Tuesday, 23 October 2018

TUESDAY, 23 OCTOBER 2018

TUESDAY, 23 OCTOBER 2018

The Speaker took the Chair at 2 p.m.

Prayer

Prayer

SPEAKER: Malo ni. Members, because it is Tokelauan Language Week, I have asked the Hon Kris Faafoi to say the prayer today.

Hon KRIS FAAFOI (Minister of Broadcasting, Communications and Digital Media): Te Atua Hilihilikēhē fakafetai atu kimātou mo nā fakamanuiaga kua liligi mai e koe ki luga o Niuhila. Ke tuku kehe o mātou lagona fakapito tautokatahi ma e tatalo atu mō tau takitakiga ki a mātou fetufaakiga, ka e ke mafai ai e kimātou oi fakatino nā tiute ma te pule o te Fale tēnei i te poto ma te loto maualalo mō te ola lelei o tagata ma te fīlēmū o Niuhila. Amene.

Motions

Conservation—Helicopter Crash

Hon EUGENIE SAGE (Minister of Conservation): I seek leave to move a motion without notice and without debate on the recent tragic helicopter crash that claimed the lives of the pilot and two senior Department of Conservation staff.

SPEAKER: Is there any objection to that course of action being taken? There is none.

Hon EUGENIE SAGE: I move, That this House express its deepest sympathy to the family, friends, and colleagues of Department of Conservation Senior Ranger, Biodiversity, Paul Hondelink; Ranger, Biodiversity, Scott Theobald; and Director and General Manager of Alpine Helicopters, Nick Wallis, and acknowledge the large contribution to conservation that these three, highly skilled professionals made over many years.

Motion agreed to.

Speaker’s Rulings

Select Committees—Minority Views

SPEAKER: Members have raised with me a growing reluctance in some select committees to allow minority views to be included in committee reports.

Select committee reports to the House are an essential part of our parliamentary system of government. The House delegates to committees the role of investigating, consulting on, and scrutinising matters on its behalf. Committee reports inform the House of the result of those activities, of the different perspectives of members, and of recommended changes. In a unicameral Parliament, select committee scrutiny is the only detailed parliamentary scrutiny given to the business of the House.

There is a strong convention that differing views of members should be fairly reflected in select committee reports. In 2011, the Standing Orders Committee stopped short of requiring the inclusion of minority views because it would deprive committees of the right to control the form and content of their reports. However, the Standing Orders Committee stated that there is a strong presumption that differing views should be fairly reflected in reports, and members who are in a minority have a legitimate expectation that all reasonable steps will be taken to ensure this occurs. A minority view should only be excluded, as a last resort, where the text provided is significantly misleading or intemperate. This is a matter for the committee as a whole to judge, rather than solely the role of the chairperson.

The chairperson has a duty, in presiding over the committee, to lead it towards finding agreement on minority views. I would remind members of the findings on the role of the chairperson made by the Standing Orders Committee in its 2017 report. The chair has a responsibility to ensure that the legitimate expectations of Government and non-Government members are accommodated; and reports properly crystallise the outcomes of committee consideration and allow the expression of differing views.

Where a minority view is excluded from a committee report, then the report should note that fact and should direct readers to a source for the minority view. That would allow readers to judge its merits.

I encourage members of committees to work constructively with each other to ensure that all views are fairly reflected in their reports.

Hon CHRIS HIPKINS (Leader of the House): I raise a point of order, Mr Speaker. Mr Speaker, the issue that you’ve raised is a very, very important one. It’s important to note that in this Parliament a number of select committees are, in fact, tied select committees, so there is no majority report in many cases, because if the committee is unable to find a majority for a majority report, then bills get reported back with no amendment, effectively. And it would seem to me rather odd if we ended up in a situation where we had a minority view but no majority report, which is what we could end up with if we moved to a position where a minority view was expected by default.

SPEAKER: And if the committee cannot come to an agreement and a bill is reported back without a report—automatically reported back—then there will be no minority view, because there’s no select committee report. So that matter is taken care of fairly easily, I think.

Oral Questions

Questions to Ministers

Question No. 1—Prime Minister

1. 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): Malo ni, and happy Tokelauan Language Week. And, to answer the member’s question, yes.

Hon Simon Bridges: How many cents per litre have taxes on petrol increased under her Government?

Rt Hon JACINDA ARDERN: Fuel prices have risen 46c since we came into Government, and fuel excise is being increased by 3.5c this year, with a regional fuel tax of 10c in Auckland. Including the fact it includes excise, not regional fuel tax, Ministry of Business, Innovation and Employment (MBIE) data indicates tax is 9.53c of that increase, and that discounting changes the price of fuel overall by 15c.

Hon Simon Bridges: Does she accept that under her Government, petrol taxes have increased by more than 10c outside of Auckland and 20c in Auckland, while the trend for importer margin has increased by just 1c?

Rt Hon JACINDA ARDERN: No, I don’t accept that member’s analysis. The change in margin since the Government came into office was 9.28c—that’s the actual margin.

Hon Simon Bridges: Is the importer margin all profit for petrol retailers or does it also cover costs?

Rt Hon JACINDA ARDERN: Our concern has not just been the importer margin in recent months, but, actually, the importer margin over the last 10 years. Since the start of 2008, petrol margins increased by 21.65c, or 183 percent. In fact, my understanding is when Simon Bridges, the member who asked the question, was Minister of Energy, the profit margins for petrol companies went up 50 percent. If he’s arguing that in that time, that wasn’t profit margin—it was solely costs—then I’d be interested in hearing that member’s view on whether or not that was consistent.

Hon Simon Bridges: Would she expect the importer margin to increase if costs increased, such as because of higher labour costs?

Rt Hon JACINDA ARDERN: I think that’s why it’s interesting to look at the pre-tax fuel costs across the OECD. We’re comparing it across the OECD, who are experiencing similar prices in what’s happening to the price of Brent crude, and, when we look at that, we have moved to the highest pre-tax cost in the OECD. Ultimately, though, the principle here still stands: either the member agrees that we need to look at fuel costs in New Zealand or he doesn’t. On this side of the House, we think it’s about time that we had a look on behalf of consumers.

Hon Simon Bridges: So did she ask her office or MBIE whether the 6.8c figure she referred to comprised the excise tax and the regional fuel tax?

Rt Hon JACINDA ARDERN: As I’ve consistently said, I was quoting, at post-Cabinet, MBIE data. It’s obvious it doesn’t include the regional fuel tax because the regional fuel tax is 10c.

Hon Simon Bridges: So has MBIE mistakenly added the regional fuel tax to the imported margin figure that she is continuing to reference?

Rt Hon JACINDA ARDERN: That would be a question for MBIE.

Hon Simon Bridges: Does she stand by her statement last week that the reason the Government will not act now on petrol prices is that “we need the evidence before we move forward”?

Rt Hon JACINDA ARDERN: When that member was last in office, he thought it was a good idea to look at what was happening at the pump. He undertook a study in 2017. He also wrote to every single fuel company. Nothing happened, and now that we’re changing the law so we can do it properly, apparently he’s changed his mind.

Hon Simon Bridges: Does she stand by her statement last week: “We need the evidence before we move forward”?

Rt Hon JACINDA ARDERN: There are a range of options of things that can be done about the situation that consumers are facing now. I don’t think there’s anything wrong with digging in and looking at what exactly is happening in our fuel market. The member, when he was in office, thought that was a good idea; he just didn’t do it properly.

Hon Simon Bridges: What evidence did she have when she said that the petrol companies were fleecing New Zealanders?

Rt Hon JACINDA ARDERN: The increase in the margin—which the member thought, when he was in office, was a problem, but apparently now he thinks consumers are getting a fair deal.

Hon Simon Bridges: Does the Government have evidence or doesn’t it?

Rt Hon JACINDA ARDERN: Did that member have evidence when he wrote to the fuel companies asking them about this exact same issue? I’d love the member to enlighten me about what happened in the last 12 to 24 months that means that now he absolutely agrees with the fuel companies—there’s nothing wrong, consumers are paying a fair price, and there’s nothing to see here!

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. It’s one thing for the Leader of the Opposition to be shouting out in protest during an answer, but all the contenders can’t do it as well.

SPEAKER: Order! And I’m on my feet. The most experienced member of the House knows that he should not use the point of order procedure to be disorderly himself, as he was. He will stand, withdraw and apologise.

Rt Hon Winston Peters: I withdraw and apologise.

Hon Simon Bridges: Has she seen reports in the Dominion Post of a black market developing for petrol due to record high prices, and if so, does she take responsibility for the black market as a result of the Government’s significant increases in taxes?

Rt Hon JACINDA ARDERN: I did see a report of a case that was referred to around theft between January and July, before excise came into effect.

Hon Simon Bridges: What immediate action is she taking to help ease the cost of living for New Zealanders at the petrol pump, as well as putting an end to the black market for petrol?

Rt Hon JACINDA ARDERN: We are changing the law, which is more than what that Opposition member ever did.

Question No. 2—Finance

2. KIRITAPU ALLAN (Labour) to the Minister of Finance: What recent international meetings has he attended to discuss the global economic situation and outlook?

Hon GRANT ROBERTSON (Minister of Finance): Malo ni. I recently attended the IMF and World Bank annual meeting in Indonesia, the APEC finance Ministers’ meeting in Papua New Guinea, and held a series of bilateral meetings in Malaysia. During those meetings, I met with economists, credit rating agencies, business leaders, and Ministers from countries in the Asia-Pacific region, Europe, the Americas, and Africa. I also met with New Zealand businesses operating in those countries I visited. The meetings were very timely, given rising international economic risks due to trade protectionism. They were also a good opportunity to reaffirm the strong trading relationships we have, particularly in the Asia-Pacific.

Kiritapu Allan: What were the main themes regarding the global and regional economic outlook?

Hon GRANT ROBERTSON: The IMF recently downgraded its local global economic outlook slightly. At the IMF, World Bank, and APEC meetings, a number of regular themes came through in presentations on the international economic outlook. The main theme was on the risks faced by the global economy if the US-China trade war escalates. I was interested to hear concerns from my global counterparts similar to those held by New Zealand. At the meetings, I reiterated New Zealand’s position, emphasising the importance of a strong rules-based global trading system, not only for our economy but our trading partners as well. Other themes at the meeting included the importance of sustainable levels of public debt and making long-term investments in infrastructure and social services, all of which the coalition Government is doing.

Kiritapu Allan: What did the meetings highlight about New Zealand’s economic position?

Hon GRANT ROBERTSON: The IMF recently raised its growth outlook for New Zealand following the release of Budget 2018, which included many growth-friendly policies such as the R & D tax incentive and record infrastructure investment. While New Zealand is in a better position than most of our global peers, on paper, we must keep in mind that we are more susceptible to the classic rainy day like a global economic shock or a natural disaster. That’s why the coalition Government is committed to managing the books responsibly, running sustainable surpluses, keeping net debt under control, and managing our expenses wisely. At the same time our careful fiscal management means we can make record investments in infrastructure and social services to ensure that all New Zealanders benefit from a growing economy.

Question No. 3—Finance

3. Hon AMY ADAMS (National—Selwyn) to the Minister of Finance: Is it a goal of this Government’s economic management to help New Zealand businesses remain competitive so that they can contribute to lifting the “living standards and well-being of New Zealanders”?

Hon GRANT ROBERTSON (Minister of Finance): Yes.

Hon Amy Adams: Does he think that with businesses and the Mood of the Boardroom ranking this Government’s employment law changes as the second-biggest domestic economic concern, that’s a pretty big hint that this Government’s changes are going to make it harder for our businesses to stay competitive?

Hon GRANT ROBERTSON: No. I think what we heard, and from the Mood of the Boardroom, was that businesses in New Zealand are largely optimistic about their prospects, they know that New Zealand is a great place to do business in, and, while from time to time there may be the odd policy disagreement, they want a Government that’s getting on with the job, and that’s what we’re doing.

Hon Amy Adams: Well, does he think that having more than 65,000 workers go on strike in the past 12 months—more than double the total of the previous nine years—is helping businesses remain competitive?

Hon GRANT ROBERTSON: I’d be interested to know if the member is suggesting that the right to strike should be removed from workers, but I would note that all of that industrial action has taken place under the policy settings of the previous Government.

Hon Amy Adams: Why does he think that New Zealand has now fallen to 18th overall under the past year in the Global Competitiveness Index and specifically has declined in cooperation in labour employment relations and the flexibility of wage determinations?

Hon GRANT ROBERTSON: I note that in that survey the biggest issues were around infrastructure gaps, finding skilled employees, and R & D investment—areas where the Government has inherited a deficit that we’re turning around. Specifically, to the member’s question about pillar eight on the labour market, I note that an area where we rank below our overall rank is in workers’ rights, and we’re getting on with solving that problem too.

Hon Amy Adams: How much of the Government’s contingency fund in Budget 2018, which was largely set aside for public sector pay rounds, has so far been allocated?

Hon GRANT ROBERTSON: I don’t have that information with me. What I do know is that this Government has undertaken in good faith a number of public sector pay rounds, and particularly when it came to the nurses we were able to agree on a settlement significantly larger than what we’d been left by the National Party because we had to make up for nine years—can’t do it all in one year, but we’re doing our best.

Hon Amy Adams: So is his message to New Zealanders to just get used to more and more strike disruption in light of Unite union representatives telling the Guardian that they’re gearing up for a big round of strikes in 2019?

Hon GRANT ROBERTSON: No. My message to New Zealand is that it’s time for an economy that’s growing to have the benefits of that shared fairly across all New Zealanders after nine years of the opposite.

Question No. 4—Internal Affairs

4. DARROCH BALL (NZ First) to the Minister of Internal Affairs: What progress, if any, has been made on the setting up of the Royal Commission of Inquiry into Historical Abuse in State Care?

Hon TRACEY MARTIN (Minister of Internal Affairs): Significant progress has been made in terms of both considering the scope and practical issues. While not yet fully operational, the royal commission has approximately 15 staff who are involved in planning and preparatory work, much of which is focused on looking at how best to conduct the process, hear evidence, and support the people who will be talking to the commission about their experiences. The royal commission has established a contact centre, as well as a website, and through these, approximately 500 people have so far registered to participate. Once the commission is operating, it is expected that this number will grow.

Darroch Ball: What does the Minister say in response to statements that the royal commission has stalled?

Hon TRACEY MARTIN: The Government established this royal commission in recognition of the fact that the abuse of people in care is one of the most serious issues of public importance, and we have to get it right. It is worth noting that the commitment made by this Government to the Royal Commission of Inquiry into Historical Abuse in State Care was announced on 1 February this year. At that time, the Prime Minister and I also announced a first under the Inquiries Act, which was a period of public consultation on the draft terms of reference. After four months and over 400 submissions, Sir Anand delivered his findings to me on 30 May. The ministerial group has been working through these recommendations. We know from experience, both here and overseas, that inquiries of this size and scope are complex and take a lot of planning to ensure they can listen to people who will be talking to the commission about their experiences and successfully deliver for the community. That is important for the country and especially for the people who need to be heard.

Darroch Ball: Why is the royal commission taking so long?

Hon TRACEY MARTIN: The Government has been giving serious consideration to Sir Anand’s recommendation following the public consultation period and the inquiry’s final shape. There is substantial work in establishing a royal commission and finalising such things as scope, cost, operational set-up, and membership. The largest is determining the final terms of reference, which includes looking at a range of technical and legal matters. There are also a number of budget issues to work through, which includes understanding how the royal commission plans to undertake the inquiry, the structure of the secretariat, and other functions such as IT and property that will support it. Establishing an inquiry of this magnitude is similar to setting up a small Government agency. The ministerial working group is meeting this week to consider a range of matters before taking a proposal to Cabinet for final decisions.

Question No. 5—Housing and Urban Development

5. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: Is he confident KiwiBuild will achieve the Government’s “Overall objectives to support a range of family and household types”?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): The national housing crisis is so bad that it is affecting all kinds of families—big families, small families, couples without kids, single parents with kids, people who live alone with their cat—and we are building affordable homes for all kinds of Kiwis. I am confident that KiwiBuild will achieve the Government’s objectives to support a range of family and household types.

Hon Judith Collins: Why did he tell Cabinet earlier this year that smaller houses were likely to be built to “achieve the price points which have been established for the programme”, but that this risked not achieving the Government’s overall objectives?

Hon PHIL TWYFORD: Because it’s all about striking the right balance. We’re going to be building, mostly through the KiwiBuild programme, three-bedroom homes, because that’s what most first-home buyers want, but there is a huge shortfall in the current provision of one-storey homes, and one- and two-storey homes for smaller families, and a shortage of larger homes for larger families, like four-bedroom homes. So we’ll be building a mix of all of those, and we’ll be doing our best to strike the right mix.

Hon Judith Collins: Why are there now only 11 KiwiBuild houses under construction that have three or more bedrooms, with most of those, by the way, being in Wānaka?

Hon PHIL TWYFORD: Well, I’m not sure what the member is referring to, but more than 70 percent—70 percent—of the KiwiBuild homes that the Government has so far announced in the first year of the programme have three or more bedrooms.

Hon Judith Collins: Is he able to build sufficient three-bedroom houses in Auckland for the $650,000 affordable price point he has established?

Hon PHIL TWYFORD: Well, we’re going to do our very best to achieve that. In fact, the first KiwiBuild homes are 12 three-bedroom homes selling for $579,000—way under the price cap for Auckland and Queenstown of $650,000. There will also be six four-bedroom homes selling for $649,000. The first 18 families are going to move into their KiwiBuild homes very shortly, and I know they are going to be very happy to do that.

Hon Judith Collins: Why does he believe that 80 percent of people who responded to the KiwiBuild registration of interest stated a preference for a three- or four-bedroom house?

Hon PHIL TWYFORD: Because, as I said, I think that’s where the predominant demand lies from first-home buyers, because so many of those first-home buyers are young families. That’s why 70 percent of the homes that we have announced for the first year of KiwiBuild have three or more bedrooms, and 87 percent of the homes announced for this first KiwiBuild year are stand-alone homes.

Question No. 6—Transport

6. Hon PAUL GOLDSMITH (National) to the Minister of Transport: What actions, if any, has he taken to maintain public confidence in public transport?

Hon PHIL TWYFORD (Minister of Transport): As Minister, I have made public transport a priority. Over the next three years, we will nearly double investment in public transport to a record $3.9 billion. With regard to the current bus disputes, these contracts were let by regional councils under the past Government, but I encourage the councils, the companies, and the unions to work together to conclude fair deals for the drivers and get the buses back on the road. I’ve also tasked officials with examining the past Government’s competitive tendering policy, the Public Transport Operating Model, which has created significant problems for public transport users, drivers, providers, and councils alike.

Hon Paul Goldsmith: How many buses or trains have to not arrive at the station because of strikes before he will take action to restore confidence in public transport?

Hon PHIL TWYFORD: I’m doing everything I can as Minister to build public confidence in a public transport system that was run down, neglected, and underfunded for the last nine years under that Government.

Hon Paul Goldsmith: How many public transport strikes have there been since his Government came into office?

Hon PHIL TWYFORD: Well, I draw the member’s attention to something the Deputy Prime Minister said: you don’t turn up at the bus stop if you think that the bus is never going to come. We are committed as a Government to building a sustainable 21st century transport system, but we will not do that on the backs of low-paid bus drivers.

Hon Paul Goldsmith: What does he say to the typical Henderson, Papakura, or Hamilton commuter who woke up this morning to find the buses not running, the gas more expensive, and congestion not improved?

Hon PHIL TWYFORD: What I say to those people is that this Government has been left to clean up the mess left by National in public transport, in health, in education, and in housing, and we’re doing it. We’ve doubled the funding for public transport, and we’re looking at fixing the problems that we inherited from that Government’s competitive tendering framework, that has driven down the labour costs of drivers and the people who get up every day to make the public transport system work.

Hon Paul Goldsmith: Does he not accept that the Government sent a signal to the unions that it wants them to be stronger, and strikes are an inevitable result of that signal?

Hon PHIL TWYFORD: On this side of the House, we do believe in raising incomes. Yes, we believe in improving productivity. It’s not our policy to build a modern public transport system by driving down the wages and conditions of the people who get up every day and make that system work.

Question No. 7—Health

7. MARJA LUBECK (Labour) to the Minister of Health: What recent announcements has he made to add capacity to district health boards in Auckland?

Hon Dr DAVID CLARK (Minister of Health): On Friday, I accompanied the Prime Minister to North Shore Hospital to announce funding for a new elective surgery block. Planning work is well advanced for the new Waitematā District Health Board (DHB) facility, which will include four new operating theatres and 120 new beds. The project is expected to cost more than $200 million. Auckland is facing significant population growth, and this major new development will help service not only the people of Waitematā and the North Shore but the wider Auckland region.

Willow-Jean Prime: What further capital investment has he announced in the northern region?

Hon Dr DAVID CLARK: At the same event on Friday, I announced $24 million for the new endoscopy and cardiac care capacity that will be built at Northland’s Whangarei Hospital. The prevalence of cardiovascular disease in Northland contributes to the greater life expectancy gap between Northland and the rest of the northern region, and between Māori and non-Māori. The new cardiac catheter lab will mean fewer avoidable deaths, through improved cardiac care for Northlanders, and represents a significant opportunity to improve equity of outcomes.

Marja Lubeck: How do these announcements align with the just released Northern Region Long Term Investment Plan (NRLTIP)?

Hon Dr DAVID CLARK: The Northern Region Long Term Investment Plan highlights the poor state of many of our DHB facilities. It provides a good picture of long-term demand and demographic pressures. Friday’s announcements will add significant new capacity in Auckland, but as the NRLTIP confirms, more will be needed. While future capital announcements may not always align exactly with the northern region long-term plan, it will play a useful role as we plan to meet future health needs.

Question No. 8—Education

8. Hon NIKKI KAYE (National—Auckland Central) to the Minister of Education: Does he stand by his statement, “What I understand the PPTA have asked for is the individual costing of each element of the offer”, and has that information been provided to the PPTA?

Hon CHRIS HIPKINS (Minister of Education): Yes, and yes.

Hon Nikki Kaye: Is it an uncanny coincidence that this information, despite months of requests, was finally provided to the Post Primary Teachers Association (PPTA) within an hour of my primary question being lodged?

Hon CHRIS HIPKINS: No.

Hon Nikki Kaye: If I lodge a primary question regarding the individual costing of each element of the primary teachers’ offer, will this information be provided to NZEI within an hour as well?

Hon CHRIS HIPKINS: If they had asked for it, they would be given it.

Hon Nikki Kaye: Will he admit that his statement, reiterated by the Prime Minister, that the current offer amounts to more than all of the settlements they reached under the previous National Government is absolutely false with regard to secondary teachers?

Hon CHRIS HIPKINS: I believe that, at the time, I was speaking about the primary school teachers.

Hon Nikki Kaye: In light of the fact that he made up the offer with regard to secondary teachers and he was absolutely wrong—

SPEAKER: Order! Just ask a straight question.

Hon Nikki Kaye: In light of the fact that the Government has committed billions of dollars on tertiary students, has billions more cash in surplus, and has provided a lot more to other areas of the public sector, will he talk to the Prime Minister and the Minister of Finance about providing a new offer for secondary teachers?

Hon CHRIS HIPKINS: As I have been very clear in all of the public comments I’ve made on this, the Government is absolutely committed to bargaining in good faith with both of the teaching unions on the claims that they have on the table. Many of those claims don’t relate to salary; they relate to other things which they—

Hon Nikki Kaye: You lied on the secondary teachers’ offer—

SPEAKER: Order!

Hon Nikki Kaye: I withdraw and apologise.

Hon CHRIS HIPKINS: Many of the issues that have been raised by the unions relate to matters other than salary, including, for example, extra support for children with special needs. All of these things come at a cost, and part of the negotiations is ensuring that we get the balance right in addressing all of the issues that are being raised and not just cherry-picking them.

SPEAKER: And I want to reinforce to members of the House who didn’t hear what happened then that the Hon Nikki Kaye made a very serious allegation about me.

Hon Nikki Kaye: I withdraw and apologise.

SPEAKER: No, no—you already have. There seemed to be doubt around the House as to why the member stood up.

Hon Nikki Kaye: Point of order.

SPEAKER: No, no. Just ask the next question. We’ve had enough.

Hon Nikki Kaye: I’ve done that. I raise a point of order, Mr Speaker. The Minister didn’t answer my question. I asked whether he’s going to talk to the Prime Minister and the Minister of Finance about a different offer.

SPEAKER: He certainly did answer it.

Question No. 9—Social Development

MARAMA DAVIDSON (Co-Leader—Green): Fakafetai lahi lele.

SPEAKER: Order! Order! It is getting pretty serious that the member Nikki Kaye is a repeat offender within about a minute of her previous offence. She’s sort of tempting me pretty severely to do what I’m trying very hard not to do, and that is to toss members out. She will withdraw and apologise again, but I tell her, she’s on a warning for the rest of the week.

Hon Nikki Kaye: I withdraw and apologise.

9. MARAMA DAVIDSON (Co-Leader—Green) to the Minister for Social Development: Is she concerned that the over 340,000 hardship grants provided by MSD in the September 2018 quarter indicate baseline benefits are insufficient to meet housing and food costs?

Hon CARMEL SEPULONI (Minister for Social Development): Yes, I’m concerned, and I’m also relieved that we have a more responsible Ministry of Social Development (MSD) culture that means those requiring help are getting it. I think it’s very important to note that the evidence available to us clearly identifies the cost of housing as the key reason why so many New Zealanders require access to hardship grants. Thankfully, unlike the previous Government, this Government is making housing a priority.

Marama Davidson: Does she think that the significant increase in hardship grants, almost doubling over the past five years, demonstrates beneficiaries are falling further and further behind?

SPEAKER: Order! Grant. Grant Robertson—please be quiet.

Hon CARMEL SEPULONI: As previously noted, it’s really important that we emphasise the fact that all of the evidence supports the fact that hardship grants have been increasing over the last five years due to the increase in the cost of housing. With regards to income adequacy, it’s also important to note that this Government has committed to undertaking a welfare overhaul, and as part of that we have appointed an expert advisory group for welfare. Part of the terms of reference is to look seriously at income adequacy.

Marama Davidson: Should baseline benefits be enough to ensure everyone has decent housing and enough food for their families?

Hon CARMEL SEPULONI: As I have said, income adequacy is something that is being looked at as part of the Welfare Expert Advisory Group’s work. Although we are seriously looking at income adequacy and look forward to the recommendations and report back from the expert advisory group, we cannot ignore that something needs to be done about housing. I’m very glad to be part of a Government that has made housing a priority, because the very families that the MP is asking about are reliant on us making sure that we make housing affordable.

Marama Davidson: Does she agree we have a responsibility to ensure everyone in our country has a decent standard of living, and that the number of people needing food grants or borrowing to cover the basics shows that we’re not living up to this responsibility?

Hon CARMEL SEPULONI: I’m highly concerned that there has been a trend upwards for the last five years of New Zealanders having to access hardship grants. I’m committed, as the Minister, and our Government is committed, to making sure that we have a fairer, more accessible welfare system. I’m looking forward to the report that we will receive from the expert advisory group in February, and I’m looking forward to the positive changes that I know that this Government is capable of making.

Question No. 10—Social Development

10. Hon LOUISE UPSTON (National—Taupō) to the Minister for Social Development: Does she stand by all her statements and actions?

Hon CARMEL SEPULONI (Minister for Social Development): Yes, in the context in which they were given.

Hon Louise Upston: Does she stand by her statement in the House last Thursday that “the actual unemployment rate overall is 9.4 percent, which is exactly the same as what it was this time last year.”?

Hon CARMEL SEPULONI: Can I reiterate that with the last numbers that came out, 9.4 percent of working-age New Zealanders were receiving a main benefit. That is exactly the same proportion as this time last year.

Hon Louise Upston: I raise a point of order, Mr Speaker. I asked quite a specific question about the unemployment rate that she quoted in this House last Thursday.

SPEAKER: My understanding is, in my memory—and I’m willing to be corrected—that the member referred to benefits in her answer then, as she did now. We’re digging back a week, but I’m pretty sure that’s what she said at the time.

Hon Louise Upston: Why did she not correct her answer that was incorrect in this House last Thursday, which is what she’s meant to do as soon as she becomes aware of it?

Hon CARMEL SEPULONI: To my knowledge, I referred to the 9.4 percent of working-age New Zealanders receiving a main benefit, and that is the same proportion as last year.

Hon Louise Upston: Does she agree with Statistics New Zealand, who released the unemployment figure of 4.5 percent, rather than the 9.4 percent that she quoted in this House in the question last week, as announced on 1 August—that the unemployment rate is 4.5 percent?

SPEAKER: Order! I think we’ve just had an explanation. We’ve just had a comment from the Minister that—although it wasn’t as part of personal explanation, I think it was a reiteration. OK, well, I’ll ask the member to ask the question again, but it is a bit of a problem where a Minister says very clearly in this House that they used one set of figures and another member says, repeatedly, that they used another set of figures. I’m warning both the former Minister and the current Minister that one of them is running into trouble.

Hon Louise Upston: Does she agree with Statistics New Zealand, who released the unemployment figure as 4.5 percent on 1 August, as opposed to her quote in the House last week that the unemployment rate was 9.4 percent?

Hon CARMEL SEPULONI: Last week, when I spoke in the House, I was referring to the 9.4 percent of working-age New Zealanders receiving a main benefit. If there were any semantic mix-ups, then I do apologise, but I was not referring to the 4.5; I was referring to the 9.4 percent of working-age New Zealanders receiving a main benefit.

Hon Louise Upston: Is the 9,000 extra people on a jobseeker benefit higher or lower as a percentage of the population than a year ago?

Hon CARMEL SEPULONI: The most recent stats that came out showed that 9.4 percent of working-age New Zealanders are receiving a main benefit, which is exactly the same as last year. With regards to the actual numbers rather than the proportion, there has been an increase in population—

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Mr Speaker, you suggested that your recollection may not be entirely on the mark given that it was last week when this was raised. I’ve checked, now, with our people. The question that was asked was answered last week: that the unemployment rate is 9—whatever it is—percent. Now, the question was: did the Minister today stand by that—and we got this other answer about all benefits. I think it’s pretty unreasonable to have then had a bit of a question from you to the person asking the question and requiring them to base their questions on the new answer from the Minister.

SPEAKER: I’m sure all of us are going to go back and review that situation pretty carefully. I can remember the Minister last week using the expression “proportion of the working-age population on benefits” and using the 9.4 percent around that. If she responded to a question about the unemployment rate and used that figure, that is—I mean, it’s not the best answer, but it’s not incorrect as long as she caveated it in that particular way. But I’m sure that all of us who are interested in these things will go back and have a look at what the Minister actually said. If she made an error, she will be correcting, and if Louise Upston has made an error, she will be.

Hon Louise Upston: I raise a point of order, Mr Speaker. The last question that I asked was specific about job seeker benefit. I asked a simple question—if it was higher or lower as a percentage of the population as a year ago—and I didn’t get an answer to that.

SPEAKER: And the member said it was 9.4 percent both times. Surely, that’s an answer. I mean, you know, you couldn’t get a clearer answer than that, and it’s the same—could you?

Hon Grant Robertson: You don’t ask questions.

SPEAKER: No, I don’t ask questions—you’re quite right. We got into trouble with the wrong people asking the questions last week.

Question No. 11—Revenue

11. Dr DEBORAH RUSSELL (Labour—New Lynn) to the Minister of Revenue: What recent announcements, if any, has he made in relation to the collection of GST from offshore suppliers?

Hon STUART NASH (Minister of Revenue): Malo ni, Mr Speaker. Last week, I announced the removal of the current tax break for offshore suppliers. From 1 October 2019, offshore suppliers will be required to register, collect, and return GST on goods valued at or below $1,000 that are supplied to consumers in New Zealand. Kiwis shop online for a number of reasons. This Government is removing any tax incentive that is involved in that decision. It’s about fairness.

