of thousands upon thousands of New Zealanders’ lives in this country under the laws that that side of the House is so staunchly defending. What they are defending is the degradation of thousands of people in our country, and I’ve got no truck with it. People who are saying that this legislation is extreme and that it’s going to lose us jobs are just beating a drum that has created that inequality.

I know most New Zealanders care about that inequality. They see the stories in the media. They see their neighbours, their friends, and their family members struggling, and they want something else. They want better for themselves and for their families. That is why they voted for a change of Government, because we can do better, but it means stepping out of the way that things have been done for the last 10 years. Increasing the minimum wage will help, but we also need to connect the dots around our employment legislation. We need to improve people’s employment security and even up that imbalance between employers and their staff.

We’ve got too many examples of people not getting even their legal entitlements because their employer either doesn’t know them or thinks no one is watching. Even the International Monetary Fund has said that unions and their access to workplaces is essential in addressing inequality. Reduced union power: increased inequality. It’s a global pattern. It’s a key thing that we need to address if we are serious about addressing inequality, and the Green Party is. We want to hear from workers, like we want to hear from all the voices on this side of the House working towards a solution, and we’re pleased to support a Government that put this in the first 100-day work programme.

Hon MARK MITCHELL (National—Rodney): Nine years in Opposition and almost 12 months in Government, and what have we seen from this Government in terms of justice reform? Zip—nothing.

Actually, that’s not fair—that’s not fair. Let’s think about the only thing that the Minister of Justice has tried to do, and that’s repeal the three-strikes legislation. And how did that go for him? Well, he thought that he had agreement from this coalition Government, from his coalition partners, and he was all ready on the day to take the paper to Cabinet to have it approved and to go through Cabinet, and all of a sudden he heard the revving of a loud engine behind him. He turned around, and what was it? It was a bus. It was a big black bus with “Send them a message” on it. And behind the wheel was the Rt Hon Winston Peters. He was bearing down on him, cigarette out the corner of his mouth and, you know, a glass of whisky on the dash, and he had Clayton Mitchell and Darroch Ball and Fletcher Tabuteau standing behind him egging him on with their Dirty Dog sunglasses. And here he was, bearing down on poor Andrew Little. Where did he have to go? He had nowhere to go. What happened? Straight under the bus—straight under the bus and over the top.

I just put it to the Labour caucus, because I know for a fact that the Labour caucus—Kris Faafoi especially—

Hon Kris Faafoi: Ha, ha! Stop name dropping.

Hon MARK MITCHELL: Kris Faafoi especially is not happy about this. How do you think they feel having their justice Minister thrown under the bus, driven over the top of by their coalition partner? Imagine how we would feel as the National Party if that happened to our justice Minister. Oh no, that’s right; it wouldn’t happen, would it? And just as—

Hon Kris Faafoi: When are you starting a new party?

Hon MARK MITCHELL: —and just as Andrew Little’s getting up and dusting himself off, and picking the asphalt out of his beard and—

Hon Kris Faafoi: How’s the new party going?

SPEAKER: Order! Order! The member will resume his seat. The Hon Kris Faafoi: interjections are meant to be rare, reasonable, and witty, and not draw the Speaker into them. The member failed on all three counts.

Hon MARK MITCHELL: Thank you, Mr Speaker. It’s a bit like that in the Parliamentary Rugby Team changing sheds as well, but he always gives it a good effort.

He’s just dusted himself off. He’s picked a bit of asphalt out. He’s just thinking that he’s got over having been put under the bus, and he turns around, and all of a sudden there’s a big red bus. The big red bus drives straight over the top of him. Under he goes. And just as he’s going under the grill, he looks up and a big tear wells up in his eye, because he sees the driver of the bus is the Rt Hon Jacinda Ardern. She’s sitting there behind the wheel and bang, over she goes—boom! The reason for that is because the only other thing that he’s done, other than try to repeal the three-strikes legislation, which failed miserably, is he decided to deliver a justice summit—a justice summit that he told us was going to cost $700,000. I thought that was a bit excessive. I thought that was still $1,000 per participant, and that was a bit excessive.

Hon Willie Jackson: You had lunch.

Hon MARK MITCHELL: Oh, I had lunch? Who’s saying that? Oh, the Hon Willie Jackson says I had lunch. Actually, let me correct you on that. I had a green tea, but I wish I had had some lunch now that I have found out that it was $2,500 a head to attend the justice summit.

Mike Williams—the great bastion of the Labour Party, Mike Williams—wrote a column last week saying that my view on the justice reforms was disgusting because I’m advocating for victims and I’m saying that public safety should always be at the forefront of any justice reform that’s done. And then he goes on to say, “You know what? Mark Mitchell wasn’t even at the justice forum.” Well, if he had just looked up, he would have seen that I led the pōwhiri with Andrew Little. And if he’d actually been there, he would have realised that, actually, I did attend the justice forum. The problem was the opening of the justice forum, where the Minister Kelvin Davis got up and told Stuart Nash that he looked like Tom Cruise, and then Stuart Nash got up and told Kelvin Davis that he looked like George Clooney, and then poor old Andrew Little—I don’t know, Elmer Fudd or something like that. That was the opening.

Then I was getting interviewed by Tova O’Brien. And while I was getting interviewed, she said, “What do you think?” And I said, “Well, I’m really worried. There’s no real victim representation here. It appears to be a bit of a talkfest.” And then what happens? Anzac Wallace jumps up out of the crowd as I’m being interviewed. And what does he say? What does he start shouting down on the main floor of the conference?

Hon Willie Jackson: Utu.

Hon MARK MITCHELL: “Too much talk”. Yes, utu; that’s right. Utu from Willie Jackson. He says, “Too much talk. Too much talk and not enough action.” And he summed it up perfectly. All we’re seeing is too much talk and not enough action in a coalition Government that not once but twice has thrown their justice Minister under the bus. They had rooms there for counselling. They had a reflections wall; they had rooms there for counselling. The Minister actually, I think, has got post-traumatic stress disorder. He didn’t turn up yesterday in the House for a very important bill—

SPEAKER: Order! The member will resume his seat. The Hon Willie Jackson.

Hon WILLIE JACKSON (Associate Minister for Māori Development): Tuatahi e tika ana ki te tautoko te kaupapa, Te Wiki o Te Reo Māori; e tika ana ki te whakanui i tō tātou reo i ngā wā katoa. Nō reira, ki a koutou, tēnā koutou, tēnā anō tātou katoa. E tika ana kia huri ki te reo Pākehā i tēnei wā ki te whakamāmā aku whakaaro.

[Firstly, it is appropriate to support the initiative, Māori Language Week; it is right to celebrate our language at all times. Therefore, to you all, greetings, greetings to us all. It is appropriate to turn to the English language at this time to ease my thoughts.]

I wanted to speak Pākehā for the rest of my speech today to explain the Māori policy, the Reo Māori policy, which seems to be confused in the media and particularly from the other side.

Now, we’re very clear that we have a universal strategy. Labour’s very clear: it’s a universal strategy going forward that we want put in all the schools by 2025. Not compulsion—I know we’re getting all twisted and broken over the compulsion carry-on. Take it from me, I’m someone who advocated down that track for 10 years and got into the most stupid idiotic debates on radio talkback about what’s compulsory and what’s not compulsory.

Then you say, “Well, you pay your taxes compulsorily. You stop at the red lights. You learn maths compulsorily.” I’m sick of it. I’m sick of it going on for 10 years about whether it should be compulsory or not compulsory. If we all want a result in the end, we should all support the Labour Party policy, which is about getting that Reo, our Reo, into all the schools—available in primary and intermediate; all our Māori, Pākehā, Pacific Islanders kids talking—by the year 2025. It’s a fantastic policy, it’s a terrific policy, and the Hon Nanaia Mahuta expressed it tremendously well on television last week and supported what our Prime Minister’s been saying all the time.

In this week of the Reo Māori, I think it’s important to remember the fight for the Reo. The fight for the language was fought by mainly non - Māori language speakers. I worry sometimes as we’re progressing that we forget the fight of Ngā Tamatoa, of my uncle Syd Jackson, of my auntie Hana Jackson, and of Marama Davidson’s father, Rāwiri Paratene. They were all young radicals who fought against society and at times against our own—at times against our own: all the Māori language speakers who thought they were too young and silly and stupid. But they put the challenges down to Māori, they put the challenges down to Government, and we are here where we are today.

I say to a lot of our young guns, never forget where the fight came from, because whilst we’re fighting for the language, there are a lot of Māori who don’t speak Māori. There are a lot of Māori who try, much like my uncle—hopeless, you know; couldn’t speak a word of Māori—they got worse as they got older. They were absolute fighters for the kaupapa—absolute fighters for the kaupapa—and no less than anybody who is an expert in the language.

I say to our matataua, I say to our young experts, don’t you forget that. Don’t you judge people on the quality of their language. You challenge them on the quality of their advocacy. We’ve had a lot of our people—they’re fabulous at the back of the marae, they’re great cooks, and they’re great at different areas. They’re no less than a lot of our young ones coming through. They’re great advocates and role models for our people.

We have groups of Māori who are mataku ki te kōrero Māori. They’re actually speakers of Māori, but they are so nervous of making mistakes that they refuse to talk Māori. They don’t go on Te Karere; they don’t go on Te Kāea. I say to our experts today, “Encourage those groups of people.” When I went to learn the language, when I started getting some fluency in the language in 1989, at Ngati Raukawa, they said to us, “Why do you come to learn this language?” We waited and we thought, “Well, we’re not sure.” And the response from our kaumātua was, “It’s because of the fear of humiliation, isn’t it? It’s because of the fear of humiliation that you go on to the marae and you can’t talk, or they come to you and you can’t karanga.”

That was the reality back in 1989, but we’re in 2018 now, and our people should not be feeling humiliated because they can’t speak the language. They should feel proud that they’re Māori first and foremost, and, if they’re not speaking the language and supporting the language, that should be main point. Tēnei te mihi ki a koutou, tēnā anō tātou katoa.

[I acknowledge you all, greetings to us all.]

MELISSA LEE (National): Thank you, Mr Speaker. Ko tēnei Te Wiki o Te Reo Māori. Ko te reo Pākehā te reo tuarua ki au. Ahakoa he iti he pounamu Te Reo. Tēnā koutou katoa.

[This is Māori Language Week. In my view, the Pākehā language is second. However small the amount of Māori language, it is precious. Greetings to you all.]

Hon Members: Kia ora.

MELISSA LEE: Thank you for that—I think a thumbs up from across the House for my pronunciation. But I can’t actually start this general debate without actually mentioning the fact that the gentleman who just sat down, Willie Jackson, actually vigorously—vigorously opposed the Labour Party policies back in 2015—

Hon Tim Macindoe: 2014.

MELISSA LEE: 2014. I do, however, like his sentiments in term of having pride in their language, as someone who speaks Korean, my mother tongue, and I’m very pleased that my parents actually kept up with the lessons throughout my childhood.

What an amazing and utterly shambolic Government this is. I’m reflecting on many things and I don’t want to draw to the public’s attention too much by repeating some of the things that were said last week—I did not get an opportunity to speak in the snap debate. The honourable gentleman behind me, my dear friend Tim Macindoe, had the opportunity but I did not as I was at a meeting. I did not actually talk about the resignation, because the resignation came after the sacking of the Minister, the Hon Clare Curran, from the portfolios that she held for the shambolic ways that she actually managed herself.

In terms of what she said, I just wanted to quote something from one of the speeches that she actually made, if I can find it. One of the things that she actually said was that “My priority”—and I’m quoting—“is that this will be the most open, most transparent Government that New Zealand has ever had. We will do this in several ways,”—she actually said—“including requiring proactive disclosure of some official information, … improving Government capability and performance in relation to the Official Information Act; and deepening the Government’s commitment to the Open Government …”. That’s just not true, is it, as we’ve seen.

This particular Minister, who is no longer a Minister—her time as a Minister is actually probably an example of what not to do as a Minister. It started back in December, when she had this secret meeting with a Radio New Zealand executive—she was the head of news and head of content at Radio New Zealand. The Cabinet Manual actually states that when a Minister wants to have a meeting with someone like Carol Hirschfeld, she needs to remind Carol Hirschfeld that you need to tell—not you, Mr Speaker. Carol Hirschfeld needed to get permission from her chief executive, or the board, or the chairperson. Carol Hirschfeld actually failed to do that, and, ultimately, that led to Carol Hirschfeld leaving RNZ. Perhaps the Prime Minister should’ve sacked the Minister then, and then maybe the Prime Minister would not have this embarrassment of Clare Curran having to be sacked from two portfolios for not being open about her dealings with Derek Handley.

Derek Handley was another shambles. She actually claimed in her written question 19442—that’s my question to the Minister—that her staff had access to all of her emails, and that if it was ministerial business or Government business, the staff will decide. Well, it seems like they didn’t have access to the Minister’s email addresses, because they didn’t even know about the meeting that she had with Derek Handley. They never actually put down the fact that she had a meeting with Derek Handley when my colleague Brett Hudson asked the question of who she met with on a particular date. Derek Handley was actually left off the list, and the Minister, once again, had to correct her answer she gave wrongly. That’s a second offence.

The Prime Minister should have actually known by the appalling performance in the House. And I don’t think it’s the case that she was inarticulate. I don’t actually believe that Clare Curran is inarticulate, because I have worked with her over the 10 years—

Brett Hudson: Fifty.

MELISSA LEE: No, I know—some people might say that. But I think the thing was she started answering a question that I gave her, “What Government business did she do on her personal Gmail address?”—she started her answer by saying she did not, and then that played in her head over and over again.

RINO TIRIKATENE (Labour—Te Tai Tonga): Tēnā koe e Te Mana Whakawā. Tēnā koutou ngā mema o tēnei Whare.

Ko te maunga Aoraki ka tārehua.

Ko te maunga Aoraki ka tārewa.

Ko te maunga o Aoraki ka tū tonu mai mō ake, ake, ake tonu atu.

E mihi ana ki te rangi.

E mihi ana ki te whenua.

E mihi ana ki ngā tāngata katoa.

Tēnā koutou i Te Wiki o Te Reo Māori. He mea nui Te Wiki o Te Reo Māori kia kore ai tātou e wareware ki Te Reo Māori. Kia mōhio mai koutou, Te Whare, nā taku whaea, nā Whetu Tirikatene i waihanga te pire tuatahi mō Te Reo Māori, te pire kia whakamanahia Te Reo Māori i raro i te ture kia rite ki te reo Pākehā. E tū ake ahau ki te tautoko ngā kōrero o taku tuakana, a Willy, i ngā tāngata e kōkirihia ngā tāngata o mua, i kōkirihia te kaupapa o tō tātou reo Māori.

Engari, i te rangi nei, e kī ana te kōrero he 20,000 anake ngā tāngata e mōhio ana ki te kōrero i Te Reo Māori. Ko te kōrero o Te Taura Whiri i te Reo Māori e kore e taea mā te Māori anake e whakarauora i Te Reo Māori, engari, mā te Pākehā hei āwhina, e taea. Nō reira e Māori mā, kaua e tūkino i ō tātou hoa Pākehā o Tauiwi.

Kua rima tau ahau e ako ana i Te Reo Māori. Kāhore i te mahi ngāwari. E tinitini ana ngā tauiwi e ako ana i tō tātou reo. He mea nui tēnā ki ahau. Engari, e kore e kitea ngā kaiako Māori. Nā wai te hē?

Iwa tau te roa o Te Kāwanatanga i raro i a Nāhinara, i te Pāti Māori, engari kāhore he kiko mō Te Reo Māori. Kei te mihi ahau ki te Rōpū Kākāriki mō tō rātou kaha tautoko i Te Reo Māori. Kei te mihi, kei te mihi, kei te mihi.

I runga o Pouaka Whakaata, kei te tautoko ngā tāngata i Te Reo Māori. I runga o irirangi o te motu kei te tautoko ngā kaimahi ki Te Reo Māori. Kua kōrero te Pirimia. Kua kōrero te Minita Māori. Kua kōrero ngā mema Māori o tēnei Whare. Ko te rapu me pēhea e taea e tātou te whakatutuki i te moemoeā kia reo Māori ngā kura o te motu? Kua kore ngā kaiako Māori. Kua kore ngā kaiako e taea ki te kōrero Māori. Koia tēnei ko te rapu. Me kimi kē ki hea?

Ko tētahi kaupapa nui kei runga i te tēpū i tēnei wā, e pai ana Te Reo Māori. E pai ana te iwi. He maha ngā iwi. Te hunga manene ka nui tō rātou tautoko i Te Reo Māori. He iwi kōrero reorua rātou. E hia kē ngā reo kei tāwāhi. Kāore ō rātou māharahara mō ngā reo o te tangata. He aroha nō rātou ki tēnei whenua o Aotearoa.

Kei te tautoko ngā kamupene. Kei te tautoko te irirangi o te motu. Kei te tautoko ngā kura. Ko te mea e tāria nei ko te māia o te Pāremata—ko te tautoko o ngā tōrangapū, ko te tautoko o ngā rōpū nei: ko te tautoko o Nāhinara, ko te tautoko o Aotearoa Tuatahi, ko te tautoko o te Rōpū Reipa. Ko te tautoko o tēnei Whare te mea e tāria mai.

Nō reira, kua tāroaroa tōku kōrero mō tēnei wā. Kua kōrerohia kē ngā kōrero. Ko te mea e tāria nei i tēnei wā ko te whakatau o Te Whare Pāremata. Nō reira, āpiti hono rātou te wairua ki a rātou, āpiti tātou te hunga ora ki a tātou. Tēnā tātou katoa.

[Greetings, Mr Speaker. Greetings to the members of this House.

Mt Cook, hidden in the mist.

Mt Cook of great heights.

Mt Cook who will stand for ever more.

I acknowledge the sky.

I acknowledge the land.

I acknowledge one and all.

Greetings to you all during Māori Language Week. Māori Language Week is important, lest the Māori language become forgotten. To make those in the House aware, it was my aunt, Whetu Tirikatene, who developed the first Māori language bill, a bill that gave the Māori language equal status to the English language under the law. I stand to support what my brother Willy said about those in years past who drove the Māori language agenda forward.

However, currently there are apparently only 20,000 people who know how to speak Māori. According to the Māori Language Commission, Māori cannot revive the language alone, but with Pākehā help, we can. Therefore, to my fellow Māori, do not disparage our Pākehā friends.

I have been learning the language for five years. It is not easy. There are many Pākehā who are learning our language. That is important to me. However, Māori teachers are difficult to come by. Who is at fault?

We had nine years of Government under National and the Māori Party and there was nothing of substance for the Māori language. I would like to acknowledge the Green Party for their strong support of the Māori language. Thank you very much.

On television, people support the Māori language. On radio throughout the country, staff support the Māori language. The Prime Minister has talked about it. The Minister for Māori Development has talked about it. The Māori members of this House have talked about it. The real question is, how we can achieve the dream of Māori language in schools throughout the country? There aren’t any Māori teachers. There aren’t any Māori teachers. There are no more teachers who can speak Māori. This is what we are looking for. Where can we find them?

One big issue on the table at the moment—the Māori language is flourishing. We are doing well. There are many different tribes, including immigrants, who strongly support the Māori language. They are bilingual. There are countless languages overseas. They don’t worry about how many languages a person speaks. They love New Zealand.

Business shows support. Radio throughout the country supports it. Schools support it. All that we need now is courage from Parliament—support from the politicians, support from these political parties: National support, New Zealand First support, and Labour support. It is the support of this House that is wanting.

Therefore, I’ve spoken for long enough at this time. What needs to be said has been said. What we need now is the support of this Parliament. Therefore, to those who have passed on and to those of us amongst the living, thank you.]

BRETT HUDSON (National): Thank you, Mr Speaker. Well, what a sad and sorry saga it’s been over the last few weeks for the Government. And it is for the Government, because, although the main actor on stage has been former Minister Ms Clare Curran, it’s actually a symbol. It’s symbolic of the absolute disgrace and mess that this Government is.

And how did it begin? Well, it began just after they took office with arrogance and hubris. I could, I know, be referring to basically anyone on that side of the House, but I’m actually referring to then Minister Clare Curran, who was determined that the rules and the expectations around ministerial behaviour should not have to apply to her. So what does she do? She goes out and sets up a secret meeting with a very senior member of the Public Service, and a very well respected broadcaster—a sneaky little meeting on the side to achieve who knows what. What we do know is it was found out about, and she then spent quite some time trying to dissemble and dance on the head of a pin as to what it was really about.

What it ended up at was Carol Hirschfeld got the sack. Really, the person who needed to get the sack at that point in time was then Minister Curran. It would have been the right thing to do, and, as events have transpired, it would have been the caring thing for the Prime Minister to have done. But, unfortunately, we have a weak leader in the Prime Minister—she didn’t do that.

Fast forward just a few short weeks from that saga, and one would have expected that Minister Curran would have learnt from that episode and wouldn’t have repeated it. Instead, what we find out is that in the second round of recruitment—or just before the second round of recruitment—for the Chief Technology Officer, Ms Curran has done it again—a serial offender.

After a Twitter conversation with Mr Derek Handley, she rushes to her private Gmail account. She initiates an email conversation, which leads to a meeting. She doesn’t acknowledge it. It’s not in her calendar. It’s only in a little bit of hygiene—if we believe media reports—that, because the Government had decided to appoint Mr Handley to the role, they discover that, actually, there was a meeting and it wasn’t in her calendar, and—oops—someone’s asked about it, therefore they will find out that it was hidden. Using a personal email account, I think, is enough evidence for the public at large to say that it was deliberately hidden.

So, finally, some action is taken. The Prime Minister strips a couple of portfolios from Ms Curran, but she’s in the spotlight—the glaring spotlight—because members on this side know that if she’s done it once, she’s done it twice, she’s done it a number of times. So the maelstrom of activity from the Opposition in this Chamber and through written questions and Official Information Act (OIA) requests—I can only imagine the pressure that Ms Curran was feeling at the time. Ultimately, that was her downfall, because, with those OIA requests that my colleague Melissa Lee and I had submitted, those emails, those additional communications, were going to come out. We can say with some confidence that there were further emails because just yesterday Ms Curran herself was quoted and reported as saying there might be more emails between her and Mr Handley. Given her previous actions, “might be more emails” is about the same as saying the sun might rise in the east tomorrow morning.

Ultimately, it was her hubris and arrogance that was her undoing. She proved what is known as the Peter Principle—that people will rise to the level of their incompetence. And she certainly did. The Peter Principle, however, is not to be confused with the “Peters principle”. The “Peters principle” is where a person acts like they actually have the job of their immediate superior so that eventually the public believe that they do.

So, look, in all this is a failing of leadership and, actually, uncaring leadership. With all the pressure that Ms Curran was under, a caring and thoughtful leader—Prime Minister—would have relieved that burden from her early in the piece. Instead, she made her suffer through a week to 10 days of further intense pressure—pressure that, ultimately, led to her downfall.

We’re left with a Government, still, that claims that it’s going to be the most open and most transparent that New Zealand has ever had, and yet, aside from those secret meetings, we also have a coalition document annex that they won’t show and an example of a local government OIA on the Three Waters strategy where every page—every page—was redacted. If that’s their view of an open and transparent Government, we’re in big trouble. But this is just stage one. This is just the end of the beginning.

KIRITAPU ALLAN (Labour): E tū ake ana au i tēnei wiki o tō mātou reo rangatira whakamana i tō tātou nei reo. Heoi, kei te wiriwiri au i roto i ōku nei hū. He tino pēpi noa iho ahau i roto i tō tātou nei reo, heoi anō, ko tēnei te wiki ki te karawhiua, ki te whāia te ara o tō tātou nei reo. Heoi anō, kei konei ahau.

Kei te tautoko au te kōrero o tēnei hoa, tēnei Minita, te Hōnore Kelvin Davis. Ka huri atu au, ōku whakaaro ki te tuahine, ki te tuakana, a Willow-Jean i tēnei wā taumaha, otirā ki tōna kāinga; ko Season-Mary, taku tino hoa mai i te mahi o te ture, ki a rāua māmā ko Adrienne, ā, Nandy. I tēnei wā taumaha, tino taumaha ki a rātou, heoi anō, kei a koe te pāpā, e Barry, e takoto, moe mai rā.

Heoi anō, ka huri ahau i tēnei taupatupatu he kaupapa tino whakahirahira ki ahau ki te whakamana ngā kui mā, ngā koroua mā, i ngā wā i mua i te whakarauoratanga a tō tātou nei reo, i ngā kura, i ngā kōhanga reo, i ngā marae, i ngā wāhi katoa, otira kei muri i tēnei Whare.

Kei te haramai ngā iwi mai i ngā hapū, mai i ngā iwi katoa ki te haere ki tēnei Whare ki te pātai atu ki ngā mema o tēnei Pāremata ki te kite a rātou reo, ki te whakamana i te ture a mātou nei reo.

Heoi anō, ka titiro atu ki ngā hua o ā rātou nei mahi, ā, kua kite au i taku tamāhine, kōtahi tau ia, ko Hiwa-i-te-Rangi. I roto i tana haerenga i tēnei ao kei te whakakoa mai, kei te whakapuāwai, kei te hīkoi tonu i ngā reo e rua, te reo Māori me te reo Pākehā. Ā koinā te mahi o ngā tāngata tino maha kua haere i mua i te whawhai mō tēnei take o tō tātou reo.

Kei te titiro ki ngā kura. Tino maha ngā tamariki kei roto i ngā kura. Kei te titiro ki ngā taupatupatu o te Manu Kōrero, i ngā kura kei roto i Aotearoa. Tino maha ngā tamariki, tino maha ngā rangatahi, ngā taiohi kei te haere mai ki ngā kura katoa. E tino kaha rātou i tā mātou nei reo.

Heoi anō, ka tahuri au ki ngā pūwaha, ki ngā pūwhaikaha i te reo mai rā anō, ā, nā rātou te reo i manaaki, i tiaki hei taonga tuku iho ki a Ngāi Tātou o Aotearoa whānui. Heoi anō, ko wai ēnei rangatira? Kāore e ārikarika ngā amorangi e tū i Te Reo i roto i ngā tau kua tuhia ki te rae o mātou te hunga ako. Engari, e tika me mihi mamona ki a rātou e whakahua i te reo i te kura i ngā tau o mua, ahakoa, he kino, he pai ake, ā, ki a rātou e whawhai kia tū Te Reo Māori hei reo ōkawa o Aotearoa, ki ngā kuia, ngā koroua rātou i kaha whakatinana i ā mātou tikanga i runga i ngā marae hei tauira, kei ngā kairaho, kaiako i ngā kura katoa. He aha te kai o ēnei rangatira. He kōrero, he kōrero.

Nō reira, ki tēnei Whare, ki te whakamana ko tāku nei reo, kei a koe Mārama, tēnei te mihi nō reira kei a koe e te Māna Whakawā, tēnā koe.

