Wednesday, 24 October 2018
Volume 734
Sitting date: 24 October 2018
WEDNESDAY, 24 OCTOBER 2018
WEDNESDAY, 24 OCTOBER 2018
The Speaker took the Chair at 2 p.m.
Prayers.
Speaker’s Observations
Debating Chamber—100th Anniversary
SPEAKER: Members, on 24 October 1918 the House first sat in the Chamber of the new Parliament buildings. Hansard, Volume 183, page 3, reports that the then Prime Minister, the Rt Hon William Massey said, “Sir, in moving the adjournment I desire to take the opportunity of congratulating you, and also my fellow-members of the House, upon our being able to occupy the new parliamentary chamber this session. No doubt we shall have to put up with a certain amount of inconvenience, but the fact of our being here to-day is a promise of better things in the future, and I have no doubt that promise will be kept. It will, of course, be in the minds of honourable members that the chamber in which we have met this afternoon will in all probability be the principal legislative chamber of the Dominion for long after the present generation has passed away—perhaps for centuries to come—and I hope that within its walls legislation will be framed which will be for the good government of the Dominion, which will mete out just and equal treatment for and between different classes of the community, and which will encourage national sentiment and national ideas [that] will tend to make this country honoured and respected not only [with] the British Empire, but among the whole of the nations of the world. Sir, I move the adjournment of the House.”
I was sad for myself; I think it’s a real pity that they didn’t actually finish the job.
Oral Questions
Questions to Ministers
Question No. 1—Prime Minister
1. Hon SIMON BRIDGES (Leader—National) to the Prime Minister: Does she stand by all her Government’s statements and actions?
Rt Hon JACINDA ARDERN (Prime Minister): Mr Speaker, malo ni. Yes. I particularly stand by our actions to extend paid parental leave, stop foreign purchasing of Kiwi homes, stop State house sell-off, building that first KiwiBuild home, restarting super fund contributions, increasing the minimum wage, committing to child poverty reduction targets, implementing the Families Package, making GP visits cheaper, investing in hospitals and schools, funding more teachers, beginning planting 1 billion trees, investing in regions through the Provincial Growth Fund, beginning the recruitment of 1,800 more police, running a healthy surplus, sticking to the Budget responsibility rules, committing to net zero carbon emissions by 2050, stopping new offshore oil and gas permits, creating tax breaks for research and development, phasing out plastic bags, and making the first year of tertiary education fees free. [Interruption]
SPEAKER: Enough. Thank you.
Hon Simon Bridges: What is the current national price of petrol and how does that compare to this time last year?
Rt Hon JACINDA ARDERN: Mr Speaker, I haven’t got the exact Ministry of Business, Innovation and Employment (MBIE) number today. I keep an eye on the fuel prices in Auckland regions, which are fluctuating at the moment between mid $2.30 and mid $2.40 in the Auckland region.
Hon Gerry Brownlee: What? Where do you buy that?
Rt Hon JACINDA ARDERN: In Auckland.
Hon Gerry Brownlee: Where do you buy that?
Rt Hon JACINDA ARDERN: You’re not from Auckland. We’ve always—if Minister Brownlee actually reflected, this is the exact problem we are talking about: the fact that it is more expensive in other parts of the country than it is where there’s an Auckland regional fuel tax proves our point.
Hon Simon Bridges: Does she know how much extra that is costing the average Kiwi to refill their car?
Rt Hon JACINDA ARDERN: Look, we are cognisant of the cost of living for New Zealanders, which is why the first thing we did when we came into Government was improve the incomes of low and middle income families through the Working For Families package, which is over $5 billion straight into the back pockets of those who need it most, instead of tax breaks for those who do not.
Hon Simon Bridges: Does she know any numbers on the price of petrol and how much more it’s costing people today?
Rt Hon JACINDA ARDERN: I know that the margin—the actual margin—since the Government has come into office by fuel companies is in the order of 9.28c, and that’s been enough for this side of the House to act on this issue, change the law, and look at what is happening at the pump for consumers and why, in 10 years, we now have the most expensive pre-tax fuel price in the OECD. For us, we’re going to do something about it. That member seems to think that it’s OK and stands on the side of fuel companies.
Hon Simon Bridges: What does she say to the average Kiwi who is now paying $25 more every single time they refill their car?
Rt Hon JACINDA ARDERN: For those across the country, they’ll know the 3.5c that came in on 1 October is not the vast bulk of the problem. They’ll want something done about that, and we are.
David Seymour: Is the Prime Minister happy that rising petrol prices are reducing people’s driving and, therefore, the country’s carbon emissions?
Rt Hon JACINDA ARDERN: There is absolutely something to be said about a just transition, but we have said that we are not comfortable with the fact that we are in a situation—we have an infrastructure deficit—
SPEAKER: Order! I am going to interrupt the Prime Minister. It’s now just got too noisy from my left. All right? I want to be able to hear the Prime Minister. She’s got the advantage of the microphone, she’s quite close to me, and I’m struggling.
Rt Hon JACINDA ARDERN: There aren’t the public transport options available to people that there should be, and that is why we are transitioning to ensure that those options exist. And in the meantime, we are concerned about the prices that they’re paying.
Rt Hon Winston Peters: Is it true that support for these policies is unwavering, in contrast to Mark Mitchell overnight: “Support for Simon is unwaving”?
SPEAKER: Order! Out of order.
Rt Hon Winston Peters: What’s wrong with that?
SPEAKER: No. Now, can I just make it clear to the right honourable member that he is the most experienced member of the House—[Interruption]—and he should know that he doesn’t interject while I’m on my feet. He knew that question was out of order, and when you ask a question that one knows is out of order, that is in itself disorderly. He will stand, withdraw, and apologise.
Rt Hon Winston Peters: I withdraw and apologise. I raise a point of order, Mr Speaker. We are in grave danger of losing the character of this House if when you’re given a golden goose, you cannot use it.
SPEAKER: Order! We are in danger of losing one of the characters in the House.
David Seymour: So would this Government like the price of petrol to be lower or higher?
Rt Hon JACINDA ARDERN: It is about giving options to those who currently rely on their vehicle for transport. At the moment, those options aren’t widely available for people, particularly in parts of Auckland. We’re investing in public transport alternatives, and we are moving towards a just transition of low-emission alternatives, but at the moment we’re dealing with a deficit left by that Government, and consumers are paying for the price.
David Seymour: I raise a point of order, Mr Speaker. The Prime Minister gave us a lot of information, but I don’t see how she addressed the very simple question: what is the Government’s intention with respect to fuel prices?
SPEAKER: Well, no, I think she addressed it at length.
Hon Simon Bridges: Why, when petrol prices have gone up by 46c a litre across the country under her Government, is she still pressing onward with two more petrol tax increases over the next two years?
Rt Hon JACINDA ARDERN: It is absolute mischief-making to imply that a 40c increase comes down to the 3.5c excise that has been introduced by this Government. But the member is in the habit of mischief-making, throwing out this morning completely fake, false information about regional fuel taxes that, by law, cannot be introduced by this House. It was absolutely false and incorrect, and a complete distraction by that member.
Hon Simon Bridges: Why, when petrol prices have gone up by 46c a litre across the country under her Government, is she still pressing onwards with two more petrol tax increases over the next couple of years?
Rt Hon JACINDA ARDERN: What I’m pressing on with is getting to the bottom of that 40c increase, which is what consumers want us to look at. That is our duty, that’s why we have changed the law, and that’s why we are committed to getting to the bottom of an issue he gave up on when he was Minister.
Hon Simon Bridges: Why doesn’t she just use some of the $5 billion sum surplus she’s got from the legacy of the economy over the last few years rather than piling on yet more taxes on fuel, hurting Kiwis today?
Rt Hon JACINDA ARDERN: The 3.5c goes directly into the kinds of initiatives that are required to keep our people safe on our roads and the kinds of initiatives that will give them options to get out of their vehicles. What I’d like to hear from that member is what he’s going to cut as a result of not having excise in place?
Hon Simon Bridges: What relief will the market study she’s referred to a number of times today provide New Zealanders right now when they fill up at the petrol pump?
Rt Hon JACINDA ARDERN: The direct relief we’re giving New Zealanders are increases to the minimum wage, the families tax credit, which results, on average, in $75 a week going directly to those families, getting rid of things like letting fees, making sure that there are more housing options, including State and public housing. That’s the kind of thing that makes a marked difference to people’s lives. When it comes to fuel, we’ve said that we will undertake a market study so we can look at competition. We can look at what’s happening to Wellingtonians because they’re paying a huge amount for their fuel that cannot be explained by transport. Clearly, that member thinks we don’t have a problem.
Hon Simon Bridges: In light of her claim today of mischief-making, has she or any of her Ministers discussed with any regional council other than Auckland the possibility of introducing a regional fuel tax?
Rt Hon JACINDA ARDERN: It is a matter of public record that a number of councils have asked for one because of the infrastructure deficit that Government left them, and they are so desperate for investment in their area. We have ruled it out. In fact, if the member knew a little bit about the legislation we’ve passed, he’d know by law it is being ruled out.
Hon Simon Bridges: Why does the Government’s regional fuel tax legislation enable other councils to bid for a regional fuel tax from 2021 onwards?
Rt Hon JACINDA ARDERN: The regional fuel tax legislation puts in a date, but I can give this guarantee to this House and to consumers: there will be no other regional fuel taxes while I’m Prime Minister, which at the moment feels like it might be for a while.
Hon Simon Bridges: Did she just make that undertaking on the hoof because she knows how much this is hurting Kiwis all over this country?
Rt Hon JACINDA ARDERN: I’ve made that statement because that member is circulating false information.
Question No. 2—Finance
2. Hon AMY ADAMS (National—Selwyn) to the Minister of Finance: Is it a goal of this Government’s economic policy to make it easier for New Zealand families and businesses to get ahead?
Hon GRANT ROBERTSON (Minister of Finance): Yes.
Hon Amy Adams: How does he think having 65,000 people go on strike in the last 12 months alone, more than double what we’ve seen over the last nine years combined, will be affecting the abilities of families and businesses to get ahead in New Zealand?
Hon GRANT ROBERTSON: I imagine for many of those people who are undertaking that strike action it’s because they and their families experienced nine years where they didn’t get the benefits of economic growth. On this side of the House we’re doing something about that by lifting the minimum wage and through the Families Package and paid parental leave. All of those things will make a real difference to the well-being of those families, so sadly neglected by that member and her party.
Hon Amy Adams: How does he think taxing people more for their petrol is the right thing to do at a time when New Zealand families and businesses are facing higher costs and more transport strikes than they’ve seen in a decade?
Hon GRANT ROBERTSON: On the matter of transport strikes, the member should look squarely in the mirror to the model that her Government put in place that led to a race to the bottom in contracting, that said that the way to be able to provide transport services was to pay bus drivers less—some of the lowest-paid people in the country. On this side of the House we actually think that bus drivers and others who deliver people to work every day deserve to be paid decently.
Rt Hon Winston Peters: Just to be clear, considering that the Employment Relations Amendment Bill is yet to reach its second reading, who is responsible for the present policy settings under which these strikes are happening?
Hon GRANT ROBERTSON: It’s quite clear that all of the strikes that are taking place are taking place under the legislation that the previous Government put in place. On this side of the House, we’re actually trying to make it fairer.
Hon Amy Adams: Does he see a relationship between the rising cost of living and the fact that 20,000 more people are now needing food hardship grants than at this time last year?
Hon GRANT ROBERTSON: What I see is a population of low and middle income New Zealanders who were neglected for nine years by the previous Government, who are finally getting some assistance from this Government through the Families Package. We’ve said many times it will take more than one year to undo nine years of neglect, but we’re getting on with the job.
Hon Amy Adams: What’s the Government going to do, then, for the 75 percent of New Zealand families who are worse off under that Government’s families income package than the families income package it replaced, as they too struggle with transport strikes and rising fuel costs?
Hon GRANT ROBERTSON: I’m sorry to say that on this side of the House we don’t believe that people like us in here needed a $1,000 tax cut when there are low and middle income families who are struggling. We are very proud of the fact that we redirected that funding to low and middle income New Zealanders, because that’s how we’ll reduce inequality.
Hon Amy Adams: Is the fact that Government Ministers are not concerned about rising fuel prices more to do with the fact that all of their petrol is paid for by taxpayers?
SPEAKER: Order! No. The member will ask the question again. That was out of order on two counts.
Hon Amy Adams: Is the fact that this Government is not concerned about rising fuel prices and their impact on families because they’re not connected to the real cost of living pressures facing families in this country?
SPEAKER: I’ll let it go, but we will at some stage review with the member the assertions that she is making. Members cannot rely on unsubstantiated assertions to hang a question off.
Hon GRANT ROBERTSON: We are concerned about fuel prices. That’s why we’re actually doing something about the majority of the increase, which relates to the margins that oil companies have; that’s why we’re going to give the Commerce Commission powers to look into it; and it’s why we put in place a Families Package. The former Minister might be missing her BMW; on this side of the House, we’re trying to get it right.
Question No. 3—Finance
TAMATI COFFEY (Labour—Waiariki): Thank you, Mr Speaker. Malo ni. My question is to—
Hon Amy Adams: Tetchy, Grant, tetchy.
SPEAKER: Order! Sorry, the member will resume his seat. Who was the member who interjected then—who called out then?
Hon Amy Adams: I withdraw and apologise.
3. TAMATI COFFEY (Labour—Waiariki) to the Minister of Finance: What are the most significant investments the Government has made in the past year?
Hon GRANT ROBERTSON (Minister of Finance): At the risk of trying your patience, the coalition Government has made many significant investments to address the issues that New Zealanders are facing. I cannot go through all of them today, but I’d like to just name a few of the highlights: a $5.5 billion Families Package that will see 384,000 families better off by an average of $75 per week; a $2 billion investment in KiwiBuild to begin delivering 100,000 affordable homes; the restarting of contributions to New Zealand Superannuation Fund after nine years of them being frozen; the billion dollars of the first year of Provincial Growth Fund; a billion dollars for the R & D tax incentive; and much, much more. And we’ve done all of that while maintaining a surplus and keeping debt under control. [Interruption]
SPEAKER: Order! We’re not performing seals. That’s to stop.
Tamati Coffey: Why has the Government made these investments?
Hon GRANT ROBERTSON: We’ve made these investments so that New Zealand families will be better off. They will have more money in their pocket from increases to the family tax credit, extensions of Working for Families, the Best Start payment, and the winter energy payment. They will have an opportunity to achieve the Kiwi dream of homeownership. Wherever they will live, they will see economic opportunities thanks to the Provincial Growth Fund. They can have confidence that their schools are being fixed, their hospitals are being rebuilt, and their transport infrastructure improved. They know that their environment is being looked after through policies like the phasing out of plastic bags and the move to a zero-carbon New Zealand. We came into office and got on with the job from day one. We still have much to do, but I am proud to be part of a Government where we are making investments that are about the long-term well-being of all New Zealanders.
Question No. 4—Housing and Urban Development
4. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: What is the total target number of KiwiBuild dwellings via “buying off the plans” across the three financial years to 2020-21, and what is the total financial value the Government is expected to underwrite if this target is met?
Hon JENNY SALESA (Minister for Building and Construction) on behalf of the Minister of Housing and Urban Development: Malo ni, Mr Speaker. Happy Tokelau Language Week. The number of KiwiBuild homes being built through the Buying off the Plans initiative depends on a number of factors. The business case set a target of 800 in 2018-19, 2,500 in 2019-20, and 4,000 in 2020-21. The total financial value may be between $3.7 billion and $4.7 billion over the three years, depending on the types of homes being underwritten and their price points. The financial value of the underwrite will depend on the price points of the individual homes.
Hon Judith Collins: Does he stand by his advice to Cabinet that while the Crown is “taking the sales risks as [the] houses we end up with through [an] underwrite may not be sold.”, the Crown has the option of using KiwiBuild houses for social housing?
Hon JENNY SALESA: The Minister stands by his statement, and we are making sure that we build KiwiBuild homes, because the reality is that in Aotearoa New Zealand we do not have enough homes.
Hon Judith Collins: Is he ensuring that KiwiBuild buyers are aware that some of the neighbouring houses may be used as Housing New Zealand rentals?
Hon JENNY SALESA: We do not have all of the plans of, say, for instance, the 10,000 homes that we will be building in Māngere set out right now. Some of them will be KiwiBuild homes, some of them will be social homes, and some will be sold in the market, but the fact is that we are in this position because we inherited housing under the National Government where we do not have enough houses. We’re short by 71,000 residential homes, which is why we are building KiwiBuild homes.
Hon Judith Collins: I raise a point of order, Mr Speaker. That’s all very interesting, but it did not address the question of whether he is ensuring that KiwiBuild buyers are aware that some of the neighbouring houses may be used as Housing New Zealand rentals.
SPEAKER: I think that was addressed in the first part of the answer. There was probably some superfluous stuff at the end of it.
Hon Judith Collins: How will the eligibility criteria that requires KiwiBuild buyers to own the home for at least three years be applied in the situation where a homeowner wants to sell due to any antisocial behaviour from Housing New Zealand neighbours?
Hon JENNY SALESA: That is a question that we haven’t had to deal with yet. As the honourable member knows, we are going to be ensuring that the first folks that are moving into KiwiBuild homes in her electorate, in Papakura, happens before Christmas. I do not have the specific answer to her question, but if she’s wanting to have the Minister answer that specific question, she is most welcome to put it down in writing.
Hon Judith Collins: Then why did he say earlier this year, when announcing a Housing New Zealand development on Greys Avenue in Auckland, that having a mix of State and non-State houses together “[avoided] the potential pitfalls of having a very high concentration of high needs people living in a close vicinity,”?
Hon JENNY SALESA: We are a Government that is absolutely committed to ensuring we house all of our families. Those who are vulnerable, we’ve made announcements that we will build public houses for them. Those who are homeless, we’ve also made announcements that we will build and make sure that they are housed. These are challenges that we, as the Government came in, were landed with. Under the previous Government, over nine years, they did not build enough houses. They sold off State houses. We are a Government that is absolutely committed to ensuring that we build enough houses to house all of our vulnerable people.
Question No. 5—Transport
5. Hon PAUL GOLDSMITH (National) to the Minister of Transport: Will he rule out a regional fuel tax for the Wellington region?
Hon SHANE JONES (Associate Minister of Transport) on behalf of the Minister of Transport: On behalf of the Minister of Transport, yes.
Hon Paul Goldsmith: What’s changed in the last six months since he would only rule out regional fuel taxes outside of Auckland for this parliamentary term and today, when the Prime Minister ruled it out for as long as she is Prime Minister?
Hon SHANE JONES: What has changed is the Rt Hon Jacinda Ardern has just told the nation, via the highest court in the land, the answer.
Hon Paul Goldsmith: When was the decision made to rule out any future regional fuel taxes?
Hon SHANE JONES: The law outlines what the options are. The Prime Minister has indicated what the course of travel is. The answer is there are no more options while she’s the Prime Minister.
Hon Paul Goldsmith: When did he—the Minister of Transport—know this was the new policy?
Hon SHANE JONES: The Minister of Transport is well-versed in the law. There was never going to be an option over the next two years, and in terms of—
Hon Dr Nick Smith: Why did you legislate for it?
Hon SHANE JONES: Taiho, Nick, taiho.
SPEAKER: Order! Order!
Hon SHANE JONES: The answer has been given by the Prime Minister. There will be no regional fuel tax options.
Hon Paul Goldsmith: I raise a point of order, Mr Speaker. I asked a very simple question about when and there was no answer in a timely fashion.
SPEAKER: I’ll get the member to ask it again.
Hon Paul Goldsmith: When did he, as Minister of Transport, know about this change of policy?
Hon SHANE JONES: When the Prime Minister stood up. [Interruption]
SPEAKER: Order! Order! I’ve warned the other side of the House as to their seal-like behaviour. Just try a little bit of dignity.
Rt Hon Winston Peters: Was the Minister of Transport responsible for the very law which prohibits the eventuality that the questioner constantly keeps asking about?
Hon SHANE JONES: The development of an option for a regional fuel tax is rich in the legacy of the Labour Party. It was initially promoted by Dr Michael Cullen, it was picked up by the actual Minister of Transport, and the fact that the law clearly states there was no possibility of any other region gaining access to that statutory provision just shows there’s too much innuendo being spread by the other side of the House.
Hon Paul Goldsmith: Isn’t the thing that’s changed in the past six months that his Government has finally woken up to the fact that Kiwis are sick and tired of being fleeced by this Government with extra fuel taxes, and that he and his colleagues are backpedalling as fast as possible?
Hon SHANE JONES: Without a doubt, there is great responsiveness on the part of our Cabinet, but the most important thing is that this Government does not have control over the amount of oil flowing out of the various oilfields around the world, we are not responsible for interest rates set by the federal bank of America, and those are the largest contributing factors to the current challenges that we do have, as a nation, with fuel prices.
Rt Hon Jacinda Ardern: Can the member confirm that the only thing that has changed in the last six months is that the Opposition has started spreading utterly false information contrary to legislation that prohibits the use of a regional fuel tax, and that responses in the House today have been for the sake of clarity in the wake of the Opposition leader throwing down what’s called, loosely, a “dead cat”?
Hon Gerry Brownlee: I raise a point of order, Mr Speaker. I appreciate that you are often mesmerised by anything the Prime Minister says, but that was a question of exceptional and unreasonable length.
SPEAKER: While the question was long, the member has reflected badly on me in a way that I find unacceptable. As a result of that, the Opposition will lose five supplementary questions.
Hon Gerry Brownlee: I raise a point of order, Mr Speaker. That is a most unreasonable action. In the last two days, you’ve pulled up the Deputy Prime Minister on no less than four occasions, requiring him to withdraw and apologise to the House. One of those occasions was a reflection on you, and there was no penalty. That can only lead others outside this House to reach their own conclusions about the way the place is being operated.
SPEAKER: I want to thank the member for his comments. I think he’s just reinforced my determination to stick with my decision. The Hon Shane Jones.
Hon Gerry Brownlee: Tough day for the Government—protection from the Chair.
SPEAKER: Order! The Hon Gerry Brownlee will stand, withdraw, and apologise.
Hon Gerry Brownlee: I withdraw and apologise. When the going gets tough, you look to your mates.
SPEAKER: No, no. We’re now at the point of last warning for Mr Brownlee, and he will withdraw and apologise again. If we have a repeat, he will have an early shower.
David Seymour: Point of order.
SPEAKER: No, I’m dealing with this point of order. The member will resume his seat.
Hon Gerry Brownlee: I withdraw and apologise. I raise a point of order, Mr Speaker. It’s a sad day when you can’t make observations in this House about what you see going on.
SPEAKER: Very tempting.
David Seymour: I raise a point of order, Mr Speaker. Surely, the question was one designed to attack the Opposition, which you’ve ruled out of order many times in the past.
SPEAKER: Shane Jones.
Hon SHANE JONES: The Prime Minister has rightly identified that there has been misrepresentation, there has been rumour-mongering, and there has been innuendo, which is why the other side of the House have their current dramas.
Hon Gerry Brownlee: I raise a point of order, Mr Speaker. What are the requirements for authentication of supplementary questions? We know what they are when it comes to our side of the House, and you pulled up the Hon Amy Adams on that very point, but you have allowed the Prime Minister to make those accusations without any authentication whatsoever.
Rt Hon Jacinda Ardern: Speaking to the point of order.
SPEAKER: No, I don’t need the Prime Minister to assist me. On occasions, people run into hard luck when the Speaker happens to be listening to a radio in the morning.
Hon Gerry Brownlee: I raise a point of order, Mr Speaker. That is a reflection from the Chair on this side of the House, and I think it deserves some further explanation.
Rt Hon Jacinda Ardern: Speaking to the point of order, I am happy to seek leave of this House to table the transcript in which the very subject matter I was referring to in my supplementary question was canvassed by the Leader of the Opposition, where he made the false claim I’ve referenced.
SPEAKER: The Prime Minister—well, she hasn’t sought leave. You want to seek leave?
Rt Hon Jacinda Ardern: I’ll seek leave, if it helps, Mr Speaker.
Hon Gerry Brownlee: I raise a point of order, Mr Speaker. You can’t seek leave to table something and at the same time make an accusation. So she’s either tabling information and that’s it, or not at all.
SPEAKER: As I’ve said when I intervened earlier, there are some things where you don’t need authentication, where it’s either common knowledge or, on occasions, my knowledge. In this particular case, I did listen to the radio interview where the comments were made.
Hon Simon Bridges: I seek leave to make a personal explanation.
SPEAKER: Regarding what?
Hon Simon Bridges: Regarding the accusation that I said something false.
SPEAKER: The Hon Simon Bridges seeks leave to make a personal explanation in relation to the accusations made by the Prime Minister about comments he made on the radio this morning. Is there any objection? There appears to be none.
Hon Simon Bridges: This morning on television, I made clear that a source had told me that the council in Wellington was talking in some detail to the Government in relation to a regional fuel tax in Wellington. That was then confirmed by the spokesperson for the council, who made it very clear that was true. Unfortunately, that spokesperson was then heavied out of that position by Mr Twyford and the mayor.
Rt Hon Winston Peters: Mr Speaker—
SPEAKER: No, no, just—the member will sit down. We do have a problem when people are given leave to make a specific personal explanation. The member very deliberately went on beyond what was a personal explanation to relate something which did not relate to what he said and was, again, an abuse of this process. Now, I am quite reluctant to continue this, but we have a point of order from the right honourable gentleman.
Rt Hon Winston Peters: This point of order relates to the fact that two people on that side of the House were going for a point of order. You did not choose the leader of the National Party; you chose Mr Brownlee. Why was that?
SPEAKER: Well, I—
Hon Gerry Brownlee: I’m much bigger—he saw me first.
SPEAKER: Volume—he was louder. I heard him.
Question No. 6—Regional Economic Development
6. MARK PATTERSON (NZ First) to the Minister for Regional Economic Development: What reports has he seen recently regarding regional development?
Hon SHANE JONES (Minister for Regional Economic Development): It has been brought to my attention that Statistics New Zealand has shown for the first time in eight years that the population has increased in every region. This is after years of neglect and a decrease of numbers in West Coast, Manawatū—
SPEAKER: Order! Order!
Mark Patterson: What regions in particular showed strong population growth?
Hon SHANE JONES: Obviously, the regions that I’m focused on: Northland, Bay of Plenty, Manawatū, Whanganui—in fact, from the rafters of every hall in the country, they’re happy that the provincial champion’s at work.
Mark Patterson: Why is this good news for provincial economies and the country?
Hon SHANE JONES: Well, obviously, as a consequence of unfettered immigration, enormous pressure has been placed on metropolitan infrastructure, and as more people move into the provinces on the back of the investments and the good news that has been spread around the four winds, we’ll find that we are getting a better level of utilisation from our provincial assets. People can have the option for a greater quality of life, and I will continue to lead that charge.
Question No. 7—Social Development
7. Hon LOUISE UPSTON (National—Taupō) to the Minister for Social Development: Does she stand by her statements, including the statement in the House last week that “the proportion of people that are currently unemployed is exactly the same as what it was at this time last year: 9.4 percent.”?
Hon CARMEL SEPULONI (Minister for Social Development): Malo ni, Mr Speaker. I stand by the answer that I gave when viewed in its entirety, including answers to the supplementary questions. As I indicated to the House yesterday, I accept that I could have caused some confusion for the member and other members of the House by referring to the proportion of the working-age population on a main benefit as the unemployment rate, and I do apologise for this.
Hon Louise Upston: Why did she include those on sole parent support and supported living payment as “currently unemployed”?
Hon CARMEL SEPULONI: When I was referring to the 9.4 percent number that I was using in the House, that number was specifically in relation to the number of New Zealanders on main benefits. Main benefits includes the supported living payment, the sole parent support benefit, and the job seeker benefit.
Hon Louise Upston: What is the percentage of the population on the job seeker benefit that are, in other words, unemployed?
Hon CARMEL SEPULONI: I don’t have the exact numbers in front of me, but if that member would like to put that question in writing, I would be more than happy to answer it for her.
Hon Louise Upston: Is the figure of 4.3 percent of the population on the job seeker benefit higher or lower than it was a year ago, when it was 4.1 percent?
Hon CARMEL SEPULONI: The last figures that we received with regards to those that were unemployed were the June figures that came out in August. That figure was 4.5 percent. At the same time last year, it was 4.8 percent.
Hon Louise Upston: I raise a point of order, Mr Speaker. My question specifically was about the job seeker benefit. I gave as much detail as I could about the 4.3 percent and whether that is higher or lower than the 4.1 percent.
Hon CARMEL SEPULONI: Speaking to that point of order, Mr Speaker, as I said earlier, with regards to specific numbers that that member wants, I can look them up if she would like to put the question in writing. However, I did refer to the actual current unemployment rate, which was 4.5 percent in the June quarter, and at the same time last year was 4.8 percent.
SPEAKER: OK. I know we’ve had a bit of back and forth around the authentication of questions today, but it is my view that if exception hasn’t been taken to specific figures—and Ministers might want to caveat their replies, as Ministers sometimes do—I think it is possible to address the question as was asked.
Hon CARMEL SEPULONI: Speaking to the point of order, Mr Speaker.
SPEAKER: No. We’ve finished the point of order now. The member will—does the member want the question repeated?
Hon CARMEL SEPULONI: She can repeat the question.
SPEAKER: Repeat the question, thank you.
Hon Louise Upston: Thank you, Mr Speaker. Is the figure of 4.3 percent, which is the percentage of the population on the job seeker benefit, higher or lower than it was a year ago when it was 4.1 percent?
Hon CARMEL SEPULONI: The actual primary question is in relation to the figure that I used in the House yesterday of 9.4 percent. If she has specific questions about another figure that she’s referring to, then she will need to put it in writing because I do not have that information on me.
Question No. 8—Workplace Relations and Safety
8. Hon SCOTT SIMPSON (National—Coromandel) to the Minister for Workplace Relations and Safety: How many people have gone on strike in the last 12 months, and how does this compare to the 12 months prior?
Hon IAIN LEES-GALLOWAY (Minister for Workplace Relations and Safety): I’m advised that the data the member is looking for is collected and reported on an annual basis from the beginning of each calendar year. So far, in 2018, the Ministry of Business, Innovation and Employment has received reports of 7,285 employees going on strike. The number for 2017 was 421.
Hon Scott Simpson: How can he have confidence in the Government’s approach to industrial relations when information supplied to me by the Parliamentary Library indicates that 65,000 people have gone on strike in the last 12 months, more than double the number that went on strike in the previous nine years?
Hon IAIN LEES-GALLOWAY: I would point out to the member that although we’ve made good progress in this House on the Employment Relations Amendment Bill, thus far the Government has made no changes to industrial relations law. We’re operating under the settings we received from the previous Government.
Hon Scott Simpson: How can he have confidence in the Government’s approach to industrial relations when Joe Carolan, an organiser at Unite Union,, has said, “We’re gearing up for a big round of strikes in 2019 that is coming with the new mood”?
Hon IAIN LEES-GALLOWAY: I can understand why people whose wages were supressed for nine long years under the previous Government now see the opportunity to get a fairer share of a prospering economy. They’ve seen how this Government is running the books, they’ve seen the fact that this Government is responsible in the way it runs surpluses and in the way it spends taxpayers’ money, they’re feeling confident, and they want a decent share—at last.