Dr Deborah Russell: How will he ensure that offshore suppliers comply with the new rules?

Hon STUART NASH: The proposals build on the GST on online services that the previous Government introduced in October 2016. Issues of compliance were worked through as part of those changes. With over 200 registered offshore suppliers of services to New Zealand and over $130 million collected in the first full year, it is clear that offshore registration and compliance is not an insignificant issue. Australia, the first cab off the rank for the collection of GST on imported low-value goods, has also had over 700 offshore suppliers register after only one month of their new rules.

Dr Deborah Russell: What changes has he made to the proposal as a result of consultation?

Hon STUART NASH: The key change was to lift the threshold from $400 to $1,000. Submissions received from offshore suppliers indicated that the higher threshold would make it easier for them to comply, as this threshold aligns with the Australian model and avoids double taxation. This Government has made a bold move to ensure that the playing field is level for our 26,000 New Zealand retailers, who employ more than 62,000 Kiwis. The previous Government had signed off on a similar proposal for consultation, but got cold feet before the election and didn’t go public with their proposal. As mentioned, it’s a question of fairness, and we have responded.

Question No. 12—Energy and Resources

12. JONATHAN YOUNG (National—New Plymouth) to the Minister of Energy and Resources: Does she stand by all her Government’s policies, statements, and actions in relation to the energy and resources portfolio?

Hon PHIL TWYFORD (Acting Minister of Energy and Resources): Yes, in the context in which they were made.

Jonathan Young: What policies or actions is the Government considering in addressing potential electricity supply shortages because of hydro lake levels being at an eight-year low and current gas supply disruption?

Hon PHIL TWYFORD: Well, this Government doesn’t accept the predictions of an insecure energy supply as a result of this policy. Our strategic direction is to encourage a shift towards renewable energy so we can successfully transition to a low-carbon future. There’s currently approximately 3,300 megawatts of renewable energy generation consented to be built. Transpower’s Te Mauri Hiko report shows that as our electricity demand grows heavily in the years to come, those consents will be able to come on stream to add capacity. There are a number of other major investments currently on the way, particularly in the area of renewable energy.

Jonathan Young: Will, therefore, the Government guarantee there is no risk of power blackouts because of current low hydro levels and gas supply disruption?

Hon PHIL TWYFORD: We won’t guarantee anything, but we will do our best to provide the political courage and the leadership—the willingness to look beyond the three-year electoral cycle—to ensure that this country makes a just and speedy transition to a post-carbon economy.

Jonathan Young: What is the Government doing to ensure adequate gas supplies to businesses like Fonterra, who are coming into their peak production in the next few weeks, considering the current gas supply disruption?

Hon PHIL TWYFORD: Well, there are 100,000 square kilometres of offshore prospecting still in place—

SPEAKER: Order! Order! I’m going to ask the member to ask his question again.

Jonathan Young: Thank you, Mr Speaker. What is the Government doing to ensure adequate gas supplies to businesses like Fonterra, who are coming into their peak production in the next few weeks, considering the current gas supply disruption?

Hon PHIL TWYFORD: Well, there are a number of very short-term impediments to supply in the current climate. That’s a completely separate issue to the need for this country to transition to renewable energy sources, and we have the policies in place to do that.

Jonathan Young: Point of order, Mr Speaker.

SPEAKER: No—just ask it again.

Jonathan Young: Ask it again? What is the Government doing to ensure adequate gas supplies to businesses like Fonterra, who are coming into their peak production in the next few weeks, considering the current gas supply disruption?

Hon PHIL TWYFORD: I haven’t been briefed on that particular issue, so I can’t give the member a detailed answer on that.

Jonathan Young: Is it the Government’s intention to support use of coal-fired generation to stop power blackouts if gas is no longer plentifully available, as is currently the case?

Hon PHIL TWYFORD: No, it’s not, because we believe that there is perfectly adequate generation consented coming on stream for renewable electricity sources. I would point to the fact that Genesis and Tilt Renewables have just announced that they intend to partner in the development of a 100-megawatt windfarm at Waverley, and last month the Eastland Group commissioned an additional 25 megawatts of geothermal power at Kawerau, which is now providing baseload renewable energy to New Zealand’s grid.

Voting

Correction—Education Amendment Bill

SPEAKER: On 16 October, when the committee of the whole House was considering the Education Amendment Bill, the result of the vote on the clauses 1 to 3 closure motion was incorrectly recorded as Ayes 63, Noes 56. The correct result is Ayes 64, Noes 55.

Bills

Commerce Amendment Bill

In Committee

Part 1 Competition studies

BRETT HUDSON (National): Thank you, Madam Chair. It’s a pleasure to rise and talk on this Commerce Amendment Bill, particularly Part 1, which is the most contentious part—a part which the National Party had issues with when in Government, and it has continued to espouse those in Opposition. The issue with this particular section is not the ability to undertake market studies, or competition studies, as the Commerce Commission prefers to term them; it’s not any sort of reluctance on our part to inquire into the good workings of industries and markets across New Zealand.

The issue we have long held is around the decision making for when those studies should be undertaken and who should approve them. In particular, it’s an issue of governance and, indeed, actually, of management of the budget that the Government has set out for these studies. The Government has allowed, across each of the next three Budget years, $1.5 million dollars a year for the undertaking of market studies. But then, we would argue, it poses quite a significant challenge if more than one party is able to independently initiate them, and that is because when giving evidence in the select committee stage the Commerce Commission pointed out that a market study would be expected to take, at a minimum, $1 million of resource to undertake, and they were very clear that in their view the budget that had been allowed would permit only one market study to be undertaken per year.

That being the case, if the Government decides it wants to undertake a market study—and they have clearly indicated they want to do at least one—and the Commerce Commission of their own volition determines that they also want to undertake a market study, well, there’s not enough money in the kitty to do both. So, actually, the bill doesn’t have a mechanism for determining who gets priority if both wish to undertake a study in the same financial year and there’s not enough money to go around. But, more to the point, it creates a bit of a mess of the management of that, and I would argue, and we would argue, that the mere fact that that potential mismanagement, that potential confusion, could arise is itself deeply unhelpful for confidence across our business communities. They don’t quite know where they’re going to get hit and who from, or, indeed, if from more than one angle at once across multiple markets.

Our position all along has been—including when we were in Government—that only a Minister should initiate those market studies, and we know this. It’s actually quite troubling in more than one sense, because, in consulting with my colleagues here on the background to this bill, although it’s had amendments at the select committee, this is still largely the bill that officials have tried to push over a long period of time. The officials actually took every opportunity at every change of Minister, including changes of Minister within the same Government, to rehash the same approach. Under Minister Foss there was an approach that was not agreed to. Then under Minister Goldsmith they tried to reintroduce the same provisions, and that wasn’t agreed to. Under Minister Dean they tried again, and under this Minister of Commerce and Consumer Affairs they have tried at least—well, it would appear to be at least—a fourth time.

Despite every other time being knocked back, we had officials try and try and try again until they finally found a Minister who would acquiesce to their desires. But, in doing so, it introduces risk to our businesses and risk to our business confidence, which, as we well know, has been trending very, very poorly under this new Government. So I would encourage the Minister to take that into consideration. We think it would make it more difficult to manage and be potentially messy, while not actually adding any more value. We would by no means get any more novel studies or any more studies than we might otherwise have. They would be no less comprehensive, no less effective, and no less valuable in the outputs and the recommendations they might bring. It would simply be more than one vector of attack, if you will, and that is not necessary if it’s not adding anything.

So, to that end, I have tabled Supplementary Order Paper (SOP) 139. It is quite a simple one. The Supplementary Order Paper merely adds a couple of provisions—a provision that says that when the Commerce Commission is going to self-initiate one of those market studies, or competition studies if they prefer to use the term, that that must be approved by the Minister. This way—one simple provision—means we have the same ability to investigate across markets, undertake the same level of research, undertake the same depth and comprehensive breadth, reach the same conclusions, and make the same recommendations but do it in a way that doesn’t create confusion—[Bell rung] Madam Chair?

CHAIRPERSON (Hon Anne Tolley): I call Brett Hudson.

BRETT HUDSON: —and removes the potential confusion that could be present if we’ve got multiple forms of an issue or multiple vectors of initiation. There is actually another reason too—which is why I asked for the second call—to delve into why it is a very good idea that there either be ministerial-initiated studies, or at least ministerial-approved. And that is because officials in the departmental report provided us with information about how our closest neighbours operate in this area of market/competition studies.

The Australian Competition and Consumer Commission (ACCC) do already have the power to undertake market studies—they have the power to self-initiate them too—but here’s the key difference: where the ACCC self-initiates market studies, they do not have the ability to compel businesses to provide them the data they want. It is completely voluntary. They cannot force them to provide certain data, nor in certain formats, nor to certain extents. They make requests; the businesses voluntarily choose to comply and oblige with those responses, or they choose not to.

Not surprisingly, the information from the ACCC, through our officials, shows that in some instances the ACCC believes that that has resulted in them receiving suboptimal levels of information, but it has definitely had a much lower impost for each of those studies on those market participants, on those businesses.

Where the ACCC is able to invoke compulsion for the acquisition of data, ministerial approval is required in every instance. Where they exercise the power to compel businesses to provide them data, that must be accompanied with ministerial approval. So my question to the Minister is: why are we so different? Why should we be different? Why, when we are, in a sense, copying, to one degree or another, the ability to undertake market studies where we harmonise so many other regulations and approaches across the Tasman, why do we persist in operating a model that is different to theirs? Their market isn’t about market studies or not market studies; it’s about whether the commission has the ability to compel businesses to provide the information they want.

In Australia, where they self-initiate market studies, the commission there does not have the ability, the authority, to compel the provision of data. We do in our market studies, and this piece of legislation requires it. We have that compulsion. We don’t disagree with that. We think that’s actually an important factor to make sure that these competition studies—market studies—would actually work well. But we also contend that, like in Australia, where that is the case, that should require Ministerial approval.

That’s why, Minister, if you can’t—well, by all means, tell us why we should be different to Australia in this matter. But that’s why I encourage the Government to support my Supplementary Order Paper. It is a sensible one. It doesn’t add any enormous process, cost, weight, or time. It doesn’t affect the nature of the studies, or the time it will take, or their findings. It simply makes sure that the Minister—or Cabinet, through that Minister—appreciates the level of impost on businesses of a very comprehensive study. Because the Commerce Commission made it clear in their evidence that it will absolutely be a comprehensive study across a broad range of market participants. They will not do market studies by half measures. These things will be large. They will be long. They will be expensive to the Government and, equally, they will be hugely expensive to large, medium, and very small New Zealand businesses.

So I encourage the Minister and encourage the Government to take a deep breath on this one. The action we take here, which we fundamentally support—this idea of market studies—has enormous impacts on New Zealanders and New Zealand businesses, particularly the small ones. It is absolutely appropriate and, we would argue, right that Cabinet, through the responsible Minister, should reflect on each study, including those the Commerce Commission might put forward itself, reflect on the level of impact that the study will have on New Zealanders and New Zealand businesses, and either give it the stamp of approval or reject it. Minister, I call on you to support the SOP.

Hon JUDITH COLLINS (National—Papakura): Thank you, Madam Chair. What a great contribution from our colleague Brett Hudson.

I would like to congratulate the Minister in the chair, Kris Faafoi, who is my favourite Minister at the moment. I have no idea why he’s not in Cabinet. He should be there. I think we’d vote for that—except that, of course, he won’t be there long, because we’ll be back. I’d like to congratulate him for taking up the work that our excellent colleague the Hon Jacqui Dean did last year when she worked with me when I was dealing with the fuel price study that was undertaken into the price of petrol and diesel in New Zealand and the margins that were being charged by the fuel companies. The Hon Jacqui Dean undertook some very good work. Cabinet, under the National-led Government last year, agreed to a proposal which is, essentially, this bill plus Brett Hudson’s Supplementary Order Paper 139.

In other words, the concerns were always around—those eloquently expressed by Mr Hudson—the ability of the Commerce Commission to undertake surveys and work, and to get right into the detail of how pricing is being calculated, and also around the profits involved and the supply of goods and services, but, at the same time, remembering that the Commerce Commission is quite a blunt instrument. It is a very powerful organisation, even now, and to give it the powers that the Government wishes to do, without any caveat or any responsibility to come back to a Minister or to a Cabinet about whether or not the Government wants to have that sort of extremely invasive and costly look at a market, I think is a little dangerous.

I say “it’s a little dangerous” because the cost involved to businesses and therefore to workers, and therefore to everyone else who buys from those businesses, tends to be extremely high. So this is not a power that should be undertaken lightly or because of a general gut feel. It should be based on whether or not there appears to be a serious issue that needs to be reviewed and looked at and got to the nub of. That is why I think it’s quite important to bring this decision back to Cabinet, to the Minister, because Ministers in Cabinet are responsible to the people.

The Commerce Commission is not elected. It is not responsible to the people. It’s appointed by the Government of the day and, once they’re in there, they’re there until the end of the term. So what that really means is they’re not going to have to answer all sorts of questions. They’re not subject to questions in question time. They’re not subject to the sorts of interrogation and holding to account that Governments are. So I think it is a very wise thing for the Government to adopt Supplementary Order Paper 139, which gives the Minister and therefore Cabinet a say in whether or not something goes ahead.

The reason why we can do this without worrying about what this does to an individual business is that the Commerce Commission’s market study powers would not apply to a single business but to a whole industry or a whole market, and therefore it’s not about deciding to interrogate down into one particular business but an entire area. Now, the cost of that can be enormous. Time is money in business, so the cost in time is enormous. The threats around this if someone gets things wrong when they’re providing information can be enormous. So this is not a power to be used lightly.

I would suggest to the Minister—who I am backing to have two years in Cabinet; I thought that was quite generous, really—that he considers this, because that would actually take away quite a lot of the concerns and the fears, particularly of people in business who are wondering whether or not this is actually going to become an empire being built by the Commerce Commission without anybody being able to say “Hang on. This is really not OK, and it’s not what this Act is all about.” So I would suggest he takes on that concern.

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): Can I thank the two members of the Opposition for taking calls to Part 1, which does contain most of the heft of this piece of legislation in and around market, or competition, studies. Can I thank the member Judith Collins, who’s just resumed her seat, for her support. I also offer my support in her further career endeavours, if they may eventuate.

Can I just point out that we’ve had 15 minutes from the Opposition so far in this Part 1 debate and I don’t think I’ve heard the word “consumer” once. So if we strip away what this piece of legislation is—you can talk about self-initiated market studies if you like, but what this piece of legislation really is about, if you took it to people on the street, is it is a piece of legislation to make sure that consumers in New Zealand are getting a fair go. That is going to be done by the Commerce Commission by looking at a market—whichever market it might be—if we think that that market isn’t operating efficiently or effectively. Now, that’s the language we use in this House, but what that means to the average New Zealander is do we think they’re getting a fair deal? Do we think they are paying too much for a particular good or a particular service? The ability for the Commerce Commission to undertake these market studies is an extremely important tool to make sure that we as parliamentarians, when New Zealanders ask us whether or not we think that they’re getting a fair go, are able to investigate that issue itself.

Can I point out to Ms Collins her efforts in a previous Government—I think it was 2017—when the previous Government tried to get to the bottom of petrol prices, as one example. The stumbling block that the previous Government had there was their inability to compel particular players in that market to give them information so that this Parliament and that Government could answer the simple question as to whether or not we thought that those petrol companies were giving consumers a fair go.

I’d like to quote the previous Minister of Energy and Resources, the Hon Judith Collins, who said at the time of her frustration of not being able to get that information that “There were difficulties in comparing the information received from the companies, and some very specific information that was required could not be obtained. As a result, the Study doesn’t definitively answer whether fuel prices are reasonable or not.” It’s a pretty simple question that consumers will ask of us as MPs and of us as a Government as to whether or not a market is operating effectively and efficiently. I will also point out that the previous Government was working towards this piece of legislation but didn’t get to introduce it.

To Mr Hudson’s point: yes, Mr Foss was approached. Yes, the Hon Paul Goldsmith was approached. Yes, the Hon Jacqui Dean was approached by Ministry of Business, Innovation and Employment officials as to whether or not the Commerce Commission should have the power to self-initiate. On each of those occasions, each of those Ministers of Commerce said no. I would put to the committee that on each of those occasions those Ministers were wrong, because we need to make sure that the proper questions are being asked to ensure that consumers are getting a fair go. And if the Government of the day hasn’t initiated a market study into a market that the rest of New Zealand believes isn’t operating effectively—i.e., isn’t giving them a fair go—then any Government worth its salt should have initiated a market study.

I think the Opposition need to have a little bit more faith in the Commerce Commission and their ability to manage these things, and also the faith in any stripe of Government to manage these issues as well. The previous Government allocated $1.5 million to the Commerce Commission in terms of budgeting to make sure that it could follow through with these market studies. I have every faith that they and the Government will be able to manage those market, or competition, studies within that budget to ensure that that is being done to a responsible level and also ask the questions that consumers want answered.

I know that the Opposition doesn’t like the idea of the Commerce Commission self-initiating market studies. Again, I would reiterate that any Government worth its salt, if it thinks New Zealanders are getting ripped off, would make sure that a market study is undertaken but also, if it doesn’t, that the Commerce Commission has the ability to do it itself.

Hon PAUL GOLDSMITH (National): Thank you, Madam Chair. Following on from Minister Faafoi’s comments, of course if New Zealanders are being ripped off by any company or industry, there are very substantial powers that the Commerce Commission has in relation to price fixing or cartel behaviour or any such illegal activity by businesses where very large fines and significant penalties can be raised. So that’s not what we’re talking about here. What we’re talking about is a suspicion that there may be something going on in a particular industry which is not as effective as it could be. So no laws have been broken, necessarily, but there’s a hunch.

As Minister of Commerce and Consumer Affairs, I was always cautious about this and a subsequent Minister of Commerce and Consumer Affairs—and the National Government itself—did advance this bill in order to offer market studies powers to the Commerce Commission. The only hesitancy I had was, of course, that it relies upon a Government of the day being disciplined in its approach to how it operates. The danger, of course, in allowing politicians to have access to market studies powers using the powers of the Commerce Commission is that it will be used for political purposes and drive-by shootings of particular industries when particular Ministers are feeling the heat on other issues.

So what we’ve seen so far hasn’t filled me with a great deal of confidence because we’ve had the Prime Minister of this country stand here in this Parliament and appoint herself as judge and jury on this topic and say that New Zealand consumers are being fleeced—full stop. Full stop. Now, she may be right; she may be not—who knows? She certainly has no evidence to base her accusation on, but we are granting the Commerce Commission powers to undertake full studies into a particular industry when the Prime Minister—and then, last week, it was confirmed by the Minister of Transport, who agreed with the Prime Minister, and then by the Attorney-General of this country, for goodness’ sake! The Attorney-General of this country, who was answering on behalf of the Minister of Energy and Resources, confirmed the Prime Minister’s view that New Zealanders were being fleeced.

So the worry is that, unbelievably, this Government has given an answer to a question that it’s going to ask the Commerce Commission to come up with some evidence and a reply on, and that is the thing that concerns us a great deal about this. It requires discipline from a Government, and, instead, what we see is petrol prices going up considerably, largely because of international fuel prices which fluctuate over the years—everybody understands that—but there has also been a very significant addition of fuel taxes and levies. The Prime Minister has been slippery as all heck on that topic, with all sorts of different numbers that have been sort of shuffled out there—6.8 percent, which is complete nonsense. There has been more than 4 percent added through excise tax, plus GST, and plus another 11.5c on the Auckland regional fuel tax that this Government has passed, and that has flowed through to fuel taxes.

So New Zealanders up and down the country are upset about trying to find the extra money within their weekly budgets to pay for the petrol and the diesel that they need to get around. They know that there are international forces behind that, but they see this Government at that very time of vulnerability adding their own taxes and levies. They see all the incontinent spending of this Government and they are rightly annoyed, and for the Government to then just turn around and use this power to say that New Zealanders are being fleeced without evidence is something that gives me real concern.

Now, that is not to say that we shouldn’t ask the question. Of course we should ask the question, and that’s why we absolutely support having the ability to have these powers and to ask that question. But the only point I would make is that that power needs to be accompanied by discipline, and this Government has shown none of it. We had the Minister talking about the fair go, and, absolutely, we want to see all New Zealand consumers getting a fair go—absolutely. We also expect that New Zealand businesses also get a fair go and that they don’t have the Prime Minister acting as a judge and jury, answering a question that she herself has asked.

So we support this bill, and we implore this Government to show some discipline. Thank you very much.

Hon JACQUI DEAN (National—Waitaki): Thank you, Madam Chair. I support Supplementary Order Paper (SOP) 139 of Brett Hudson, who has made an amendment, and I think this is a very good suggestion—very consistent with National’s policy when we were in Government: “In clause 4, new section 50, replace subsection (2) with: (2) Before carrying out a competition study, the Commission—(a) must obtain approval for the study from the Minister; and (b) must, by notice in the Gazette,—(i) prescribe the terms of reference for the study; and (ii) specify the date by which the Commission will make the final competition report for the study publicly available.”

This is a good check on the Commerce Commission. I’m touched by the faith of the current Minister, Kris Faafoi, in the Commerce Commission. They are good people—they are very good people—and it’s lovely that he has such a kind and loving and trusting relationship with them. But, actually, a competition study is going to have a large impact on New Zealand business large and small, particularly on the small. If one thinks about the fact that business in New Zealand, any market in New Zealand, generally, is dominated by small business—after all, 97 percent of all business in New Zealand is undertaken by small business—then the cost and the impost of a market study or competition study is going to fall on small business rather than a larger business which has a whole business unit, which I’m sure is taking place as we speak, to be the body which deals with incoming market studies.

So it is lovely of the Hon Kris Faafoi to have such a warm and trusting relationship with the Commerce Commission, and a commission which I also have a lot of respect for, but who live in the city. They live in Wellington and they live in Auckland; mostly, the people who work for the Commerce Commission are people who live in cities. Well, a lot of the markets—and particularly if we choose just one market study, potentially a fuel market study—they sell fuel at Mount Cook and they sell fuel in Ranfurly and they sell fuel in Tongariro National Park. It is those small-business fuel retailers who are going to feel the imposition of a market study disproportionately to the size of their business and disproportionately to the larger suppliers of fuel who are spread, mainly, because of the numbers, in the cities. So I absolutely support this SOP.

I think the Minister must step up and take some responsibility in the initiation of a market study. I think it is simply not good enough for the Commerce Commission to test the wind from Auckland or Wellington and sense there is an anomaly or an unfairness or some practice that they are not supporting within a market. It does need ministerial responsibility. Isn’t that what a Government is for? Isn’t that why we have Cabinet and Ministers?

Under this Supplementary Order Paper, the Minister of Commerce and Consumer Affairs will be alerted to a market dysfunction or market problem. It may well come from the public—there might be a public outcry. It may well come from the Commerce Commission, but if I were the Minister, I would expect that the Commerce Commission, in that instance, would come to my office and outline their concerns around that market and why they feel that a market study is worthy of consideration by the Minister and by the Cabinet. That’s why we have a Government: to provide a check and a brake on our bureaucracy.

I don’t buy the “I trust the Commerce Commission because they are good people.” argument. Yes, they are good people—of course they are good people—but that is why this country has got a Minister of commerce and a Cabinet, which has got to be the check on any market study, any competition study. It’s not for the big guys, not for the big fuel companies, not for the big supermarkets but for the little guys, the small business owners, who might well be a husband and wife team somewhere in New Zealand, somewhere in the provinces, who will have a disproportionate burden placed upon them in any form of market study.

ANDREW BAYLY (National—Hunua): Thank you very much, Madam Chair. First of all, I want to say that I support Supplementary Order Paper 139 in the name of my colleague beside me, Brett Hudson. I think it’s an excellent Supplementary Order Paper, and I spoke about it the other day, in fact.

First of all, I just want to reiterate—as I think is absolutely implied, but let’s just be clear—that we all support that there should be in New Zealand the promotion of healthy competition, so that consumers, picking up on the term that the Minister Kris Faafoi used, get access to the goods and services they require, at the right price. So that’s an absolute given because this bill is, essentially, a National Party bill, but the bit that we differ from is this bit about whether you give the Commerce Commission unfettered rights of power to undertake a market study.

Of course, I was fascinated hearing that the Minister, when he rose to his feet just before, and I am deeply appreciative that he took the opportunity to do that—the only thing he could talk about was the consumer. Of course we are concerned about the consumer, but I am just a little bit concerned that the only issue the Minister of Commerce and Consumer Affairs could raise about this and why it wasn’t a good thing that we were opposing this aspect was that we didn’t have sufficient regard to the consumer. Now, I know he’s a former broadcaster and retail politics is an important part of it and the consumer is an important part of it, but as I’ve heard from my colleagues earlier, when they were asked this question when they were Ministers, they were very careful about this power. So the officials must have just been waiting for a soft touch, and I think the soft touch has arrived.

Brett Hudson: They found him.

ANDREW BAYLY: They found him—they found him. They said, “Oh, here we go. We’re going to get it this time.”

Of course, I want to hear the Minister stand up and tell me about the other jurisdictions around the world, about why New Zealand should allow this, and just talk about some of the other jurisdictions. I understand the officials’ document talked about the Australian Competition and Consumer Commission—ACCC, as people talk about it. As has been alluded to before, they can undertake market studies, of course they can, but the difference is that where they exercise the power to require information and all that specific stuff that goes on in these inquiries—and I have been involved in them—that’s when they need an oversight, and in that case they go to the Minister. So they are judicious about those powers—very judicious.

Now, I would love to hear the Minister talk about the UK situation, because I’m sure that in coming to this decision, he must have considered that very, very carefully. Of course, we know about the UK Competition and Markets Authority. They too have a right to go and do market studies, but, of course, they too have an oversight. Very, very few jurisdictions allow their Commerce Commission equivalents unfettered rights to undertake these types of powers, and in those cases they have boards: the management proposes; the board decides. They are very, very protective of that relationship, because I know I had this conversation with them about a year ago, and when I was meeting with them—the senior officials from that unit—no one was proposing that they should have unfettered rights. So I think that’s a crucial part of what we’re debating today.

I think this view that we should just let the Commerce Commission loose because it’s in the best interests of consumers has a place to some extent, but you must recognise how invasive these inquiries are. They are absolutely disruptive and, in some cases, destructive to the businesses concerned, and, certainly, because they get publicity around them, there is also this element of being seen to be guilty before proven innocent.

I think it’s particularly injudicious that the Prime Minister has been talking about undertaking an inquiry into fuel companies and using the term “fleecing the New Zealand consumer”. I think those are very injudicious comments, and that’s why we don’t support this. I think it’s even worse when she’s gone out and talked to Ministers and asked Ministers what other inquiries we should be doing, because that is simply irresponsible in these situations. So I do not agree with these.

ANDREW FALLOON (National—Rangitata): Thank you, Madam Chair. I am pleased to be taking a call this afternoon on the Commerce Amendment Bill. I want to focus my comments specifically, of course, on Part 1, which relates to competition studies and inserts a new Part 3A into the Commerce Act. But I did just want to start with new section 51, which allows the Minister to require the Commerce Commission to carry out a competition study.

Now, at this point, I have to remind members and those watching at home—I’m sure there are many of those—why we have this bill coming to us at this point. At this point, we’ve had this Government in charge for around 12 months—just over 12 months—so why is it that they feel the need to bring this piece of legislation to Parliament after 12 months? And the answer to that question is petrol prices. Today, in my electorate of Rangitata, petrol prices are $2.46—$2.46—for a litre of 91 octane. That’s 20 percent more than a year ago—20 percent more than a year ago. And we ask ourselves why that is—why that is. What is it that changed 12 months ago? What happened 12 months ago that might have had an impact on petrol prices?

Hon Shane Jones: The dollar.

ANDREW FALLOON: Well, first, of course, there is the regional fuel levy—the so-called regional fuel levy—of around 12c that the Government opposite brought in, and the problem with that legislation that they brought forward was, of course, price spreading. There was nothing in that piece of legislation that meant that that tax, that was meant to be applied to Auckland, would stay in Auckland. The second reason we have higher fuel prices than we had 12 months ago is a nationwide levy of 4c a litre across the country. So at a time when we have, as the member opposite said, a declining value of the New Zealand dollar, the Government opposite are putting additional taxes on. In real terms, petrol prices now are the highest they’ve been in 35 years.

So this Government has suggested, “Oh no, the problem is not us. The problem is not all these additional taxes that we’re putting on.” The problem is not the 12c a litre they’ve put on Auckland car owners! The problem is not the 4c a litre they’ve put on across the country! The problem is not the 4c a litre that they’re going to put on next year! The problem is not the 4c a litre that they’re going to put on the following year! The problem is somewhere else! The problem is with the fuel companies! And so they’ve brought this piece of legislation forward to require the Minister to allow for competition studies by the Commerce Commission.

I’ve got two questions to the Minister in the chair, Kris Faafoi. He’s been very good at answering our questions so far today, so I’ve got two questions for him. The first one is: if he is genuine about helping consumers—he talked before about consumers—will he agree today to talk to the Minister of Transport to take those additional taxes off until the commission has reported back on the study into fuel prices? Will he do that today? The second question I have: will the Minister commit, if once that review has come back the commission finds that the Government’s additional fuel taxes are having a disproportionate impact on the price of fuel across the country, to having those taxes removed?

I now want to turn to the Supplementary Order Paper in the name of my very hard-working colleague Brett Hudson, and in it he asks for some additional democratic oversight because, as has been talked about this afternoon, we did this. This piece of legislation was drafted by our Government, the National Government, in a sense, and it really allowed for these competition studies to go forward but only at the discretion of the Minister—at the discretion of the Minister. The legislation that’s been brought now by the Minister allows for those studies to be put forward at the suggestion of the Commerce Commission.

Look, that’s fine if he wants to do that; we disagree with that, actually. We don’t think that that should be the case. We think there should be some democratic oversight. But if he is going to go down that route, why not provide for the commission to have to come to the Minister to, essentially, receive sign-off for that decision? The Commerce Commission can decide that they want to hold an investigation or a review into something, but require them to come to the Minister first. And the reason I ask that is because, in the Minister’s own bill—in fact, it’s a new part to the bill; section 51(e)—it already requires the Minister to respond to a commission report, which is fine. Again, I think that’s a valid approach to require the Minister to report back at the end. Why not have him involved at the start?

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): Madam Chair, can I thank members opposite for the debate so far. I’ve found it very entertaining. What I’m finding slightly troublesome, though, is trying to make logic of some of the National Party arguments. The member for Hunua, Andrew Bayly, mentioned that this was essentially a National Party bill, but then another member, Jacqui Dean, picked the details to shreds about the effect that this will have on small businesses. I just want to know if the National Party wants to clarify its position on this, because I know it’s changed its tune on which way it’s going to vote on this piece of legislation—if it is a National Party bill from the outset, whether or not it actually agrees with the detail of the bill. I heard the former commerce Minister saying she didn’t like, necessarily, how these market studies are going to be done and the impact that it may have on small businesses, but then Mr Bayly says this is essentially a National Party bill. So it would be really good for the people listening at home if the National Party would clarify its position on this piece of legislation. So that would be helpful.

The next piece that I would like to respond to is the point made by the former commerce Minister Jacqui Dean. The fact is that I actually think that small businesses and regional areas will welcome this piece of legislation. When large players in concentrated markets are using their power in those markets, it is shutting some of those players in regional markets out because of their inability to compete with some of the larger markets. So I’m just trying to see, again, if there is actually a constant strain of an argument for or against from the National Party around this piece of legislation.