[I stand today during this week to celebrate and acknowledge our beautiful language. However, I am shaking in my shoes. I am still a baby within our language, however, this is the week to let it fly, to follow the path of our language, so here I am.

I support the words of this friend, of this Minister, the Hon Kelvin Davis. I turn my thoughts to the sister Willow-Jean and her household during this difficult time; Season-Mary, my good friend from my legal work, through to their mother, Adrienne, to Nandy. It is a very difficult time for them, and I say to you, sir, Barry, may you rest in peace.

I turn the focus of my debate to a subject that is very important to me, to pay respect to the elderly women and elderly men who supported the language before the move to revitalisation, at schools, at pre-school, on marae, everywhere, behind this House.

Tribes and subtribes from throughout come here to this House to ask questions of the members of this Parliament to see their language, to support the law for our language.

If we look at the fruits of their work, I think of my daughter; she is one year old, her name is Hiwa-i-te-Rangi. In her experiences of the world she smiles, she grows, she walks with two languages, the Māori language and the English language. That is a result of the work of the many who came before us who fought for our language.

I look at schools. There are many children in school. I look at the debates at Manu Kōrero in schools throughout the country. There are many children, many teenagers, many young people who come from schools throughout. They are very strong exponents of our language.

I now turn to the language stalwarts from the years gone by, they who protected the language, who fostered the language as a treasure for wider New Zealand. So who are these stalwarts? The leaders who stood proud for the language are numerous, but they are inscribed in the memories of us, their students. However, it is only right to acknowledge those who used the language at school in the earlier years—despite the difficulty, it was good—and to those who fight for official recognition of the Māori language, to the elderly women, to the elderly men who embodied our customs on the marae to set an example, to the teachers of all schools. What is the nourishment of these leaders? It is discourse, it is discourse.

Therefore, to this House, to support my language, Marama, I acknowledge you, thank you, Mr Speaker, thank you.]

Hon NICKY WAGNER (National): Thank you very much, Mr Speaker. You know, in Parliament we often hear the term “the devil’s in the detail”, and what that really means is that talk’s cheap, it’s difficult to get things done unless you pay attention to process, and it’s essential if we want to get good outcomes and good results. That’s why I’m so shocked, surprised, disappointed, and actually more than a little angry that the new Minister for Greater Christchurch Regeneration has neglected her responsibilities in setting the work programme for the entities that she’s responsible for in Christchurch. The reason why this is so shocking and, frankly, almost unbelievable is that the Minister has talked long and hard and loudly about making a difference—and I do not doubt her sincerity—but she hasn’t bothered to put in writing any changes to the expectations of organisations that she is responsible for are working to.

So let me explain that a little bit. A letter of expectation is the way that a Minister can guide, direct, manage, and activate the organisations that they are responsible for. It’s one of the most important levers that they have. The Statutory Crown Entities: A Guide for Ministers states that setting expectations is the first step in setting the strategic direction and annual performance of Crown entities. That’s the Minister’s prime job: setting strategic direction, and making sure that we get a good performance and that we get the outcomes that the people of New Zealand need.

When the Hon Megan Woods became Minister, she was determined to see more momentum in the rebuild of Christchurch, and I absolutely support that. We all want to see more momentum, and when National was the Government, we worked really hard to do that. But she also said, “You can’t keep on doing the same thing and, magically, expect a different outcome.”, and that’s the surprise. After 11 months in the job, that’s exactly what she’s doing, because Ōtākaro and Southern Response are still working to the letters of expectation—because they haven’t had a new one—that were put down by the previous Minister, the Hon Gerry Brownlee. So, with no attempt to change those expectations, how can she expect different outcomes? Do you think it’s by magic, perhaps, or maybe perhaps by ESP or mind-reading?

Now, having no letters of expectation adds another problem to Ōtākaro and Southern Response. They are in a compromised position because in response to the Minister’s letter of expectation, Crown entities are required by law to provide an annual statement of performance expectations, and that’s so the public can see what the Minister has asked and they can see how those organisations are responding to that and there’s also transparency and accountability to the community.

The real problem we have here is that without the Minister’s letters of expectation, Ōtākaro and Southern Response don’t know what they’re supposed to do, so they can’t write a statement of performance expectation and, therefore, they’re in breach of the law. It’s a total shambles—no transparency, millions of dollars are being spent without any formal oversight or accountability—and I think it’s absolutely symptomatic of what we’re seeing from this Government every day. They’re ill-prepared, inexperienced, distracted, and totally chaotic. It’s everything that we don’t want to see in a Government.

I think it’s criminal that the neglect of this Minister is slowing down the progress in Christchurch. I think it’s absolutely not good enough for the people of Christchurch or the people of Canterbury. Thank you, Mr Speaker.

VIRGINIA ANDERSEN (Labour): Ko Ranginui kei runga, ko Papatūānuku kei raro, ko ngā tāngata kei waenganui, tihei mauri ora. Ko te mihi tuatahi ki te Atua, nāna nei ngā mea katoa. Ko te mihi tuarua ki Te Whare e tū nei, tēnā koe. E ngā mate, rātou mā kua whetūrangitia, haere, haere, haere atu rā.

Tātou ngā kanohi ora, tēnā koutou. Te Māngai o Te Whare tēnā koe. Ki ngā mema o tēnei Whare Pāremata tēnā koutou. Nō reira tēnā koutou, tēnā koutou, tēnā tātou katoa.

E tū ana ki te tautoko i tēnei taupatupatu i roto i te āhuatanga o te wā, arā, Te Wiki o Te Reo Māori. Ko te kaupapa o tēnei wiki, “Kia kaha Te Reo Māori.” Ka mōhio au, ehara au i te mea pai rawa atu ki te tū ki te kōrero kaha ki Te Reo Māori, engari ko tēnei tōku whakaaro: me whakamātauria; kia kore e taea i te tuatahi, whakakaha, whakakaha, whakakaha anō.

Kei hea ngā mema o tērā taha o Te Whare ka taea te kōrero i Te Reo Māori i ēnei rā? Karekau. Taihoa, arohaina mai, tēnā koe Melissa Lee mō tō mihi, tēnā koe.

Ko te tūmanako o tēnei Kāwanatanga ki te whakanui i te rōpū kia taea ai ki te kōrero i Te Reo Māori arā ki te whakamana i Te Reo Māori. Ko te tino hiahia o Te Pirimia he miriona ngā tāngata kei te kōrero i tō tātou reo rangatira a tau e 2040. Pai atu tērā ki a au.

Ko tētahi o ngā mea pai mōku mō te haerenga mai ki tēnei Whare, ki tēnei Whare Pāremata, ko te haerenga mai ki tētahi wāhi e taea ai e au te whakapakari i tōku reo. Kāore he kāinga mōku e kōrerohia ai Te Reo Māori i te huhua o te wā. Kāore he marae, e hoki atu ai au e kōrerohia ai te Māori i te huhua o te wā. I ngā wā o mua ko Te Whakaata Māori me Te Reo irirangi tāku i whakarongo ai i te mātakitaki i Te Reo Māori. Kāore rātou i te whakautu mai i ētahi wā.

Ko taku tino waimarie ki te whiwhi i tētahi rōpū mō ngā mema Pāremata hou. Ko ētahi o rātou i pēnei te pakeke i a au he matatau ki te kōrero Māori. Kātahi anō au ka whiwhi wā kia kaha ai te pātai, “He aha te tikanga o tēnei? He aha te take o tērā? Me pēhea te whakahua o tēnei?” He mihi aroha ki ōku hoa Pāremata mō ō tātou mōhiotanga mō ō tātou manawanui hoki.

Mehemea he maha kē atu ngā tāngata pātaitai, ā ka maha noa atu ngā tāngata kaha ki te kōrero Māori. Ko tōku tūmanako āpōpō mō Aotearoa ko tōku kaha ki te haere ki te toa hokomaha tērā ranei te haere o aku tamariki ki te kura e kaha ana te kōrero Māori, ā ki te whiwhi whakautu i roto i Te Reo Māori hoki. Ko te mea tino pai ki a au ko te ako i Te Reo Māori, te homai tirohanga, ahakoa he iti, ki roto i te ao Māori. Ko tōku whakaponongia pai mō ngā tāngata katoa o Aotearoa tēnei ko te mahi mā rātou. Nō reira kia kaha Te Reo Māori.

E Te Whare nei, tēnā koutou, tēnā koutou, huihui mai tātou katoa.

[Ranginui abides above, Papatūānuku below and mankind is between them, let there be life. I pay first respects to God, to whom all things belong. Secondly, I acknowledge the House which stands here, greetings to you. To those who have passed beyond this realm, farewell, farewell, farewell.

Let us now turn to the living world. I acknowledge you, Mr Speaker. Greetings to the members of this House of Parliament. Greetings to one and all.

I stand to support this debate as per the present focus, which is Māori Language Week. The theme for this week is “Let’s make Māori language strong.” I realise that I am not the best example to demonstrate strong Māori language, but what I think is this: we must try; if at first we don’t succeed, let’s strengthen more and more.

Where are the members on that side of the House who are currently able to speak Māori? There are none. Wait, sorry, I acknowledge you Melissa Lee, for your greeting, thank you.

It is the hope of this Government that we increase the number of able Māori speakers, thereby honouring the Māori language. The Prime Minister would like there to be a million people who can speak our Māori language by the year 2040. That is better to me.

One of the good things for me during my journey to this House, this House of Parliament, is that I came to a place where I am able to develop my language. I don’t have a home where Māori is spoken most of the time. I don’t have a marae to go back to where Māori is spoken most of the time. I used to have to rely on Māori Television and iwi radio to see and hear the Māori language. Sometimes they didn’t reply.

I am indeed fortunate to have a group for new members of Parliament. Some of them are my age and fluent in Māori. I have just plucked up the courage to ask, “What does this mean? What is that used for? How do I pronounce this?” I thank my parliamentary colleagues for our knowledge and for our patience.

If more people would ask, there would be more Māori speakers. My hope for New Zealand in the future is that I will be able to go to the supermarket or my children will be able to go to school being able to speak Māori and to receive a reply in Māori, as well. What I would really like is to learn Māori, which would give me a glimpse, however small, in to the Māori world. It is my fervent belief for all New Zealanders. Therefore, let’s make Māori strong.

Members of this House, greetings to you all who are assembled here.]

Hon SHANE JONES (NZ First):

Tēnā anō tātou katoa i roto i tēnei Wiki o Te Reo Māori. Me te tautoko hoki i tēnei tuahine-ā-tōrangapū āku e kaha nei ki te whakahuahua i tō tātou reo Māori i roto i tō tātou Whare i tēnei rā.

[Greetings one and all during Māori Language Week. I would like to acknowledge my sister-in-politics who spoke our Māori language in our House today.]

I want to again acknowledge the efforts of the parliamentary community to use our language, to naturalise it, to normalise it, and to strip it of its cringe factor so that people will feel more comfortable giving it a go.

I stand in this debate to address a matter that is a regular feature of how I discharge my functions and obligations. From time to time, I’m challenged as to whether or not the fiscal decisions that are made have been made with the necessary probity, and whether I am a very good steward. I think that’s a fair enough challenge: that the face of the Provincial Growth Fund needs to be able to withstand attacks from time to time, and criticism, in terms of stewardship.

Now, I have visited my ire upon Fonterra, and I would say that Fonterra has a new CEO. They’ve lost both their CEO and their chair in recent times, and the CEO needs to be given an opportunity to help correct the trajectory of the waka. He’s a younger man. There are big challenges in Fonterra. No doubt there are big challenges because there are large numbers of people that are going to have to curb their ways or be invited to move on in order for this powerful company to sustain itself.

But there’s one thing that I will not tolerate. I will not tolerate anyone saying the following things about my good self: that my intervention in the Fonterra issues, according to Mr Mark Townshend, a former director of Fonterra, was driven by my donations. That is not only malignant; that is grossly untrue, and I say to Mr Townshend, a large shareholder at the Fonterra company: if you want to come out into the public and doubt the integrity of our party, sure. Mr Townshend and his ilk may think that our small party, New Zealand First, is a rinky-dink outfit, but you, sir, are out of line. You are casting aspersions on the donors that I have listed. You are doubting the integrity of me and my party as we participate in the Dairy Industry Restructuring Act review, and that remark of yours cannot go unanswered. I say to you: go back to Chile and redeem your reputation over there, where New Zealand’s reputation for being strong on animal rights failed under your stewardship. I say to you, sir: do not direct your ire at the ability of New Zealand First to continue to be critics and supporters of various options for improving Fonterra.

Now, Fonterra is an important entity, but no one in Fonterra is bigger than Parliament. No one in Fonterra is bigger than the law. So I say to those directors that are signing up to take on directorial duties, as I said to the recently departed chairman of that organisation, keep your nose out of NZ First politics. Keep your nose out of politics, out of this Parliament, because Fonterra is a creation of the law, and we as legislators are utterly entitled to reflect perspectives and views. I am not going to remain silent whilst one of New Zealand’s most wealthy dairy farmers believes he can blithely go around and darken my good name and expect to continuing to ride around on a helicopter or fly all over the world and survey his dairy empire whilst imagining that those remarks, designed to diminish my integrity and status, and the ability of our party to speak fearlessly, go unanswered.

Now, I know the man is a grandee of the National Party. I don’t care whether he’s donated to any member of the National Party. My approach is very candid, my approach is very lucid, and it’s very transparent, but I give fair warning to any new director or old director who does that again: you will feel the entire wrath of our party.

The debate having concluded, the motion lapsed.

Bills

State Sector and Crown Entities Reform Bill

In Committee

Part 1 Amendments to Crown Entities Act 2004

Hon Dr NICK SMITH (National—Nelson): I’m pleased to take a call on Part 1 of the amendments proposed by the Minister in respect of the Crown Entities Act 2004. It matters because the performance of Government in so many of our Crown entities depends on the strong leadership and the skills of the chief executives that are appointed. Now, for a large number of those Crown entities, Government is responsible for the appointment of the board, and the board is then responsible for the appointment of the chief executive, their terms of employment, and ensuring their performance.

The question for Parliament this afternoon in Part 1 of this bill is how far the Government, through the Minister of State Services and particularly the State Services Commissioner, is able to further interfere in the processes of that Crown entity. The question that I have for the Minister in the chair, Chris Hipkins, is how far he expects the provisions that are provided in this bill to go. The reason it matters is that there can easily be a culture of envy that gets in the way of getting the best performance for New Zealand out of its Crown entities.

I had the unfortunate ministerial experience of being appointed the Minister for ACC when it had lost over $4 billion in the preceding year. That entity is now in good shape and has a net balance sheet of over $20 billion. Every member of Parliament and every New Zealander has a huge interest in seeing that a Crown entity like ACC is well managed.

The question that I’ve got for the Minister in the chair, with the new provisions that are provided in clause 4, is how far does he expect the State Services Commissioner to go? In my view, while we might save, maybe, $100,000 a year on the salaries or performance payments that might be made to a chief executive of an organisation—like the super fund or ACC or one of our other very large entities, like Housing New Zealand—with the billions of dollars of assets that those organisations run, you would only need a 100th of a percent change in their performance for it to actually end up as a negative net balance of Government outcome. So I think it would be very helpful, with the new powers being provided to the chief executive, for the Minister in the chair to give the Parliament a greater degree of direction about how far we intend the State Services Commissioner to go.

I’m pleased and I compliment my colleague, Brett Hudson, the chair of the Governance and Administration Committee that took on board some of the concerns about the State Services Commission’s powers and provided some restraint on interference in that process by requiring a set of conditions to be set down in new section 117(2AA) about the sorts of factors that the chief executive would need to take into account—things like the legal, the commercial, and the operational context of the entity; what sort of information the board had; what commercial rates of pay would be appropriate; what the Government’s expectations are; and what the market information is about.

So while I think the select committee has taken a step forward, it’s not gone as far as National would prefer. We would actually want a statutory criterion that is judicially reviewable so that the State Services Commission is not driven by some sort of political motive of a drive to the bottom but really is interested in the best appointment.

I would, in closing, just make reference to the Ministry of Business, Innovation and Employment (MBIE): one of New Zealand’s largest entities in the State department. We, as Government, tried to secure a private sector person for that role and there was actually little interest with the rates. So if we are to get first-class people to be able to lead these major sector organisations, we do need to ensure that we are offering terms and conditions of employment that will deliver the quality of the public sector that we want.

So our own Government’s experience around the appointment of the chief executive of MBIE was actually quite telling. We thought that by having a very large economic development ministry that covers a very large range of electricity, immigration, labour laws, and building laws, we would be able to attract a candidate from the private sector who may be interested and apply some of that expertise to a major Government agency of that sort. Our experience was actually only receiving applicants from the public sector. I want to express full confidence in the appointment of the chief executive that was made for that agency, but it’s a reminder of the risks of what we’re doing in Part 1 of this bill in undermining our capacity to be able to get the very best person possible.

The further part that I would want to question the Minister in the chair on is that National members do have some concerns about some of the recent changes that have been made to chief executives’ employment. That is, there was an at-risk component of chief executives’ pay that this Government has decided to automatically provide for them. So there is no longer an at-risk component for chief executives who lead organisations that are clearly failing, and the removal of any sort of performance payment for those chief executives and simultaneously providing every chief executive with a week’s holiday.

Those issues are not specific to Part 1 of this bill, but I’d be very interested in getting an indication from the Minister in the chair—if you’ve got a board or an organisation like the super fund or you’ve got a board of an organisation like ACC that wants to include quite specific requirements in the performance of the chief executive, maybe for an organisation like ACC it’s about rehabilitation rates, a really important factor for that organisation, or whether the board of the super fund quite specifically provides performance requirements for the head of that super fund, managing nearly $30 billion of public money—whether the provisions that are being provided to the State Services Commissioner cut across the capacity for those significant Crown entities to be able to provide the very best of incentives for those organisations to perform?

The last point I would want to make in respect of Part 1 of this bill is to get some clarity from the Minister as to how different the practice is intended to be following the passage of this bill, which National is supporting, around those new Crown entities that have come under these powers. In other words, there are Government State departments and others right now of which the State Services Commissioner, effectively, has a veto over the terms and conditions of their employment. So what I’d be really keen to get an indication from the Minister on is, with the passage of this part of this bill, is the intention to simply extend the practice that currently exists over a range of Government agencies and Crown entities? Is the intention to simply extend that to all Crown entities, or are these provisions, in fact, going to be used to up the ante and for the State Services Commissioner to have their fingers deeper into the operational elements of these sorts of Crown organisations that Parliament and Government entrust to those boards? Those matters are important.

I want to stress to the House that across these Crown entities we are talking about north of $100 billion worth of Government assets. We’re talking about Crown entities that manage over $15 billion a year in public funds. The way in which we structure those organisations, and the degree to which they are autonomous, and the degree to which they are constrained by these extra powers of the State Services Commissioner deeply matter to New Zealand, how we do as a country, and how well our public services do. National is of a view that we want a connected Public Service, but we also want an accountable Public Service. That is, we don’t want to go back to the gliding-on days—so well illustrated with the, sort of, Yes Minister approach to Government—where we have an amorphous, massive Public Service where nobody is accountable for anything. So while we’re happy to have some extension of these State services powers, it’s absolutely critical that chief executives are accountable.

BRETT HUDSON (National): Thank you, Madam Chair. In the second reading speech this morning, I did point out that while we have reached a consensus in the select committee on this bill proceeding and the recommendations back to the House, there were some areas where the National Party members wanted to see different provisions in the bill, and they are in Part 1. As we move to this, I have some questions for the Minister. Particularly, they’re around the State Services Commissioner’s ability to direct, in effect, the boards around the terms and conditions of chief executives’ pay and conditions. For instance, subsection (2AA)—which clause 4 puts into section 117 of Crown Entities Act—states: “When considering the terms and conditions of a chief executive, the State Services Commissioner must have regard to the following”, and it is that very phrase that we expressed concern to officials about in the Governance and Administration Committee, because, in practical terms, what does “must have regard” mean?

Our argument to them was that in respect of all the words that could be used or the structures that could be used, “must have regard” is a much lower threshold than some others, because it is not required to substantiate a level of evidence to have achieved X—a threshold, if you will. It is simply—well, in English, at least—having to show in some minor way that you’ve had regard to something. So I would like to hear from the Minister, particularly as it is his policy, what his expectations on the State Services Commissioner are and how “must have regard to” will be evidenced in reality and, indeed, in the documentation the commissioner will have to provide.

In terms of those elements that the commissioner must have regard to, I don’t have any particular argument to make with the criteria that are there. They are the things I think that we would expect that the commissioner should have to take into consideration. What is absent is any indication of the weighting of any of those particular conditions. So, on face value, does that mean that each of them is of an identical importance to the other? If that were not to be the case, either in law or in practice, that creates some level of potential uncertainty, certainly, at least, in reviewing legislation, because, of course, one of the elements is Government expectations. We appreciate that a Government’s expectations for CEOs of Crown entities are very important, but equally so is information provided by the board with respect to the skills and abilities of the candidate, or the performance of the existing chief executive and the nature of the commercial business.

So when we have these elements, along with the public interest and market information, what weighting is the commissioner supposed to apply to each of them? How does he or she show that the weighting has been applied appropriately? And how, in the legislation, is it confirmed that the boards of those entities will know in advance—and sufficiently in advance, I think, to plan their business and appointments—what those weightings are? At the moment, we have the conditions. That’s fine. But if it turns out that the expectation or the reality is that Government expectations form 95 percent of the decision, and the rest of the elements get a mere veneer of treatment at best—and I’m not suggesting that that is the intention, but in the absence of those weightings it could be—then we could end up with some serious distortions which actually undermine the intent, certainly, of the select committee in reaching the recommended amendments that we have, but also, I would argue, undermine the boards themselves, particularly in the context of some of the operations they have, particularly the ones that are more commercially oriented or minded, such as the Superannuation Fund, and particularly in the reality of the world, and the investment world, that the Accident Compensation Corporation lives within.

That flows on, actually, not just to the weighting for each of those. If we look at subsection (2B), in clause 4, and indeed new subsection (2AB)—actually, I’ll start with (2AB) first: “The State Services Commissioner must provide reasons for refusing consent to any proposed terms and conditions.” from the boards, and those conditions or criteria in new subsection (2AA) are the route by which he or she will reach that conclusion. I have concern in regard to “must provide reasons for refusing consent”, and my question to the Minister is: does he really believe that just simply saying “provide reasons” is sufficient to ensure that what the commissioner comes back with—because this will be the heated part: when he or she disagrees with what the board, nominally considered an independent board, puts forward. Is simply saying “must provide reasons” enough?

We have the time now to reflect on this and to say “Officials, maybe some slightly different wording here would be useful.”, to give confidence to the public, and particularly to the boards, that if the commissioner is going to disagree with him, he or she has got to elucidate the grounds for that disagreement very, very clearly and comprehensively. That will give confidence—confidence to the boards, and confidence, I would also argue, to the public, and, indeed, to members of this committee.

That also has relevance to subsection (2B): “The State Services Commissioner must provide the boards of statutory entities with advice and guidance on the terms and conditions”, and I do believe this is just simply an oversight, and we in the committee are, therefore, as guilty of that as anything else, But the Minister might note that while we would believe in practice that a good commissioner would see that these are natural linkages here, in law there aren’t. So the commissioner can apply weightings to criteria, legally at least, anyway he or she wants to, and he or she is not obliged to actually give guidance to the boards that is consistent either with the criteria that he or she will apply, or, indeed, with the weighting that any one of those criteria could have applied.

I think it’s actually tidier legislation if we were to take this opportunity to ensure that there is absolutely no misunderstanding or confusion that these things all operate together—that the conditions themselves are not simply for reflection in one area to make a decision but form very much a part of the guidance responsibilities he or she has to those boards, and, indeed, are also a very important part of the reasons, the documentation, should the commissioner determine that they’re not going to consent to the proposed terms and conditions for those boards. If we were to look at those, I think each of them is very important, and I think if we can ensure that wording is there that is very clear and links them together, we create a situation where there’s a great deal more confidence from the boards in particular, but, because we are making laws for the country, also from the public.

Now, the other matter I want to just traverse in this call—there wasn’t a huge number of submissions on this bill but we did get a few—is that the submissions we got were very well reasoned and came from very respectable and reputed bodies. The Institute of Directors was very clear that their view—and this is the nature of their organisation—is that the autonomy of a board is paramount, and that if you take one role, one item of responsibility, from the host that a board has, the most important one for them to exercise their independence in is the appointment and terms and conditions of a CEO.

They argued quite strongly that setting fixed terms would mean, potentially, the possibility of people choosing not to seek a role, and would impair the board’s ability to structure those terms and conditions in a way that’s most, in their view, appropriate for their entities. And while, yes, they can be reappointed, there is no doubt that having that term limit means that the structure of the expectations has to be around that term. It can’t possibly go beyond it, because there is no guarantee of continued employment beyond that. I think—and we did reflect this to officials in the committee, as well—that when we have a reasoned submission from a reputable organisation that exists for strengthening the ability of directors in both public and private sectors, then we do have a duty to show the consideration to that. I’d like to hear from the Minister how he believes that five years will work effectively.

VIRGINIA ANDERSEN (Labour): Thank you very much, Madam Chair, for the opportunity to speak to this bill. I acknowledge my colleagues from the Governance and Administration Committee, who listened to the seven quite detailed submissions that we received on this bill.

As has already been acknowledged, new section 117(2AA), in clause 4—the new provision in this bill—was the part that caused the most rigorous discussion at select committee. That is the provision that “When considering the terms and conditions of a chief executive, the State Services Commissioner must have regard to the following”—and we have five criteria listed below. But I’d like to point out that there are words after that that haven’t been mentioned yet. It’s those five areas that are listed in the bill, which you are able to read. It also states “(among any other relevant factors):”. So it’s important that, while we’ve heard that the National members within the committee felt that this bill didn’t go quite far enough, the Government members felt that the right balance was struck. It’s always difficult to get that, getting that right balance between enabling a person with the appropriate skills and experiences to lead those significant organisations, which are a wide variety of Crown entities, and the fact that we want to make sure that we have a consistent approach right across the public sector—trying to get that balance. It’s not the private sector; we do not have the same free rein and the same mentality that goes there. So trying to get that balance right is important.

One of the points that remains there that really sticks with me is that, for those skilled and experienced people who choose to be chief executives within Crown entities, financial remuneration is not the only motivation to take that role; there are many other motivations that put people into those positions, and one of them is delivering good-quality public services to New Zealanders. So I think it’s important that we take note that, in that subsection, 117(2AA), from the advice we received from the officials who briefed the select committee and the Government members, we felt that that balance was about right: that there was a good, clear description in those five criteria within (2AA), and there was also that ability for the State Services Commissioner to have regard to any other relevant factors. So there’s a good amount of flexibility there. And also the words “must have regard to”—so there’s a requirement that those things must be taken into play.