Marja Lubeck: Malo ni. How does the Minister characterise the proposed changes of the Employment Relations Amendment Bill?
Hon David Bennett: Communism.
SPEAKER: Order! Who said that? Stand, withdraw, and apologise.
Hon David Bennett: I withdraw and apologise.
Hon IAIN LEES-GALLOWAY: For the benefit of everyone, especially those who are travelling the country spreading misinformation about the Employment Relations Amendment Bill, the bill overwhelmingly restores settings that were in place—many, as recently as 2015, but which were all in place when Labour was last in Government; a period of sustained growth, nine years of surpluses, and record low unemployment.
Hon Scott Simpson: Does he believe the way union organisers went about advising bus companies of their intention to strike over the long weekend was constructive given the union hasn’t been engaged with bus companies for a number of months and they’re not currently in collective bargaining?
Hon IAIN LEES-GALLOWAY: Well, I’m relying on what that member says about that situation, and I find that hard to do given that the member has claimed that this year 81,000 people have gone on strike—no wait, 70,000 people have gone on strike; no, no, it’s 65,000 people have gone on strike. I would say, though, that that trend is downward, not unlike the member’s party’s polling.
Question No. 9—Education
9. JO LUXTON (Labour) to the Minister of Education: What action, if any, has the Government taken to increase the supply of teachers for 2019?
Hon CHRIS HIPKINS (Minister of Education): The latest analysis suggests that we’ll need around 850 more teachers in classrooms from the beginning of next year. The Government has put in place a number of short-term measures to ensure that we have enough teachers in classrooms next year, including recruitment from overseas. I’ve been advised that 2,284 applications have been received through the overseas recruitment process—315 of those have already been assessed as meeting requirements and they have begun the registration process. We are pulling out all of the stops to ensure that we have enough teachers for next year.
Jo Luxton: What do schools need to do to take advantage of this pool of teachers available for 2019?
Hon CHRIS HIPKINS: The Government will do everything it can to support schools to recruit teachers to fill any vacancies they have. Of the 315 that have been assessed as “ready” to date, only 115 of those have been interviewed by schools. My message to schools is that if they are concerned that they are going to have vacancies they cannot fill at the beginning of next year, they need to advertise those as quickly as possible and work with the Ministry of Education and the recruitment agencies to ensure that we have people available to fill them.
Jo Luxton: What else is the Government doing to increase the supply of teachers for 2019?
Hon CHRIS HIPKINS: Two other notable measures the Government has in place are: fully subsidising the cost of refresher training for teachers whose registration would otherwise lapse—1,250 people have been undertaking refresher training as a result of that—and we have also introduced new grants of up to $10,000 to support those schools that are taking on teaching graduates, so that they get a good start to their teaching careers.
Question No. 10—ACC
10. Hon TIM MACINDOE (National—Hamilton West) to the Minister for ACC: Will he rule out proposed increases to ACC levies, including a 12.1 percent increase in the average motor vehicle levy for road users that would raise the price of petrol by a further 1.9 cents per litre?
Hon IAIN LEES-GALLOWAY (Minister for ACC): Although I have said that ACC will need to make a very convincing case for an increase, it would be irresponsible of me to rule something in or out before consultation ends; so I will neither rule in or out any proposed increases to ACC levies nor will I rule in or out the proposed decreases to levies that they are also consulting on.
Hon Tim Macindoe: If the Minister won’t rule out further petrol tax increases through an increased ACC motor vehicle levy, what does he say to New Zealanders on modest incomes who are already struggling to cope with the recent rapid increases in petrol taxes and the cost of living?
Hon IAIN LEES-GALLOWAY: I would say to them, first of all, “Don’t listen to the National Party’s fearmongering.” and, second of all, I would say to them that this is, ultimately, a decision for Cabinet, and Cabinet gets to take into account the entire economic context, and that’s exactly what we’ll be doing when we make the final decision on ACC levies.
Hon Tim Macindoe: Why did he not advise his ACC officials not to propose a 12.1 percent increase in the average motor vehicle levy for road users in the current levy consultation process?
Hon IAIN LEES-GALLOWAY: Well, if the member wants to be an effective Opposition spokesperson for ACC, he’ll need to learn the process. ACC is a Crown entity. It has the responsibility for consulting on its recommendations to me; that’s what it is doing. Once it makes a recommendation to me, I’ll take those recommendations and make my recommendation to Cabinet.
Ginny Andersen: What does the motor vehicle levy fund?
Hon IAIN LEES-GALLOWAY: The motor vehicle levy funds treatment and compensation for people who have suffered an injury as a result of a motor vehicle accident. One of the things driving ACC’s consultation on an increased levy for motor vehicle users is the fact that we have seen the road toll explode over the last few years, something that that member and his party should be ashamed of.
Rt Hon Winston Peters: Would the Minister tell the country what the Government thinks of the proposal for our Crown entities officials to be muzzled to the extent they don’t make any representation to the Minister, legal or otherwise?
Hon IAIN LEES-GALLOWAY: I would consider that bordering on unconstitutional.
Hon Gerry Brownlee: I raise a point of order, Mr Speaker. One thing: how did that question relate to the primary question?
SPEAKER: Well, it related to the supplementary that Mr Macindoe asked. It’s absolutely related to it.
Hon Gerry Brownlee: It is a reasonable question to ask. He cannot make an assumption in a question. For the Deputy Prime Minister to continue with his sort of disruption of the afternoon’s events by bringing up irrelevant questions like that is completely unreasonable and outside of the Standing Orders.
Rt Hon Winston Peters: Speaking to the point of order—
SPEAKER: I’ll let the Rt Hon Deputy Prime Minister have a go.
Rt Hon Winston Peters: Mr Macindoe began by saying, “Why didn’t he ask his officials not to report to him?” That was the substance and the portent of what he said, which is so outrageous that I just wanted to make sure that my colleague had a chance to show the level of outrage this Government has with such undemocratic ideas.
Hon Tim Macindoe: Mr Speaker, I did not say “Why will the Minister not report or ask for that report?” That’s not the words I used at all.
SPEAKER: Well, I think it might be helpful to the House if the member just repeated what he did say so we all understand it.
Hon Tim Macindoe: Why did the Minister not advise his ACC officials not to propose a 12.1 percent increase in the average motor vehicle levy for road users in the current levy consultation process?
SPEAKER: Well, I don’t think we need to go any further, do we?
Hon Tim Macindoe: What is the current financial position of the ACC scheme in terms of assets, reserves, and investments?
Hon IAIN LEES-GALLOWAY: That is a very good question, and, frankly, I’m surprised the member goes there. Under the previous Government, ACC’s assets were able to balloon to a point where they are nearly 120 percent funded in many of the accounts, something the previous Government did to prop up its own surpluses. It is true that we do need to get those accounts back to being more sensibly funded. We need to do that smoothly, over time, and that is certainly something Cabinet will take into account when it makes a decision about future ACC levies.
Question No. 11—Justice
11. CHRIS PENK (National—Helensville) to the Minister of Justice: Does he stand by all his Government’s actions and statements in regards to the Criminal Cases Review Commission Bill?
Hon ANDREW LITTLE (Minister of Justice): Yes.
Chris Penk: Does the bill contain any measures to preclude accountability of the commission?
Hon ANDREW LITTLE: The legislation establishes the Criminal Cases Review Commission as an independent Crown entity. Ultimately, it reports on its functions to Parliament in the usual way.
Chris Penk: Will the commission decide to refer cases to an appeal court on the basis of consensus or unanimous decision-making or, as with the courts, majority decision-making?
Hon ANDREW LITTLE: The legislation is clear that the commission will determine its own decision-making procedures. The way that Criminal Cases Review Commissions operate in other countries is that those designated as commissioners consider the reports put before them following an investigation, and they make their decision in the way they choose to decide to refer a matter to the Court of Appeal or not. [Interruption]
SPEAKER: No, no, the member’s run out of questions.
Question No. 12—Social Development
12. WILLOW-JEAN PRIME (Labour) to the Minister for Social Development: What progress, if any, has the Government made with the Te Hiku o Te Ika - Crown Social Development and Wellbeing Accord signed in 2013?
Hon CARMEL SEPULONI (Minister for Social Development): The accord was signed in 2013 and is an agreement between the iwi and Crown agencies to work on solutions to remove disparities and create socio-economic equity for the people. However, work languished until June this year, when the iwi came to Parliament to meet this Government’s Ministers and recommit to the renewed Te Hiku - Crown social accord. Progress has been made. Last week the Ministry of Health and Oranga Tamariki signed agreements with Te Hiku iwi to join the accord, and the development of a co-governance model is under way, which will focus on the social and economic revitalisation of the rohe.
Willow-Jean Prime: How are Te Hiku o Te Ika’s priorities for its people in line with this Government’s priorities?
Hon CARMEL SEPULONI: The iwi is focused on investing in industries to create sustainable, meaningful employment and improve social outcomes for Northland people. This Government has invested $3.5 billion to grow infrastructure and job opportunities in the regions. Northland was one of the first areas the Government invested in. In June, the Ministry of Social Development invested $2.5 million into He Poutama Taitamariki, a programme providing young Northland people with more meaningful employment pathways and pastoral care. There are signs that this Government’s investment in the Northland region is paying off: unemployment dropped to 4.7 percent in the June quarter—that’s 2.5 percent lower than in the same period last year.
Willow-Jean Prime: How has the dialogue progressed between the iwi and the Crown since the signing of the renewed accord?
Hon CARMEL SEPULONI: Iwi leader Haami Piripi stated publicly that the iwi is “100 percent committed to making sure the social accord succeeds and provides real outcomes for our people that help them raise their children in safe and nurturing homes and improve the quality of their lives. This is what our people expect from us as iwi leaders, and this is what we have already agreed with the Government through the Te Hiku social accord. We’re looking forward to working seriously with this Government to achieve these outcomes.” This Government is committed to doing our part to achieve these outcomes.
General Debate
General Debate
MARAMA DAVIDSON (Co-Leader—Green): I move, That the House take note of miscellaneous business.
Malo ni tau huhuga a te Takitaki Fono. We here have great privilege in this House. We have the honour of standing in this place and representing the values and aspirations of our communities—our communities that put faith and trust in us to govern. And this Parliament has, sadly, let people down. [Interruption] I’m thinking of young New Zealanders growing up in Manurewa, Morrinsville, or Motueka who are watching on today and becoming angry and disillusioned by our conduct here—including the conduct here right now, particularly coming from across that bench there. I’m thinking of women on minimum working wage, trying to raise their families. I’m thinking of our migrant communities who are a part of our society and have made Aotearoa their home.
So the Green Party is calling for a sea change in how we do things here in this place. We have long called for this sea change, because, collectively, we are the people’s representatives, and as their representatives, we have the duty to work together and solve those big challenges of our time. But we are seeing our politics being dragged into the gutter. We must own up to this toxic environment and we must change it. New Zealand values have had a bit of a spotlight on them of late, and as a country we are asking: how do we truly value diversity? How do we truly value democracy? How do we ensure strong, true relationships between communities and us as politicians? And this is why we have to act: because the trust and confidence in our politicians is at risk. And we rely on that. We need that confidence to do our work. Our democracy is at risk. Our relevance is at risk. So the Green Party is calling for the extreme adversarial politics of this place to come to an end. We need a politics of partnership—
Hon David Bennett: Give her a hug, Chris.
MARAMA DAVIDSON: —that builds consensus on those very issues that—
SPEAKER: Order! Order! Mr Bennett, your interjections are far too frequent and, frankly, given the context of recent times are just offensive. They will stop.
MARAMA DAVIDSON: Mr Speaker, a case in point. Mr Bennett, we actually—
SPEAKER: No, no. Sorry. I’ve just dealt with the member. You can’t deal with it again.
MARAMA DAVIDSON: Thank you, Mr Speaker. I would urge all the members being quite vocal in the House here today that we’ve actually got to get on and do the real work in this place: climate change, poverty, equity of outcomes for women, for Māori and Pacific, for migrant people, for people with a disability, and for people on low incomes. The Green Party is renewing its calls for all MPs to agree—how about this—to a code of conduct of our behaviour, as we have in the past: a code of conduct for right here, for how we behave in the House today; not 20 years ago, but today. And the Green Party will be calling for our MMP democracy to be strengthened in line with the recommendations of the 2012 Electoral Commission review and we will be calling for major reform, as I have been doing this week, of political donations so we can get big money out of politics and restore the balance of power in our democracy.
We know that these issues have long been a problem in our politics, recently coming to light with searing, searing detail, and we cannot go back to that as business as usual. That is not an option. We have to change. New Zealanders are calling for that change.
To those listening, I wouldn’t blame people for being put off this system. I totally get that, but I’m asking people to not switch off, because it is the powers that are relying on people to turn off in order to continue to get away with the bad behaviour in this place. So turning away will only keep the abuse of that power strong. This country is worth more than that. It’s worth more than gutter politics. There is a way that we can bring integrity back into this House in the way that we work and behave. Thank you, Mr Speaker.
Hon SIMON BRIDGES (Leader of the Opposition): National has just had its toughest week in a very long time, but today it’s the Government that’s on the ropes. They come down here. They make policy on the hoof. They don’t know their numbers. They’re not sure what they’re doing. They can’t help themselves. They’re hopeless.
It started this morning. I went on television. I made it quite clear: a regional fuel tax, I’ve been told it’s coming in Wellington. And then surprise, surprise. A spokesman came on for Wellington: “That’s right. That’s exactly what’s happening.” And then who do we hear from? Phil Twyford and the mayor: “No, no, no, no, no.” Well, I know who I believe, Grant Robertson, and it isn’t Phil Twyford.
Then we heard in Parliament from the Prime Minister. Now, granted she didn’t know how much petrol prices are at the moment. It’s an inconvenient detail. She didn’t know that petrol prices in this country under her watch have gone up, every time someone fills up, $25. But on the hoof—under pressure from myself, she’s made policy on the hoof. She’s made it quite clear there’ll be no regional fuel tax coming.
I’ve got a couple of questions for the Prime Minister. Maybe Grant Robertson can answer me this: why, then, did they legislate for regional fuel taxes from 2021? Maybe they don’t know what they’re doing. Maybe they’re not remotely competent and up to a Government that New Zealand deserves and expects in this country. And why doesn’t she follow the logic of what she said today and axe the regional fuel tax in Auckland, Grant Robertson? Why doesn’t she do that in the three excise taxes that we know are coming?
I just say to this House that over the last few days what have we seen from this Government? We’ve seen petrol prices rise at an unprecedented rate in the history of New Zealand. People filling up for the long weekend who can’t afford it are doing it tough. We’ve seen bus strikes—the 15th transport strike this year. That’s more than we had in a decade. And why is that? It’s because Iain Lees-Galloway knows that the unions in this country are emboldened.
Hon Paul Goldsmith: He’s revving them up.
Hon SIMON BRIDGES: He’s revving them up. They’ve got militant because they know that Grant Robertson is going to pay the piper, and that’s what we’ve got right there.
If this is what they can do in just a week—petrol prices, unprecedented strikes—don’t you imagine what they can do over three years? The damage that those parties—and there was a poll last night, and it made quite clear, in the eye of the storm, that, actually, we’re remarkably strong on this side of the House. We are remarkably strong. It showed something else, Grant Robertson. It showed something else: that New Zealanders are the most pessimistic about the economy and the outlook of this country, while Grant Robertson is finance Minister, than they’ve been, look, at least since the global financial crisis. I say shame, Grant Robertson.
Here’s what we know he does. He goes “Oh, it’s the international conditions, what’s going on internationally.” Well, why, Grant Robertson, has it happened here first? I’ll tell you why it’s unprecedented industrial unrest. It’s more taxes, and Cameron Bagrie is exactly right: small and medium sized businesses, Shane Jones, are doing it tough in our regions, despite you throwing the money around. It’s wasteful spending on an unprecedented scale—$20,000 to set up some tables, Andrew Little. Well, I’ve got news for the Government. Mark Mitchell, Kanwaljit Bakshi, and Chris Bishop—they’ll do it for free. Just ask them.
We’ve got a Government that loves tax, that loves spending. New Zealanders need National right now. They need a party that will hold this hopeless, incompetent Government to account, and we’ve shown our worth today and we’ll keep on showing it. We’re for the people of this country. We’re united, we’re strong, we are holding this Government to account.
Hon GRANT ROBERTSON (Minister of Finance): I’ve got some advice for the temporary Leader of the Opposition, and it’s this: if you have to give a speech which says twice “We’re united; we’re strong”, that means you aren’t, OK. That’s actually what that means. I’m quite surprised the Leader of the Opposition decided to refer to any aspect of last night’s poll when he referred to the economic conditions, because there was one very significant number in that poll: 7 percent. And there was another very significant number which emerged in the TVNZ graphic from the ground up, which was Judith Collins on 5 percent. So 7 percent; 5 percent: they’re the numbers that Mr Bridges should be focusing on from last night’s poll.
What I want to focus on today is the fact that one year ago, a very significant event occurred: that was a Government coming together from three parties with different traditions but shared values for this country, to form a coalition Government that I am extremely proud to be a member of. At the outset today I want to thank our New Zealand First colleagues for their contribution to this Government, for giving us a focus on the regions of New Zealand, for making the biggest investment New Zealand has seen in more than two or three generations in the provinces of our country: a billion dollars rolling out to lift the incomes and the spirits of those people.
I want to credit the Green Party of Aotearoa / New Zealand for their role in the Government, making sure that that focus on our long-term environmental vision is kept. I want to thank Eugenie Sage for her work in conservation, overseeing the biggest boost to conservation that we have seen in a decade in this country. This is a Government that has shared values about making sure that every New Zealander gets to share in our success. It wasn’t so much Married at First Sight; it was actually quite a long courtship, the coalition negotiations. More like a big, long chaperoned date that Annette King was part of. But, at the end of that, that enduring relationship we have forged after one year has delivered so much to New Zealand.
If we just pick off the big issues of that election campaign last year: the worry that New Zealanders had that not all New Zealanders were benefiting from economic growth. Well, we turned that around in the first 100 days. We said no to tax cuts that favoured the wealthiest New Zealanders and turned that back to being low and middle income New Zealanders actually getting a fair share.
This is not just about dollars and cents; this is about how New Zealanders feel. As one person who wrote to the Prime Minister said, “I just want to write to thank you. Thank you for giving me hope that the children of New Zealand are thought about. I work as a nanny for two young children and I constantly worry about what our world and our country will be like by the time they have grown up. Under a National Government, I am OK. Under a National Government, the children I know are OK. But under a National Government, the children that need us are not OK.” That’s what we have turned around. We are here for all of the children on New Zealand. We are making sure every single one of them gets the best start in life.
But it also ranges from the big picture of the Families Package to things that every day New Zealanders will not think about, but they are proud of. I want to acknowledge the role of Andrew Little and his work on the Pike River Recovery Agency. I saw on TV the other night Anna Osborne saying, “For once, we’ve got a Government that’s listening to us. For once, we’ve got a Government that’s truly committed to righting a wrong. For once, we have a Government that understands the true New Zealand values of kindness, of looking out for one another, of making sure that when we can set something right, we will.” And that’s what we’re doing at Pike River.
And it runs right across every portfolio: in housing, in health, in education. We are making sure that every New Zealander gets the chance to fulfil their potential. We know that there’s a lot to do. We can’t solve everything in one year, but what we have is a Government that understands that it is future generations that matter. It is the well-being of future generations that matter. That’s why next year’s Budget will be the first well-being Budget that New Zealand has ever seen, where we make sure that our fiscal position is strong, but we don’t think that’s the end of the story; where we make sure alongside that strong fiscal positon that we’re protecting and enhancing our environment; where we’re building the human capital—the people of New Zealand—so that they’re healthy and well-educated and feel secure, and that we are building strong communities that will provide the foundation for every New Zealander to succeed. One year on, I’m proud of what we have achieved, and there’s so much more to come.
Hon NATHAN GUY (National—Ōtaki): Now, Mr Speaker, what you didn’t hear in that summary of one year on, and when we reflect back to the election campaign, that member, now the Minister of Finance, was out there saying, “No new taxes.” Well, lo and behold, today, what a boomerang we have and a real back-down. The Prime Minister has ruled out any further regional fuel taxes anywhere under her watch. And then we had the stand-in Minister of Finance, Shane Jones, when he was asked when he found out by Paul Goldsmith today—well, lo and behold, he just found out then, just a couple of minutes ago. And I’ll tell you why that occurred, it is because UMR Insight, the polling agency that Labour uses, had been telling them that fuel taxes have been a massive issue. The polling has been picking up that the cost of living has gone up. It’s the highest cost of living in the last quarter, and it’s all because this coalition Government have been heaping on more taxes. They stood there in their election campaign and said, “No new taxes.”
Well, here we have a regional fuel tax rolled out in Auckland, secretly. And I’m not sure how secretly it was. We had Wellington City Council officials meeting the Ministry of Transport and the Ministry of Business, Innovation and Employment to talk about how they could get a slice of the pie. They needed to start the work before 2021 so that it was all ready to go, because there’s a plan in place and it’s called Let’s Get Wellington Moving. We know it’s going to cost $3 billion to $4 billion, and we know that they were sitting there hoping that they could get a regional fuel tax. This is a great day for any voter in the Wellington region, because now they know there won’t be a Wellington regional fuel tax—all the councils were lining up.
It was really interesting this morning—because I saw Simon Bridges on Newshub. I thought he gave a fantastic interview. He let this information out today, and it needed to come out. Then what did we have? We had a Wellington official—probably a person working in the communications unit of the Wellington City Council—say, “Yes, we have been in discussion.”
Then what happened? Phil Twyford monstered that official, so did Justin Lester. I’ll tell you what will happen. I bet your bottom dollar that when we put in the Official Information Act request, we’ll find out what’s been going on, and the truth will hurt. There have already been a lot of discussions happening about the regional fuel tax.
What is also fascinating is that New Zealanders are hurting. The Prime Minister has stood up today and, effectively, said, “I will axe the regional fuel tax.” What about the excise tax? Why doesn’t the Prime Minister, who wants to be seen as caring and compassionate, rule out the excise tax and the further excise taxes for the next couple of years? Why doesn’t she rule out the Auckland regional tax? The reality is she won’t.
Their polling has been picking up that this is a massive issue for New Zealanders. If they want to be seen to be caring and compassionate, you would’ve thought they shouldn’t be ruling out the regional fuel tax from 2021 and beyond; they should be ruling out the excise taxes—the one that’s just come in and the future ones. They could do that. They could save motorists 25 bucks every time they fill up, and yet when you look at the fuel pricing—and I know it’s 20c different in my electorate down here to the capital city of New Zealand.
This whole market study with the Commerce Commission—
Matt King: Twelve months away.
Hon NATHAN GUY: —well, that’s going to take ages. My colleague Matt King said it will take 12 months. It’ll actually take longer than that. I’ve been through how the Commerce Commission does things. It’s very thorough. It’s robust. They will put a heap of officials into it. And we’re worried about the political influence of this. Yes, we support it, but it should always be signed off by Ministers, because you could just have, at a whim, as we saw, the Prime Minister saying that the oil companies are fleecing motorists. Well, where is the evidence? So yes, we will back the Commerce Commission to have a look, but that’s not going to impact on people’s back pockets now; that’s going to take another 12 to 18 months.
So I summarise by saying this is an amazing revelation by the Prime Minister today, to come in and indicate that their polling is picking up that fuel taxes are hurting New Zealanders, to rule out future fuel taxes, and then for Ministers to stand up and say there weren’t detailed discussions going on between the Government and the Wellington council.
Hon JENNY SALESA (Minister for Building and Construction): Mr Speaker, malo ni. Fakafetai lahi lele. It’s a pleasure to take a call in the general debate this afternoon. I’d like to, first of all, commend our Prime Minister, the Rt Hon Jacinda Ardern, for her leadership of our Government. We’ve been in Government now for 12 months. I would also like to thank New Zealand First, as well as the Green Party, for working with us.
We have done a tremendous amount of work. We came in with a plan and we are focused on what matters for New Zealanders. Housing is an issue that is number one not just for members of Parliament from South Auckland but for many of our members of Parliament right across Aotearoa. For so long now, we have been told by a lot of our constituents that many of them cannot afford the rent for houses. Many of them are now homeless, living in cars and in garages, and we as a Government are committed to ensuring that we build the houses that our people need to live in.
As a Government, we came in and we promised that we would build 6,400 public houses. One of the things we’ve done as a Government is we came in and stopped the sell-off of State houses, because we know that when we are experiencing the highest level of homelessness when compared to other OECD countries, this is something we need to do. In order to solve that issue, we need to build more houses. We’ve also banned foreign speculators, and we’ve clarified the landlord-tenant obligations in protecting our renters.
One of the other things that we’ve done as a Government of action concerns the 800-odd families who were wrongly evicted from Housing New Zealand State houses under the National Government’s meth-test hysteria—we are addressing that. We’ve also opened up a new Ministry of Housing and Urban Development to help us build our way out of this national housing crisis, and overall, over a period of 10 years, we will be building 100,000 affordable KiwiBuild homes.
The other thing that we’ve done as a Government is ensure that there is a coordinated, coherent construction skills action plan. For the first time, we have nine Ministers that are focused on ensuring that we have skilled people, because when we came into Government, we were confronted with the fact that we are short by 30,000 skilled people in building and construction. Before we can build the houses, we know that, long term, this is an issue we need to focus on, and as a Government it is taking us nine Ministers to ensure that we move in the right direction.
When we talk about health, this is also an area of responsibility and priority for our Government. We are determined to ensure that we improve the well-being of all New Zealanders. One of the things that we have implemented as a Government over our last Budget is to ensure that doctors visits are cheaper—either free or cheaper for at least 600,000 New Zealanders. But we’re also looking at fixing up our hospitals. In our last Budget, we put aside $850 million, compared to $150 million under the previous Government, because we know that a lot of our hospital buildings do need to be fixed. Just last week, for instance, the right honourable Prime Minister and the Minister of Health announced a $224 million investment which will provide 120 additional elective surgery beds for four new operating theatres at the North Shore Hospital and, in addition, some new facilities at the Whangarei Hospital. For our seniors, we have resumed the contributions to the Superannuation Fund to help safeguard the provision of universal superannuation at age 65.
In the area of education, our Government has an ambitious goal of building the best education system in the world. I would like to acknowledge the honourable Minister of Education, the Hon Chris Hipkins, because he is doing a whole lot of heavy lifting in this area. We’re also listening to our people. The honourable Minister had two summits, one held in Christchurch and one in Auckland, and the Ministry of Education opened up an online survey. Over 25,000 New Zealanders have let us know what it is that they value in the education sector.
In addition to those surveys, I’ve gone out as the Associate Minister of Education to seek additional voices from ethnic communities as well as specific communities, because we are very focused on ensuring that we get the voices of our ethnic communities and Pacific communities heard as we look at the education system moving forward. Thank you very much, Mr Speaker.
KANWALJIT SINGH BAKSHI (National): Thank you, Mr Speaker, for the opportunity to participate in this general debate. It’s my pleasure to follow the Hon Jenny Salesa, whom I respect as the Minister for Ethnic Communities, and I do appreciate her presence at a number of occasions.
It was a very good speech, but I don’t agree with a lot of facts that she has proposed in her speech. First of all, she mentioned that they promised 6,400 houses. I think the promise was 10,000 houses. What have we got in the first year? We’ve got just 18 houses, and those 18 houses were consented and started construction during National’s reign. So I totally disagree with what the Minister is trying to claim.
The last point which the Minister picked up on was about ethnic communities and language. Here I would like to make a request to her. The point is that we have got a private member’s bill by the Hon Nikki Kaye which gives opportunities for primary and intermediate schools to opt for a second language. We know, because we are in Opposition, that we don’t have a majority. I request her to support that bill of the Hon Nikki Kaye, to make sure—because she is consulting, but we are proposing a bill which will ensure that a second language can be an option for primary and intermediate schools. I hope she will listen to it.
Further, she mentioned about championing South Auckland. I would like to share some figures with her which are very important. If we compare the waiting list for housing in December 2017, the waiting list was 58 in Howick; today, it is 100. In 2017, in Māngere-Ōtāhuhu the waiting list was 271; now it is 431. In Manurewa, it was 278; today, it is 377. If we total up all the areas in South Auckland, the total waiting list in December 2017 was 1,008, and today it is 1,546. The point which the Minister brought up—that people are sleeping in cars and parks and garages—I agree with, but nothing has improved under this Government, who claim that they are the champions for the people and they are looking after the people.
Another point which I would like to touch upon is the increasing living cost, which is the biggest issue in South Auckland. When I go out and about, people are talking about how much costs are increasing: rents are increasing, petrol prices are increasing, and a number of others. If they go do the groceries, where earlier they used to spend a certain amount, today they are spending more than that. For the benefit of some of the Government benches, the petrol price—I would like to share that if you filled up a petrol tank of 50 litres last year, it was approximately $90. Today, it is $120 approximately—not exactly but approximately. That shows that there has been a substantial increase in petrol prices. When this side of the House asks questions about it, none of the Ministers have that answer. I hope that this will clarify to them what the price is right now.
Another point which I would like to touch upon is that the Hon Grant Robertson mentioned the poll yesterday, but he did not mention a very important point: that business confidence is going down. Forty-one percent of people surveyed said they don’t have any confidence in this Government; the businesses will be doing worse than what they are doing today. Grant Robertson did not touch on that point because it did not benefit him. He could not answer why we are losing business confidence.
Another thing which we need to understand is that because of the loss of this business confidence, the dollar is dropping. That is why the petrol price is increasing. That increases the GST also, and this Government is not committing at all to reduce either GST or excise, which is really hurting the back pocket of the ordinary Kiwi and which is hurting the families.
We know that in this country we have—
SPEAKER: Order! The member’s time has expired.
Hon DAMIEN O'CONNOR (Minister of Agriculture): I’ve been to a few first birthday parties in my life; this is the sixth most significant. The five others have been my daughters’; this is the sixth most significant first birthday party I have been to. And you know what? The country is celebrating. We’re part of a united, strong, and focused Government, and I am never more proud in my life to be part of this team.
What we have on the other side—firstly, I’d like to thank New Zealand First Deputy Prime Minister Mr Peters for his part in bringing this Government together, and the Greens for being part of a strong coalition Government. On the other side of the House—it’s hard to explain them. It’s a group of people that you would think don’t still have a bad taste of post-election blues; they still are a case of post-election blues—a bad case. There’s a front bench there of wannabes—people who, like when in Government, were happier to burn bridges than to build them, and we came in facing huge challenges across every sector of our society.
I have to say that I have been very, very proud to be part of a Government that’s shown the way in housing; that is getting on and putting the money in place to build houses and to offer security to New Zealanders. This is a Government that’s committed $75, on average, to over 300,000 families in this country who need that money, because we accept that wages have been driven too low under the previous National Government and we have to lift them. We’re committed to a living wage for all core Government-sector employees, and I am proud of that. But in my areas, in particular, in terms of the primary sectors, we have 65 percent of sheep and beef farmers—not a traditional area of our supporters—who are optimistic about the future under a coalition Government of New Zealand First, the Greens, and Labour. I’m very proud of that.