I can’t go without addressing some of the issues that Mr Bayly raised in terms of me personally. I don’t mind being called a soft touch, but Mr Bayly did raise the issue that sometimes Governments or Ministers could be a soft touch. I am not, because I said to the officials that, actually, we’re going to do this. But the point of the Commerce Commission having the ability to initiate a market study is that sometimes, I fear, maybe some Governments of a particular stripe might be a soft touch in the future and may not initiate a market study. I would think, again—and I’ll reiterate this point—any Government worth its salt, if it thinks a market isn’t operating effectively, which means consumers aren’t getting a fair go, if they were to do that for the benefit of consumers, then the ability of the Commerce Commission to initiate a market study is very important.

I was asked a couple of questions by Andrew Falloon in and around the Government’s decision around excise tax. Mr Falloon, I remember in our own time in Opposition an “Axe the Tax” campaign as well. We tried to stop the previous Government from increasing GST from 12.5 percent to 15 percent.

Andrew Falloon: It was tax-neutral, and you know it.

Hon KRIS FAAFOI: Well, that was a tax that the previous Government never mentioned in the lead up to the last election, and I would like to reiterate the point to the member who is using this as an opportunity to make the point: which transport infrastructure projects would that member take away, potentially even from his region, if we weren’t to bring in that excise to those issues in those regions in and around New Zealand? And also he wanted us to pre-empt a decision that, potentially, the Commerce Commission would make. I think Mr Falloon would see the folly in doing that. We’ve got to make sure that if we give the Commerce Commission the ability to do those studies, we let them do their work and make decisions after they’ve done the detailed work that they have the ability now to do as part of a market study.

ALASTAIR SCOTT (National—Wairarapa): Thank you, Madam Chair. I’d like to ask the Minister a couple of questions in due course, but much of this bill, as has been stated, is a good thing, particularly my point around the most positive aspect as far as I can see: this compulsion to provide information to the Commerce Commission when requested. There’s no point having an inquiry if you can’t get the information to find results. So that’s a very good step forward, the compulsory data collection from those businesses.

The problem that I’d like to pick up with the Minister is around when he said the Commerce Commission will initiate some investigations where the Commerce Commission might see the politicians not picking up an inquiry, or perhaps the politicians don’t see any issues out there but the Commerce Commission does. So my first question is who gets priority? Is it the list of inquiries that the Commerce Commission wants to take on or is it the list of inquiries that the politicians want to take on? I think, and on this side we think, that the politician must have the veto, or decide. The reasons I say this is because—well, first of all, answer that question of who gets priority.

I agree with Mr Jones when he talked about democracy, democracy, democracy. There’s accountability if you make sure that the Minister is responsible for the inquiry and the decision making that the Commerce Commission is directed to do. For example, I know Mr Jones would love to see an inquiry into the real estate sector. Now, you know, good luck to him putting that forward to the Commerce Commission, and good luck to him for the public, because, you see, the public can see straight through the idea that investigating the real estate sector would just be a total waste of taxpayers’ money. We know it’s an extremely competitive environment in which those businesses operate. So there’s accountability, because if Minister Jones did get that through and did say that real estate agents are going to be investigated—imagine the cost associated with that across all the agents that we have across the country, and for no benefit. The accountability—which is my point—is such that Minister Jones will get voted out. I totally agree with Minister Jones. Minister Jones’ point is that it’s democracy, democracy, democracy.

The other problem is we’ve got a Commerce Commission who has no accountability. They might decide to investigate something that—no idea—no one really cares about. So, therefore, if no one really cares about it, it’s not in the public interest to investigate it. So if the politicians haven’t raised it, why would the Commerce Commission even think that they could possibly justify an inquiry into something that, for example, Mr Jones hasn’t thought of, or Minister Faafoi? We here are much more interested in the public interest than the officials. The officials will struggle to demonstrate that they have the public interest at heart if a Minister can’t do that, because a Minister will have—and must have and needs to have—the public interest at heart, because if he or she does not, the polls will kick them out, and that’s the way it should be.

So my issue here is around governance. At the end of the day, the voter, who’s the taxpayer, is paying, and the taxpayer is able to demonstrate whether they believe the Government of the day is doing the right thing, is putting the right things before the Commerce Commission, putting the right inquiries before the Commerce Commission, by their vote. Whether it’s a real estate inquiry or a supermarket inquiry that the Minister might want to investigate, I would suggest that would be a very silly thing to do, because the public will rebel against that, and that’s a good thing.

So that’s the check and balance that is missing in this bill as it stands today, which is why, obviously, Mr Hudson’s Supplementary Order Paper 139 is an excellent one, because it gives the power to the Minister to veto any silly inquiries suggested by the Commerce Commission. Remember, they just want to stay in their job, so they’ll be putting as many inquiries—that’s the incentive that’s—[Time expired]

Hon SHANE JONES (NZ First): Madam Chair, thank you very much. It’s time for some common sense to be injected into this debate. We’ve just had a raft of exhibits that represent special pleading for corporate New Zealand. They serve up this notion that, somehow, Ministers—without looking at their own track record—are going to show less interest, or perhaps a dangerous level of interest. My response is: Countdown. In 2013-14, we took a host of concerns to the former Minister, Craig Foss—widely recognised, sadly not spoken about today. Did he move forward and support an inquiry into the egregious conduct of Countdown, ripping off producers, not well serving ordinary families but gouging the heartland of New Zealand’s productive sector? No. In fact, he went to John Key. John Key was totally uninterested. So, with my characteristic modesty, it fell to the first citizen of the provinces to stand up and take on Countdown.

What did we do? We went to the Commerce Commission, only to find, eventually, that they had inadequate power. Today, we have the National Party MPs saying they’re going to vote for this bill, largely because they’ve recognised that in their nine years they did jack. Now they’ve dreamt up a way of saying, “Ah, but you can strengthen the bill if the Commerce Commission is required to come and get the permission of the equivalent of Craig Foss.” Well, we know that that will not actually come to pass—I’m not talking about my Polynesian cousin in the chair there, Kris Faafoi; I’m talking about the fact that we just look backwards to see the future. When we look back, we have absolutely no confidence that if characters of that nature are back, God forbid, on this side of the House again, they will take the lance to destroy that pernicious behaviour which passes for the ordinary course of events in banking, in insurance, in the oil industry, in the supermarkets. They all require the laser-like attention of the Commerce Commission because they enjoy extraordinarily large privileges in New Zealand society, the banks in particular.

I would say this: don’t ever forget the fact that it was the Aussies who actually underwrote their banking system, and after the Aussies had done that, that then spilled over into New Zealand and Dr Cullen had to give quite a hefty guarantee to the banks. So why should the banks not be required to submit their information, like the oil industry, to an enhanced and empowered Commerce Commission? There’s not a single Kiwi—individual, business, whānau—who does not suffer the full impact of banking decisions and banking policies. Without a word of a doubt, which is why I’m very, very happy to announce that at our party conference we actually passed a levy, which may or may not see the light of day—sorry, a remit, which would require a levy, but that’s more for a political discussion, and I’m here in a constitutional role today, ensuring that the nonsense being talked about on the other side of the Chamber is called out for what it is.

They had a chance to tame corporate behaviour over the last nine years. They won’t do that, because they are the political extension of corporate New Zealand; on this side of the House, we’re not. We stand up for the provinces. We stand up for small to medium sized enterprises. We stand up for ordinary, garden-variety households that are struggling to deal with the pernicious effects of monopolistic behaviour in oil companies, in supermarkets—look, the list could go on, and for fear of exhausting the English language I won’t say too much more on that list, but rich it is—an array of targets, and it’s absolutely legitimate for the Commerce Commission to be given that power. Now, if they use the power egregiously, the High Court and the inherent jurisdiction of the High Court stands there willing to receive complaints, and the High Court will move against the Commerce Commission. The notion that somehow we’ve weakened the Commerce Commission is an absolute load of codswallop.

What will actually happen is that the message will go out to the executives and the decision-makers in corporate New Zealand—sneaky, egregious, manipulative behaviour will now be shown the full light of disinfectant sunrise as a consequence of this side of the House agreeing to pass the bill.

MATT KING (National—Northland): Thank you, Madam Chair. National supports the bill, and I’d like to acknowledge the officials who came to the Transport and Infrastructure Committee and were mighty impressive with their contributions and their help with drafting this bill. It amends the Commerce Act 1986 to introduce a market studies regime. I’ve had the pleasure of hearing from the Minister Kris Faafoi, and I have a question for you: why is he not in Cabinet? He’s the best they’ve got.

Kiritapu Allan: Relevance.

MATT KING: He’s the best they’ve got. So, very relevant—very relevant. So I support your application to Cabinet.

This bill says that either the Commerce Commission or the Minister can initiate a market study if it’s in the public interest, what’s best for the consumers. On the select committee, we heard a reference to having an enforceable undertakings regime, which gives it teeth, because I understand that the cease and desist regime previously was rarely ever used—didn’t have any teeth. So we support this bill because it’s, essentially, our work—it’s, essentially, our work—but I think the Government needs to axe the fuel taxes.

Now, Minister Faafoi asked the question before—

Kiritapu Allan: Relevance.

MATT KING: —well, he asked a question, so I have to answer it—what we would axe out of roading projects when we axe the tax. The trams—the billion-dollar trams, multi-billion-dollar trams. Axe those trams, that’s what I’d say. We’ve got record high fuel prices, so it’s a real burden on our economy. It’s really hurting families, it’s really hurting small businesses, and it’s hurting rural New Zealand. It’s really affecting the cost of living. Everything that’s transported on the road has gone up in price—the cost has gone up.

I’ve got a constituent in my patch who has a trucking company, and when I went to see him during the campaign 18 months ago, things were going all right for him—he was trucking along. His fuel bill has nearly doubled—it has nearly doubled—since 18 months ago, and he passes that price on to his consumers. The Gull service station—we’ve got the Gull service station down the road—had diesel at under a dollar, and now it’s $1.60, and he passes that on. His fuel bill, on average, was around $10,000 a month, and now it’s close to $18,000. That’s a massive increase in cost.

The Government seized on the Commerce Act. It’s come along at the right time for them to say we’re going to have a market study. But I can save them the cost, because most of the increase is taxes. I remember Jacinda Ardern during the campaign saying, “No new taxes.”—no new taxes. She said that during the election campaign—

Hon Jacqui Dean: “In our first term.”

MATT KING: “In our first term.”—no new taxes. Man, are they hitting us with taxes. Clearly, they’re spooked by the community anger about this.

So a market study—it’s a lengthy process. It’s going to take at least 12 months, so there’s no immediate relief to motorists. It’s going to take at least 12 months, and it’s going to be a huge burden on businesses—it can be a huge burden on businesses—so it shouldn’t be taken lightly. We support the idea of market studies—we do. We just think there should be some ministerial oversight. They should have a veto right. Commerce Minister Kris Faafoi estimated the cost to be around $400,000, but the officials have said that figure’s more likely a million dollars or more. So he’s way out on his estimates, but I ask you this question—this really important question: why is he not in Cabinet? Thanks very much.

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): Madam Chair, thank you. I’d like to thank Matt King for being able to have the rehearsal of his general debate speech this week. Alastair Scott raised some issues for which I have concern as the Minister of Commerce and Consumer Affairs, and, again, it goes to show, I think, some of the confused messaging that the National Party has had during this Part 1 debate. Earlier in the debate, former Minister of Commerce and Consumer Affairs Jacqui Dean was talking about the Commerce Commission people—they’re nice people—but then what concerns me is that we have a member of the Opposition calling into question the integrity of the Commerce Commission, saying that they wanted to stay in their jobs as a ruse to making sure that they could initiate market studies. Now, I’m hoping that that is a careless remark from the member, but I think that the Commerce Commission has a lot more integrity than that. To the suggestion that Mr Scott made that they may, willy-nilly, initiate market studies as a ruse, as I say, to keep their jobs is both simplistic and, I think, stupid and dumb on the member’s part.

I’m a big fan of independence of certain entities within the Government framework, the Commerce Commission being one of them, but for the member to suggest that the Commerce Commission would be silly and initiate market studies because they wanted to stay in their jobs I think crosses the line, to a degree, and doesn’t show due respect to an entity that is very important in terms of the enforcement of the Commerce Act. The debate can be robust in this House, but the member might want to rethink his remarks. I’ve only been the Minister of Commerce and Consumer Affairs for one year—for 12 months—and all my dealings with the Commerce Commission have been ones with integrity. I know that there are points of difference of opinion in and around this legislation, and if the Opposition thinks that the members of the Commerce Commission are good people, that’s fine—that’s an opinion—but to suggest that they might use the market power initiation to “keep their jobs” or stay in their jobs I think might need a little bit more thinking from the member involved.

BRETT HUDSON (National): Thank you, Madam Chair. I’d like to respond to some of the earlier comments of the Minister in the chair, Kris Faafoi. Before I do that, I just want to respond to Mr Jones’ contribution where he was talking about Countdown supermarkets, his concerns, and how the Government—apparently, nothing happened. Well, Mr Jones must have a very short attention span, because in February 2014 the Commerce Commission announced it was going to undertake a study around those allegations, and on 20 November 2014 they reported back.

Just to make it clear, their chief executive said “the allegations … against Progressive … were serious and the Commission had undertaken an extensive and thorough investigation into those allegations.” They also remarked, “The Commission [did] not believe that Progressive has breached any of the laws it enforces and it will not be taking any action against Progressive.” So for Mr Jones to suggest that the laws were somehow inadequate or the Government somehow didn’t do anything is patently incorrect and in no way supports this bill or its provisions, because what the Commerce Commission did there is it used existing powers to investigate a single market participant. Market studies are not about single market participants; they are about entire markets, and the Commerce Commission have been absolutely clear on that. In order to undertake a market study, they will have to study the breadth of the market across all participants—large, medium, and small.

So when Mr Faafoi made the remark that he thought small businesses would welcome this change—small businesses are the ones who are disproportionally going to be impacted by the imposition of these studies. The commission have acknowledged that they’ll have to include them in the study in order for it to be a market study, and those businesses have fewer resources to deal with them. But all businesses, whether they’re small, medium, or large, can only respond to the impost of a market study by seeking to recover those costs against their consumer base. So it won’t help bring prices down. Unless it finds some egregious findings and recommends changes in law, it’s not going to bring prices down, and, actually, the undertaking of the studies themselves is going to put upward pressure on prices.

Look, I don’t think Mr Faafoi also understands the impact that small business can have on a market. I think that for the consumers it’s actually very positive. For instance, if he had spoken to people in the fuel services industry—petrol companies—he might realise that, for instance, in the Auckland market, one of the fundamental drivers as to why that’s such a competitive price market is not actually Gull—it’s not actually Gull. It turns out that over 1,200 of the 1,500 service stations around New Zealand are mum and pop - type operations, and in Auckland it is those small independents that drive price movements in petrol and diesel across the city. It is people who buy their petrol from a supplier and make their own decisions on how to price it that drives the price down. Then they have the big players reacting to them.

So what’s Mr Faafoi’s answer? “Oh, I’m going to penalise those small players—I’ll undertake a market study.”—huge cost impositions on them, having to provide the same data that BP and Z Energy and Mobil have to provide. So, Mr Faafoi, your proposition here is not going to protect those businesses; it’s going to put cost impositions on them, which is all the more reason why it should be Cabinet, through the responsible Minister, that has the final say as to whether or not a market study is undertaken, because Cabinet will, as its elected members—it’s their job, it’s their fundamental reason for being, to understand what any decision will mean for constituents, for people in our communities, for businesses, for business owners, and of course for consumers.

The other point Mr Faafoi raised: he said, in the first 15 minutes of this Part 1 debate, that National Party members had not mentioned the consumer once. Well, that’s troubling because for some reason Mr Faafoi doesn’t understand that a well-functioning market is good for the consumer. That’s what people on this side of the Chamber were saying. So when he claims they weren’t mentioning the interests of the consumer, the whole comments from this side are in the interests of the consumer.

Mr Faafoi might want to read his principal Act again, because the objectives of the Commerce Act make it clear that it is about protecting the interests of consumers not just through prices—no—but through innovations from business. Mr Faafoi, businesses that are being smacked with extra regulation and extra cost not only don’t have that spare profit to innovate with but, quite frankly, it will erode business confidence even further and the likely outcome from that is that business will be less likely to innovate. It will be the consumer that suffers. Support the SOP, Minister.

Hon JACQUI DEAN (National—Waitaki): Thank you, Madam Chair. A lot of the debate this afternoon has, quite rightly, centred around the initiation of a competition study or a market study. The position that the National members have expressed in various ways is that by supporting Brett Hudson’s Supplementary Order Paper (SOP) 139, which puts, effectively, ministerial and Cabinet oversight over a market study, it actually protects business in New Zealand. It protects business—both large and small business—in New Zealand from a Commerce Commission - initiated study, which, in the view of the current Government of the day, may or may not be required.

I think we need to reflect a little bit on the meaning of leadership and our representative parliamentary democracy which we have in New Zealand, where the current Minister of Commerce and Consumer Affairs, the Hon Kris Faafoi, represents his electorate, he comes to Parliament and is given the honour and responsibility of being a Minister of commerce, and yet, very quickly after having been in receipt of that honour, he just puts it across to one side and gives responsibility back to the bureaucrats. So the very reason why, when National were in Government, Cabinet approved a ministerial and Cabinet sign-off of a market study was to protect New Zealand businesses and to protect New Zealand consumers. But this Government has cast that aside. It is not the Commerce Commission’s role to protect small businesses, but it is that Minister’s, and that Minister has quite happily and quite trustingly—touchingly trustingly—cast that responsibility off to one side.

I do regret that this Government has taken a policy position which seems to, effectively, be the easy way out—the path of least resistance. “I know there’s a market study on, but it wasn’t my decision. We’ve got to allow the bureaucrats to take charge of decisions such as a market study which is going to impact on your business. I’m terribly sorry that it is costing you a lot of money, but it’s not my fault because I must let the bureaucrats lead this.”—I mean, isn’t that a ridiculous policy position?

That is why I support the SOP of Brett Hudson, which reinstates the very sensible approach of having Cabinet doing what Cabinet should do—that is, take responsibility for a measure which is going to be intrusive and expensive, and probably worth doing. But the reason National advanced the Commerce Act amendment work was because, in certain circumstances, very carefully thought-out market studies are an absolutely necessary tool for the Commerce Commission. They’re a tool for the Commerce Commission, but they should not be something that the Commerce Commission can initiate.

However, we now have a situation where the Prime Minister of the day has been judge and jury, talking up market studies, noting that customers are being fleeced at the pumps, and then inviting other Ministers—as if it were some kind of lolly scramble—to come up with ideas of their own for market studies. How enticing and how exciting is that for a Minister who can’t think of anything else better to do with their time—“Yes, let’s have more market studies.” Well, that’s all very well, but doesn’t that completely ignore the fact that it’s not the Ministers who are initiating market studies? Aren’t they just arguing against themselves?

All of this points to a woeful lack of good policy development within this Government. What this points to is a Government which has put yet more taxes on the public of New Zealand. The absolutely inevitable thing has happened. They’ve put a regional fuel tax on Auckland which we are feeling in North Otago—diesel, by the way, is $1.86 at the pump. No wonder small business—

Hon Shane Jones: Shop around.

Hon JACQUI DEAN: Ah, and there we are. There we have the “Clown Prince of the Regions” saying “Shop around.” How do you shop around in a small town—[Time expired]

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): Before the debate on this part closes, I want to make sure I make some points, because I do feel it coming to a natural end. Can I just respond to some comments made by the Hon Jacqui Dean, where she said that it’s not the job of the Commerce Commission to protect small business. Well, I’ve got some news for her: it actually is. To make sure that businesses flourish in New Zealand and that competition is fair—that’s one of the key outcomes of what we asked the Commerce Commission to do. So I’m quite troubled that we have a former commerce Minister in the Opposition who fundamentally believes that it’s not the job of the Commerce Commission to protect small business, which should also be troubling for the Opposition.

I also want to point to an argument that has been made by a number of members opposite in and around their disdain for the fact that the Commerce Commission would go and ask businesses of all shapes and sizes within a market to get information. Well, my simple question to the members opposite—as they have been saying during this debate this is a piece of National Party legislation, allegedly—is how would it have been different under you? Where in the bill would it have been fundamentally any different in the collection of that information?

Judith Collins, a former Minister herself, has said that in the fuel market study, the previous Government didn’t have the ability to go and collect information and data, and Alastair Scott himself—in amongst a couple of shocking things—made this point that we need to make sure that we’ve got the information and the data. The Commerce Commission will only do that with businesses, both big and small, if it finds it necessary and desirable to get the information that it needs to make the recommendations and the findings to the Government as to whether a market is operating effectively.

So can I just reiterate the point to the members opposite: you might have to start bringing your arguments together to be clearer. I’m not sure whether you actually support or don’t support this piece of legislation. I know you’ve changed your minds as to whether or not you’re going to be voting for or against it, but I suggest you don’t poke holes in your own arguments by saying this is a National Party bill and taking credit for it, but then end up making arguments against the details of it. It doesn’t look good, especially when you change your tune in the voting.

Andrew Falloon: Madam Chair?

Brett Hudson: Madam Chair?

CHAIRPERSON (Hon Anne Tolley): I call Andrew Falloon.

ANDREW FALLOON (National—Rangitata): Thank you, Madam Chair, and I apologise to my senior colleague Brett Hudson. Look, I just want to respond to Minister Faafoi for a moment, because I think we’ve been reasonably clear—in fact, very clear—this afternoon about what our position is. Our position is that we support the overall intent of the legislation. We support the legislation as it was drafted by the previous National Government. What we don’t support are the changes that have been made to the legislation since the new Government’s come in.

We all support the bill because we do think that it is, overall, a worthy piece of legislation, but we don’t support some of the aspects around it that don’t provide for democratic oversight of decisions made by the Commerce Commission, and that leads me to my point that I want to make to begin with.

In my previous contribution, I spoke largely around petrol tax and, I guess, the reason that the Government’s brought this legislation to the committee this afternoon. But just at the end of my last contribution I was making a point in support of Brett Hudson’s Supplementary Order Paper 139 around why we should require the Commerce Commission to come to the Minister and seek his approval before they go off and do their market study. I pointed to new section 51E, inserted by clause 4, which says that a Minister must respond to a competition report. So the bill as it stands already acknowledges that the Minister plays a fundamental role in this process, that the Commerce Commission has to come back with their report, hand it to the Minister, and the Minister has to respond. All we’re asking is that that process is, I guess, frontloaded, where the Commerce Commission has to come to the Minister to begin with to seek his approval to go off and do a market study.

That leads me to a couple of questions I have for the Minister. Again, he’s been very good at answering our questions this afternoon. The first one is, particularly where the Commerce Commission have gone off and decided that they want to hold these market studies themselves, will the Minister, or will the Commerce Commission, put a limit on time? As we’ve heard from the Prime Minister recently in relation to petrol tax, this is an urgent issue apparently—this is an urgent issue. Well, our concern on this side of the Chamber is that all they are doing is kicking it down the road. These market studies could take a year, two years, three years, or more, and all the Government will have to do during that time is say, “Oh yes, we’re holding a review. We’ve got this market study; the Commerce Commission is looking into it.”, and it won’t actually report back until, potentially, the next term of Government.

The second question I have for the Minister is in relation to scope, and again I’ll use petrol as an example. If the Government pushes ahead with their plan for a market study on petrol, which I think is not a silly idea—if they do do that—will they put a limit on the scope of that inquiry to certain players in the industry? What we’re worried about is some of those smaller businesses, particularly petrol stations—and, let’s be fair, individual petrol stations don’t really have a lot of say over what the price of petrol is. Will the Commerce Commission start knocking on the door of the Allenton gas station in Ashburton and say, “You need to turn over all of your records. You need to turn over your books. Tell us what your business is. Tell us what your margin is.”, because that would be quite a frightening experience for a lot of small business owners.

Exactly the same goes for the dairy industry. I know Minister Jones across there has had a lot of words to say about Fonterra, which is fair enough—he’s entitled to those views. But our concern is that if he wants to go off and make those statements about the dairy industry, that might force the Commerce Commission into undertaking a study into the dairy industry, and if there was going to be one of those studies, what would be the parameters of that? Would it be a focus on Fonterra? Would it be a focus on farmers? Would you have the Commerce Commission turning up to dairy farms and saying, “Turn over your records.”? Would it be the Commerce Commission turning up to your corner dairy and saying, “Turn over your records. We want to know what your margin is on a litre of blue top milk.”?

I also have another very brief question to ask the Minister, which is just in relation to new section 51C, which relates to consultation on a draft competition report. In new section 51C(2), it says that “In preparing its final report, the Commission must have regard to any comments received on the [final] draft”. My question to him is: when it says “must have regard to”, what does that mean in terms of if there are factual inaccuracies in the report? “Must have regard” can mean, “Oh yes, we’ll listen to you, but we don’t really care what you have to say.”

My final point in this five-minute address is just, I guess, the overall signal that this legislation sends. Shane Jones, again, has made lots of comments about Fonterra, he’s made lots of comments about supermarkets—just this afternoon he’s been making all sorts of comments about banks. Is this going to be a vehicle for Shane Jones and the Minister to go off—[Time expired]

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

CHAIRPERSON (Poto Williams): Oh, I think we’ve got room for one more.

BRETT HUDSON (National): Thank you, Madam Chair. I want to talk principally about the reporting elements of this and the Minister having the ability to have regard to or to follow those, or not. But, before I do, I just want to make a point to Minister Faafoi, who stood to say that the Commerce Commission in a market study may choose to talk to a broad range of participants, or may choose to talk to small or medium sized businesses or may not. Well, in actual fact, in the oral submission for the Commerce Commission at the Transport and Infrastructure Committee for this bill, in response to a specific question about would a market study require the commission to talk to participants, small and large, across the breadth of an industry, their response was yes; in order for it to be a market study, they would have to talk to a broad range of participants. That, by definition, means they will have to talk to smaller and medium sized businesses—not all of them, but at least some of them—in order for it to be a market study.

So the Minister might want to reflect: did he mislead the committee when he said that they have the choice of whether or not they might talk to small or medium sized businesses? In order for it to be a market study, they will have to, or otherwise what they undertake will be something of a sort of market study. So is the Minister actually suggesting that a market study may not be a study of an entire market but it may be just whatever the Minister or the Commerce Commission might want it to be on any given day of the week? In their submission they were clear it should be very comprehensive, very long, very resource-consuming, and with a broad range of participants.

The reason I stood to take this call—my final call on this part, because I know I am limited to four—to talk about the reporting is that it was offered as a protective mechanism. It’s this idea that, well, the Minister doesn’t have to or Cabinet doesn’t have to accept the recommendations that the Commerce Commission may make as the outcome of a market study is somehow, in itself, providing a protection for industry. And that is true; I mean, the Minister won’t have to necessarily adopt any or all of the recommendations that might flow from the study, but the problem with that is that the study’s already been undertaken. The impost, the cost on the taxpayer, and the cost and impost on all of those businesses will already have been felt because, of course, by definition, the report of findings can only happen after all of the investigative work has been undertaken.

That is the ambulance at the bottom of the cliff, to use an analogy. My Supplementary Order Paper 139 is the fence at the top, because it provides a level of governance to ensure that the potential benefit that can be foreseen from the study warrants the total cost—not just the cost on the budget of the Commerce Commission but the total cost of the impost on all of the New Zealand businesses across that market; large, medium, and small—and that it is worthwhile placing that impost on them because the benefits which might come from the study and its recommendations warrant that. To wait and see until the end if, actually, the study that was undertaken was worthwhile because it actually uncovered some things that should be changed is leaving it all a little bit too late, because if the commission doesn’t find anything of great substance that somehow warrants a fundamental change to that market, then there will have been a huge amount of cost imposed on, particularly—my concern, obviously, is for small and medium sized New Zealand businesses, because they are less in a position to deal with that.

But, actually, even for the larger businesses, you know, they, by the nature of their businesses and their shareholding, will look to offset the cost of these studies against their customers somehow through prices. It may be deferred discounting. It may be that a price that would have gone down this year won’t go down because of that additional cost elsewhere to their business. But, fundamentally, if you go through an entire exercise and there’s nothing of great substance required to change at the end of it, that can have an incredibly high impost, not only of taxpayer spending because of the consumption of that Commerce Commission budget and Commerce Commission resource—because they told us they won’t be hiring additional full-time people and dedicating them to market studies. These are coming out of existing resource. So for that period of time, there’ll be other things they won’t have been doing because they’ll be doing the studies, and if at the end of all that we get to the point where there’s nothing that really needs changing, then there’s a huge impost on New Zealand and on the taxpayer for no real benefit.

So I’d implore the Minister one last time: place the fence at the top. Place a level of governance over the top and have ministerial approval for self-initiated market studies.

RAYMOND HUO (Labour): I move, That the question be now put.

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

Ayes 63

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

Noes 55

New Zealand National 55.

Motion agreed to.

The question was put that the amendment set out on Supplementary Order Paper 139 in the name of Brett Hudson to Part 1 be agreed to.

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

Ayes 55

New Zealand National 55.

Noes 63

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

Amendment not agreed to.

Part 1 agreed to.

Part 2 Specified airport services

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

BRETT HUDSON (National): Thank you, Madam Chair.

Hon Shane Jones: Wake up!

BRETT HUDSON: It’s wonderful to move on to—oh, I was just texting my daughter, Mr Jones. I’m sorry if that’s a terrible thing in your eyes. Some of us care about our children.

On Part 2, “Specified airport services”, this is a part on which, as the bill was introduced and went through the Transport and Infrastructure Committee, we had particular issues.

Hon Shane Jones: I raise a point of order, Madam Chairperson. At a time of heightened sensitivity to family concerns and the damage that bad politics does, I take very strong exception to that member’s suggestion that I, or anyone else, do not have my seven children or my nine mokopunas uppermost in my mind.

CHAIRPERSON (Poto Williams): Mr Hudson—

BRETT HUDSON: Thank you, Madam Chair.

CHAIRPERSON (Poto Williams): No, Mr Hudson. I think perhaps—

BRETT HUDSON: I withdraw and apologise.

CHAIRPERSON (Poto Williams): Thank you.

BRETT HUDSON: The airport services is an area of the part that we had issues with coming into the Transport and Infrastructure Committee, but of which I will acknowledge the officials, who, upon listening to the submissions that were received on this part, have made some significant and constructive changes to. There are still two particular areas of concern that we have around this, but I do want to at least begin by acknowledging that the attention they paid to those submissions and the changes they have made have gone a great way to, from our perspective, making this change far more palatable.

The two areas that are still concerning but which we’re not going to allow to stand in the way of the passage of this legislation are, first, a comment I made when the departmental report was presented to the committee was that the basis behind the argument that a full inquiry into amending the particular regulated services or type of regulation, particularly the type of the regulative method on airports that are currently regulated, was acceptable to be done under a truncated process because Parliament had already considered that those airports should be regulated.

I think that, actually, we have to take Parliament at its full extent of word and knowledge when it passes legislation. Unless we can find very clear statements from Parliament at the time, I don’t believe that the fact that Parliament agreed to a certain amount of tier-two regulatory power at one time inherently means that Parliament would have no issue therefore with that being changed.

My view on this is that when Parliament passed that law at the time, it fully appreciated that what was in place was that those airports would be regulated under an information disclosure regime and that it wouldn’t necessarily be an easy task for that to be changed, and, if it were changed, the process to change it would be as comprehensive as the process that put it in there in the first place, in terms of the inquiry.

So we don’t actually think it was established satisfactorily during the select committee process that there was a prior argument, a prior evidence, that changing the ability for how an inquiry might be undertaken under currently regulated airports and the truncated nature of that—how that was already established to be OK in the eyes of Parliament. The argument was “No, this is actually a matter for Parliament to debate from the very beginning to the end.”

The second point, and I think it’s the more fundamental one, actually, to this, is that in the regulatory impact statement that accompanied the introduction of this bill, officials noted that there is no evidence that the current regime of information disclosure is not working for those regulated airports. It also noted in that same regulatory impact statement that even if there were a problem, the impact of landing fees on consumers—and the Minister of Commerce and Consumer Affairs has been telling us how we should all be thinking about consumers in everything we talk about in this bill—would be minimal and far less than the other competitive pressures on airfares.