So I’d be interested to hear from the Minister the views on that, because the Government members of the committee certainly felt that that balance was about right in terms of how we would be looking at the appointment of chief executives of Crown entities going forward. Thank you, Madam Chair.

Hon JACQUI DEAN (National—Waitaki): Thank you, Madam Chair. I’m very pleased to follow on from the contribution from the member opposite, Ginny Andersen, because she does touch on an issue which was of great interest to the Governance and Administration Committee, and that was around the submission of the Institute of Directors. It was an in-depth submission, but they showed very strongly held beliefs about the role of a board and a board of directors, and their almost singular role, one could argue, in the appointment of a CEO.

The Institute of Directors made some really interesting points. It has been said before, so I won’t labour this point, but, in their view, appointing a CEO is one of if not the most important functions of a board, and the important functions of the board include setting the terms and conditions of employment, including remuneration. I do remember from their submission, as I imagine all of us did, that they made that point on a number of occasions and in a number of different ways, because we were interested in that view and questioned them. But they were very firmly of the view of the fact that in section 117(2A) in clause 4 “the board must obtain the written consent of the State Services Commissioner before—(a) finalising the terms and conditions; or (b) amending any or all of the terms and conditions once they have been finalised.”—in a way, it diminished and took away some of that autonomy that boards have in the appointment of directors of Crown entities.

From our point of view, from the National point of view, we want the best people available to fill the role of chief executive in Crown entities, which themselves have large budgets, a lot of responsibility, sometimes a high degree of public service, and public accountability. We would like to think that choosing people to be those chief executives can be done in a way that really is enabling—unfettered, if you like—boards to go about choosing that candidate for the role. So while the Institute of Directors does not support the proposed change, we do, having noted on the way through some real concerns that the provision that is being inserted into this bill will have an impact not only on the ability of boards as they go about making appointments to Crown entities but also, perhaps, on the other side of the ledger, the type of person who is going to be prepared to put their name forward for those roles. The last thing that we need in New Zealand in the Public Service and on statutory boards are people, who are considering putting their names forward for a role as chief executive, being dissuaded from doing that by the requirement and fettering that section 117(2A) in clause 4 displays in saying that “the board must obtain the written consent of the State Services Commissioner”.

The member who spoke previously also traversed section 117(2AA) in clause 4, which outlined the terms and conditions of the appointment of a chief executive and those five terms that the State Services Commissioner must have regard to. Yes, they’re there for all of us to see, and no doubt my colleagues will traverse them, because they are quite substantive. She did note “among any other relevant factors”, but that does not take away, in any way, the provision in section 117(2A) in clause 4 where written consent for an appointment of a chief executive must be given.

Madam Chair, I am interested in—[Time expired]

PAUL EAGLE (Labour—Rongotai): Thank you, Madam Chair. I’ll just take a short call, just to reflect on some of these—

Chris Bishop: Oh, come on. Give it a good go.

PAUL EAGLE: Not as short as you, the member for Hutt South.

Hon Kris Faafoi: He’s a very efficient speaker!

PAUL EAGLE: Very efficient. Efficiency is—“P E”, for efficiency.

Brett Hudson: Much better than our bus network.

PAUL EAGLE: That’s true. Now, let me just reflect on the submissions that we heard, because they were interesting. What I discovered is that there is no difference, actually, at central government compared to local government. Sometimes people think when you are an arm’s-length organisation, that gives you more autonomy and freedom with the entity, but what I found that many forgot is that they are funded by public money—and it’s that that really brings into account that word “accountability” but also puts that “public” back into the Public Service. That’s what I want to focus on, because that’s where we had a bit of a tussle—that’s been traversed by previous speakers—around really saying, “Look, if we pay more, we get more, and we get this better person.” But really that’s a bit of a myth, and I don’t subscribe to “Paying more means you get more.”

Hon Kris Faafoi: You know you’re pretending.

PAUL EAGLE: And you have the entities listed—

CHAIRPERSON (Hon Anne Tolley): Order! Order!

PAUL EAGLE: They’re a very rowdy bunch, Madam Chair.

CHAIRPERSON (Hon Anne Tolley): From behind you.

PAUL EAGLE: Thank you.

Hon Kris Faafoi: It’s support.

PAUL EAGLE: Ha, ha! That’s his way of showing public service to me.

But, look, you’ll see that there are several Crown entities, for example, that are really out of step—in fact, 22 of them: 14 autonomous Crown entities and 10 independent Crown entities—and so this really brings them into line.

In my experience, certainly from managing the performance review committee of a chief executive in local government, that five-year term works well. There are some provisions there to stay on an extra two, or you choose to readvertise the role and apply on the open market for five years, but my experience told me this: the arm’s-length autonomy actually means you need to actually rein them in a little bit more. You appreciate what they do there in the market place, but they sometimes forget that the very funding they get is public money, and I think—and the Minister will clarify this—that’s the point of this. Let’s get some consistency. Let’s say that this Government is putting back the “public” and “service” into the Public Service by saying we want our senior leaders in our whole-of-government approach to be accountable and to give that trust and confidence back.

The narrative won’t be that we have highly paid CEOs who are actually running public entities; it will rather be that the services that they provide are providing value. So things around paid performance and that risk—look, if they want to do that, then by all means go and find that role in the private sector. Sell more cars, sell more tyres, do what you need to do and get that performance bonus. But what we’re saying in the Public Service is that you get paid a decent wage—much more than a living wage, I might add—and your service is part of that. You made that choice. You didn’t come into the Public Service to try and exceed some of your board expectations. Maybe you did, but therefore that risk component has been built into it in a different way. Madam Chair, I commend this bill.

Hon CHRIS HIPKINS (Minister of State Services): Thank you, Madam Chair. I’m happy to respond to a few of the issues that have been raised so far. I want to thank the Opposition for their constructive work through the Governance and Administration Committee to improve this bill and for their support for it. They’ve raised a number of issues, and I start with the ones raised by the Hon Dr Nick Smith around how far Governments should go. I think that that is a very reasonable question to ask and to have answered. I welcome the work of the committee to add in the criteria that the State Services Commissioner should consider in deciding how far to go in agreeing or not agreeing to a proposed remuneration package put forward by a Crown entity board. I think that they’ve done a good job of doing that. Market conditions are still a factor that they need to consider, and that’s specifically listed as one of the criteria that the State Services Commissioner will need to consider.

The Government’s expectation certainly is that they should be paid a fair market package, but they shouldn’t be at the top of the market. This was a view that was expressed not just by this Government but by the previous Government as well. We all know of a notorious situation not long before the election where the then Minister of Finance and the then Prime Minister both agreed with the State Services Commissioner that a remuneration package was too much, and the board of that particular Crown entity chose to offer it anyway—much to the frustration of the then Government of the day, in a sentiment supported by the then Opposition of the day, that that was out of kilter with what was a reasonable expectation, even on a market salary. So I think that addresses that particular factor.

Public service is a factor in taking on these roles, and that’s something that we need to consider. One of the tests that the State Services Commissioner would reasonably apply is: would a lower salary package affect the ability to recruit the best person for the job—you know, the most competent person to be the chief executive? And if the answer to that question is yes, then I think that would have a significant bearing on any recommendation that they might make or any decision that they might make.

The other main issue that’s really been raised—well, there are the issues raised by the Institute of Directors around what this means for the overall autonomy of the board. The issue there is the board will still make the appointment and they’ll still make that appointment independently. They will still recommend the salary package. So they’ll still determine the salary package. It simply will require now the agreement of the State Services Commissioner.

Now, that comes to the final question that, I think, Nick Smith asked, which was: is this about extending the status quo—i.e., widening the status quo—or going deeper? The answer is, and I think it will be to his comfort, that it is about widening the status quo, because there are already Crown entities where agreement is required. This extends it to a larger group of Crown entities. We think that system works quite well.

Brett Hudson raised an issue, a very legitimate one, around the “must have regard” clause. I think that’s something that this Parliament has learnt a little bit about in recent years. The closest analogy that I can think of off the top of my head is the remuneration of members of Parliament, because it’s an issue that we’re grappling with. Where previously the Remuneration Authority were responsible for making judgments about that, based on a set of criteria, the Parliament didn’t like what was happening. We felt our salaries were growing too fast. So we changed that from criteria that they should consider, or must have regard to, to a set formula. So we were much more prescriptive. The result of which is that we then ended up in a situation where we were getting even bigger pay rises and the Remuneration Authority were saying to members of Parliament, “This is the pay rise that we are required to give you, though we do not think you deserve that much money.”

So the flip side to a “must have regard to” criterion is that you go to the other extent where you end up with a very specific criterion and you remove all the subjective judgment from the exercise, and then you end up in a situation where you can have the completely opposite effect—both ways; either too little or too much—to what you had intended. So there is always going to be a degree of subjectivity when it comes to determining what an appropriate remuneration package is.

The ultimate test, and the ultimate safeguard from the abuse of power there, is really with the board of the Crown entity, because the board of the Crown entity still needs to recommend the ultimate salary package. The State Services Commissioner can agree or disagree to that. If the State Services Commissioner disagrees and the board continues to have concerns about that, then they do have, I guess, the ultimate course of action, which is to resign their positions and force the issue back on to the Government.

Rt Hon DAVID CARTER (National): Madam Chair, I wasn’t going to take a call, but I’ve become now more concerned after listening to the Minister, the Hon Chris Hipkins’, attempt to answer some of those questions. My concern is that this legislation risks politicising the public sector. I think I can set the scene first by my own experience as a Minister, in 2008, when the Ministry for Primary Industries—or the Ministry of Agriculture and Forestry as they were in those days—came into my office. The director-general in those days was Murray Sherwin, and he said to me, amongst his senior leadership team, “We were here to serve the wishes of the previous Government. The Government has changed and we are now here to serve the wishes of your Government.”—completely apolitical. I think New Zealand is hugely lucky to have such an apolitical State Service, whereby their job is to serve the Government of the day.

Then we have this legislation before the House, and I think we’re at risk of actually finding the Government having a role in politicising the State service. I want an absolute assurance that that’s not the reason this legislation is before the House today. When you look at clause 4, “Section 117 amended (Employment of chief executive)”, you get to the situation where ACC, for example, wants to employ a new chief executive. The board goes through a recruitment process and makes a decision. It knows the capabilities of the person it is attempting to employ. The board knows the expectations of that new potential chief executive. So it starts discussing an employment package around days off, amount of holiday pay, and, most importantly, salary, and it comes to an expectation of what might successfully engage that person to become the chief executive of ACC—the sort of process that works with every board in the country, whether it be a private board or a Crown entity. But then, having finalised that package to the satisfaction of the potential chief executive, whoops, there’s one more important step. They’ve got to rush off to the State Services Commissioner and get the State Services Commissioner to approve those negotiations.

The State Services Commissioner hasn’t been involved in those negotiations. He has no idea how capable this new chief executive may be. The only people who know that are the people who did the recruitment process—in other words, the board—and if it’s a case like ACC, the board’s actually appointed by the Government. But then you look at what’s got to guide the State Services Commissioner, and you look at section 117(2AA)(a), (b), (c), (d), and (e), and look at (d), “Government expectations:”. That is politicising the Public Service. That’s what that does. The Government now steps in and starts to determine whom they want employed as the chief executive of ACC, because no longer do we have the independence we used to have with State entities.

I think this is very dangerous legislation before this House, and I’m just not convinced that the Minister himself has got his head around the issue. The last thing this country wants is to see the situation they have in the United States of America, where a Government changes, a new president comes in, and all the institutional knowledge of the Public Service is, effectively, thrown out because they’re all political appointments. That’s where we could potentially head, and I just say to the Minister that I hope he’s given this real thought as to the danger of this legislation. I’m sure there wasn’t an attempt when they introduced the legislation for that to be where it might lead to, but I’m concerned it could lead to that.

I go back to my opening statements about the way that I first engaged, as a new Minister, with the Ministry of Agriculture and Forestry, as it was in those days; the way I was absolutely assured at the start that the Public Service was there to do its job in an apolitical manner. If there’d been an election the next day, they’d have gone and started delivering the agenda of the next Government that was about to be installed. What we don’t want is a Public Sector in this country that is in any way politicised, and when you look at the process of appointments of chief executives, whereby the responsibility to find a chief executive rests first of all with the board, then they’ve got to get the permission of the State Services Commissioner, and then the commissioner has to follow Government expectations, we’re in trouble.

Hon CHRIS HIPKINS (Minister of State Services): I think the Hon David Carter raised a very legitimate point, which is around preserving the political neutrality of New Zealand’s public services. I think that’s something that we should all jealously guard in this House. It’s something that New Zealand is internationally recognised for. It’s something that we should be incredibly proud of.

With regard to Crown entities, I’d point out that, actually, Crown entities are probably one of the most political parts of the Public Service because the boards of those are political appointees. The boards of all of the Crown entities are appointed by Ministers through a Cabinet process, through a collective process, obviously, but it’s a political one—unlike, say, a chief executive of a public sector agency where that is appointed by the State Services Commissioner independent of Ministers. So actually there are more safeguards within the core Public Service for that political neutrality than there is within the Crown entities sector.

Ministers send letters of expectation, for example, to the boards of Crown entities, setting out what their expectations are—and this is not something that this Government’s introduced; it’s something that has existed for a very long time—for how that board will operate. So it seems to me: why would a Government be sending a letter of expectations to a board around these matters, and then the commissioner, potentially, could be recommending something that was completely contrary to the expectations that the Government have sent to the board. I think that would set them up for—if the board has to consider Government expectations, then the commissioner should also have to consider Government expectations.

I do think that the Hon David Carter has raised a legitimate point around preserving that political neutrality, though, and I was concerned in the contribution of the Hon Dr Nick Smith, where he talked about the desire of the previous Government in making an appointment to the chief executive job role for the Ministry of Business, Innovation and Employment that they specified that they wanted someone from the private sector. In fact, that would be contrary to the State Sector Act. The commissioner makes the appointments for a Public Service chief executive. The idea that the Ministers in the Government were directing the commissioner as to who it should appoint would seriously undermine the political neutrality of the Public Service.

So I think thus far in this debate, the only evidential basis we’ve seen for any undermining of that political neutrality is actually from the illustration that Dr Smith raised with regard to the previous Government.

MATT KING (National—Northland): Thank you, Madam Chair. It’s a real honour to speak, and I’ve been listening very carefully to both sides of the committee with their debates. I’m fortunate enough to not be on the Governance and Administration Committee. I’m on the Transport and Infrastructure Committee, but I see that the membership there is—there are some highly talented people there: Brett Hudson, Virginia Andersen, Kanwaljit Bakshi, the Hon Jacqui Dean, Paul Eagle, the Hon Peeni Henare, Raymond Huo, and Jian Yang. So we’re in good company.

Essentially, this piece of legislation is to control the pays of—at last count there were three entities who didn’t comply with the State Service Commission’s guidelines. So we’re talking about three people at the moment, but we support this bill, because we understand that it’s a tidy-up process, brings the powers for Crown entities—namely, the terms and conditions of employment for CEOs. It effectively gives the State Services Commissioner a right to veto appointments, because if he doesn’t agree to the salaries or the conditions, that’s, effectively, a veto.

However, limiting the terms to five years—I think that’s a good call. But I’m a little bit worried about the direction that the coalition Government are going in terms of public services under their governance. There’s a little bit less of the accountability coming in here. For example, in admissions in hospitals, we had a time limit and that, effectively, saved lives in emergency departments, and I see that they’ve been kicked to touch. I see that CEOs’ salaries—the performance part of the salary is going to be paid out so there’s no incentive there, and automatic payouts for risk share. So for people that don’t understand what that means in terms of a salary, if they didn’t meet the target, they lose that payment. And I see it’s all going to be swallowed into one.

Now, Treasury have warned that this bit of legislation might impact competing to get good CEs, because we have to compete with the private sector. I see Minister Hipkins is keen on dropping measurement and setting of performance standards since they got into power. So they’re more insistent on knocking the top rung of the ladder than pulling up the bottom.

I see the 8,600 members of the Institute of Directors state the bill may undermine good governance and take away too much power. Appointing and managing CEOs is one of the most important conditions that a board does. It’s important that these functions are kept at arm’s length. As I said before, we’re talking about three entities that didn’t follow the rules. But I talk in relation to the New Zealand Superannuation Fund and Adrian Orr. I know that that got some coverage for a million dollar salary, but he runs an organisation that has $38 billion worth of assets under management. So you need—

Brett Hudson: Was.

MATT KING: —was. He was. And you want the top people in charge of that. They paid $6 billion worth of tax. So I think that you need to pay the money to attract the top people. I don’t want inferior people running big organisations where we’re dealing with a lot of money.

So we support the bill. I’ll just quote here, with this Government, “rich pricks” populist attacks are common from the other side of the House, and it’s unhelpful when the serious business of governance is involved. We support the bill.

Dr JIAN YANG (National): Thank you, Madam Chair. Now, this bill, in essence, as I said earlier today, has the intention to strengthen integrity, openness, and, of course, accountability in the management of the public sector. So the intention is well-known and, of course, good. The challenge here is how to maintain a balance.

There are all sorts of conflicting themes here. One, of course, in Part 1, we can see, focuses on employment and remuneration. So these are important matters when it comes to hiring top chief executives. So Part 1 focuses mainly on the Crown Entities Act. It requires the boards of statutory Crown entities to obtain the State Service Commissioner’s written consent to the terms and conditions of the employment of a chief executive. So this is new, because, at the moment, it is, basically, required to consult with the State Services Commissioner. So now it’s required that these Crown entities get written consent from the State Services Commissioner. Also, for some Crown entities, this already applies, but now this bill will expand its scope to include many more Crown entities.

The bill also specifies a term of employment for a chief executive. This, again, applies mainly to Crown entities, because, in the State sector, most of these chief executives are already employed under a five-year term. So, under this current entities Act, there are no specific references to terms of employment for an entity, and this bill will set five years as a term. So the balance here is: how do we have this term or this kind of remuneration and, at the same time, have the ability to attract top or experienced chief executives? Now, the New Zealand Superannuation Fund, in its submission, does provide some good points, which I think we should point out, and, hopefully, the Minister will be able to elaborate or answer some questions on.

In its submission, the New Zealand Superannuation Fund states, “There is a broad spectrum of Crown organisations with diverse risks, challenges and complexities and their demand for knowledge and specific skills varies within the public sector.” So they are opposed to what we call a one-size-fits-all approach to the employment of chief executives. I think this is a valid point, mainly because the New Zealand Superannuation Fund outperforms many other funds. Specifically, they mention that “Since the inception of the Fund in September 2003, the Government has contributed NZ$15.02 billion to it. As at 28 February 2018, the Fund has returned 10% [per annum] (after costs, before New Zealand tax).” So this is very impressive. How can we be sure that we are able to attract top chief executives and, at the same time, make sure the New Zealand Superannuation Fund will continue to perform?

In its press release—of course, a public release—the New Zealand Superannuation Fund also mentioned that the remuneration for all Guardians of New Zealand Superannuation staff, including CEOs, was paid for from the fund, not from parliamentary appropriations. So this is another point. I hope that the Minister will give us an assurance that we will be able to make sure the New Zealand Superannuation Fund will continue to perform well. The reason why I’m asking the Minister to explain this is because the Minister specifically mentioned, in his interviews with the press, that this bill will target the New Zealand Superannuation Fund. So my question that I hope the Minister will—[Time expired]

Hon JACQUI DEAN (National—Waitaki): Thank you, Madam Chair. I have a number of questions for the Minister in the Chair. I have three questions, in fact—all three are for clarification. The Minister in his last intervention noted that there needed now to be agreement between the board and chief executive on the appointment of State services and on the appointment of a chief executive. I’m assuming he was referring to clause 4(2) but then we go on to 4(2A), which really is the kicker in Part 1, which says, “the board must obtain the written consent of the State Services Commissioner …”. So I’d like the Minister to just clarify which of those two clauses he was referring to when he made the intervention, because while “agreement” sounds entirely reasonable, I think “consent” is an entirely different matter. It comes to the very point of Part 1 of this bill, so I do seek some clarification. In the context of the comments that the Minister was making, which clause was he referring to, because I think it does matter for the Hansard for the Minister to be very clear about what he understands about Part 1 of this bill?

The second query I have for the Minister is around his outlining of good process—good due process—in the appointment of chief executives in the State sector and Crown entities. The Minister did mention that Ministers will send a letter of expectation to Crown entities in the sure and certain knowledge that they will get a reply and there will be discussion about that and so the Crown entity then goes on understanding very fully the priorities and the expectations of the Minister. I was interested in those comments because we have a couple of examples right now where there are—is it two or three?—Crown entities which have not received letters of expectation. Ōtākaro is one of them and the other one is—

Hon Nicky Wagner: Southern Response.

Hon JACQUI DEAN: Yes, Southern Response. So we have two Crown entities which haven’t received a letter of expectation from their Minister, the Hon Megan Woods.

So where does that leave this Minister in terms of being a champion of good process in ministerial work with a Crown entity where the Minister, in this case Megan Woods, has not even submitted—has not even sent—a letter of expectation to these two Crown entities so that they are, effectively, operating under the previous Government, which by the way was a very good Government and set some very good letters of expectations? Maybe this is an acknowledgment by that Minister, in particular, in this Government that the letters of expectation sent by the Hon Gerry Brownlee were in fact not only set for purpose under the former National Government, but also so exemplary that they would continue under this new regime for now—what?—11 months.

So I am interested to hear from the Minister around whether he believes—and it was his words in the contribution he made about good process around the appointment of chief executives and how important a letter of expectations was. The Minister said so himself. I’d like him to therefore explain and perhaps outline the conduct and inner thinking of his fellow Minister who has failed to do that, so that for 11 months there have been two Crown entities which have been rudderless in this current Government. He can tell the committee whether he believes that that is good process.

The third issue, which I would like to traverse and seek the comment of the Minister on, is around clause 4(1): “A chief executive of a statutory entity is appointed for a term of not more than 5 years, but may be reappointed.” This is what I’m interested about in this clause: the reappointment process—“may be reappointed”. So what exactly does that mean? I’d like the Minister to come to his feet when I’ve finished my intervention and explain to the committee what that—[Time expired]

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

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

Ayes 63

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

Noes 56

New Zealand National 56.

Motion agreed to.

Part 1 agreed to.

Part 2 Amendments to State Sector Act 1988

CHAIRPERSON (Hon Anne Tolley): This brings us to Part 2, the debate on clauses 6 to 17 and schedules 2 and 3, relating to the amendments to the State Sector Act 1988.

Hon JACQUI DEAN (National—Waitaki): Madam Chair, thank you. It’s just a shame that I cannot finish the point I was trying to make in Part 1. However, I’m very pleased because I did want an answer. There were three questions I posed to the Minister and I did wish for answers to those, and I know I’m now out of order in wanting those questions answered, but, in fact, the questions still remain and there will be questions arising out of Part 2 of this bill.

Just to set the scene, since I’m the first keen member to leap to their feet, Part 2 of this bill makes amendments to the State Sector Act, and it does so in a couple of ways relating to a couple of areas. It improves the State Services Commission’s investigatory powers. If you think—and some member has said this—it is a pretty light and small bill, it’s not, because, in fact, this provision on improving the State Service Commission’s investigatory powers is a very, very important part of this bill. Being able to conduct an investigation is a crucial function of the State Services Commissioner, and so this part of the bill addresses that.

We’ve had a number of incidences in New Zealand where the State Services Commissioner has had to rely on powers under the Commissions of Inquiry Act 1908 to undertake those inquiries. However, with the Inquiries Act 2013—it says “2013” in my notes, but I wonder if it’s 2014. I would be interested, actually, if the Minister can answer that little question. The Inquiries Act was a good piece of legislation that was brought through when National were in Government. So what needs to happen now is that the bill will update the commissioner’s investigatory powers under the Commissions of Inquiry Act by bringing them into and under the Inquiries Act of 2013-14. While the Minister is answering that question—whether it’s 2013 or 2014—perhaps he might care to answer the three previous questions that I posed to him. I’m sure Madam Chair won’t mind. We’ll just test that in due course, but I don’t think there’s any chance of him doing that, so that is a little bit of a moot point.

Under new section 9A(2) in clause 8, there is a list of the sections of the Inquiries Act that would apply when the commissioner investigates something in the course of their functions under the State Sector Act. As I say, this is an important aspect of the ability of the State Services Commissioner to hold Crown entities to account for their actions. I do support this part. I think, in the course of our consideration in the Governance and Administration Committee, there weren’t too many submissions in opposition to this provision—and I will be interested in other members who are looking through and recollecting. Perhaps Government members might wish to comment on this. We received only seven submissions, but they were substantive submissions, and I would be interested in other members’ views—particularly across the Chamber—on this new investigatory power, which brings them into the Inquiries Act of 2013-14. It is quite a neat little clause which has gone into this bill, and I do hope that members opposite will take time—well, I’m assuming they’ve taken time to go through the submissions on this bill—and really express their view to the committee for the fullness of—

Brett Hudson: Maybe we’ll get some substantial comments.

Hon JACQUI DEAN: Yeah, I’m looking for some substantial submissions on this bill. I had only a few calls on Part 1 of the bill. Part 2, again, is a substantive part, and I do look forward to making a further contribution.

BRETT HUDSON (National): Thank you, Madam Chair. In Part 2, I’d like to, firstly, draw the Minister’s attention to clause 12—clause 12(3) in particular. Now, we have absolutely no objection to giving the State Services Commissioner the power to institute a code of conduct—no issue with that at all—but my question for the Minister is, reflecting on that particular subclause, does he believe that we have actually got the wording right in, sort of, the effect and how we would expect that the State Services Commissioner might exercise that authority. It says, “The Commissioner may apply a code, with any variations that the Commissioner thinks appropriate in light of the legal, commercial, or operational context, to … (a) any agency or agencies … (b) any particular persons or groups …”. So what that actually confers to the commissioner is not to apply a code of conduct to boards of Crown entities, but to apply as many different codes of conduct as the commissioner may see fit to do over time.

Now, bear in mind that this amends section 57, and it’s about minimum standards of integrity and conduct. Do we really believe that the principles of integrity and the principles of how board members would conduct themselves in the operation of their responsibilities would vary between entities simply because the function of the entity is somehow different? Remember, we are talking about integrity and professional conduct. My contention to the Minister is that those standards are the same, irrespective of which entity a person may serve on. Indeed, you could have a situation where one person serves on multiple entities. It’s rather confusing and complex to have different codes for each entity that a person may serve as a member of a board on.

I have reflected on that, and I actually think the wording is wrong. I don’t think we should be encouraging the commissioner to have multiple codes of conduct with respect to integrity and general conduct. There will be instances, and I’m not certain—certainly in this part of the bill, at least—that the commissioner necessarily has direct influence on these or not. Where the reflection is touching upon the actual operations of the entity, its functions and purposes, and the actions that the executive takes, which may well be guided through the governance of the board, absolutely, I can understand that those things will be different—naturally different—between entities, because the entities do have different sets of responsibilities. The characteristics of the people that sit on the boards in terms of their personal integrity and the way they conduct themselves in discharging their duties, their obligations, as members of the board, I contend are the same, but the legislation, very clearly and, therefore, purposefully, is actually setting the commissioner up to create multiple codes of conduct.