What we’ve done is show leadership where it’s counted. We’ve gone out, formed the Primary Sector Council, and said that we must establish a vision for the primary sectors in this country because the previous Government had none—no idea where we were going. We say we need to know where we are going, not just to encourage farmers to do more but to get more for what they do. That’s the key difference between the previous Government and this Government.
We accept there are environmental limits. We accept that we have to pay people more for their efforts. We accept that we want to produce the finest goods in the world, and there must be a plan to do that. The previous Government just said to farmers, “Get on and export more, and we’ll all be better off.”
Mānuka honey standards—something the previous Government had completely ignored, to the point where our reputation internationally was at risk. We’ve gone in, we’ve established a standard, and we’re now saying to those people exporting, “Adhere to this standard or we’ll come down hard on you.”
We’ve put more money—
Hon Mark Mitchell: Health.
Hon DAMIEN O'CONNOR: —$5 million into OVERSEER. Oh, health—I’ll leave that to my other colleagues, for the hundreds of millions of dollars that we’re committing to health. In my own electorate, a Grey Base Hospital rebuild—complete chaos; a plan that did not have space for people to run administration. That’s how chaotic it was. We’ve had to step in and commit the money to complete that rebuild—one of many, many projects across health.
Across education—in my electorate, a $33 million cheque to Tai Poutini Polytechnic. Why? Because nine years of National Government oversight had almost destroyed that polytech for my region. My colleague the Hon Chris Hipkins—I have to thank him for that—was prepared to front up, write a cheque for $33 million, and get in there and sort out what is a crucial institution for the future of our region. That story is repeated time and time again around this country, where every time we tip over a rock we find some dirty National Party turd there that they tried to hide from the rest of the country.
We are committed to building a better, fairer Government; a place where every New Zealander has an opportunity. We’re doing it in conjunction with two parties that are committed to that better future as well, New Zealand First and the Green Party. Finding the right balance between sound environmental protection, regional economic development—putting a billion dollars a year to grow and support the population that drives the economies of this country. That’s why the country always does better when we’re in Government. They are a sad, sad case of post-election blues—
SPEAKER: Order! The member’s time has expired.
Hon MAGGIE BARRY (National—North Shore): Thank you, Mr Speaker. You may remember the song, the old song, “Another Day Over and Deeper in Debt”. Well, it’s been 365-odd days—a very long year—and we have gone deeper and deeper into debt. We left them awash with cash. What have they done? They have taxed and spent and borrowed. This is typical of core Labour values.
When we look at the roll call of dubious achievements in that year it makes for very chilling reading, so we are spoilt for choice as to what is the worst. I’ve been looking through the archives trying to figure out, is it the falling dollar? Is it the rising fuel prices and the ill-thought-through policies? They’re all driving up the cost of living for hard-working Kiwi families. These things are all bad enough.
But let’s try and be fair to the Government, just for a moment. There have been a number of dramatic increases under their watch. The cost of living is rising, much faster than wages in the last quarter. Rents are higher, rising around $20 each week, on average. And there’s been a 9,000 increase in the number of people on benefits. Aren’t these remarkable achievements, and isn’t that typical core Labour—cradle to the grave dependency? Keep them on the benefit, keep them dependent, take away their mana and their self-respect, and they’ll keep voting for you. I think that’s the old logic—used to be, back in the day—and it doesn’t seem to have changed the refrain of this Government.
Working groups galore—it’s hard to keep track. I did look it up though: 185 to date.
Simon O'Connor: How many?
Hon MAGGIE BARRY: 185, and at around a million dollars each, that’s $185 million that could be better spent on making life better for New Zealanders—creating work, making jobs, making the economy more stable—but instead of that, they continue to spend.
I guess, when you look at the number of people on strike, that is another thing that’s really biting hard. In Auckland there was chaos yesterday, and in Hamilton; tomorrow is Wellington’s turn. So the bus drivers are out on strike. The transport unions are having a lovely old time of it, again harking back to the day when there were wage rounds. In the mid-1980s, when I was a presenter on Morning Report, Geoff Robinson and I would toss a coin as to who was the lucky one to get the wage round, industrial union strife interview done for that day, and the cycle is repeating itself again. The same old problems are emerging with a Government—as we heard Iain Lees-Galloway bellowing today—very happy that people are going on strike, because at last they’re being listened to and paid attention to. Teachers, nurses—people who are feeling now that the opportunities are there for them, and if they’re there for one group, why not for the other. So there is a growing momentum around all of this.
Apparently, we New Zealanders just need to get used to it. The reality is that more people are going on strikes this year than at any other time in the last 30 years. You have to go back to 1989 to find a bumper selection of strikes like the ones we have been experiencing. So the unions are clearly running the show over there. It’s payback time, and they’re gearing up for a bumper year next year.
We are spoilt for choice, but which one of the very many taxes and the very many increases that this Government has brought in should we highlight the most? Well, for my part of the world, in the North Shore, it has to be the fuel tax. We’ve seen petrol prices up 19 percent in the past year. In most parts of the country, petrol has gone up 10 percent a litre; in Auckland, that’s 20 cents a litre and climbing. People come in to my Takapuna electorate office and they say, “How are we going to do business? How are we going to manage to keep our trucks on the road?” How are the people who are doing the trading, the building, all of these things—these are very difficult times. You could ask them to catch a bus, but oh dear—that’s right, the buses are on strike. No use for that—and the seniors who are carpooling, who could not afford to fill their tanks to go away at Labour Day weekend to visit their families because of the additional charges.
The regions are feeling the pain as well. I was in Taranaki and New Plymouth last Monday and they were absolutely astonished. We talked about evidence-based decisions that are made. We know from our Official Information Act requests that there were no Cabinet papers, there was no advice on this Taranaki oil and gas ban—they just did it. It was a nice soundbite overseas. Who knows about the motivation? What I know is the reality of what’s happening in the regions and what people are saying to us. All of our National MPs are hearing the same refrain: they cannot afford to do business and to keep their local, regional, and community economies working. It’s just too hard under this Government.
When we look at job creation, which we did very well at—up to 10,000 a month; it’s now down to 4,000 and decreasing. These are dark days for New Zealand. One year on, we are deeper in debt, more despondent than ever and there needs to be hope. That Government, on the other side of the House, is not giving it to anybody.
SPEAKER: Order! The member’s time has expired.
Dr LIZ CRAIG (Labour): Thank you, Mr Speaker, and what a grim speech to follow. I think it’s completely in contrast to the mood last night when many of us got together to celebrate our one year in Government, because it’s been a stunning year full of absolutely brilliant achievements. Somebody asked me—
Hon Member: Is that why you will look so hung-over?
SPEAKER: Order! The member will not reflect on me in that way.
Dr LIZ CRAIG: —to write a piece reflecting back, as a new MP, on what surprised me the most about our first year in Government. I think the key theme that I was thinking about was, (1), escaping Groundhog Day—and I’ll explain a bit about that in a minute—but, secondly, just how quickly a Government can move on the things that it decides are important.
I think many of us know that I got into Parliament because I was interested in addressing the issues around child poverty. You know, we were seeing high child-poverty rates, thousands of kids getting into hospital with poverty-related diseases. When the global financial crisis hit, back in 2008, we were thinking we were going to be having these huge rises in unemployment. A lot of us got quite concerned and we set up this thing called the Child Poverty Monitor. What we said is that we would monitor the well-being of children every year until their economic position improved.
I think what came to pass is something a bit like Groundhog Day. So, every year we would update that monitor and every year the findings would be exactly the same. We had high child poverty rates. We had thousands of sick kids coming into hospital for poverty-related diseases. As a group of child health advocates, we got together and we always advocated for exactly the same three things. We wanted measures to address child poverty to improve family incomes, we wanted measures to improve cold, damp, crappy housing, and we wanted kids to have better access to GPs and primary care. Every year, we would say those same three things, and every year, there would be a huge outpouring of public concern, but what happened was, once the media coverage abated, nothing happened. The same old, same old, and we turned up and did it all over again.
I think what surprised me the most, coming in as a new MP, was just how quickly the new Government acted on measures to address child poverty. We got into Government in October, and by Christmas, sitting in the House, we were passing that legislation. So what the Families Package did was it put 60 bucks extra a week into the back pockets of families of newborn babies, and that extended right out into the third year for low and middle income earners. We increased the accommodation supplement. We increased Working for Families. For families on benefits, we gave them an winter energy payment so that they could turn the heater on, so kids could be warm in winter and not get respiratory infections. So we did a whole lot of things immediately upon entering Government, including extending paid parental leave so parents could stay home and care for their kids that little bit longer.
So, for me, it was quite an emotional moment. I remember sitting as the Families Package passed, probably just over there at the back of the House, and looking down at that bill and thinking of all the stuff we’d been advocating for over those 10 years. It all, at the time, seemed really, really hard, but all of a sudden, it was so simple. It was just in law.
Then we went over Christmas and had a bit of time just to reflect, but coming back, the first thing up was the Child Poverty Reduction Bill. I remember sitting, again, listening to the debates in the House under the previous Government about how hard it was to actually measure child poverty—how we couldn’t do it—but within that first 100 days in Government, we had the legislation in saying, “We will measure and monitor child poverty, we will ensure that Governments are held to account on their performance on child poverty, and we will make sure that strategies and plans are in place to address it.” So, for me, just thinking through—as an advocate, it seemed so hard and so many of us fought for so long, and yet coming in, when the new Government made up its mind to do those things and to move on those things, it was just so simple.
But the problem is that I actually also live in a community, and I’m also very aware that some things are easy to legislate for but that others will take time. Down our way, we’ve sold off so many of our State houses, it’s going to take time to rebuild them. We’ve got this huge shortage and an acute emergency in social housing. It’s going to take time to rebuild. Many of our families have been living on low incomes for many, many years. Their reserves are gone and they’re in debt, and as those incomes rise, it’s going to take time for those reserves to build back up. We’ve put massive investments into health and into education, but, again, it’s going to take time to filter through so that those workforce pressures and other things start to ease.
But, irrespective of the hard journey ahead, I’m absolutely proud to be part of this Government and of our first year and what we’ve achieved. Thank you.
MATT DOOCEY (National—Waimakariri): Thank you very much, Mr Speaker. That last speaker, Dr Liz Craig, I think, typifies this Government: it’s all about slogans. Yes, talking about child poverty—talking about it doesn’t address it. How about the 9,000 extra people who are on a benefit this year? How about the 10,000 jobs a month being cut to 4,000? Talk about poverty—they’re the drivers. Get people off benefits and into work. Don’t give us a lecture on slogans. Tell us what’s happening out in the real world, and in the real world, people are hurting.
Then we had the Hon Damien O’Connor. He—
SPEAKER: Order! Order!
MATT DOOCEY: Sorry?
SPEAKER: No, sorry. I’m just trying to draw the attention of the Minister who’s been standing in an inappropriate manner for some time.
MATT DOOCEY: Then we had the Hon Damien O’Connor refer to their first year of tenure as a kids’ party. In fact, that’s exactly what it feels like: immature decisions—and impulsive—with total disregard of who’s going to pay for it. And who’s going to pay for it? The taxpayer—the taxpayer is bankrolling this Government’s poor policy decisions.
Look at the fees-free policy.
Kieran McAnulty: Great idea.
MATT DOOCEY: What an embarrassment. What an embarrassment, and Kieran McAnulty yells out—
Kieran McAnulty: Sit down.
MATT DOOCEY: —“Great idea.” “Great idea.” is what he yelled out, and there he goes. He knows that his Government’s got reports that a third of tertiary students drop out after their first year. A third of that money is wasted, and the poor taxpayers are bankrolling their bad policy. Mr McAnulty will sit there, and he’ll call out “Sit down.” and “Stand up.”, but the reality is that he knows. Yes, in his first election, he didn’t win and he’ll be thinking, “Hmm, they probably won’t stick with me for the second one if I don’t win in my seat.”, and it’s policies like that that frustrate the voter, because if you go out and talk to them now, what are they frustrated about?
Kieran McAnulty: Simon.
MATT DOOCEY: Fuel tax. Fuel tax, that’s—and see, here we go. He carries on about beltway issues. He’s in the bubble. He’s got no idea what’s frustrating taxpayers at the moment, because the reality is that after one year, what’s been shown by this Government? They actually don’t care about hard-working Kiwis. They don’t care about hard-working Kiwis, because if they did, they would axe the Auckland regional fuel tax. They’re stubbornly denying it because, as we’ve seen, with that Auckland regional tax, the flow-on effect is driving up—
Dr Duncan Webb: Are you from Auckland?
MATT DOOCEY: —petrol prices across New Zealand. Here we have Duncan Webb yelling out, as well. He will know, because I know he’s an MP on the ground. He will know. He’s getting feedback—
Dr Duncan Webb: Talk about Christchurch, Matt.
MATT DOOCEY: Sorry?
Dr Duncan Webb: What about your people?
MATT DOOCEY: Yes, what about my people, Duncan Webb? I’ll tell you what they’re upset about. It’s you cancelling the Belfast to Pegasus motorway, and do you know why? Because you’ve stripped $5 billion out of the State regional funding. The New Zealand Transport Agency turned up to the Woodend residents’ AGM a couple of weeks ago and said that the Woodend bypass is now off the table because the new Government has new priorities for prioritising funding for Auckland public transport projects.
You challenged me on the people I represent—what’s on their minds? Why are they paying money into the Government coffers to pay for a tram in Auckland when you’re cancelling a motorway that’s much needed in a high-growth area of Waimakariri—that’s what my constituents are saying.
After one year, you tell me who cares for hard-working Kiwi families. I’ll tell you what; it’s the National Party, for standing up for them and for making sure that you guys are held to account, and where did we see that today? Question time. If it wasn’t for Simon Bridges, the leader of the National Party, holding the Prime Minister to account, we would have had a flip-flop on your regional tax, because, I’ll tell you what—
SPEAKER: Order! The member’s time has expired.
Dr DUNCAN WEBB (Labour—Christchurch Central): Beltway issue—beltway issue? Well, I’ll tell you what, 93 percent of New Zealanders don’t think it’s a beltway issue. It might be a belt issue, but not a beltway issue.
Now, look, I’ll tell you what: I’m disappointed with you, Mr Doocey, because you’re a decent bloke, and the only thing you can talk about—
SPEAKER: Order!
Dr DUNCAN WEBB: —for your constituents is another—
SPEAKER: Order!
Dr DUNCAN WEBB: —motorway.
SPEAKER: Me.
Dr DUNCAN WEBB: Sorry, Mr Speaker.
SPEAKER: Just get it right.
Dr DUNCAN WEBB: All Mr Doocey can speak about is his motorway. Well, I’ll tell you what: there’s $176 million going into Canterbury transport projects, but it’s not just about cars across to “Waimak” bridge. It’s $17 million into public transport in Canterbury. That’s what we need—some new thinking, Mr Doocey, not the old, stagnant, stilted thinking. You know, I know you feel for your constituents, and I feel sorry for you because in the last Government, do you know what? [Speaker puts his head in his hands] Nothing happened for Christchurch—sorry, Mr Speaker. Nothing happened for Christchurch, Mr Doocey, and you had to stand by and watch. Things have changed.
In Christchurch, there has been a sea change. Whilst all of those anchor projects in my electorate were stalled because that lot couldn’t get on with it, all of a sudden, things have changed. The first thing that happened was that concrete got poured on the convention centre. Seventy-five million dollars was trimmed off the budget for the Metro Sports Facility—that’s under way. Congratulations to the Christchurch City Council—$5 million to Tūranga, the city library. All of a sudden, these anchor projects—all of which were supposed to be complete before we assumed Government—have now, finally, got under way.
I’m excited about being able to go to the town hall next year—another project that was languishing whilst the National Government ignored Christchurch. And look at what else has gone on: if you look at the wider projects that have all of a sudden been stimulated, even Hoyts Cinemas has now got the confidence to build in the inner city—opened recently. The Christchurch inner city has been given a vibrancy that it lacked under that Government, and that is all within a year—not six years, not seven years; in one year, things have changed.
And what’s more, we’re looking now much more closely at the heartbreak that genuine hard-working New Zealanders have suffered through the Earthquake Commission (EQC) debacle under the last Minister. The current Minister has taken that by the throat and given it a good shake, and all of the statistics have changed: 46 percent of the claims that were open in May have been closed.
Hon Member: How many?
Dr DUNCAN WEBB: 46 percent. You know, that’s amazing. You’re absolutely right. Claims are being closed 33 percent faster than they were before. And you know what? One hundred and sixty three claims a week are being closed now—that’s up 40 percent. That was hopeless before. Why? Poor and broken leadership—stalled, backlogged, and gridlocked. Things have changed.
Now, six years later than it should be, we’re getting an earthquake tribunal—a tribunal that will look after ordinary homeowners and their claims. This is something that’s been needed a long time; this Government’s doing it. We even had to save the Residential Advisory Service—not an expensive service, but one that National thought was no longer needed, notwithstanding all the claims that were still out there. What’s more, it’s being beefed up. It’s being turned into the Greater Christchurch Claims Resolution Service—EQC and Southern Response insurers coming together, putting a system together, and getting on with the job. This is a huge change.
But it’s not all about earthquakes. There’s a whole lot more going on in Christchurch and elsewhere, looking after our rangatahi—mental health for every schoolchild in Christchurch. That is absolutely needed—something that we have been needing for a long time—and it’s going to be rolled out more widely. We know—we absolutely know—that this is a huge issue across the country. Access to primary mental health care is something that’s been needed for a long, long time. All of a sudden, what we have is critical mass. What we have is leadership. We’ve reached a tipping point in Christchurch and across the country. What we have is a sense of optimism, a sense of the future, and the fact that we’re going to get on with the job, start working, and keep going. I’m proud: in one year, things have changed. Things are going to keep going, keep changing and changing and changing for the better.
IAN McKELVIE (National—Rangitīkei): Thank you, Mr Speaker. The great thing about speaking last in the general debate is you get to hear an awful lot of nonsense in the course of a day. I want to start with a couple of pearls of nonsense I’ve heard today. One is from Minister Jones, about the great job he’s done increasing the regional population in New Zealand. That population statistic that he was claiming, of course, was to the beginning of June or the end of June this year, and that, clearly, was as a result of the last nine years of very strong policy, not as a result of a bit of cash he sprayed around in the short time he’s been the Minister.
The next thing I want to touch on was the Minister of primary industries—the Minister of Agriculture, I think he’s called now—who spent two minutes talking about everything but his own sector. So he took exactly one minute and 43 seconds, actually, to get on to primary industries at all, and when he did he claimed what a great success he’d made of the sheep and beef sector in his six or eight months of dealing with us. Of course, the ram went out before he became the Minister, but we’ll put that aside too. So whilst he was right about the fact that that sector is doing extremely well, it’s also propping up the Government’s tax take, so that’s a great piece of news for rural New Zealand.
I just want to get back to the regional population stuff for a minute and talk about Ruapehu alpine lifts in the north of the Rangitīkei electorate, where we’ve seen an extraordinarily good ski season—thanks to the weather, to some extent, but also thanks to a very good organisation that’s putting in place some very strong regional strategy. And, of course, we’ve seen populations in those areas increase because there’s a whole lot of opportunity being created there in the last few years that has suddenly come to fruition.
Last Friday, I had the opportunity to go to the Massey University agricultural awards at Massey University in Palmerston North on Friday night and to see the young people coming through in that sector as a result of, I guess, the change in fortune of agriculture in New Zealand and the primary industries doing really well. It’s very exciting—a whole lot of young people coming through in that sector that I think—really exciting for us.
This is a Government that’s full of surprises—expensive surprises—and I want to talk about two or three of them. One I came across today. I found this map in my travels today, and I just thought it was, obviously, a map of the blue voters in the Rangitīkei electorate, because it’s pretty much covered in blue—my electorate. And I thought that’s pretty encouraging, until I found out it was the new trees the Minister is proposing to plant in the Rangitīkei electorate. So instead of having a few sheep dotted around my electorate, we’re going to have a whole lot of trees and no people at all, and they’ll all exit the Rangitīkei electorate—off to Auckland they’ll go. This is the sort of danger we run with policy—I’m not going to say made on the hoof, because it’s been around for a little while—that doesn’t give a whole lot of thought to the outcomes. And I think that’s a great concern when you see electorates like the Rangitīkei pretty much covered in trees. Rangitīkei, of course, currently is the biggest sheep-breeding electorate in New Zealand. That’s a talent for us.
The next thing I want to touch on was the oil and gas decision. I, of course, live very close to Palmerston North, a city that’s pretty much built its infrastructure on gas supply. It was one of the first cities in New Zealand to have a gas pipeline to it, and, as a consequence of that, they undertook to deal with a whole lot of gas in that city. Very encouraging, and you’ve got to wonder—and there’s a lot of businesses wondering—about their future as a result of that oil and gas decision.
The third thing I want to talk about is the working-party issue. I hear there’s some 180 of those working parties. Well, the one, interestingly, that’s just reported back to Parliament is the one I want to deal with, and that’s the Messara report, which deals with the racing industry—an industry which is certainly dear to my heart. I was virtually brought up in it, I guess. There’s no question that that industry does need restructure, and we in the National Party understand the need for that restructure, and we certainly support parts of that report.
However, there’s some great challenges in that report as well—also from a regional perspective—and so, whilst we’ve got the Minister who proclaims he’s the regional champion on the other side of the House, we have his party as well looking at perhaps the potential to undermine a whole lot of regional infrastructure that deals to the racing industry, that provides entertainment for those communities, and that builds the spirit of those communities, and things like that. Part three of the Messara report deals with that infrastructure in regional New Zealand, and it certainly needs to be considered in a much different manner than that report has put forward. I think that that issue will clearly be debated as the result of this report moves its way into legislation. It’s an issue that we’re very interested in and will be very concerned about.
In that case, the report also appears to have picked up some very good work the industry undertook, but, unfortunately, it’s introduced it into the report in a manner that won’t last.
The debate having concluded, the motion lapsed.
Bills
Trans-Pacific Partnership Agreement (CPTPP) Amendment Bill
Third Reading
Hon DAMIEN O'CONNOR (Minister of State for Trade and Export Growth): I move, That the Trans-Pacific Partnership Agreement (CPTPP) Amendment Bill be now read a third time.
The purpose of this legislation is to enable New Zealand to meet the obligations in the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) trade agreement when the CPTPP enters into force for New Zealand. This will occur 60 days after New Zealand and at least five other signatories have ratified the agreement.
In order to implement the CPTPP, changes are needed to the following legislation, and I’ll list those. Firstly, changes are needed to the Tariff Act 1988, so that New Zealand can provide preferential tariff rates for CPTPP countries. The bill also provides for the imposition of safeguards on CPTPP imports if, for example, goods from another party are causing injury to domestic industry.
The second piece of legislation is the Hazardous Substances and New Organisms Act 1996. It will be amended to extend the comment period for technical regulations that are notified under the relevant provision of this Act from 30 days out to 60 days. Thirdly, the Legislation Act 2012 will be amended to lift investment screening thresholds for significant business assets from $100 million to $200 million for relevant investors.
Fourthly, the bill amends the Copyright Act 1994 to provide new rights for performers and additional enforcement mechanisms for pirated copyright works. The Patents Act of 2013 will be amended to provide a 12-month grace period for patent applications if inventors disclose their inventions to the public. The Trade Marks Act 2002 will be amended to provide additional enforcement mechanisms for trade mark infringements. And some changes will also be made to the Wine Regulations of 2006 to restrict the export of wine labelled “ice wine” unless it is made from grapes frozen on the vine.
As the Minister for Trade and Export Growth, David Parker, has outlined previously to the House here, the CPTPP will bring commercial, strategic, and sustainability benefits to New Zealand. For these reasons the legislation has this coalition Government’s support, minus one party. In terms of sustainability, the CPTPP goes beyond just reducing costs for business; it contains the most comprehensive outcomes on labour and environment that New Zealand has ever achieved in a trade agreement. These are legally enforceable for the first time. Suspensions and side letters negotiated since the Trans-Pacific Partnership (TPP) have reduced the risk of investor-State dispute settlement being used. The CPTPP preserves New Zealand’s right to make laws to protect the public interest and our environment, and it upholds the Treaty of Waitangi.
Commercially, the CPTPP also matters. It gives New Zealand improved trading conditions with 480 million consumers across 11 countries, including four of our top 10 trading partners and four countries—Japan, Mexico, Canada, and Peru—where we do not yet have a trade agreement. This grouping already buys around one-third of New Zealand’s goods and service exports and we expect this to grow, creating more jobs and better standards of living for all New Zealanders.
Finally, the CPTPP is important strategically. At a time when we are seeing serious and growing challenges to the global trade environment, it is more important than ever for New Zealand to be part of an agreement that provides for a robust set of international trade rules in our region, as well as for New Zealand to be in a position to help shape and inform these rules into the future.
I would like to take the opportunity to thank everyone who’s contributed to the legislation: the previous Ministers involved in the negotiating of the TPP, but, more particularly, Minister Parker; the chair of the select committee, Simon O’Connor, and all other members of the Foreign Affairs, Defence and Trade Committee; the Parliamentary Counsel Office; the officials; and members of the public and industry representatives who have participated in the various submission processes.
I’d also like to acknowledge the recent committee of the whole House and thank the New Zealand National Party and the New Zealand First Party for their work on, and their support of, this legislation. Lastly, I would like to again thank all the officials for their hard work and their dedication throughout the challenging negotiation process to deliver CPTPP—a comprehensive and progressive agreement for New Zealand. It is a tremendous achievement that they should feel very proud of. I commend this bill to the House and I move that it be read a third time.
Hon TODD McCLAY (National—Rotorua): Madam Assistant Speaker, thank you, and it gives me great pleasure to stand and speak in this debate. This is the second time this House has had a third reading on the vast, vast majority of this legislation, and I do want to commend the Government for the position they have taken on trade following the election, because when we had the debate on the original Trans-Pacific Partnership (TPP)—I think it was in November two years ago; in fact, I think it was 15 November 2016 that this House had the third reading and voted on the TPP legislation—the majority was much thinner than it is today.
What I thought I might do, because this is something that this House has considered on many occasions and so many New Zealanders have paid more attention to trade and TPP than any other trade deal New Zealand has ever done, is talk a bit about the genesis of where the agreement we have before us today to vote on came from. It actually came from a strategy that Labour, when last in Government, saw some of, but it wasn’t until there was a change of Government, and we came in under National at the beginning of our time a decade ago, that actually the first steps were taken towards where we’ve arrived. You see, the Trans-Pacific Strategic Economic Partnership Agreement (P4) was between New Zealand, Singapore, Brunei, and Chile, and it was a very high-quality agreement—one of the better ones we had signed at the time—and the idea was that those four countries would come together and then look to bring America into the fold, into that P4, to have a trade agreement that would reach across the Pacific from Asia across to South America, North America, and down to New Zealand in the south.
In February of 2008, that strategy worked. The US joined the negotiation, joined the P4 for what had become TPP—the TPP negotiation was launched. In November of that year, Australia, Peru, and Vietnam joined the negotiation. In October 2010, Malaysia joined; in October 2012, Mexico and Canada; and then, finally, in May of 2013, Japan joined as well. And over many, many years of negotiation, finally the TPP was concluded and it was signed in Auckland on 4 February 2016.
The reason that I’ve gone through that is that a strategy for a small country like New Zealand to be able to do high-quality trade deals with very, very large countries is not straightforward; in fact, it’s not easy for us on the world stage. Indeed, the strategy that was developed by some of the best trade minds anywhere in the world, who sit in the Ministry of Foreign Affairs and Trade, was to bring others into the fold to negotiate with us so that the large countries of the world that New Zealand absolutely needs a trade deal with would come to the party.
I think that the final vote and reading of this legislation today says that the National Government, over that period of time, was right to push ahead with the TPP negotiation and we were right to conclude it and sign it in the face of significant opposition from parties in this House and from people in New Zealand. I would say to those in Government who are now supporting it—the Labour Party and New Zealand First Party—that if we had not pushed on, if we had not concluded, if we had not decided to go onto the world stage to tell others that there was still a deal to be done, if TPP hadn’t been concluded, they wouldn’t have been able to make that speech today about the good of this trade deal and what it will deliver for New Zealand.
You see, TPP was a high-quality deal. Of any trade deal that we’ve had, it was our most lucrative deal negotiated and signed. It had safeguards in it. It was the first free-trade agreement with five countries that are of importance to New Zealand today or of growing importance in the future. We know it was a high-quality deal that was open to others, with safeguards that New Zealanders needed, because there had been very few changes made to it. And, as far as New Zealand’s access to these remaining countries with the revised TPP, there is no change. It was good enough in TPP and it’s good enough today—or the other way round; for the Government today, if the access that New Zealand has through the revised TPP is good enough today, then it must have been good enough in the original TPP because that access has not changed.
We’ve since then seen, as far as TPP is concerned, other countries say they believed it was high quality and they too wanted to join. I ask—this is a question but it really is a statement: if so many other countries were interested in the original TPP deal and that the revised TPP deal has “minor” amendments to it, then actually it was a high-quality deal that was in the best interests of New Zealand. Columbia, the Philippines, Thailand, the Republic of China, South Korea, Indonesia, Sri Lanka—all formerly said they intended to join the TPP. I encourage them to join the revised TPP that this House will pass today.
The original TPP had significant tariff reductions in it. Beef exports to Japan—we will have the lowest tariff of any country in the world. Our beef exporters will be competitive in that market. In kiwifruit, Japan is one of the most lucrative, most important markets for us. The tariff rate will fall away to zero. Under the original TPP, New Zealanders will sell avocados to Mexico, the world’s largest avocado producer. Then, in fact, as far as dairy was concerned, when the US was in there, it’s our number one dairy market. We had substantive gains there as well.
It had a lot of protections in it. The Pharmac model was protected. We’ve heard the current Prime Minister say that actually Pharmac was not up for grabs and that it was well protected, but as part of the negotiation there afterwards, that has been taken away.
The investor-State dispute settlement (ISDS) clause that concerns many in this House and many New Zealanders around the country—the original TPP excluded 80 percent of all foreign direct investment to New Zealand from ISDS under that agreement. As far as the revised TPP is concerned, it is correct that the new Government has signed an additional five side letters to exclude ISDS from those countries. It relates to 80.2 percent of foreign direct investment. So TPP excluded 80 percent of foreign direct investment; the additional five side letters that have been signed by this Government in the revised TPP means an additional 0.2 percent of foreign direct investment to New Zealand is now excluded. Is that significant? No, it’s not. But if that’s what it took to get New Zealand First and Labour to vote for a deal that is high quality and good for New Zealand, we’ll let them go out and talk about the importance of that 0.2 percent, because we are voting for something that’s important in this House.
We had a very long process both with the original TPP and the revised TPP. They were almost identical. There were public meetings around the country for New Zealanders to come and learn and have their say. The difference was there were more than 50 public meetings under the original TPP; there were far fewer under the revised TPP. But that’s not important. In both cases, the public was given an opportunity to have their say. There was a full parliamentary procedure for the original TPP, as there has been for the revised TPP.