So my argument there is I don’t believe it was ever established that there was a fundamental need to take power away from Parliament—because that is what this does—and place it actually in the hand of the Government, the hand of the Ministers, the hand of the Executive Council, to be able to decide to change the regulatory environment for these airports that are currently regulated, instead of sending it back to Parliament to decide whether or not there should be a change, should it come to pass that there is sufficient evidence, or any evidence, quite frankly, that the current regime is not working and, therefore, that it should be looked at to change.

That simply was not ever satisfactorily—well, it wasn’t actually truly canvassed to be honest, but it was never evidenced. There was some talk about the potential that the information disclosure means that airports could play a bit fast and loose; they could choose to try to not disclose information or all of the information, or they could argue a lot to try to delay things. But I come back to the point that the officials made on the introduction of the bill: that they had no evidence that that was happening. There was no evidence that the information disclosure regime was not working as intended.

Now, I think it’s actually a fundamental part of the legislative process here, which is why, when legislation comes in that is creating or amending regulation-making powers—that, one, the Regulations Review Committee was established in the first place, but that it goes off to that committee for comment. What is happening is effectively the outsourcing of parliamentary sovereignty, because it’s Parliament that makes the law, not the primary legislation. It’s not the Government; it certainly isn’t the officials; it is Parliament that, through the process of debate here across all stages, makes the determination of whether or not a law will be enacted in the first place or amended. To then put greater latitude into regulation-making powers is to outsource that decision from Parliament as a whole to the executive wing, to the Government, to the Executive Council on advice from officials. It’s a big step because it takes the decision away from 120 members and places it in the hands of—I think it’s roughly about 29 members now—25 members, shall we say, in Cabinet, plus the Governor-General.

So I actually think it is—well, it should be—contingent on the Government, given that it’s their legislation, establishing the need to begin with. So giving the evidence that says what we have today isn’t working and this is why Parliament shouldn’t wait any longer but should hand the power over to the Government on its behalf to make the change when Government feels that it might become a greater need. That is in effect what the amendments in Part 2—prior, particularly, to the amendments the officials recommended in the departmental report. It’s what those amendments do. It removes the authority from Parliament and places it in the hands of the Government, and what is Parliament for if not to scrutinise the work of Government? But by doing these things we take that scrutiny away. After this debate it probably will in fact—because we have given our support to the legislation as a whole—enact that.

So I do acknowledge, again, that the officials did listen to submissions on this part of the bill. They did make changes. I particularly commend the amendments that they did offer up around the need to properly assess the costs versus benefits, particularly if there is a move to seek to add additional airports into the regulated airports scheme, but also if there are new services—not particularly changing those current regulated airport services, but if there are new services to be brought on—the Commerce Commission will have to undertake a cost-benefit study on that, and will have to provide that report that shows that it will be worthwhile, and why it would provide those additional material benefits.

But that doesn’t take away, I argue, from the fundamental point that while it is all good that the bill that has been before the House has proposed amendments to make it better than it was on introduction, there was still not an establishment that the need to change, to add the regulation and to amend the existing regulation—it was not evidenced that there was a current need that would require that Parliament release some of its sovereignty to the Government to make the decision on its behalf. Hopefully, were there to be some future evidence, that might actually give Parliament cause to want to change it. Minister, if that comes about—because there’s no evidence of a problem today—why not bring that back to Parliament then? It’s what we exist for. Let Parliament make that decision when it’s required. Minister, please answer that one.

ANDREW FALLOON (National—Rangitata): Thank you, Madam Chair, for the opportunity to speak to Part 2 of the Commerce Amendment Bill. This relates to the regulation of airport services, which, in my view, is a very important but probably understated part of this bill. We’ve talked a lot this afternoon about other parts of the bill, but this is a very, very important part, which I think is worthy of a lot of debate.

I want to draw the committee’s attention to the fact that, in the bill, it specifies three airports, they being Auckland Airport, Wellington International Airport, and Christchurch International Airport. So my first question for the Minister is: at what threshold does an airport become large enough, or provide enough services, to be included in that list? As we know, Auckland, Wellington, and Christchurch are our three largest centres. But if you look around the country at the moment, there are a large number of airports which are increasing services, and they’re increasing the number of airlines that are flying in, which is very good to see. And so the example I’d draw the Minister’s attention to specifically would be Queenstown. Queenstown now, I believe, has more airlines flying into it than Wellington Airport does, which is very good for the South Island and very good for my part of the world. So that’s my first question to the Minister: at what point does an airport become of a scale or of a size to be worthy of being included in this list?

The second question I have is just in relation to a point that Brett Hudson made, which is in relation to oversight by Parliament. The piece of legislation before us talks about strengthening the regulatory regime. Of course, strengthening the regulatory regime usually means imposing more regulation. It also goes on to say: “the commission and the Minister to consider when deciding whether to impose a stronger type of regulation on airports in the future”. And that, I guess, on this side of the House, is of concern to us: that a Minister could go off and willy-nilly decide to put additional regulations on without adequate parliamentary oversight. Of course, Ministers always have the opportunity to put on regulations, but our question, I guess, is: what oversight does Parliament have of that process?

The third point I want to make is just coming back to other airports, because my electorate—I’m very fortunate—has three airports: Timaru Airport, Ashburton Airport, and Rangitata Island Aerodrome, which, if you haven’t been there, I thoroughly recommend. It’s a great part of the world. And I have this hope, I guess, that Timaru Airport will one day provide services to the east coast of Australia and perhaps as far as the Pacific. So I have concerns that if this piece of legislation, as it’s currently drafted, specifies three airports, how far will the Government want to go with that? Because what they are talking about is increasing regulation on those three existing airports, but what plans does the Government have to increase regulation on other airports other than those three specified airports?

The last question I have is just coming back to how those airports are determined. The bill as it’s currently drafted talks about—and I’ll read one of the three examples, because it’s Auckland, Wellington, and Christchurch airports, but it says in here “the company (as defined in section 2 of the Wellington Airport Act 1990) that operates Wellington International Airport or any subsidiary of, or successor to, that company …”. And so the question I have for the Minister is: who determines what the successor or subsidiary is? Because, as we know, companies can structure themselves in many, many ways. Look at Air New Zealand, for example: they operate multiple companies under the banner of Air New Zealand. They also have Air Nelson, they have Mount Cook Airline, and until a couple of years ago they also had Eagle Airways. Airlines and airports and companies in general construct themselves in such a way that they can have multiple subsidiaries, and so who determines, under this Act, what companies are or what subsidiaries are, as defined by this bill?

That also relates, I guess, to the successor aspect. So, again, unfortunately, companies do go under from time to time, and they do restructure themselves, and it can be very difficult sometimes for regulators to determine what a successor company is. So my last question to the Minister is: under this Act, who will determine who the successor company is if Wellington International Airport, for example, went into liquidation, and a new company came in to take over Wellington International Airport—that would obviously be the successor, but if they were to structure themselves in such a way that that was to become unclear, who would determine who the successor airport and company was?

Hon JUDITH COLLINS (National—Papakura): Thank you, Madam Chair. I’m really looking forward to hearing from the Minister about what the problem is that we’re wanting to solve, because from my experience of travelling around the country and doing a lot of flights, our airports generally seem to be operating very well, and I’m just not quite sure what the problem is. So I think one of the issues that we always need to keep in mind when we are wanting to regulate even more than what we currently do is that we need to understand that almost all regulation brings with it cost.

I’ve heard the Minister before—I thought quite unjustifiably, actually—commenting that this side of the Chamber wasn’t talking enough about consumers. So, as a consumer, let me say, actually, this matters. It matters because cost is added, and that cost is passed on to consumers for the use of those airports, whether it’s through airline tickets or, in the odd case, where it’s some other form of levy on customers who are travelling. So I’m not sure what the problem is. Our airports seem to work very well. The only one thing I’d say for Auckland Airport: please sort out the roading that you also control, and then I’ll be even happier. And, by the way, quite a lot of the issues there are issues around security that tends to take quite a long time if you’re there at the wrong time of the day. So what’s the problem? Why do we need to have this? We understand absolutely the fuel issues. What we don’t understand is what it is that we’re talking about here and what is the problem. What I see are airports that are operating very well around the country.

The odd other issue that I’ve seen is where civil aviation has not been able—say, was it in Napier?—to guarantee that there would be air traffic controllers. Those are the sorts of issues that are probably well outside of the realm of this proposed legislation, and yet I would have thought were probably quite important. So I don’t think that’s the role of the airport companies; I think that is the role of the Civil Aviation Authority (CAA), and these are the things, I think, that we would want to see more. I’m not quite sure what is going wrong at Wellington Airport or Auckland Airport that needs to have specific inquiries into it—all of which I know will cost those companies tremendous amounts of money, which will then be added on to tickets when people travel there. So I would really like to understand that.

I also note that replaced section 56F of the Commerce Act, set out in clause 10, makes it quite clear how a commission or inquiry is to be triggered, which is that the commission must hold an inquiry if required to do so by the Minister and also may hold an inquiry on its own initiative. So I’m not quite sure why we’d want to have it to be both the commission and the Minister. Why not the Minister? Obviously, the commission would come to see the Minister and would speak to the Minister who’s in the chair—who could be slightly more generous to us, because we’ve been so generous to him, quid pro quo, and all that.

He could actually—you know, if they had a problem that they wanted to solve, I don’t see why they wouldn’t go to him to discuss it. I’m sure his door is always open, as it always was when the Hon Jacqui Dean was the Minister—always willing to listen. So who’s going to pay for it? Well, the answer is the consumers. That’s who pays for it. I think that the Minister does need to realise that whether it’s fuel or anything else, every cost from a business ends up being paid for by the consumer. That’s who pays for it. There’s no point talking about business paying for it. Business will pass it on and if business can’t make a profit it won’t be in business. So let’s just be real here.

The cost of living is not something that we should think is somebody else’s issue. It is an issue for all of us and it’s one of the issues that the New Zealand public has said to us is one of the most important issues it is facing. And just added cost to everything, more regulation, less in terms of outcomes—I think we deserve an answer in the committee from the Minister as to the problem that he’s wishing to solve. And, by the way, how’s that not going to be passed on, the cost of it, to the consumer? We’ve taken his message and we’re going to talk about that.

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): Thank you, Madam Chair. I just want to take an opportunity to respond to some of the comments made by members of the National Party during this debate so far. Can I begin with those made immediately before I took to my feet in respect of section 56F, in clause 10, where the commission can hold an inquiry at the behest of the Minister and of their own initiative. I’m assuming the Opposition has a problem with that because it had a fundamental problem with Part 1 of this piece of legislation.

Can I just point out that this is kind of one of those quasi-operational roles for the commission. The commission is not waiting around for the Minister to tell it what to do. It has powers to make sure that it does protect consumers and competition. So, to the member who asked the question in and around section 56F(1)(a) and (b), the commission can either initiate itself or the Minister of commerce can ask it to initiate an inquiry, which I think we should see fit to it doing.

Can I also respond at a relatively high level to Mr Hudson’s concerns around the increased regulation or potential regulation for the airports in and around Part 2. In his Part 1 speech he was talking about putting a fence at the top of a cliff. In essence, I believe this is an example of where we are putting a fence at the top of the cliff to make sure that if an information disclosure regime for those airports which are currently regulated does not work, we do have the ability to further regulate. So to answer the question that the Hon Judith Collins made in terms of what we are trying to fix, I would note that the airports themselves welcome the clarification in and around this piece of legislation, but while the information disclosure regime is working at the moment, this piece of legislation, as I mentioned before, in and around section 56F allows for an inquiry to be started if we believe that the information disclosure regime isn’t working any longer.

Now, I don’t see the sense in us giving the Commerce Commission the ability to have an inquiry if we don’t give it the option of further regulation down the road, because at the moment we’ve got an information disclosure regime that works well. We can’t guarantee that it will always work well, but if it does not, if the integrity of it is called into question, then having a look at it and then having a further regulatory regime already there within this piece of legislation there ready to go, makes sure that this legislation acts, I guess, in a way as a deterrent for those airports that are regulated, which, as Mr Falloon mentioned, are currently Auckland, Wellington, and Christchurch—there would be another regulatory step available to the Commerce Commission.

So, I guess, that’s the response to the questions that have been posed so far by the members of the Opposition. Making sure that we can ask these questions is a right and proper thing to do, but, I guess, to answer Mr Hudson’s question again, not giving any regulatory ability beyond what is already there doesn’t make sense if we’re going to give the Commerce Commission the ability to inquire.

ANDREW BAYLY (National—Hunua): Oh, thank you, Madam Chair. First of all, I’d just like to acknowledge and thank the Minister, Kris Faafoi, for stepping up to the plate and actually trying to answer some of the issues that have been raised by members from our side. I think the first thing I would do is I’ve got to make a disclosure. I’ve got to come clean: I am a consumer. I heard earlier before that it was all about the consumer, so I just wanted to say to the Minister that I am a consumer and I do use and avail myself of airport services, as no doubt he does from time to time.

I just want to reiterate the same point I made earlier, that this is all about making sure that we as consumers get the right services and products, at the right time, and at the right price. So that’s a given—that’s a given. But here we are. We’ve got another example, I think, of the Minister being soft—soft.

The Commerce Commission has a very important role. We know that it regulates the telecommunications, electricity, dairy, and, of course, the airport industries. This legislation is particular to three airports: Auckland, Christchurch, and Wellington, of course. Of course, we’ve got lots and lots of other airports in New Zealand. Before I came to Parliament, I actually advised one of the airports—not of the three specified but one of the others—and I found it interesting. It is the most technical economic aspect, working out whether an airport is charging the right fees. You’ve got terminal fees, you’ve got landing fees, you’ve got car parking, and you’ve got passenger levy fees. But the terminal, as an example, when you come to calculate that, you have to look at their public spaces as opposed to office spaces, as opposed to areas used for airport functions. All that needs to go into an equation—very complicated type of stuff.

What this does, this piece of legislation, is that we’ve got a willing Minister pushed on to actually say, “Well, we think we need to do something.” I think the question that my colleague the Hon Judith Colleague asked was the most pithy, concise question, and I didn’t hear an answer to that sufficiently before.

CHAIRPERSON (Poto Williams): I think you got her name wrong, Mr Bayly.

ANDREW BAYLY: Sorry, Collins.

CHAIRPERSON (Poto Williams): Thank you.

ANDREW BAYLY: Thank you, Madam Chair. The question Judith Collins mentioned before—to the Minister—is that we haven’t had the answer to why we need this regulation. I understand that we do need the Commerce Commission to be able to get access to this information, and they are rigorous. They are rigorous. If you go trawling back through all the media reports over the last few years, the scraps, if I can use that word, between the airports and the Commerce Commission and just general scrutiny of those three major airports have been quite significant.

What this piece of legislation does is it says that we need to give more powers to the Commerce Commission to be able to go and do further work. Of course, if you look at some of the powers, one of the issues is there’s no specific process for imposing additional regulation if the information disclosure regulations are found to be ineffective. I do note that the ministry report said there is no case for that. The second thing is to make sure that the commission’s summary and analysis reports can comment on whether information disclosure is effective for a regulated supplier, introduce a truncated inquiry process to investigate the need for further regulation, and look at new types of regulation using an Order in Council. I’ve just got to say to you that the case for this needs to be made strongly, and I don’t think it has been.

The issue that we’ve got—and it’s the same with Part 1, which we were discussing before—is one of balance. It is one of balance. It is one of protecting the rights of consumers and, on the other side, having a sufficiently robust competitive situation, using the Commerce Commission as the prime agent to do that, to go and investigate and make inquiries as required. It is striking the right balance. What I’d like to hear more from the Minister is not just the word “consumer”, which is an important part; it’s one part of his portfolio. The other part is looking after commerce in New Zealand. That means businesses, large and small across New Zealand, to make sure that they have a fair go.

TIM VAN DE MOLEN (National—Waikato): I raise a point of order, Madam Chairperson. I’d just like to reference a comment made by Minister Jones during that contribution from Mr Bayly which I believe was quite unparliamentary and brings this House into disrepute. The comment “He’s making it up”, clearly inferring that the member was lying, is absolutely inappropriate, and, given that member’s recent delicacy around a comment from Mr Hudson, I would suggest that it is indeed bringing the House into disrepute per Speaker’s ruling 42/3. I would ask that you require him to withdraw and apologise.

CHAIRPERSON (Poto Williams): I thank the member for that point. You are correct in saying that there is some sensitivity in the committee today, and I think we are all aware of that. However, the term that the member used is one that is used often in this debating chamber and one that I don’t think requires the intervention that the member is seeking.

Tim van de Molen: Speaking to that, Madam Chair.

CHAIRPERSON (Poto Williams): No, I’ve ruled on that, thank you—I’ve ruled on it.

TIM VAN DE MOLEN (National—Waikato): I raise a point of order, Madam Chairperson. Are you now ruling that the term “making it up” is dissimilar to an accusation of lying and therefore completely unrelated?

CHAIRPERSON (Poto Williams): Let me just be clear, the member did not use the term lying when he made the comment. I have said that, yes, there are sensitivities in the committee at the moment. However, it is a discussion point that has been well-made in this committee and has not been ruled on. So that’s the end of the matter. We are—is someone else taking a call?

ALASTAIR SCOTT (National—Wairarapa): Thank you, Madam Chair. I would like, quite obviously, to talk about Part 2 of the bill relating to airport services. I also want to point out what I see as a slight inconsistency between Part 1 and Part 2. Part 1 does not require an Order in Council, or a ministerial veto if you like, around any Commerce Commission (ComCom) inquiry. ComCom can initiate an inquiry themselves, as in Part 1. But, in Part 2, it seems—and the Minister might want to help me out here—that the Minister or Cabinet or by Order in Council, you know, gets the last say in whether a short-form process or an inquiry or a regulatory investigation into the airports takes place.

So that, to me—in Part 2 where the Minister or Cabinet has the veto—is a good thing. That ensures that public interest is at the heart of the matter. It is not a bureaucratic decision. It might be a bureaucratic recommendation, but, at the end of the day, the Minister has the say as to whether that short-form process, bothering to intervene or to compel airports to disclose more information for the purposes of transparency and commercial understanding of those airports, is with the Minister. And that’s good, but it’s inconsistent with Part 1—if I can just reflect back on Part 1. That’s where the ComCom is able to initiate an inquiry without the Minister’s veto or without the Minister’s public interest at heart. So if the Minister could help me out on that one, that would be good.

The second point is around the three airports. It does seem to be, again, an inconsistency where only three airports are relevant to this piece of regulation. There are a lot more than three airports around here that have the same market dominance in their area. If it’s good for one, why isn’t it good for another, if you like? Whether it’s Queenstown, whether it’s Invercargill—I think they’ve still got an international airport in Invercargill, correct me if I’m wrong, but they do. They’d probably like a few more passengers through there, and because of the lack of passengers, maybe their prices are too high. Maybe they should be looked at. Maybe that is an issue.

In fact, where there are more passengers and more throughput and more competition, you’ll find that—because competition’s a good thing; it drives efficiencies and it drives costs down. I would expect that where there are greater traffic flows, greater levels of international and domestic transport with people coming through, you will find that they’re able to get their costs per capita really low. Where there’s an airport—even an international one—with fewer tourists and less traffic, they will struggle because of the economies of scale and the lack of throughput through the doors of that airport. So my question is: why just the three? Queenstown’s been mentioned, but I think, as I say, there are other airports and other international airports that might serve fewer people but might well be charging way too much. Let the ComCom make the recommendation.

I agree that the Minister has the last right—the veto, if you like, or the sign-off—and that’s the way it should be, because the Minister in this Parliament does have public interest at heart, and I see that as an inconsistency with the way the Minister’s argued in the first part of this bill. Thank you.

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): I’ll just take a short time to respond to Alastair Scott’s points that he made in his speech. First of all, he raised the issue of only a Minister being able to initiate an inquiry and asked why Part 2 didn’t have the ability for a commission-initiated inquiry. I’d point the member to new section 56F, in clause 10, on page 9, which the Hon Judith Collins alluded to earlier in this debate, where the commission can hold an inquiry if the Minister required it to do so or the commission can “(b) … hold an inquiry on its own initiative.” So there isn’t any disparity between Part 1 and Part 2, because the commission itself can hold its own inquiry upon its own initiative.

The member also asked—which I think is a reasonable question—in and around why only the three entities currently under the information disclosure regime under Part 4 of the Commerce Act—Auckland, Wellington, and Christchurch airports—are included under that information disclosure regime. It is because there is a legislative threshold in the Act as it stands now under section 52G—and I won’t bore the committee by reading it—where, if a good or service does meet a certain threshold around competition in an area—or the goods or services offered—it does come under regulation under Part 4. So it’s not to say that, in the future, other airports won’t be included under the information disclosure regime within the Act, but, at the moment, only the Auckland, Wellington, and Christchurch airports, I believe, meet the test under section 52G of the Act as it stands.

KIERAN McANULTY (Junior Whip—Labour): I move, That the question be now put.

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

Ayes 63

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

Noes 56

New Zealand National 55; ACT New Zealand 1.

Motion agreed to.

Part 2 agreed to.

Part 3 Enforceable undertakings and miscellaneous provisions

BRETT HUDSON (National): Thank you, Madam Chair. I’m pleased that I was a little quicker this time than in the last part—and this being the least controversial part of the bill, because we supported Part 3 at the introduction of the bill, and we still support it.

Often the select committee will undertake deep scrutiny of elements that members find controversial, but one can also learn things about elements which the entire committee supports. That actually, as it transpired, was the case with these enforceable undertakings and why we’re even having those. To my point on Part 2, when I said there was no evidence found as to why we should change the current regime with regard to enforceable undertakings, there was, and officials were able to show us that the current cease and desist model is so ineffective that, in fact, it has never been used. That alone is some pretty good grounds for wanting to perhaps find a better model.

The parties, certainly across the Transport and Infrastructure Committee, had no fundamental argument about enforceable undertakings being the better vehicle. What we did discover though—and this is a question I will get to for the Minister—is about exactly when enforceable undertakings should be allowed to apply and what sorts of enforceable undertakings should be allowed to apply. So there’s no problem at all with the idea that enforceable undertakings will replace the cease and desist model. That is an absolute given. We supported it on the introduction; we still all support it now. It was when we were exploring how enforceable undertakings might be used in the case of mergers that there was, actually, not even contention—or perhaps contention but not disagreement—across the table. There was agreement with members as to why there was a certain area where we wouldn’t allow certain enforceable undertakings in mergers, particularly behavioural undertakings.

So this bill will enable structural undertakings to be accepted by the Commerce Commission in the case of these merger activities, but not behavioural undertakings. The part that was somewhat confusing, if you will, particularly because of the arguments that the Minister has reiterated in Part 1, that we should trust the Commerce Commission—don’t fear the reaper; we can trust them to do the right things—raises the question of consistency. The Minister himself has said that in his mind, parts 1 and 2 are consistent in the way they treat the Commerce Commission and the ability it has to use the tools in its tool box correctly and make the right decisions. Why then, here in Part 3, were officials adamant that we shouldn’t permit the Commerce Commission to have an additional tool in its tool box to allow it, at its own discretion, to choose to accept behavioural undertakings, enforceable undertakings, under a merger? They said, “Oh, there’s not been enough policy consultation on that matter.”

Now, quite frankly, listening to them in that deep discussion around the departmental report, on both sides of the table we thought, “Hey, this is a really good idea. This is actually a worthwhile tool to add to the tool box.” It doesn’t say the commission has to do it; it simply says here is an option the commission could choose, at its own discretion, to accept if it felt it was worthwhile. And the answer was “Oh, there’s not been enough consultation.” Well, we interpreted that to mean “We haven’t asked the Minister if he actually agrees with this yet or not.” But here’s an opportunity, Minister. We can ask you now, because we—and it was Mr Wood in the committee who spoke about this, alongside myself—think it’s a really good idea.

Having listened to you today, Mr Faafoi, I don’t necessarily agree with you around market studies, but you have said that we shouldn’t fear the Commerce Commission; we should have faith in them to be able to make the right decisions and to use the authority they have appropriately, to use the right tools in their kitbag in the right circumstances and in the right way. Therefore, we should be consistent. We should say, “We trust them.” So let’s trust them, Minister. Let’s get your officials to whip up a quick Supplementary Order Paper (SOP) and say that it’s at the Commerce Commission’s discretion, that we’ll allow them to accept behavioural undertakings as well. You’ve told us; you’ve convinced me, Minister. Well done—a really persuadable approach you’ve taken in the committee today. You’ve done it through conflict but none the less you’ve done it.

I agree with you. Let’s put a bit of confidence in them. Let’s give greater confidence to the Commerce Commission and say, “Look, we know you’ll do the right thing.” So let’s give them a quick SOP, Minister. Let’s give them the ability to choose themselves, at their discretion, whether or not the merger to accept behavioural undertakings—you’ve got faith in them. I think we’re prepared to back you up in this. A quick SOP—it should only take a minute or two.

Hon PAUL GOLDSMITH (National): Thank you, Mr Chair, for this opportunity to speak on Part 3 of this bill here, talking about enforceable undertakings. People tuning into this broadcast might be wondering what on earth an enforceable undertaking is. Well, it’s a mechanism that allows particular industries or businesses to reach an out-of-court settlement, as opposed to going through a very large, long, and incredibly expensive court process in relation to company law, in relation to competition. So it’s a cost-effective enforcement tool, as it can be used by a regulator to resolve alleged breaches of the law without asking the court to find a breach and impose a penalty. You can imagine—

Kieran McAnulty: We know.

Hon PAUL GOLDSMITH: Well, thank you very much. I’m glad that you understand it, but people outside might not have had a chance to consider this possibility.

So what we’re looking for here is the opportunity for New Zealand businesses to deal with the Commerce Commission in a way that doesn’t necessarily involve three months of very painful court work and at colossal expense. What we’re trying to achieve is a competition framework that allows New Zealand consumers to have access to robustly competitive industries in whichever field of endeavour that they are dealing with, whether it’s supermarkets when buying their groceries, or fuel, or airports—you name it—so that we have a good system in place so that New Zealand consumers can get a fair go. This is part of the process.

The balance that we’re trying to achieve is having those rules in place and having them robustly enforced by the Commerce Commission so that New Zealand consumers are getting a fair deal and getting the best bang for their buck, and, at the same time, having a clear and transparent rules-based system so that New Zealand businesses who are investing and going into business can feel like they have a high degree of confidence that they know what the rules are and they know how to be on the right side of the rules, so that they can make investments and be confident that they are going to get something back for that investment. That’s the basis of all decent business.

I suppose it comes back to the point that I was making earlier: it all does rely on that discipline within Government and around the way that it conducts itself. What we saw last week was the Prime Minister acting as judge and jury on the question of fuel prices, where she said and declared, in thunderous tones, that “New Zealanders are being fleeced, and I’ve come to that conclusion based on whatever evidence I have. Then we’ll go and get the Commerce Commission to look at it, but I’ve already made the decision.” Not only was it the Prime Minister, but also the Minister of Transport, and also the Attorney-General answering on behalf of the Minister of Energy and Resources. When all these Cabinet Ministers and the Prime Minister have concluded something before they have even asked the question, that doesn’t lead to a high degree of certainty in the broader business community.

The only point I would make is that this particular part here, this provision that’s being brought in in Part 3 around enforceable undertakings, is a useful addition to the law, so that everybody can have a chance to deal with issues of contention in a manner that is sustainable from an economic point of view, particularly in a country such as ours where most businesses are small businesses and we don’t have colossal resources at our fingertips. So that all makes good sense, but it does rely on a broader discipline within which we are operating around the conduct of our political system, in relation to the legal system when it comes to competition law.

So the question I would ask the Minister is: can he reassure us that the Government that he is a member of will continue to act with good discipline—well, not continue to act with good discipline, but actually will reflect upon the manner with which it has operated over the past few weeks, and give us that assurance that they will actually let the law take its course in an appropriate way? I leave that for the Minister to consider.

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): Thank you, Mr Chair. Just a quick response to a couple of points raised by the Hon Paul Goldsmith and Brett Hudson. Of course, Mr Hudson, we will continue—as you said in your very truthful statement just seconds ago—to be disciplined.

Can I also just note that for a while I thought peace had broken out, until Mr Goldsmith got two minutes and 45 seconds into his speech, because I actually think he gave, up until that point, a pretty good synopsis of what exactly Part 3 is hoping to achieve in the wider context. So I won’t try and explain that, because I actually think he did a pretty good job of it himself.

To Mr Hudson, the question around behavioural undertakings—that wasn’t considered within the scope of this bill, but it’s still something that the Government would like to investigate and do some of the policy work on. So while Part 3 allows the Commerce Commission to look into structural undertakings, as he will know, we believe that more work needs to be done around behavioural undertakings for that to be legislated for. So, hopefully, that will answer that question.

BRETT HUDSON (National): Thank you, Mr Chair. Well, look, I want to extend, in this sense of bipartisanship, that one of the best things—the best policy-making machine we’ve got across Government—is this House. So I’d like to extend an invitation to the Minister, if he will take it up. I’m pretty sure I’ll get the support of my colleagues here, and we’ll talk to our House leadership as well. We have got the opportunity here, Mr Faafoi, to do the only depth of policy consideration that New Zealanders need, which is for their elected officials, their elected representatives, to make a decision about the legislation that governs their behaviour and governs the behaviour of businesses. So enforceable undertakings, behavioural undertakings—Mr Faafoi, we can do it here.

It is true there was a question about whether or not behavioural undertakings were in scope. As I recall the discussions in the Transport and Infrastructure Committee, it was never established that they were out of scope. The question was raised by the Clerk of the House, but instead, when officials said “Oh no, no, there should be more consultation.”—the code for “We haven’t talked to the Minister.”—it was allowed to sail through, principally because, obviously, the Government members were going to vote in accordance with that.

So here’s an opportunity, Mr Faafoi. We could seek the leave of the House to allow that to be within the scope of the bill, because the House is sovereign. So we could just, at this moment tonight, seek the leave of the House—can we add behavioural undertakings in?

I’ll go even further than that, Mr Faafoi, because it is quite possible that under the Standing Orders, the committee of the whole House can’t make that decision. So we could resolve to go back. We could report progress and go back to the House, and we could seek the leave to do that. I’m sure, Mr Faafoi, my colleagues would support you then.

If there is an issue with the Standing Orders, we would give leave to immediately come back into committee for the same orders of the day for which we first resolved to go into committee this afternoon. We would support you that much, Minister. Just go to the House and put the leave to add behavioural undertakings to the scope. We can resolve to go back into this committee for all of the orders of the day. We can then have a policy discussion about behavioural undertakings. It’s got the support of your own members. Mr Wood thought it was a wonderful tool to add to the tool box. I agreed with him. The other members on the committee seemed to think it was a good idea as well, and we could craft some policy today, Minister, in this House.

That’s Parliament at its finest. That’s the reason that the public elect us to this place—to make those decisions for them. So let’s show them just how nimble—we can be an agile Parliament for a change. Instead of the old waterfall model, let’s get agile on this. We could do this. Put down a scrum, Minister—maybe one or two. We could do this work right now, and we could resolve as a group of parliamentarians whether this is a good idea and should we put it in this amendment bill as it’s going through, because we have the right as a Parliament. Maybe not as this committee of the whole House, but as a Parliament we have the right to add that to the scope, because we have that sovereignty. Despite the Minister wanting to outsource a bit of that in Part 2, which has been voted on and has been successful, we still have the right to make that determination.