So my question for the Minister—and reflect on it, firstly. Please reflect on that, Minister. Is that really the message that we’re wanting to send—that professional behavioural expectations and personal characteristics, personal qualities, around integrity, might be different, depending on the Crown entity you may serve as a member of a board on? I’m not at all convinced; in fact, quite the contrary. I think that, actually, it creates more problems than it would solve. So I’m looking forward to hearing from the Minister on that particular point.

Now, the other part of Part 2, which I’ll also be seeking, if not a complementary call now, then one later, is on the power of inquiry. In the second reading debate, and please forgive me if my memory fails me slightly on this, the Minister noted that the commissioner’s powers around inquiries were derived from a 1908 statute—I think it’s the commission of power of inquiry—and that this would bring them more in line with the Inquiries Act 2013. Aside from the minutiae of the actual provisions, I would like the Minister to consider and comment on why it is we are replicating, duplicating, certain provisions of the Inquiries Act in this piece of legislation, instead of taking a position that says that the commissioner’s powers of inquiries are defined in the Inquiries Act, and that if there were, in fact, specifics for the commissioner that were different or greater than or lesser than the elements, the provisions, in the Inquiries Act, we make amendments to the Inquiries Act instead.

Doing it this way complicates the overall statue book, because we say a number of sections of the Inquiries Act will apply for inquiries undertaken by the commissioner—for instance, section 14, “Regulation of inquiry procedure”; section 15, “Power to impose restrictions on access”—I’m not counting them, but there are about a dozen just in new section 9A(2) in clause 8. There are about a dozen of them. That means that if there’s a future amendment to the Inquiries Act, anyone who’s going through that has to establish whether those amendments will have any consequences on any other piece of legislation which refers to them, and particularly, in that instance, it does refer that they apply. Therefore, if they change, they still apply. They’re not a copy of; they are a reference to.

If we look at that, that means that that’s a very complicated future outlook for amendments to the Inquiries Act, and I could talk about how this has got a broader principle across the legislative amendments that we make. But, in this particular instance, it means that any future amendment to the Inquiries Act creates a great deal of work for officials and for drafters to understand, because any error that they make and that we don’t catch through these stages of the legislative process can have very, very significant consequences for those people that get caught up in it.

Then, those elements where there are changes to this legislation, not by way of reference to other Acts, but instead by copying the words of those Acts but not creating a connection: actually—and I don’t mean this in a perverse sense—they create the same sort of problem in reverse. Where we might want them linked to changes in those other Acts in the future, they won’t automatically be. So the real point is, Minister—and I see the smile—perhaps it would be better to take an approach that says “How do we do this by reference?”, rather than a hodgepodge of some reference that creates certain issues versus some copying that creates a different set of issues, and I think it’s particularly around the Inquiries Act but also the Privacy Act where the other part applies.

We do agree to that. We heard these in the committee. We’ve got no problem with the actual provisions themselves. We agree wholly with this, but I think it is right for us to question in this stage—in the short time that is available before this does receive Royal assent—should we look at whether it is possible, whether it is better, to do it a different way. I’m not seeking leave to put this back into the committee for another six months; I’m just saying this is an opportunity to actually make sure that what we’re doing—although, you know, the committee would do a great job if you gave it to them for another six months, of course, and that applies in both the context of the reference and the copying of wording of specific provisions.

One, particularly, that I think is perhaps a little more problematic in the minds of the public than some others is the suspension of certain privacy rights during the inquiry. My read of this, Minister, is that that is simply copying the provision. It is copying the wording of a provision, rather than making a reference to it. I think it’s that suspension of privacy—which we agree with, by the way. We think it’s absolutely the right thing to do. We do not want to compromise the evidence of other people during that inquiry process, and we do not want to compromise the inquiry itself, but it does raise the question—because there is a linkage there, and the wording was very clearly and definitely made to be consistent with other legislation—that, therefore, if there are certain changes made in other areas of legislation, we may get a natural break here that causes a future issue.

So I think it’s worth, you know, getting the officials on the phone, Minister. They can rush across; they could give a bit of advice on this. We’ve still got time. Thank you very much.

Hon CHRIS HIPKINS (Minister of State Services): The member who’s just resumed his seat, Brett Hudson, raised a lengthy and interesting issue, which I’m sure the Attorney-General at some point would be more than happy to comment on in great detail, and that was around the issues of cross-references in legislation. I can say that in the almost decade that I have been in the House, this is something that has frustrated, I think, many a lawmaker and many a law interpreter. I’m sure, at some point, as we tidy up our statute book in New Zealand, it’s something that we’ll get better at. I think that the statute book that we have in New Zealand could do with a significant amount of housekeeping, and I know that successive Attorneys-General, including the current one, are working on that very process.

The more substantive issue was around: would there be one code of conduct or many codes of conduct? I think that’s a really important issue to raise, and I’d simply draw at this point the member’s attention to an amendment made during the select committee process which made it very clear that any specific provision does not limit or affect any other provision in the Act in terms of the conduct of a member. Their statutory requirements, if they have statutorily defined requirements, would not be affected by a code of conduct.

But there’s another related issue, which I think cuts to the heart of the concern the member was raising, which is around where people are subject to more than one code. The code of conduct that applies to the Crown entity board might not be the only code that they have to comply with, because the Crown entity itself may be regulating, for example, a profession where there’s another code that’s in existence. For example, the Code of Conduct for Directors of Victorian Public Entities in Australia states explicitly that it “should be read in conjunction with any professional code” that establishes “specific behaviours relevant to that profession.” If I go the UK Code of Conduct for Board Members of Public Bodies, it applies in addition to any duties of directors under company law or duties of trustees under charities law.

I think what the drafting of this is getting to is that—you know, I can’t envisage that the commissioner would be issuing, willy-nilly, lots of codes of conduct, but I think what they do need to have the ability to do is take into account other codes of conduct that those same people might be subject to.

Hon Dr NICK SMITH (National—Nelson): There are two substantive issues with Part 2 of the State Sector and Crown Entities Reform Bill that I wish to make a contribution on and ask the Minister some questions on. The first of those relate to the powers in Part 2 for the State Services Commissioner to be able to be exempted from some of the provisions around the Privacy Act.

Here’s the concern that I’d love the Minister in the chair—now Grant Robertson—to be able to respond to for me. The bill is absolutely appropriate—that is, when the State Services Commissioner initiates an inquiry under the Inquiries Act, we don’t want them being constrained by provisions of the Privacy Act that would have people refusing to provide information for the State Services Commissioner, who’s acting in the public interest to get to the bottom of what often is something gone wrong. Sometimes a person may have behaved unethically, maybe they’ve breached some law, or maybe they have misused some public money. But the challenge I’d want to know from the Minister—and it does concern me more generally around legislation—is that we conveniently exempt State agencies from law, with no regard for organisations outside of Parliament.

So if you’re running a major corporation, and let’s say a big organisation, whether it be an organisation like Fonterra, which I know my colleague Barbara has an interest in—Barbara Kuriger; I’m sorry, Mr Chair—

Hon Ruth Dyson: Another name-dropper.

Hon Dr NICK SMITH: —or whether it be another major company. Well, she’s a feisty chief whip and one that we must keep onside, as I’m sure members of her side of the House understand. Anyway, if you’ve got an organisation, in Fonterra, and the Fonterra board is wanting to investigate it—and we could take the whey inquiry, for instance—why should the provisions of the Privacy Act for that organisation fully apply to that investigation but not to the State Services Commission? The reason I raise that question is because so often when Parliament passes law, we impose all sorts of requirements on the private sector, like the Privacy Act, and then the State sector comes in the back door and says “This makes practical life too hard; we’re going to fix it.”, rather than us actually fixing it for everybody.

So my challenge for Parliament with Part 2 and the provisions of the Privacy Act is, if the Privacy Act does not work for the State sector, shouldn’t we fix the Privacy Act for the private sector as well where there are investigations of wrongdoing, rather than going down this road of conveniently just exempting the State sector from those provisions? I would suggest to the Government—and this is important, because the Privacy Act is currently being reformed with a major bill before the Justice Committee. The Justice Committee is waiting for further advice from the Minister, where, actually, in our view that would be a better vehicle for fixing this problem for both public sector and private sector agencies. For instance, rather than amending the State Sector Act, why don’t we make provision in the Privacy Act, whether you are a Fonterra or whether you are an ACC or a superannuation fund organisation, to say that where an organisation is investigating wrongdoing—breaking the law, inappropriately using funds—there are exemptions to the Privacy Act, rather than having the quite selective approach that’s taken in Part 2 of this bill?

Now, the second question I have is in respect of clause 12 of this bill, and that relates to the important issue of the minimum standards of integrity and conduct. It is actually quite significant. What clause 12 is proposing is that the influence of the State Services Commissioner and the minimum standards of integrity and conduct don’t just apply to the employees of that organisation. Whether it be the officials that are within Housing New Zealand or whether they are in ACC, my point is that what this provision in clause 12 is proposing is that those standards that are set down by the State Services Commissioner now apply to board members.

Now, the Parliament should not underestimate how significant that is. I recite back to the history of the original intent of the 1988 State Sector Act. It was actually to enable boards of our Crown entities to operate with a lesser level of that sort of Gliding On Public Service culture, and while National members totally support the application of standards of integrity and conduct, what we don’t want it to become is an all-encompassing State Services Commission that starts returning us to that sort of amorphous mass of an unaccountable and blurry public sector.

Now, I also want to specifically ask the Minister how these provisions will apply to some of the new innovations that the Government’s applying. It’s fascinating to read the Cabinet paper on the appointment of the Chief Technology Officer, because what the Government’s wanting to do is to get out of the normal State sector requirement of appointments being politically neutral and create a really odd situation where the Chief Technology Officer will be a political appointment made by the Prime Minister and the Minister for Government Digital Services and not through the normal State services process. Now, the question I’ve got for the Minister in the chair is: will the new standards of integrity and conduct set down in clause 12 of this bill apply to that new office?

It’s quite interesting that the Government did not want the Chief Technology Officer to be a normal public servant, to be accountable to a chief executive, or to be accountable to the State Services Commissioner—that they wanted a political process. In fact, the way it’s described in the Cabinet paper is that the Chief Technology Officer for the Government will actually be like a one-person board. So my question for the Minister in the chair—and I’m pleased the Minister of State Services is back in the chair and is able to respond to this point. It is: will those minimum standards apply to whoever it is—and there’s some controversy about it—who is appointed as the Chief Technology Officer for the Government?

When I look at the list of employees in new section 57(3)(b) in clause 12, it says that, yes, it will apply to chief executives, that it will apply to employees, and that it will apply to board members, but it is absent on whether this new innovation—that I think the Government has quite cynically created to be able to override the normal standards of appointment and political neutrality. It’s created this new role without any of that constraint, and that person is not specifically listed in clause 12.

The analogy that I would make is that we have the position of the Prime Minister’s Chief Science Advisor, and I would expect the new codes of conduct that are being set down through clause 12 for members of boards, public servants, and chief executives should equally apply. Whether you are the Prime Minister’s Chief Science Advisor or the Chief Technology Officer, it would seem to us to be an anomaly in this provision that those specific office holders are not mentioned.

The last part we just want to put a question to the Minister on in respect of Part 2 is how far will these standards of integrity and conduct go—that is, we’re all in favour of the issues of probity and being careful with public money and those sorts of issues being included in these codes, but what we don’t want is for these codes of conduct to have those arms, legs, and fingers of the State Services Commissioner sneaking too deeply in to it, whether it be our school boards of trustees, whether it be our health boards, whether it be our other significant Crown entities. It would be very helpful if the Minister was able to give a steer as to how far those codes will go.

IAN McKELVIE (National—Rangitīkei): Thank you, Mr Chair. It gives me a bit of pleasure to take a call on this bill, which, on the face of it, looks quite simple, but I just wanted to follow on from Dr Nick Smith, the previous speaker, because having been around business and boards for a fair bit of my life, I’m naturally suspicious of the motive of all sorts of things that go on in this sector.

I think one of the great challenges we have with all of our boards in this country is the stifling of innovation and the stifling of the ability to pick up on things and make change for the better. I’m not at all sure it’s bad, because I don’t really know where this will end up, and I think that’s the challenge we have with some of this stuff: we don’t know how far it’s going to go.

I guess that I’m not opposed to having codes of conduct imposed on boards of directors, but I am very suspicious of having codes of conduct that cover boards of directors, chief executives, and employees of whatever with the same conditions imposed on all of them, because I don’t think it can possibly work. So I’d be very interested to understand how the codes of conduct might work, because I do think that board members do need to have a very different set of standards around them. I know the Minister said a little earlier that the statutory requirements of board members will not be impacted by the code of conduct, and I was pleased to hear that because I think that makes a deal of common sense.

I’d also be a bit interested to understand—and, I suppose, time alone will tell us that—how much influence the Minister of the day might have in the implementation that the State Services Commissioner might put on these codes of conduct, and, in fact, what you might be able to influence in the course of the code of conduct being, I guess, implemented, because I think also that that could impact the type of person that puts their name forward for these boards. It could also impact on the quality of board member that we’re able to attract into these sorts of organisations.

I’d have to say that I’ve never, obviously, been part of one of these types of boards, but I’ve certainly been around boards for a fair bit of my life and seen what I think is inhibitory behaviour, I suppose, for want of a better word. In other words, I think it’s very easy to inhibit the quality of the result we get by legislation, and I’d be nervous that there is a potential in this for that to happen. I’m not sure there is, and maybe the Minister can assure me of that, but I just think that we need to be careful when we start to put these sorts of things in place that we don’t stifle innovation and stifle the ability to get a better result.

As I said earlier, I don’t have an issue personally with a code of conduct, and I certainly don’t have an issue with the State Services Commissioner being able to implement those, but I’d just remind the committee that this is not an academic exercise we’re undertaking here. This is about performance and about getting better results for the taxpayer, I suppose, for want of a better word. I think it’s important when we consider how we might impose these types of things on boards that it’s done constructively and in a manner that certainly—as I said a minute ago—doesn’t put people off being part of that board and that encourages the very best people to put their names forward to be part of those boards.

I guess, if we don’t do that, we could end up with a—and I think the previous speaker referred to it—situation where we’re dumbing down the State sector. Of course, as soon as that happens, you then impact on the type of person you can employ in the State sector. So I think that’s quite a concern to us, and I’m probably just slightly outside the scope of this, but I’m certainly not in favour of the massive pay increases that we get in all parts of business in New Zealand. I do think we need to be able to attract the best people at the same time, and I’m not sure how you get that balance right.

So, as I said, this is not an academic exercise; it’s really about getting a better performance for the sector. I think it’s important that we retain the independence of those board members and enable them to perform to their best. As I said, I would be quite interested to understand from the Minister in the chair, Chris Hipkins, one or two of those points I’ve raised, because I think it is interesting. I do think this kind of legislation—as we saw right through from the time of the global financial crisis (GFC)—if we’re not careful, has the ability to, I guess, stifle or impact negatively on what we’re actually trying to achieve. We saw that with some of the finance companies as a result of the impact of the GFC, because I think we ended up doing away with a sector in the New Zealand economy that was pretty important to it. So that’s my point. Thank you, Mr Chair.

Hon CHRIS HIPKINS (Minister of State Services): Thank you, Mr Chair. I’m very happy to respond briefly to a couple of issues raised by the Hon Dr Nick Smith. I understand—I briefly had to duck out to attend to a call of nature, but I understand that he was raising issues around—

Hon Member: Too much information.

Hon CHRIS HIPKINS: —it’s too much information, yes; I apologise—whether entities other than State agencies should be exempted from the Privacy Act considerations, as State agencies will now be as part of this bill. I actually think there is some validity to the argument that Dr Smith might have been making, but it would fall outside of the remit of this bill. But I think that it is something that the House may wish to consider and that there’ll probably be opportunities to consider as we look, for example, at the rewrite of the Privacy Act and also work around the Protected Disclosures Act, for example, as to how we could deal with those issues.

With regard to the issues around codes of conduct, just to reiterate the points that I made earlier, I’ll perhaps refer people to the departmental report that was provided to the Governance and Administration Committee, paragraph 33: “A code of conduct issued by the Commissioner cannot override, undercut or otherwise interfere with Board members’ statutory duties or any statutorily independent functions, as the statute will prevail.” This bill has been amended to absolutely crystallise and guarantee that, but the report does go on to specify that there might be variations in the code of conduct and specify the reasons why that might be. The report notes that the “operational context of an agency or of particular persons or groups of persons.” might be different, and the commissioner therefore has “discretion to issue modified codes to different types of entities or different persons or groups of persons.”

The example that it cites is actually an example from the core Public Service, where the Public Service code of conduct has been modified in the case of political advisers or ministerial advisers in Ministers’ offices, because they cannot do their jobs if they operate in a completely politically neutral and independent manner. There are parts of the Public Service code of conduct that, quite rightly, should apply to them, but there are parts that, if applied to them, would stop them from doing their jobs, and so the State Services Commissioner, in recognising that, has issued a modified version of the code for them. What the provisions in the bill allow is for the commissioner to issue a code of conduct and then, if necessary, issue modified codes of conduct, depending on the particular statutory functions of an entity concerned or the people within that.

Hon NICKY WAGNER (National): Thank you very much, Mr Chair. Part 2 of this bill, as we’ve heard, makes two amendments, one to do with the State Services Commission’s investigation powers and the other to do with setting out the codes of conduct. I do appreciate the Minister in the chair, Chris Hipkins, talking about how those codes of conduct can be specified and bespoke and tailored to the types of roles people have in the State services. But I really want to look at the investigatory powers and the additional sections of the Inquiries Act which have been included in this bill.

This bill seeks to update the commissioner’s advisory powers under the Commissions of Inquiry Act 1908. So it’s an Act that has really, truly done its time, and I think it’s really important that we regularly update some of these older bills. Interestingly enough, even though with these bills, often, the actual values don’t change, we need to modernise and simplify the provisions so that they are fit for purpose in the future. So bringing the Inquiries Act of 2013 into this bill makes common sense, and I think it’s particularly interesting what we’ve heard in terms of privacy, and I’ll come to that a little bit further in.

First of all, delegation of an inquiry—I think that’s important. We hear here that under section 21 of the Inquiries Act and section 23 of the State Sector Act, they allow for the commissioner to delegate, under certain powers, an inquiry, but, unfortunately, there’s a conflict between both of those Acts—slightly different rules about that. So the Governance and Administration Committee has recommended inserting a new clause, clause 8, inserting new section 9A(3A), which will “make it clear that [the] delegation under section 21 of the Inquiries Act must be carried out in accordance with section 23 of the State Sector Act.” I think, again, this is a good example of getting clarity in this bill.

I’m always interested, also, in these clauses exempting inquiries from privacy principles, and the two principles they are exempting for are principles 6 and 7 of the Privacy Act 1993. For those who don’t have that up their sleeve, what they actually mean: privacy principal 6 is “Access to personal information”, and privacy principle 7 is the “Correction of personal information”. I think it’s been quite an interesting and useful debate that we’ve had from my colleague the Hon Dr Nick Smith, which the Minister has also spoken about, in terms of whether this should only be for the State sector or whether it should also be available in terms of the private sector.

But what we’re saying in this bill is that the purpose of this exemption is to ensure that inquiries have access to the best evidence—the best evidence—by allowing witnesses to provide evidence in confidence and also without being concerned that a third party could have access to this information. Although the committee thought that this exemption was important, it wanted to make sure that it only applied to inquiries made by the commissioners that were formal inquiries. So, in other words, you can’t use it willy-nilly; it has to be a formal inquiry before you can have these exemptions under principles 6 and 7 of the Privacy Act.

I think the committee also recommended that the bill provide a way to signal that an inquiry has been initiated and the exemption applies, and so they did quite a lot of work in terms of amending clause 8 and proposing new sections to make sure that the commissioner had to have a written certificate in order to initiate an inquiry. It also set out in the bill what that certificate should include, also making it clear that the commissioner’s power to make a certificate could not be delegated. So, again, the commissioner has to be responsible if he is going to make a certificate. Furthermore, added to that, there were further accountability and transparency measures, which is always a good thing.

I think the issue around that in terms of reporting is that the State Services Commission annual report had to include the number of certificates that had been issued and a summary of each inquiry, so that, therefore, the public and anybody reading the annual report would know which inquiries they’re doing and why they had been initiated. So we think that’s an improvement to the Act, and we support that.

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

Hon JACQUI DEAN (National—Waitaki): Thank you, Mr Chair. Following on from my colleague Nicky Wagner’s intervention around the inquiries, there are some pretty beefy powers contained in this piece of legislation, and one of those powers that did concern the Governance and Administration Committee—and to which we have a proposed amendment—is in section 10 of the State Sector Act, which provides for access, which provides for the provision of documents and a requirement for employees to answer questions.

If you think about that provision, it is pretty wide-ranging. It must be incredibly intimidating for those who are caught up in the subject of an inquiry. I’m very mindful of what Ian McKelvie said previously, which is that we’re not just talking about hypotheticals here. We are talking about real incidences where there has been an inquiry triggered, a certificate has been issued, and that process, which has just been well canvassed by the Hon Nicky Wagner, is in train. Now, here, the rubber hits the road where, under section 10 of this power, there is an absolute requirement for access to an office, access to a building, within certain conditions, of course. There needs to be a period of notice and there needs to be consideration around that time where that office, say, for the purposes of this argument, is there.

But in the bill as drafted, the State Services Commissioner’s powers of entry, at least to a broader range of inquiries, would have started with a wider range of triggers. I think it’s also really important to note that powers of entry are not used often—in fact, very rarely used—but they also provide a very important component in the undertaking of an inquiry.

The committee, having considered section 10 of the principal Act, has proposed an amendment in new clause 8A that entry should be made only if the commissioner has first obtained the agreement of the Minister of State Services. That is a fettering or limiting of the power of the bill as it was introduced, because when the bill was introduced, the commissioner would have had quite a wide power to enter the premises of a State services entity, where an inquiry is launched and where an inquiry is launched into a matter of integrity.

So clause 8A constrains this power. Clause 8A would require the commissioner to obtain the consent of the Minister of State Services before exercising that power to enter the premises. I would imagine that would provide cold comfort to those who are on the receiving end of an inquiry such as this and who work in an office or an environment which is subject to an inquiry, but they should take some comfort that this recommendation in clause 8A, which amends section 10, limits the power and constrains the power of the commissioner to enter premises.

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

Dr JIAN YANG (National): Part 2 deals with codes of conduct and also inquiries. In terms of codes of conduct, on the website of the State Services Commission, there is a statement, actually. It specifically states why there is no code of conduct for Crown entity board members. It says, “As the Crown Entities Act 2004 specifies individual and collective duties of board members, the Commissioner has decided not to include the personal conduct of board members in the coverage of the code of conduct.” Now, of course, we are going to change that. On the other hand, it is important for us to make sure that we make it clear how we will apply the code of conduct. Will it be collectively or individually?

A submission by the Institute of Directors specifically raised this particular point. It emphasised the importance of there being clarity around the collective and individual duties of boards and board members under the Crown Entities Act 2004, and their obligations under a code of conduct. While legislation takes precedence, there may be issues with how the Act and the code interrelate and operate. It also emphasises the importance of how the proposal will not compromise the statutory independence of independent Crown entities. I think these are points that we need to bear in mind when we come to talk about this code of conduct issue.

I am very proud that the Governance and Administration Committee made a substantial contribution to Part 2 of this particular bill. For instance, the committee included section 9A(4) about exemptions—some members have mentioned that. But, at the same time, the committee also made an effort to constrain the power of our commissioner—for example, in clause 8A. The reason for us to have the exemption clause is to ensure the commissioner would have more power to make sure that the witness would be able to give their evidence without being concerned about the access of third parties. So that is important in that sense. At the same time, the committee also made it clear that we need to somehow limit the power of the commissioner, in this particular case, with the exemption. This kind of an exemption will be applied only to formal inquiries, not to other inquiries—it must be very formal. The committee also proposed a new section which would provide a mechanism for a witness to apply to the court, seeking an order to allow them to withhold privileged, confidential, or State-sensitive material.

At the same time, the committee would also constrain the commissioner under the bill. As introduced, the commissioner would have had relatively wide powers to enter the premises of a State services agency where an inquiry is being launched into integrity matters. Well, this bill, as amended by the committee, will constrain the commissioner’s power. The committee also made a contribution in the sense that the commissioner would make sure that this kind of inquiry would be limited only to formal inquiries, and also transparency will be assured with annual reports, because with annual reports we’ll be able to know how many inquiries have been launched in the past year and also all those details. This will ensure transparency.

This bill itself, of course, is about integrity, openness, and, of course, transparency. So the committee itself made a great contribution in this sense. Thank you, Mr Chair.

MICHAEL WOOD (Labour—Mt Roskill): 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 56

New Zealand National 56.

Motion agreed to.

Part 2 agreed to.

The question was put that the amendment set out on Supplementary Order Paper 93 in the name of the Hon Chris Hipkins to schedule 1 be agreed to.

Amendment agreed to.

Schedule 1 as amended agreed to.

Schedule 2 agreed to.

Schedule 3 agreed to.

Clauses 1 and 2

BRETT HUDSON (National): Thank you, Mr Chair. Now, while we do remain broadly supportive of the bill, we’ve had concerns, which we’ve expressed through the appropriate debate parts this afternoon, particularly around the State sector or Crown entity CEO pay and employment terms and conditions—enough so that, perhaps, such a bland title as the State Sector and Crown Entities Reform Bill may not be the very best title. We’re concerned that this could potentially—not just potentially, actually. We’re concerned, because we haven’t got movement today on some of the provisions around what the commissioner can and can’t do—what they may have to give regard to, but no clear weightings and expectations, in the legislation at least—that this could have a very chilling effect, particularly on those Crown entities on which there have been past public pronouncements around this very area. The Superannuation Fund and ACC strike me as two particular ones. So perhaps we could call it the “Suppressing Crown CEO Salaries Reform Bill”, or the “State Services Commissioner Empire-building Bill”, or any such name like that—not as flippantly as it might sound, but actually because we’ve raised some questions on this side this afternoon which we are concerned haven’t been addressed by the Minister.

I do note that while it’s against Standing Orders to refer to the absence of any member in the Chamber, to my knowledge it is not against Standing Orders to refer to the absence of officials in the Chamber to advise the Minister in the committee of the whole House stage. So while I’m very mindful that the Chair might make a comment about the seriousness of a name change that I might suggest, I’ve only been a member here for four years, but I can’t really recall a committee stage where officials haven’t been present to provide advice to the Minister. I actually think that sends a signal to the committee—I’m a member of it, and it certainly sends a signal to me—that the Minister didn’t come to the committee today with any serious intent to debate the provisions. That is not meant to be unkind to the Minister, but it is reflected in the absence of officials to actually answer the questions, because he hasn’t answered the questions. He’s sought to deflect and dissemble and divert—

Hon Grant Robertson: No, no, he has not. He has answered the questions.