The final thing I want to do is talk about how this deal arrived here today. When we had the third reading of the original Trans-Pacific Partnership Agreement Amendment Bill, members of the Labour Party stood up and said it was a waste of time, it was over, it was dead, and we were wasting the House’s time. Well, actually, New Zealand officials and me as trade Minister got on planes and we visited countries in short shifts to convince them it was worth going ahead without the US. In a week, we visited Australia, Japan, Mexico, and Singapore. We then went on to Vietnam, Malaysia, and Chile. We held meetings in London with all of the countries. We went to Chile twice. Officials went to Japan on a number of occasions with the Prime Minister. We went back to Japan to convince them that this was a worthwhile deal to go ahead with, without the US.
We held a full meeting in Vietnam where New Zealand was asked to co-chair at ministerial level and where agreement was reached that we would try to get this there by the end of the year. Hundreds of our officials over a decade have worked on the original TPP and the revised TPP. There are far too many to be able to name here today. To all of them, everybody in New Zealand that has a job as a result of trade, who has a company because they trade and they export, owes them a huge debt of gratitude.
In particular, the two people I want to recognise and mention are David Walker, who was a chief trade negotiator over the TPP, who is now our ambassador in the World Trade Organization in Geneva, and Vangelis Vitalis, who came back from Geneva and spearheaded, on behalf of every single revised TPP country, the fight to make sure TPP would be delivered for New Zealand. It’s to them we owe the credit. It’s to them that New Zealanders have their jobs. I absolutely commend this bill to the House.
LOUISA WALL (Labour—Manurewa): Malo ni, e Te Māngai o Te Whare. Tēnā koutou katoa. It’s my pleasure as a member of the Foreign Affairs, Defence and Trade Committee to speak in this third reading of the Trans-Pacific Partnership Agreement (CPTPP) Amendment Bill. Firstly, I want to congratulate Minister Parker for progressing this piece of legislation through the House, and also his officials. I want to concur with the Hon Todd McClay that this process actually started in 2005, so it’s been a long time in its gestation. But, can I say, today it has support mostly across the House. It was passed by a majority in the select committee, but I know that the Green Party, specifically, do not support this agreement.
What this particular bill does, essentially, is to amend the Trans-Pacific Partnership Agreement Amendment Act, which will enable us to ratify the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which was signed on 8 March this year in Chile. In doing so, we will join Mexico, Japan, and Singapore, who have progressed their domestic legislation, and once ours goes through we need two more of our partners in this agreement—either Australia, Brunei, Canada, Chile, Malaysia, Peru, or Vietnam—for it then to come into force, 60 days after that sixth country has ratified the agreement.
Throughout the process, I have to say, we have had a lot of submissions. So I want to acknowledge the 577 submissions that we received, and the 33 submitters who presented to the select committee.
The issue about whether we trade or not is a moot point. The reality is we have to. We have to trade because through our trading sector, we provide jobs and opportunities for our farmers, our agricultural sector, our horticultural sector, our manufacturers—
Chris Bishop: We don’t have to trade.
LOUISA WALL: —which essentially—“We don’t have to farm,” says Chris Bishop. It’s one of the things that we do. So the businesses that we have in New Zealand, essentially, now have access to a market that includes 480 million consumers. We, currently, in terms of our exports, are—it totals $70-plus billion per annum. So the opportunity that we see as a country through trade is, obviously, to service those consumers and to provide better opportunities for our business owners and our sectors in New Zealand that are employing New Zealanders and contributing to our country.
I do want to take the opportunity, though, to highlight some of the issues specifically that have been raised through this entire process about how trade necessarily needs to ensure that women are supported in the process, how indigenous peoples are supported in the process of trade, and how labour rights and wages need to reflect, I guess, everybody’s contribution to the process.
There are people who believe that the people who were doing all the work actually don’t share in the spoils of trade. The reason I choose to focus on that is that through that CPTPP coming into force, there will be the creation of specific committees that will look at those specific areas. How is the trade agenda benefiting women? How are women going to be part of this process? How can the CPTPP benefit indigenous communities? What are the specific opportunities?
I think, for me, that’s what makes this piece of legislation and this agreement comprehensive and progressive. For the first time, we actually will be deliberate in our attempts to engage with sectors of society that, historically, possibly have missed out, or their contribution has been underutilised, underestimated, and they haven’t benefited fully as others have. So I do think that this is a new day in terms of the significance of trade, and I particularly say all these things because a lot of the people who came to the committee doubted this agreement and that specific allocation of resources, or the opportunities that they would get through this agreement.
So I support this bill from a place of being hopeful, because I am hopeful that through this agreement all the people that submitted to us who have concerns about it—and I wouldn’t categorise all of them as anti-trade. I think most of them came with good intent, but they actually doubt the whole trickle-down theory of economics. From their perspective, too many people miss out, and so if we can make sure that everybody is a beneficiary of trade through this trade agreement and set a new benchmark for trade agreements, then I think we’ve achieved a lot.
So just finally, thank you to all those who have been involved in bringing this opportunity to fruition, because I know it’s taken, as my colleague the Hon Todd McClay outlined, many, many hours of work by many, many people, and so to all of those involved, I say congratulations. Thank you.
SIMON O’CONNOR (National—Tāmaki): Thank you very much. I’m just contemplating what I’m going to say. The great thing is that I’ve got nine minutes and 54 seconds to work it out. I say that for a particular reason, and without taking away from the seriousness of this bill. We have well covered, as a House and as a committee, this Trans-Pacific Partnership Agreement (CPTPP) Amendment Bill. That’s the title of the bill, but as we know, the title once this becomes an Act of law is the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP)—well, it will be then an Act. But we’ve well traversed it.
Like other speakers who have recently taken their seats, there are actually a number of people to thank, and there’s going to be no particular order in this. First and foremost, it is my thanks to the many people who, throughout this process, have submitted to bring us to this point so far. As I’ve probably belaboured far too much, it’s always important, Madam Assistant Speaker—sorry, rather than Madam Chair earlier; this was a really bad start, wasn’t it? This is a very particular bill. It is not the Trans-Pacific Partnership itself; that’s a 6,000-plus page document. It’s something that we had a national interest analysis on a good few months back now, and on which the public were, at that time, able to have their say. As the Foreign Affairs, Defence and Trade Committee, we were able to hear and report back what were the major concerns to the Parliament, primarily so that, through the Parliament, the executive could understand what those concerns were. Fundamentally, trade agreements like this—in fact, any international agreements—are the exclusive domain of the executive. So I think it’s really important for the public to understand that it’s the rightful prerogative of the executive to undertake treaty negotiations, to decide whether to sign them, and then, as has been done, to bring them to this Parliament for discussion and, where possible, for the Parliament to feed back.
What we’ve been going through recently is a relatively small piece of legislation, this Trans-Pacific Partnership Agreement (CPTPP) Amendment Bill, which, in effect, allows this international treaty, signed by the Government, to come into force here in New Zealand. It’s probably not lost on people in this House, but it may be for some at home, that New Zealand simply signing an international agreement—it doesn’t matter if it’s a trade agreement, an agreement around copyright, around the law of the sea, or around nuclear weapons; we’ve dealt with, actually, most of those in the select committee so far—doesn’t necessarily bind it into New Zealand law, unless there is a domestic piece of legislation which puts it on to the books. And that’s what this piece of legislation is about.
So to those New Zealanders who have spent a good amount of time—often, they would feel, as they have said to me, repeating themselves through the process. They’ve had heartfelt and strong opinions, more often than not opposing this bill and opposing the trade agreement, which is, I’ll be honest—well, I don’t have to be honest; it’s all on the public record. I’m very much in favour of this trade agreement, even in its current form—
Dan Bidois: That’s good to know.
SIMON O'CONNOR: Yeah. As Dan Bidois from Northcote says, “That’s good to know”, as if there was somehow some doubt, but, actually, it doesn’t take away from the respect of listening, importantly, to those that had to speak and, where necessary, questioning one’s own thoughts and judgments. But through that process, I want to thank the many people who have spoken and, more recently, the almost 600 people who submitted on this bill. To be fair, the submissions were more on the concept of the treaty, the Trans-Pacific Partnership itself, than the technicalities of the bill, although, importantly, some suggestions were made, and we heard from just over 30 of those. So the first, sort of, round of thanks on this third reading goes to the New Zealand public who have made their voices heard. I hope that in some way the select committee’s report at least indicates to this Parliament what we heard and what the Parliament may want to consider in the future.
Thanks, too, goes to the select committee. I’ve mentioned in a few points during the process of this bill that we moved very swiftly to hear from submitters and to bring this back to the Parliament. The fact that, actually, we’re discussing this now, and that we’ve even reached third reading, is indicative of a cooperative approach from all the parties, regardless of their viewpoint—because I know there is at least one party up to this point, though one lives in hope that they might kick in in support. But, actually, regardless of where the final votes go, all the parties worked quite cooperatively in the Foreign Affairs, Defence and Trade Committee to make sure that we could get this bill back before the Parliament. Otherwise, it could have been up till December. But I really want to stress, on the record and in voice, that the committee didn’t cut any corners and it didn’t expurgate the process. What it did was it just made sure that once the submissions were in, we prioritised hearing from New Zealanders and were able to move also quite swiftly to write up what we’d heard and, importantly, not slow the process down as we reached this third reading.
So thanks to those members of the committee, and to the Ministers, of course—and it is “Ministers”. It is important to recognise the current Minister, the Hon David Parker, and the work that he’s led, but I think it’s also important that we all acknowledge, actually—not just this side of the House—the work of Todd McClay, and before him Tim Groser, to bring the agreement to pretty much where it is now. I know it’s a debating point between what has and has not changed—I certainly don’t see substantial or material changes—but it doesn’t take away from what’s effectively a good agreement with New Zealand and 11 other countries.
Obviously, Ministers don’t act alone. I think it’s been very present to me—and I’m sure the other members of the committee, and hopefully this House—that it’s been the trade negotiators and officials who, to me, have been an absolute stand-out. I indicated very briefly in the committee stage last evening my thanks to them, but the third reading provides a better opportunity. The clarity of their thought and understanding to the select committee, I think, is a great credit to them, not just because it helps us as members of the committee to understand what can at times be a fairly complex system, but it shows the skills that they bring into the negotiation. So, on record, my thanks go to them.
Look, New Zealand has been and remains very keen to be one of the early ratifiers of this agreement. It has been signed off; that’s why we’re at this stage of the bill. Once we pass this piece of legislation, the Minister of trade—and it’s very specific—will instruct either the Sovereign or the Governor-General to ratify the agreement, and then it will be lodged, and, importantly, lodged here in New Zealand. New Zealand as a country is the lodgement country of those 12 interested CPTPP parties, and I think it’s both material and symbolic that New Zealand is one of the early adopters. It’s not purely altruistic. There are benefits to being some of the early signers—if you are amongst the first six, I think there are, if you will, added benefits. I won’t go into all of those, but there is benefit to that, and it probably begins to explain why we are moving as swiftly as we can, despite the fact that I have now taken up eight minutes. But that aside—
Alastair Scott: Keep it up! Keep going.
SIMON O'CONNOR: Oh no, we’ve got more to go; I was just sort of conscious of the—
Hon Christopher Finlayson: Tim Groser could speak for three hours.
SIMON O'CONNOR: That’s quite true.
Hon Christopher Finlayson: All about himself.
SIMON O'CONNOR: Very good. However, it’s good that New Zealand is signing very early, and I would expect—although I do not know—that the Minister will move swiftly after this third reading to talk to the Governor-General and move this through to ratification.
There’ve been a number of issues that have popped up from time to time around this whole agreement: the investor-State dispute settlement (ISDS) disputes. Look, I certainly sit on the side that says, actually, there is a place for these. I think there’s been a lot of fear and misunderstanding around them. They exist, these mechanisms, to protect New Zealanders as much as anyone else. I know it’s easy to blame corporates, but the long and the short of it is that if a New Zealander or New Zealand company invests money into another country, into another sovereign nation, which then does something, effectively, illegal—such as, I don’t know, nationalising those assets—I think a New Zealander would want to have some ability to claim back against that Government, in the same way that if we in New Zealand were to act against our principles, effectively, and take away the rights of a company or another individual, even if they were foreign, there should be some mechanism for that to be addressed.
There’s been talk around the Treaty of Waitangi. That’s always been strongly protected. It’s certainly part of New Zealand’s legal structure. It’s been protected right through this process, as too has Pharmac. I followed that relatively closely when I chaired the Health Committee. Pharmac’s always been protected. There hasn’t been any change there, and I don’t think anyone needs to worry.
I suppose the final part—and it remains a wider, let’s say, philosophical political discussion—is, really, are trade treaties fundamentally about trade, or do they become, I would argue, sticks or levers for other agendas? You can argue the merit of that or not, but there has been some talk in this whole process of whether trade agreements should be used to promote issues on climate change or gender or other things—a discussion for another day. But I just acknowledge and commend this bill to the House.
Hon SHANE JONES (Minister of Forestry): Kia ora nō tātou. The last speaker, Simon O’Connor, represented as someone who showed endurance and staggered over the line. He managed to fill 10 minutes of his allotted speaking time, much of which will soon be forgotten, but congratulations to him for signalling that this is an effort which enjoys the support of both sides of the House.
It’s good to see that spirit of amity being shown by the other side of the House, because there are so many improvements. I don’t mean to be provocative; it’s not really in my nature. There are so many improvements that have surfaced after the last 12 months and in the capable hands of Minister Parker.
Chris Bishop: How many—how many?
Hon SHANE JONES: Now, look, I don’t want to be diverted by these churlish questions. The reality is that side of the House picked up a concept initiated by Phil Goff. That side of the House picked up a concept championed by the Labour leader of that time, Helen Clark. It’s only appropriate that the consummation happens as a consequence of some good common-sense, practical advice from my leader and the leadership shown on the global stage by my leader supporting the steward of trade—trade that protects the sovereignty of Aotearoa, trade that protects the interests of New Zealanders. That’s why today the world is going to stare with great admiration—that the current Government has led the Parliament to a point where we can enjoy what we deserve: i.e., one of the nation States that is a signatory to this trans-Pacific deal standing up through the power of Parliament, and the two main parties joining together, and the other party accepting the virtue of the changes that have been made.
These changes represent a great deal of local wealth creation opportunity. In the area that I hail from, nigh on 25,000 people are employed in export-exposed industries. When the rules and the barriers are reduced, then the other provincial investments and the other provincial endowments that will grow over the next several years can flourish and there’ll be fewer barriers over the foreseeable future. It’s happening at a time when a fault line is emerging in terms of one of our great friends, America—not quite sure whether it’s actually going to commit to multilateralism, or is it going to screw up that playbook?
Naturally, David Parker, my leader Winston Peters, and the Prime Minister have spoken incessantly about the importance for a small, open trading nation like New Zealand to fight and defend the importance of these rules. Indeed, those rules are tested from time to time not only at a World Trade Organization level, but the rules that exist within agreements. And this agreement, irrespective of what the Auckland University might say or the mouth of Te Arawa Annette Sykes might say—they’re entitled to their views, but their views are now in the dust heap of history. Because the House has met—and, in fact, I joined forces with the Hon Chris Finlayson in Whangarei nigh on 18 months ago where we presented the upside of this proposal to a small group of business people and a large group of hapū concerned about things to do with the Ngāpuhi claim.
I may be taking a risk saying this, but I thought we were a reasonable duo. We had the Minister advancing the technical qualities of the deal, and I was there to pour oil and calm the waters. Now, I couldn’t calm the waters in so far as the eruption to do with the Kermadecs was concerned, and I couldn’t actually get all the hapūs on side, but I said to them, “When you go home tonight, hapūs, bear in mind that the people that belong to your hapū who work in the freezing works, who work in the forest, who work on the farms, who work on the fishing boats, and who work in those areas that generate foreign exchange, they’re the mouths, they’re the households that I was thinking about.”
Now, the fact that I should have been sharing that opportunity with the Hon Christopher Finlayson might get me in trouble with my leader, but let history record—let history record—that on that particular occasion I was not the most modest of the duo. Mr Finlayson was very modest that day. And when the tempers flared, he said “OK, Jones, although you’re meant to be in the Pacific, we’ll leave you to handle the rest.” Being a pononga, a loyal servant, of that regime—never to be repeated, I might, say for at least another nine to 12 years—I stood up and did some of the heavy lifting.
Anyway, jokes aside, this has been through a long period of gestation, and let us not forget that it started with four countries. Those countries were championed initially by Phil Goff, and the country unwisely tossed that particular Government out, and we suffered nine years. But that has changed and we’re now looking forward to the next nine to 12 years under the current administration as we watch the fruits grow as a consequence of us joining together and passing this piece of legislation. Kia ora tātou.
Hon Christopher Finlayson: I’m available for consultation as from the end of February.
ALASTAIR SCOTT (National—Wairarapa): Thank you, Madam Assistant Speaker. I didn’t want to interrupt Mr Finlayson’s comments. I just thought I’d give it—
Hon Ruth Dyson: No, we’d rather listen to him too, actually.
ALASTAIR SCOTT: Would you—would you, madam senior whip! Madam Assistant Speaker, thank you for the opportunity to make comment on the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) ratification bill. That’s what it does: it ratifies the trade agreement that is so important. And, as the previous speaker has mentioned, it has taken so long to get to this point. Reflecting on the build-up to this point, those same speakers that have just spoken so positively on this bill were just not very long ago speaking so aggressively against it. It’s quite interesting—at least, “interesting” is an understatement—to see the swing in the political dial.
Hon Willie Jackson: Oh, it’s different.
ALASTAIR SCOTT: They say there’s a difference—Willie Jackson says there’s a difference, and I challenge him to stand up and even name the differences, because Minister Jones could not name the differences, though he too said there were some strong differences. There’s a couple of pages that acknowledge that. There are some minor changes, but the fundamentals of it are the same as what the National Government brought in—
Chris Bishop: No, no. Willie says it’s different.
ALASTAIR SCOTT: —under the Trans-Pacific Partnership agreement (TPPA). And if Willie Jackson does say it’s different, then let him stand up and take a call and just describe in detail the big changes that the Labour Government has made to enable them and New Zealand First to vote for the ratification of this bill.
I too would also like to acknowledge all those people that have been involved over the years, as Minister Jones said, and hundreds and hundreds of people, thousands and thousands of hours, having to deal with the political swing from one pendulum point to another but still determined to make sure that this multilateral trade agreement takes place, because you can imagine how difficult it is to get, you know, quite frankly, more than one or two people to agree. It’s difficult enough getting agreement with your partner across the dinner table. Imagine how difficult it is to get a whole family together to decide on where to go on holiday. So I can just only imagine how difficult it is to get the 10 parties together to agree on the whole entire framework and agreement.
We talk positively about this trade agreement, and it absolutely is, but remember that in a negotiated agreement we must be giving something up in return for the stuff that we receive. It’s not all one way. It is good and, overall, the pluses outweigh the minuses, and that’s why we participate, and that’s why all those parties participate. That’s why in a bilateral relationship you can do certain things, but you can’t get everything done in a bilateral relationship. Often it’s useful to have a third party or a fourth party, in this case 10 parties, to be able to cross-subsidise—“cross-subsidise” is not quite the right word, but to be able to agree multilaterally to enable those two original parties to benefit from the agreement.
I’ll just give you one example. So, we know that we’ve got greater access to have our beef go into Japan. That’s because the tariffs in Japan—big tariffs—are going to be reduced over quite a long period of time. That hurts the Japanese beef producer, because at the moment they’re protected. New Zealand beef, though it’s competitive because we’ve a cheaper and effective and a high-quality product—we can’t get it into Japan because of the tariff structures that are in place. So the Japanese beef farmer is going to see more and more New Zealand product on the shelves in Japan. So that group is one of the losers in this trade agreement. Overall, that’s great for New Zealand, but we may not have been able to give a lot to Japan because we’re only a little nation. But perhaps the agreement has enabled Japan to sell more product into, say, Canada.
That’s a good thing, and I’m reflecting on, and I want to come back to, my point relating to the definition of ice wine. The definition of ice wine can now only be used for wine from grapes that have been frozen on the vine. Now, when you read that, you think, that is definitely a plus for Canada. So they’re going to win because of that clause. They’re going to win at the cost of New Zealand winemakers, because we can’t freeze grapes on a vine and really turn it into ice wine. When we see a dessert wine, it’s usually botrytised wine—that’s the fungus that shrinks the grapes to concentrate the sugars, and then you make the wine from that. But those grapes haven’t been frozen—certainly not frozen on the vine. But in Canada, they have a situation where you can get these dehydrated grapes late in the season and they’re frozen, which gives the grape a characteristic. Now, prior to this, we could call our botrytised wine or even a non-botrytised wine—a sweet wine, say—a New Zealand ice wine, because it’s just a name; it’s nothing specific, and there’s not a determination of what that means. But now, we are not—
Dan Bidois: Sounds good.
ALASTAIR SCOTT: It is a bloody good wine, actually. It’s sweeter than a rosé, but not a rosé. But now we will not be able to do that. Now, only those people who can produce this wine from frozen grapes on the vine—you can’t take the grapes off the vine and freeze them; they’ve got to be frozen on the vine. So that’s a win for the Canadians and a loss for New Zealand winegrowers. It’s a very small loss, but that give-up, that loss to our market place, is part of the give-up which enables us to have access to the Japanese beef market, for example.
So my point here is that multilateral agreements can have benefits that are not necessarily available in bilateral agreements. Now, bilateral agreements are very important as well—no doubt about that. As Minister Jones said himself, the Chinese agreement, the first free-trade agreement with China—pioneers in free-trade agreements, if you like.
My second point I just want to reiterate is that there are things that we have given up. There are things that other nations have given up. There are things in industries, in whole industries, that they are giving up because their tariffs will be reduced. Unfortunately, there are some countries that want to increase tariffs, and that is to protect and to surround and to put them in their own different parallel universe in a way.
Dan Bidois: In South America.
ALASTAIR SCOTT: Yeah, unfortunately, the Americans had that mentality at the time, and so I wonder—and it would be great if they could join the CPTPP, and there’s nothing to stop them, except for the fact that they would also have to give up some access, give up something, for them to join in the party. It would become a party of 11.
The Tariff Act is also affected, and, as I say, the tariffs are barriers to trade. It’s fantastic to see that the Labour Party and the New Zealand First Party are voting for this, because I recall, just a few years ago, when the Labour guys were voting against the Trans-Pacific Partnership agreement, there was an ability for one or two of the Labour members to vote for the agreement. I think it was Mr Shearer who voted for the agreement. Mr Finlayson might have a better memory than me. Mr Shearer was able to vote for the TPP agreement, to cross the floor and support—
Hon Christopher Finlayson: It was Goff, wasn’t it?
ALASTAIR SCOTT: Was it Goff? Goff did—that’s right. Thank you. And that’s fantastic, but now it’s great to see that they’re all voting the same way that Mr Goff voted those years ago. It’s great to see the pendulum swing—that, essentially, 90 percent of us are in favour of this free-trade agreement. We know that it’s great for the economy. It’s great for all those people that Louisa Wall referred to. It raises the tide, it increases the economy, it creates jobs, and it is just simply a wonderful thing.
GOLRIZ GHAHRAMAN (Green): Thank you, Madam Assistant Speaker. I stand once again as the lone voice in this House maintaining a principled opposition to the Trans-Pacific Partnership agreement (TPPA), to the Comprehensive and Progressive Trans-Pacific Partnership agreement (CPTPPA), and to this legislation which essentially implements one and the same agreement.
I carry with a heavy heart the voices of the majority of New Zealanders who voted last election for political parties in opposition to this deal, and the overwhelming majority of those who turned up to the treaty examination process before the Foreign Affairs, Defence and Trade Committee, to the bill’s forum before the select committee, opposing this deal.
We are a small nation. We need trade, and the Green Party is all for trade that serves the interests of New Zealanders and addresses the pressing concerns of our time. We don’t support a deal that marries our nation to a failed neo-liberal global order that Kiwis voted against this election. We were promised a transformed deal. We were told over and over again by the coalition parties that this was changed—that our democracy, our human rights, our workers’ rights, and our Treaty of Waitangi were now protected—and that all of those risks had vanished, and it turned out that that was mostly spin. We found out all too late that even the most egregious threat to our democracy, the provisions in this deal that provide for a system sitting above our law, giving foreign multi-national corporates the right to sue our lawmaking body—if we legislate in the interests of New Zealand over their profit margins, even the investor-State dispute settlement (ISDS) provisions in respect to the investor chapter, remain exactly the same.
So our ability to adopt transformative progressive change for New Zealand is under threat. There’s good reason we don’t let business sue the Government to protect its profits, because health policy, education policy, and environmental policy should focus on providing the best hospitals and schools and protecting our natural environment, not protecting the profits of an elite few. But that’s exactly what we’re giving away to foreign corporates today. They can hold these privileges over us and over future Governments. That’s chilling.
The only real change in respect of the ISDS clauses—and we’ve been told there’s been all of this real change—is that a few member States have signed side agreements, saying that their corporates, their investors, won’t access this. And we’ve been told over and over again that this includes Australia—that’s 80 percent of our trade—but we know that multinational corporations can use their bases anywhere to sue us. Australia itself found that out when it was sued by Philip Morris, using its Singaporean base. That could happen here, and it doesn’t even need to happen; it’s the fact that they hold that risk over our necks.
What’s particularly chilling, as a Green, is that in 85 percent of cases around the world where similar provisions have been used to stop progressive policy, it’s been to stop environmental protections. Yesterday, I proposed a change that would require at least a mitigation of this risk, that at least if new members are about to join this agreement, our Government would require them to sign side agreements. That was declined. The Government has said that it won’t be entering any new trade agreements that include ISDS clauses, an admission of the risk that these provisions do pose to us. So why not start now? At this moment in global history, can we really afford to give primacy to the profit margins of multinational corporations over the threat of climate change?
In fact, this agreement, if we’re talking about trade, isn’t all that much about trade—the trade of goods and services, which is what most people would think. I think most New Zealanders would be shocked to find that the overwhelming majority of the 6,000 pages of this agreement are not about trade; they are about protecting the privileges of multinationals. They allow them, in this data-driven economy that we live in today, to hold their data offshore to opt out of our privacy law. New Zealand has agreed not to regulate future unknown technologies. Who does that serve, and what does it have to do with trade?
Why are we buying into a system that has been proven to be dangerously deregulated, causing the incredible loss of the last global financial crisis? Even the protections that we did get, these changes that came via the suspended provisions, one of which is to protect Pharmac’s ability to regulate prices and quality of medicine in New Zealand—even that, we’ve been told by officials in the select committee, could go if new members join. Another one of my proposed changes was to bring the agreement back to the select committee if new member States are going to join, so that we will know the terms they are joining on. That was declined. So, today, this House is signing up to give up its parliamentary oversight of something as important as Pharmac.
Why are we upholding such a corrupt financial system that we have promised we would move away from? We have been told that the agreement is progressive and comprehensive because it has some workers’ rights and some environmental protections included in it already, and I do want to address that, because those provisions are expressed in such vague, such opaque, terms that they have proven unenforceable. Again, around the world, where exactly the same provisions have been in trade agreements and people have tried to use them to protect workers’ rights or the environment, in 48 cases only four have been successful. They are different to the detailed, enforceable, hard-law nature of the investor protections, and we know that. That is why this deal has faced such overwhelming opposition around the world, an outpouring of people on the street here in New Zealand.
We know that the EU member nations don’t agree to trade agreements like this. They don’t agree to ISDS clauses because their human rights protections, their commitment to climate action, sits above this kind of trade law and they won’t enter it. New Zealand should be placing itself among those nations who are seeking to find a fair way to trade.
Our hope and intention as the Green Party is that trade agreements like the TPPA or the CPTPPA—trade agreements that require this kind of legislation—don’t happen again, that this is the last of its kind. I will be working to introduce changes that require trade to be fair and require trade agreements to be entered into in a transparent and democratic way in future. They should be contingent on our ability to protect human rights, combat climate change, and do right by tangata whenua.
We need to make trade fair, fit to serve our 21st century purpose and concerns, with all the lessons of that failed neo-liberal system. But, sadly, today, with this bill, we are passing no ordinary trade law; we are giving up our democratically mandated sovereignty in this Parliament, giving it up to multinational corporates. Thank you.
CHRIS PENK (National—Helensville): Thank you, Madam Assistant Speaker, for the opportunity to add a few words of my own to the debate on the Trans-Pacific Partnership (TPP)—excuse me, the CPTPP, or the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. I was going to note, actually—and have inadvertently made my first point, which is that that it seems like déjà vu all over again, in the famous words of Yogi Berra—it has been some time now that this nation and indeed this Parliament, certainly prior to my time of arriving here, has been debating this particular agreement and now the variation to it, or, according to taste, perhaps a new agreement based on the old one.
Much has been made of the different acronyms: CPTPP versus TPP versus TPPA, and so forth. I would actually like to focus on a few key words that have been associated with this agreement and the parliamentary process that goes along with that.
The first phrase that I would like to pick out is “export exposed”, which was used by a speaker in this debate recently to describe areas of New Zealand that are exposed to exports, and hence will be beneficiaries of this particular trade agreement. I might add that not only are such areas exposed to trade but the fact that they are able to trade well—an ability that will be enhanced by this agreement—is that they are, in fact, reliant on trade, too. It’s almost a truism to note that New Zealand, as a small country at the end of the world, is very reliant on its export economy, but, actually, we could go further and say that an area that is reliant on trade is New Zealand itself, because all areas of New Zealand are in turn reliant on those areas that are particularly engaged in trading commodities with other nations’ peoples. Briefly, then, the Helensville electorate is one such area that not only trades directly—various businesses are contained within its boundaries—but it is also reliant on the hard work of our cousins across this great land who also engage in exports, and thereby increase the common good, or the commonwealth, if I may use that term.
Focusing on the words “the agreement”, it’s tempting to say that at times the TPP and/or the CPTPP could actually more accurately be described as a disagreement, but that’s really reflective of a domestic political phenomenon as opposed to the way in which the agreement has been discussed, debated, and, ultimately, concluded by various nation States around the world, of which New Zealand is, of course, one. An agreement in international law is often described as a treaty. It’s international by definition, but it’s not dissimilar to a contract that private parties might enter into. Like a contract between individual persons, whether legal or natural, it is a meeting of minds, or perhaps a herding of cats—to pick up on the theme that a colleague noted earlier—given the difficulties sometimes and the complexity of the different nations and their respective interests, and, dare I say it, their respective politicians complicating matters when it comes to having an agreement come into force.
The complexity involved actually gives me an opportunity to note the hard work done by many people within this institution, and I refer to the Foreign Affairs, Defence and Trade Committee staff as well as those of us fortunate to serve on it, and Ministers various across two parliaments now—or two executives, more properly—but also many who have engaged in the process very thoroughly and very passionately. I thank and commend all of those who have done so, on whichever side of the debate they have found themselves at any given time.
Some useful contributions, to my mind, were made in relation to the constitutional aspects by various submitters to the select committee but also those in civil society, who have engaged very diligently. I hope Mr Bruce King will not mind me mentioning him in this connection as someone who has advocated strongly and clearly for further parliamentary scrutiny than is currently the case for international agreements. My own views on that—I hope reflecting those of my party—are not only that in this case that’s not something we have an appetite for, given the benefits of the trade deal, but also, speaking personally, if there is to be a wider constitutional discussion and change regarding international treaties and the way they are entered into, which is, currently, essentially by the executive and signed off by Parliament, then that should be part of a broader discussion that we might have if some person or party intends to commence that.