So, Minister, no games here—no political games at all. Both sides of the table in the select committee thought this was a good additional tool. To be absolutely clear, we are not suggesting it as a policy, which would mandate that the Commerce Commission had to accept it. We are not suggesting that it is something that business would have the right to demand, nor would have any judicial avenue to contest; we are saying here’s an opportunity to give a tool in the tool kit of the Commerce Commission that would be at its discretion to undertake. Minister, we’re even happy—seeing as you seemed to be quite happy in Part 1—that you as a Minister, and, therefore, Cabinet don’t get a say in whether or not it’s used in any given situation. But give the tool to the Commerce Commission and allow them to decide whether or not to use it in a given circumstance. Don’t give any right of appeal to the courts for a business, but make it purely a discretionary thing for the Commerce Commission. It adds a useful and practical tool into their tool kit, something that we’d argue—and I think your own colleagues would argue, given that conversation in select committee—would advance the interests of New Zealand, and it actually would advance the interests of business, because it won’t get much easier to reach certain undertakings through a merger process, and it would be the power of Parliament in action.

Those people listening or watching today would be able to witness that, Minister. It doesn’t necessarily happen all that often, but this is our opportunity to grasp the nettle, so to speak, and to do it here today. So I make that offer to you, Minister. We can resolve to go back to the House, get leave to add this to the scope, have a policy discussion here, and let’s add these undertakings as well.

KIERAN McANULTY (Junior Whip—Labour): I move, That the question be now put.

Motion agreed to.

Part 3 agreed to.

Schedule agreed to.

Clauses 1 to 3

BRETT HUDSON (National): Well, actually, I think we now have grounds to have an amendment to clause 1. Perhaps this should now be the “Commerce (Loss of Opportunity) Amendment Bill”. We’ve just had an opportunity when this House could have undertaken some very serious and important policy work, policy work which certainly appeared to have unanimous support in the Transport and Infrastructure Committee when it was raised in discussions with officials as we went through the departmental report, something that would have shown how adaptable we can be as lawmakers, something which could also have evidenced—because I think, obviously, more New Zealanders follow the proceedings of this House through the various broadcast means than follow individual select committees. It would have given the public the ability to witness work across the House—constructive work—to do something that we can all agree on that would make the fundamentals of how business can operate in New Zealand better.

I do appreciate, Minister, that commerce is perhaps not the most glamorous of all of the ministerial portfolios, but it is a hugely important one because of the mechanics of how our business and markets operate. We had the opportunity, Minister. It is regrettable that it wasn’t taken up by members opposite, it appears, but we could call this the “Commerce (Loss of Opportunity) Amendment Bill”.

Personally, I’m not going to make any great argument on the commencement clause. I know that it’s often in these parts of the committee of the whole House debates that people can start saying, “Well, I think it should come into effect in 2050.”, or certain dates which are, in some respect or other, often held to be a bit mischievous.

We have said, going into this debate and, indeed, going into the second reading, that we would support the legislation despite our concerns with it, so on that basis, we’re not going to play games around the commencement date. We’ve said we’ll support it because the Prime Minister made a very clear statement that she wanted to direct the Commerce Commission that the Part 1 market studies would commence with a study into fuel pricing. We have publicly made comments that we think that will take far too long and that Kiwis will bear the brunt of these current, or even higher, prices for the best part of a year as that is undertaken, but it would only serve to delay the initiation of such a study if we had dug in our toes in on this committee stage and sought to drag every part out for an interminable number of hours with amendment after amendment.

But, ultimately, while we don’t think the inquiry can happen quick enough and while—as we have argued earlier today—we think that the inquiry will have great impost of time and cost on small businesses, there is by no means nothing even approaching certainty that will indicate that that inquiry will find any huge misdemeanours that, if rectified, will fundamentally address the price that consumers are paying for their fuel. But none the less we said publicly, and we will do so with our actions today—we have said that it is better for New Zealanders, given what they are facing, particularly at the fuel pumps today, that Parliament resolves to get an inquiry under way than to potentially be seen to be playing politics either by opposing the legislation as a whole or by trying to craft an amendment on this clause, even if it was just to put Part 1 provisions off for a greater period of time or to make any commencement contingent on other factors such as the Government suspending the fuel taxes of the last 12 months until the date that the Commerce Commission reports back on that study.

That’s not mischievous. It’s not something the Government—we appreciate—supports, but it wouldn’t be frivolous. It wouldn’t be a mischievous amendment. It would have really positive impact, we would argue, for consumers today, and the Minister has told us repeatedly today that this bill, for him, is all about protecting consumers. But, ultimately, as we said in the preceding week, when this was up for second reading, while we disagree with elements of it—and I think we have articulated those disagreements quite effectively through this debate this afternoon—and we accept the democratic process where they have been voted on and we have not been successful in getting our amendments through, none of that is any just reason why we should stand in the way of an inquiry going ahead which may or may not result in some positive news for New Zealanders and what they pay at the pump.

Clause 1 agreed to.

The question was put that the amendment set out on Supplementary Order Paper 138 in the name of the Hon Kris Faafoi to clause 2 be agreed to.

Amendment agreed to.

Clause 2 as amended agreed to.

Clause 3 agreed to.

Bill to be reported with amendment presently.

Bills

Trans-Pacific Partnership Agreement (CPTPP) Amendment Bill

In Committee

Part 1 Amendments to Title and commencement of principal Act

CHRIS PENK (National—Helensville): Thank you, Mr Chair, for the opportunity to speak to Part 1 of the Trans-Pacific Partnership Agreement (CPTPP) Amendment Bill. I start by noting perhaps an obvious point—but one with some significance, which I’ll spell out in a moment—that this is an amendment Act. I say that because not only is the word “Amendment” in the title but it will perhaps surprise some to realise that we are, in fact, amending here an Act of Parliament that’s already been passed. It is referred to here, of course, as “the principal Act”, and that, in turn, refers to the fact that a treaty commonly referred to as the Trans-Pacific Partnership (TPP) has already been signed, entered into by New Zealand, and, indeed, ratified in the form of that parent legislation.

So just to be clear then, as Part 1 does explain very clearly, it is the principal Act that we’re amending by this amendment Act in the act of—excuse me, I’m using the word “act” in two different senses, with a lower case “a” in the second example there within the same sentence. We are, in fact, using this process now to amend that and, from a political perspective, I think it highlights some of the confusion that’s been experienced by members of the public even before I started speaking about this process, and, in particular, the fact that some political parties did not support the TPP—as I shall henceforth revert to—yet supported the revised agreement, the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The wording of the clauses in Part 1 really actually highlight that pretty well, as we’ll see with reference to clause 5.

In clause 5, “Section 1 amended (Title)”, new section 1(2) points out that “Every reference in any enactment and in any document to the Trans-Pacific Partnership Agreement Amendment Act 2016 must, unless the context otherwise requires, be read as a reference to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership Amendment Act 2018.” The construction of that looks pretty straightforward and benign in that it’s a pretty standard formulation setting out that every reference will mean one thing unless it’s specifically noted to the contrary. Again, the political significance of this is that, essentially, what we’re saying is that everything is the same except for some things that aren’t, but that really, in effect, means that most are. So, from this side of the House, we’ve noted with some bemusement the apparent change in heart regarding the value of trade—this agreement, specifically—again, we’re granting that some amendments have been made, and we’re really noting that in the context of an amendment bill, that actually makes it pretty clear that not many amendments are required to the previous legislation. Hence, again, one agreement is not far different from the other.

As for the way that this will come into force, in section 2 of the 2016 amendment Act , we see that it can be done by one or more Orders in Council that will be used to make this new law effective, and it’s stated that different provisions can come into force on different dates and that there might also be different dates for different purposes. The significance here is that there are different moving parts within the revised agreement that by necessity and operation of the TPP, or—excuse me—the CPTPP, come into effect at different times. So that’s quite an unusual way of highlighting the fact that, actually, we might have somewhat of a piecemeal approach. That’s not an error or a mere indulgence in the drafting of legislation, but, actually, something that’s needed quite specifically to ratify the terms of the treaty itself, which is, after all, the very point of this parliamentary scrutiny.

Of course, the commencement of the amendment Act can’t be before the commencement of the parent legislation, and we don’t yet know that date. I think albeit it was a matter engaged with by the previous Parliament, none the less, of course, this amendment Act won’t come into force until such time as this House passes it and the other one previously being in place, and then, naturally, the date of effectiveness for various parts of it will be after the commencement date and the effectiveness of the parent legislation itself. So I think there’s probably no confusion on that, but perhaps some other colleagues might have some views on that, and certainly, if the Minister’s got any thoughts he’d be prepared to share, that would be good to hear.

Hon TIM MACINDOE (National—Hamilton West): Thank you very much, Mr Chair. Could I just say to the Minister of Immigration, who has just, I think, rather gratefully left the chair, I was looking forward to putting some questions to him to tap into his considerable knowledge of this particular agreement and support for the bill. But it seemed to be with a degree of relish that he saw the Acting Minister for Trade and Export Growth enter the committee and swap places with him, so I’ll save my questions to that particular Minister for another day.

I want to commend my colleague the member for Helensville, Chris Penk, not only for demonstrating his considerable understanding of this particular part of the bill with that contribution but also for the very fine contribution he has been making as a new member of Parliament. I hope he’ll accept this with the goodwill with which it’s intended. He is a very fine contributor to the work of the Foreign Affairs, Defence and Trade Committee, and when we were discussing this particular bill and hearing submissions I noted with admiration how engaged he was and how constructive he was—

Hon Willie Jackson: Put him on the front bench.

Hon TIM MACINDOE: —in assisting. Well, if that were in my gift, I’d say to the Hon Willie Jackson I would be more than happy to do that. While I’m sure the member of Helensville will be delighted to hear that, nevertheless I wouldn’t want to get his hopes up too much, because I suspect that it may take a little while for me to be able to use my influence in that way. But it is good to know that members opposite respect the great depth of talent on our side of the House, and I can assure him, as he has obviously already noted, that the member for Helensville is going places in a very positive way in his career.

Let me return to Part 1 of this bill, because now that the Minister of State for Trade and Export Growth is in the chair, I do want to just point out that one of the things that was most evident as we listened to submitters in the Foreign Affairs, Defence and Trade Committee was that there was real cynicism from all of the individuals—I stress, the individuals, not the organisations—who submitted on this particular bill about the change in name. Here in Part 1, we are just talking about the amendments to the title and commencement of the principal Act, and in clause 5, section 1 is amended so that “Every reference in any enactment and in any document to the Trans-Pacific Partnership Agreement Amendment Act 2016 must, unless the context otherwise requires, be read as a reference to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership Amendment Act 2018.” All of the individuals, as I say, who came to the committee were expressing real cynicism—and I’m looking at the Green member who is nodding her head because she also was there listening to that.

Essentially, what they were saying was that there is no significant difference in this agreement from that which it replaces, i.e., the original Trans-Pacific Partnership Agreement, which was first negotiated on behalf of New Zealand by the Hon Tim Groser, and that fine work was carried on by the Hon Todd McClay, who had the great pleasure of seeing it come into force while he was the Minister, only to see that upon the election of President Trump in America, the rules changed; the agreement changed. It was then the current Minister, the Hon David Parker, who picked up the cudgels on New Zealand’s behalf and contributed, in a very constructive way—and I do want to acknowledge the work of the Hon David Parker—to assisting this new agreement to come into place.

But we, I think, need to acknowledge that the submitters were not overly convinced by the change in name, and they would want it placed on record. While I’m a very strong supporter of this bill and of this agreement, I think we owe it to the submitters to acknowledge that point. So I would ask the Minister in the chair what practical changes this means for New Zealand and for all of the parties that are signatory to this agreement. It is, after all, an agreement which is worth a huge sum to New Zealand in dollar terms—vitally important, I think, to our export producers and markets and something that I believe will be very, very good for us. But what is the practical impact for country, is the first question, of the change of section 1, the amended title.

The second thing is I wonder if the Minister could enlighten probably those who are listening—I think this is one of the useful things about the committee stage of a debate: here in the House, we may know the answers to some of these questions, but there are many members of the public who may be listening. In new section 2, the commencement, inserted by clause 6, we are advised that “This Act comes into force on a date appointed by the Governor-General by Order in Council”—this is all fairly standard stuff—“on the recommendation”—in this case—“of the Minister for Trade and Export Growth.” But new subsection (3) of that particular part states, “However, the date appointed for the following provisions to come into force must not be earlier than the date on which the Trans-Pacific Partnership Agreement, done at Auckland on 4 February 2016, enters into force for New Zealand:”.

Well, of course, that was over two years ago now—[Bell rung] Thank you, Mr Chair. I’ll be reasonably quick. I must admit, I had noticed that the first call seemed to have expired about a minute ago. This particular provision refers to a date that’s more than two years—in fact, it’s 2½ years old, so I’m hoping that for the benefit of those who may be listening and who will have been devouring every word of this particular bill, the Minister might just be able to explain what the practical consequence of having that subsection in this bill would be.

There’s no question that we were advised by officials that it was important for New Zealand to be moving quickly to ratify the provisions, and that’s one of the reasons why we’re, after all, debating this bill here right now—to try to ensure that it can be completed through all its stages in the House before Christmas. Clearly, we’re on target for that—in fact, I assume, if we complete the committee stage today, that we’ll probably have the third reading on the next sitting day. So New Zealand will comfortably meet its requirements. I’m hoping that the Minister will outline, for the benefit of anybody who may be listening, why that is particularly advantageous for New Zealand, and I think that this is the appropriate part of this debate for him to do that.

I know that some my colleagues will have some other questions as well, but those are just a couple of matters that I wish to bring to the committee’s attention that I hope will be helpful for the House and for the public at large. I’m very pleased to have had this opportunity to speak on Part 1 and look forward to speaking again later on in Part 2.

SIMON O’CONNOR (National—Tāmaki): Thank you very much, Mr Chair. I was hoping my colleague Tim Macindoe might’ve thrown another three minutes into that conversation, but thank you for the call. To acknowledge the Minister in the chair, from one O’Connor to another, I’m very pleased to talk to Part 1 of this Trans-Pacific Partnership Agreement (CPTPP)—as it’s become known through its acronym—Amendment Bill.

You’ll see, through the Foreign Affairs, Defence and Trade Committee’s report—I’m very pleased to facilitate that committee—that we’ve made three substantial changes. Most of them are in Part 2, so at this point I’m really just going to keep around the commencement aspects.

First and foremost, we should be clear that when we’re talking about “commencement”, we’re not talking, obviously, about clauses 1, 2, and 3—particularly clause 2, which we’ll get to later—which is the commencement of this particular piece of legislation. Instead, we are, in fact, referencing the commencement of the treaty—the Trans-Pacific Partnership (TPP) itself. I’ve always been at pains in the House—through all the readings and now in the committee of the whole House—to make sure that we’re very clear in the understanding of the difference between what’s, obviously, the ratifying of a treaty and then the placement of domestic legislation to bring that into effect.

So today we are discussing, here in Part 1 and through into subsequent parts, the domestic legislation. But, importantly, in clause 6 we are bringing about the commencement of the treaty. In other words, this domestic piece of legislation, this amendment bill, is empowering, if you will—though probably not just “if you will”; it is empowering—the Minister to ratify. I’ve probably got the exact nomenclature wrong, but, basically, it is empowering the Minister to make the treaty come into effect. Let’s just use some plain English for a second before I get into trouble and your officials start throwing things at me—and quite rightly, probably: after having sat through this for a long time, I should have it right. But, in effect, let’s not confuse the two forms of commencement.

Clause 4, in Part 1, is a renaming of an Act of Parliament that was passed in 2016. It won’t be lost on this House that we went through quite a rigorous discussion of what was then known as the Trans-Pacific Partnership Agreement. That was agreed by the previous executive and, in many ways, affirmed by the Parliament and passed into law prior to the 2017 election. So there is actually an Act of this New Zealand Parliament in 2016 to bring about the TPP. Two factors in particular, but not exclusively, came into play. One was, of course, that we had a general election, and, let’s just say, things changed. I won’t ask the Minister in the chair to offer an opinion on that; it might cause me to have to keep talking more than five minutes. The other, as was alluded to, was a substantial change in American politics, but I think it’s quite important to understand it wasn’t simply a change from the Obama administration to a Trump administration. Any change, had it been to the Democrats and Hillary Clinton, was also going to see America step away from this pluralistic agreement, which I think is unfortunate, but, being a Westphalian, I really believe that each sovereign nation can choose to do what it wants.

But we are changing the name of that 2016 piece of legislation. That makes sense, and I might come to it later, or other colleagues might as well, but, importantly, that piece of legislation still exists. The TPP legislation, even though it is to be renamed, still exists, and is sort of a preview, if you will. It’s probably more academic than anything, but, strictly speaking, that legislation, that previous TPP agreement, could, strictly and probably academically, be started. Maybe this would encourage my Green colleague to speak to it. It is just a change of title, but an important one there. So that’s in clause 5.

Then we move to new section 2 around commencement. I just want to spend a little bit of time on the commencement. This is in clause 6, replacing the commencement provision: “(1) This Act comes into force”—so this piece of domestic legislation, not the CPTPP—“on a date appointed by the Governor-General”—which makes sense—“by Order in Council on the recommendation of the Minister for Trade and Export Growth.”

Now, intuitively, that makes absolute, perfect sense, but there is actually a question in this, Minister. It’s natural, if you will, that, obviously, the Minister in charge of trade and export growth would be the one to talk to the Governor-General, but it’s my understanding too that, actually, any Minister of the Crown could, strictly speaking, ask and authorise the Governor-General to act. So it makes sense in terms of a partnership agreement, a trade agreement, that primarily the Minister of trade would be that person. Again, it’s probably just a curiosity or a small element, but I’m pretty sure any Minister can, or should be allowed to, advise Her Majesty’s Governor-General to make that decision. So I suppose what illustrates the point is that if the Prime Minister decided for some reason that she wished to provide the recommendation, could she?

So I suppose, then, it ultimately comes to two questions, Minister: one, should this be slightly broader? Should it just really be saying the “date appointed by the Governor-General by Order in Council on the recommendation of a Minister.”? Does it have to be absolutely specific? So that’s one element to it: should we just widen that out?

The second is: does being so specific about who the Minister is preclude another Minister making that advice to the viceregal representative here in the Realm? The other is—and, look, it’s completely minutiae; it’s unlikely to happen—that Governments, and it would happen on this side too, are very wont to change titles. Very, very quickly—we’ve obviously just had a new ministry around urban development opened. This is a fairly new title, to be the Minister for Trade and Export Growth. If, perchance, there was to be a change in title, would that affect the efficacy of that particular Minister?

So, to illustrate the point, if the Minister for Trade and Export Growth turned into the “Minister for Trade and Comprehensive and Progressive Export Growth”—it’s always good to throw a “c” word and a “p” word in there these days—would that affect the Minister’s ability to act? Would we invalidate this? Yep, I know at some levels it can be seen as tongue-in-cheek, and so forth, but I’ve been in this House long enough now—

Kieran McAnulty: Too long.

SIMON O’CONNOR: Some would say too long, Mr McNulty, but, fortunately, not the good people of Tāmaki, who—

Kieran McAnulty: It’s “Mc-A-nulty”, O’Connor.

SIMON O’CONNOR: Is it “McAnulty”?

Kieran McAnulty: Thank you.

SIMON O’CONNOR: I withdraw and apologise. You’re a good man, regardless, sir, and the great thing is from that new member—and he is going to learn—that when they do an interjection across the Chamber, it gives the person speaking just a few extra seconds to talk, which is fantastic. So thank you very much. Look, it’s a small thing, but, actually, when these changes come through, we need to be, ourselves, quite comprehensive.

The other point is, and we’re moving now into new section 2(3), that it is noting—it’s probably more for information, but I think it does make sense that not all the provisions are coming in at once. The important context here is that New Zealand wishes, quite rightly, I think—and I will acknowledge the Government’s approach on this, as would have been the National Government’s approach, had it remained on the Treasury benches, which is that we want, as the lodging country for this trade agreement, to also be one of the first signatories. There are benefits to the country for us to sign early, which is one of the reasons the committee has worked cooperatively and quickly on this. Again, we were not overriding what people had to say, but, in moving quickly, we understand we should get in early. There are benefits to New Zealand and our economy, in particular, for being some of the early signatories or adopters of this treaty, but it’s really important to note that some factors will not come into effect immediately.

In other words, once the Minister for Trade and Export Growth advises the viceregal representative of a date to sign, the treaty comes into effect, but it’s important in new section 2(3)(a), and then into new section 2(3)(b), that certain elements will not be coming into force. That’s primarily around patents and copyright. Again, we’ll probably have to touch on that a little bit later, but there are elements of what New Zealand needs to do. I suppose when we are working in a trading environment, New Zealand is always looking to other and new treaties and agreements, and it’s my understanding that we have some changes to make first.

Look, I’ll begin to wrap up there. Elements around the Copyright Act and others come up, particularly in Part 2, but, yeah, my fundamental aspects at the moment—working backwards—are just those little questions, or minutiae, if you will, to the Minister in the chair around the specificity of a particular Minister. As I say, should it just be broadened to “any Minister” in order—you know, be it symbolically or otherwise, the Prime Minister wishes to be the adviser. Equally, could it be any Minister—is there a convention that if that Minister is not available, another Minister could step in?

Obviously, there’s just some indications of why there’s a staged approach to the dates, and then just a hint at this point of, obviously, the name change of a previous Act of Parliament, but indicating—as I understand things, but I’m very happy to be corrected—that simply changing the name does not actually change the fact that—strictly speaking, it’s purely academic and, I think, highly, highly unlikely, but I will not be racing to the TAB—that previous Act, that previous Trans-Pacific Partnership agreement, could come into effect. So I’ll leave it there for now.

GOLRIZ GHAHRAMAN (Green): Thank you, Mr Chair. As has been alluded to repeatedly, and I think everyone here and, hopefully, out there in New Zealand knows, the Green Party has always opposed the Trans-Pacific Partnership agreement (TPPA), continues to oppose the newly named—and I’ll say a rose by any other name—Comprehensive and Progressive Trans-Pacific Partnership agreement, and will not be supporting any legislation that implements it here. We share the deep concerns of two-thirds of the submitters—and these are hundreds of submitters we’re talking about—who found unacceptable the chilling risks that arise with the investor-State disputes settlement (ISDS) clauses, that are still included in this agreement.

So we come back to this issue that the bill is an amendment bill. It is referring back largely to the TPPA and implementing legislation to that dirty deal, as some would call it, and the ISDS clauses are at the heart of that. This means that this bill requires us—and, with it, this Parliament, this House of Representatives—to sign on to a system that will sit above our law and above our sovereignty and it binds us to protect the profits of foreign multinational investors over the interests of ordinary Kiwis and our environment.

So, as an example—and as a Green—I have to note that in about 85 percent of cases where this type of provision has been relied upon to stop Government policy being implemented it has been in environmental protection cases. But as an example of the chilling effect of this, I would note that when Indonesia tried to adopt laws that would protect against particularly damaging mining practices, the very threat of being sued using this type of ISDS provision was enough to stop them. Their Minister for the environment said, “They will sue us for billions to compensate their losses, and we can’t afford to pay.” That’s the situation that we’re walking into, and that isn’t what Kiwis voted for this election.

So to mitigate some of that damage, some of that risk, I’ve tabled two Supplementary Order Papers (SOPs), the first of which relates directly to the ISDS clauses. Part of the reason this deal was sold by the coalition parties as a changed deal was that a number of the signatory States—

CHAIRPERSON (Adrian Rurawhe): Can I just remind the member that those SOPs are on Part 2 of the bill. We’re on Part 1, so—

GOLRIZ GHAHRAMAN: Oh sorry, they’re in Part 1 in front of me.

CHAIRPERSON (Adrian Rurawhe): —if you could reference your speech to Part 1.

GOLRIZ GHAHRAMAN: Sorry, Mr Chair. I have them noted as being for Part 1, but I could be mistaken. I’m happy to keep speaking to the ways in which this bill is similar to the TPPA.

Hon Willie Jackson: Chuck it in—time’s up.

GOLRIZ GHAHRAMAN: Time is not up. So all the ways in which this bill remains the same as implementing the old agreement, the TPPA: I would say that this was sold to us as a changed deal, and it was only because there were some State parties that signed on to agreements that they would not, in fact, avail themselves of the ISDS clauses.

The other big change that we were sold on was that there are these suspended provisions now in this agreement. Some of the damaging provisions in the TPPA were now suspended—things like protections around Pharmac’s ability to set fair prices and to make high-quality medicine available in New Zealand.

We now have found out through official advice that all of that could go were the USA, for example, to join the agreement and revive the TPPA. Any member State could join and not sign on to the suspended provisions, we’re told. Chillingly, the very changes that were sold to us could go, and they go through this bill without further parliamentary oversight. So it is important to note that this is an amendment bill because, in fact, what we’re implementing is so very close to the old TPPA and not only that but the old TPPA is actually up for grabs. We’re signing on to give away our parliamentary oversight of those provisions coming back, of the old agreement coming back through this bill.

KIERAN McANULTY (Junior Whip—Labour): I move, That the question be now put.

Hon TODD McCLAY (National—Rotorua): Mr Chair, thank you very much. Here we are at Part 1 of the debate, and if one reads the press release from the Minister last week or had just paid attention to question time on Thursday, the Minister for Trade and Export Growth was speaking about how inclusive his Government wanted to be and how widely they wanted to consult on issues of trade. It’s appalling that after four or five interventions on Part 1, we’ve got a member of the Government standing up to try to close the debate down. There’s a lot more to be said here. At least that counts as one speech from that member, Kieran McAnulty, in this debate, and what he has done is he’s saved the public from four minutes and 55 seconds of his ranting. But he can take another call, I suppose, if he took the time to read the bill.

Now, the point here is in Part 1, it goes directly to what the Government said and to its credibility on the Trans-Pacific Partnership (TPP), because they’ve come forward and they’ve said, wholesale, that it is a different agreement. It’s virtually completely different from the original TPP, and the Government has taken a lot of credit for that. But if we look at Part 1, largely, all it does is says to do a search and replace, where, if the original Act says the TPP—the Trans-Pacific Partnership—replace it with the “Comprehensive and Progressive Agreement for Trans-Pacific Partnership” (CPTPP). So I ask the Minister whether he could explain to the committee and to those listening in exactly why he believes it’s important to go through and change the title of the original Act—the title of the original Act; not the parts within it, but the title of the original Act—to demonstrate it is comprehensive and progressive.

I heard a story many years ago about African countries that were ruled by dictators. They would change the name to be called the “Democratic” such-and-such country. Well, they say that if you have to put the word “Democratic” in the name of your country, you might not be democratic, and, in this case, if all Part 1 is largely doing is changing the name of the principal Act from the “Trans-Pacific Partnership Agreement Act” to the “Comprehensive and Progressive …”—if you must put the words “Comprehensive and Progressive” in it, perhaps it’s not.

Now, the second thing here that I think is very important for the Minister to answer for this committee and for the public is exactly what happens to the original TPP legislation. We know that it actually remains there on the books, but can the original TPP enter into force, or is the comprehensive and progressive TPP legislation we see today taking it off the book so that it never can? And if it can enter into force—well, we know it’s ratified, but can it enter into force?

So we have an agreement that’s ratified that hasn’t entered into force around the world yet: can it enter into force? If the answer to that is no, be up front and say that very, very clearly. If the answer is that it can enter into force—if the TPP comes into effect—what happens to the comprehensive and progressive TPP if it too is entered into force?

Now, perhaps what the Minister is going to say is “Well, the CPTPP is better. It’s comprehensive and progressive. It actually does many, many things that the original TPP didn’t.” If that’s the case, I would invite him to make that case and to be very clear with us, because what we do know with the original deal, the TPP, under the agreement that was reached to get to CPTPP—isn’t it lucky they didn’t put more letters of the alphabet in it? It would have been very, very hard to actually roll this through—the changes, the bill itself, would be longer. But what we do know is that there are a number of clauses in the original legislation, the original agreement, that are being suspended, and that word “suspended” is the important one. I would believe that there are many, many New Zealanders who campaigned against the TPP, who marched in the streets against the TPP, and who have voted for parties in this House at the last election because they were told that they would stand against the TPP that have now been told that the clauses that they were concerned about have been suspended.

But I say to the Minister, exactly what does that mean for them to be suspended in so far as the CPTPP is concerned to make it so comprehensive and progressive? Secondly, what does it mean in so far as the TPP is concerned should it be able to enter into force at some time in the future?

LAWRENCE YULE (National—Tukituki): It’s a pleasure to speak to Part 1 of this bill. I think we should remind ourselves that this is a very significant bill for New Zealand. Really, what we’re doing—really, what we’re doing—is simply changing the name of all the hard work that had been done by the previous National Government. It’s like this: already in this Parliament this evening, Mr McAnulty has said that he prefers to be called Mr McAnulty than Mr McNulty; another member, Jo Luxton, prefers to be called Jo Luxton than Jo Luckton; and the Hon Willie Jackson, I profess that his proper name is the Hon William Jackson, probably. But despite all that—

Hon Members: Wīremu.

LAWRENCE YULE: Yeah, I couldn’t think—one of you, the Hon Iain Lees-Galloway. But despite all of this—despite all of this; the first list MPs, one is a Minister—how we actually pronounce their name makes very little difference. I know it does to the member and I respect the honourable member, the list member from the Wairarapa, but what I’m saying is whether we call it the Trans-Pacific Partnership (TPP) or the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) in my view makes very little difference to what we’re doing. In fact, the only thing that has been changed as a result of going from the TPP to the CPTPP is the fact that some other legislation has meant that we have banned foreign buyers.

I remind this committee that that legislation is effective over this weekend—

Kieran McAnulty: Overseas buyers.

LAWRENCE YULE: Overseas buyers.

Hon Tim Macindoe: It’s ironic, isn’t it?

LAWRENCE YULE: It’s ironic; that’s the only thing. It wasn’t even part of this legislation; it was something that was done on the outside. You can’t even find it in this legislation, because it’s not mentioned any more.

So I want to honour the various Ministers: the Hon Todd McClay, the Hon Damien O’Connor, and the Hon David Parker for making this get to this point.

Hon Member: Tim Groser.

LAWRENCE YULE: And the Hon Tim Groser before that. But let’s not kid ourselves in this Chamber tonight, as we take it through this committee stage on the first part—there’s very little that has changed other than the name.

I would like the Minister in the chair, the Hon Damien O’Connor, to address one issue, and it’s been raised already, and that’s under clause 6. New section 2(1) says “This Act comes into force on a date appointed by the Governor-General by Order in Council on the recommendation of the Minister for Trade and Export Growth.” My colleague Mr Simon O’Connor raised earlier that if the name of that title changed, what would that mean? I’m suggesting that maybe the term “for Trade and Export Growth” be taken out and just “the Minister” be said, because we do not want to have to come back to this Parliament or change something in the future because the title of somebody changes.

So as we head into the dinner break, I think we should all congratulate ourselves across the Parliament that we have actually got to a position, despite the fact that the United States has withdrawn, to have a fantastic trade opportunity when six countries sign up. I think we should also acknowledge that this is a National bill that’s been adopted by this Government. They’ve changed the name and we’re working together—but actually in the interests of New Zealand, as we should do—to make sure that our trade is strong.

Hon Mark Mitchell: Just say thank you.

LAWRENCE YULE: So absolutely, the Hon Mark Mitchell. Some thankyous on the other side would be helpful.

Kieran McAnulty: You got his name right.

LAWRENCE YULE: Oh, would you like me to repeat your name, Mr McAnulty? Have I got that right?

Hon Member: The member from Napier.

LAWRENCE YULE: I’m not from Napier. I am the member—

CHAIRPERSON (Adrian Rurawhe): Order! Sorry to interrupt the member, but it’s become time for me to leave the Chair for the dinner break. The committee will resume at 7.30 p.m.

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

CHAIRPERSON (Hon Anne Tolley): Members, the committee is considering Part 1 of the Trans-Pacific Partnership Agreement (CPTPP) Amendment Bill. Lawrence Yule has the call, and he has one minute left. I call Simon O’Connor.

SIMON O’CONNOR (National—Tāmaki): How unexpected. Ha, ha! Madam Chair, thank you very much. I think this may well be my last contribution to Part 1.