BRETT HUDSON: —but he hasn’t actually answered—OK. Mr Robertson raises this, so if I may respond to that interjection, Mr Chair, I specifically asked a question about, in the legislation, what weightings would be applied to the criteria that the commissioner has to give regard to—

CHAIRPERSON (Adrian Rurawhe): Mr Hudson, we’re on clauses 1 and 2.

BRETT HUDSON: Yep, but the Minister did not answer that question.

CHAIRPERSON (Adrian Rurawhe): That’s already been accepted by the committee.

BRETT HUDSON: If the officials had been here, they could have answered that. So I don’t think it actually would be out of order to say that maybe we should rename the title of this bill, because perhaps the absence of those officials does indicate that this bill is all about suppressing the salaries of hard-working Crown entity CEOs, and perhaps, particularly, those that have enormous responsibilities for the well-being of New Zealanders. I particularly refer to the Superannuation Fund, with their $38 billion worth of assets, and ACC, who are able to wash their own face in terms of managing the risks and potential financial liabilities to ACC because of the nature of how they run their business, and particularly the investment arm of it. So we could, and should, perhaps, call this the “Suppression of Hard-working Crown Entity CEOs’ Salaries and Some Associated Inquiries Amendment Bill”.

The commencement date, I think, is interesting, because it’s not been explained. Normally commencement dates are a date, or “when it receives Royal assent”. It’s not been explained by the Minister, and I call upon him now to take the opportunity to explain: why is there a specified hard date in this legislation? (1), why doesn’t it come into effect as soon as it gets Royal assent? I think the draft Order Paper we saw for this week could see it pass its third reading tomorrow, so why is there no Royal assent element to the commencement date? Why that specific date? Why, in fact, does it not just come into effect for each Crown entity at the time they seek to make their next amendment to CEO salary and conditions, for this particular Part 1, or, indeed, when they next employ a CEO? The Minister might like to just, you know, elucidate on that. I’m sure he’d be keen to.

Hon JACQUI DEAN (National—Waitaki): Thank you, Mr Chair. I will pick up the point that my colleague Brett Hudson was making around the commencement date, 31 October. Here we are on 12 September, and it’s only, what, six weeks away. It just seems like almost unseemly haste in the implementation of this bill. There are a number of steps that still have to come into force, so I’m sure the committee will be watching—oh, we still have to have the third reading. I suppose the Leader of the House will—there was time this morning, in fact, because the House rose an hour and 45 minutes before it was due to, and a couple of bills just slid off. The whip on that side of the House is called Ruth Dyson, so there we are. There was no Minister ready in the House to take a call, which is pretty outstanding work on behalf of the Government—just a shambolic state of affairs, because this morning could have been an opportunity to perhaps pop in another reading of this State Sector and Crown Entities Reform Bill, because the Government just seems to be so very keen to have this bill enacted with a lot of haste.

I think members on this side would have been quite prepared, since the Order Paper has moved around considerably. Not only last evening but today there has been considerable movement on the Order Paper, so I don’t see any reason why for this particular bill we couldn’t have had the committee stage this morning, after the grand mal which was the fault of the senior Government whip and the Ministers present in the House. But our whips, who are ever-vigilant, would have made it possible for us to deal with the committee stage of this bill. Of course, this morning was still yesterday, as members will recall, and so we could well have been on to the next reading of this bill, which would have suited the Government’s agenda. I don’t know why they didn’t think of that.

CHAIRPERSON (Adrian Rurawhe): This is not a general debate. This is a debate on clauses 1 and 2 of this bill.

Hon JACQUI DEAN: Oh, thank you—thank you, Mr Chair. I do appreciate your guidance. So I just say, with regret: opportunity missed, and a shambolic morning on behalf of the Government.

We do need to be careful, in the passage of this bill and the provisions in this bill, that we don’t enable a witch-hunt on behalf of this Government for a couple of CEOs and their conditions and rates of pay. If we do see that, then our concerns on this side of the Chamber will be vindicated, but I sincerely hope that we do not. We also need to be mindful of Treasury advice, which said the Public Service agencies are very large organisations that control very large budgets and have a high degree of public visibility and ministerial accountability, and we need to make sure that in enacting this bill we recognise that potential CEOs of these large organisations are, in fact, competing against the private sector for top-quality candidates. I know that this Government wants to bring the top down and wants to sort of suppress the top. I understand that; I understand their philosophy. But we mustn’t—mustn’t—have a situation where good people are turned away from public sector service because of the enactment of the State Sector and Crown Entities Reform Bill and the dampening impact potentially it will have on CEOs’ salaries.

We have to recognise, and on this side of the Chamber we absolutely recognise, that for the important public sector work we need the best candidate possible, and if we can possibly take someone from the private sector and put them into a public sector role, then all power to them. Their experience, and the degree of responsibility they are going to have to show in that public sector role—the visibility they have to all New Zealanders and to the Government—are accounted for in their conditions of work and their remuneration. National does support this bill, but it has noted a number of concerns, and raises a flag to this Government that we will be watching how this bill is enacted.

Hon Dr NICK SMITH (National—Nelson): There are three points that I would like to make in respect of Part 2 of this bill, and I want to particularly draw the Minister’s attention—

CHAIRPERSON (Adrian Rurawhe): We’re on clauses 1 and 2.

Hon Dr NICK SMITH: Oh, I’m sorry. My humble apologies to the Chair. I had to absent myself quickly from the Chamber—

Hon Grant Robertson: It’s a shambles over there!

Hon Dr NICK SMITH: Mr Robertson, I’d be happy to provide an explanation of where I was.

Hon Grant Robertson: I really don’t want to know.

Hon Dr NICK SMITH: Well, actually, I’ll tell you exactly what it was. The Minister in the chair, the Hon Chris Hipkins, has invited our side of the Chamber to engage on important issues around a major State sector reform. The State Services Commissioner said the only time that he could meet with me was this afternoon—at the same time as the Minister in the chair is wanting us to debate a State sector bill. Now, actually, it’s a bit like the fiasco that occurred over education. It actually does make it quite hard, but I’m only moaning about those matters because members opposite wanted to raise them.

In respect of the title and commencement of this bill, I am interested to know from the Minister why it is urgent for these new standards to apply. A question that I put to the Minister on the earlier parts was that we have this controversy raging around the appointment of the Chief Technology Officer—that has resulted in the resignation of a Minister. Now, here’s the really interesting part that’s relevant to this bill, and that is the open question that the Minister did not respond to on the debate on the earlier part, as to whether the new codes of conduct and ethics that are being applied will, in fact, apply to the Chief Technology Officer.

Now, given there is serious doubt—serious doubt—about whether the Chief Technology Officer will be appointed by 31 October or not, is the reason that the Government wants this bill coming into effect in relatively short notice—and that’s more than just a few weeks away—because the Government wants to install some ethics and some standards around the Chief Technology Officer, given that this is one of the more dodgy things that I think this Parliament has seen in some time around the extent of the public sector?

We know it’s a very unusual appointment. It’s unusual in the sense that, unlike an appointment of any of our major public servants, that’s managed by the State Services Commission, the Cabinet paper for the appointment of the Chief Technology Officer directly went around that process. So my question is: is the timing in the commencement clause, clause 2 in this bill, related to that? Or, if not, why is the Government so keen to get this provision in place? Could it be that there is some other thing going on? And I’d love the Minister in the chair to comment. Is there some inquiry under the Inquiries Act that the State Services Commissioner has got his eye on initiating, that there is an urgency with the deadline of 31 October—just six weeks away—when the Minister is wanting these additional powers to be able to bypass the Privacy Act around an issue of an inquiry?

Hon Grant Robertson: We just want to help Simon Bridges with his inquiry.

Hon Dr NICK SMITH: We would just like—and I notice that Grant Robertson is intervening. I’d love to know as to whether there is some sort of inquiry—

Hon Grant Robertson: There’s only one inquiry going on in this building—right over there.

Hon Dr NICK SMITH: —that the Government has in mind. I’d love to know from the member opposite: who is it? Mr Robertson has just asserted that it’s from over our side of the House. Does he have information on it? We know the Government knows. We know parts of the Government know. And why not just disclose that so that we can get through that?

Hon Members: Ha, ha!

Hon Dr NICK SMITH: Members opposite think it’s quite funny. Actually, it goes to the heart of Government if the Speaker’s office or some other public servant has leaked that information, and I’d love to know. I’ll tell you something: I’m absolutely confident that it is not a member of our caucus team. We’ve not gone down the road of ripping our guts apart, as I saw with Grant Robertson when he knifed Andrew Little and when they knifed the other three Leaders of the Opposition. That’s not what we do on our side of the House.

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

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

Ayes 63

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

Noes 56

New Zealand National 56.

Motion agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

House resumed.

Bill reported with amendment.

Report adopted.

Bills

Financial Services Legislation Amendment Bill

Second Reading

Hon GRANT ROBERTSON (Minister of Finance) on behalf of the Minister of Commerce and Consumer Affairs: I move, That the Financial Services Legislation Amendment Bill be now read a second time.

The bill reforms the regulation of financial advice in New Zealand. Its overall objective is to promote the confident and informed participation of investors and consumers in financial markets. The bill also makes changes to reduce the misuse of the Financial Service Providers Register. The bill has been reported back by the Economic Development, Science and Innovation Committee with a unanimous recommendation that it be passed with amendments.

I would like to thank the members of the committee for their careful consideration of this complex bill. The committee considered more than 70 submissions, covering a range of matters. Most of those submissions supported the policy intent of the bill, but the committee has recommended some important changes, ensuring that the bill achieves its policy intent. These changes will be covered in later speeches by members of the Government. I kindly and fully recommend this bill to the House.

JONATHAN YOUNG (National—New Plymouth): I’d like to, as the chair of the Economic Development, Science and Innovation Committee, thank the Minister of Finance for his kind words for the hard-working committee as we deliberated on and considered this bill.

The financial advice and services reform that was started by the previous Government followed the global financial crisis that incurred tremendous losses for people in New Zealand. I believe at the time there was around $9 billion that was lost. So the first regulatory regime for financial advice and financial service providers came into force in 2011, and there was in that original bill a statutory review of the existing regulatory regime to be completed in 2016, which was part of this whole process that brings us to this amendment bill, the Financial Services Legislation Amendment Bill.

There was industry and public consultation on the issues paper; an options paper released by the Ministry of Business, Innovation and Employment; and, following those rounds of consultation, the National Government sought views on an exposure draft of the legislation.

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

ASSISTANT SPEAKER (Poto Williams): Members, the House has resumed. Before the dinner break we were debating the second reading of the Financial Services Legislation Amendment Bill, and Jonathan Young has eight minutes and 33 seconds remaining to speak, should he wish to take it.

JONATHAN YOUNG: Thank you, Madam Assistant Speaker, I certainly do.

As the chair of the Economic Development, Science and Innovation Committee, I am pleased to come and report to the House on the work of the committee. We received 72 written submissions on the bill, and quite a number of those submitters came and spoke to us.

Just for some context and history, this bill—or, in fact, the whole regulatory regime for financial advice and financial service providers came into force in 2011. This bill is based on a statutory review of the existing regulatory regime, and that review was completed in 2016. Then Cabinet policy decisions were made on a new regime and, in February-March 2017, consultation opened up on the draft bill. Then, of course, we had an election, and, coming back into the House, the bill has come to the Economic Development, Science and Innovation Committee. It would, ordinarily, go to the Commerce Committee.

What the bill does, it creates a new framework for giving financial advice by amending the Financial Markets Conduct Act 2013 and the Financial Service Providers (Registration and Dispute Resolution) Act 2008 and repealing the Financial Advisers Act 2008. Under the new regime, financial advice providers, being any person carrying on a business of giving financial advice, will be required to be licensed by the Financial Markets Authority (FMA) to give advice to retail clients. Of course, all of this came in to being because during the period of the global financial crisis many New Zealanders lost their life savings through poor advice that had been given to them, and that amount has been estimated to be $9 billion. So we now have a regime which is robust and has gone under a period of review, and now this bill comes back to the House.

So, as I said, the committee received 72 written submissions. Twenty-eight were from financial service firms including small and large financial advice firms, banks, KiwiSaver funds, insurance companies, trustee companies, and other financial service firms. Seventeen submissions were received from industry or professional bodies representing the interests of financial advisers, financial service providers, insurance companies, etc. Included into that was chartered accountants, retirement villages, and even exercise facilities. Eight were from law firms, seven from individual members of the public, six were from individual financial advisers, five were from consumer-interest groups or dispute resolution schemes, and one was from the code working group that is developing the new code of conduct for financial advice. So you see, there was quite a broad range of submitters that came to the committee. The committee heard the submitters here in Wellington and also in Auckland.

The review found problems with the current regulation of financial advice. The review found problems with the misuse of the Financial Service Providers Register, and there were some key amendments proposed in the bill. They included removing the requirement that only a natural person can give financial advice, which allows for provision of online advice. People can go to a website of a financial institution, they can put in their data—confidential of course—and there can be assessments made around their data, and they can receive advice from that data, often called robo-advice.

Expanding the minimum standards of competence, knowledge, and skill to all categories of people giving financial advice to retail clients was a very important part of the bill, and, certainly, having a customer-centred piece of legislation is absolutely critical, and this bill strengthens that. So requiring all people who give regulated financial advice to comply with standards of ethical behaviour, conduct, and client care is very much part of this, adding a requirement that anyone who gives financial advice must put the interests of the client first and disclose prescribed information. It limits who can give regulated financial advice. It simplifies the regime and its terminology, for example, by removing the categories of “authorised financial adviser”, “registered financial advisers”, and “qualifying financial entities”. It amends the requirements to be registered on the New Zealand Financial Service Providers Register to prevent its misuse.

The bill defines “financial advice” as making a recommendation about financial products or designing an investment plan. Of course New Zealanders all over this country seek that advice. They want to prepare for their future, and they want to have advice that will give them confidence and surety in that future, the best advice possible. Of course, many people, as we learnt very early on in the piece, that took wrong financial advice during the financial crisis that took place, lost the opportunity of not only being able to invest their money but being able to earn money again, and so they’re incredibly vulnerable.

One of the most common types of financial advice relates to switching KiwiSaver funds. We noted that a decision to switch between funds within the same managed investment scheme is technically not a renewal or variation of the terms or conditions on an existing financial advice product. Therefore, providing advice on switching funds could be excluded from the regime. We consider that the regime should apply to advice on switching funds within KiwiSaver or other managed investment schemes.

In clause 27, new section 431J(2) of the Financial Markets Conduct Act would impose a duty on financial advice providers to take all reasonable steps to put the client’s interests first. We understand that this is to stop advisers from recommending one product that might advance their own interest—for example, by earning them a commission—over another that would better serve the client’s interest, a matter that has been discussed a number of times prior to this bill coming to this House and the committee.

We looked at the conduct of nominated representatives. The scope of advice that could be offered by nominated representatives should be limited. The intent of the bill is that financial advice providers should, ultimately, be responsible for the conduct of their nominated representatives. Therefore, the activities of a nominated representative should be tightly controlled by the processes and systems of the provider.

We looked at exclusions from regulated financial advice, particularly for lawyers and accountants, who, in the normal course of their business, may give some degree of advice to their clients. We recognise that normal legal and accounting advice may sometimes technically fall under the bill’s definition of what financial advice is. However, we consider that lawyers and accountants should not be burdened with additional regulatory controls in the course of their ordinary business or occupation. Existing regulatory frameworks for the legal and accounting professions should suffice. We, therefore, consider the exclusion necessary to avoid unnecessary compliance requirements and, of course, costs, which are passed to the clients.

I am very pleased to support this bill to the House. Thank you.

MICHAEL WOOD (Labour—Mt Roskill): The Financial Services Legislation Amendment Bill is an important piece of legislation in establishing a good regulatory environment for New Zealanders who are in receipt of financial services. We’ve had two very comprehensive speeches—from the Minister of Finance, who launched the debate, and now the chair of the Economic Development, Science and Innovation Committee—that have gone into some detail on the provisions of the bill. I thank both of those members for that.

My own select committee, the Finance and Expenditure Committee, will next week be receiving submissions from a number of organisations in respect of the Australian royal commission into banking issues. So it’s very much top-of-mind for our select committee, while we have not considered this piece of legislation, the issues that go to the heart of consumers being able to have confidence in the financial advice that they receive when they go to experts in receipt of advice that is principled and will provide them with good avenues to invest their hard-earned money. As Mr Young outlined, we’ve had issues in New Zealand in the past with that.

Perhaps the most pressing issue, actually, at the moment in New Zealand is the sheer number of New Zealanders who simply don’t receive any good advice at all. We have a huge number of New Zealanders who have billions of dollars in funds—some in KiwiSaver, some in other forms of investment—who simply don’t have the right avenues to go and receive information. Some of that’s about access, but also I think some of it is about a lack of confidence, given some of the issues that have occurred in New Zealand in recent years.

So this piece of legislation, to me, at its heart is about trying to re-establish that confidence for consumers, for people who need financial services advice, by ensuring that we have a transparent system, and by ensuring that we have, for example, a good code of conduct in place so that people know there is a place to go if something goes wrong. I doubt that there are many New Zealanders who, if they walk into a financial institution, know the difference between an authorised financial adviser and a registered financial adviser, for example, and this piece of legislation, amongst other things, is about making that kind of thing simpler.

Just a couple of key matters that I wanted to touch on: one is the level of innovation that comes through in this bill in respect of not requiring natural persons to have to give the advice. That opens up some capacity for robo-advice to be provided. I think it’s important that we all keep an eye on that to ensure that the best outcomes arise as possible. It’s very important that we do that. The second issue, which I know came through in a number of the submissions, was a concern around ensuring—and this is one of the objects of the bill—that we have adequate regulation at both the big end of town and the small end of town. The bill has certainly tried to deal with that by ensuring that that applies across the board, that the duties are universal to people who are providing advice, but I think, again, that’s something that we’ll be needing to keep an eye on.

It’s very much my view that this is a good piece of legislation that brings our regulations up to date, that deals with a number of the concerns that the Ministry of Business, Innovation and Employment and others in the sector have raised, but it’s probably not the final word on the matter. As the sector continues to grow, as our understanding of the issues changes, as technology changes, it’s likely that this House will return to some of these issues in future years as well. But for now, I think the House can be well-satisfied, through the tabling of this legislation and through the select committee process, that we have a good, robust piece of legislation to give New Zealand financial consumers confidence in the advice that they will receive, and I commend it to the House. Thank you, Madam Assistant Speaker.

Hon PAUL GOLDSMITH (National): Well, it was very pleasing to hear that previous speech from the chair of the committee that worked hard on this bill. It’s interesting; I was the Minister at the time when it was first developed, and I’m sure that if I had brought this bill to the House, the member who has just resumed his seat probably would have opposed it, but that’s the funny way of politics.

The origins of this legislation go back to the global financial crisis, I suppose, and the situation where, right throughout the world, there was concern about the conduct of financial markets. There were a lot of people who lost a lot of money in the course of the market transactions that went on during the global financial crisis. In New Zealand, the particular thing where a lot of people lost a lot of money through was the finance company collapses that we saw.

New Zealand, like many countries back around 2012 and 2013, came through with some very heavy and substantial regulations in the financial markets area. One of those was the regulation of financial advice in New Zealand, which up to that point had been pretty relaxed. As a result of that, there was a five-year review period where we agreed, when the first bill came in, to take stock of where the regulated financial advice services got to. As a result of that review, this legislation was developed, and then a wider series of issues came along as we went.

From my point of view, there were a couple of things that were driving it. One is that when you look at why New Zealand is the successful country that it is and why so many people want to live here, it’s because we have high living standards; we have a good, strong, vibrant economy; and we can provide good quality healthcare and education, superannuation for everybody when they’re old, and opportunities for people to get ahead. That’s partly why New Zealand is a successful country, but we also have a series of things which are very precious to us and that we should never lose sight of. One is the quality of our environment, but another one is the relatively high-trust, low-corruption, rule of law - based society and economy that we enjoy. That is incredibly rare in this world, and we’re one of the relatively few places where there is that high level of trust and relatively low levels of corruption.

But we should never take that for granted, and we’re not perfect by any means. One of the core functions of the Government is to keep asking ourselves: have we got the settings right so as to encourage good levels of probity in the way that various things are dealt with? Here we’re talking about the conduct of financial markets so that people can have the confidence to invest their funds effectively.

Another driver of it, of course, was the concern around the escalation in house prices that we’ve seen in many of the cities around New Zealand in recent years. Part of that, of course, is also related to the conduct of financial markets. A lot of people invest all their savings in houses because nobody has ever managed to steal a house very effectively, but, in living memory, in the last 20 or 30 years, there have been three or four generations who have lost huge amounts of savings through the sharemarket collapses and the finance company collapses.

So part of the reason why New Zealand doesn’t have a great tradition of saving in a financial market sense, as opposed to real estate, is because of a natural wariness over the conduct of those financial markets. So that is why we took the step to regulate as heavily as we did. Of course, if you have, on this side of the House, a philosophy of regulatory restraint, you do that with a great of care and caution and concern. So we’re asking ourselves: did we over-egg it, or did we get it about right, or what are the things we need to do to change in order to ensure that the financial markets sector continues to innovate and provide great services and isn’t bogged down in regulation?

One of the outcomes of that was a desire to enable robo-advice, which was one of the things that I pushed quite hard early on. We want to be enabling of innovation as much as we can. The purpose of all this legislation is to ensure that New Zealanders can get access to advice. One of the concerns arising several years after the heavy regulation was introduced post the global financial crisis, was that one of the consequences of that heavy regulation was that it had become so expensive to provide that advice—because you have to jump through many hoops of fire—that the net effect was that people with relatively modest savings didn’t really have access to financial advice. You needed, effectively, to have half a million dollars before anybody was interested in offering that advice.

So one of the objects of this legislation is to try and streamline the way that the regulations operate. How successful, in the end, the Government has been at that is an open question and something that we’ll come back to, but enabling digital innovation in this area and removing barriers to that is an important part of encouraging people to access financial advice more easily. Certainly the younger generation of Kiwis would far rather turn to an app of some sort to get, effectively, some advice on what to do with their savings, rather than necessarily sitting down and talking for half an hour to somebody and going through 500 questions. So we need to make it fit for purpose, fit for the task. So that was one of the issues that we dealt with there.

The other thing, of course, is around conflicted advice. When you look at it, it’s relatively straightforward. If somebody is coming along and offering me a financial product, it is highly relevant to know whether or not they are getting a commission. If they’re suggesting that you invest in product A rather than product B, we should expect to be able to know whether they’re getting a commission on product A and not on product B. That is a fundamental piece of transparency that is required in the provision of advice. So that is the purpose of requiring some transparency around what an adviser is able to do.

There have been long debates at the Economic Development, Science and Innovation Committee about how far to push that. In terms of somebody who is working within a particular firm that offers a bunch of financial services, where we got to is you can’t expect an adviser within that firm to offer everything in the whole market that is available, but you can expect them to say, to make it absolutely clear, when they’re giving that advice, “Well, these are the products that I’m selling, but there is a whole lot of other stuff that you could look at. I’m not pretending that the products that I’m offering are the only ones, and, obviously, I have a commission that is related to those products.” But just getting transparency into that process has been a critical part of this.

Then the second point was to make it quite clear around the expectations that advisers should put the interests of the clients first. You might think that’s obvious, but if the practice has been to churn clients through, chopping and changing through different offerings, purely so that the adviser can get a commission every time they do it, regardless of whether the change is beneficial to the client, then that is not something that we would support. You might argue that that’s something for individuals to deal with, but the whole point of financial services is it is a very complex area and that is why we have chosen to regulate in this area.

So I hope that this will, over time, add to the slow process of rebuilding confidence in the conduct of financial markets in New Zealand so that more New Zealanders diversify their savings away purely from real estate and into the financial sector, and on that basis I commend this legislation.

JENNY MARCROFT (NZ First): Tēnā koe, Madam Assistant Speaker. Thank you for the opportunity to stand and speak on behalf of New Zealand First on this Financial Services Legislation Amendment Bill. It is a pleasure indeed to take this call on behalf of my colleague Fletcher Tabuteau.

I’d just like to acknowledge the previous speakers on this bill tonight for the great clarity that they have given in their speeches. For someone who’s not really a bean counter—my father was, in fact, a bean counter; I’m much more of a spender myself than a saver—it’s been really interesting. So what I’d like to talk about really is perhaps from a Kiwi perspective of those who don’t really engage in financial markets but have some small amount of savings and want to make sure they are secure. It’s really the mum and dad - type investors that this legislation will be protecting and that is a really important thing that we are doing here.

The Financial Services Legislation Amendment Bill was actually introduced as a safeguard for all New Zealanders whether they are high rollers or just your mum and dad savers. It’s against improper financial advice and about providing certainty for all these New Zealanders so that their interests are being put first. This bill speaks to the core values of New Zealand First and so we are happy to support it. It speaks on behalf of the many New Zealanders who want progressive policies and legislation that is in the best interests of all New Zealanders.

The Financial Services Legislation Amendment Bill will protect investors from low-quality and poor financial advice and these changes will demand all financial advisers adhere to the same conduct, the same compliance and obligations. The bill has been reported back—and a job well done from the Economic Development, Science and Innovation Committee—with a unanimous recommendation that it be passed with some amendments. They considered 70 submissions through the course of their work in the committee, and most of these submissions supported the policy intent of the bill, but the committee has recommended some important changes aimed that ensuring the bill actually achieves its policy intent.

Particularly, I note, for example, the technical reading of the bill as introduced suggested the regime may not cover financial advice relating to switching between KiwiSaver funds—and this is probably for most New Zealanders who are investing with their KiwiSaver funds. It could actually result in a situation where a consumer is advised to switch—maybe they’re on a conservative fund up into a growth fund—and they need really good advice about what that means for them and for their future financial health. If they’re changing within the same provider without the advice, that will be caught by the regime. Making a decision about what KiwiSaver fund to invest in—well, that’s, you know, for many, a really important financial decision. The committee, helpfully, recommended changes to in fact clarify that financial advice in relation to those decisions is covered by the regime.

My call on this tonight is brief other than to say really that this has been a good work across the House. Financial advice in fact plays a very important role in the lives of all New Zealanders, particularly our mum and dad investors. Good advice, high quality advice—it’s instrumental in improving the financial position of ordinary New Zealanders. The financial world—it’s not a very easy one to navigate. It can be very complicated, somewhat confusing for many consumers, so sound, quality advice is crucial in successfully traversing the financial landscape. I commend this bill to the House.