The fact that it is a multilateral agreement I think is worth noting. It is literally across many different parties, and I’ve talked about the complexity of that. If we’re talking about, for example, New Zealand beef being a beneficiary of that, well, there have been many beefs that New Zealand has had with other countries and their respective negotiators, but our negotiators have acted very skilfully to maximise this country’s benefits and minimise this country’s costs. But it is, of course, in the nature of any kind of agreement, and in an international treaty no less so, that there is give and take. There are pros and cons. So when we talk about the consideration of this agreement, we talk not only of the way that the agreement is considered by this place in the sense that Parliament is scrutinising the bill, and giving it consideration in that sense, but also in the technical, legal meaning of the word “consideration” which is, in the context of a contract, something which is given up by one side in exchange for something given up by the other side or, in this case, sides—plural.
So there’s a formal requirement in a contract that something is given up—that’s almost by definition. Certainly, that’s what our domestic law states, although that can of course be circumvented by way of a peppercorn type of consideration. I should have looked up before I started speaking as to whether there are any literal peppercorn farmers in the Helensville electorate. This would have been a good opportunity—
Greg O'Connor: You should have done a lot of things before you started speaking.
CHRIS PENK: —to acknowledge them. But notwithstanding the feedback that I’m receiving in real time on my speech from one of the Mr O’Connors who inhabit this Chamber—“Mr O’Connor the Third”, perhaps—I will proceed with noting that New Zealand is indeed giving up something. That’s inevitable and natural in an agreement in which we are also gaining something. So there are pros and cons—literally, things that are for and things that are against—and it’s quite right that people engaging in the debate and discussion about the TPP, whether a political party or, perhaps, interested or even concerned citizens, but it is important that we all do acknowledge through the process that we will gain much and we will give up something. That, as I say, is not only inevitable but also natural and is not, in itself, something that we should fear or resile from.
My colleague Alastair Scott gave a very good dissertation on intellectual property in relation to wine—particularly ice wine—and it brought to mind the fact that a rosé by any other name would smell as sweet. So while there are restrictions, of course, in the way that we can talk about certain products that we formulate or products that we produce, so to speak, none the less the world will continue to turn in the way that our people will continue to produce these things and sell these things, offshore as well as onshore, and we will all be the beneficiaries of that.
Part of the benefit that we derive as a country is in relation to the fact that these industries are supported such that they can also provide, with the benefits of economies of scale, domestically. But also, of course, they’re paying taxation to our Government, and that’s revenue that’s needed for many different things that whichever Government of the day inevitably does need. So, through various forms of GST, income tax, and so forth, it’s a good thing in itself that we have a productive economy—“productive”, of course, in the literal sense that we are producing goods and services that those who are overseas wish to purchase from our people.
I will conclude on my theme of examining particular words because, of course, the words of the treaty itself are important. The words of the law that is ratifying the treaty are important as well. There are some suspensions, which is a point of difference, I note, between different parties within the Government, so it’s a suspension of disbelief, I suppose, as far as Labour and New Zealand First go, given the before and after analysis that we can provide in terms of their positions pre- and post-election. But also there are some aspects of the agreement that can and may come back into force. That detail has been well canvassed by other speakers before me in this debate, so I’ll leave it there, except to congratulate all those involved and say that we look forward to the benefits and we accept the costs of this agreement going forward.
ASSISTANT SPEAKER (Adrian Rurawhe): This is a split call—five minutes.
PRIYANCA RADHAKRISHNAN (Labour): Malo ni, Mr Assistant Speaker, in recognition of Tokelauan Language Week. As I rise to take a call on the Trans-Pacific Partnership Agreement (CPTPP) Amendment Bill, I want to begin by addressing some of the rather flippant comments addressed to us on this side of the House by members opposite who have said that it’s been a pendulum swing, a swing in political something that I didn’t quite catch—indicating that it’s been a rather arbitrary decision made by this Government to now support the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) when we didn’t support the Trans-Pacific Partnership initially. I want to begin by saying that a Government—any Government, and this Government definitely—has the duty to govern in a way that we advance the status of our people to ensure that we further the well-being of New Zealanders and, of course, to be a good global citizen as well. So it wasn’t an arbitrary decision at all.
We had five bottom lines. There were reasons why we opposed the agreement that was previously ratified and signed by the previous Government, and I’ll get to that in a minute. I also want to point out from discussions with many people outside of this House some of the benefits and the importance of trade to the person on the street, to the average New Zealander. Now, the export sector in New Zealand sustains over half a million New Zealand jobs. It is an important driver of productivity, of employment, and of incomes in New Zealand. Research tells us that productivity per New Zealand worker is 36 percent greater if they’re in a firm that is exporting, compared to if they’re in one that isn’t. Independent economic modelling tells us that once the CPTPP is fully in effect, we’re expected to see New Zealand’s real GDP increase by $4 billion. The opportunity cost of not signing up is a $173 million decline in our GDP. So there is an argument there, of course, that signing up to this would be beneficial.
What we had an issue with previously was the cost that this would pose to New Zealand, and that’s where the five bottom lines came into play. Before I get into that—just very briefly—what does this bill do? Basically, it makes changes that are necessary for New Zealand to ratify the CPTPP as it is now, post-negotiation, by this Government. As others have also pointed out, of course, it’s a free-trade agreement that involves New Zealand and 10 other countries in the Asia-Pacific region.
Now, the bottom lines that I just want to touch upon: the first was meaningful gains in tariff reductions and market access, and that’s what we have seen. Tariffs will be eliminated on New Zealand exports to CPTPP economies, with a few exceptions, but it also means that our exporters are not disadvantaged when it comes to important, high-value markets like Japan that we haven’t previously had trade agreements with.
The protection of Pharmac continues, which is retained, and, incredibly importantly—and as I began—the duty of a Government is to look out for the interests of our people, and one of our bottom lines was the ability to restrict house sales to foreigners and to govern in our national interest. That was one that we stuck by and that this Government fought for and advocated for. So when members opposite claim that there’s not been much change, I refer you to the 22 suspensions within the CPTPP and, of course, the fact that we have passed the Overseas Investment Amendment Bill—which came into effect on 22 October—that actually allows us to do just that.
The fourth: upholding Te Tiriti o Waitangi. The clause was almost unheard of internationally because of the strong rights that it provides in terms of regulating for the benefits of an indigenous population here.
The final point: the investor-State dispute settlement (ISDS) clauses, which, of course, most of the submissions pointed to. Not perfect—the Government considers that we do have robust safeguards to protect Government’s rights to regulate and prevent the abuse of ISDS by investors but of course shares the overarching concerns about the fact that it even exists.
But I come back to the point that I made at the start: it’s about weighing the costs and benefits. Is it perfect? No. Are there significant gains for New Zealanders as a result of the renegotiated CPTPP? Yes. Is the opportunity cost of not signing up high? Yes. As such, I feel that this bill—
ASSISTANT SPEAKER (Adrian Rurawhe): Order! The member’s time has expired.
DAN BIDOIS (National—Northcote): Today is a great day to be a member of this House, because today this House gets to reaffirm its commitment to free trade. When the rest of the world is looking at protectionism and rates of higher trade barriers, New Zealand is saying “No thanks.” New Zealand is going to say that we want a country that is open to the world, where our firms and businesses thrive internationally, and where our people have the opportunities to live in a globalised world that we live in today—opportunities like Lifestream International, which is a business in my electorate of Northcote. Lifestream will be able to take advantage of this bill to help them expand their global footprint even further, therefore providing far more income back to its New Zealand shareholders and staff.
Another company is Fraser’s Car Ltd, which is a company that sells Lotus replicas globally.
David Seymour: Fraser, singular.
DAN BIDOIS: That’s right, and the honourable member David Seymour owns one of those vehicles. Thankfully, out of this bill, more people throughout the world are going to be able to have an opportunity to drive the vehicles from my electorate.
The benefits of the Comprehensive and Progressive Trans-Pacific Partnership Agreement (CPTPP) are very clear from where I sit: up to $4 billion—bottom-line dollars—in our GDP, estimated by 2040. An extra $2.5 billion in exports is also predicted by 2040. Jobs and opportunities for all of our kids in the 11 countries that make up the CPTPP, nine of which I’ve travelled to myself—and I must say they’re fantastic countries, and I do hope New Zealanders get an opportunity to go on exchange and work in these countries and bring these foreign skills back to New Zealand.
I do want to acknowledge that this has been an effort of multiple Governments throughout the years, starting from Helen Clark’s time, back in 2005, right through to the current Government. I want to acknowledge the support from two parties of the opposite side of the House: the New Zealand First and Labour parties. I’d like to acknowledge all of the Ministers of trade—Minister McCully, Minister Todd McClay, and now Minister David Parker—for their commitment to this. I’d like to acknowledge the commissioners and everybody at the Ministry of Foreign Affairs and Trade for helping to push this through, particularly at a time when this trade deal could have fallen apart, when the USA announced that they were pulling out. New Zealand stuck in there. There were a lot of sceptics out there—of which, I was one of those sceptics—and I’m very happy that this Government and the effort of our public servants was steadfast to bring this to a conclusion today.
This is a unique agreement. Despite what the Green Party members say, this is progressive. It sets the standards for trade in the Asia-Pacific region. It lowers barriers not only for goods but also for services. So whether you’re a doctor or an engineer or a baker or a butcher, you’ll be able to take advantage of these countries and the opportunities that it has for our nation.
I do want to say—look, we need to get this done today and I’m very supportive of this bill. But in terms of the next steps, we do need to continue to build more trade agreements in the future, so I urge the Government to make sure that they’ve got a pipeline of trade agreements, because this country is a trading nation, as we know, but our future depends on reaching out to the globalised economy and making sure that we are integrated and positioned to take advantage of that.
The second is really making sure that we get the most out of this trade agreement, and that means providing information to all of our small businesses on the opportunities to trade in these countries, and making sure that we reduce the non-tariff barriers in particular. So I commend this bill to the House. Mr Assistant Speaker, thank you very much.
ASSISTANT SPEAKER (Adrian Rurawhe): This is a split call. Five minutes—I call Jamie Strange.
JAMIE STRANGE (Labour): Mr Assistant Speaker, thank you for the opportunity to take a call on the Trans-Pacific Partnership Agreement (CPTPP) Amendment Bill. This certainly is, as the previous speaker, Dan Bidois, said, a very exciting day for this Parliament, because we are going to be one of the early signatories to this agreement. That signals leadership and, at a time when many countries are moving towards isolationism, we are moving more towards working together. I was particularly proud of the comments that our Prime Minister, Jacinda Ardern, made recently when she talked about some of the false promises of protectionism. She said international trade has helped bring millions of people out of poverty around the world, but she also noted that we must all work to ensure that the benefits of trade are distributed fairly across societies. This coalition Government have worked hard to ensure that all New Zealanders will benefit from this agreement.
New Zealand has a proud history around free trade. As many people will know, in 2008, we signed the first free-trade agreement (FTA) with China. The previous speaker asked about a pipeline of trade agreements. Well, there are many discussions going on in this space—discussions currently with the UK, the EU, and also India.
What this agreement does is it provides access to 10 key markets, including Japan and Canada. I’d just like to highlight a few companies from my neck of the woods who would benefit from this agreement—just a couple of companies from the Waikato region. So Gallagher Group, who are fairly well known across the country for fencing, technology, and security, will certainly benefit from this agreement; Company-X around software solutions; and Progressive Hydraulics around manufacturing hydraulic systems. This is about us as a country keeping relationships with other countries and building on new relationships, and our businesses will certainly benefit and all New Zealanders will benefit around this.
Early ratification means an immediate levelling of the playing field for New Zealand exporters in some crucial markets. A couple of these key examples—one of them is kiwifruit. New Zealand incurs a tariff of 6.4 percent into Japan. Chile, a key competitor in this high-value market, pays zero tariff because of its current FTA with Japan. So the coalition Government is excited that we will have an FTA with Japan which will help our kiwifruit exporters. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership will also immediately remove Australian beef exporters’ current tariff advantage over New Zealand in the Japanese market. This has resulted in a decline in New Zealand’s exports, and the loss of $53 million to the industry per annum. We’ve heard about wine today, so I’d just like to highlight some of the benefits in that area.
It’s very important that as a country we don’t move towards isolationism and protectionism, but move towards cooperation and working with other countries. As a small nation we’re absolutely dependent on trade. There’s only a certain amount of products that we’re able to produce—that we should produce—in terms of comparative advantage, so it’s absolutely vital that free-trade agreements like this are signed, that they continue to be signed, and that we continue to play our part in a global community. I commend this bill to the House.
ASSISTANT SPEAKER (Adrian Rurawhe): I call David Seymour—five minutes.
DAVID SEYMOUR (Leader—ACT): Thank you, Mr Assistant Speaker. I congratulate the member who’s just resumed his seat, Jamie Strange, on a very fine speech. I think in the quality of his presentation we can see a lot about the future of the Labour Party and its prospects. Well done to him. I want to join with almost all members of this House—I will get to the exceptions in a minute—in saying it is a great day. The history of free trade is a history of prosperity and of civility. As Adam Smith once said, you never see a dog voluntarily exchange a bone with another dog. To trade freely and voluntarily is to be human, it is to be civil, and to do it across international borders is to be peaceful.
As Frederic Bastiat said, when goods don’t cross borders, soldiers do. It’s important that we meet our friends around the world and trade value for value, and get stronger together. As David Ricardo pointed out—
Hon Christopher Finlayson: Stop name-dropping.
DAVID SEYMOUR: —even nations that may not be particularly prosperous or productive are wealthier when they can trade with countries that have a greater opportunity cost than they do. Even Paul Krugman—if Mr Finlayson would like one more name-drop—was in favour of free trade before he completely lost his mind. But who is it in this House that is opposed to free trade? Well, Donald Trump is not here, but he has his allies in the Green Party. The Green Party think that it is an assault on the sovereignty of this Parliament and of New Zealanders to have a trade agreement.
Well, let me put it in perspective. Let me put three societies to you with a very similar economy and population to that of New Zealand. Let me give you Denmark, British Columbia, and Colorado. Now, I can tell you, even the Green parties in those states or provinces or countries are in favour of being integrated into a wider economic unit. The Green party in Copenhagen does not campaign on Denmark leaving the EU. The Green party in Colorado does not say that it’s an affront to the sovereignty of Coloradans to be part of the United States, you know. The Green party in Colorado are not separatists in the Trumpian fashion—they leave that to the Green Party of Aotearoa New Zealand—and the Green party in British Columbia is not advocating that British Columbia should leave the federation of Canada to protect their sovereignty from trade. They’re all Green parties that are sensible—sensible Green parties that believe that trade makes us prosperous, that trade makes us peaceful, and that trade makes us human. They accept there’s a trade-off that, actually, a society has to have some common rules with other people across the seas or across land borders in order to have that civilising trade.
This is how absurd the position of the Green Party of Aotearoa New Zealand is. They want a society of 5 million people to be separate from the rest of the world economically because they think it’s a slight on our sovereignty to have an agreement with more than 4 million or 5 million people—a totally absurd situation that no one in British Columbia, Denmark, or Colorado would take seriously for a moment, even in their Green parties.
On the other hand, the ACT Party is proud to have stood in this House, now, for 22 years and counting, so far, and been in favour of free trade with free people, trading value for value, getting stronger together, and making our world peaceful, making our world civilised, and making our world human through the voluntary exchange of goods and services under agreed rules. I’m so happy that the Labour Party, who only a few short years ago were pulling stunts about Chinese-sounding names, have all grown up. They’ve got to Parliament, and they’re supporting—
ASSISTANT SPEAKER (Adrian Rurawhe): Order! The member’s time has expired.
Hon MARK MITCHELL (National—Rodney): Thank you, Mr Assistant Speaker. In the generosity of spirit, maybe the Labour Party would give David Seymour the last call as he only got a split call. But—
David Seymour: I could go another 10 minutes easy, mate.
Hon MARK MITCHELL: Ha, ha! I just want to, first of all, congratulate the Hon David Parker on making sure that we got this legislation through the House as quickly as possible. We want the Trans-Pacific Partnership (TPP) to be triggered and activated as quickly as possible because it is very important for Kiwis who are selling their services and products on to the global market to have a level playing field, and that’s what these high-quality trade agreements provide. They provide a level playing field for us.
I’d just like to go back very quickly, as it will be the last call I’m taking on this bill, and acknowledge—and we haven’t actually acknowledged him yet in this House—Sir Lockwood Smith. Sir Lockwood Smith was our first trade Minister in the National Party to actually begin the initial negotiations on the TPP. So I just wanted to make sure that he was acknowledged, and I remember standing in this House back in 2011, making my maiden speech and acknowledging him and the work that he’d done to get this TPP agreement under way. So it’s nice to be able to be standing in the House in 2018 and seeing that the original agreement that he started is now going to be passed today in this House.
I want to acknowledge Tim Groser, who took over the work from Sir Lockwood Smith—the Hon Sir Lockwood Smith, or the Rt Hon Sir Lockwood Smith—and he did an outstanding job. That’s when—
Hon Christopher Finlayson: Dr The Rt Hon Sir Lockwood Smith.
Hon MARK MITCHELL: Oh, Dr The Rt Hon Sir Lockwood Smith—thank you for that correction. I just want to acknowledge David Walker, who at that stage was the chief negotiator, along with Tim Groser. There were several times where that agreement almost fell over, and there were long days, long nights where they worked very hard to get the agreement back on track and keep it moving forward. So I want to acknowledge them and the role that they played.
Finally, I want to acknowledge the Hon Todd McClay, because when America pulled out of this agreement, it looked like the agreement was going to fall over entirely. I remember, clearly, going to a debate in Wellington, or it was a panel discussion, with the Hon Grant Robertson, and it was soon after the Americans had pulled out and the agreement had virtually fallen over. I said “Look, I prefer to see things with a glass half full, and I think there’ll be a way of being able to maybe get this agreement back on track if we can get some support from some of our partners.”, and Grant Robertson turned around and said, “Don’t be an idiot. Move on. Forget about it. You’ve failed. It’s all gone. It’s not going to happen.” So I’m very pleased to be able to stand in the House today and say that, actually, through the hard work of Todd McClay and his team from the Ministry of Foreign Affairs and Trade—and I want to acknowledge the Japanese Government and their Prime Minister, who lent his support to this and had a major role to play—there was life breathed back into the agreement and it was brought back online.
Finally, I want to acknowledge the Hon David Parker, because he has carried it on. He inherited that momentum. He inherited a 6,000-page agreement, and he’s shepherded that through and brought it back into the House for us to be able to pass it, as a Parliament, in its third reading today.
But I do want to make a couple of observations, because I’ve listened to some of the previous speakers who are wondering why we have taken the position in saying that, largely, this agreement has not changed, and there are a couple of reasons for that.
Hon Christopher Finlayson: Because it hasn’t.
Hon MARK MITCHELL: One is that—that’s right. It hasn’t. You just heard the Greens’ speaker get up and say that they are still firmly against the bill. They’ve been consistent in their position—
Hon Judith Collins: Oh well, that’s a good sign, then. We’ll definitely support it.
Hon MARK MITCHELL: —that’s right—on this, but their two biggest partners throughout the process in terms of trying to get this agreement through Parliament were the Labour Party and, actually, one of their best spokespersons, and someone who campaigned very actively, was Professor Jane Kelsey. Now, the Labour Party, of course, have changed their position on it, and that’s the responsible thing to do. With things like trade and national security, where we can, they should be bipartisan—there should be bipartisan agreement. But the funny thing is that the Labour Party’s two partners, the Greens and Professor Jane Kelsey, have said, “This is the same agreement. There’s been hardly any change to this agreement, and that is why we’re not going to support it.”
So when the Labour members stand in the House and say “Oh no, we’ve changed our position now. We are going to support it because we’ve been able to implement and make changes.”—no, you haven’t. In a 6,000-page agreement, there are two additional pages, and there are two changes to the name. It’s now “Comprehensive and Progressive”, and we still are yet to find out exactly what the “Comprehensive”—
Hon Willie Jackson: I’ll tell you about them.
Hon MARK MITCHELL: —“and Progressive” actually means. So if the Hon Willie Jackson is going to take a call, maybe he can answer those questions. I hope that he will.
The investor-State dispute settlement (ISDS) provisions—these are very common in just about every trade agreement globally. The ISDS provisions, by the way, have never been triggered by us. We’ve never actually had to use them. The only real trade disputes that we’ve had, for example, were, if you think back to when our exporters couldn’t get our apples into Australia. We went to arbitration over that, and, actually in every arbitration we’ve entered into, the finding has always been in our favour. So they actually work for us because, generally speaking, as a country and nation, we’re pretty fair in how we deal with people.
But the ISDS provisions—and what was lost on the Opposition was that, actually, they provided much greater protections for our own people, for Kiwi companies that wanted to export their services and their products into overseas countries as trading partners, because if they didn’t have the ISDS provision, which is an independent arbitration process, it meant that they had to rely on the courts and the justice system in those countries. Actually, we are very lucky here in New Zealand that we’ve got one of the best justice systems and the best courts and the best judges in the world. We are largely—in fact, on all the indexes we are right at the top in terms of no corruption and a very fair, open, transparent system.
Hon Christopher Finlayson: Who appointed most of them?
Hon MARK MITCHELL: Yeah, to a point—that’s true. The problem is that with a lot of the countries that we trade with—although that relationship is very important and we want to trade with them—actually, our people are carrying an enormous amount of risk, because often their own justice system, their own court systems, are not as transparent and are not corruption free. So that poses enormous risk to our people actually trading in those countries.
Let’s give you an example. If we had a New Zealand company that decided to go to a country where they made a big investment in property or plant—you know, hugely capital intensive—and then, all of a sudden, that Government decided to nationalise and seize the assets, then without the ISDS provisions, they’ve got no avenue, they’ve got no pathway to be able to actually fight that and dispute that. So the ISDS provisions actually provided us more protections than they took away. What have the Government done about the ISDS provisions? Nothing. All they’ve done in this agreement is said that if there’s a contract involved between the Government and another country, then that can’t be brought into any ISDS dispute. So, effectively, it means that, actually, our Government is just as exposed to the ISDS provisions—we’re just as exposed to the ISDS provisions—as we were in the original agreement. And, like I said, ISDS actually, more often than not, works in our favour.
So I just want to say that I just finally want to commend the bill to the House. These free-trade agreements are very important for us. I want to acknowledge Phil Goff, who put the Chinese free-trade agreement together. But it’s important—it’s very important—that there is bipartisan support across the House when we are working on and developing these free-trade agreements.
Lastly, I just want to mention the Korean free-trade agreement, and maybe a comment to the Greens and New Zealand First who, again, did not support that agreement. If you look at it now, the Korean free-trade agreement that was passed maybe three years ago is benefiting this country by tens of millions of dollars every year in our increased trade with Korea. If there was really an issue or problem with that free-trade agreement, then I’m sure that New Zealand First or the Greens would have stood up and they would have made a case against it, but there’s not. These free-trade agreements are very important to us as a small trading nation down the bottom of the world, and I commend this bill to the House. Thank you, Mr Assistant Speaker.
MICHAEL WOOD (Labour—Mt Roskill): Tēnā koe, Mr Assistant Speaker. I’m very pleased to be able to take this final call in this debate and in the passage of this piece of legislation, and, in doing so, I feel a small sense of poetry in that it was my successor as the member for Mt Roskill the Hon Phil Goff who, of course, was one of the integral political players in the development—
Hon Judith Collins: Predecessor.
Hon Christopher Finlayson: Predecessor.
MICHAEL WOOD: Well, who knows what might happen in the future.
Hon Judith Collins: Why? Are you going?
MICHAEL WOOD: In many, many years. Phil Goff is a politician of considerable longevity, as should be clear already.
My predecessor, Phil Goff, was, of course, one of the politicians who was central to the negotiation of the original Trans-Pacific Partnership agreement (TPPA). I well remember discussions with Phil, when I was his electorate chairperson before becoming a member, during which I expressed my concerns in the fact that I wasn’t across the line in respect of the TPPA at that time. That was a position which was shared by many on this side of the House and, in fact, was shared by many across New Zealand and many internationally.
One of the points I want to come to in my comments in this closing speech is to say that for those of us who believe in the principles and the benefits of free and open trade, and I believe that the vast majority of members in this House do, and for those of us who see the benefits flowing through in a particular way through this agreement—and they are manifold in respect of market access, the lifting of quotas and tariffs, and economic benefits for New Zealand exporters—we can’t just ignore the concerns that the community holds about these agreements.
The concerns that were held by many at the time that the TPPA came to the fore were real ones. We had tens of thousands of New Zealanders who marched to express their concerns. We had public opinion polling which showed that it was a pretty even split across the country between people who favoured the agreement and people who didn’t, and, at a meta level, the concerns that people had at that time were that agreements such as the TPPA were agreements which potentially shaded out our democratic institutions and may contribute to growing inequality, and, indeed, that’s been the experience of many people in our community over recent decades.
The concerns about the TPPA were expressed more specifically at that time by the Labour Party. They were concerns around the right to regulate, concerns around investor-State dispute settlement (ISDS), concerns around control of our own land, and concerns around Pharmac. I am proud to say—and I said this in previous debates—that it was the Labour Party in this House which was in fact the only party that didn’t take a predetermined position at that point. We said, “These are our tests, these are our values, and we’ll judge the outcome of the negotiations by whether or not the agreement at the end meets those tests and meets those values.” At the time the TPPA came out of the negotiation process, we didn’t believe that that was the case.
When the new Government took over, only one year ago, one of the first things that we did was to get to work on this. The process was led by the Hon David Parker and the Rt Hon Jacinda Ardern, who went overseas and went to work, negotiating to try and deal with those concerns. I’m really happy to say that we made significant progress in all of those areas.
Let’s start with the right to regulate. To be fair, much of this was settled before the coalition Government came into power, but it’s my view that many of the protections around the right to regulate—particularly in respect of social services, health, and education—came about as a result of pressure that came from those who were concerned about those areas.
In respect of ISDS, we have made significant progress in terms of the side letters and in terms of exclusions to ISDS. It is the view and the position of the Labour Party that we would prefer that ISDS provisions were not in this agreement whatsoever. I just want to pick up on, actually, the very reasonable discussion that the Hon Mark Mitchell launched in this area. It is true that ISDS provides New Zealand companies who may be engaged in investments overseas, in jurisdictions where perhaps you don’t have total trust in the local justice system, with another avenue and, potentially, additional protections. That is a benefit to those private entities. The flip side is that those provisions can be applied within New Zealand, where we do have a justice system and where we do believe that justice system should be the one that governs disputes. That is the reason that the Labour Party prefers that ISDS provisions are not part of these agreements and will not negotiate for them to be part of these agreements in the future. But we made progress and have excluded them in respect of 80 percent of the likely flows of investment into New Zealand.
We made progress on the control of land, not through negotiations in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) itself but by having a legislative process in this House that we got done in time before the ratification process kicked in, and that means that this Parliament retains its sovereign right to control the sale of our own land. That’s something the Opposition said could not be done. This Government did that, and I just cannot emphasise how important that is for New Zealanders that they do not need to worry under this agreement—that we have protected the sovereign right to control the sale of our own land.
In respect of Pharmac, it is true that before the coalition Government came in most of the protections for Pharmac had been achieved, after significant public pressure and pressure from the Opposition. But we still had to pay—the New Zealand taxpayer still had to pay millions of dollars per year for a monitoring regime—to have an intrusion into our Pharmac system. We’ve managed to negotiate that out as well. So progress has been made on each of those areas in which there were concerns.
We’ve heard a couple of times in the debate today and the debate earlier in the week that we should try and take the politics out of trade, and what I’ve argued previously is that is the wrong approach to take. If we make trade an elite technocratic project—if we say it’s not in the sphere of democracy and it’s not in the sphere of debate—then we will lose people. Members of this House should remember that the most significant event in the passage of the TPPA/CPTPP was, of course, the withdrawal of the United States, and that is because the man who was running to be President harnessed the rage of people who felt left out—who felt that agreements like these left them out and felt that their concerns were not being taken seriously. So what I say to members of the House, who do believe in free and open trade, is don’t pretend this is beyond politics. Don’t make it an elite project. We have to take these concerns seriously and we have to deal with them in a meaningful way, and I’m very proud of the fact that that is what this coalition Government has done.
I want to note, in particular, the role that the Hon David Parker has taken in this area. Beyond the CPTPP he has picked up the Trade for All project, which is about going out to New Zealanders and not just selling the benefits of trade—although of course we need to do that—but actually listening to the real concerns that people in the community have: concerns around sovereignty, concerns around loss of control, concerns around whether we are sharing the benefits of trade in a fair and equitable way with New Zealanders. I believe that it’s by having that debate, by listening to those concerns and bringing them in, that we will build more support and build consensus, rebuild consensus for trade and for future trading agreements.
So if I can end my comments by coming back to my conversation with my predecessor, the Hon Phil Goff. I’m happy to say that at the end of this process, with that consideration, with that discussion, with the changes that this Government has made to get us to the point of CPTPP, I’m very happy to be able to talk to my old friend Phil Goff and say that I agree that this agreement does have benefits for New Zealand and that we have addressed so many of the concerns that people held, and I am very happy to commend it to the House. Thank you, Mr Assistant Speaker.
A party vote was called for on the question, That the Trans-Pacific Partnership Agreement (CPTPP) Amendment Bill be now read a third time.
Ayes 111
New Zealand National 55; New Zealand Labour 46; New Zealand First 9; ACT New Zealand 1.
Noes 8
Green Party 8.
Bill read a third time.
Bills
Commerce Amendment Bill
Third Reading
Hon CARMEL SEPULONI (Minister for Social Development) on behalf of the Minister of Commerce and Consumer Affairs: I move, That the Commerce Amendment Bill be now read a third time.
The passage of the Commerce Amendment Bill is part of the Government’s agenda to build a productive, sustainable, and inclusive economy. This bill will support increased competition and better performing markets for goods and services. Healthy competition promotes affordable goods and services for consumers and encourages innovation and productivity by businesses.
A key measure in this bill is the new market studies function for the Commerce Commission. The Government is committed to encouraging an honest business environment. We want the commission to have the tools it needs to promote competition and protect consumers. Market studies will shine a light into poor performing markets so we can better understand why markets are not working effectively. As a Government we can then make an informed decision as to whether intervention is desirable and, if so, what form that intervention may take. The Commerce Commission has been allocated $1.5 million per annum to carry out this new market studies function. This is in addition to the $5.7 million over four years the Government committed to ensure the commission is adequately resourced to use the tools it has to protect consumers and honest businesses.
There have been a number of Ministers who have raised concerns about certain markets that are not performing effectively and delivering the best outcome for consumers. Once the bill receives the Royal assent, Minister Faafoi will be writing to Ministers asking them to nominate poor performing markets for consideration. The intention is to make an announcement on the first market study in December.
The bill also makes amendments to strengthen the regulatory regime for the three major international airports. These amendments do not impose new regulation on these airports. Rather, they provide a regulatory backstop in the event that the Commerce Commission finds that the current information disclosure regime for airports is not working effectively. Following the passage of this bill, if the Commerce Commission considers that the airport companies are acting contrary to the interests of users of airport services, the bill makes clear that it may inquire into whether further regulation is desirable and make recommendations accordingly.