Matt Doocey: Two more.

SIMON O’CONNOR: Thank you to the whip, who very helpfully said that I have two more, but we’ll see how we go. Now, look, Part 1’s around, obviously, the amendments to the title and commencement of the principal Act, and that being, again, the Trans-Pacific Partnership Agreement Amendment Act of 2016. In my prior contribution, which I still welcome the Minister in the chair to engage with if he so chooses, if only for academic “fullity” just to elaborate a little bit on the one area I touched on, is the question which was raised in committee—and is, in fact, referenced in the Foreign Affairs, Defence and Trade Committee’s report—around whether or not the previous Trans-Pacific Partnership (TPP) could come into effect.

In other words, the current legislation passed in 2016 for the TPP is about to be renamed in this Part 1, clause 5, to call it the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). However, even with that change of name, the previous Trans-Pacific Partnership agreement remains. So the argument, as was brought up in committee—and it would be good to get some surety from the Minister in the chair, or perhaps other Ministers who are keen to opine—is that strictly speaking, and I hope I’ve got this right; I’m more than happy to be corrected—

Kieran McAnulty: Probably not.

SIMON O’CONNOR: But if the likes of—in fact, that’s probably the one truthful thing that Mr McNulty has said for a while—McAnulty, sorry.

Kieran McAnulty: McAnulty!

SIMON O’CONNOR: Um, actually, that’s probably getting close to breaching a Standing Order.

CHAIRPERSON (Hon Anne Tolley): Yes, it is. Ha, ha!

SIMON O’CONNOR: Look, the long and the short—ha! The current situation, to illustrate the point, is, in theory, if the likes of the United States of America and probably two other countries who have not engaged—well, sorry, if the United States of America and other parties came in, ratified, and signed up to the terms of the previous TPP agreement, that we passed domestic legislation to approve in 2016—if that were to occur, we would find ourselves beholden to that. We would all of a sudden find ourselves linked in to those previous conditions.

So the changes in this piece of domestic legislation and the changes—and I know colleagues have argued they are minor—in the CPTPP would likely continue. But there is that academic, if you will, chance that if the previous agreement was to come into force, then New Zealand would be bound to follow those. So any clarification the Minister would care to provide would be welcome.

I know it was something we interrogated the officials on at length. I think we have a relatively good handle on it, both in terms of what would happen and how it might happen. There was discussion on whether it would need to come back to the Parliament or not. We looked into the Standing Orders, whether it would be a further examination, whether it remains in the hands of the executive, or whether, in fact, because we’ve already agreed that treaty that we’ve already passed legislation on in 2016, that, in fact, there would be no need for further discussion because we’d already agreed with it.

So it’s just raising the question of whether we’ve got that right. I would stress to the Minister—as I’m sure he appreciates, as do the officials—it is a relatively academic argument. It would be rather odd for it to come into being. But a little bit like my previous contributions, particularly around Part 1, clause 6, around the commencement and the title of the Minister of Trade and Export Growth, we’ve just got to be absolutely clear. There’s been a few too many times in this Parliament where we’ve sort of overlooked something, thinking it was all OK at the time, and then circumstances arise and we go, “Hold on, we should have thought about this more clearly.”

So if the Minister would like to engage with that again. I’d like to stress, it’s more academic than actually an existential issue that we have to face. But it really is just in this contribution to highlight that simply amending Part 1, clause 5, around the title—while it makes sense, it tidies up the statute book a little bit, it does not, as I understand things, materially change a possibility that actually the former TPP would come into effect.

Again, it is highly unlikely. The Americans have indicated that they, as far as I’m aware, are not interested in coming on board, and without them this couldn’t be enacted. So that’s really my only further contribution on this part. Elements around the Copyright Act and the Patents Act and so forth are touched on in the commencement—that they will be in a staged fashion—but the particular changes themselves, I’ll address later in the contribution.

Hon DAMIEN O’CONNOR (Acting Minister for Trade and Export Growth): Thank you, Madam Chair. I’ll just take this opportunity to answer a couple of queries that have come up from the Opposition. I think they have reasonable questions. Regarding the one from Mr Simon O’Connor, yes, we would have to adhere to the Trans-Pacific Partnership agreement (TPP) if the US, of course, came in and agreed—hell would probably freeze over before that would occur—and then, of course, Mexico, Canada, or Australia, so that we had greater than 85 percent of the total GDP for the agreement. The chances of that happening are highly unlikely. Of course, ultimately, though, New Zealand could withdraw its consent to the TPP. So it’s a reasonable question, but there are a number of safeguards in there.

Can I just take the opportunity to acknowledge the Opposition—or the then Government, I guess—for progressing the TPP. This is a treaty that was signed up to by the Government in 2016—of course, it hasn’t come into force. We, as a Government, did commit to a few qualifications for support and, having been voted into Government, followed through with the reasonable requests that we needed to see before we would support the TPP.

We believe that the “comprehensive” and “progressive”—the questions that have been asked by the Opposition—indeed, those two words do encompass the objectives of the Government. This must be an agreement that supports and benefits all New Zealanders, not just a few, and it does need to be thoroughly researched, and we need to know exactly what it would mean. There were provisions that a Labour Party in Opposition—and I know the Greens shared that—needed to see change before we would endorse what was the TPP in law but not in force, and we took the opportunity. I have to acknowledge the commitment of David Parker, the Prime Minister, Jacinda Ardern, and the trade negotiations team, who worked very, very hard in a cooperative way to get the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) over the line.

The provisions that we were seeking were, of course, to ensure the Treaty provision, or protection for the Treaty obligations in this country. We needed those, firstly. The second was that we needed to protect the Pharmac model, and that wasn’t guaranteed under the TPP. I have to acknowledge, once again, the National Party, who brought Pharmac into being. We believe that that fine structure around pharmaceuticals needed to be protected—so that was the second one. The third one was that we needed to protect the right to regulate for our own good—the sovereign right in our own country—and that was upheld. And we needed decent gains for exporters in terms of market access to make the whole deal worthwhile. It has been, as I say, somewhat contentious, and I accept that people have had concerns. Then, of course, the last one was that we needed to protect the right to who owns land in New Zealand—a sovereign right, again.

And so we negotiated all of those things. The investor-State dispute settlement process has not been negotiated out of the agreement. It’s still in there, but we have protections through side letters and agreements in principle with other countries to ensure that a country like New Zealand that generally upholds the law—I doubt whether we’re going to see any of the provisions or concerns from our trading partner countries. But, anyway, we moved to ensure with those protections that we ended up with the comprehensive and progressive trade agreement that has been put in place. What we are doing here, of course, is going through the process to ensure that there are suspensions in the TPP agreement that indeed give effect to the negotiator positions that New Zealand has found itself and negotiated.

So, again, just answering a few of those questions, there was another one about whether any Minister could bring the bill into force by an Order in Council. Yes, that is true. Any Minister can, but, clearly, that would be if the Minister for Trade and Export Growth wasn’t available. I hope I’ve answered a few of those questions that have been legitimately raised by the Opposition, but I think we’ve worked through. In terms of issues that the Green Party still have, we respect their right to have those concerns, but we believe we’ve moved a long way to protect the sovereign right of New Zealanders and New Zealand in terms of moving forward, particularly in terms of those four provisions that we were seeking.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. Well, it’s a great pleasure to speak on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the CPTPP. I actually sat on the Foreign Affairs, Defence and Trade Committee, hearing the Trans-Pacific Partnership (TPP), for some of the hearings. I want to turn to Supplementary Order Paper 141 in a moment; but to lay the groundwork for that, I well recall sitting in Christchurch listening to submissions on the TPP. There were really two features of the day: a lot of submissions that really said the same thing over and over again, particularly which will relate to the Supplementary Order Paper in a moment.

CHAIRPERSON (Hon Anne Tolley): Part 2.

STUART SMITH: It’s in Part 1, isn’t it? 6A?

CHAIRPERSON (Hon Anne Tolley): No. Part 2.

STUART SMITH: OK, Part 2. Well I won’t talk about that, then. I’ll talk about that in another call. But the feature of that day was Sir Graeme Harrison speaking from ANZCO about the TPP and market access and the importance of that and how it would work with his company’s particular issues that they were facing with trade. It really highlighted these actual treaties and how they work. It’s not just about tariffs; it’s about the non-tariff trade barriers, and how the Trans-Pacific Partnership and now the CPTPP—it’s a bit of a mouthful, really—lay out those particular rules to make trade so much easier. In the case of ANZCO, having their access for their beef was a massive gain for them and for the beef industry in general, and that goes back right through to behind the farm gate. So it has a huge impact on our economy, right through our farming sector.

I think that that is often lost on many of those other submitters that were there on the day, which were talking about the investor-State dispute settlement and those particular clauses that were related to that. Most of their submissions, while heartfelt and well-intentioned, really missed the mark and didn’t understand the impact that could be on New Zealand companies trading overseas. That’s particularly why those clauses are in the bill. So market access is absolutely a massive plus.

The Pharmac provisions in the bill—I understand why they are there, and I think that’s obviously a very good thing. It is a great model for us in New Zealand. They’re a bit like banks, really—pharmaceutical companies: everybody doesn’t like them, but they quite like to use the products that they have when they’re quite ill. So you can’t have new pharmaceuticals if pharmaceutical companies don’t make money out of the production of those and the research that they put into those drugs before they become available for us here in New Zealand.

But trade’s very important for us and, obviously, having this particular bill go through will shore up our place in the world trading scene. I think the renaming of the principal Act—that’s in clause 4, the principal Act being renamed—the name isn’t all that much of a concern to me, but that’s the new Government’s right to put their spin on it, and that’s what’s happening in this particular bill. I think, well, you know, what’s in a name? At least it’s still going to do exactly, pretty much, what the original TPP—very good work that was done—

Kieran McAnulty: Rubbish! It’s completely different.

STUART SMITH: And the member across the way wasn’t involved in the previous Parliament, so I’m not sure how he knows what he’s referring to. But I’d welcome him getting on his feet and putting his point forward. I’m sure that everybody would love to hear that, particularly the good people of Wairarapa—they’d quite like to hear what’s going on and running through their anti-trade person, who is not a representative for them but resides in their area. So we’d love to hear what they’d have to say about it, particularly since most of the income in that particular area relies on trade.

This bill will, in fact, make it a lot easier for people—well, although it’s only adding on to the good work of the National Government. But I acknowledge the Minister’s role in this, and I commend it to the House.

ANDREW BAYLY (National—Hunua): Thank you, Madam Chair. It’s an absolute pleasure to be talking on the Trans-Pacific Partnership Agreement (CPTPP) Amendment Bill—

Simon O’Connor: You missed “Comprehensive and Progressive”.

ANDREW BAYLY: Well, that’s part of the debate. My colleague is just identifying that I’ve missed the “Comprehensive”, but, of course, that is one of the issues that we’re talking about in Part 2, isn’t it—

Hon Member: Part 1.

ANDREW BAYLY: —Part 1—which is that we all knew that this bill was about the Trans-Pacific Partnership agreement, and, of course, that was when it came into force under our Government some time ago. Obviously, there was a lot of opposition at that stage, but—

Simon O’Connor: Who from?

ANDREW BAYLY: Who from, my good colleague asks. There was, of course, widespread opposition, including members from the other side, but also renowned commentators from the outside. Professor Kelsey springs to mind as someone who is always prepared to share her views in the most open, transparent manner, and, of course, she’s got a lot to say on this issue.

So the issue was that we understood it as the Trans-Pacific Partnership agreement, TPPA, and it was a massive agreement that we put in place which was going to be a catalyst for huge amounts of growth in the Pacific—huge amounts. And, of course, it was going to have a huge or a significant impact for New Zealand. I seem to recall, I think, an estimate of about $2 billion a year—from memory, I’m going from here. But what Part 1 talks about is the issue around what title we should give it, and, of course, we’ve now got this new rather unwieldy title, “CPTPP”.

Dr Duncan Webb: Come on, you can spell.

ANDREW BAYLY: Yeah, I can. I can spell. Thank you for that helpful comment across the way. And, of course, it says “Comprehensive and Progressive”.

Hon Tim Macindoe: What do you think the impact of adding those words is?

ANDREW BAYLY: I don’t know, but we’ve dropped the “agreement” at the end, so it’s now the Comprehensive and Progressive Trans-Pacific Partnership. I personally prefer the word “agreement”, because I think that implies some form of negotiated outcome where all parties actually know what they’re going to do. But for some reason—and no doubt Minister Damien O’Connor’s got a view on this—it is far more important to have the words “Comprehensive and Progressive”. I’ve got to just suggest to you if you’re going to sign an agreement, surely you want to achieve comprehensive and progressive development. That’s self-evident. That’s why you enter into these agreements, because you want to see the country grow, or you want to see living standards improve, or all those sorts of things. But for some reason we think we have to put a self-evident title in front of it, which says “Comprehensive and Progressive”. But, as I said before, the missing word is that sense of agreement. That sense of cohesion.

Chris Penk: It’s agreeable.

ANDREW BAYLY: Agreeable—that’s another alternative. I could’ve quite happily lived with that, or even an alliance. Those are all good words. They’re excellent words, because they sort of show what you’re trying to achieve. But anyway, we’ve got to that outcome. I’m sure the Minister is going to explain to us one day why this is so vitally, vitally important that we have these words.

The other thing, of course, is around the commencement date. I think we’ve got to differentiate between the two dates. One is the date that the bill comes into existence, and one is the date that we, essentially, allow this piece of legislation, this bill as it currently stands, to come into existence. Of course, I haven’t actually checked the day that the bill comes into existence. I think the bill comes in after the third reading and Order in Council. There’s nothing unusual about that. But the interesting thing about this, in Part 1, is the issue around when this bill actually becomes operative—operative.

Of course, in this bill we’ve got a couple of processes. Normally such a thing is undertaken either through an Order in Council, but when is the treaty operative? In this case we’ve got this double approval process—one might even say double jeopardy; oh no, maybe that’s not very appropriate in this case—but, anyway, this requires the Minister for Trade and Export Growth to do that.

I think this is an interesting bill. I’m looking forward to the debate on it as we go forward.

CHRIS PENK (National—Helensville): Thank you, Madam Chair. It’s a pleasure to speak again on Part 1, my ante antepenultimate contribution in this part—for scholars of Latin and, indeed, trade.

Hon Tim Macindoe: I got that one.

CHRIS PENK: Mr Macindoe got that one. Of course he did. I wonder if it’s good timing, when we’re talking about the commencement, to sort of understand how this fits in with our broader constitutional arrangements. I’m going to let the committee into a secret—indeed, the whole nation, as I’m sure everyone is following closely—and just explain that I’ve received some advice from the Parliamentary Counsel Office (PCO) some time ago. It was general advice, not related to this particular bill, whereby a set of criteria is established for understanding whether legislation is going to be “great law for New Zealand”. There are different aspects of that, and I’ll relate to each of those to new section 2, in clause 6, within Part 1 of this bill.

The first is that it’s accessible—namely, easy to understand, easy to find your way around, and easy to find. You’ll excuse me using the second person pronoun, hopefully, Madam Chair—easy for one to find one’s way around, I suppose. No doubt, you will have no difficulty in finding your own way around it, ma’am. So, in terms of the way that this particular clause is set out, it’s pretty obvious, I think, the way that it has effect. It talks about the Act itself having effect; the Act being the parent Act, the Trans-Pacific Partnership Agreement Act, as distinct from the Trans-Pacific Partnership Agreement (CPTPP) Amendment Bill, as Mr Bayly has explained very helpfully. It sets that out in a way that I think is very easy to understand because it establishes that that will take place when a particular Minister gives some advice to the Sovereign—

Hon Member: Return of the King!

CHRIS PENK: More specifically, it is, of course, the Governor-General—and I say the “Sovereign” coincidently with Matt King coming into the Chamber, but that’s entirely coincidental in terms of his surname. But it’s the Governor-General, of course, standing in place of the Sovereign, who receives that advice from the relevant Minister. I say “advice”; technically, actually, the word used in the clause is “recommendation”. Advice is a term of art, I suppose, in constitutional circles regarding the functions of the Ministers of the Crown, the Ministers of Her Majesty as it currently is, and through the Governor-General, of course. It’s the Minister for Trade and Export Growth who would be making such a recommendation or, as I say, advice.

It’s worth noting perhaps, just in passing, that the advice would come from the Minister to the Sovereign via the Governor-General, no doubt as part of a Cabinet decision that would have been made by the executive more broadly, but to meet the particular requirements of this bill it would be that particular Minister, whoever he or she might be at that time. I think that’s appropriate. So as far as the PCO’s advice on the way that law should be structured in a way to be accessible, that passes the test as far as I’m concerned.

The next major category of appropriateness is whether it is fit for purpose. It is fit for purpose, in my view, because the purpose of the Government of the day—represented by the Minister in the chair, Damien O’Connor, at the moment; and, indeed, this side of the House is supportive of the purpose of the bill itself, as well—is clearly to enable legislation, or rather to enact legislation, that will ratify the amended trade agreement popularly known as TPP or CPTPP, depending on who one is talking to and how much weight one attaches to certain amendments that were negotiated.

Certain and flexible for the future? That’s one other criterion within that overall aim that legislation be fit for purpose. The date appointed by new section 2 under the heading of “Commencement” is indeed pretty certain, and it says it’s flexible for the future, and, actually, I think it’s quite wise in that regard because it specifically outlines that there can be different parts of the Act entering into force or into effect at different times, and that again relates back to the nature of the agreement itself.

Finally, constitutionally sound is what the PCO recommends for us in drafting all law, including this particular provision that is before us today. It does follow good process notwithstanding that there are some different views out there in the way that Parliament and the executive interact in terms of treaty making. That’s something that’s covered by a Supplementary Order Paper that relates to Part 2, and no doubt our colleagues in the Green Party and my colleagues in National too—and perhaps even, who knows, Labour and New Zealand First—might care to take a call on it very shortly. That’s all I have to say on new section 2, “Commencement”. Thank you, Madam Chair.

KIERAN McANULTY (Junior Whip—Labour): I move, That the question be now put.

BRETT HUDSON (National): Thank you, Madam Chair. It’s great to take a call on this, on Part 1, seeking to change this name: Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). I think we’d probably have far less of an issue if the “CP” were instead to be renamed “Carefully Presented”, because, in essence, that’s all the Government has actually done with these changes. They have carefully presented a Trans-Pacific Partnership (TPP), which is still the TPP that we all knew and loved on this side of the House, but they pretend that they’ve somehow made some substantive change to it.

But in doing so they perhaps are careful not to say what would happen to this CPTPP if the US were to re-enter the Trans-Pacific Partnership as it had been originally agreed. So it’s actually the Minister Damien O’Connor’s comments that I want to take the time to talk about in this my first contribution on this part. The Minister claimed—in response to one of my colleagues saying that “Well, what happens if the US actually changed their mind and decided to enter this thing under the terms and conditions that were agreed to by all the parties?” The Minister tried to claim that (1) that was incredibly unlikely and (2) that we would be able to do certain things. Well, let’s take a look firstly at the first part of that.

Even under the name CPTPP this agreement affects a huge amount of the world’s GDP, particularly in the region of which we are one of many inhabitants. So as those nations that are a part of this use this agreement to mutual benefit—each of us growing our opportunities, growing our economies, creating jobs, and lifting incomes in our country—it is not by some far-stretched hypothetical to think that another country that could still be a member of it, the US, will stick to a position that it is not good enough for them. In fact, the more successful the nations under CPTPP are, under this agreement, the more likely it is the United States will review its position and look to find a way to re-enter, because it’s only alternative against that entire bloc, if you will, of economic might across the region is to seek to negotiate bilateral agreements independently with each of the nations. That is a very, very difficult thing to do whilst maintaining the sort of opportunities that a multilateral agreement can yield.

So I think, Minister, it is not some amazing far stretch of the imagination that the US would seek to re-enter the agreement under its original terms, which they are unable to do and which would then have significant impacts to those not quite substantive changes the Government did negotiate into the renamed CPTPP—most or all of which would go out the window if the US decided to re-enter the original agreement.

The second part, then, the Minister raised that I think is extraordinarily troubling for this Government and for New Zealand is he made the statement that if the US did choose to re-enter, then we have a reserved right to withdraw our consent to the TPP. So he’s just sent a message to every business in New Zealand and every exporter that they cannot be certain of what would happen to their international market access and their opportunities under this agreement should the US unilaterally decide they will re-enter TPP, which they are absolutely able to do. The Minister has sent a message to them that they might lose all of that opportunity, because this Government would have the option to withdraw from it. Well, given the environment that this Government has existed in, pretty much since it came into being, of low and decreasing business confidence, that one statement in this Chamber by the Minister can only have made that worse. That comes on top of the news tonight in the Colmar Brunton poll that more people think the economy is headed backwards into the future than is heading upwards.

So really, the Minister has introduced a sense now of absolute uncertainty across those businesses—the businesses we need to prosper under CPTPP, or whatever you want to name it; the businesses we need to grasp the opportunity and make the most of it. Ultimately, when we talk about the economy, we are simply talking about jobs and incomes. Harnessed well, this, along with our other trade agreements, is all about growing jobs and growing incomes. The Minister has just really put a huge at-risk component into that.

ALASTAIR SCOTT (National—Wairarapa): Thank you, Madam Chair. I too would like to contribute briefly on this on the words “Comprehensive and Progressive”, because one has to consider all the work that was done prior to today in other bills to enable this bill to pass.

It’s not comprehensive—progressive, yes, because one step in the right direction is progress, but comprehensive it is not. When we talk about this, the Government had to pass, to suit themselves, an amendment to the Overseas Investment Act which did not allow foreigners to buy existing houses but did allow them to buy houses off the plan, for example. So comprehensive this is not. If it was comprehensive, it would have included those types of things in this bill.

Trade is really important, and it’s really pleasing to see that, essentially, both sides of the House, with a few exceptions, are in support of removing tariffs and progressing free trade. Free-trade agreements, as Mr Hudson has talked about, increase GDP, increase income, and create jobs. That’s really important. It’s particularly important in these times, given some of the barriers and tariffs that some countries are putting up to protect—or so they say—the jobs in their own economies. Thankfully, we know here in this House, on both sides, that we’re a trading nation and that we must continue to trade and enable greater access and freer access to all of the markets in the world to enable our small economy to progress.

Even the larger economies that are supporting tariffs and barriers—in the short term it might appeal politically; in some places it does appeal politically. It’s protectionist. You get a group of people who believe they are being protected. They do believe that their jobs are being protected in their own domestic economy, but on both sides—I think I can speak, because this is what we’re talking about: free trade—we know, in the medium to long term, tariffs and barriers to trade do not protect jobs at all. They increase the cost of production in the domestic economy, making those jobs uncompetitive compared to others. That is why we, on this side—and I’m hearing from the Labour side—support free-trade agreements generally.

So that’s a good thing. So free trade is a good thing. So the “Trans-Pacific Partnership Agreement”—which is what it was—those words are absolutely appropriate, but comprehensive it is not. Progressive, it may be in small steps, which is excellent. Some people would say that we don’t do enough here fast enough and soon enough, and I might be one of those people in fact. But a step in the right direction is still progress, and that is why we support this document. We will support even the title of “Comprehensive and Progressive” in the title, because it’s important that the bones and the substance of the bill is enacted for the benefit of all New Zealanders, to increase incomes, to increase the GDP, and to support more jobs in the economy.

I mean, even a year ago we were doing around 10,000 new jobs a months. That’s what a growing economy gives. That’s what free-trade agreements do.

Hon Member: How many?

ALASTAIR SCOTT: Ten thousand new jobs a month.

Andrew Bayly: What are we at now?

ALASTAIR SCOTT: Four or five thousand. So we’ve slipped. The economy’s slipped. We can’t blame it all on the global economy. The Government has to take some responsibility for a slowing economy, for lack of confidence in the business community, and a lower currency which reflects that—and that’s not good. So the Government’s got quite a lot of work to do to regain the confidence in the business community. They’ve got a lot of work to do to increase, basically, the trade-weighted index of this currency, because it’s weakened significantly in the last 12 months. So the Government’s got a lot of work to do in that area, but at least, by ratifying this Comprehensive and Progressive Trans-Pacific Partnership agreement, we are taking a small step in the right direction.

JAN TINETTI (Labour): I move, That the question be now put.

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

Ayes 63

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

Noes 55

New Zealand National 55.

Motion agreed to.

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

Ayes 111

New Zealand National 55; New Zealand Labour 46; New Zealand First 9; ACT New Zealand 1.

Noes 8

Green Party 8.

Part 1 agreed to.

Part 2 Amendments to other provisions of principal Act

CHAIRPERSON (Hon Anne Tolley): I call Simon O’Connor.

Kieran McAnulty: Argh!

SIMON O’CONNOR (National—Tāmaki): Yeah, it’s probably true actually, Kieran. But look, I’m very pleased to speak on Part 2. As you, Madam Chair, will know, but not necessarily members of the public, this is a bill in two parts. This isn’t a bill as such that has substantial parts to it, which is not meant to be a paradox, but I, again, just to stress, particularly for those listening as we get into Part 2, understand that this is the domestic piece of legislation which is an instrument to bring about the wider treaty—6,000 or so pages. So I certainly encourage—actually, the Minister in the chair, the Hon Damien O’Connor, may edify us later with the exact number of pages so that I get that right, but let’s just say a lot of pages. So for those listening and curious, to get the absolute substance of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) agreement, turn to that, not this particular piece of legislation.

So what we’re here discussing in Part 2 are those, effectively, what I’d call consequential changes to a number of Acts in existing New Zealand legislation, particularly the Copyright Act of 1994, as those who have been following the debate would expect. The Customs and Excise Act of 1996—in fact, that’s a fairly simple change. It’s a tidy-up in terms of just repealing a particular part of that Act. There are some minor—in fact, all of these changes are relatively minor, other than probably the copyright area, where there may be a little bit of dispute, and I might touch on some of that.

This part also changes the Hazardous Substances and New Organisms Act of 1996. We’re beginning to get a bit of a theme, actually, that clearly 1996 was a fairly busy year. The Legislation Act of 2012 is also changed. Most of it is actually nominative; it’s really just around definitions. In effect, this part, particularly those clauses, or clause 13 onwards in this particular area, are just tightening up so that New Zealand’s domestic law—in this case, the Legislation Act—is aligned with the treaty itself.

Somewhat controversially, we are making changes to the Overseas Investment Act of 2005. This is bringing into effect elements that the Government has discussed, and it’s not my intention to go too much into that. There’s a change to the Patents Act. As friends of mine would note, there are distinct differences between copyright and patents, but that’s a fairly small set of changes, and it’s particularly adding a new Part 2 to a schedule in the Patents Act of 2013. Most of it, again, is around the nomenclature of the title between the Trans-Pacific Partnership (TPP) and the comprehensive and progressive agreement. So a lot of this part is tidy-up, as too with the Tariff Act of 1988, which you would expect, seeing as this is a bill to bring about a treaty which is to do with trade. Finally, but not because it’s unimportant, the Wine Regulations of 2006 are also to be changed.

If I might, my primary thoughts are around the changes to the Copyright Act. Minister, I’m supportive, as far as I’ve been able to get my head fully around matters of copyright. I think it’s prudent that we are bringing into effect other agreements that we’ve got. So, again, particularly for those who are out there, the CPTPP, while obviously a comprehensive agreement in and of itself, also rests on wider agreements that New Zealand is party to. It may or may not be known, but we are part of a group called WIPO—that’s how I would say it as an acronym, but the World Intellectual Property Organization—and New Zealand is required to make some treaties under a copyright treaty and a performance and phonograms treaty.

So it’s a little bit like the United Nations Convention on the Law of the Sea recently, where obligations through that treaty meant that we had to make some changes to our customs work. It’s similar here that the CPTPP and our—sorry, actually, I’ve got that the wrong way around. I apologise to the Chair and the Minister. New Zealand is party to these copyright agreements. We have signed understandings, treaties, in this regard. We’re conscious that, being good global citizens and engaging with the likes of the World Intellectual Property Organization, we need to make sure that our domestic legislation aligns with that, and in this particular debate tonight—or discussion, I think it is, more than anything—that our Copyright Act, as articulated in this amendment bill, is aligned.

So, really, in a lot of ways it’s a tidy up. Most of the changes being proposed in this bill are around the technological protection measures, often just referred to as TPMs. It’s really just being very, very clear about who is and who is not covered. I don’t think there’s anything particularly controversial in these. When we sat through the select committee, it was very well explained to us—and I would say in advance, if not already, that any lack comes from my own understanding rather than what was given. But, really, it’s just tightening up the requirements and what is proposed to be. So this is in Part 2, clause 8, which is inserting new sections into the Copyright Act. There’s a new section 226F, just around the meaning of copyright information, and just being very clear that we’re talking about the work, the author of the work, the copyright owner, the performer, and when it comes to a film, also the director of that film. So these are small things, but those who work in industry would just see that that’s clearly aligning with things.

I’m not so sure it’s as much a question to the Minister as perhaps I thought, but he’s very welcome to address it. I know, in talking to various people involved in the creative industries, there is concern around just how comprehensive—no puns intended there, Minister—our copyright work is. I’m very conscious that we’re not here discussing tonight the Copyright Act itself; we’re talking about the CPTPP, but, I suppose, just some assurances that we’re not, through this CPTPP amendment bill, locking in poor copyright behaviours. Those who are more expert than I am in the copyright industry would say there are very different laws and approaches in New Zealand between that for books, music, those who are writers, those who are performers, or copyright for computer games. New Zealand’s copyright law is good, but there are different rules, different lengths of protection for those different organisations. In fact, there are even differences, I am told—and always happy to be corrected—for even those who are involved in writing, between those who write books, so what you would particularly get at Whitcoulls, through to those who write technical manuals, through to those who do academic works. What I am hinting at here, poorly, is that there are a whole series of different copyright rules for different media or mediums.

There is controversy, Minister, around this. There is concern for those in the industry, and there has been a long desire that this be tidied up. But, importantly, where it affects here is probably just some assurances that our agreeing to the WIPO agreements and putting it in here, in Part 2, does not stop New Zealand making its own consequential changes in the future. Or, to put it another way: if this year, next year, it was the will of the Government to implement a lot of the changes that those in the creative industries are asking for, which is, basically, an alignment of copyright rules and some new ones, particularly around the notion of gaming and digital rights, will our having been part of WIPO, but, more importantly, our having put those provisions into this Part 2 of the CPTPP amendment bill, preclude the executive and the Government, this Parliament, from actually making those changes?

So it’s relatively technical, the rest of the sections. It may seem like a lot of words to those reading through, but, in effect, it’s just bringing about changes that we as a country have already agreed to. So I think I will leave my contribution on those parts there. I’m conscious there are two Supplementary Order Papers in the name of the Greens. As, perhaps, a courtesy, I will let that member, who I suspect will speak but I cannot be absolutely sure, address those. I may, if I get the opportunity, have some comments on those later as they relate to new parts within Part 2. Thank you very much.

BRETT HUDSON (National): Thank you, Madam Chair. It’s a pleasure to talk on this Part 2 of this bill. I want to, in this contribution, limit my comments to the technology protection measures (TPMs). My colleague Simon O’Connor spoke about copyright and potential ramifications there. I actually don’t want to talk about where that copyright might go, but I want to hear from the Minister in the chair, the Hon Damien O’Connor, because the Government has claimed they made substantial changes that merited a name change, to “Comprehensive and Progressive”.

I’ve read through these changes here in new section 37A in clause 8, that the bill would amend—

Kieran McAnulty: They’re comprehensive and progressive.

BRETT HUDSON: Yeah, they comprehensively do very little, Mr McAnulty. So we’ve got some minor wording changes to how you, basically, define a copyright owner of a work that issued a copy of the TPM to the public or communicated the TPM work to the public, or a person under licence from the copyright owner who issued a copy of the TPM work to the public or communicated the TPM work to the public. It’s not really a substantive change from what was already there.