ASSISTANT SPEAKER (Poto Williams): Just before I call the next member, I just want to encourage all members across the House, particularly our new members, that by now we should not be reading speeches. We should actually be just reading from notes. So I encourage members to take advantage of the debating chamber in its fullness and encourage members not to read their speeches. I call Brett Hudson.

BRETT HUDSON (National): Thank you, Madam Assistant Speaker. I hope you weren’t anticipating my contribution with those comments. It’s a pleasure to rise and speak in support of the Financial Services Legislation Amendment Bill, and I think it’s important we do consider, as this has exited select committee, why we as a Parliament would look to not only introduce but potentially pass legislation that does a great deal to regulate the behaviours of a particular part of the market—the financial services part of the market.

It’s well within living memory to remember the global financial crisis and the implications that had not just at a macro level on countries’ economies. But, if we look at the heart of it, a lot of the stimulatory activities, a lot of the bail-out activities that happened around the world and including New Zealand were not just to protect an institution, certainly, or a system; at the heart of that, it was about protecting what the member who just resumed her seat, Jenny Marcroft, referred to as the mum and pop investors—the people who had taken what they had, and what they had wasn’t necessarily a great deal, and had looked to invest it in reasonable return areas and found themselves compromised when something that was akin, at least in parts, to a house of cards collapsed.

That actually brings us to the heart of why we should have regulation and legislation like this. Financial services is an area perhaps greater than many, if not most, where there is an information asymmetry in the transactions that take part. That is, the people that offer the services or sell the products and services have a great deal more knowledge—an in-depth knowledge—of not only what they are selling but what backs it up than the consumers or the purchasers of those products and services. So they are in a natural position to potentially take advantage explicitly or, simply, through inaction, if not direct action, to encourage people down a line of investment that, if they had the benefit of the same level of understanding, they may not take.

So when we have in a market information asymmetry, it is a natural place for Parliament to consider either primary legislation or regulation, or both, to help to address that and to mitigate what could be very, very negative consequences for consumers and indeed, when enough consumers are affected, the market as a whole. So I’m delighted that what has come out of the Economic Development, Science and Innovation Committee is recommending some very sensible additions to make sure that there are minimum standards of competence and knowledge within the industry but that there are also standards of ethical behaviour in the nature of advice and the responsibilities that come with giving advice. It means that New Zealanders and our markets can have greater confidence that the fundamentals, the foundations of our financial services markets, are on a stronger and more solid foundation.

I noted my colleague Mr Goldsmith, the Hon Paul Goldsmith, made a point—he was talking when I walked in, at least—about people getting their information today on apps and new ways of interacting with service providers. It is pleasing to see that one of the changes recommended from the committee is that a prohibition on non-natural persons offering financial advice has been recommended to be lifted.

Now, at a very simple level, people call that robo-advice, but I think that as technology continues to mature—and something we’ve heard quite a bit about over the last couple of years is artificial intelligence—robo-advice is no longer going to be what might have been thought of, in the first instance, as where you ring up a telephone number and a machine answers “Press 1 for this.” and suddenly you get some basic, or perhaps slightly greater than absolutely basic, advice. Most people would understand robos because some of them have been subjected to inbound robo calls. This is a bit broader than that, because what sits behind that advice is actually what the programming is, what the decision making is, and how that advice is constructed and offered. We will see artificial intelligence have a far greater role to play, particularly when that institution knows the person that calls them, and particularly if they are an existing client and they have a great deal of information on their position and their current investments.

Actually, that is a good thing. It is a good thing if it’s used well, because any company—in this case, a financial services company—can offer enormous value to their clients if they take what they know about them, what they know about products and services, what they know about markets, and what they know about other investors. They can tailor advice to them that is beyond the absolute basic and can be of greater future value to that client. But, if it’s done poorly, it could also result in, if not financial harm to that client, certainly a sub-optimal outcome. So I’m very pleased that there is a recommendation to remove that restriction and to allow robo-advice, which will lead to so many opportunities in the future.

I am particularly happy—particularly pleased—about the provisions around a duty of priority to the clients’ interests. Any business, whether they are financial services or not, if they have a vision of a long-term successful future for their business and their shareholders, should be placing their clients’ interests ahead of all else, because, ultimately, it is that client remaining with that business or coming as return business that leads to their greatest success. So it’s pleasing to see that the legislation enshrines that duty of care to the advisers. I’m also pleased, along with it, that there are good, strong elements of pragmatism to it—a recognition, for instance, that no matter who the financial adviser is, they can’t possibly know every single product or service that might be available on the planet, and, particularly, although there is some contention within the industry, it does permit that some institutions that will only ever offer products that are their own, such as banks, are able to do so and not contravene the Act, as long as they make that disclosure upfront. I would note that that is not without some controversy in the industry. The smaller and more independent financial service advisers that have spoken to me have, certainly, raised this issue that that means that there is less control or less oversight on what some of those things, those larger institutions, might be, but I think, on balance, we’ve got it absolutely right—not close to right but absolutely right.

Also, the exclusions from regulated financial advice: I had a wry smile as I read through, particularly, new schedule 5 in schedule 2 of this bill. On the face of it, if you didn’t sit in the committee—and I didn’t; I attained the spokesperson role for commerce and consumer affairs when the hearings were already under way for this bill—it looks like almost every profession and person you can imagine is actually excluded from giving financial advice, and I breathe a huge sigh of relief that members of Parliament are included in those exclusions, so feel free to talk to people about what you wish. It is right that we make some genuine effort to ensure that the law that will cover financial advice and regulated financial advice is targeting the right people, the right businesses, and the right sorts of services in the market place and not, through an unintended consequence, affecting a broad swathe of others.

One of the ones I was pleased to see is that journalists are excluded. They do not offer financial advice. So, for instance, if I was to ask Mr Richard Harman if it would be a good idea for me to put a bet on this Government not lasting three years, he wouldn’t be at risk of being subject to regulation under this Financial Services Legislation Amendment Bill. So I would encourage Mr Harman to give me the good oil on what actually is going to happen, because I think he has a bit of insight there.

Greg O’Connor: Have a bet on Simon!

BRETT HUDSON: The last part I would like to talk about—and, you know, things that bring Governments down, for instance, are when their own backbenches don’t have confidence in the Prime Minister. [Interruption]

ASSISTANT SPEAKER (Poto Williams): Members.

BRETT HUDSON: I mean, it’s quite shocking isn’t it? If you don’t have confidence in your Prime Minister, how can the country have confidence in her?

The other thing—and I’d say that a practitioner came to speak to me about this—is that it’s very important that the legislation we make doesn’t turn off legitimate opportunities for New Zealand businesses. We have the ability to offer high quality, high-integrity financial services as an export to the rest of the world, and we shouldn’t have legislation in place that prevents it. I’m very pleased to see that officials recommended a change that means that if you’re a New Zealand exporter of financial services and you don’t have New Zealand clients, you can still get registered, which was pleasing to see. So, overall, I will commend this bill to the House.

GARETH HUGHES (Green): Kia ora, Madam Assistant Speaker. Ngā mihi nui ki a koutou, kia ora. I rise to support this legislation. Look, when you’ve got tens of billions of dollars of New Zealand’s hard-earned income invested in private enterprises—I mean, for example, just look at KiwiSaver. This year, it cracked $45 billion. It’s estimated to grow to $200 billion over the next 12 years. How that money is dealt with and the investments that are made are critically important. We want to make sure that people have certainty that financial providers are going to be acting in the best interests of their clients and their money.

Now, I don’t know if it’s a cliché in 2018 to still keep referring back to the 1980s sharemarket crash, but we do know we have a different investment culture to many other developed countries. You have to wonder: was a generation burnt off by that experience of what we saw in the sharemarket in the 1970s? That’s why it’s critically important we have a robust, fair, transparent, modern regime, and that’s exactly what this legislation is about. It’s developing a new financial services regime, and then, secondly, also embracing innovation.

We saw some of the debate from the previous speaker, Brett Hudson. Look, it’s good to be taking steps when it comes to robo-advice, but the last member was absolutely right: we need to be preparing for the likes of artificial intelligence, blockchain, crowd computing—all the sort of modern clichés—but this is going to transform the financial market sector. Why is it important in the big scheme of things? It’s because those hundreds of billions of dollars set the framework for what our country is, going forward. We have an historic problem with investing. Instead of investing in modern business, capital, and new processes or technology, we’ve got a history in New Zealand—maybe it dates back to the sharemarket crash—of investing in our houses and speculating on asset gain. That’s why I’m so looking forward to the Tax Working Group coming back, because we need to make sure we’ve got the tax settings right for the financial services.

Look, it was a pleasure to be on the Economic Development, Science and Innovation Committee. I’d like to acknowledge the chair. I acknowledge the members. I understand there were around 71 submitters—I thank them. For me, I think one of the big changes we saw coming out of the committee was new clause 27, which is the duty to protect their clients’ interests. What we heard was that financial service providers face a wide range of pressures, both internal and external, for the types of products they could recommend to the advisers. Having this clear and unambiguous is a very positive step forward.

Obviously, the committee has taken a pragmatic step, which is clarified in the committee’s report, which is that there’s a caveat. It’s not requiring that a financial service provider goes across the entire product of every single range and every single potential market; it’s requiring only acting in the clients’ best interests.

Another area where I think a reasonable, pragmatic step was taken was the terms of the nominated representatives. Here you see, I guess it’s akin to subcontracting, with financial service providers divvying out some work—so making sure we’ve got some clarification around where those responsibilities lie.

An area I was particularly interested in and asked a number of the submitters about was around how we deal with our brand risk. We saw as a result of the Panama Papers and other international reporting that we’ve had some less than desirable practices in our financial markets in New Zealand. What the risk was was that some, let’s say, less than scrupulous providers were registering in New Zealand, or providing quite a tenuous link to New Zealand, and then marketing themselves into international markets using New Zealand’s brand and New Zealand’s good name.

While we’re cleaning up as a result of the Panama Papers, it’s very positive that the Financial Service Providers Register’s regime has been improved. This means that our international clients can have much more confidence that if they’re dealing with a company which is on the New Zealand Financial Service Providers Register, it has much more of a stronger link to New Zealand and our regulatory regime.

Thirdly, we look at the exclusions in clause 58. Here, you’d want to make sure that as you’re developing this financial services regime and applying it so that customers or clients can have confidence in their providers, we’re not drawing too wide of a bow so that your lawyer or your accountant or—as we heard previously, before—your member of Parliament or your media is covered.

We also saw the issue of disclosure of information. That’s in the regulation-making powers, and that was something I raised in the first reading speech that the Green Party caucus was concerned about when it was introduced under the previous Government. We didn’t hear any concerns from our submitters on that, so we’re quite comfortable.

All in all, it is good legislation setting up this regime. We’re comfortable with the direction. We’re pleased by the improvements and glad that it’s seeing unanimous support in this House tonight. We’re very proud and pleased to support it. Kia ora.

MELISSA LEE (National): Tēnā koutou katoa. Madam Assistant Speaker, it’s a great opportunity. Thank you for the opportunity to take a call on the Financial Services Legislation Amendment Bill, sometimes called F-SLAB, and I think sometimes it was actually called FSLAB. In Parliament, we often come across some acronyms, and I think I was actually picked up by one of the newspapers, suggesting that I didn’t actually know what the legislation was because I didn’t know what FSLAB was, versus F-SLAB—and going “What was that?”. I just want to say, I do actually know what the Financial Services Legislation Amendment Bill is all about.

As earlier speakers have said, there were at least 71 different organisations and individuals who actually submitted to this legislation, to this bill, through the select committee. We heard from 34 of them, and I’d like to take this opportunity to thank the chair and the members. There are some new members to the Economic Development, Science and Innovation Committee, and I’d like to welcome them.

I would also like to acknowledge the Minister the Hon Kris Faafoi. This is the first chance I’ve actually had in the Chamber to thank him for the support of his officials and commend him on being named as the new Minister of Broadcasting, Communications and Digital Media—particularly digital media Minister—in addition to his role as commerce and consumer affairs Minister. I’m sure that he has a lot of work already. He has a big workload, and I hope that he is up to the task of the massive issues that the digital sector is actually facing.

If I could actually go back to one of the things that Jonathan Young has mentioned, in terms of what this bill is actually about, this bill actually seeks to establish a new regulatory regime for financial advice and financial advisers in New Zealand and to amend requirements for registration on the Financial Services Providers Register to prevent its misuse. The bill is actually based on a statutory review of the existing regulatory regime which was completed in 2016.

Many members have actually mentioned the particular point in terms of removing the requirement that only a natural person—meaning, you know, human beings—is able to give financial advice; to, in fact, allow for provisions of online advice, called robo-advice, and I want to get to that particularly.

Some members have talked about the telephone call that people make to, let’s say, a bank and it saying “Press 1 for this thing. Press 2 for this thing.”, and recently I’ve had an opportunity to meet with and actually visit some of New Zealand’s very innovative companies such as FaceMe and Ambit and to actually be shown what their business is actually capable of and what they’re innovating in this space of digital technology.

One of the things that I came across was an avatar. This particular company had developed an avatar—it’s a face; it’s a computerised face—which was a meld of Māori, Asian, and Pacific faces and actually looked like one of my god-daughters, who happens to be Samoan, Dutch, and Chinese. This avatar was able to provide financial advice. For example, I think this particular one was actually developed for the ASB bank. What this avatar and the robo-advice can actually do is that, with the access of the person’s identification card or the bank card number or a bank customer number, they can get advice from this particular computerised robot—to say, for example, “I want to buy a new car.”, and the robot can actually say “You are able to borrow”—or have the capability to borrow—“a certain amount of dollars, from your past history.”

This is something that new technology is making happen in New Zealand, and some of these New Zealand companies are leading the way in this new digital era. All that artificial intelligence technology that people talk about actually puts us in a space where, instead of having real people providing financial advice, there are technical things that even robots can actually do, and, hopefully, the regulatory regime that actually removes requiring natural persons to be the only ones who can actually do this will provide the banks to provide sometimes simple advice—and more complex—that robots can actually provide to the customers.

I think it is important to note that during the National-led Government, we improved a number of existing matters in the financial sector, including tightening the market regime for those who provided financial advice, and, also, we strengthened New Zealand holding the reputation as a good place to do business, and I think that is really important.

We actually talked about—some of the members have sort of talked about—how in the 1980s, with the stock market crashes and everything that has actually happened around the world, people are very gun-shy in terms of what they will actually invest in. Often, we are dealing with, you know, mums and pas—and people have actually said that—and, often, they don’t actually have the expertise, nor do they have the sophistication, to think about what they can actually invest in and what kind of benefits they will actually have. It’s very important to make sure that we have a trustworthy, very good regime that can actually protect the customers and make sure that how little or how big—it doesn’t really matter; I think one of the members opposite actually said we need to protect both the people on the high end and the low end of the spectrum when it comes to investment—they get very good advice. And I agree, and I’m glad that all of the members here actually agree on that.

One of the things that we also heard during the select committee process is, because New Zealand has such a good reputation—being transparent and a place to do business, and, you know, it’s good for business—we’ve actually had situations of overseas financial companies that don’t actually belong in New Zealand registering their companies here and never actually providing advice. They’re taking advantage of the fact that they happen to be registered in New Zealand, and this is one of the things that we will actually protect New Zealand people from, as well as making sure that those businesses who establish here are in fact New Zealand businesses—that they do actually run a business here and they’re not just taking advantage of the good name of New Zealand and not operating some shyster, fake business or whatever just to take advantage of New Zealand’s good name.

The other thing that I wanted to talk about is the confidence that people have. Actually, it reminded me of what Mr Gareth Hughes talked about, and earlier, I think, Mr Brett Hudson talked about, which is the issue of making sure that unintended advice—for example, there are reporters and column writers writing for newspapers or on blogs or whatever. It is not necessarily financial advice that they’re giving. They give an opinion, and some of them are experts and some of them are not. Lawyers provide—in their everyday transactions, where they’re dealing with mortgages or discharging mortgages or giving some advice as to what they should do, and in terms of accountants when they’re dealing with their customers, they are not necessarily providing financial advice. If they’re going about their everyday kind of work, then they should not caught in this regime and also be punished for their everyday work that they do. Like a member of Parliament might say, “Maybe you should talk to a financial adviser. Maybe it’s a good idea to put some money in a savings account or invest in something.”—we’re not necessarily providing financial advice, or what most people would consider to be financial advice.

As a migrant, one of the things that I have noticed, just talking for myself, is that our parents have a different way of thinking about what savings are or what investment is, because we come from a different culture. You come to New Zealand, and the way that we view investment is actually very different. Often, migrants—you know, for my parents, it was always about things that are tangible, and investing in things that were tangible. So they would never invest in stocks, but they would always put money into things like plants, factories, or buildings. As we get more sophisticated, we will actually move on to other investment portfolios like stocks, for example. Having good, robust financial advice is what people need, and I think this particular piece of legislation provides that and protects New Zealand customers so as to get the best-possible advice that they could have. The very fact that this bill has come to this House is, I think, a great thing, and I commend the bill to the House.

ASSISTANT SPEAKER (Poto Williams): Thank you, your time has expired—I’m sorry about that. I understand this is a split call. You have five minutes—Greg O’Connor.

GREG O’CONNOR (Labour—Ōhāriu): Kia ora, Madam Assistant Speaker. It does give me great pleasure to rise on this bill, and the consensus that I’m seeing and feeling about the need to protect vulnerable New Zealanders—I think the words are “mum and dad investors”. Mum and dad New Zealanders are to be protected. I’m just looking for that consensus continuing when we talk about housing over the next few days and weeks, because we are all agreed that there are many people in this world who do need the protection of the State.

We’re in the financial system—I mean, we go back to the State, and internationally, we’ve always tried to protect people. We can go back to the Bretton Woods Conference in 1944, which was a way to protect the world economies, countries, by imposing the gold standard, until, of course, Mr Siegmund Warburg sort of ruined that. We have the wild west of the financial world, which we see now, and other speakers have spoken about the global financial crisis (GFC). Well, the GFC, there was nothing really—that’s not what we’re protecting against. I mean, don’t forget that in the GFC, the products that dragged us all down had triple A ratings from international credit agencies.

No, the people need protection from the everyday advice. It’s not really even protection from the troughs and it’s not even from the highs and lows; it’s from the everyday advice. I know from personal experience of people who got advice from the family lawyer or the family accountant. They were well-meaning. They weren’t crooks. They just didn’t really know what they were talking about and sent people off into investments, and it was those investments that cost families their money, as much as it was the big highs and lows of our GFCs.

So it’s a very short call. At the risk of incurring the ire or the wrath of my whip—I’ve incurred the ire this week of several members of my party, so at this stage I will just say that this is a very good piece of legislation, and I look forward to this consensus continuing.

LAWRENCE YULE (National—Tukituki): Madam Chair, it’s—

ASSISTANT SPEAKER (Poto Williams): Madam Assistant Speaker, actually.

LAWRENCE YULE: Madam Assistant Speaker—my apologies. Tēnā koutou katoa. It’s easy to forget while we’re here, and it is nice to hear the unanimity in this House for the support of this bill, because what happened in New Zealand was a whole lot of unsuspecting Kiwis—mum and dad investors, as I refer to them, Mr Greg O’Connor—got ripped off, and $9 billion was lost in the sector during the global financial crisis. So this side of the House, when it was in Government, decided to do something about it, and I congratulate the current Government and the Hon Kris Faafoi for bringing this material back to the House for debate and consideration.

There’s been a lot of very positive contributions this evening, and I think it was also reflected in the Economic Development, Science and Innovation Committee—which I’m lucky enough to have joined recently—where we had 74 submitters who spoke to the select committee. Melissa Lee was absolutely accurate. We got an in-depth picture of what had been done, what was being recommended, and, actually, for the main, where we’d end up now—we’ve got pretty much agreement across both sides of the select committee as to what needs to happen.

There are some new technologies out there which we need to protect New Zealanders from. We shouldn’t be scared of them, but robo-advice and things like that are going to happen more and more. I’d remind members of this House that even today, the purchase of life insurance, health insurance, contents insurance—the amount of that that’s now done online without the intervention of a single human being is actually a thing for the future, I believe. So in those sorts of industries and for further financial advice, we need to make sure that there are appropriate rules and regulations in place.

I specifically come to clauses in the bill which I think are very important. One is new section 431J(2) in clause 27, which is talking about the duty to give priority to a client’s interests. We know how advice has often operated in New Zealand, whether it’s financial advice or other financial products, and I acknowledge what Michael Wood said previously about work that’s coming to the Finance and Expenditure Committee. But there is an area of risk in this space, and that is where a financial adviser seeks income and gains income from some financial products and not others, and then seeks to use those products in the advice. But this bill says that, actually, the client’s interest is the first interest and their best interests should be at heart, and I think that we, as a select committee, understood that and supported that.

One that still has some work—and I’ll be interested when this bill comes back to the committee stage—is around nominated representatives, because what we need to be very careful of is that as financial advisers come in and out of institutions, where is the liability for that advice several years into the future? What we’re basically saying, and what this bill says, is that there is an onus on the parent body of financial advisers in an organisation to take overall responsibility for that and for the advice of people that are working within that institution or organisation. The intent of the bill is that financial advisers should be ultimately responsible for their conduct and for their nominated representatives.

We also looked at this whole question of lawyers and accountants, and there are lawyers and accountants in this House. We actually believed that if they were giving the advice as an ancillary to their core function, they should not be regulated. I support that provision, and I think we will get to that point. I think, though, it does become clear, and it will have to be worked on when we get to the committee stage, how the regulations, how the rules, and—when the Minister is front of this House—how some more of the detail of this will work out.

The misuse of financial products and advice has cost a lot of New Zealanders a lot of money. In many other sectors it has happened, as well, and various things have gone wrong. It is the role of this Parliament and the people that are sitting here tonight and for future readings to make sure that we protect those people, and I’m happy to commend this bill to the House.

Dr DUNCAN WEBB (Labour—Christchurch Central): Kia ora, Madam Assistant Speaker. I really just want to talk about one thing tonight, and that’s what I think is probably the most important part of this bill, and that is new section 431J, inserted by clause 27, which really talks about conflicts of interest. Whilst sometimes the wrongs that are wrought upon investors are easy to see when something fails because they have been poorly represented, conflicts of interest can be somewhat more insidious. Many times, an investor won’t know that the advice that they’re receiving is being influenced by other things, whether it be by the soft commissions of a trip to Sydney or Fiji or whether it be by more concrete measures—the 5 percent they get for churning investments from one provider to another. So can I commend the Economic Development, Science and Innovation Committee on the fine work it’s done in strengthening in that provision not only the conflict of interest rules themselves but the identification of associated persons.

Really, all I want to say is I hope that as this comes to find its way through to codes of conduct and so on, and possibly through the courts, this is recognised as a key provision, one which should be expansively interpreted for the protection of investors. For that reason, I commend this bill to the House.

Hon JACQUI DEAN (National—Waitaki): Thank you, Madam Assistant Speaker. Just as the member Duncan Webb was taking his brief call—it was unfortunate, because I was just reviewing my notes and might seek some guidance from members in the House, because I didn’t sit on the Economic Development, Science and Innovation Committee. But as success has many fathers, I was one of the progenitors of this bill in my time as commerce Minister. One of the things that really concerned me about this financial services legislation work was the code of conduct working group, which was a group which was working continuously with the development of the legislation in my time. I have to say, since I’ve moved on to other portfolios, I don’t know where that’s gone, but it’s a very important part of the development of this bill. It probably is not contained within this bill, but, certainly, a requirement to have a standard of conduct for financial advisers is an integral part, certainly of the philosophy of the bill.

That financial advice code of conduct working group was talking widely with the financial advice sector over how to bring the sector together. There were a number of disparate groups providing financial advice in New Zealand. Some were highly regulated; some were completely unregulated, and we had an environment where financial advice was limited by the level of the label that you were given and the amount of training. For example, there would be people walking into trading banks looking for a bit of advice, perhaps on a term deposit or maybe something very simple like a KiwiSaver question, and the person behind the counter at the bank was unable to give them advice because they weren’t qualified or allowed to do so under the previous Act—the current Act, which is about to be amended.

That has several impacts on citizens. First of all, they don’t get the advice they’re looking for. They might get the advice, but it’s very limited to the expertise of the person giving that advice. But if that person walks away from the financial institution—the trading bank, for example—then that person will be somewhat disillusioned and confused about the advice that they may or may not have got, because it certainly wasn’t fit for purpose.

I want to acknowledge the committee who have worked on this bill, and also the Minister Kris Faafoi, who has shepherded this piece of work into the House. I am pleased to see that this is, again, another piece of sensible legislation which is non-controversial because it makes sense, and it’s good for just a while to have a bit of collegiality across the House for it.

So there will be a new regulatory regime for financial advice and for financial advisers in New Zealand. There will be a new regime and an amendment for registration on the Financial Service Providers Register to prevent its misuse. The bill is actually based on a review of the existing regulatory regime for financial advice, and that was started and completed back in 2016. So there have been a number of ministerial hands on this bill.

I also want to commend the officials from the Ministry of Business, Innovation and Employment (MBIE) who, in my time and no doubt in Paul Goldsmith’s time and, no doubt—I believe, it’s the same officials who have assisted the Minister in the Hon Kris Faafoi’s time. I want to commend them. They are a good bunch of public servants who provided good, robust advice where it was needed, provided the expertise where it was needed and, when they didn’t have the expertise themselves, were unafraid to go out and seek it and talk to people in the sector, because there was a very strong view in MBIE, supported by Ministers, that this is an important piece of work for the financial advice services regime in New Zealand. So just a note to advisers: I think you’ve done a great job on this. Also the select committee, because I believe that they have considered this bill very carefully and have come up with a number of enhancements to it.

I want to say a few words about the provision of robo-advice. Even a year ago or 18 months ago, when I was sitting in the commerce chair, the talk of robo-advice was becoming louder and louder, and financial institutions were evaluating how they could be part of providing robo-advice. I had conversations with the Commerce Commission at the time, because, of course, it was not allowed under the current legislation, and, in fact, the Commerce Commission issued an exception to the rules in advance of this bill so that robo-advice could be taken up. The concerns I had—it is exciting; let me just say. The provision of robo-advice is exciting for the financial services sector, not just for them but for people like myself and all of us who, from time to time, want to get a little bit of financial advice, which can be done by way of an algorithm, but be certain about its security and the effectiveness of that advice. For someone like me, it might be checking something to do with my KiwiSaver account, something to do with some banking operation I wish to do—I don’t know, should I turn over a term deposit, that sort of thing. Am I paying the right interest rate? The sky’s the limit.

Hon Member: Get a loan.

Hon JACQUI DEAN: Yes, get a mortgage, get a loan. Robo-advice can extend across all areas of financial advice, and I would wager that the scope of that financial advice which is able to be provided in the future is not even known yet.

I was in Auckland at a Vodafone incubator programme a couple of weeks ago, and there were young innovative business people going through a wonderful business incubator at Vodafone in—

Melissa Lee: Christchurch.