Finally, the bill improves the Commerce Commission’s tools to resolve enforcement cases in a cost-effective and timely manner. It repeals the current regime for cease and desist orders in the Act. This regime has not worked as intended. However, I want to thank the current and past statutory officers that have held the position of Cease and Desist Commissioner under the Act. In particular, I would like to acknowledge the inaugural commissioner, Terence Stapleton QC, who issued the only cease and desist order under the regime, and the two current commissioners the Hon Sir Bruce Robertson and Michael Behrens QC.
In conclusion, I would like to thank all those people who have contributed to this bill. This includes those parties that made submissions as part of the policy and legislative processes, the officials who have provided advice, and the Transport and Infrastructure Committee members that considered the bill. I commend the Commerce Amendment Bill to the House.
Hon JUDITH COLLINS (National—Papakura): Thank you, Mr Assistant Speaker. Well, that was a brilliantly read speech by the Minister who’s just resumed her seat. It was stunning really, wasn’t it?
Hon Carmel Sepuloni: I like your cardigan too.
Hon JUDITH COLLINS: Oh, she likes my jacket. Isn’t that sweet? You see, I can do green.
Clayton Mitchell: You could do anything, Ms Collins.
Hon JUDITH COLLINS: Clayton Mitchell, you are such a charmer. Can I just say, though—
Hon Christopher Finlayson: But she wouldn’t throw dwarfs around.
Hon JUDITH COLLINS: Oh, I think we’re getting all a bit—
Hon Christopher Finlayson: She wouldn’t engage in dwarf-throwing competitions.
Clayton Mitchell: You’d love to be one of the ones that’d be sliding down all oiled up, wouldn’t you?
ASSISTANT SPEAKER (Adrian Rurawhe): No, you don’t know that.
Hon JUDITH COLLINS: Right, coming back to the bill, I did, however, think that there was an opportunity there for the Hon Carmel Sepuloni to acknowledge the very good hard work of our dear colleague, the Hon Jacqui Dean, who was the Minister of Commerce and Consumer Affairs, who started this process when we were in Government last year, when the world was a better place, actually, to be frank—and the sun shone more and everything was wonderful.
So Jacqui Dean worked very hard on this, and I know because I also worked with her. I undertook the first of the studies into the fuel market prices last year. It’s taken this Government a year to sit on it; Cabinet last year approved—I think it was August, actually, last year—giving the Commerce Commission extra powers around market studies. But we did impose a caveat to that and that was to have a Minister decide whether or not there was a particular industry or area that needed to be looked at and studied. That was because we were very aware of the cost to business and therefore the cost to employees and therefore the cost to consumers of any overdoing of any market study powers, because of the fact that an open-ended power can be incredibly expensive for an industry.
What some people don’t seem to understand is that the cost always ends up being paid by the consumer, and that means that people who don’t get choices about where they spend their money end up paying the most.
So I think the Government has got very frightened and concerned about what’s been happening with fuel prices around New Zealand. We’ve seen some incredibly interesting captain’s calls today from the Prime Minister around fuel prices. That is very much around the fact that people are hurting when they are going to buy their petrol. And why is that important for this bill? It is because, actually, the work was started last year to deal with this very issue, particularly around the domestic fuel market in New Zealand. There are basically four big players in it. There’s Gull, which is an independent. Their fuel is brought in already refined out of Singapore, from memory. The other ones are Mobil, BP, and Z Energy, and they all own the refinery at Marsden Point. They, therefore, have control of most of the domestic fuel in New Zealand—domestic and aviation fuel, I should say, as well—and they sell on to some of the independents like Waitomo Group and some of those very small players.
I was always fascinated, as the Minister of Energy and Resources, and never really got a straight answer, about why it is that companies like Waitomo could buy their fuel from the big three and still sell it cheaper. I did not understand that, and I never got a satisfactory answer. I had some very interesting answers, but they weren’t satisfactory. Some of those answers were around—and I really love this one; this is one of my favourites, which was “Well, Minister”—as I was then—“we sell coffee as well.” Well, I don’t know where that one came from. And I said to that particular company—and I won’t name them; some people might guess—“And you sell, by the way, very good coffee, but if you can’t make money on coffee and you’re telling me that fuel is cross-subsidising your coffee, then you’re doing something wrong, because I think I could make money on coffee.”
So we had an interesting discussion. The reality is that we have a market where we don’t have as many big players, where even though there is no cartel, as such, and the fact that three of the big players own the refinery and are shareholders and have information from that refinery about how much fuel is being refined quite clearly shows there are issues there around our market and the lack of competitiveness.
We saw before we even undertook the study—but the study from the Ministry of Business, Innovation and Employment clearly showed it as well—the thing called the Gull effect. One of the reasons that people in Wellington wonder why the fuel prices are higher even than other parts of the North Island is actually that Gull hasn’t set up shop here. And I asked them that too, and I know that the House will want to know, and the answer was that Gull imports their fuel through Tauranga ports, and that their model works on the basis of one day’s tanker trip, basically—they don’t want to overnight. They don’t want to have anything else. They have issues, I think, accessing storage facilities in Wellington at the ports, and they’ve had issues trying to even sell into other parts of the country.
So these are all things that I think can be looked at, and I think it’s a worthwhile thing to do—to find out about any issues around competition or lack of competition around access to storage at ports, access to ports generally, and also to understand why it is that people can bring fuel into New Zealand fully refined and sell it cheaper than anywhere else.
One particular part of the country that seemed to have some of the best prices for fuel, and still has, is Levin, primarily because it’s one of the last places with all the big fuel players in it, in quite a small area, and therefore people can shop around.
I don’t think it’s good enough to be able to say that if you’ve got a competitor like Gull or even some of the very small players, like Waitomo, who as I’ve said buy their fuel from the big three, in your town that therefore all of the other prices are cheaper than they are in the town next door where there is no Gull effect. It’s simply not good enough, and it’s not credible for the industry to say, “Oh well, there’s more cost.” I know that some of the service stations provide more service than others. There’s not that much service, to be frank, on the forecourt of any service station in New Zealand unless it’s privately owned or there’s a particularly good—let’s say, there’s a lot of competition from other service stations.
I think the situation has become one where over the years Governments have found it very difficult to deal with because we are only small players in the fuel market as a country. There is nothing to stop the big players like, for instance, Mobil, or others, saying that they’ll just exit our market, and that certainly has happened—Shell has exited the market. But that doesn’t mean, I believe, that that wouldn’t open up opportunities for others as well. So we’ve just always got to remember the fact that we have a population smaller than Melbourne. We have a physical size and, therefore, all of those issues around transporting fuel, storage and everything else—we’re bigger than the United Kingdom physically—and so obviously we do end up paying more.
But one of the big issues that the Prime Minister hasn’t dealt with is the issue about all of the excise taxes on fuel. It is not fair, I believe, going into the future, with more people using electric vehicles and more people with hybrids, for the only people who contribute towards our roads through the fuel taxes being petrol users and, through the road-user charges, diesel users. It is simply not fair. There would not be many electric vehicles in my electorate, in Papakura. There are not that many people who could afford them, because they are significantly more expensive than the combustion engine.
So I think there need to be ways of looking at this, and just adding cost on cost on cost, as this Government has been doing for the last year, is not satisfactory. This is a sop at the moment because they could actually fix quite a lot of the problem right now by taking off that tax. Axe the tax.
MICHAEL WOOD (Labour—Mt Roskill): I’m very happy to speak in favour of the Commerce Amendment Bill. I’ll start by acknowledging the previous speaker, the Hon Judith Collins. She was actually quite a good Minister of Energy and Resources, after years of lethargy from the previous Government. In the final year she did initiate a fuel market study—
Hon Christopher Finlayson: Was she a predecessor or a successor?
MICHAEL WOOD: —to look—well, she was certainly better than her predecessor. I don’t think she’s quite as good as her successor, but she did a good job for a National Party Minister in that role, and I want to acknowledge her for that.
She also gave a pretty good and measured speech in which she spoke about many of her experiences and gave some insights. The last minute or two got a little bit ungracious, and it was a little bit lacking in terms of some of the facts, but there was one important thing that she missed in the course of the whole entire 10-minute speech—and it’s important to check this—and that is to confirm what the National Party’s position on this bill is.
It’s a little bit of a mystery to many of us. I have in my notes here, and from my time on the Transport and Infrastructure Committee, the minority view from the National Party which said that they oppose the bill. I listened to the National Party speeches for most of the second reading and most of them spoke as though they opposed the bill, but at least one of their senior members said that they were in favour of it. I missed the way that the actual vote went at that stage. From the Hon Judith Collins’ speech today, we’re actually none the wiser. So we’ll look on with great interest to see which way the National Party actually chooses to vote at the end of this. It will be an interesting observation to make if they do vote in favour of this bill, having written a minority view against it at the select committee stage. One can speculate on what the reasons for that might be.
Hon Christopher Finlayson: We’re too subtle for you.
MICHAEL WOOD: Certainly too something, Mr Finlayson. I’m, obviously, speaking in favour of this bill, and that is because the coalition Government stands in favour of fair competition, fair rights, a fair go for Kiwi consumers, and a level playing field for good businesses, and that, ultimately, is what this bill is about, because abuse of market position undercuts all of those things. This is an excellent bill. The changes that it makes to market studies, forceful undertakings, and specified airport services will serve those ends. I commend it to the House. Thank you, Mr Assistant Speaker.
Hon CHRISTOPHER FINLAYSON (National): I just want briefly to take a call to talk about the cease and desist provisions, because when I was in private practice I remember doing some work on those provisions. Everyone hoped that they would be a very effective jurisdiction, but as the Minister, Carmel Sepuloni, said in her third reading speech, on behalf of Mr Faafoi, they have largely been useless, and, indeed, she rightly pointed out that Mr Stapleton, the first Cease and Desist Commissioner, only issued one such order. So it hasn’t been a jurisdiction that’s been particularly successful, and I think that parties that have been desirous of urgent injunctive relief have found it more effective to go straight to the courts for interim relief. That is why, on that aspect at least, the National Party supports the removal of the cease and desist provisions, because they are of very little practical effect at all.
The other aspects of the bill—and this will be for the benefit of the member for Mt Roskill, who was speaking immediately before me, and will be a reasonably subtle speech—is that we need to look very closely at the market studies regime. The point of difference between the National Party and the Labour-led Government was that there was some concern about who would initiate the market studies. But there’s no doubt at all that some kind of market studies power is necessary and that the Commerce Commission, properly advised, would be able to undertake a very careful study of a particular market like the petroleum market.
ASSISTANT SPEAKER (Adrian Rurawhe): I apologise for interrupting the member but it has come time for me to leave the chair for the dinner break.
Sitting suspended from 6 p.m. to 7.30 p.m.
CLAYTON MITCHELL (NZ First): Before the break, I had the great pleasure of listening to two whole minutes of what I considered to be a ballerina dancing around the head of a pin, trying not to give any credit where credit was due on a bill, the Commerce Amendment Bill. Because, of course, giving credit to this Government, which is now 12 months in and going so well, couldn’t possibly be done. So it was quite a nice little wee Twinkletoes around the subject without actually getting into the nuts and bolts of it.
I’m going to be taking a relatively short call this evening on this bill, but I was in the Chamber yesterday through the committee of the whole House stage, when I had the pleasure—or, some may say, displeasure—of listening to some of the comments that were made from the other side. And anyone listening might have actually thought that these people were going to be opposing this bill tonight, but no, alas, they are in full support of it but they were loving the throwing of the stones and the muck. So we’ll just hit it back to you guys. But great stuff—it is fantastic. This bill does do everything it’s designed to do. It is great that the Opposition are in support of this bill, despite some of the comments that were coming out yesterday.
Look, you don’t have to be a politician or a rocket scientist to work out the many things that have been going wrong in this country, and going wrong for a very long time in relation to the cost pressures around the cost of living particularly. In fact, it was Judith Collins who spoke quite considerably and specifically on the petrol pricing in this country. In fact—just to segue way for a second—the cheapest petrol price we’ve got at the moment is in the Waikato in this tiny little town. I think it’s Apirinui? Somewhere like that. I’m not sure. Anyway, it’s like $2.07 a litre, and they’re the only petrol station in town. They’ve got no competition—
Hon Andrew Little: Ātiamuri.
CLAYTON MITCHELL: Ātiamuri? It is Ātiamuri. Thank you, Minister. Ātiamuri have the cheapest petrol in the country. Now, they’ve got no pressures of other petrol stations around them to get that, but they are delivering the cheapest petrol in the country. And when you compare that to the prices that we are paying now in and around our large centres and cities, even in Tauranga—I mean, I drive a diesel. It’s a very good diesel, not one of those dodgy ones. And the price of diesel’s doubled. In fact, it’s not doubled; it’s gone up by 50c. This time last year it was $1 a litre. Now it’s $1.50, or just under. And petrol has gone up astronomically, despite a 3.5c increase with excise, which some people are suggesting is the reason for the rapid increase. The cost pressures and the way that some of these fuel companies are behaving is exactly what this bill will go and address.
But it’s not just the fuel companies. We’ve had discussions around the issues specifically to do with supermarkets and the costs around the supermarkets—the price of living—and the monopolies and duopolies that are operating in this country, and giving the power of the Commerce Commission to go in and have a look at some of those things. I’ve got a list here. Apart from the supermarkets and the fuel prices, we’ve got energy and gas pricing—we pay over the odds for our gas and our energy in this country—and the building and construction sector. With costs just going up through the roof, there’s no such thing as an affordable home. I’ve built recently a very small, modest 118 square metre home with my wife, and the cost was over $500,000 for the build—and we’ve just got chipboard floors.
Jenny Marcroft: Chipboard floors?
CLAYTON MITCHELL: Chipboard floors. We don’t even have a garage. But the costs going through these building companies are just out of control. And these are the sorts of things that we could get our Commerce Commission to take a serious look at. The scope of work that they’ve got and the ability to check that out with the airlines, the bank charges—when you compare the charges and the credit card charges that we pay in New Zealand versus what they’re paying in Australia, remembering that most of our banks are owned by those foreign monopolies and duopolies in Australia. So, to hold them to account and hold their hands to the fire is exactly what this bill will enable the Commerce Commission to do.
Something that’s quite dear to my heart, and something that we’ve talked about as a party quite considerably—in fact, it came up as a remit at our recent convention in Tauranga—was the costs of retirement villages and the disparities and differences between one retirement village and another. I think those are the sorts of areas that we could be spending some time, some effort, and some energy making sure that we get those settings right. Enabling the Commerce Commission with the right tools to deal to these sorts of situations, I think, will go a long way for all New Zealanders.
We are a very expensive place to live, when you look around the world. In fact, I’ve got family in the UK that pop down and get £20 worth of groceries and they’ve got four bag-loads of groceries, whereas here you go and spend $40 on groceries and you won’t even have enough to feed your kids for the night. You’d be better to go down to McDonald’s or get some fried rice from your local Chinese takeaways because it’s just so expensive to buy groceries in this country.
The airport regulations are another great opportunity. There are three main parts to this bill, and giving the Commerce Commission the tools, enabling them to have reviews, and looking at the way the airport regulations and airport services can behave, I think, is a great thing. And it’s very, very pleasing to see the House, as a whole, come together to support this bill as we steward it through the House. And tonight, it’s the third and final reading, so look out New Zealand. We’ve got some good things on its way—another great thing that this Government has achieved in a very short amount of time. It looks like they’re all ready to take a call. So on behalf of New Zealand First, we commend the bill to the House, and I’ll take a seat. Thank you.
ALASTAIR SCOTT (National—Wairarapa): Thank you, Madam Assistant Speaker, for this opportunity to speak in the third reading of this bill, the Commerce Amendment Bill. I’d first like to acknowledge and congratulate Jacqui Dean on the work that she did as Minister in the initial stages of this bill. This is essentially a National Government bill, which is the reason why we’re supporting it. There was excellent work, I say to the committee and to the submitters who brought this bill to its current state.
Now, competition is a good thing. Healthy competition is essential to drive economies efficiently and effectively, to allocate resources appropriately, and to ensure that the inefficient die and the efficient and effective businesses survive. But there are situations where there could be duopolies or people who have very strong market influence, where they’re not doing anything illegally, but there is a need from time to time to investigate and to test that competition as anticipated—as expected—is being carried on in that particular market place. And that’s why Jacqui Dean, as commerce Minister, initiated this piece of work.
So let’s turn to the idea of having competition studies. Now, competition studies, according to the bill, can be initiated by the Commerce Commission or the Minister. We say that the Minister should have the final decision on whether there should be a particular study, and there are some very good reasons for that. There are very good reasons why the Minister—or at least the Government; the Minister, let’s say—has the final veto, the decision, about whether a market study should take place.
For a start, when you’ve got two people throwing up ideas on what should be investigated, you know, it’s all about prioritising. It would be tough enough for the Commerce Commission on their own to decide what is the most important in their view. In fact, they are guided by the view that it must be in the public interest, and I’ll come to the problem with that in a moment. But, you know, they’ve only got limited resources, and we know that it costs probably a million dollars or more, and might take up to a year or more, to do a proper study. There’s no point doing a shallow, short-cut, flippant inquiry. If you’re going to do something, do it well. So there’s an issue of what determines the priority that the Commerce Commission might put on their favoured list of inquiries.
Then you’ve got the Minister. The Minister can initiate competition studies as well. That’s a good thing. He or she will also have priorities. It’s not clear to me how either of those two initiators prioritise. There’s no criteria other than that everyone, both of those people, both of those entities, the Minister and the Commerce Commission, must have the public interest at heart.
So what does that mean? What is in the public interest? I say that the Minister understands what the public interest is about, because we here are involved with the communities every day. We hear and listen to people’s concerns, whether it’s a problem that they’re having with their council’s consenting issues, for example, and I’ll come to that more than a minute; whether they feel they’re being ripped off at the petrol pump—I don’t hear that other than the problem with the excess taxes that we know about—or whether it be supermarkets, as suggested by Minister Jones, but, again I don’t hear that from my constituents. There’s lots of places in the Wairarapa that people can buy their goods and produce other than supermarkets, so there’s lots of competition out there in that regard. But at least the Minister can make that decision in the best interests of the public, because the Minister and the politicians here are very connected to the community and the public interest.
The Commerce Commission is a bureaucracy. The Commerce Commission does not necessarily have the public interest at heart. It would be difficult—and this was in submissions made in the select committee process—if challenged, for the Commerce Commission to justify that study A has a greater level of public interest than study B, whereas a politician can easily and justifiably say, “Well, I’m going to make that decision in the public interest, and if I’m wrong I will get voted out—I will get voted out.” So it’s all about the governance that we’re talking about here—the governance of, and accountability for, those decisions as to which study should be initiated first.
So we talked a lot about the fuel and the need to investigate fuel suppliers, the suppliers of fuel, refined oil, into this country. But from where I sit as a constituent MP, I hear of other issues, other competitive issues or other markets that don’t appear to be working as well as they could be. I know Minister Jones has his favourites. It’s the supermarkets and real estate sector. Well, I would disagree on the real estate sector. There’s lots of and lots of competition there. No problem with having a healthy, active, competitive market. But we have an issue around the supply of building materials in New Zealand. Why not look at the problems and the bottlenecks and the competitive market that is or is not occurring in the building sector? We know New Zealand is an expensive place to build a house, and we’re short of them, and I suggest to the Minister: get an inquiry, get another working party, if you like, Minister, to kick off and direct the Commerce Commission into understanding the market forces that are or are not at play in the building supply industry.
Then, touching on that similar industry, is the consenting. Who provides consent to the building sector? The councils. Do they have competition? No, they don’t. So there’s another example of a very tough bottleneck, a bottleneck issue, a monopoly situation in a local area, an authority, a business, if you like, or an entity for sure, that has a monopoly situation, which has a massive influence on the pace that building and homes are constructed in New Zealand. So let’s direct the Commerce Commission to do that, and I suggest the Minister does that. If you left it to the Commerce Commission, I really don’t expect them to take that initiative.
Water: where is the efficient and competitive tension around the allocation—allocation, I’m talking about—of water? Why not initiate an inquiry into the competitive nature of the labour market? The labour market is an extremely important resource to the well-being and productivity of this country, but the labour market is not as flexible. It is less mobile than it could be. So I’m talking about the mobility and flexibility and competitive marketplace for labour and why we are not as flexible and mobile as we should be to increase productivity in this country.
So if the Commerce Commission decided to initiate any of those topics, there’s really no accountability if it’s the wrong topic, if it’s the wrong subject, if people think it’s a waste of taxpayers’ money doing this or that. They’ve still got their job tomorrow. That’s why it’s important that the Minister decides. The Minister must be held accountable for the use of taxpayers’ money to decide, because all these initiatives and studies do cost money, and that is why a Minister should be in charge and should decide on the competitive market study that needs to occur, and if he gets it wrong and people don’t like the way that the study is conducted or the choice of study or the cost of the study, the accountability is that that Minister gets voted out. Thank you.
Hon EUGENIE SAGE (Minister of Conservation): Tēnā koe, Madam Assistant Speaker. Thank you. What is not to like about this bill? The fact that this Government is interested in protecting consumers, and we’ve just had Alastair Scott again—Mr Mitchell talked about dancing on the head of a pin. National seems to be reluctantly supporting this bill, giving all the reasons why it doesn’t really want to support it, giving all the reasons why it doesn’t trust the Commerce Commission, but this bill is about ensuring that markets operate well by giving the Commerce Commission and the Minister the ability to conduct market studies. This Government is interested in ensuring that consumers are protected and that we have some checks and balances on the way in which the market operates. So there is a test of whether or not it’s in the public interest.
I have a great deal more confidence than the previous speaker that the Commerce Commission will be able to determine whether a market study is in the public interest or not. It is also ensuring that New Zealand catches up with the rest of the OECD and with around 40 other countries internationally which have a similar power of doing market investigations. But, oh no. The National Party only wants these to happen if the Minister decides. It doesn’t trust the Commerce Commission. So when we want to ensure that New Zealanders get really fair and appropriate treatment, as the Minister said in his first reading speech, by delivering competitive markets and supporting honest business, this is one bill that will help make that happen.
My colleague, our commerce spokesperson Gareth Hughes, has suggested that one of the first times this market investigation should be used when the bill is passed is to look at the duopoly around supermarkets and to do a market study there, because we’ve seen in the submissions that have been done by organisations like the Food and Grocery Council, and some of the concerns that they have raised about the duopoly powers, that this is right for a proper study. So that’s what this bill is intended to do.
The National Party seems to want to protect its ideological base of markets working virtually untrammelled. On this side of the House, we want to ensure that markets work well, and that we protect consumers. So, yes, the National Party when it was in Government did set about doing the targeted review of the Commerce Act which developed some of the proposals that are in this bill, but it failed to actually proceed to introduce legislation to the House and that’s what this Government and the Minister, the Hon Kris Faafoi, has done.
So when we’ve got a tourism industry, which is so important to our economy, where we’ve got 3.7 million arrivals in 2017, and that’s expected to increase to over 5 million by 2025, most of those international arrivals come in via our airports. This is another area where it would be entirely suitable for the Commerce Commission to undertake a market study because of the concerns that have been raised by the Board of Airline Representatives of New Zealand and others about the potentially excessive profits that some airport companies have, and the fact that they are targeting that.
They’re charging users highly, and they’re not recognising that, if we’re going to have a successful tourism industry, we need to ensure that airports are operating so that we get the regional benefits of distributed tourism, that we get an ability for airlines to negotiate effectively with those airports, and that they don't abuse the power that they have of being the sole operator in our major metropolitan areas. And so this is another example of why we need this bill and why it should also be possible for the Commerce Commission and not just the Minister to initiate these market studies.
I would have thought, Mr Scott, that the National Party would recognise that good decisions are well-informed decisions—that if the Government is going to intervene with more regulation in, for example, the supermarket sector or with airports, that you would want that to have been preceded by a market study to see how that market is operating, to see what regulatory interventions are needed, and to see whether there are other levers that the Government should be pulling. So this bill is a very sensible bill because it enables that to happen and gives the Commerce Commission more teeth. If you're going to have an effective market regime, you need that regulator to have a variety of levers available to it. So the Green Party commends this bill and hopes that it passes promptly. Thank you.
Hon JACQUI DEAN (National—Waitaki): Thank you, Madam Assistant Speaker. Speaking to the Commerce Amendment Bill, and the last speech that has just been given has illustrated very neatly and very clearly why business confidence is tanking in New Zealand. Absolutely, undeniably when you have a Minister inside of Cabinet who says that the purpose of the market studies power is not to increase competition, it’s not to be to the benefit of consumers with prices and services—that Minister said the Commerce Commission’s market studies power will be a tool so that Government can intervene with more regulation. You just heard that from the Minister’s mouth herself: so that the Government can intervene with more regulation. So that is why this Government—this Labour-led coalition Government—has removed ministerial controls over the initiation of a market or competition study.
That might be fair enough—and National acknowledges that, yes, this was our bill and absolutely we support the market studies ability for the Commerce Commission, but there must be a control on that because of the impact on business in New Zealand. So I go back to my first point: no wonder business confidence is daily, weekly, monthly taking a hit under the uncertainty provided by this Government over a whole range of signals that it is sending the New Zealand business community, least of which is that a market study by the Commerce Commission may be initiated by the commission itself but under the direction of this Government. And the previous two speakers—a New Zealand First member and a Green Minister—spent quite a bit of their time in this debate this evening telling us just what parts of the economy are going to be subject to a market study. Isn’t that extraordinary given that we are now legislating a provision where the Commerce Commission itself initiates a study—no, no, it will be under the direction of an anti-business, interventionist Government. You heard it. You heard it from their mouths. They don’t like it, but the House heard it from the mouths of the New Zealand First member and the Greens Minister.
So I just want to go through, in the under 25 minutes since the House has resumed since the dinner break, the strong suggestions that have come from the coalition partners around what will be a market study in the future. And if you think about the fact that a market study will take up to a year—in fact, you’d really want to have a look at a time frame of 18 months because you’ve got to initiate the study and then the Commerce Commission has to get out and do it—
Hon Nathan Guy: Consult.
Hon JACQUI DEAN: —consult and talk; to require information—
Hon Nathan Guy: Then put out a draft.
Hon JACQUI DEAN: —and then go through the whole draft—quite right—go through the whole stage and then present the market study. It seems like there’s a decade of market studies; so I do hope the Commerce Commission are girding their loins, because they’ve got an awful lot of work to do. And one wonders, under this pressure, what other activities are going to have to be forgone because they’re going to be totally, in my view, and I want to tell you why in a minute, taken up by conducting market studies, which on the one hand this Government says they will initiate because they need to be independent, but on the other hand they are only too happy to give direction in this House and in the media about just which market studies should take place.
I’m going to run through some of them. Twice tonight we’ve heard about market studies into the duopolies of New Zealand supermarkets. We’ve even had the unedifying view of shopping bags full of groceries which are so much cheaper in the UK than they are in New Zealand. That member clearly doesn’t understand that Great Britain, or the United Kingdom, is almost completely surrounded by the European Union and is not an island floating at the bottom of the Pacific. That little piece of policy mistake aside, the supermarkets beware. Beware supermarkets, the Government is coming for you. Beware Commerce Commission, because the Government is going to give you subtle and unsubtle messages about what kinds of market studies it just wants to be initiated so that it can, subsequent to that market study—and I quote the Minister Eugenie Sage—interfere with more regulation. Well, that’s marvellous. That’s just what New Zealand business does not need—
Hon Nathan Guy: What did she say? Say that again.
Hon JACQUI DEAN: Intervene with more regulation. I have it here, and exactly what New Zealand business does not need is more regulation. Well, I can tell you something: over this side of the House, we are firmly committed to less regulation, less intervention so that New Zealand business can get on with doing what it does best, and that is providing goods and services for the New Zealand public.
But wait, there’s more—there’s more. There is quite a bit more. So we’ve ticked off supermarkets. There is a fuel study. Now, the Prime Minister herself several weeks ago contended that New Zealanders are being fleeced at the pumps. Well, they’re being fleeced all right. They’re being fleeced by the Government’s own taxation regime—the Auckland fuel tax—which I am paying for in the rural South Island as I drive around, as that tax gets spread across New Zealand.
There’s more. Tonight, we heard about an energy and gas market study. Well, that will be interesting—an energy and gas market study—particularly in the uncertainty that is now pervading the energy and gas sector with the Government’s signal to shut down further exploration, which is collapsing not only support for Labour in New Plymouth but is actually collapsing New Plymouth. No wonder there is a lack of business confidence with that kind of signal coming from the Labour-led coalition Government, enabled, of course, by the Green Party, who have now had a road to Damascus moment and are now supporting market studies, whereas in the last Government they were implacably opposed to them. Never mind.
We also have tonight on the table a market study of the building sector, OK? We also had a member in the House saying housing is unaffordable. They’ve had a year. They had a previous nine years of talking about housing affordability. What have they done? Not much, but what they are doing tonight, because they announced it tonight, is they will lean on the Commerce Commission to undertake a market study into the building sector. Well, that’s excellent! I think we’re up to about three.
Fourth: airlines—airlines. We’re going to have a market study on airlines for no better reason—
Chris Penk: That’s going to take off!
Hon JACQUI DEAN: —than in the view of the Minister in the Green Party—my colleague just said a joke and I’m trying hard not to laugh but it really was rather funny. Yes, it’s going to take off. Sorry about that.
Here we go. That’s five market studies that have been talked about tonight. What is the Commerce Commission to do with this kind of direction from the Government? It happened in the debating chamber by members of the Government. Well, if I were the Commerce Commission, I would know what my riding instructions were very clearly: they are to drop everything else. All the work that the Commerce Commission commonly do and are funded for—they would drop all that because they have at least five market studies which have been announced tonight by the Government, from the Prime Minister several weeks ago, the Hon Shane Jones, and now other members across this coalition Government. We’re in a bidding war for just how many market studies. What’s that going to do for business confidence in New Zealand? It is going to continue to tank, and they don’t even know why.
ASSISTANT SPEAKER (Poto Williams): I understand this is a split call. I call the Hon Meka Whaitiri. You have five minutes.
Hon MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): E Te Māngai o Te Whare, tēnā koe. Otirā, ngā mema o Te Whare nei, tēnā tātou katoa. After that last speaker, Jacqui Dean, what can I say? We are a coalition Government wanting to get on and do the hard yards. We had a speaker who talked about apparently being the party of the free market and who had every opportunity to usher this bill through, but I want to commend my colleague the Hon Kris Faafoi for bringing in a well-considered bill, a bill that actually gives the tools necessary to the Commerce Commission.
As the Commerce Act says—and I quote—“The [main aim] of this Act is to promote competition … for the long-term benefit of consumers [and markets] within New Zealand.” How can the Commerce Act be achieved if the tools are not readily available to the commission? So what this bill does is enable the Commerce Commission, in their wise judgment, to initiate market studies, and, of course, the Minister himself can also initiate market studies—and that’s all. On this side, we want to be informed when we make decisions, and we want to do it on good evidence, and that’s what the market studies are about.