So if this is comprehensive and progressive, Minister, what has the Government negotiated and how is that reflected in this bill before the committee that seeks to address the concerns that were raised across the technology industry, the ICT industry, across the years that this agreement—both the original and this latest change—was in negotiation? What changes are there in this bill that addresses the concerns of that industry about what the TPM measures would mean for users of accessing content over the internet, over physical devices, over new media, and with new technologies? For instance, their concern at a most basic level was that this entrenches geo-coding through the likes of DVD regions, although DVD is all but a dead technology now. Particularly, they were very concerned that technologies like geo-coding or geo-blockers would—that signing up to this agreement without particular exceptions would open otherwise law-abiding New Zealand citizens up for potential prosecution—for instance, by using a DNS re-router, a domain name system re-routing service, so that they could watch US Netflix content instead of the curated Netflix New Zealand content.

So simply signing up to those, their argument was, exposed New Zealanders to risk. The only way that risk could be addressed was through court action, because it wasn’t sufficiently explicit in the legislation or the agreement as to what they could or couldn’t do. They have for years signalled their concerns. They have spoken when the Minister and his team were in Opposition. They spoke with these people a lot. The former Minister for Government Digital Services, when she was an Opposition spokesperson, spoke to these people all the time, including the likes of InternetNZ, and their support partner, the Greens—this is how important the groups like this were to these members in the past—have actually suggested that the Government should just make InternetNZ the Government’s Chief Technology Officer.

So, given the Government members had expressed so much concern for what these groups had been advocating when those Government members were in Opposition, I’d like the Minister to spell out for us now that if this bill is worthy of being called the Comprehensive and Progressive Trans-Pacific Partnership agreement, then how, in Part 2, has the Government addressed the concerns from within the ICT community that just signing up to these TPM measures would expose New Zealanders to legal ramifications—simply using software services that would allow them to present themselves as being resident other than the physical place where they live, which might then allow them to access certain content from overseas that is normally curated or not even available at all in New Zealand. Let’s just be clear: these people aren’t talking about stealing or not paying for this content; what they’re talking about is New Zealanders who will legitimately sign up and pay to view the content but who use software tools to present themselves in a fashion that would open up their access to larger and different content libraries.

So, Minister, if this is comprehensive and progressive, then point out for us—answer the question—where the changes are here that address those concerns.

GOLRIZ GHAHRAMAN (Green): Thank you, Madam Chair. I rise again with pleasure and a bit of heartbreak as the lone voice in this committee speaking against this agreement, the agreement that it was designed to project, and also the bill itself, which seeks to implement that damaging and dangerous trade model.

So we’ve heard earlier this afternoon and this evening a couple of things that really jump out. One is that this trade agreement appears to be changed in name only, and in the second part we see the breadth of it—just how much there is here that we’re implementing that has very little to do with free trade.

Now, the Green Party is not against trade. New Zealand is a small country and we need trade.

CHAIRPERSON (Hon Anne Tolley): Can I just ask the member to speak into the microphone, otherwise Hansard will have difficulty picking it up. Thank you.

GOLRIZ GHAHRAMAN: So Part 2—we’re talking about a lot of things that don’t seem particularly related to trade per se, but they are part of this corporate privilege framework that this trade agreement and the Trans-Pacific Partnership agreement (TPPA) before it was based on. We heard from hundreds of submitters, two thirds of whom opposed this agreement, and they opposed it on the basis that it was rather unchanged and that it went far beyond what is necessary to ensure trade.

We have 6,000 pages that were negotiated without transparency and much of which are about things like copyright, things like the privilege of foreign corporate investors to keep their information offshore so that they can avoid our privacy laws. We’ve promised not to regulate future unknown technologies—not much to do with trade—and, of course, the investor-State dispute settlement (ISDS) clauses, the provision that allows foreign multinationals to sue our Government if we legislate or if we adopt progressive policy that protects New Zealanders, our environment, our workers’ rights, our Treaty of Waitangi, over their profits. And we’ve talked about that a lot.

So I have tabled two Supplementary Order Papers (SOPs), and I will speak to them. The first is to add a provision into this law that ensures that no future new States can join without signing binding agreements that opt out of the ISDS provisions. This agreement was sold to us as being completely changed, in part based on the fact that a number of member States have signed side agreements, so to speak, that say that investors based in those States won’t avail themselves of the right to sue us under the ISDS provisions. Now, we know that any level of ISDS is too much, because, of course, multinational corporations can base themselves anyway and sue us. An Australian company can sue us from Singapore bases. But let’s mitigate that risk at least, and the Government has said that we’re not going to sign on to any further trade agreements that include ISDS clauses. So let’s limit the risk that ISDS will be used against us under this agreement or, in fact, the old TPPA, because we have heard from officials that that can be resurrected were the US, for example, to join it. So the first SOP seeks to include a provision that says that no further States can join and avail themselves of that ISDS provision. That’s important to our democracy.

The second Supplementary Order Paper that I’ve proposed we adopt seeks to bind the executive in bringing back this agreement for select committee consultation, for New Zealanders’ voices to be heard, were new member States to join and change the agreements. Now, the other way that this agreement was sold to us is by way of all of these suspended provisions, these protections, that could be lifted if new member States join—the protection of Pharmac to set fair prices and provide high-quality medical care for New Zealanders is in there. We want parliamentary oversight if new members are to join and to opt out of the suspended clauses. That’s about democracy. It’s about a new way of doing trade. It’s about trade being transparent and subject to parliamentary oversight, democratic oversight, by New Zealanders, which we weren’t given when this Government signed on to this newly named trade agreement.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. Well, now I do get to speak on Supplementary Order Paper (SOP) 140. Thank you for your guidance, Madam Chair. We just heard the person whose name this SOP is in, Golriz Ghahraman, and, when I look at the commentary and the Green Party minority view, it really was a bit hard to follow, in a lot of ways. They say that they’re for trade, but, when they explained the qualifications that would be required for them to be in favour of it, basically, they’re not in favour of free trade at all. But this SOP, as the member who just sat down said, the new bill—the CPTPP—is a change in name only, and then she goes on to talk about a number of things in there: it has very little to do with free trade. And then she mentioned corporate privilege. I’m not quite sure what she means by that. She didn’t explain what that means.

Her SOP seeks to ensure that the executive must not agree to any country joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership or any other changes to that agreement unless the House of Representatives has examined the resulting amendments. And it’s, basically, I suspect, to try and keep the US out, and it seems a very strange thing for the Green Party to have a hatred of the United States, which I can’t understand why that would be, other than the fact that they’re successful—perhaps that is what is driving that. So that doesn’t make a lot of sense.

She said there was no transparency and that they really don’t like anything without transparency, and yet they signed up to a coalition agreement that they had no idea what they were signing up for. So I think, on transparency, it’s a bit rich for them to start complaining about that when they were very keen to sign up to their coalition and had no idea they were agreeing to supporting the waka-jumping legislation, which was anathema to Rod Donald, et al., who set up the Green Party in this Parliament. So transparency is just very odd. It really hurts—you can see it hurts when you talk about it. The truth hurts. We do hear that.

So, OK, they feel there wasn’t any transparency. Well, no one would agree on any trade agreement negotiated in an open forum. You would never get anywhere, and people wouldn’t agree on anything. I think everyone understands that, except for them. They said it was sold to us in lots of ways.

The investor-State dispute settlement (ISDS), which seems to be lost on the Green Party, protects us from other countries doing what they’re afraid that we might be sued for—that is, a Government coming in over the top and bringing in a law that would single out a company. So the example could be, let’s say, a motor vehicle producer from a country that is banned—[Interruption]

CHAIRPERSON (Hon Anne Tolley): Excuse me, could we just have a bit of quiet.

STUART SMITH: —because the other country doesn’t support it. That would be an unfair practice, and that has to be dealt with in free-trade agreements. We have used those provisions—not those provisions directly, but provisions within these trade agreements—to our advantage, going to the World Trade Organization. If we don’t have those things spelt out very carefully in our agreements—and ISDS has that all spelt out for us so that if a country’s Government steps in over the top and disadvantages our producers, we’d have recourse for that. There are serious sanctions for that and the ability for a small producer to protect themself. I just can’t understand how the two sides of their argument are so opposite—they’re arguing against one another—and they don’t seem to be able to see that.

In short, the Supplementary Order Paper we won’t be supporting. It is poorly drafted, it is poorly thought-out, it is actually against our best interests, and it’s against the best interests of trade around the world. Trade is what puts food on the table: it gives people jobs and it makes societies far better than they would have otherwise been rather than being a Fortress New Zealand with a very low standard of living.

Hon DAMIEN O’CONNOR (Acting Minister for Trade and Export Growth): Thank you, Madam Chair. I’ll just take the opportunity to answer a few queries that have been made by members of the Opposition and by the Green Party. Can I just, in starting, acknowledge the members of the Foreign Affairs, Defence and Trade Committee, who have scrutinised this piece of legislation. Most of the points they have raised in the committee here tonight are legitimate and reasonable points, and I’ll try and work through a couple of them.

In response to Mr Simon O’Connor’s question around how many pages, I’m told there are about 30 chapters, and we’re still counting the number of pages. This is a substantive agreement. Moving on to Mr Hudson’s point about no substantial changes, I have to say that the changes, while they seem to be technical—and they are, effectively, to, I think, seven pieces of legislation and then of course to the Wine Regulations—are all significant from New Zealand’s perspective. That is to ensure we have protected the rights of our performers in terms of copyright, the sovereign rights of Government to ensure we can have a say over who buys our land, and that we can have a say over other key pieces, like who can trade pharmaceuticals with us. Those are things that this Government, prior to coming into Government, determined were important, which is why we went to renegotiate and why we’re now dealing with this.

In terms of the points raised by the Green Party regarding investor-State dispute settlement (ISDS), as I’ve said before, I respect their view on that. Can I just clarify, because no negotiated agreement is ever perfect for both parties. We accept that. We were opposed to ISDS clauses, but, of course, we go into negotiation to get the best outcome overall—not perfect, but the best overall outcome, ensuring that New Zealand’s sovereign rights have not been traded away. Can I say, we have also agreed to reciprocal limits on those able to use the Comprehensive and Progressive Agreement for Trans-Pacific Partnership’s (CPTPP) ISDS provisions.

New treaty-status side letters were signed with Brunei, Malaysia, Peru, and Vietnam to either exclude CPTPP ISDS between us or require prior consent by the Governments concerned—that is, we’d both have to agree before any such action could be carried out. We also reconfirmed a side letter with Australia which excludes ISDS between the two countries—again, the country we do most of our trade with, so, really important. These side letters are significant and, effectively, exclude up to 80 percent of the current investment flows from the CPTPP group into New Zealand from using ISDS.

We are opposed to it, and we will be in future trade agreements. I believe that Minister Parker and Prime Minister Ardern got the very best deal, while protecting our rights, through this agreement. So it is not perfect, but it’s certainly one—and I can assure the Green Party that we will adhere to the provisions in the side letters and the protections that we have, and we will continue to oppose, as a starting point, ISDS provisions. But any negotiation is, by virtue of its nature, a compromise over certain particular issues, keeping in mind that, overall, we believe this is a very significant step for a nation that relies on trading for our existence.

Unlike most of the other countries involved where they consume most of what they produce, we export most of what we produce, hence the significance of this agreement and, I guess, the sensitivity around the provisions that we are changing here tonight.

Hon TIM MACINDOE (National—Hamilton West): It was the wave that did it—Madam Chair, thank you for your excellent choice there. Could I also thank the Minister who’s just resumed his seat, Damien O’Connor, because, as I mentioned to him when we were having a discussion at the start of this session, it is appreciated when Ministers engage with the Opposition and their questions. I want to thank him for having responded to a number. I was just a little concerned that he got the call when he did, because I have a few more questions I’d like to put to him, and I hope he’ll have a chance to respond.

Hon Member: Gosh, that’s a surprising tactic!

Hon TIM MACINDOE: I do also—ha, ha!—want to acknowledge my colleague the member for Kaikōura, because I was utterly incensed when he stood up and got the call before I did, but I thought that he actually gave—

Andrew Bayly: A very good speech.

Hon TIM MACINDOE: —a very good summary. It was a very good speech, Mr Bayly. You’re quite right.

Andrew Bayly: But you could be even better.

Hon TIM MACINDOE: Thank you. I’ll do my best. If you would stop interrupting, I’ll certainly get on with it. The point I was going to make was that not only did Mr Smith answer, in an intelligent and clear fashion, the National Party’s thoughts on the Greens’ Supplementary Order Paper, but also he gave a very clear explanation at the end of his speech as to the primary benefits of this particular agreement and free-trade benefits overall. So that is constructive and useful.

My colleague the member for Tāmaki made the point in his contribution earlier that this is a fairly technical bill with two quite small parts. I want to acknowledge him again for the fine job that he has done steering this bill through the select committee. He is an excellent chair of the Foreign Affairs, Defence and Trade Committee, and that’s widely felt right across the House. It’s a great pleasure to work with him, and I know that submitters felt that he treated them with great courtesy throughout the whole of the submission process.

Let me just remind the committee that what we’re dealing with here is a bill which makes changes necessary for New Zealand to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). That’s probably fairly self-evident. The second thing is that it incorporates most of the Trans-Pacific Partnership agreement (TPPA), which had been signed and ratified back in 2016. The third thing is that the bill would amend the Trans-Pacific Partnership Agreement Amendment Act to reflect the new CPTPP agreement.

I made the point, when we were debating Part 1, that a number of submitters came along to express their real concern and, in particular, their feeling that it was a cosmetic change and really there was no substantive change. What I’d like to do now is just give those submitters a bit of a chance to be heard, because I think while I am firmly in favour of this agreement and, by extension, naturally—

Andrew Bayly: It’s not called an agreement; it’s a treaty.

Hon TIM MACINDOE: —support this particular bill—thank you, Mr Bayly. I see you’ve piped up again. I will try to do my level best to help you through yours as well.

What I just wanted to put on record was that when submitters came to talk about the different sections of this bill, it was notable that all of the individuals—and I do mean all of the individuals—who made submissions were opposed to the bill. I looked through and I recognised quite a few names—in fact, I think we’ve got quite a strong list of Green Party members here. But nevertheless it’s valid that their concerns are not only put into the record—and to some extent we did that in the second reading—but in the committee stage, to give the Minister in the chair a chance to answer some of those questions because, ultimately, it is desirable for the public to have a good understanding and a clear—if not acceptance, at least an awareness of why decisions have been made.

So I’m going to ask the Minister a few questions which I think are relevant to this Part 2 of the bill. In particular, one of its key features is that it includes commitments to safeguard and enforce high labour and environmental standards across the Asia-Pacific region, and yet one or two of the submissions—and I can’t cover all of them, but on behalf of Mrs Bronwyn Judge, her submission included the concern that “The haste with which the CPTPP has been signed leaves the question as to whether the goals of the CPTPP have been considered in relationship to more important goals such as the zero carbon emissions target by 2050.” I would simply ask the Minister if he would like to comment on that. I’m sure that Mrs Judge and others who share that view would be grateful for an answer, even if they may not necessarily agree with it.

Oliver Hailes is a well-known submitter to select committees, and he came along to our committee both in the previous Parliament when the TPPA was being discussed and again when the CPTPP came up. One of the points that he made was that “The overriding purpose of the TPP has always been to secure the formal separation of politics and economics”—well, that’s his view—“Thus it serves disproportionately the interests of foreign investors and multinational corporations over those of voters, workers, consumers, local businesses, indigenous peoples, taxpayers, patients and their environment”—[Bell rung] Thank you very much, Madam Chair; pity the bell has interrupted—“And when the projected economic gains are so trifling”, says Mr Hailes, “it is clear that ratification of the TPP”—or, in this case, the CPTPP—“would be against New Zealand’s national interest.”

Now, I accept the fact that the Minister has already, to some extent, covered the national interest, but I now would like just to pick out a little bit more from Mr Hailes’ submission in the hope that the Minister will be able to answer some of his concerns: “One need only turn to the NIA’s breakdown of the sectoral winners”, says Mr Hailes, “in order to see how the TPP is unlikely to create new opportunities for international trade: meat, dairy and other agriculture are poised to enjoy nearly 72 percent of the total estimated tariff savings.” Now, I fundamentally disagree with that view, but I’m hoping that the Minister might be able to take the call and explain to Mr Hailes—because I’m assuming that he disagrees with that view as well—why he feels that way. Mr Hailes also went on to say “it is clear that the TPP is likely to entrench New Zealand’s long-lamented dependence on animal agriculture rather than create new opportunities for economic diversification.” It’s really helpful that not only is the Minister in the chair the Associate Minister for Trade and Export Growth but he is also the Minister of Agriculture, because I’m sure that he would want to be able to answer that question from the benefit of his considerable knowledge of that portfolio and that issue.

Just another one from Jen Olsen, who’s the organiser for TPPA Action Dunedin—and I apologise to the others who submitted on this bill; time obviously wouldn’t permit me to go through all of them, and I am trying to ensure that I make this relevant to Part 2 of our discussion. Jen Olsen, who’s the organiser for TPPA Action Dunedin, said that he was “seriously concerned by the potential human, social and environmental impacts of the … (CPTPP).” He is a social worker, and he concluded by saying he didn’t want to see a future “where we are locked into a system that permanently damages our social and environmental well being.” So I hope that the Minister will be able to respond to his concerns when he takes his next call.

Maybe just one last one—and I’m not entirely sure that I’ve got the name of the submitter, but he had previously opposed the TPPA, he continues to oppose the CPTPP—or “whatever it’s called”, as he said—and he made this particular claim: “There are many errors in the cult of free trade that has dominated New Zealand thought since the mistakes of the mid-1980s, and the unquestioning allegiance to principles that are fundamentally and fatally flawed remains evident in the blind pursuit of a path that will lead inexorably to ruin within the next two decades.” Now, I have to say, there’s such a rhetorical flourish in that, it could almost have been uttered by my learned colleague the member for Hunua. Although I’m not sure that it would’ve met philosophically with his direction, certainly the hyperbole, the rhetoric, seems Bayly-esque in the extreme.

But I do hope that the Minister would like to respond to that particular submitter, because, as I say, I think it is an important part of a functioning democracy that we give the Minister the chance to respond to the concerns of submitters. These were the things that we were hearing, along with many other concerns, during the course of the select committee process. I recognise that this is a very technical bill. To some extent, it might seem that, philosophically, this goes well beyond the provisions of the bill, which is simply designed to make the changes from the TPPA to the CPTPP, but I think that the public of New Zealand, in particular those who take the effort to make submissions, do have a right to feel that their concerns have been heard, have been articulated in the Parliament. I do again acknowledge the fact that the Minister in the chair has been responding to a number of questions and concerns that have been raised by speakers in the committee tonight, and I’m hoping that he will take the opportunity to respond to some of those submitters at all.

Now, having mentioned that all of the individual submitters were against the bill—and I do farewell the Deputy Speaker as she makes her way—it would, nevertheless, be remiss of me not to point out that of the organisations that submitted on the panel, a large number were in favour, and they included some pretty significant players. Perhaps, if I could just mention a few: we had Agcarm, Export New Zealand, Federated Farmers of New Zealand, Fonterra, the Fresh Fruit Company of New Zealand, Horticulture New Zealand, Medicines New Zealand, the New Zealand Horticultural Export Authority, New Zealand Winegrowers, the New Zealand International Business Forum, the Wellington Chamber of Commerce, and Zespri, just to name some of the better-known ones. But the fact that all of those organisations took the trouble to make detailed submissions to the committee in support of this bill and in support of this agreement shows that it is something that is having wide-reaching implications and, as the Minister in the chair and Mr Smith have both noted, underlines just how significant and how special this opportunity is for New Zealand.

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

ANDREW BAYLY (National—Hunua): Thank you, Mr Chair. I think we’re witnessing tonight the strength of a strong, united Opposition. I just heard a series of speeches tonight that just demonstrate the breadth and interest in this topic, and this is from active members of this very good Foreign Affairs, Defence and Trade Committee. I particularly want to just acknowledge the chair, a good friend and colleague from—

Hon Tim Macindoe: And the deputy chair.

ANDREW BAYLY: And the deputy chair—ha!

Hon Member: What about the other members?

ANDREW BAYLY: Well, I’m getting there. But the 10-minute speech from the chair—lucid, concise—and then I looked at that speech we just heard from the member from Hamilton West—

Hon Tim Macindoe: Yeah, the deputy chair.

ANDREW BAYLY: And deputy chair. But good points were being made, questioning of the Minister in the chair, Damien O’Connor, and I think the way that the Minister stood up and answered some of these questions has been very good too.

One of the things I just do want to highlight is this discussion around investor-State dispute settlement (ISDS) provisions, which are, effectively, a dispute. I listened very carefully to the Minister’s response before, and, Minister, honestly, you could be one of us—you could be one of us—because your explanation around trade and the importance of trade was very good. I just hope your learned colleagues are listening to you intently in Cabinet, because we need good people like you who promote trade and make sure we get the right framework and legislation in place. I think the ISDS—I know last time certain members of Cabinet, on our Cabinet, were very, very opposed to them. What you pointed out is the importance of being—[Chairperson gestures to himself] Sorry, what the Minister pointed out was the importance of being flexible. Last time, when we were negotiating the Trans-Pacific Partnership Agreement, we just had these irrational comments around the inappropriateness of the ISDS provisions, and I think what you’ve talked about tonight is very useful.

Now, I see Mr Chair just looking at me slightly—I want to turn my mind to Part 2, clause 13A. This is inserting new section 68A, and what it reads is “In section 61(1)(i) (as replaced by section 46(4) of the Overseas Investment Act …), [to] replace ‘either or both of overseas investments in sensitive land and overseas investments in significant business assets’ with ‘overseas investments in sensitive land’.” Now, we’re all very aware of how important the implications are of the Overseas Investment Amendment Bill, which is now an Act, that’s just recently passed its way through Parliament, and the chilling impact that is having on foreigners looking to invest into New Zealand to help us do a whole lot of additional activities that we would not otherwise achieve. These are responsible investors, but that Overseas Investment Act has had a chilling impact on it.

I just want to highlight that with the current arrangements, we already have certain thresholds where overseas investment coming into New Zealand is subject to strict oversight. We have those under the most favoured nation clauses, and, of course, we’ve got arrangements with China, China Taipei, Korea, and Hong Kong. Then we’ve got the Trans-Pacific Strategic Economic Partnership Agreement, or the P4, which, of course, includes New Zealand, Brunei, Singapore, and Chile, and, of course, our obligations under CER. What most people don’t realise is that there are already these thresholds, and so, under the rules, the thresholds now are $200 million, other than for Australian businesses, which have a half-billion-dollar threshold.

The issue with the Overseas Investment Amendment Bill was that what it did was it promoted and allowed for our forestry industry, which is 75 percent owned by foreigners now, to, basically, have a free ride. It could invest in a whole lot of additional forestry, and anything over 1,000 hectares was open slather. So what that means now is that this bill helps allow that.

What it’s done, in my view, has actually made the issues around overseas investment a difficult topic, and even more so under these arrangements. I don’t think anything in this bill that’s before us tonight actually helps in terms of making sure that New Zealand continues to be a good place for people to invest in.

CHRIS PENK (National—Helensville): Thank you very much, Mr Chairman. I’ll concentrate my remarks on the Supplementary Order Papers (SOPs) in the name of Golriz Ghahraman of the Green Party, who has spoken to those already herself and, I think, has made some good points that certainly make sense in terms of the Greens’ position in relation to this bill, and they have some interesting constitutional points about them. On this side of the House, we’re comfortable with not only the arrangements that we in Government in the previous Parliament and through our executive had implemented but also those that have been made by the Government subsequently, and I acknowledge the Minister in the chair, Mr Damien O’Connor, for his contribution to the debate, as well.

The Supplementary Order Papers that would be within Part 2 if agreed to are numbered 140 and 141. They are similar in structure, but they do have a couple of significant differences between them, which I’ll highlight as I go through. First, I’ll note that it could be said that these are themselves comprehensive and progressive, so perhaps they would have a certain appeal to the Government of the day, seeing as it has some penchant for renaming legislation and perhaps allowing things to slip through to the keeper on that basis. Perhaps they will be moved by that or perhaps not, but in any case, we will find out whether they agree or not in due course.

But Supplementary Order Paper 140 talks about new countries being prohibited from entering into the Trans-Pacific Partnership (TPP) or the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and it does actually set out both of those, so it’s certainly comprehensive in that respect. I thought the wording would be helpful to look at rather closely, because if it is the case that the fellow Government parties join their Green colleagues in voting for this SOP, then it will be as well that it’s well-constructed and fit for purpose in that regard.

So it starts by saying that “The Executive must not agree to any country joining the [CPTPP]”—excuse the acronym, again—“unless New Zealand has negotiated and signed a binding instrument with that country”, and it then goes on to talk about the investor-State dispute settlement provisions, or ISDS. So the words “The Executive”—I think that’s the Green Party member looking to be as broad as possible about the nature of the agreement. That’s actually a sensible thing in itself as a matter of good drafting, I think, because it includes not only the Minister for Trade and Export Growth but, actually, the whole executive, which would mean, presumably, the officials within the Ministry of Foreign Affairs and Trade, who always do a good job for our nation in negotiating such agreements, and also the Cabinet colleagues who would no doubt be working alongside the Minister himself—or herself, as the case might be, from time to time—in a collective Cabinet responsibility kind of a way.

So it’s the executive, then, who the Green Party by way of SOP 140 would look to preclude from agreeing to any country joining this revised agreement. Their proposal is that such a country would prohibit its own investors from being able to access the ISDS provisions against New Zealand, and in the Green Party view of things, that’s a necessary safeguard for New Zealand sovereignty.

I wonder if, in fact, their phrase “existing or future agreements” is perhaps a little broad. I expect that they mean trade agreements specifically, or even trade agreements with other elements added, but trade agreements rather than, for example—oh, I’m lost for an example—other agreements, in any case, on non-trade matters. So perhaps as a matter of good drafting, that could be amended, but most significant, actually, is really the substance of the SOP that they’re putting forward.

The other significance of the phrase “The Executive”, I think, is that it highlights exactly who within our constitutional arrangements would be prohibited from making such a change. It’s balancing or setting the executive against, for example, the legislature. So the Greens, I think, are anticipating that it would be Parliament, as the legislature, that would be a check on the power of the executive, because it would be Parliament that would be scrutinising each new, individual country that would seek to join the CPTPP in that scenario.

Of course, the word “executive” does mean by its very—[Bell rung] Mr Chair?

CHAIRPERSON (Adrian Rurawhe): Chris Penk.

CHRIS PENK: Thank you, Mr Chair. I appreciate the opportunity to continue. I was just pointing out that the word “executive”, etymologically, means the body that executes, so it’s executing Government policy. So it’s a group that this Parliament—and, indeed, this nation more generally—says can go out and execute policy on its behalf, can sign up to agreements significantly, in the current context, and, of course, can negotiate agreements too before they enter into force.

Hon Tim Macindoe: That’s eliminated any obfuscation, thank you.

CHRIS PENK: I’m grateful to Mr Macindoe for saying that I’ve eliminated any obfuscation. I’m assiduously pursuing hyper-verbosity, he will no doubt also observe. So it is that the historical basis is, of course, the executive being sovereign—being able to commit a nation, State, or a realm to certain actions—and in the Greens’ view, that should be limited somewhat in the 21st century in the New Zealand context by way of parliamentary scrutiny every time a new party wishes to join.

I do note that the phrase “any country” is pretty broad. Again, it’s comprehensive in that sense, and I expect that that’s intended quite specifically to include the United States of America, which may or may not wish to join subsequently, and so they’ve certainly covered their bases on that one.

As for the proposed amendments being progressive, which was the other half of the “comprehensive and progressive” phrase that I referred to earlier, well, as far as the progressive nature of it goes, I suppose in a general sense it might be said to be progressive—in the general political sense, that is. But also it reflects a notion that changes such as this, that the Greens feel strongly about from a sovereignty perspective, should be incremental—so just take steps progressively, or incrementally in that sense. It is at least consistent with their position that the TPP should not be signed. Again, I note for the record that our party disagreed with that, to the point, of course, of having been the ones to have promoted, negotiated, and signed that in the first instance.

So it’s consistent with the Greens’ position on that that they would also oppose the CPTPP, at least in the sense that they maintain that there is little or no change between those two agreements. That’s a position that we also hold, but from the perspective that what was acceptable before remains acceptable now. Of course, other members of Government parties have taken a different view, but it is, as I say again, at least consistent of the Greens to maintain that caution in wanting a progressive approach in the sense of limiting progress. That’s slightly Orwellian, perhaps—not my fault; it’s not my SOP, not my position—by saying that progress should be limited in respect of any new countries that would join. So that’s in relation to SOP 140.

SOP 141 is along similar lines in emphasising the need for parliamentary scrutiny, but this one is actually somewhat broader because it seeks to prohibit changes in general to the CPTPP or the TPP—again, setting out both. Actually, the way that this is phrased, it talks about the executive being disallowed from agreeing to any country joining the agreement or any other changes to that agreement.

So actually my observation is that the two SOPs do overlap somewhat, so actually if the Greens are successful in convincing their governing party colleagues of New Zealand First and Labour that they should support SOP 141, that would preclude other countries from joining without parliamentary approval, and other changes—meaning SOP 140, which is in relation to other countries only—would actually become completely redundant. So perhaps that’s food for thought for any members opposite—or parties opposite, I suppose, inevitably in this MMP environment—who might wish to vote for one or the other, but maybe, I would suggest, not both.

So that, I think, brings to a conclusion my remarks on these two different SOPs. I’ll watch with interest to see if the Government agrees about the logic of their colleagues and can accept any kind of comprehensive and progressive nature within that. If the Minister has any views on those and can indicate to us whether his party and his Cabinet colleagues on the New Zealand First side are likely to support it, that would be very interesting indeed.

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

Hon NATHAN GUY (National—Ōtaki): Thank you, Mr Chair. It’s a great opportunity to take a call—and I’m not sure why the Government wants to close down the debate on such a very serious and important issue. I would have thought the whip from Canterbury, the Hon Ruth Dyson, would have realised how important this bill is to her constituents, particularly out there on the Port Hills—quite a few farmers and growers out there. But anyway, we should focus on Part 2 of this bill this evening.

But before I do that, I want to acknowledge the two former Ministers: in particular, Tim Groser for the work that he did in the early stages; and Todd McClay, the former Minister of Trade in the last National Government for the work that he did. There was a huge amount of work to get to this point, and I know David Parker, with the support of the Prime Minister, came in and did a couple of title changes, and here we are now with the Comprehensive and Progressive Trans-Pacific Partnership agreement (CPTPPA), and it’s a very important bill that we have in front of us.

I want to talk specifically about tariffs this evening, which is a part of Part 2—it deals with the Tariff Act 1988. I also, in passing, want to mention the uniform rules. I haven’t been able to find that particular part. It might be in the schedule, or, indeed, because this is quite a technical bill, it might be elsewhere. I’d be very keen to hear from the Minister about that particular part to do with uniform rules, and I’ll come on to that in a moment.

But it’s interesting from the outset to acknowledge the Minister in the chair, the Hon Damien O’Connor. He wears a couple of hats in the Government, and the interesting one is that he had a title change recently in terms of one of his portfolios. Not many people will realise that Damien O’Connor was the Associate Minister for Trade and—

CHAIRPERSON (Adrian Rurawhe): The member needs to come to Part 2.

Hon NATHAN GUY: Yes, I will come to Part 2. The Minister—

CHAIRPERSON (Adrian Rurawhe): He actually needs to do that straight away.

Hon NATHAN GUY: Yes, I’m coming to Part 2 now, Mr Chair. In particular, I want to talk to you about—

CHAIRPERSON (Adrian Rurawhe): Well, relevance will become an issue.