Hon JACQUI DEAN: —Christchurch, sorry; Christchurch—and I spoke to someone after the presentations had been made, and because he was an online IT specialist dealing in the financial world I asked him about robo-advice. I said, “Are you contemplating doing that in your small start-up business?”, and he said, “We’re doing it. It’s so exciting.” This is what happens when you talk to young, entrepreneurial business people—they get so excited about the opportunities that are being presented to them in innovating in the financial services sector. If this bill does nothing else, it will support small business in that way, in particular, small businesses, because it absolutely opens the door to be innovative and new in the provision of the services—whatever their services are—into the market. If we wish to remain competitive as a country in New Zealand, if we wish to continue to support small business, small to medium sized enterprises, business in general in New Zealand, there is one thing we have to do, and that’s be able to innovate. That means through our banking systems, and that means through our financial services.

Hon Stuart Nash: Well, we’re putting in an R & D tax credit, which you guys never did. That’s how you innovate.

Hon JACQUI DEAN: Oh, here we go—here we go. It’s really disappointing, isn’t it, that the Minister for Small Business chips in with a negative comment at this point. Oh dear! Oh dear! Bit all at sea over things, aren’t we, because I’m just describing the excitement of innovation, supporting small business—

Hon Stuart Nash: You’re just describing what you should’ve done—

ASSISTANT SPEAKER (Poto Williams): Order!

Hon Stuart Nash: —in the last nine years.

ASSISTANT SPEAKER (Poto Williams): Order! Do not bring me into the debate.

Hon JACQUI DEAN: —and here’s the Minister for Small Business having a negative chip. Well that speaks volumes about this current Government’s focus on supporting small business. Shame, shame, shame, Minister. We didn’t think that one through, did we?

The genesis of this legislation started a number of years ago. It has been well supported by the financial services sector as a whole, the banking sector—

Hon Stuart Nash: Nine long years and you did nothing.

Hon JACQUI DEAN: —the insurance sector, and now I am very pleased to see this next stage of this bill go through the House.

Hon Stuart Nash: They should’ve put a businesswoman into the portfolio.

Hon JACQUI DEAN: Members, just note that the Minister for Small Business is still chirping away like some dissatisfied little canary, because he’s been caught out. He’s been caught out in not supporting small business in New Zealand. So with those words, I commend the bill.

JO LUXTON (Labour): Thank you, Madam Chair. I just want to take a really—

ASSISTANT SPEAKER (Poto Williams): Madam Assistant Speaker.

JO LUXTON: —quick call—Madam Assistant Speaker, sorry—on this piece of legislation, on the part that I think really aligns really well with what this Government stands for, which is the people—the people. What this legislation is going to do is ensure that mum and dad consumers are going to get really good, clear, sound, quality financial advice. We know that that’s really important, because often this is around things where people are looking to purchase a home, start a business, or to what to do for retirement, and I think it’s really, really important that good quality, sound advice is given to people when making those decisions.

I also really like the fact that the legislation is going to allow people to have robo-advice rather than having advice from a natural person. I think that’s going to make things more easily accessible as far as financial aspects go, because it will ensure that people that wouldn’t ordinarily get financial advice are going to get it through robo-advice, and it will be a cheaper option for businesses also. I really commend this bill to the House.

Bill read a second time.

Bills

Education Amendment Bill

Second Reading

Hon CHRIS HIPKINS (Minister of Education): I move, That the Education Amendment Bill be now read a second time.

This bill amends the Education Act 1989 and the Education Update Amendment Act of 2017. This bill is about backing our public school system, moving away from a system of a punitive and narrow approach to measuring a child’s achievement, to one that is meaningfully measuring children’s progress against the rich and diverse curriculum that we have in our school system, and restoring student and staff voices in the decision making on councils of tertiary education institutions, which the previous Government removed.

This bill will strengthen the quality of schooling education by removing national standards. National standards were neither national nor were they standard. They significantly increased the workload of teachers for no discernible gain for the young people who were in their classes. The evidence continued to mount up, making the case against national standards an easy one to make. This Government has listened to those with expertise and we have abolished national standards already. This bill removes them from the statute books.

The second major change that this bill implements is the removal of the charter school model from legislation, and supporting the transition of existing charter schools into the public education system. Nobody should be surprised by this. When the last Government decided to embark on their ideological charter school experiment, every other party in Parliament, except for the ACT Party and the Māori Party, indicated that they were opposed to that experiment. Labour, New Zealand First, the Greens, and I’m pretty sure that United Future at the time, as well, made it clear that we did not want to see our public education system undermined in that way, and this bill gives effect to the commitment we made back then. We are removing the ideologically driven experiment of charter schools, and we are supporting those who are currently in charter schools to transition into the public education system, because we do not believe that they should be disadvantaged and penalised because of the last Government’s ideological experiment.

The bill also supports the integrity of the fees-free tertiary education commitment that the Government has made by creating a new offence for making a false representation in relation to an application for free tertiary education. This will significantly simplify the enrolment process and remove the need for people signing up for fees-free to do a statutory declaration. They will no longer need to go and find a justice of the peace to sign their application, because this process has been made that much simpler. It’s a similar amendment to one that this House made recently, or within the last few years, around passports, where people no longer have to do statutory declarations in order to apply for a passport. It’s a very sensible provision that will remove a lot of administrative burden and create much more convenience for those wishing to access their entitlement to free post-school education and training.

The bill also restores guaranteed staff and student representation on the councils of tertiary education institutions. Let’s go back and rewind to when the last Government removed that provision, and let’s consider how well that’s worked out for the governance of our tertiary institutions, as this Government has to bail them out to the tune of tens of millions of dollars because of poor governance decisions by some of those very same institutions. Would those decisions have been made had the staff and students who actually have a direct interest in those institutions been involved in the decision making and if they had had a voice at the table—I don’t think they necessarily would have. Yes, there are some big problems facing that sector as a whole, but there is no question that the governance model imposed by the last Government has failed spectacularly. We can significantly improve that by ensuring that the people with the most direct interest, the staff and the students who are absolutely committed to the success of their institutions, have a say in the governance of those very institutions.

The bill will also make some pragmatic changes to the new strategic planning and reporting framework for State and State-integrated schools and enable a smooth transition to the regime. The Education (Update) Amendment Act passed by the last Government made quite significant changes to the way our school governance planning processes work. That was something that the Labour Party component of the Government—I can’t remember how New Zealand First and the Greens voted—supported, the intention of that, which was to have a statement of national education and learning priorities, and then to get schools to align their plans to that.

We supported the statement of national education and learning priorities, but the timing for doing that was so short that the Government wouldn’t have been able to issue that and schools wouldn’t have been able to consider that before they had to have their new strategic plans in place. So this bill buys some time so that we can get that right, so we can get a statement of national education and learning priorities that reflects the priorities of the nation when it comes to education, and so we can ensure that the transition from the existing regulatory regime is a smooth one. That amendment, for example, removed all of the National Education Guidelines and National Administration Guidelines that schools currently adhere to, and we’ve got to make sure that the process of repealing those and replacing those is a smooth one and we’re allowing the time to do that properly.

The bill also resolves errors and omissions in the Education Act of 1989 and the Education Update Amendment Act of 2017, to address minor technical issues in the Education Act of 1989. The Education and Workforce Committee deserves kudos for reporting this bill back to the House with some credible and sensible amendments. With regard to removing national standards and establishing the new offence provision, they recommended no amendments. With regard to the removal of the charter school model, they have made some technical changes in the bill, and the Government supports these changes. They have also adopted a Supplementary Order Paper put forward by the Government that responds to some of the concerns raised by the charter schools in their transition into the public education system, including their desire to ensure that their designated character is preserved, and we have made provisions to ensure that. Also we have made sensible changes around the transitional provisions for staffing, consistent to transitional provisions that have been made in other parts of Government policy where there has been a transition from one form of entity to another. They are very sensible amendments that have been put forward.

The committee has also made some sensible amendment suggestions to tertiary education institution governance, including ensuring that the process for selecting staff and student representation is a fair and robust one and is consistent with the overall intent of the bill.

This is the first major step, or one of the major steps, in fulfilling several Government election commitments for education. It removes national standards—commitment delivered. It removes the charter school model—commitment delivered. It restores the right of staff and students to have their representation on tertiary councils reinstated—commitment delivered. And it signals a move towards a system of reporting that provides a far richer and more comprehensive picture of student progress against the curriculum and removes national standards—commitments delivered. This bill is a sign of a Government that is getting on with the job of delivering on the commitments that we made to New Zealand of ensuring we’ve got a robust, quality public education system that serves all New Zealanders.

Hon NIKKI KAYE (National—Auckland Central): Tēnā koe e Te Mana Whakawā. It is actually with real sadness that I rise to take this call on the Education Amendment Bill. One of the reasons that I got into politics, and the reason that I am still a politician, is that it is ultimately about what Jo Luxton said before: he tangata, he tangata, he tangata—it is about the people. So to be standing in this House and realising that this legislation will go through and it will be harmful not only to a group of young people who have had complex needs and who have had pretty disadvantaged backgrounds, who will not get the opportunity to attend a partnership school in the future, but also to a group of parents, of which 87 percent in a poll on Stuff said they did not support the removal of national standards, who will no longer have the same level of confidence around how their children are doing at school—that does make me sad.

Again, what our party on this side of the House stands for, absolutely resolutely, is high standards in education. In order to have high standards in education, we do believe in lifting achievement. In order to lift achievement, we have to have accountability back to the centre in terms of the Ministry of Education. What the removal of national standards by the Minister of Education, overnight, effectively, late last year—and now this bill condemns the final remnants of national standards—does is it, effectively, gets rid of the ability to have that nationwide picture of achievement and actually ensure that parents have confidence around that information. It also reduces the ability of us to help disadvantaged children, because we do not have the ability now to target our schools in terms of numeracy and literacy.

Can I take a moment to acknowledge you, Madam Deputy Speaker. Thank you for your contribution in bringing in national standards. It is a sad day, I am sure—and you cannot say this from the Chair—to see this happening in the House.

The second thing about this bill—again, in line with the removal of accountability and the removal of the ability of the Crown to help teachers and parents lift achievement—is the removal of partnership schools. Many New Zealanders have approached my office. They have been there online. They have gone on and supported students like Parris Bryant and asked the basic question: why? Why is this happening? Why is this Parliament passing a bill that would remove a model that has helped so many disadvantaged students? Why? Labour did not campaign that they were definitely going to get rid of partnership schools. We know for a fact that we had Kelvin Davis out there, who is now still the deputy leader of the Labour Party, saying that he would resign if, effectively, partnership schools closed. That has not occurred.

We had Willie Jackson—in fact, perhaps I should quote what Willie Jackson actually said at the time in terms of partnership schools. He said, and I will take his quote, “I truly believe in the partnership school model.” Well, there are a whole lot of other New Zealanders that believe in this model: the parents of Parris Bryant, the people that I will name now who set up these schools—Alwyn Poole, Karen Poole, Raewyn Tīpene, Nick Hyde. There are some incredible New Zealanders who have put their heart and soul into this model, and it is delivering results. People like Sir Toby Curtis came to the Education and Workforce Committee and they pleaded to the Prime Minister, “Please show some aroha. Please listen to us.” They went so far—Lance O’Sullivan, Dame Iritana, Dame Tariana, Pem Bird, Sir Toby Curtis. These are the giants of education, and they said, “Please stop this.”

They went further. They went to the Waitangi Tribunal. They lodged a claim, and they said, “Please, please listen to us.” But the Government didn’t listen. Not only did the Government not listen; it denied that a formal claim had been lodged. The Minister has now admitted that error, but they issued a press release in the last 24 hours pleading to the Prime Minister, “Please intervene. You’ve, effectively, terminated the contracts of these schools, but why? Why do you have to pass a law to remove the model when we have a Waitangi Tribunal claim live?” All they want to do is sit down and have a discussion about how these schools have helped Māori and Pasifika students in particular. But, no, the Government is pushing this through. That, for me, really sums up some of the education agenda. We on this side of the House—I meet with parents and teachers all across New Zealand—want to work in good faith in terms of the education agenda, but it is really, really hard when we see ideological decisions like this around national standards and partnership schools being pushed through.

I want to come back to national standards, because it does cut to the heart of the right of parents in our education system. You know, what parents say to me—and we actually put through a decision last year to say we would enhance national standards and move to a system of progress reporting—is they basically want to know how their children are doing in some core areas. We passed that decision, but we accepted that actually it would take a couple of years to design the tools and to support schools to make that change. But instead we saw, late last year, national standards, via the National Administration Guidelines, changed and now this legislation being pushed through.

What that means to the parents that write to me is that if they don’t have confidence in the achievement, there is no ability of the Crown at an individual school level to get that benchmark of nationwide achievement. It has massively reduced the ability of the Crown to, as well, target, and that is why we absolutely oppose this bill and will be putting a number of amendments through in the committee stage of this bill, to demonstrate to New Zealanders why we believe, actually, that teachers and principals should be accountable and that we should provide information back to the centre around achievement. We make absolutely no bones about that.

Finally, I want to acknowledge that in the bill, there are provisions there around statutory declarations and fees-free, and I know that my colleague Simeon Brown will talk to that. There are provisions around improving reporting in our schools, and, of course, National supports that, but we are opposing this legislation, and we are absolutely gutted about the process. I want to talk briefly about that, because we accept that Governments come into power and they do make decisions. Even if they don’t have the support of a whole lot of parents—87 percent on a Stuff online poll said that they wanted to keep national standards—even if these partnerships schools are going well, we accept that they have the right to scrap these partnership schools. But what I can’t accept is the atrocious process that has happened around this legislation.

I want to acknowledge Mark Patterson. I want to acknowledge the New Zealand First Party for supporting National when we went to the Business Committee and we said, “Please, we’ve had amendments that affect these schools and people’s individual lives. Please just let us go and have a decent consultation on that.” New Zealand First supported us in that letter to the Business Committee, and I want to acknowledge them for that, but I also want to acknowledge that we nearly ended up having this debate at a time when the select committee was going to be in Auckland. So it is really good to acknowledge that my colleagues have now been able to come back from Auckland to be here and participate in this incredibly important debate. That would not have been the case unless we, effectively, had filibustered the bill last night, and the Leader of the House, I acknowledge, then accepted that, actually, to not have the permanent members of the Education and Workforce Committee speaking in this debate would be a very bad thing.

So, finally, I do want to just leave this call in this debate with some of the memories that I have now from visiting partnership schools and meeting those children. I have not really protested as a member of Parliament, and I did. I walked down Queen Street with these children, and you know what a number of them said to me? They said to me, “Many people in my life have let me down, and I can’t believe that this Government would be scrapping our schools, which have been the one thing in our lives that have been really positive. We don’t understand that.” And I said to them, “Look, there is hope. There will be a National Government in the future, and we will bring those partnership schools back, and we will expand those schools, and we will also ensure that there is accountability around achievement.”

DEPUTY SPEAKER: I call the Hon Jenny Salesa. Before I do, could I just ask Chlöe Swarbrick not to stand in the aisles over here, please. And the noise over here was pretty tough when someone’s speaking in the House.

Hon JENNY SALESA (Associate Minister of Education): Kia ora i Te Wiki o Te Reo Māori. Kia kaha Te Reo Māori.

[Greetings in Māori Language Week. Make the language strong.]

I rise in strong support of the Education Amendment Bill. This is a bill that we’re bringing into Government, and it is a policy that we have, for many years, been very, very clear about. We came in saying that we will get rid of partnership schools and charter schools, and that is one of the things that this legislation will do. I’d like to thank the chair and the members of the Education and Workforce Committee for the work that they’ve done. I’d also like to thank all of our parents, our teachers, our educators, and our organisations that came to present and to tell us their views.

In addressing the Hon Nikki Kaye, when she said “Why are we doing this?”, we’re listening to our teachers, we’re listening to our educators. So many of the teachers I talked to in South Auckland have told us they would like to get rid of partnership schools. I come from an electorate that has, and that serves, a lot of Pacific and Māori students, students the partnership school model is supposedly addressing. But can I refer to the submissions that were made; these are in the words of those submitters. They said they are supporting the removal of partnership schools because partnership schools failed to bring about significant improvement to academic performance. They’re supporting it because students with learning support needs and disabilities are not well served by this model. They said they’re supporting it because the model was not well designed, and it was having a negative effect on the State system.

I strongly support this bill, and I’m very happy that we’re bringing the Education Amendment Bill forward. Thank you, Madam Deputy Speaker.

SIMEON BROWN (National—Pakuranga): Thank you very much, Madam Deputy Speaker. I rise to take a call on the Education Amendment Bill, in opposition to the Education Amendment Bill. I think this bill could be put into three themes: a lack of accountability, complete ideology, and a rushed and sham of a process. I will be touching on four of the key themes of this bill in my speech: firstly, on partnership schools; secondly, on national standards; thirdly, on the Institutes of Technology and Polytechnics of New Zealand; and, lastly, on to the fees-free policies.

What we see in this Government is one of the most ideological Governments that New Zealand has ever seen, and the most ideological Minister of Education that New Zealand has seen. He spoke of pragmatic changes in his speech, but there are no pragmatic changes in this bill. He spoke of resolving errors and omissions in the Education Act, but all that this bill puts into the Education Act will be errors and omissions. We just heard from the Hon Jenny Salesa, who just sat down, who said that Labour has been very clear about its opposition to partnership schools. We’ll touch on that soon, and we’ll hear a few comments from Willie Jackson and Peeni Henare and hear exactly what they do have to say about partnership schools.

She then said that she thanked all of the submitters who came and submitted to the process. Well, I’ve got news for the Labour Party: the majority of those who submitted on partnership schools submitted against repealing partnership schools and closing those schools down. So I think those facts need to be put on the table and on the record for all New Zealanders and all of those listening, to understand the facts of what we are debating here tonight.

Firstly, this bill removes partnership schools and removes the partnership school model. The Minister might be trying to say, “Well, we’ve managed to move these schools and they’re going to remain open and we’re going to keep them going.” But there are key differences in the partnership model to the special designated model that he has moved them to. What he is doing is putting ideology above kindness, ideology above caring, and ideology above the 1,500 young people whose lives are being changed and whose lives are being impacted positively by these schools. One only needs to go so far as to go and visit one of these schools and you will see the difference that they are making in the lives of the young people who are being taught at these schools. I challenge the Minister and I challenge the Labour Party members to go and visit these schools and see what they are doing, the impact that they are having, and the results that they are having on some of our most disadvantaged communities, on some of the communities that they represent on that side of the House. Young people—

Erica Stanford: Not any more.

SIMEON BROWN: Well, they don’t represent them. That’s the problem, as Erica Stanford rightly points out. They don’t represent them, because if they truly represented those young people, they wouldn’t be down here in the House clapping their hands and closing these schools on a Wednesday evening. So this is a bill that drives to the heart of the ideological difference between what National believes and what Labour believes in.

Chlöe Swarbrick: That’s ideology.

SIMEON BROWN: Labour and the Green Party—thank you, Chlöe Swarbrick—and New Zealand First believe that the Government knows best. The State knows best. We believe that there are people who can choose and their parents can choose how they believe their children should be educated and that there are other ways in which education models can work, and that outcomes are more important than the model that the Government dictates.

So National is strongly opposed to removing the partnership model and will, when we’re back in Government, be putting this model back in place. That will only be two years away, at most, because we know what a shambolic Government this is on the other side of the House and how disorganised, disunited, and shambolic that they are. We’ll be back in Government very soon, and we’ll get our education system back on track when the most ideological Minister of Education, Chris Hipkins, will be kicked out of his office and will probably also lose the seat of Rimutaka. So back to the bill.

The second point that I’d like to talk about is the removal of national standards. Again, we go back to the fact that this is about removing accountability. It is about ideology above what matters for parents and what matters for children. We have to remember what national standards do. They provide a nationwide picture of achievement and they allow parents to know how their child is doing. We don’t want to go back to the bad old days when parents didn’t know what their child was doing and they were given some report that kind of said this or kind of said that. What parents want to know was how their child is doing, how their child is achieving, and how they can support their child in their educational journey. This legislation takes away that ability for parents to be part of that process, because of the ideologically driven nature of this bill.

We have to remember who is behind this bill and we have to remember the support that this Government gets—

Hon Tracey Martin: Don’t say it.

SIMEON BROWN: —from its unions and its union friends. I know that Tracey Martin is counting how many times I’m going to mention the word “union”, but it’s the union friends who support the Government on the other side of the House and who are adamant in their support of making sure that they get some—I wouldn’t use the word “payback”, because I used that yesterday and I got into trouble for it, but—

Kieran McAnulty: I raise a point of order, Madam Speaker. If I’m not mistaken, Speaker’s ruling 52/1 prevents members from trying the little trick that was tried just then: saying “I won’t say something but …”, which has just been evident there, and I would ask, Madam Deputy Speaker, that you reflect on that ruling.

DEPUTY SPEAKER: I don’t need to reflect on it. I was already glaring at the speaker who knew jolly well that he had transgressed. I don’t need the help; however, it’s nice to know that you have been reading the Speakers’ Rulings.

SIMEON BROWN: That’s very good. Thank you very much, Madam Deputy Speaker.

These changes are supported by the unions, but parents know what is needed, parents know what they need to know about their children, and parents will be voting for National to be back so that we can bring back into law standards and bring into law the opportunity for accountability in the education sector. I can’t wait for the next election once more.

Thirdly, I’d like to touch on the changes that this bill makes to the governance structure of our universities and polytechs. Again, this is about removing accountability and weakening the governance of the structure. It’s putting in place student voices and teacher voices around the governance tables and the councils. What we know is that these bodies are governance bodies; they require governance skills. But the changes that this bill makes are that those who are elected by the students or by the staff will be deemed to have the knowledge and skills and experience that those who would be appointed by the Minister have. It is essentially a weakening in the governance and structure of our universities and our polytechs. It is about weakening the governance of these institutions, and it is about weakening our education institutions further.

The last point I’d like to touch on is around the fees-free changes. We know on this side of the House that the fees-free policy has been a $2.8 billion policy that has achieved no increase in enrolments in our university and tertiary institution sector. It is $2.8 billion that they have poured in without any impact on enrolments or any impact on the number of students going to university and studying. But what this legislation does—and we know the process was put in very quickly. They got elected and then they had to put the process in. Now what they’re doing is they’re putting a $5,000 fine in place if you make a false declaration that you haven’t studied before—$5,000. That’s all it is. A $5,000 fine if you’re caught. And it’s not a statutory declaration, it’s just an ordinary declaration, so it’s a lower standard. It’s not the same standard that most people have to do for many other things that they go and get Government services for and get a statutory declaration, which they have to have witnessed. This is a lower form of declaration, and that is what this bill has put in place. It’s almost a year late. The fees-free policy started at the beginning of this year and now we’re discussing the second reading of the Education Amendment Bill, which puts in place a scheme. Will they be going back and checking on all of the students who enrolled at the beginning of this year to ensure that they actually qualify for free fees? We’ll be asking these questions in the committee stage. We’ll be bringing some Supplementary Order Papers through to clarify what is meant by this legislation.

But I’d like to go back and touch on partnership schools and the partnership school model. We know that on the other side of the House they’re not united in their opposition to partnership schools. We know that they’re not united in their opposition to partnership schools, because we know from what we’ve heard from Willie Jackson and Peeni Henare. Peeni Henare said the bottom line is “Why would you stop something that is working?” That’s the question that the other side need to answer: why do you stop something that is working? That’s not said by me; that’s said by one of their own. They need to answer that question here in the House tonight.

My challenge to them is show me some evidence. Show me why they believe that partnership schools should be closed and how they are failing our schools, because they are not. The evidence is clear. They’re making a huge difference in the lives of many of our most disadvantaged young people.

Hon TRACEY MARTIN (Minister for Children): I want to take these first moments and probably the only moments of my contribution to actually talk directly to—directly to—the parents and the students of the charter schools here in New Zealand. Your schools will all be open again at the beginning of next year. Do not listen to the scaremongering and the politicising of your children by the National Party in an attempt to try and convince you that your children will not be able to walk into their schools again next year. But what I can guarantee you of is that they will have registered and qualified teachers in front of every classroom. What I guarantee you of is that the Minister of Education has made sure that the Ministry of Education has looked at the property some of your children have been taking their lessons in, and we will not allow them—

DEPUTY SPEAKER: Don’t bring me into it.

Hon TRACEY MARTIN: I beg your pardon, Madam Deputy Speaker. We will not allow the children that have been in of some of those partnership schools to stay in those substandard conditions.

Nicola Willis: You know better than their parents.

Hon TRACEY MARTIN: Ms Willis, you wouldn’t put your children in them. Ms Willis, some of us wouldn’t put our dog in them. But we will make sure that those children are inside a property that is of an adequate standard. The Opposition challenges this side to visit those schools. I have visited several of those schools—I have visited several of those schools. So it’s interesting that they haven’t visited the schools with substandard property—that they stand there and are quite happy for those children to be taught by unqualified, unregistered teachers in property that we wouldn’t put dogs in. But, no, no, they are prepared to use those families and those children for political gain. And to suggest that this is an ideological movement! I sat on the select committee with Ms Kaye, who couldn’t even pass the changes to the legislation they required by majority—

David Seymour: I raise a point of order, Madam Deputy Speaker. We all have a duty not to bring this House into disrepute. I’d put it to you that suggesting that parents of New Zealand children have been treating those children worse than dogs in their educational choices is actually going to bring this House into disrepute, and the member should apologise and withdraw for that comment.

DEPUTY SPEAKER: Look, I understand that feelings run quite strongly on this debate. There has been some robust debate and I think I’ll ask the Hon Tracey Martin to continue.

Hon TRACEY MARTIN: Can I clarify—I appreciate the member’s statement. If he’d like to go back and check the Hansard, he would see that I accused the National Party of deciding that they were quite happy for children to work and be educated in those circumstances. I’d be really interested to know whether they’re—

Hon Nikki Kaye: I raise a point of order, Madam Deputy Speaker.

DEPUTY SPEAKER: I’m sorry to interrupt the member again—the Hon Nikki Kaye.

Hon Nikki Kaye: I appreciate that the Minister was attempting to clarify, but actually I believe that she made it worse when she, effectively, accused the National Party of believing that a situation would be OK to treat children as dogs. That is absolutely appalling and disgusting. I want the Minister to withdraw and apologise.

DEPUTY SPEAKER: Well, it is a debatable point. Quite frankly I’ve heard much worse accusations in this House. I think you’re being a bit sensitive. The Minister can say what she thinks and people will judge her on that. I call the Hon Tracey Martin.

Hon TRACEY MARTIN: All right, let’s move on so that we move away from the sensitivity of the National Party about what they allowed these children to be in, shall we?