I am a member of the Transport and Infrastructure Committee, and I’m somewhat confused because, in the report back to the House from the select committee, we have got this piece that says “National Party members do not support the bill in its current form. The amendments proposed in the departmental report do not address the issues we have with the bill. We recommend that the bill not proceed.” So I’m somewhat confused. Are the Opposition supporting this bill or are they not supporting the bill?
I’ve been listening quite carefully to the contributions on that side of the House in terms of their concerns for not supporting it—or now are they supporting it? I would like one of the members—we’ve had Alastair Scott from the select committee, and hopefully we’ve got another member from that side—to get up and actually make it clear to this House whether they are supporting a very sensible bill, a sensible bill that gives the Commerce Commission the right to undertake market studies and, yes, of course, address the issues around certain airports around our country. That’s really critical, particularly for people like myself—a rurally based MP—and, of course, tourism is a big economic opportunity for the areas I come from; so making sure that we’ve got the right tools to ensure that we are enabling more tourism to come into some of our regional parts of Aotearoa New Zealand.
This is a really, really important bill that does, like I said, enable the Commerce Commission to do the market studies. Yes, people are going to share what those market studies would be, but, ultimately, the test of public interest—and I trust the Commerce Commission. Like my colleague the Hon Eugenie Sage said, they will make the right call, and, obviously, discuss with and be led by the Minister of Commerce and Consumer Affairs himself, the Hon Kris Faafoi. It is a common-sense bill. It is something that, unfortunately, that side didn’t enable us to get through the House. I absolutely commend it to the House in ensuring that it gets through so that we can start doing the things that New Zealanders want from this Government and expect from this Government—one of action and one prepared to do the mahi. I commend this bill to the House.
LAWRENCE YULE (National—Tukituki): It’s a pleasure to take a call on the Commerce Amendment Bill.
Hon Meka Whaitiri: Are you on the select committee?
LAWRENCE YULE: I wasn’t on the select committee, but I do have some knowledge in this area. For the Hon Meka Whaitiri, who spoke before, I want to make it very clear, from my humble position on the backbenches, that the National Party is supporting this bill but is raising some concerns about the oversight that is portrayed in this bill. We do so with sort of an interesting background, because today, for the second time in this parliamentary term, we have seen yet another announcement on the hoof. The first was the announcement by the Prime Minister before she went off to Paris, about the oil and gas ban, and we now know there was no analysis done, no Cabinet paper, and the subsequent information that has been provided by the Ministry of Business, Innovation and Employment is somewhat damning about that decision.
We remember what happened to the Hon Shane Jones that day: the picture of his hand over his face when all of that was decided, because he knew very little about it until the night before. But that was actually an advantage compared with what happened today. What happened today was that the Prime Minister, in the light of some pretty intense political heat from the Leader of the Opposition, unilaterally announced that a new provision under the regional fuel tax legislation won’t be used on her watch.
Chris Penk: Cabinet of one.
LAWRENCE YULE: Cabinet of one—no advice, no Cabinet decision, announced in this House. We then asked the Minister responding on behalf of the Minister of Transport when he knew. He said, “When the Prime Minister announced it.” To me, this is what is damaging business confidence in New Zealand. There is no proper analysis. There are flip-flops, U-turns, whatever you want to call them, being done on pretty much a weekly basis. It’s actually because there is pressure to bear and the work hasn’t been done.
So this side of the House—and I want to congratulate the Hon Jacqui Dean on bringing this material to the House—believes that proper studies should be done and that policy and decisions should be made based on evidence. That’s why we support this bill. The Hon Jacqui Dean just spoke previously to me about all the new announcements that have, sort of, been made by members on the other side—a study on energy and gas. Mr Clayton Mitchell talked about building costs, talked about how hard it is to buy a house, how hard it is to build a house. If that was such a concern, why isn’t there a study already enacted on the costs of building materials? We’ve heard high-profile announcements on supermarkets—the supposed duopoly effect.
I want to refer this House and remind this House that there is already a very good model that could be used in a similar way to the Commerce Commission, and that’s the Productivity Commission. The Productivity Commission assesses, on behalf of the people of New Zealand and taxpayers, a whole lot of things that go on in the New Zealand economy. They are asked to do that by a Minister, usually the Minister of Finance but other Ministers are involved. An independent group of people—it’s the same situation in Australia, but it’s been done in New Zealand in the last three years—assess a whole lot of topics and provide independent advice to the Government. All we’re saying on this side of the House is that you’ve got to be careful who is in charge. In our view, Governments should be in charge—Ministers should be in charge—of what the Commerce Commission actually looks at and studies in a market study.
The Government is the place, this Parliament is the place, that resolves issues of the day and it’s actually their responsibility to set the terms of reference and the workload of the Commerce Commission. It’s glaringly obvious—to me, anyway—that one of the most urgent studies will be on looking at the price of petrol, and I think every side of the House would agree with that, but it’s also important, if this Government wants to deliver the savings and the number of houses it wants, that it undertakes a study on the costs of building materials. If this was such a big issue and we left it to the current model, then it may be that the Commerce Commission didn’t get to these things in a timely manner. So all we’re saying is that we support this legislation, but we think this House, through its representatives and Ministers, should determine what studies.
ASSISTANT SPEAKER (Poto Williams): I understand this is a split call. Tamati Coffey, you have five minutes.
TAMATI COFFEY (Labour—Waiariki): Thank you, Madam Assistant Speaker. This is the third reading, obviously, so now we just get to reflect on the wholeness of the Commerce Amendment Bill. There are lots of clauses in there. I think, as many of the previous speakers have alluded to, the big conversation is around market studies. I have a lot of faith that, actually, through these market studies, through the Commerce Commission, by us actually delegating that power to the Commerce Commission to be able to do their market studies, we’ll actually be able to get a few answers. These are answers to questions that New Zealanders are asking us out on the street.
The Opposition, throughout question time, was for the whole time talking about these questions that real New Zealanders are asking—things like petrol prices. As I’ve travelled around my electorate, I’ve been very interested to see just the range when it comes to petrol prices: everything from $2.10 at my local gas station, which is quite fortunate as I understand, to somewhere up in the late $2.40—something like that. It makes a big difference, of course, if you are not on a healthy income. If you are just struggling to make ends meet, then, actually, we as a Government need to make sure that we’re doing everything possible to be able to use the levers of Government to be able to make life better for our people, for the people that we represent out there in the community.
So getting the Commerce Commission to be able to undertake these market studies in the public interest is a great thing. Some people may be uncertain about the term “public interest” and whether or not it’s a wee bit vague and whether or not we need a better definition of it. To that I would respond that, actually, there are plenty of examples in law at the moment where we talk about things like the public interest of New Zealand, and I point to the Official Information Act, which is one of those levers of Parliament where we think that if something is in the public interest, then, actually, that information needs to be divulged. Similarly, in these market studies, we are all quite certain that somewhere along the line, petrol prices are going to be in that line for a market study.
I heard what my colleague was saying earlier in terms of supermarkets—I hear that. I heard the member opposite, Lawrence Yule, talk about the “apparent duopoly” in supermarkets. It’s not really apparent; it’s very real. In fact, I would be looking forward to seeing how a market study might be able to dig a little bit deeper to be able to ask the questions that, I guess, regular New Zealanders would like to know about when it comes to how their supermarkets operate and, obviously, the bottom lines, really.
This is a fixed amount of money, as well. Some people had some concerns, I know, about how many market studies might be able to be performed in a set year. At the end of the day, the Minister has indicated that the actual funding appropriation is $1.5 million per annum. That, the Commerce Commission estimates, would enable them to undertake one medium-sized market study per year. So you can be thankful that we’re not going to be inundated with market studies about anything and everything, and that actually the budget will dictate just how many market studies we do. Hopefully, that will be able to deliver those benefits back to New Zealanders, whether or not we’re talking about petrol prices, whether or not we’re talking about supermarkets, or even if we’re talking about airports. Airports make quite a prominent feature in this regulation, as well.
It has been talked through quite considerably, even in the House tonight, so I won’t go too far into that, suffice to say that this is a piece of legislation that we, obviously, as the Government, are supporting. It sounds like the Opposition is supporting it too. This is in the interests of the people. This is in the public interest of New Zealanders, so that we can actually dig down into whether or not the competition that’s occurring is fair and whether or not we’re delivering the best outcomes that we can to New Zealanders. So with that said, I absolutely commend this bill to the House.
DAVID SEYMOUR (Leader—ACT): Thank you very much, Madam Assistant Speaker. I was sitting in my office, working away for the constituents of the Epsom electorate, and I caught in the background Meka Whaitiri asking the question: “What does the National Party think about this bill? Are they in favour of the bill, and are they in favour of competition studies, or are they opposed to it?” And then I listened to Jacqui Dean speak, and I got even more confused, because she said, “This is the worst thing ever. It’s going to destroy business confidence. It amounts to a choice of socialism over free markets and private property rights, but I thought of it and I’m going to vote for it.” Well, I want to tell my friend Meka Whaitiri and you, Madam Assistant Speaker, that the Opposition is opposed to this legislation.
Then I want to tell you why. It comes down to a very simple choice. The choice is this: do we believe in a society with free markets and private property, or do we believe in a society where a bureaucracy attempts to answer questions that it cannot possibly answer? Questions like: how many competitors should be selling fuel in a unique island nation in the middle of nowhere, on a rocky outcrop 1,500 kilometres long, mountainous, and with fewer people than Sydney? How many petrol retailers should be competing in a market in a country like that? Who will the Commerce Commission compare New Zealand with?
You see, there are already lots of rules in the Commerce Act that prevent people from abusing market power. There are already rules against withholding trade simply to prevent a new entrant coming into the market, and they can already be enforced if there is a complaint. But that’s not what this bill is about. This bill is about the Commerce Commission being able to—off its own bat, or with the instruction of a Minister—go into an industry with greater powers than the police to request information and basically poke around and try to come up with questions of what the market structure should be and how much money people should make, even though they have no way of knowing the answer to that whatsoever.
It is a simple choice: we either believe in free markets and private property rights and competition under well-understood rules, or we believe in another layer bureaucracy and bureaucrats poking around. But there’s another issue here. F A Hayek wrote The Road to Serfdom to the socialists of all parties, and tonight I know how he feels, because there’s another issue. The National Party say, “Well, we don’t think that bureaucrats should be able to initiate these studies, because that is an invitation to corruption. We don’t trust bureaucrats to decide which industry to target, but we trust a politician—a Minister seeking re-election—to initiate such a study.” Well, where’s the logic in that?
The fact is you can imagine the scene: a Minister or a Commerce Commission bureaucrat on the canapé circuit here in downtown Wellington on a windy winter’s evening, and he’s got everybody around him terrified that their industry will be next if they don’t do the right favours. That’s why it’s an invitation to corruption. The Commerce Commission—whether it’s at the behest of a Minister, or the head of the Commerce Commission—will use these powers to request information or potentially intervene in a market, adding another layer of bureaucracy that won’t make anything cheaper or better for consumers, but it will make New Zealand an even more bureaucratic place. The fact that the Prime Minister has already told us what the outcome of the first study is going to be, when she said that consumers were being fleeced, just confirms all the worst fears that people have about this particular bill.
I stand proudly in opposition to this bill, because it’s not going to solve the problem of petrol prices. The problem with petrol prices, by the way, is the price of oil’s gone up 6 percent in the last year in New Zealand dollars—both things that the Commerce Commission has no way of controlling whatsoever. This bill is not going to control that, but it will make life in New Zealand just a little bit more bureaucratic at best, and a little bit more corrupt at worst. So I’m proud to tell Meka Whaitiri that the Opposition will be opposing this bill.
ANDREW BAYLY (National—Hunua): Thank you, Madam Assistant Speaker. It is a pleasure to follow my friend, the good MP for Epsom. He always gives a certain perspective that is an interesting one in the House because it’s more diverse than some others. And, in that light, it's always nice to follow him. So just to be clear, the National Party believes in competition, believes that consumers should have the right to go and buy goods and services at the right price and not pay too much for them. I heard the Minister during the course of the debate as the bill progressed through the House talk only about the rights of consumers. Well, I actually think he, as the Minister of Commerce and Consumer Affairs, should also have regard for commerce in New Zealand and protecting the rights of commerce both large and small.
Clearly this bill is about enhancing the powers of the Commerce Commission, and generally my view is that they do a pretty good job. But this bill actually takes it a little bit further because, whilst large parts of this bill—actually a National Party bill. It was actually promoted under my colleagues when we were in power. So Labour and New Zealand First have literally picked up most of it. The large departure is around the issue of the additional powers we're going to give to the Commerce Commission, and of course we all know that it's been politically driven.
It’s been driven by the fuel price issue, and we’ve heard about that today, and then we’ve heard the off-the-hoof change in policy by the Prime Minister in question time—unilaterally and without notice to, clearly, anyone else in her party or New Zealand First or the Greens—unilaterally deciding that there’s going to be no further regional taxes. Of course, that is bad policy. That is bad policy. That should be done in a considered manner, particularly when you’re looking at large industries like the fuel industry or the airports or whatever. It shouldn’t be a game and it shouldn’t be something that occurs on a random basis. We should have good policy in New Zealand, well-thought-through, and I’m not sure that that is where we’ve landed with this bill as we currently work our way through.
I think that the Minister has been a soft touch. I’ve said this before, because the reason for that is many of the reasons for promoting the changes to this bill weren’t actually supported in the statement in the background papers provided by the ministry. But the Minister has decided to pick up the cudgel, where former Ministers and particularly National Party members have feared to tread—have feared to tread.
So I think the biggest issue is the oversight of the Commerce Commission, if it is to have these additional powers. We believe that there should be the right to undertake market studies. We don’t disagree with that concept, but the difference—and this is where I differ from the previous speaker—is how you provide an effective oversight of that. And that is the question of balance. That’s a question of making sure that if we provide enhanced powers—and as the previous speaker noted, they are significant. How do you provide a framework where those are only used in proper circumstances, and have proper regard to the impact on both the businesses and also consumers?
I think we’ve talked at length about the Australian Competition and Consumer Commission, the ACCC, and of course we’ve highlighted—and it is highlighted in the report by the officials—that this entity is empowered to undertake market studies, but where they want to use these additional powers that are proposed in this bill, that those powers are subject to ministerial oversight. So they are the best example and the closest example of those types of powers and how they may be exercised. But I’ve also highlighted the UK Competition and Markets Authority—the equivalent to the Commerce Commission. I met with them a year ago, and they also have the right to undertake market inquiries as such, but they also have an override—that balancing tension. In that case, there is a clear separation between the management of the UK Competition and Markets Authority and the board.
That’s another option. So the management propose; the board decides. As proposed in this bill, what would happen is the management of the Commerce Commission would propose and decide in one body. Right, it could be a Minister, it could be a board structure—if we had one on the Commerce Commission—but there is an element of an independent check before these comprehensive powers can be deployed.
Moving on, just the implication for commerce—and this is what I think the Minister is missing in his role—is that these are incredibly invasive, they are time-consuming, they are costly, and they also besmirch the reputation of the industries when these take place. They have a chilling effect on those industries, and even though they may prove to be innocent, the whole thought of these inquiries are significant. Everyone in the market gets to know that the Commerce Commission are undertaking these studies. They are not done confidentially. It just seeps out in the market, and the impact, particularly if you’re a listed company, and the implication of what it might mean to your share price, the disclosure regimes that you may have to meet to meet the takeovers or the market listing requirements—all those implications are significant, and before you pull the trigger you need to make sure that the Commerce Commission is doing it properly and with the right reason.
That’s why I think the Prime Minister’s comments were injudicious—saying that she wanted to undertake a review of the fuel companies, and, obviously, one of the reasons why this bill is going through is to enable that to occur. But even worse, in my view, it was actually irresponsible for the Prime Minister to call to other Ministers to almost nominate—if I can use the term “turkey shoot”—on which industries the Commerce Commission might also undertake market studies of. I think that’s irresponsible. That’s like having a trap shoot, and that’s not the way that this legislation, which is incredibly empowering, should be in use and even talked about by the Prime Minister. As I said, I think it’s terribly, terribly irresponsible. For the Labour - New Zealand First Government to allow these unfettered powers to be conducted, I just think strikes an issue in terms of what it means for corporate New Zealand. And I don’t think it’s been properly thought through.
The other thing is—I don’t think I’ve heard anyone talking about—does the Commerce Commission, under the current construct, have the necessary competency and expertise to undertake or to decide these types of issues? For instance, I think if you looked at the Commerce Commission, they certainly have very strong economic ability, they have very strong technical skills around analytical competition issues and I think also around assessing the issue of efficiency. But the issue that the Commerce Commission has no expertise in and the one that this power actually gives them the right to undertake is the ability to broadly consider public interest.
I don’t think we should be asking a technical body to stray into the area of public interest. I just think that is striking a chord that is too far for what is basically a body that has quite a constrained expertise. I know there’s a requirement to publish terms of reference, but there’s no guarantee in the legislation under what—or guidelines as to the nature and scope of their terms of reference. And again, I think if you were going to introduce these broad powers, these mitigating aspects that put some form of limit on them in how they’re deployed should have been captured in this bill, and I think it’s remiss of the Minister not to have done that.
The last thing I want to talk about is the issue of the cost of undertaking these market studies. I know the Government broadly talks about the $1.5 million they put up. The Minister ill-advisedly talked about these things costing $400,000. That figure is so far removed from reality it’s unbelievable, and I think, again, it’s showing a Minister who’s been a soft touch, who’s out of touch with the technical aspects of this bill, and does not properly understand the practical elements of what’s proposed and incorporated in this bill. And I think it’s a disappointment on that issue.
Hon RUTH DYSON (Labour—Port Hills): It’s a real delight to be able to speak in the third reading of this legislation, although I must say that watching the response of the member for Epsom to Andrew Bayly, the previous speaker, I was very tempted to see if he wanted to have another go, because I would have been prepared to split my 10 minutes in order to listen to his contribution to this debate once more.
The three—
David Seymour: Please tell us the member’s not going to use 10 minutes.
Hon RUTH DYSON: I was thinking of going for longer, if it’s possible. I was—
David Seymour: Thank God for the Standing Orders!
Hon RUTH DYSON: Ha, ha! Thank you for your contribution, Mr Seymour. It’s always appreciated. It adds life to the House.
So there are three parts to this bill. The first is, as has been the focus of the third reading debate, the market studies issue—or, as they’re referred to in the bill, competition studies—the second one is the regulation of specified airport services, and the third one is enforceable undertakings, so alternative enforcement mechanisms.
I want to commend the former Minister of Commerce and Consumer Affairs, the Hon Jacqui Dean, for her work in this area, and I want to commend the current Minister of Commerce and Consumer Affairs, the Hon Kris Faafoi, for his continuation of that work. It’s interesting when we have an area where there seems to be such hot debate between National and Labour on these issues, that you’ve had two Ministers both working on the same areas and there seem to be very little points of difference.
It was confusing, listening to the National Party members’ contributions. They were all over the place, desperate to find something to pick holes in in the Government, and actually making fools of themselves by attacking legislation that they are then going to vote for. So they need to get a little bit more of a grip on the issues that are before the House.
It is our view on this side of the House that consumers should be at the heart of competition and consumer policy. This bill progresses that ambition. It does give us the security that we need. There will be parts of it that will need to be refined in the future, and I hope we see the continued efforts, such as were demonstrated at the Transport and Infrastructure Committee, to make New Zealand a better place for all consumers. Thank you, Madam Assistant Speaker.
A party vote was called for on the question, That the Commerce Amendment Bill be now read a third time.
Ayes 118
New Zealand National 55; New Zealand Labour 46; New Zealand First 9; Green Party 8.
Noes 1
ACT New Zealand 1.
Bill read a third time.
Bills
Residential Tenancies (Prohibiting Letting Fees) Amendment Bill
Second Reading
Hon JENNY SALESA (Associate Minister of Housing and Urban Development) on behalf of the Minister of Housing and Urban Development: I move, That the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill be now read a second time.
Around half of New Zealanders are renters. This Government is committed to making life better for renters, and this bill is a down payment on that commitment. Banning letting fees will save renters up to an estimated $47 million a year.
I would like to thank the Social Services and Community Committee for its consideration of the bill. They’ve worked hard on the bill and have listened carefully to many submissions in their thorough consideration. I would also like to thank the 187 submitters, whose feedback and insight helped the committee in shaping the bill. These came from a variety of interested parties, including property managers, landlords, tenants, student associations, and community groups. Letting fees are unfair. They have no economic rationale. That may be why 60 percent of submitters supported the general intent of the bill to prohibit the charging of letting fees to tenants.
The fee is supposed to cover the costs of advertising a property, conducting open homes, and vetting potential tenants. These are services that are provided to the landlord. The contractual relationship is between the landlord and the letting agency, but somehow the existing law allows the fee for those services to be charged to a third party: the tenant. Now, in what other area of law are two parties contracting with each other for an exchange of services allowed to then charge a third party? It is an anomaly in the law.
There is no relationship between the fee and the cost of the services provided. It’s pretty standard for letting fees to be set at the equivalent of a week’s rent plus GST. Now, rent varies from city to city, and from suburb to suburb, and for different kinds of houses the rent varies, but the letting fees are set regardless of the cost of the services that the letting agency is providing for the benefit of the landlord. There is no market competition on the amount payable. This ban will mean that the costs of letting a property will be borne by the party who chooses the property manager.
The costs of letting a property should lie with the person who benefits from the service. The bill means landlords can shop around for the cheapest manager and finally brings competition to the property management sector. No area of law allows people to contract for services and charge a third party for those services.
I understand from the submissions that there is a concern that the bill will result in rent increases across Aotearoa. We do not expect there to be an impact on rents. Scotland banned letting fees, and there was no evidence that it led to a huge increase in rent. In fact, the UK housing advocacy group Shelter found that only 2 percent of landlords in Scotland increased their rents after letting fees were banned there.
The Reserve Bank notes, “Rents are driven primarily by supply and demand, not landlord costs.” Treasury has also concluded that “Experience in other countries shows no clear evidence that banning letting fees will lead to increasing rents.”—this is from the regulatory impact statement. The UK Conservative Government has also introduced a bill to ban letting fees, and their reports agreed that there was no evidence that it led to an increase in rent. Other supply, demand, and financing factors contribute more to the amount of rent than the costs associated with tenanting a property. We’ve got to plan to deal with those.
If we accept, for argument’s sake, that landlords will try to pass on the cost that is currently being sheeted home to tenants through these letting fees and if landlords do try to recoup those costs, then rents will go up by a few dollars a week. Now, even if that were the case—and we don’t expect that it will be—that would surely be better than tenants being whacked with a letting fee that’s the equivalent of an entire week’s rent all at once, up front, at the very moment when they can least afford it, when they’re having to fork out for removal fees, for bond, and for rent in advance. Landlords, or letting agencies on landlords’ behalf, will retain the ability under the Residential Tenancies Act to seek reimbursement from tenants for expenses reasonably incurred as a result of a tenant assigning, subletting, or parting with possession of the tenant’s interests in the tenancy.
The Social Services and Community Committee recommended two changes be made to the bill. The first change is to separate the bill into two parts. This will allow the bill to be considered part by part under Standing Order 303(2). The change reorders the bill so that the substantive provisions—clauses 4 to 8—are under Part 1, and further amendments in clauses 9 and 10 are under Part 2.
The second change is to the commencement provision in clause 2 of the bill. The bill will now come into force on 12 December 2018. This is because tenancy turnover is highest between November and February of each year. Tenants are more likely to move house in summer. It is the start of the new university year, and the fact is that the new year often accompanies a change in circumstances. Implementing the bill during this period will maximise the reduction in costs for tenants that are signing up for new tenancies over this peak time.
The Government has committed to a review of the Residential Tenancies Act. Submissions on this close on Sunday. This review will advance a range of changes to make life better for renters and will include a consideration of limiting rent increases to once per year. It will also contain other initiatives to improve security of tenure and better allow tenants to make their house a home. This review is expected to result in legislation being introduced to Parliament next year.
Ultimately, the best way to put tenants in a better position—in a better situation—is to increase the supply of housing and to end the shortage that is driving rents up. Our Government’s KiwiBuild policy and urban growth reforms are designed to increase supply. Homeownership rates have declined from around 74 percent in 1991 to around 63 percent in 2017. Approximately 576,000 households currently rent in Aotearoa New Zealand, 500,000 of which rent from the private market. Based on 2013 census data, 60 percent of renters moved within three years, while only 30 percent of owner-occupied homes moved within five years.
Māori and Pacific populations are overrepresented in renting statistics. Since 1986, the proportion of Māori living in private rentals has increased by 88.3 percent, whereas, across the total population, renting increased by 42.7 percent. Over the same period, the proportion of Pacific and Māori children living in a rental property increased from around 50 percent to around 61 percent for Māori and 71 percent for Pacific children.
In closing, I reiterate my thanks to the members of the committee, submitters, officials, and the Ministry of Housing and Urban Development for their contribution to the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill. I urge members to vote for this bill so that we can start reducing the costs that many families face, support a more consistent experience for New Zealanders, and make some meaningful changes to the lives of renters in Aotearoa New Zealand. I commend this bill to the House as reported back by the Social Services and Community Committee. Thank you, Madam Assistant Speaker.
Hon JUDITH COLLINS (National—Papakura): Thank you, Madam Assistant Speaker. Now, not everything that the Hon Jenny Salesa said was wrong. I thought she said a few very good things. She just seemed to take a very long time to say not much, and very fast too, and very loud—the microphones do work.
Anyway, what I wanted to say about some of the things that the Minister said—she acknowledged that one of the biggest determinants of rent increases and rent prices is actually demand and supply. I thought that was excellent, because I think she is the first Minister in the current Government to understand that, so well done. She obviously should be the Minister for housing instead of the current one.
Chris Bishop: This bodes well. She should have a chat to the PM.
Hon JUDITH COLLINS: She should have a chat to the PM—yes, absolutely.
So one of the things that I’d like to say to her is: since Labour came in to office, how come rents have already increased $25 a week?
Chris Bishop: How much?
Hon JUDITH COLLINS: It’s $25 a week. So why is that, under a Labour Government? Clearly there’s something wrong. When she has talked tonight about trying to get people into rental houses, she’s talked an awful lot about building houses for people to live in. Well, they’re actually not quite the same thing. Yes, they’re houses. Yes, people can do either, but they can’t do both at once.
So one of the things that I think she’s missed is the point that landlords are already feeling under assault by this Government, and particularly by the current Minister of Housing and Urban Development. Almost every word that comes from that man’s mouth is an insult, an attack on private landlords. He’s the biggest landlord in the country, he’s the one with the worst reputation as a landlord—the Housing New Zealand landlord—and, strangely enough, he’s the one who wants to make life very difficult for private, individual mum and dad landlords.
We’ve heard a lot tonight about prohibiting letting fees and why we should be doing that. Well, the National Party will not be supporting this. We’re not going to be supporting this because we agree with another comment from Jenny Salesa, and that comment was that these costs are paid—they’re paid all right—by the consumer. So if, in fact, the rental letting fees are not paid at the start of a tenancy, they will be paid through the course of a tenancy. She has acknowledged that tonight. She said it’s better for people to pay a little bit extra every week rather than all up front. Well, that might be right if they’re people who chop and change their tenancies, but it’s certainly not right if they’re people who are very stable tenants who stay in tenancies for years. All of those people she seems to be quite happy to allow to have more rent that has to be paid, because they’re paying for the cost of the other people who chop and change their tenancies every five minutes.
So, actually, I think there are a few things, as I said, that I thought she recognised really well tonight, and that’s because she seems to recognise the area—know the area—much better than the current Minister, Phil Twyford. But what this does do is it’s just another discouragement on people who are constantly being bagged by this Government, whether it’s in terms of—[Interruption]
DEPUTY SPEAKER: Excuse me. Can we not have conversations in the aisles, thank you.
Hon JUDITH COLLINS: Oh, thank you, Madam Deputy Speaker.
DEPUTY SPEAKER: Take it outside.
Kieran McAnulty: Carry on.
Hon JUDITH COLLINS: Thank you, Madam Deputy Speaker. Oh, thank you so much, Mr “what your name is”, over there. Thank you very much. Thank you for your permission to speak!
Hon Members: Kieran McAnulty.
Hon JUDITH COLLINS: McAnulty—I knew there was a name there somewhere. Now, anyway, I should come back.
I’ve met with the landlords association of New Zealand, and I met with the ones in Wellington, and most of the people there are people who, on average, own 1½ rental properties—on average, so one, two, or maybe three. Their message to me was that every single time Governments, including ours and this current one—this short-term, one-term Government—put more onus and more regulations on landlords, the more they want to leave. They want to leave the market. People who say, “Oh well, they shouldn’t have two houses.”—well, they’re providing a rental home for another family or for, in some cases, four younger people living together, just hanging out together and being flatmates.
Those are the sorts of things where people forget that they’re just humans. They’re not “landlords”; they’re humans. They’re people. They’re people who have, in many cases, saved their money. This is their retirement income. They don’t have confidence in the sharemarket, in many cases, because they’ve been burnt over the years. They want to be able to look at their retirement income and say, “That’s my retirement income.”—that they have something else other than the house that they live in. They’re also sometimes people who have sold their family home and have bought two smaller places instead—one to live in and one to rent out.
I know people like this. These are just ordinary, decent New Zealanders, and every single time the current Minister of Housing and Urban Development opens his mouth about landlords, it’s to bag them, and that’s unfortunate. It’s also really unfair, and this is just another piece of legislation about that. So when he says—and Minister Salesa has said—“Well, these costs shouldn’t be—we should stop this cost now.”, it’s because they often get managers in or they get someone to do the letting for them because they don’t feel, in many ways, able to deal with all the issues around letting out the property, because they are, mostly, mum and dad investors.
There are some people who say, “Well, they shouldn’t be in the market. They should get out of the market and be professionalised.” They’re also the people, by the way, who say to a tenant when they can’t pay their rent, “Oh, take another week.”, or “Here’s something off.”, or even “Take clothes for kids.”, or “Take furniture for them.” These are the sorts of things that mum and dad investors tend to do. They tend to care. When we have legislation like this that doesn’t discriminate against good and bad landlords, that just discriminates against all landlords and is yet another—and you see all the language around it. All the language around the publicity on it, the press releases, and the language in the speeches on it—it’s all about—
Priyanca Radhakrishnan: I want to get back to the bill.
Hon JUDITH COLLINS: —these nasty, horrible landlords. I heard somebody up there. Was it Clare Curran calling out? Somebody on that side—one of those people—is calling out and saying, “Oh, but they pay the bill.” [Interruption] Oh no, it’s somebody else, somebody coming up and saying, “Well, they have to pay the bill.” Well, actually, Jenny Salesa understands who pays the bills: it’s the consumer who ends up paying the bill.
One of the things that I think is really interesting for people who have never understood about this is that every time we put on regulations, every time we put on rules, every time we impose costs, understand we may be doing it for all the right reasons, but understand it’s the end consumer who ends up paying every single time. They always do. And when we have fewer people now willing to be landlords, we have the situation we have now where rents go up. Rents have gone up $25 a week on average under this Government—only one year and they’ve managed to do that. At the same time, we are having landlords exiting the rental market because their view is that this Government is going to do them over and is making it too hard to rent out properties.