Hon NATHAN GUY: —the Tariff Act, but in doing so, we have the Minister in the chair, who is the Minister of Agriculture. He is now also the Minister of State for Trade and Export Growth, and it relates to, in particular, Part 2.

A few months back, he was the Associate Minister for Trade and Export Growth, but what is not well understood is he couldn’t get appointments around the world, so they had to come up and create a new name, which is the Minister of State for Trade and Export Growth, so he could meet other Ministers around the world. He nods and glows and looks down at his papers, and he knows exactly what I’m referring to.

Now, in particular, the Tariff Act of 1988 is really important, and I’m disappointed by the Green Party’s minority view and their amendments that relate to Part 2 this evening, because the Greens obviously don’t care about free trade. When you think about the Tariff Act and the savings for the New Zealand economy and for our farmers and our growers, it indeed is immense: $222 million of tariff savings as a result of this bill passing. Admittedly, it will take some time, but there is about $92 million of tariff savings that come directly after this law comes into force. That money flows into the New Zealand economy.

There are over 600,000 jobs in New Zealand that relate to exports, and when you think about those other 10 countries that this very important bill and law relates to—and I want to, importantly, touch on a couple of things. One is that there are 480 million people in this huge bloc that we are now going to have almost free trade access to. There is 9 percent on the beef tariff into Japan. Unfortunately, we couldn’t get that down much lower. That may be in time and, of course, when everyone flocks there for the Rugby World Cup, not only will they want to consume Japanese beef, they’ll be looking, I’m sure, for some New Zealand lean beef on the menu as well. Whether it will be there by that time or not, I’m not quite sure.

What I’m keen to hear from the Minister, a little bit this evening, if we can, is about these uniform rules, because for exporters from New Zealand—[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 55

New Zealand National 55.

Motion agreed to.

The question was put that the amendment set out on Supplementary Order Paper 140 in the name of Golriz Ghahraman to insert new clause 6A be agreed to.

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

Ayes 8

Green Party 8.

Noes 110

New Zealand National 55; New Zealand Labour 46; New Zealand First 9.

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 141 in the name of Golriz Ghahraman to insert new clause 6A be agreed to.

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

Ayes 8

Green Party 8.

Noes 110

New Zealand National 55; New Zealand Labour 46; New Zealand First 9.

Amendment not agreed to.

Hon RUTH DYSON (Labour—Port Hills): I raise a point of order, Mr Chairperson. Mr Chair, I just wonder if you would care to remind members of the committee, following the interjection by Matt King, that votes should be taken in silence. It was clear that the Table was busy and you may not have heard it, but it was a pretty offensive interjection during the votes being taken.

CHAIRPERSON (Adrian Rurawhe): The member is correct; I did not hear any interjection. But the point is correct; votes are taken in silence.

Part 2 agreed to.

Clauses 1 to 3

MATT KING (National—Northland): Thanks, Mr Chair. Hey, look, it’s a real privilege to be up here and speaking in terms of the title. If ever there was a bill where the title was important, this is one of them. This is one of them. The CPTPP—what a mouthful. And you know what? We—

Michael Wood: That’s not the title.

MATT KING: Ha, ha! We—this is our bill. This is our bill. OK? The Hon Todd McClay and the Hon Tim Groser—they worked for years negotiating this 6,000-page document, so this is ours; we are claiming it. There’s so much in a title here. There’s so much in a title. The Government, they protested in the streets over this bill. They said that this was wrong, wrong, wrong. There were so many things wrong with it they protested in the street. They told their supporters they were going to oppose this with every bone in their bodies. And you know what? This free-trade agreement, it’s all about improved market access. But this Government has not negotiated one single change in the market access provisions, not one—zero. Not one single change. So their claims are exaggerated.

So the only real changes we’ve got here are two letters, “C” and “P”. This Government, they’re defensive about this. They’ve spent so much time telling the public that this was a bad free-trade agreement. They promised their supporters they wouldn’t support it. They said that the market access agreements were rubbish in respect of dairy and the rest didn’t amount to much. Now they have to admit that they were playing cynical politics, siding with the isolationists and extremists that simply never back free-trade. Now, Professor Jane Kelsey, a strong opponent to this bill when it was the Trans-Pacific Partnership (TPP), has said there is no significant change in the new deal since this new Government’s got involved. It’s essentially the same bill, which is why this Government is very prone to exaggerating minor changes to things like the investor-State dispute settlement (ISDS) clause.

So these changes are minor. This is a 6,000-page document, and there are two pages of changes—that is 0.03 percent of this document that has been changed. So it goes from some gross, terrible piece of legislation to the best thing since sliced bread, with zero—

Barbara Kuriger: And two more letters in the name.

MATT KING: Ha, ha! Yeah, two more letters in the name, two pages, and a 0.03 percent change, and all of a sudden it’s rocking and rolling. Now, I’ve looked at this departmental disclosure statement and it said there are 22 suspensions to this document—22 suspensions. Most of them relate to the USA pulling out. They relate to intellectual property and pharmaceuticals and they relate to the USA pulling out, and they can be reinstated if the USA comes back in.

So, look, we know it’s our bill. We know it is good for our country. We know that there’s been 0.03 percent of change in it, so that’s why we’re behind it. That’s why we’re supporting it. Now, this ISDS clause that’s in it—that’s been in trade agreements for years and we’ve never been sued by anyone else, with this ISDS clause. So this was held up as the bogeyman, but it isn’t. It’s been in every clause. The ISDS clause was a straw man, and New Zealand First knows it.

So we’re changing it to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). It’s the same agreement. It’s good for New Zealand. It’s good for our exporters. We’re supporting it. We’re not going to stand in the way. So with all the bluff and bluster and BS that we’re hearing from the other side of the House, for the good of New Zealanders, we, the National Party, are going to support the CPTPP, which is the TPP with two letters on the front, and that’s why we supporting it. I commend this bill to the House.

MICHAEL WOOD (Labour—Mt Roskill): I move, That the question be now put.

SIMON O’CONNOR (National—Tāmaki): Thank you very much, Mr Chair. I think, actually, it’s twofold on the member who has just resumed his seat, Michael Wood, that, one, they’re trying to shut down this discussion before we’ve even had a second speech and, secondly, more words were uttered by that member who stood up to ask that the question be put than actual changes in the agreement. So thank you for the symbolism there.

In terms of these title and commencement clauses 1 to 3, I will try to keep my comments relatively brief. I’m not actually going to be proposing a whole lot of name changes. But the primary purpose is that, actually, the name change is not the substantial aspect. Really, it’s symbolic, if you will—and I know other members have pointed out that simply changing the name has not materially changed what was once known as the Trans-Pacific Partnership (TPP). But I do want to acknowledge all those who have been part of this process, from the naming to the 6,000-plus pages. Although, as the Minister in the chair, Damien O’Connor, has pointed out—is it 30 sections or 30 parts? The count’s still continuing.

But a number of people have been involved in pulling this agreement together: obviously, the Ministers who took the nominal lead from Tim Groser—Todd McClay and now the Hon David Parker. They need to be acknowledged. But, I suppose, in some ways, in entitling this bill and talking to it—acknowledgment to all the officials, the advisers, and the negotiators, who put in the hard yards and then, I would suggest, perhaps have to put down some patience when we go through this rightful theatre in the Chamber.

There have not been substantial changes. There have been side letters, which are important, obviously, in continuing the Government’s intention, and that’s their full right. But why I wanted to take this call—and I don’t intend to introduce those titles but those really particular elements that have been of concern to people remain protected and always were protected. So Pharmac and the Treaty of Waitangi were two that were quite often mentioned, and, perhaps, particularly for the likes of the Green Party, which I’d suggest at times have created mischief around this along with some of the protest groups—Pharmac remains protected. Pharmac was always protected. Those that we negotiated with did understand, or came to understand, the model that we operate, and so there were no further protections, I would suggest. In terms of the Treaty of Waitangi, the sovereign right of this realm to actually work with indigenous people, to be a cosignatory in that agreement, was never under threat. So, to that end, it’s a good agreement and it was a good agreement when it was the TPP.

It’s excellent that the commencement date is the date after Royal assent. There is no need now that we’ve reached this point to slow things down, I would suggest, any further. Again, without belabouring the point, the agreement itself, the trade treaty, has been ratified, and this is the domestic legislation to bring it into effect. There is no need to delay it any further, and it would be my hope, here in clause 2, that once this particular bill does become law through Royal assent at the hand of the viceregal representative, we are able to move very swiftly into that which is clause 2, around the actual commencement—that’s obviously up to the Minister or Ministers to decide. In terms, then, of any other titular changes, it’s all fairly minor.

So, as I say, in order to actually give some seriousness to this, I think I’m not going to try to play around with the words—or, rather, the two letters “C” and “P”—but, rather, to again acknowledge the work that’s been done to get us this far; to acknowledge that, in this side’s view, there have not been the substantial changes that have been often put forward in discussions; and, again, to emphasise that those really important aspects to New Zealand, I think, have always been recognised by our negotiators, particularly that around the Treaty of Waitangi and Pharmac. So I’ll end my contribution there, if I might.

Hon TODD McCLAY (National—Rotorua): Mr Chair, thank you very much. I do take pleasure in speaking in this part of the debate, in the title and in the commencement. The Government whip has just asked me to introduce a Supplementary Order Paper to change the name, but there’s no need to, because whether it’s called “Comprehensive and Progressive” or just the same old Trans-Pacific Partnership (TPP), the public understands that it is the same deal that was negotiated over a very long period of time under the previous Government, particularly when Tim Groser was the Minister, and since then there have been some changes which almost every submitter, bar none, thought were only slight changes. In fact, those who submitted and came before the committee who had heard the Government say that it was a completely different trade deal had a very, very different opinion. And these are some of the very same people who, when Government parties were in Opposition, were out on the hustings, out on the campaign trail, out on the protest street saying that it wasn’t a good deal.

So it’s called the Comprehensive and Progressive Trans-Pacific Partnership agreement. It could be called the “Revised Trans-Pacific Partnership Agreement” because, actually, it’s just been revised. It could be the “Same Old TPP with Some Very Minor Changes Bill”. It could be “Just the TPP”. It could be “Look, It Actually Looks Exactly the Same as the TPP”. There are many ways to describe this.

Hon Amy Adams: How about the “National-Negotiated TPP”?

Hon TODD McCLAY: Well, there we heard it: the “National-Negotiated TPP”. But here is the interesting thing: how did the Labour Government, in a very short period of time—in fact, in a matter of days—come up with the words “comprehensive and progressive”—

Hon Tracey Martin: There is no Labour Government.

Hon TODD McCLAY: —to put at the beginning of this? How did they do that? Maybe it was New Zealand First—the Labour-led Government. Well, it’s quite straightforward. At a previous meeting that had been held in Vietnam, the Canadians came up with the idea. The Canadians said that if they were to go ahead with the TPP without the US there they agreed there would have to be some changes, perhaps some of the things that the US had wanted or had negotiated should be held back. And all of the remaining countries got around the table with the officials and they started working this through—long, long before we had an election in New Zealand, this was worked through.

The Canadian trade Minister, who is still the Canadian trade Minister, said in that meeting, “We would need to change the name and we would need to show the world that this is a different agreement.” And others—I think the Minister from Australia—said, “How would we do that?” He said, “Well, we would need them to think it was comprehensive and it was progressive. So why don’t we call it the comprehensive and progressive agreement? And if we change nothing else but the name, then actually we will show that it is a new agreement.” So I want to congratulate the new Government—the Labour-led Government, followed closely behind by New Zealand First—for actually accepting the great wisdom of the trade Minister from Canada, who said, “If we merely change the name, that will be enough.”

Now, we know other things were changed as well. I think it is good that what’s happened is that the issues around Pharmac—and about biologics and patents and so on for medicines—have actually been suspended, because at the time, of course, that they were negotiated in the original TPP, we as a Government said, “The Pharmac model is not up for negotiation. It has been protected.” And now what we hear from the new Government is it’s been taken out, and it was protected anyway, but it’s protected even more.

But what they haven’t told the public is that the original TPP deal remains there on the books, and it can still enter into force if the original requirements of that deal are met. And if it does, every single suspension that this Government has spoken of up and down the country to assure people enters into force—every single one, including every part of investor-State dispute settlement (ISDS). So for New Zealand First, who has proudly said they’ve fixed ISDS—actually, they haven’t, because this legislation doesn’t stop that. It doesn’t say that biologics are protected more or less than under the original TPP. Should the original TPP enter into force, and it’s on our books and it still can, because all this legislation does is change the name, and the other countries have agreed to hold back these suspended clauses—they enter into force.

The Minister needs to get up and confirm whether I am correct in this or not, because, actually, I am relaxed about that. I have no fear of these clauses. The original TPP was negotiated in the best interests of New Zealand, but the Government shouldn’t be saying the problem has gone away when it actually can come back.

Hon DAMIEN O’CONNOR (Acting Minister for Trade and Export Growth): Mr Chairman, just in response to a couple of those things, the member is correct, I guess. The Trans-Pacific Partnership (TPP) can come back into place, but hell will probably freeze over before that happens, so let’s be realistic about that. I think that the US will have to buy into it, and then we have to have one of three other major countries to do that to put the GDP calculation beyond 85 percent. The chances of that happening when we have the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in place are very, very slim.

Can I say that it is important that the name be changed, because it does reflect not just a token commitment to a change in objectives but a real commitment. We want trade for all, not trade for traders. Canada did lead the charge on that—I accept that—but we bought into that in the way that trade agreements now around the world, through the EU, through the UK, are wanting more than just trade for traders. There needs to be a clear benefit across the population in the countries that are negotiating. And New Zealand has bought into that. We campaigned on it, and we’re following through.

There are 22 suspended provisions in this new piece of legislation. That is not insignificant, and they are in place to ensure that we meet the promises that we had prior to the election of supporting the agreement in principle, subject to five provisions. Even in the area of concern for the Green Party, the investor-State dispute settlement (ISDS) provisions, there are safeguards here—11 substantive safeguards—to ensure that we are protected in the unlikely event that a company should take exceptions that limit the scope of the investment chapter and therefore limit the scope of ISDS. Our provision allows Government to rule out ISDS challenges over tobacco control measures. There are all of these things that should allay the concerns of the Green Party.

When it comes to the ISDS, yes, we did not wish them in there. They are in there. It is the outcome of a negotiated agreement that, on balance, we in Government think is a good deal for New Zealand and for our future, but it has the safeguards to protect our sovereign rights over who can buy our houses, who can buy our land, and whether Pharmac is protected into the future. These are important things that New Zealanders across the board wanted to see in place. We’ve carried these through.

I thank and acknowledge the efforts of the previous member who spoke, Todd McClay. As trade Minister, he did do a really good job, but we saw improvements were possible, and Minister Parker and the Prime Minister negotiated those improvements. I acknowledge the support of the Opposition in passing this through as quickly as we can to ensure that we are one of the early countries that can ratify and see the CPTPP in place, and we can start to enjoy the benefits from that. So I look forward to the Opposition’s support for this, and I’m sure that the agreement that we’re passing will be an improvement on the TPP, one that offers more security for New Zealanders, whatever party you’re in, into the future.

Hon TODD McCLAY (National—Rotorua): Mr Chair, thank you very much. I want to confirm for the Minister that of course we are supporting it. We supported the original legislation and we will be supporting this, but I want to just ask a couple of questions of him further, based on the explanations that he gave. But, first, I would say, when he says that actually it is technically correct that the provisions that are suspended can enter into force if the full Trans-Pacific Partnership (TPP) enters into force but he says that hell would freeze over before that was the case, he needs to clarify whether or not, if the US came back to the table, he’s saying his Government would not welcome a trade deal with America.

Actually, we’re one of the few countries of the world that has a positive trading relationship with the US, but we don’t have a trade deal with them. If we did have a trade deal with them, we wouldn’t find that the tariff rates on aluminium and steel exports from New Zealand to the US would have gone up, because we would have had that protection. Now, we don’t sell a lot of steel or aluminium to the US, but that’s not the point. It’s a point of principle that, actually, we are a good friend of the US. We buy more from them than we sell to them. The US is our number one beef market and our number one wine market and our number two dairy market, and, in an area that actually is not important to them, they have all but sanctioned us by increasing tariffs on us. Therefore, if the US comes back to the table and says, in a future administration, we want to adopt the original TPP, is he saying this Government would say no? Because, actually, this Government couldn’t say no, because we have already ratified and we’ve already posted the letter of ratification to ourselves, and Japan has ratified, and, actually, others would be able to and it would only take Mexico.

Of course, it’s not that long ago—in fact, it was earlier in the year last year—when he and his colleagues were on this side of the Table and we went through the final third reading to ratify the TPP, when they said it was less than a token gesture because it was dead and it was buried and there was no point in New Zealand doing that and showing leadership. Of course, if we had accepted their point then, there is a very great likelihood that we wouldn’t have the Comprehensive and Progressive TPP before this committee now—a deal that will deliver significant benefits for New Zealanders and New Zealand exporters and will deliver jobs for us.

When he says a change of the name and putting “Comprehensive and Progressive” in front of the title is more than a token gesture, he needs to demonstrate that, because, actually, in saying that we want trade for all, if all we’ve seen is the suspension of clauses that wouldn’t greatly harm New Zealand, actually, it feels token. Now, I do accept that the Government wants trade for all, but you’re going to have to do more than talk about trade for all for it to be delivered, and it will be future trade deals, not this one, because all that’s happened with this one is there have been some clauses that have been suspended that actually don’t change things significantly.

For instance, the Minister said, when he took an intervention there, that, actually, in as far as the investor-State dispute settlement (ISDS) provisions are concerned, the Green Party should be happy. The Greens are the only ones that have stuck by their principles in this debate. He said, actually, that there have been carve-outs when it comes to the protection of the Government. Well, all the Government’s done in ISDS is protect itself over a dispute when it comes to the payment on Government contracts—nothing else. And when he says that companies can’t sue the New Zealand Government when it comes to tobacco, they couldn’t under the original, either. That was there. They’ve carved out 81 percent of all foreign direct investment into New Zealand, so ISDS doesn’t apply, with a side letter with Australia. That’s the exact same side letter that was in the TPP. But the Government has signed other side letters with five other countries, so the majority of the TPP members have signed side letters and therefore ISDS is not included in our relationship with them, and it accounts to a total of 0.2 percent of all foreign direct investment to New Zealand.

So what the Government has said to the country is they have protected them. Well, actually, they’ve carved out under ISDS the bit around Government contracts and dispute over payment, and what they’ve done is protected New Zealanders from 0.2 percent of foreign direct investment. The question is: why didn’t you do it with Mexico, Minister, and why didn’t you do it with Canada? Because they said they wouldn’t and they didn’t want to.

So I accept that this is a good deal. The original deal was a good deal, but you need to be more upfront with New Zealanders in saying that you’ve made it comprehensive and progressive, otherwise the name change is merely token.

CHRIS PENK (National—Helensville): Thank you, Mr Chair. I don’t imagine that I’ll need a full five-minute call to note a couple of points in relation to the title and commencement, but thank you for the opportunity to do so, however.

The bill is the Trans-Pacific Partnership Agreement (CPTPP) Amendment Bill. My eye was actually caught by the acronym in brackets after those words “Trans-Pacific Partnership Agreement”, because it caught my eye that the acronym was, in fact, not the same as the words that preceded it. Suspecting that there might be a typographical error, I had a look and realised that in fact, actually, it’s perfectly correct because, of course, what the drafters of the legislation are saying in their wisdom is that it’s amending the Trans-Pacific Partnership agreement—that is, the TPP—and it’s doing that by way of bringing this new thing, a Comprehensive and Progressive Agreement for Trans-Pacific Partnership, into our law. So far, so good.

As far as the date of the amendment Act, as it will become—2018, of course—that’s not usually a debate point. The date of a piece of legislation passing—that much is actually very much automatic. However, I just do note and bring into the debate quickly that between 2016 and 2018, in a way, much has changed in those two years in the political positioning of parties opposite—or, at least, two out of three, noting the consistency of the Green Party position—but not very much has changed as far as the nature and content of the agreement, which, as I say, on this side of the Chamber we regard as no bad thing.

Moving on quickly, the commencement of the Act—well, it will come into force the day after the date of Royal assent. It is, in that way, an executive Act. “Executive Act” I suppose is a bit of a tautology but, as discussed before, with the constitutional implications of the executive, not only the Ministry for Foreign Affairs and Trade, the Minister himself—and I mean Minister O’Connor but also Parker, and following in the footsteps of Ministers Groser and McClay. It is their Act that this House will be allowing to take place, to be ratified, to be confirmed, so to speak. That wording, “[to come] into force on the day after the … Royal assent.”, is the legislative equivalent of a.s.a.p. You can’t really have much sooner than that. It would be the day after the Governor-General signs it, and that’s for two reasons, I think, and actually Minister O’Connor touched on both of those himself. One I would call symbolism, which is to say the benefit of being proactive and upfront, and, I think, in his words, being one of the first if not the first to ratify the agreement is viewed as a good thing in the sense that it shows that we are committed in word and in deed to this agreement.

The other is—again, as touched upon by the Minister in the chair—that the benefits will flow only once the agreement is ratified and in force. So New Zealand’s part in that now—or this Parliament’s part in it, more precisely—is to give effect to that. That is what this amendment bill will do. That is why we continue to support it on this side of the Chamber. We acknowledge others who have been involved in the process to date, and thank you, sir, for the opportunity to make these points regarding the commencement and title.

Hon NATHAN GUY (National—Ōtaki): Thank you very much, Mr Chair, for an opportunity to take a call on the title and commencement. It’s interesting that when we think back prior to the election, the Labour Party campaigned against the Trans-Pacific Partnership agreement (TPPA), and then did the right thing, in my view, and made some changes that were really just based on symbolism to get it across the line to appease some of their voters who were against this particular bill. If you think back to Jane Kelsey and her public views, they were very much along the lines that she saw this as essentially the same bill.

So I’m following on from Todd McClay, who gave two very good contributions on the title and commencement. I don’t want to go through and propose different titles like the “Essentially the Same Bill”, like Jane Kelsey did, because I think that’s really a waste of the committee’s time. What I want to do is ask a couple of questions to the Minister. We heard from Damien O’Connor, who said that it’s more than just tokenism and that the commitment is real in terms of “comprehensive and progressive”—two words that came on the front of the TPPA. What I really want to ask the Minister, and he will know this, is, when they went and effectively changed these clauses and tried to strike a new deal—and it was good to hear from Todd McClay that this all came about from the Canadian minister of trade—did David Parker or Damien O’Connor go and seek greater market access for our growers and farmers? I’m interested to know. So that’s a question to the Minister in the chair, and all he needs to do is look up and nod or shake his head. Did he or David Parker seek better market access for New Zealand exporters as a result of making this deal comprehensive and progressive?

He nodded. OK. So it would be good for Damien O’Connor to take a call—because I’ve got all the details here—and show us and tell us this evening: what is so comprehensive and progressive about this bill from the original TPPA bill, focusing directly in on gains to do with market access? If he can produce any evidence that will show that it got a better deal for farmers, for beef processors, into Japan, a better deal for our dairy farmers and dairy exporters into other countries, a better deal for our horticulture growers into 10 countries as a result of this being comprehensive and progressive, then I would welcome that. I would welcome the Minister taking a call and pointing out to me where those gains are as a result of an original bill that’s now a comprehensive and progressive bill, in terms of market access.

What is also interesting is to acknowledge the hard work that’s gone into this. We talk about the politicians who have put the hard work in. I know that Tim Groser and Todd McClay did a huge amount of heavy lifting. I felt for Todd McClay when the US came out. President Trump just did what he said he was going to do in the campaign. In January 2017, he came out and said, “The US is out.” I felt that in the depths of my stomach, and I thought, “How can we resurrect this deal?” And I want to acknowledge Todd McClay for getting in the plane, flying around these key countries, and brokering a deal. Maybe, in time, the US may indeed come back in. But while it’s worthwhile noting that Ministers and the Prime Minister and David Parker got this to where it is now—and we support it—I’m keen to hear how it’s even more comprehensive and progressive for our farmers and growers. I’m not sure we’ll get a decent answer.

I just want to take a couple of moments and acknowledge the officials. The officials have done a huge amount. Ministers fly in and out of the world and negotiate deals with their counterparts, but officials work tirelessly with their contacts around the world to get a comprehensive deal. We have heard there are 6,000 pages in this deal—it’s massive. I just want to pay a tribute to all of the officials that have done a huge amount to get this bill to where it is.

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

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

Ayes 63

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

Noes 55

New Zealand National 55.

Motion agreed to.

Clause 1 agreed to.

A party vote was called for on the question, That clause 2 stand part.

Ayes 111

New Zealand National 55; New Zealand Labour 46; New Zealand First 9; ACT New Zealand 1.

Noes 8

Green Party 8.

Clause 2 agreed to.

A party vote was called for on the question, That clause 3 stand part.

Ayes 111

New Zealand National 55; New Zealand Labour 46; New Zealand First 9; ACT New Zealand 1.

Noes 8

Green Party 8.

Clause 3 agreed to.

Bill to be reported without amendment presently.

Bills

Telecommunications (New Regulatory Framework) Amendment Bill

In Committee

Part 1 Amendments to definitions and amendments related to copper fixed line access services

MELISSA LEE (National): Thank you, Mr Chair. I apologise for being a little bit slow on my feet. I was trying to grapple with the new Supplementary Order Paper (SOP) that I’ve just discovered, SOP 118, which was released today.

It’s a great pleasure to participate in the committee stage of this bill. I would like to note that I think, actually, all of the parties in this House agree on this bill, and if I remember back to the first reading stage, I think everybody was actually very keen to get this going. Throughout the select committee process, I think we worked very cordially and very well together. Having said that, I just noticed there are a couple of points that I actually wanted to raise in the committee stage on certain parts of the bill, but I notice that some parts of it have been changed in the SOP that has been produced by the Minister of Broadcasting, Communications and Digital Media, so I’ll obviously have to look at the impact that that has on what I was going to say.

This Telecommunications (New Regulatory Framework) Amendment Bill basically establishes a framework in which fibre fixed-line access services are provided in New Zealand, and also the very idea that the old copper network can actually be removed when the time comes, and that, where fibre is provided to certain premises, we are in fact looking at removing the copper fixed-line access services. Also, it’s about streamlining the regulatory processes to enable rapid response to any competition problems, particularly in the mobile telecommunications market place. More and more, when we actually look at the work that the previous National Government has delivered for New Zealanders and which this particular Labour-led Government has carried on, if we look at the time frame of maybe 2022, I think we were looking at, 87 percent of New Zealand will have ultra-fast broadband or will be at least able to connect.

I’d like to, first of all, talk on Part 1 of the bill. I was going to talk particularly on clause 4, and I have some questions for the Minister. In relation to where the clause actually creates or amends changes, a number of definitions were used within the telecommunications regulatory environment. This has come about after the fact of the select committee process, where the definition in the legislation—and I will actually quote from Part 1, clause 4, where it says “Section 5 amended”. It’s the interpretation, in terms of the fibre network, where “fibre network” meant “a fibre-to-the-premises access network (as defined in section 156AB)” that connects the user’s interface, and I’ll just cut to the point where it talks about “access point”.

I’m guessing the SOP actually deals with the changes, and we probably have to talk about that, but the concern that was raised with me after the select committee process was actually by some of the concerned local fibre companies—LFCs—who felt that the consultation process in regard to using the terminology “access point” actually gives them an extra obligation under this bill, which they believe that they weren’t consulted on, in terms of using that terminology “access point”. By the Economic Development, Science and Innovation Committee adding those words “access point”, it made them—I guess what they’re saying is that their obligation to the Crown doesn’t necessarily change, in terms of the bill, for the contract that they have with the Crown but the regulatory regime as set up in 2011, relative to the contractual scope with the Crown, may have been changed as a result of putting “access point” into this bill. So I would like to ask the question of the Minister: why did the Minister decide to include the phrase “access point” within the definition of the fibre network?

Well, actually, it came about as a result of select committee, but I guess—[Bell rung]

Hon Ruth Dyson: Are you going to answer the question?

MELISSA LEE: Pardon me?

Hon Ruth Dyson: Are you going to answer the question as well as ask it?

CHAIRPERSON (Adrian Rurawhe): Is the member seeking a further call?

MELISSA LEE: Yes. Thank you, Mr Chair. So we did take advice, but the thing is that the access point—I don’t remember it being a major part of the select committee process. I think the discussions that we had during the select committee process weren’t actually about the access point issue; they were more about the anchor products. Also, the line of business issue was probably more prominent than this particular issue, which was actually raised after the select committee process. So the question that I’d like to ask the Minister in the chair, Phil Twyford—and maybe this particular Minister in the chair may not be able to answer, but I would like to get an answer from the Minister as to why the Minister decided to keep on with the access point within the definition of fibre network in the legislation after the LFCs had raised their concern with the Minister after the fact.

The other issue is: what advice did the Minister receive from the submitters and stakeholders regarding whether the change in the definition of “fibre network” is actually fit for purpose for those local fibre contractors, the LFCs, who are feeling rather nervous about their contracts and their business because they feel that the very word—we, laypeople who don’t really know much about this, might think “What does it matter if you put ‘access point’ into the definition of what fibre network means?” What it literally means is that it actually changes the obligation, they feel. So it would be very good if the Minister could actually answer that. Perhaps he could get some advice from the officials who are here.

Does the Minister believe that the Government has satisfied the concerns of the local fibre contractors in relation to the change in the clause 4, section 5, definition of this particular bit, as I’ve raised? When they raised it with me, they were obviously very concerned that their business model might have to change as a result of this bill going through, and they were hoping that perhaps I could bring an SOP to the House. My reaction to them was that if the National Party does not have the support of other parties in the House, it is actually a futile exercise. I know for a fact that they have contacted the Minister and they’ve had meetings with the Minister in relation to this particular issue.

The other issue, I guess, is to allay their concern. It’s to actually reduce their concern that the consultation process, they feel, was a little bit flawed, in that when their business is impacted by a particular word or a particular clause in a piece of legislation that’s going to have a major impact on their business, obviously they have the right to feel concerned and they have the right to raise this issue.

There are many aspects of this bill which are very, very technical, and we have worked through them and, as I’ve said right from the beginning, the majority of the parties actually agree. But before we move on to the next clauses, I guess I’m raising the fact that this is a particular concern to those LFCs, and I think we probably owe them an explanation or at least allay their fear, to make sure that their concerns can be reduced and that there isn’t actually a major issue with this particular word being in this.

I guess the reason why I raise this concern with the Minister is because I have also asked this question through the parliamentary written question process—

CHAIRPERSON (Adrian Rurawhe): I’m sorry to interrupt the member, but it has come time for me to report progress.

House resumed.

The Chairperson reported the Commerce Amendment Bill with amendment, the Trans-Pacific Partnership Agreement (CPTPP) Amendment Bill without amendment, progress on the Telecommunications (New Regulatory Framework) Amendment Bill, no progress on the Courts Matters Bill, and no progress on the Tribunals Powers and Procedures Legislation Bill.

Report adopted.

Amended Answers to Oral Questions

Question No. 6 to Minister, 18 October

Hon CARMEL SEPULONI (Minister for Social Development): I seek leave to make a personal explanation. I have reviewed the transcript—

DEPUTY SPEAKER: Hang on, hang on—you’re seeking leave, and we need to know what it’s about.

Hon CARMEL SEPULONI: Sorry—in relation to an answer in the House last week.

DEPUTY SPEAKER: I’ll put the leave—anyone objecting? No. You may proceed.

Hon CARMEL SEPULONI: Thank you. I have reviewed the transcript of my response to an oral question in the House last week and have seen that I used a figure inconsistently in my response. I said that the unemployment figure was 9.4 percent, and then went on to say that this figure refers to the proportion of people on the benefit in a subsequent answer. This figure does refer to the proportion of working-age people on a main benefit. I understand my use of this figure may have caused confusion to some members of the House and am correcting this on record for absolute clarification.

The House adjourned at 9.57 p.m.