Let’s go to the conversation that said that there was no way to measure the achievement of children before the former National Government had an epiphany about national standards. So let’s talk about stanines. Let’s talk about the bell curve. Let’s talk about the two-year progressions inside the back of the national curriculum. The problem with the contribution from the National Party is the fact that they wouldn’t know education if it jumped up and bit them. That’s the problem that has been going on here.

I had a conversation with Mr David Seymour way before he was a member of this Parliament, way before he was an MP, where he articulated at the Kōwhai Festival—in the middle of the road—how he was going to make sure that this country had charter schools. So for that party to decide that this was ideologically driven after that young man spent six months inside some sort of brains trust in the middle of Canada is unbelievable at this time. The fact that that party at the select committee when they created charter schools couldn’t even get it through without a majority vote from New Zealand First, who was the only party that decided that we would have the Ombudsman make sure that when you kicked a kid out of a charter school that you had to be accountable to the Ombudsman. [Interruption]

DEPUTY SPEAKER: Order! Mark Mitchell—it’s a barrage.

Hon TRACEY MARTIN: I will tell you that at the alternative education providers forum the other day, they told me how many children had been kicked out of charter schools that they were dealing with because there was no accountability by those charter schools. We fully support this bill.

DENISE LEE (National—Maungakiekie): Tēnā koe e Te Mana Whakawā. Kei te whakanuia te kaupapa o ngā kura hourua. Kei te mihi tēnei kaimahi mō ngā tamariki, tauira Māori, ngā tamariki tauira Pasifika, ngā tamariki katoa o ngā kura hourua, ēnei kura ngā kākano o te ao hou, te ao mātauranga.

[I would like to celebrate charter schools. This worker would like to acknowledge the children, Māori students, Pasifika students, and all the young people of charter schools, these schools that sow the seeds of education in the modern age.]

I celebrate Te Wiki o Te Reo Māori. It is a special week, and it’s also a real privilege to talk tonight in regards to partnership schools. What I just did there in my mihi was refer to partnership schools as the seeds of the new world: the world of learning and the world of knowledge.

So it’s actually quite fitting that in Te Wiki o Te Reo Māori we reference the importance of partnership schools to the Māori and, of course, to the Pasifika community and to all children, as I did in my mihi. I want to focus on the human side. It’s always about the human side. That’s our role. That’s what we are here for. I couldn’t be any more clearer, we couldn’t be any more clearer here, that the Government has not fully understood the impact that partnership schools have had on individual lives.

So it’s fitting tonight that I read a submission, and that submission is from a parent of Middle School West Auckland. Here’s what it says: “My daughter started going there after several attempts to stop the bullying in her school. My daughter’s schooling went down, and she ended up having her lunch in the toilets so she would not be picked on. Middle School West Auckland has made a huge difference to her schooling and confidence. My daughter has found her voice, her place in society, and is learning so much that she is asking for more challenges. The model used in this works for her and many other children similar to her. Most of these children would have been classed as truants and deviants by society, but they are all talented and smart children who needed another way to bring it out of them.

As a strong Labour supporter, I have always believed that Labour supported difference, individualism, experiences, and thinking outside of the box. Let these charter schools continue in their work, and allow the children, who are mainly in poverty and disadvantage, have another chance of not ending up another statistic in the criminal and social system. Even though it is an hour trip for us outside our route to work, and paying for bus and ferry for their return, I would do it again. Talk to the children. Remove the fact that it is a National initiative. My daughter is a strong wāhine who needs to be uplifted and empowered, not to be told that her education is wrong and pointless. Let the children have a chance, please.”

Those words say it better than I ever could. There’s a reason why people have rallied behind these schools and communities have actually grown around these schools. It’s because they recognise the positive and life-changing, amazing impact that these schools have on individual children and their families. They want these schools to stay. They have been very loud, clear, and vocal on that. Calls for compassion, literally, have been ignored. The Treaty of Waitangi claim is being lodged. As a select committee, we listened to Toby Curtis, Dame Tariana Turia, and a massive number of other senior Māori leaders, yet the Minister fails to recognise the gravity of this situation. He continues to unabashedly remove the schools; on what—the basis of pure ideology.

I received a letter today from those leaders—those same Māori leaders, as I know every other member in this House did. Every single MP received the same letter where those senior Māori leaders appealed directly to the Prime Minister to reconsider these changes. Despite what Tracey Martin has said tonight in the House, there are still calls today for an appeal against these changes. The letter says that by removing partnership schools, the actions of the Government are compelling them to return to a system that’s been “failing our tamariki for 178 years.” They do not want a return to that system. They only ask for the most basic consideration. What’s that? That the Prime Minister actually visit the schools so that she can see and understand for herself why they’ve achieved so much. They ask that affected students, parents, whānau, and communities are consulted with before any further changes—that’s reasonable. And they’ve asked, first and foremost, for a commitment to the principles of the partnership from the Treaty of Waitangi. What they’re doing is simply asking the Government to wait.

They acknowledge that we’ve come in the process up to this point tonight, and they’re asking the Government to wait—wait until the Waitangi Tribunal has made findings on what has been, we all know, a massively flawed process. That’s the least that the Government could do. The least the Government could do is to make sure that—and this is another quote; the final words in that letter to the Prime Minister—“justice and fairness prevail.”

Now, I want to pick up on something that Tracey Martin said earlier. She’s laying the claim that students will get over the summer break and return to school just as they had it before. No, they won’t, because it’s not a partnership school model any more. Tonight and the continuation of this debate, which will probably be next week, is closure. So they might get over the summer break and go to school, but it’s not going to be the same school that they were in. That’s a definitive fact.

What they don’t have is flexible funding and flexible governance arrangements—the things that they’re asking for and they’ve been wanting to keep the same. They don’t have that assurance. They’ll be coming back from the summer break to a different school. That is a fact.

I also want to touch, in my last few moments of time, on what is—and the letter refers to this—a flawed process. It is quite unbelievable the process that some of these partnership schools had to go through to get to the point where they are today: massive moments of uncertainty and letters back and forth from the Ministry of Education. They did not know whether they were up or down, starting or closing; all they knew was that they had been placed into huge uncertainty and didn’t know whether they’d have a school to go to after the summer break.

The Minister also left our committee hanging, and I take personal exception to that. It’s actually fascinating that I’m standing here, along with my other colleagues from the Education and Workforce Committee, because, as of yesterday, we didn’t know that we would be debating this bill. This is a massive, massive seismic shift in the education system, and, instead of certainty for us to be able to debate this, we were possibly—well, we actually didn’t end up going—going up to Auckland for our Education and Workforce Committee on another topic.

So it’s right and it’s fitting and interesting that the Minister of Education—who also wears another hat as the Leader of the House—saw fit to do the right thing, and here we are tonight. My heartfelt plea is that the Government continue to see the human side of what they’re doing and to pay very close attention to that letter that has gone to the Prime Minister and to all of us: pleading for a pause, pleading for the opportunity to hear through and see through that Waitangi Tribunal process, and to do right by mokopuna all around this country. Thank you, Madam Deputy Speaker. I look forward to hearing that the Government will do the right thing.

CHLÖE SWARBRICK (Green): Tēnā koe e Te Mangai. Tēna koutou e Te Whare. I’d like to rise to tautoko the final point of Denise Lee and to affirm that the Government will indeed be doing the right thing. So I rise to do the right thing in support of this legislation.

As has been well canvassed by my colleagues in Government, this legislation does a number of things—not the least, removing charter schools and national standards. But the point that I want to raise tonight in this short call is that, whilst the Greens are in support of these changes, as presented quite fulsomely in the select committee report back—and it’s not worth reiterating those points—what I want to touch on is the issue of tertiary council representation, as was brought into this debate by one Simeon Brown. He actually did so in a very disparaging manner, speaking to the involvement of staff and students around the decision-making table, disparaging their skills and expertise as though their lived experience and perspective were not important around that decision-making table. Mr Simeon Brown, if that is the elitist attitude that you have towards democracy, if it is good enough for us, why is it not good enough for the governance of tertiary institutions?

So, on that point, the Supplementary Order Paper in my name, which I’ll flesh out more broadly in the committee of the whole House stage of this bill, reflects the submissions—the 481 submissions—on the issues of staff and student representation around those tertiary institution councils. Four hundred and fifty-one of those submissions supported guaranteed places for elected staff and students, but 421 of them—that is, 87.5 percent—commented that tertiary education institutions should have more than one staff or student rep, and that is exactly what the Greens are standing for tonight as well as being in support of this bill, and we commend this bill to the House.

Hon TIM MACINDOE (National—Hamilton West): Kia ora e Te Mana Whakawā. Tēnā koutou e Te Whare. Tonight is a great night for some people. It’s a great night for the education unions, but it’s a very sad one for parents, caregivers, and those of our young people who are most at risk. It is a great night for the “We Know Best Brigade” in the Labour Party caucus—and there are plenty of them, and they have felt that way for a very long time. They have asserted that opinion sometimes in quite a pious fashion while they’ve been in Opposition, and yet even they couldn’t quite believe when they cobbled together a Government that suddenly they had the numbers to do something that, actually, the public of New Zealand has not requested. [Interruption] So it’s a great night for those people, but, at the same time, it is a very sad night for those who live—and I hope the members opposite, instead of chirping away to each other, will instead sit back and reflect on this, because they claim to represent these people in the Parliament, and they lecture us frequently about the needs of these people. But this tonight is a very sad night for those in our small, less advantaged communities, where the benefits of educational choice and opportunity are so vitally needed—most vitally needed.

A successful education is the greatest gift that our society can offer those children and those communities. And it is a great night for those who believe that all children should be educated in a one-size-fits-all model of State education, but it’s an incredibly sad night for those whose children and tamariki have always struggled in that environment, and who have the evidence to back their belief that a range of options work better and provide hope and real opportunity to communities, whānau, and children where and when alternative models and systems can be life-changing and successful.

I ask all members who are present in the House tonight: which deprived community of New Zealand will be improved by the demise of the kura hourua model partnership schools? Silence—no one opposite can tell me a single community in New Zealand that will be improved by the demise of the partnership school model, and yet tonight they are determined to put one more nail in their coffin. I ask members: which young person who previously fell through the cracks and was destined to become another juvenile delinquent statistic will be better off by the demise of the partnership school that, for the first time in his or her young life, inspired, motivated, and encouraged them to achieve; to discover their talents and potential; to gain hope, self-esteem, and purpose in the process, because that’s what they offer? And what is the answer opposite again?

Dan Bidois: None.

Hon TIM MACINDOE: None, as Mr Bidois has said; a deafening silence from the members opposite.

And yet for ideological reasons, to appease a certain faction in the education union movement, they carry on in this way, determined to ignore the evidence, determined not to listen to the submissions of those who came to the select committee—not just at the time that this bill was being considered but at the time that the partnership school model was first introduced. I acknowledge the ACT Party; it’s good to see David Seymour here tonight. And his predecessors—I want to acknowledge Catherine Isaac, who was such an impressive submitter when I was on the select committee several years ago, who brought the evidence to show that this was a model that could work where no others have.

So this is a tragic night for those young people, for those who work with them, for those who care for them and, by extension, for all of our communities who will be the poorer and who will pay the price for their demise.

Earlier, at the start of this second reading, the Minister focused on three issues. He commenced by talking about the removal of national standards, and he used his cliché that I’ve heard him utter so many times—that they were neither national nor standard. Well, how trite, and how completely that misses the point. Now, this Government ignores the fact that national standards may not have been a panacea, may not have been a cure-all for problems, but they provided vital evidence, in a timely fashion, for families and caregivers who needed that, and for schools who could use that to inform their decisions and to enable them to target resources to best effect—to enable young children, in particular, to gain remedial attention if they were falling behind in those building blocks of a solid education: literacy and numeracy. Without that achievement at an early age, a young person is almost certain to fail as he or she progresses through to intermediate and secondary education.

Chlöe Swarbrick: So where was the investment?

Hon TIM MACINDOE: As a former secondary educator—I say this to Ms Swarbrick—I have seen over and over again how vital it is for young people to have those building blocks cemented at an early age. And I don’t claim for one moment that national standards guaranteed them, but it certainly gave the information that was required to inform necessary intervention when it became apparent that those young people were missing out.

The Hon Nikki Kaye, in her excellent speech, quoted from the poll that showed a huge number—tens of thousands of New Zealanders—had been asked for their opinion, and overwhelmingly they said, “Retain national standards. Don’t get rid of them.” The evidence is there that they are a useful tool in the tool kit for our schools.

The Minister went on to talk about the disestablishment of partnership schools, that he seems to be so delighted about. I’ve already mentioned my thoughts about that, and I simply reiterate what a travesty of a policy and a tragedy it is for the vulnerable children who are being cast aside to appease the unions in a failed one-size-fits-all model.

I think all MPs have received the open letter from Sir Toby Curtis, the Hon Dame Tariana Turia, Dame Iritana Tāwhiwhirangi, and Pem Bird—a very highly respected educator from close to your region, Madam Deputy Speaker. These are people who would not normally be expected to endorse a National Party position or an ACT Party position on education, but they do so—not because it’s National or ACT policy, but because it is successful policy. It is sound pedagogy. It is evidence of something that works. In their letter—and they write in an impassioned way to the Prime Minister—they say, “We know, and we believe you would share our view if you looked carefully at the evidence, that these schools are delivering results that are significantly better than they could ever have achieved in the State-run system. Your Government”—they say to the Prime Minister—“is now compelling them to return to that system, the one that has been failing our tamariki for 178 years. The ‘designated character’ model sounds attractive but has none of the key drivers that have made our schools so successful.”

The authors of this letter plead with the Prime Minister and with her Ministers to visit those schools and see and understand for themselves what has enabled them to achieve so much. I have been to one. I know many of my colleagues on this side of the House have been, in some cases, to several. I was so impressed by the character, by the ethos, by the respect, by the sense of purpose, by what was being achieved. Why on earth would any compassionate, realistic person want to get rid of such an effective model?

The authors of the letter concluded by saying, “Prime Minister, we ask you to intervene unequivocally this week to stop the destruction of the kura hourua model and ensure that justice and fairness prevail.” I think every fair-minded New Zealander would echo that plea. Here we have a Government that is more interested in the governance of tertiary institutions, bowing again to union pressure, than they are to listening to parents and those who work so closely with vulnerable children.

The Minister asserted that there’s no question that the current governance model of our tertiary institutions has failed spectacularly, and yet not one person in my region, the Waikato, has indicated that view. I look at the governance structure of the University of Waikato and Wintec—they are working incredibly well. This bill is a travesty.

DEPUTY SPEAKER: This is a split call. I call Jo Luxton.

JO LUXTON (Labour): I just want to stand here and say that I am really pleased to see national standards removed from legislation. Our young children’s self-esteem will no longer be stomped into the ground, because they will no longer be told they aren’t good enough because they are below national standards. I commend this bill to the House.

ERICA STANFORD (National—East Coast Bays): Thank you, Madam Deputy Speaker. I did have a lot of material that I prepared tonight, but I’m going to put that to one side, and if I get time to get to it, I will. I think it’s very important that I start tonight by addressing some of the concerns that Tracey Martin came up with tonight, because she came out tonight and she said that she’s been to visit charter schools. Well, the first thing I would like to say is that she is probably the only one on that side of the House that actually has, because we know that the Prime Minister won’t go. She refuses to go. But Tracey Martin’s been, and let’s have a think about what Tracey Martin sees when she goes to charter schools. She sees substandard buildings that you wouldn’t put a dog in, and she brings into this debate the children of my colleagues—how dare she. But if that was actually the case, if there were buildings that you wouldn’t put a dog in, surely that would be against (a) health and safety, and (b) the contracts of those charter schools, and this Government should be fixing it. The point is that that’s not the case. It’s absolute rubbish.

While Tracey Martin is walking around, having a look at the buildings that these children are in, I’ll tell you what she’s not looking at, what she’s not paying attention to, and that is the children in these charter schools. She is not paying attention to what they have to say. She’s not talking to the teachers to listen to what they have to say, she’s not listening to the parents, to the whānau, and she’s not listening to iwi leaders, like the rest of this Government.

Us on this side of the House, most of us—in fact, probably all of us—have been to charter schools. We have sat down and we have talked to those students, and I can tell you some stories about those students. Josie—she had a baby when she was a teenager. She went to Vanguard Military School with no qualifications, no self-worth, and no respect for herself or anybody else. She was failing miserably everywhere, she didn’t feel great about herself, and you know what? Sorry—does this House know what? Josie is now achieving beyond her wildest dreams. She is the first female at that school to make the 300 club, and the look on her face when she achieved that was absolutely amazing. The self-confidence that that young woman had, that she’d never had before, and she probably never would have in the mainstream, was out of this world.

What about Parris? Self-harming; a dad in jail; again, failing; miserable—turns up at Vanguard Military School and her life is turned around. It’s an inspiring, incredible story that I cannot do justice to. Everyone should watch that video.

Brad—I know Brad. He lost his mum early last year, and it was terrible for his family. I’m emotional about this because I know that this school has turned his life around. He was not having a good time at other schools, and his dad didn’t know what to do, and this school has given him another chance.

And, yes, I get emotional, and, yes, I get a little bit angry about this, but I have sat in front of these students, I have spoken to them, and I have looked at the hope and the confidence in their eyes because they know they have a chance of success now—and they never had that under the mainstream.

Jamie Strange has been yelling across this House all night “Special character schools! Special character schools!”, and Tracey Martin’s been going on about how they’ll all be open next year and it’ll all be fine. These schools have existed since 1986, and they have been failing students since 1986. What this Government thinks is that, suddenly, by just giving them this different title, everything is going to be fine. Well, they’ve been failing them since 1986, and they will continue to fail them, because they don’t have the flexibility, they don’t have the ability to pay teachers more—which is what they do now—and they don’t have the ability to innovate. Charter schools offer parents, they offer families, and they offer students something different, something innovative, and something flexible. And the mainstream has been failing these students for such a long time.

I’ll tell you what Tracey Martin really likes to talk about, because I’ve heard her talk about it before. She likes to talk about attendance rates, and she does it in the House a number of times. She talks about the fact—oh, I’m a bit out of breath—that, nationally, 66 percent of students are attending school regularly, which is not very good. Vanguard: 94 percent—but this Government doesn’t want to know about it. And they’re not taking any learnings from charter schools; they’re going back to a model that’s been failing kids, with high truancy rates, and they’re not going to look at these incredible models and take any learnings from them. They’re forging ahead despite all of the submissions against this bill—from Vanguard Military School, from Alwyn Poole, from Sir Toby Curtis—which are damning of this Government. And they’re forging ahead with this bill to remove charter schools, one of the only things that are succeeding for young, vulnerable students and, especially, young, vulnerable Māori, who have been disadvantaged by the mainstream for so long, and this is the only thing that’s working for them—that ever worked for them. And this Government, and this arrogant Minister, is throwing that all down the toilet. Shame on them.

DEPUTY SPEAKER: This is also a split call. I call Jamie Strange.

JAMIE STRANGE (Labour): Madam Deputy Speaker, I believe in this bill with every fibre of my being. I’m proud of it, and I commend this bill to the House.

DAVID SEYMOUR (Leader—ACT): Thank you, Madam Deputy Speaker, and what a debate—what a debate. I have to say that the contribution from Tracey Martin was a disgrace, and to say to the parents of children in partnership schools—and she did say it—that they are treating their children worse than dogs is a disgrace. Not quite so disgraceful but amusing was Chlöe Swarbrick, who talked about “lived” experience. I don’t know what other sort of experience there is, but that’s the most we can say for her contribution. Jamie Strange, by name and nature, got up and said “I oppose this”—or support it, I don’t know—with every fibre in his body. Well, I guess you just have to take the support you can get sometimes—not a lot. I want to commend the speech from Erica Stanford. I thought that that was outstanding, and it shows the passion that partnership schools have engendered in just about everybody that they have touched.

I’m proud to stand here for the ACT Party that initiated this policy. I’m proud that, as a much younger, more optimistic, and smiley version of myself, I was John Banks’ adviser when we put together the legislation this Government is trying to erase tonight, and I’m proud that over three years as the under-secretary for education in the previous Government, I presided over the partnership school policy.

I put a question to the members on the Labour Party benches, especially the newer ones. They’re here because they want to make a difference in the world—they want to make the world a better place. Some of their maiden statements were quite moving. They showed that they had seen the human waste of people underserved by Government services, underserved by the world, who found themselves unable to access the skills that would allow them to succeed in the 21st century. They came here because they’d seen that human waste, and they wanted to make a difference in the world. I’d ask them what difference they believe they are making by supporting a bill that gets rid of partnership schools. What problem are they trying to solve?

The Prime Minister, Jacinda Ardern—their leader—said that if partnership schools taught the New Zealand Curriculum, had registered teachers, and were funded at the same rate as State schools, then they would be able to stay open. Well, every single partnership school teaches the New Zealand Curriculum, so there’s no problem there. Every single partnership school is funded at the same rate as a State school with an equivalent student population and of the same size. I know this because I designed the funding formula, and I had just as much trouble with the sponsors saying that they were not getting enough money as I did from the opponents saying that they were getting too much.

So ask yourself: what could be the remaining problem? Well, teacher registration. We heard from Tracey Martin that there were unregistered and unqualified teachers. Well, I had a little bit to do with the Cabinet paper that said that teachers in partnership schools can have an exemption from registration with the Education Council (EDUCANZ) if they have the “skills, qualifications, and experience” to raise student achievement. They were not unqualified; they were people who were able to raise student achievement by engaging with them, even if they didn’t have a certificate from EDUCANZ.

So, given that they meet all of the criteria the Prime Minister has set out, why, oh why, do we have this bill tonight? Is this really the difference that Labour members came to this House to make, to make the world a better place? No. The sad truth of it is that the real difference between a partnership school and a special character school is the use of union contracts. They weren’t afraid that 12 small schools would fail and shut down. They were afraid that these schools offered a glimmer of hope—a crack in the Berlin Wall of the education monopoly—that would allow children to succeed.

That is why they are trying to close partnership schools tonight. It is nothing to do with children. It is nothing to do with girls like Hope at Vanguard Military School, who said to me, “I never knew I was smart until I came here.” It’s everything to do with preserving the monopoly of the elites in the teacher unions. I think that’s a terrible reason to come to this House, and I’m not surprised the Labour members all have their heads down as I speak. What a shame—what a shame.

NICOLA WILLIS (National): Tēnā koe e Te Mana Whakawā, e tēnei wiki, Te Wiki o Te Reo Māori. In what sadness I stand in this Māori Language Week, the week that this Government chooses to prioritise and push through a bill which takes away the right of Māori to attend schools that their community have chosen to establish, that their leaders say serve their people, and that they believe have lifted the achievement of Māori young people.

What a sad thing it is to be this week progressing a bill that is subject to a Treaty of Waitangi claim that has led to a letter being written to our very Prime Minister urging her to await the findings of the Waitangi Tribunal and urging her to be aware of the serious concerns Māori have over the failure by the Crown to consult Māori on the closure of the 11 partnership schools—a letter signed by the Hon Dame Tariana Turia, who once sat with members from the party opposite; signed by Dame Iritana Tāwhiwhirangi; and signed by Pem Bird.

You know what? This is a Government that’s quite happy to sit around the Cabinet table with Tītiwhai Harawera and talk to her and talk to Māori about partnership. This is a Government that’s very happy to take a photo opportunity and to say that it wants to make sure the Crown meets its Treaty commitments across Government, and that it will do this by providing an independent Government view on Treaty issues. And we had Tītewhai commenting on what this would mean. She said, “I want to be able to come to you in your Cabinet and say this is not working—can we try something else?” Well, you know what, Mr Hipkins? Māori said, “The State education system wasn’t working for us—partnership schools provided an opportunity.” They went with that opportunity, and it has been delivering for their people, and what are you doing? That Minister is taking that opportunity away.

I’ll tell you what—Winston Peters knows it. He knows that it is absolutely farcical to do a photo opportunity saying you believe in Crown partnership in the same week that you’re ignoring this kind of letter. Winston Peters knows that the talk, talk, talk doesn’t match up to the do, do, do, and that is why members opposite should hang their heads in shame.

But for those who may be listening to this debate, let me remind you about what partnership schools really are about. What this taking away of them represents is a triumph of fear over hope, because what partnership schools have meant is that many people who have been failed by the traditional school system—a system that for many generations has, sadly, failed many young people, particularly Māori, particularly Pasifika. This is a system that has not been able to deliver, and what these schools have done is offer hope. They’ve said, actually, let’s give communities the power to solve their own problems. Let’s allow innovation. Let’s try something different. Let’s give it a go. Let’s see what happens if we alter the model. Let’s see what happens if we actually allow teachers to be paid a bit more, if we take away some of the rigidity of the funding systems. This little experiment, this beautiful, budding thing, has delivered goods, and what the Government has said is “No, no, no—we’re afraid of this doing things differently business. We’re going to shut them all down. We can’t have it being different. We’ve got to have the square box that makes everyone the same. We’ve got to take away the agency this gives parents. We’ve got to take away the agency this gives to communities who might be able to choose to reject the State system and do things differently and take away the monolithic power that sits within that State system.” This is a triumph of the belief in a resignation to failure instead of believing that we can do better.

As my colleague Erica Stanford said, what this actually comes down to is the people that will now be failed that these schools have delivered for. I want to take the words of Parris, who used to self-harm and whose dad went into prison when she was 11, and who says of the partnership school that she now takes two trains and four buses to get to—she says, “This school shows me I’m worth it now.” And what do the members opposite want to do to Parris? They say, “You’re not worth it. This school model isn’t worth it. Our ideology is worth more than the innovation that this school represents.” We say on this side of the House that that is wrong, that somehow believing that a community catering to its people better than a Government can is a threat shows that you are giving in to fear at the expense of hope.

If this is the best that the Government has to offer for education, then they are set to fail our children. If their answer to progress is to say they’ll take things away—“we’ll take partnership schools away, we’ll take national standards away”—if that’s the prescription for making things better, then already you are on the course to failure. The people that you are failing are the parents, who deserve choices—the parents, who deserve information about how their children are achieving at school and deserve the certainty that that information is being passed on to the Ministry of Education, as national standards provided. The people that are being failed are the young men and women who were offered the opportunity of a different model.

The members opposite should remember the words of their wise colleague that they sit around in their ministerial robes with, Willie Jackson, who said, “When you look at the success [that] this alternative style education model has had for Māori, then it gets an [A] every day.”, and “as far as Māori are concerned, … Chris Hipkins’ … bill to scrap partnership schools [ranks] an E.” That’s what Willie Jackson had to say, and I wonder what he has to say now, or whether the joy of being a Minister is such that his conscience has gone. Certainly, today we see a Government whose conscience is not there for the individuals who are benefiting from these schools, whose conscience is not there for the reality of the Crown-Māori relationship—a Government who is actually more focused on its internal dealings and its disputes between the coalition partners than it is on the well-being and progress of New Zealand students. Hang your heads in shame. We will oppose this bill.

Debate interrupted.

The House adjourned at 10 p.m.