Priyanca Radhakrishnan: Fake news.
Hon JUDITH COLLINS: I think it is really important to understand that there are consequences for the constant attacks of Phil Twyford on mum and dad investors. Those mum and dad investors don’t have to be there. They can take their money out, and that’s what he’s told them to do. He’s told them to take their money out and go and put it somewhere else. That’s what he said to them. Unfortunately, I don’t think it’s fair for his own colleague to call him fake news like that, but I do think it is important that people understand that telling mum and dad investors “We don’t want your money; if you don’t like it, get out of the market.”—that’s the sort of language, that’s the sort of sentiment, which is going to mean that there are going to be even more people waiting for State houses on the State waiting list. It’s already gone up 1,000 under their watch. What a disgrace.
Hon CLARE CURRAN (Labour—Dunedin South): Well, Madam Deputy Speaker, as one of those people, as Judith Collins referred to me—and I must say she’s looking very pleased with herself tonight—I find it deeply ironic that she spent a lot of her speech talking about humanising landlords while from the other side of her mouth, or out of her keyboard, this afternoon came the demonising of people who live in State housing, because, apparently, they’re people that regular people don’t want to live next to.
If there’s around half of New Zealand who live in rental housing, then that’s a lot of people who are affected, and a big percentage of those people really struggle when they need to move house, when they’re looking for a house, and they are being penalised by letting fees. This is one small step—one small step to try to make it easier for people to be able to afford a home, to be able to afford a home that they can afford, and it’s about fairness.
This is a bill which is small. It fits into a much bigger strategy, which National clearly opposes on principle, around affordable homes for everyone in New Zealand. Landlords are a really important part of our ecosystem. There are a lot of landlords in New Zealand and many and most of them are doing a good job. But not all of them, and there are intermediaries that charge very high letting fees. This bill attempts to address that. It’s fair, it’s about ensuring that people can afford to rent, and we support it.
Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Deputy Speaker. I’m pleased to rise and take a call in this second reading of the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill. I do want to start by saying I don’t think there’d be a member in this House that wouldn’t agree that we want people, particularly on lower and middle incomes, to be able to afford to rent a home. The difficulty is that this is yet another piece of legislation that has a good intent, but actually in terms of the policy and the ability to deliver that intent, there is a massive gap in between. So I want to take the House through some of the submissions that we did hear in the select committee, because what the Minister outlined in her second reading speech actually doesn’t line up with the reality of what we heard in the select committee.
I do want to put on record that from some of the submitters we heard, there were absolutely some horror stories, and the one thing I will agree with the previous speaker, Clare Curran, about is that there are some landlords—and I would say they are a small minority of landlords—who don’t do a good job. The unfortunate reality with this legislation, though, is that for those who want professional assistance to assist them in the letting process—guess what? That will be less available than before, and for those that continue to use that service, someone has to pay. And guess who will pay? It’ll still be the tenant. It’ll still be the tenant and, unfortunately, what it will mean, instead of an upfront cost, is that that cost, if you look at the regulatory impact statement, could be $10 a week—each week, every week—for the remaining term of the tenancy. And when we had submitters in front of us, they agreed that that would be the impact of this legislation, and so I want to come back and use some of the international examples, because I believe they were incorrectly applied by the Minister in her opening speech.
But I just want to come back to the point that Judith Collins made, which is the fact that rents have already gone up under this Government by $25 a week. That’s 6 percent. So it’s no mistake that if we look at the most recent benefit statistics, the area where we see hardship assistance massively spiking up is accommodation. So there’s already a challenge. The Government is blatantly passing another piece of legislation that will most likely increase rents even further. So the very people—the very people—that the Government purports to want to support, they’re not. They are absolutely not supporting low and middle income families and they’re definitely not supporting those on benefits, as these figures show.
We’ve already seen a $25 a week rent increase. The costs will be passed on; that’s exactly what happens. So whether it’s a mum and dad investor with one property or someone who’s got 10, if a business or an investor has costs—guess what?—they pass it on to their customer, and the reality is that is the tenant. So, unfortunately, not only has the Government whacked those households—the very households that that side of the House purports to support—with massive petrol price increases but it is also willing to increase rents willy-nilly without any regard for the very families it so often gives lip-service to.
I want to turn to the regulatory impact statement, because it’s very telling. It’s very telling in a couple of ways. One is it’s yet another example of very poor process by a Minister putting legislation into this House. So this is a regulatory impact statement, which is actually a requirement if you’re making good law, and what this regulatory impact statement says is there’s been no consultation on the proposal. Surprise, surprise—no consultation on the proposal. What it does state, though—and the Minister didn’t raise this when she referred to the regulatory impact statement—I want to quote: “There is a risk that landlords will pass the letting fees on to tenants through increased rent over the term of the tenancy.”
It goes on to say, “the current national average weekly rent [is a] $452 for tenancies managed by property managers, [which equates to] $9.99 per week [which] would be added to rents over a one year tenancy.” The example that was quoted was Scotland. So I want to bring House’s attention to what has happened overseas.
Minister Salesa quite easily quoted the fact that rents hadn’t increased. Actually, the evidence was inconclusive. Ireland and Wales looked at following Scotland’s lead, both in 2013 and 2014, but they both rejected the move. They made some other changes around transparency, which could have been something that this Government considered, but, as I say, Ireland and Wales rejected the move that Scotland made. The Minister referred to the UK, but I’m not quite sure what country she was referring to. England said that they would introduce a ban in 2015 but haven’t done so.
In Germany, letting fees were banned in 2015. The significant difference between New Zealand and Germany is the average length of a tenancy in Germany is 11 years. So they actually haven’t been able to fully measure the impact. So to have a Minister stand in this House and use one example when there are multiple, I think, is actually very misleading in terms of the reality of the impact of this legislation.
The other thing I want to say is that one of the hundreds of reviews, or working groups, that the Government is undertaking is on the Residential Tenancies Act, which is due to report back early next year. Why on earth this particular issue wasn’t wrapped into a broader piece of work around residential tenancies is absolutely staggering. So, no, it’s a piecemeal approach, and not only that: this is going to come into effect on 12 December this year. It is absolutely rushed and is poor process in terms of the regulatory impact statement, which is really interesting because when we were in Government, any time there was a regulatory impact statement that hadn’t been given the proper process and the proper scrutiny, there’d be squeals of protest from every member in the then Opposition. Oh, but they’re very quiet today. They don’t worry about regulatory impact statements now that they are in Government because it might tell them something that they don’t want to hear.
Well, what it told the Government was that there was a likelihood this will increase rents for the very households that they purport to be working for. Well, I’ve got news for you. I had an email just this afternoon to say that Labour had promised to look after those at the bottom and guess what—they’re not. Whether it’s increases in rent, whether it’s increases in petrol prices, whether it’s increases in food prices, the Labour Government and their policies, because they are piecemeal rather than integrated, are hurting hard-working, low and middle income families. This is another example of a jammed-through, poor process that is going to increase rents, and I haven’t even touched on the subject of supply that Judith Collins raised.
So I do want to say it’s a significant concern that this is coming into effect on 12 December. Again, it’s a rushed process, a poor process, and one that will have an impact on rents. As I said, it could have been included in the wider reform of the Residential Tenancies Act, which is a discussion document out at the moment.
The speaker before me, Clare Curran, from that side of the House, said it will have zero impact on people choosing to continue to have an investment property or not. Well, I can tell that side of the House that on Friday alone I was attending a meeting in a very working-class suburb of Christchurch, and there were a couple of people there who had scrimped and saved to purchase an investment property, which would supplement their retirement savings, and all three of them said, “We’re getting out. It’s too hard. It’s too expensive. There are far too many risks in being a landlord these days, and we’re sick to death of being criticised publicly by the Government, who treat us all as if we are fat cats when we have scrimped and saved to provide more in our retirement—and we look after our tenants is if they were our family.”, and that side of the House thinks it’s a joke. Well, I’m sorry, but we want to make sure that tenants on low and middle incomes don’t have their rents increased by legislation introduced from that side of the House.
Hon RON MARK (Minister of Defence): Thank you very much, Madam Deputy Speaker. I rise, obviously, on behalf of New Zealand First to signal our support for the passing of this legislation. It is interesting, it’s always interesting, listening to Opposition speeches opposing legislation that has gone through the select committee process, and I would like to start by congratulating the Social Services and Community Committee on the work that they did, and congratulating them on their two-page report. Actually, the bulk of page one was taken up by the heading. Half of the first page is actually the heading, then the recommendations.
Chris Bishop: The report’s twice as long as the RIS.
Hon RON MARK: But I guess the real—Mr, Mr—what’s his name? Lives out in the Hutt—sorry, Mr Bishop. Mr Bishop’s got a lot to say over there and no doubt he’s going to take a call and he’ll have another full 10 minutes to make his call. So just to answer his, sort of, chatter across the House, there is the minority view filed by the National Party contained in this report on the bottom of page two. And it’s a huge report. It’s massive. It’s all of two paragraphs—three if we consider the words “National opposes this bill” because that’s the entire content of the third paragraph.
So I’m finding it a little bit hard to take seriously anything that I’m hearing from the Opposition benches, or anything that we’re likely to hear from Mr Bishop in, no doubt, what will be a full-blown 10-minute blast. Try as I might if I wrote out their total objections contained in this bill, it would only take me one minute, maximum. And what do they talk about? Well, some of the things that they talk about in these two paragraphs stating their opposition to this legislation—which, let’s be clear, this Government thinks is dealing with a bit of a rort. That’s what it’s doing. It’s dealing with a rort that allows landlords or their agents to arbitrarily charge prospective tenants a fee, not based on the actual cost of the transaction.
We often hear from that side of the House about market forces; and how supply and demand will dictate what’s available; and how much one pays; and how one should just let the market forces determine; that business people are clear, analytical. They study their business models and their business cases and they come to sound, logical reasons as to how they’re going to charge, what their margins will be, and what those expenses consist of that accumulate to a total fee—known in this case as a letting fee.
Well, if that’s true, why from one end of the country to the other are landlords using such a blunt tool as charging people one week’s rent regardless of the house; regardless of its location; regardless of which city we’re talking about; and regardless of the conditions that apply in each of those provinces, districts, towns, and communities in which various rental properties are located? It’s a ridiculous argument coming from the Opposition, who touts itself as being fiscally competent, astute in business, and friends of the business community.
You know a cynic might say that there are alternate reasons for their supporting or opposing legislation like this. A cynic might say—
DEPUTY SPEAKER: Well, actually, the Standing Orders would stop the cynic.
Hon RON MARK: Well, the Standing Orders would stop the cynic, so a cynic wouldn’t actually say it. But a cynic would certainly think about some of the things one sees recently in the media. But, anyway, we’ll move on from that. I’m simply saying a cynic might ponder those things and wonder why the National Party is so determined to support landlords on this stupid fee.
Chris Bishop: I raise a point of order, Madam Speaker.
DEPUTY SPEAKER: Yeah, I did try to warn the member that Standing Orders are quite clear—which I’m anticipating your point of order.
Chris Bishop: That is indeed my point. The Standing Orders are very clear that it is not to be implied that members are acting on outside influences in this House.
DEPUTY SPEAKER: That’s right.
Hon RON MARK: That’s true. And I withdraw and apologise if I gave any such insinuation, Mr Bishop. I know that the National Party members themselves number quite a few landlords, and I understand their concerns, and I understand that they would be concerned that they might have to bear this cost and therefore they would be sympathetic to the arguments that were put across the select committee table in that respect, in that regard. Of course I do.
I heard arguments here saying that landlords are exiting the housing rental market because of this bill. I heard a comment say there are far too many risks to being a landlord these days; that people have scrimped and saved to save the money to buy a house. Now most of the landlords that I know—and I’ve got some good mates, and I actually used to have a couple of rental properties myself down in Christchurch. Smart business people actually leverage against the equity that they currently have in real estate. They don’t actually scrimp and save. They don’t actually save up money in the little jam jar, as was being suggested here tonight. They actually go to their bank manager—and on the rising escalating house prices that happened under that last Government, nine years of sky-rocketing house prices on the back of a shortage of supply, many landlords made themselves extremely wealthy and were able to leverage against massive equity gains.
And why do some of the landlords exit the housing rental market right now? Well, let’s talk about it. Mr Kieran McAnulty knows, because he’s from the Wairarapa like I am. We are seeing people exiting the housing rental market right now because they have decided, from a business perspective, that their equity is at a point where it’s smart to cash up. They have decided that because so many Wellingtonians and people from Auckland—the Auckland refugees getting out of there, escaping that rather bizarre economic environment—are cashing up their houses, cleaning up their $1.5 million, coming down to the Wairarapa, and buying up houses hand over fist. Houses are appearing on the market in Masterton, Carterton, and South Wairarapa one week and are gone the next. Landlords are making a conscious business decision to capitalise on exactly that.
Let me tell the Opposition, who clearly don’t seem to understand a lot about business these days—it’s been a sad thing to see the deterioration in the National Party’s understanding of commerce, but it’s there in this debate tonight—that these people are making clear commercial decisions. They have realised some spectacular capital gain, so they are cashing out of the market and they are doing other things with their money—some because they’re retired and they’re putting that into their retirement fund; some because they’re entering into other markets. It’s a commercial decision. It’s not about this bill. It’s got nothing to do with this bill.
In fact, here’s the irony: as the Hon Judith Collins said, there are some good landlords out there. There are some good business people out there. There are some philanthropic business people out there. And these are the people who are recognising that this piece of legislation is good, and that it’s going to clean some people out of the market who shouldn’t be making these charges. These are the people who are also staying in the housing rental market, because they see a greater public good. And I applaud them. Many of them are actually National Party voters. I applaud them for their strong sense of social conscience and for their understanding that this fee is a blight, actually, on the reputation of good quality landlords, and it needs to be done away with. And it shall be, tonight.
SIMON O'CONNOR (National—Tāmaki): Madam Deputy Speaker, I’m delighted to stand and take a call in the second reading of the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill. I haven’t sat on the committee, but I hold two portfolios within National for associate social development and associate social housing. So I’m pleased to talk to this, but naturally not pleased about the bill.
I’m concerned at the last speaker’s claims, if you will, around our knowledge of the economy on this side. And there were three things I thought were rather odd. First and foremost, the member who resumed his seat was talking about letting fees as being arbitrary. Letting fees are not arbitrary. They are applied to the person who takes over the tenancy. “Arbitrary” implies that they’re just being, sort of, thrown around; that, you know, someone walking through, I don’t know, Carterton, all of a sudden finds himself with a coffee, a doughnut, and a letting fee. It doesn’t quite work that way. They’re not arbitrary. They’re quite specific.
Secondly, there was a lot of talk about, well, what is that letting fee covering? It seems exorbitant, I suppose, was the suggestion from the member. What was odd is that he was, first and foremost, mocking, perhaps, the process—that it’s only a page-and-a-bit from the select committee. Yep, that’s true. Granted, the select committee is a majority of Government members, so if there’s any lack in terms of the documentation, it’s the lack of those members there.
The second element is that he was mocking that National only had two paragraphs. Granted, that’s about a quarter of the entire commentary, but he was questioning and even suggesting that hey, maybe it’s a good thing if we had a better understanding of what letting fees were about. And what is really interesting, had he not actually mocked but read the National Party commentary, is that it says in the last paragraph, “an alternative is to make letting fees more transparent so that an actual fee for service could be charged”. I, for one, support that, strangely enough—it’s the National Party minority report. But if the concern is why people are being charged so much, well, then let’s look at opening it up and some transparency.
The third part, and it just shows that the other side—the Labour-led Government—don’t really understand what they’re talking about, is that they were saying in the previous speeches that there’s no basis for the amount that’s being charged in letting fees; it doesn’t matter if the house is urban or rural, or if it’s run-down, in poor condition, or in a bad neighbourhood. Well, actually, there is a mechanism. It’s called the market. And if your house that you’re trying to rent out is better than the house next door, strangely enough, you’ll be charging more for it, and consequently your letting fee, which is based on one week’s rent, will be more. So it’s attached to the market. It’s just a small example, if you will, that the other side’s bluster doesn’t have much substance. And that’s unfortunate.
Look, fundamentally, this is about costs. There is a cost to let one’s house, apartment, or rental in the broader sense. There are costs. [Interruption] Sorry, I’d better hear what that interjection was?
Hon Clare Curran: Spell out the costs.
SIMON O'CONNOR: Spell out the costs? Spell? Well, the first contradiction here—it’s very hard to spell out numbers. But actually, we can spell out some of the costs. There are actually advertising costs when you’re looking for people. You have to interview people, make phone calls, and ask them to provide references. Actually, you’ve got to spend time—because those of us who work, you know, you have to take some time off work to take people through. And if you’re in, I don’t know, probably the most popular electorate in the country—I don’t know, Tāmaki? People are really keen to want to—[Interruption] Who was laughing behind me there? But people want to come through. There are costs, but, actually, the very fact that the other side are going “What are the costs?”—their heads completely in the sand. There is a cost, and that cost will not go away. That cost will go from the letting fees and that will go into the weekly rent.
One of the facts is that New Zealanders, by and large, do rent for a long time. Yep, we’ve got the horror stories that different groups put out. They are terrible. Most people, most Kiwis who rent, in fact, like myself up to years back, you rent for two, three, five years. What’s going to happen is that these costs—and the Labour Party’s already admitted to it in its early speeches. They just want to take that initial one week’s letting fee and just say, well, it will just be spread out. If it’s going to happen, it’s just going to be spread out. Well, that’s fine if you may be there for a year or two, but what about those people who are there for five, 10, 15 years, where the landlord will, quite reasonably, add more costs? They will end up paying a lot, lot more.
Fundamentally, it’s something that the left, in particular, and certainly the progressive left, have never understood: that people cannot magic away costs. If that were the case, I would love to magic away my tax bill, if the Labour Party could sort that next week. I’d love to magic away all the problems with, I don’t know, transport in Auckland. Just pass a bill, Labour; just magic it all away. That’s not the way that it operates. In fact, though, we could suggest—I mean, we have seen today that the Prime Minister can, on the hoof, just come up with a whole new policy. Maybe tomorrow the Prime Minister will come to this House and just magic away this problem that’s about to hit tenants.
Hon Member: Fuel taxes gone.
SIMON O'CONNOR: I live in hope. Policy on the hoof doesn’t work well. We’d only just have to look at Australian Prime Ministers to see how that works out for them, and there I think they call them “captain’s calls”.
But, fundamentally, what we’ve got here is increased costs, and it’s going to be on the back of two other issues. We have a whole lot of work being done by—“work” is probably generous—ideology being run by the Labour-led Government to change the residential requirements around rentals. The long and the short, they’re looking at everything from the drainage to ventilation and so forth. Actually, in concept it’s good. In fact, National, before we lost the Treasury benches, passed a lot of changes in that regard, making sure there is adequate insulation. In fact, we worked with the Green Party of all things, about nine years ago, on that ventilation and so forth. But where Minister Twyford is taking this now with some of the suggestions about heat pumps in every room, extractors and so forth, we should be under no illusion. That will increase costs.
Landlords will not act altruistically, OK? Some will try to weather the costs but that’s just not going to be feasible, so they’re going to be hit by all these extra costs to upgrade and maintain their properties. They’re going to be hit by letting fees and/or the cost of having to let the properties themselves. The real kicker I think is also that there are suggestions of legislation coming to secure tenure beyond what is potentially reasonable. It’s a discussion worth having, but some of the suggestions are almost that a person will not be able to leave their rental. That’s not a matter then of whether they are good or bad tenants, but how do you as a landlord set the rate if someone arguably is going to be there for 10, 20 years.
If the left is not sure about how this looks, go to San Francisco. Go to San Francisco where actually they had set rents and locked them in from years and years ago. So some people living around the likes of Union Square are paying basically peanuts, because they started renting 20 or 30 years ago, and can never be moved on. But what happens now is when those people move on or pass on, the rentals go absolutely through the roof. These are the perversities which get entered into the system and extra costs that will be passed on. I repeat again: you cannot magic away the costs.
We’ve already seen in the last quarter—sorry, rather, since Labour came into office we’ve gone through four quarters. That’s almost depressing to think about. But through a whole year, rents have gone up an average of $25. We’re seeing across the country, and I’ve certainly seen it in Auckland, that actually landlords are leaving the market. They’re not leaving as in selling up, because I could imagine or anticipate one of the counter-arguments is, “That’s fine. Landlords, get out, sell up. That provides an opportunity for homebuyers.” That’s not what they’re doing. Landlords are just exiting the market. They are either handing the property over to their family or they’re just shutting it up. So now we have a house sitting idle and empty, picking up the capital gains, which has been lauded and derided at the same time—a little bit confusing if not schizophrenic from the other side. Very, very strange.
Well, it’s evidenced, if you will, Madam Deputy Speaker, in the fact that the social housing list has gone through the roof—9,300 now. It’s over 9,300 people. I’ve always said, as the social housing spokesperson, that we were seeing the growth, but it has gone almost exponential under this Government. We’re seeing some crazy times and crazy activities. Yes, they’ll point to Scotland and they’ll talk about Shelter, I think it is, who lobbied very strongly—a lobby group—for the removal of these letting fees. But the Labour Government here will point to the evidence that it’s working. I’m always a great believer in tracking down the evidence. The evidence that the rental income, sorry; the rental costs—I’d better be clear—in Scotland have not increased since Shelter, the organisation that is, lobbied for the change, came from Shelter itself. Now, I don’t know the quality or otherwise of that organisation, but you have to dig much, much deeper.
It is very clear from other studies that actually costs do go up. So, fundamentally, Madam Deputy Speaker, this is a poor bill, poorly thought-out and we cannot support it.
MARAMA DAVIDSON (Co-Leader—Green): So what we’ve got at the moment, and have had for far too long, are unjust structures. What this Government is trying to do is rebalance that and bring more justice into these structures which have been hammering particular groups of people for far too long. So that’s essentially what this bill is picking up on tonight, where it’s going to make it illegal to charge a letting fee, so that people who are looking for a home to rent will not have to meet that sometimes incredibly harrowing upfront and often unjustified cost borne by people looking to rent or trying to find a home.
We’ve had recent studies talking about as many as 150,000 Kiwis as vulnerable transients. This is an example of what we are trying to correct with a series of legislation and bills going through this House, talking about renting in particular. Around 5.6 percent of the population, or 212,000 of us, are transient, of which a population the size of Tauranga are vulnerable. An Auckland University of Technology study revealed this recently. If we’re having a think about transience, it’s defined as moving at least three times in three years. How many letting fees—how much money is that for those letting fees? So 150,000 Kiwis classified as vulnerable transients moved three or more times to or within an already highly deprived area. This is a small glimpse of part of the unjust structure that we are trying to correct.
I want to pause for a minute and have a think about how much faith New Zealanders should actually have in a political system which is, in reality, stacked against people who are vulnerable or have restricted choices around living choices. Out of 120-odd MPs in this House at the moment, I believe there are probably six or seven—literally a handful—of us who do not yet own our own home, but just as worrying for me is that collectively 120-odd MPs own around over 300 homes. It’s about two and a bit—2½ each in this House. So it’s actually stacked, and has been for a very long time, against groups who really are the ones being harmed, the groups who have little and less choice.
So I am proud therefore that at least this Government can actually put movements in train and actually reject that we are, in this House, politically stacked, in theory, against people who don’t own a home. So that’s something that I think needs to be noted. It’s all well and good if we are going to have MPs and an overrepresentation of investment properties in this House—that’s as it may be—but let’s at least then proactively acknowledge the stacking and proactively put justice back into the structures which have continued to harm people actually for generations.
So of course the Greens are going to be supporting this. Removing letting fees in particular was part of a suite of changes that we have long proposed when it comes to rebalancing the power. We’ve had a bit of discussion and a bit of to and fro tonight about who are really going to lose out from this, and I do quite regret the fact that whenever the discussion is raised and focuses on “Oh, those poor homeowners and landlords which are having to sell.”, I really regret that we are just brushing over the generations of people who have really been harmed through this unjust structure, who have really had detrimental, accumulative, lifelong, and often generational struggles and challenges because of the unjust structures that are happening. So this is one part.
Now, we’ve heard a lot about how it is going to have unintended consequences by raising rents, and that is actually why the Greens will continue to be wanting to have discussions about rent controls, and I’m glad that the Minister is actually undertaking a review on the entire residential tenancy. Sorry, I’ll bring it back, yes, but I only raise that as part of how we can address this false trade-off argument that we will actually increase rents and that we will need to have complementary solutions alongside this bill. Actually, Minister Salesa clearly outlined, as well, addressing the supply problem—absolutely, and we’re on that. So using the rent increase as an excuse to vote against this rebalance of power and re-correcting this unjust structure is, simply, by the wayside. So I wanted to put that very clearly.
I think, you know, this is part of us understanding that people who rent and are in that hardship and facing those lesser choices need to be seen as equal citizens, because what has been happening for far too long is dehumanising. We have had ongoing dehumanising and smearing of people who need to rent a home, and we have set up, in a sense, a two-tier citizenship system for people who own a home against people who rent a home. This is where we are starting again with this bill, removing letting fees to try and correct not just the structure but also the narrative around Kiwis who also have less choice. So, again, I wanted to bring that into the debate tonight.
I wanted to pick up on—I think it’s worth hammering, actually—those groups who we’re talking about who haven’t fared well in the current structure. I’m going to have a look—just bear with me; there’s a few of the submissions. This is the Anglican Diocese of Auckland, the social justice group, who spoke particularly about seeing this bill as a fair and just one that reduces the significant cost borne by tenants, and given our insecure tenure rental arrangements, the costs of moving home are borne by the most vulnerable in our society. Of New Zealanders, 53.55 percent rent their properties, but for Pasifika and Māori it’s far more, and also people with a disability are more likely to rent, mums and children are more likely to rent, women and children are more likely to rent, people on low incomes, of course, are more likely to rent. Those are some of the groups who continue to be harangued by this unjust structure and, absolutely, by arbitrary and unjust letting fees, so I’m really glad that we are taking this step.
It’s a relatively straightforward and simple bill in and of itself. It speaks quite directly, quite briefly and clearly, to the letting fee part of the process and making it unlawful, and that’s why I appreciate that the Social Services and Community Committee report was also quite brief and to the point. I did want to pick up that the select committee report urged the Government to consider introducing a regulatory regime for this industry, and the Greens absolutely support that sentiment: looking at tighter enforcement controls for really, really upholding these principles of correcting the unjust structure.
So there are ways around this, I think, to finish off saying. This is part of the journey to re-correct the unjust structures. There are ways around the concerns that have been raised by some submitters and some here in the House, particularly in terms of increasing rental costs. I really commend Minister Hon Ron Mark’s comments about identifying that those landlords and homeowners with rental properties who are doing well can continue to do that and will, as we’ve seen around the world. But what we will actually start to see, as we implement all these changes, are more and more people being able to live lives with dignity, including those who rent. Thank you, Madam Deputy Speaker.
MAUREEN PUGH (National): Thank you, Madam Deputy Speaker. I stand tonight to speak against the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill in its second reading. I call this the bill of unintended consequences.
Now, the problem that the Government has set out to fix is the upfront fees that tenants are required to pay when they are moving into a new tenancy agreement, and they are, presumably, too high, and are—and we concede—a real barrier to some people. So, for the record, the upfront fees are usually four weeks’ rent as bond, two weeks’ rent in advance, and one week, all including GST, as a letting fee. Given the average rent across New Zealand, those fees actually do come to just under $4,000 if you are a new tenant seeking a new tenancy.
Now, remember this is an average across New Zealand, and in the great electorate of West Coast - Tasman those letting fees would be so much less because the weekly rents are lower. So, in some cases, they’ll be lower by half, but there’s no argument across this House that one week’s rent for a letting fee is a lot of money for some people to have to find, especially those first-time renters. But with those tenants that are actually moving house, moving into a new tenancy, then they already have their bond in place, they already have their two weeks’ rent paid in advance, and we actually heard from one submitter in Auckland—the very canny tenant—who, as he moves around, says that as he’s paid his two weeks’ rent in advance, when he gets towards the end of this tenancy, he doesn’t pay the two weeks’ rent that’s owing at the end; he banks that money and he’s got it ready for his next tenancy, and the only fee that he does pay is the letting fee.
Now, in the select committee process, we heard 187 submissions, and we heard 41 oral submissions, both here in Wellington and in Auckland, and I think it is very fair to say that those submissions were quite polarised. So those people who would be paying a letting fee were, of course, supporting the bill, and those who were landlords or property managers were, in general, opposing this bill.
Taking up the Hon Ron Mark’s point earlier on about the blunt tool that the letting fee is, it is fair. We did ask some of the property managers how they came by this fee, and it has just evolved. There was no logic behind it. So, in some cases, we had in one street the example that was used—that you could have a million-dollar house and a $500,000 house but because they attract quite a variance in rents, the letting fee would be quite different and it could be the same amount of work involved. And so the simple solution is to have a fee for service.
The actual cost that is involved by the letting agent for the work that is undertaken, and we know that there’s a huge amount of work undertaken, as Simon O’Connor mentioned earlier: there is the advertising of the property, there is the showing of the property—open homes etc.—the vetting of potential tenants, the credit checks, the paperwork that goes into the tenancy agreement and lodging of the bond, responding to the unsuccessful applicants, and also the viewing outside of hours, and we did hear from some property managers who said they can arrange for it to suit people’s schedules. They can go after hours or on weekends. But one of the challenges they have is that some people may be looking at multiple properties, find one, don’t let the agent know, and they’re left with a no show. There is a real cost to letting a property.
So the select committee did deal with that issue about the transparency of the letting fees. It was a blunt tool, it has evolved over time, and I do think that a fee for service is probably the fairest way to resolve it. However, this bill prevents fees of any kind now being applied, by any agent of any sort. So there is no ability now, if this bill is passed, for any fees to be incurred, and that is the cause and effect.
Now, we’ve heard talk tonight from some of my colleagues on this side of the House about the impact of increased rent. There is no way that a landlord is going to be able to absorb that cost. It’s like comparing it to the cost of increased transportation. A truck has to fill up its tank of gas, and it may be costing $50 or $100 more per tank, so everything that goes on that truck now goes up in price because we have to recover the cost. It’s the law of cause and effect. So the rents will go up, and we have heard from submitters that approximately—now, we’ve got 34 percent of New Zealand households are now in rental properties. That’s about 589,000 of them. Ninety percent of them are owned by mum and dad investors—90 percent. Fifty percent of them are managed by property managers, and only 50 percent of them actually charge a letting fee.
So this bill does set out to reduce the upfront costs. But let’s say those costs are passed on to the tenant. We’ve heard it tonight that the increase in rent is inevitable, but the ones it penalises the worst are those people who are stable in long-term rentals. Now, one of the consequences—these unintended consequences—is that if landlords are expected to absorb this cost, what’s going to happen to a tenant who leaves their tenancy early, wants to pull out of their lease agreement, their tenancy agreement? Well, if a landlord has to keep absorbing that cost of letting the property, he’s going to say “No. You’re going to pay me out the term of your lease or you’re going to stay there, because I’m not going to keep absorbing the cost of letting this property.” It’s the law of unintended consequences.
I would just also like to point out to the House that landlords don’t kick out good tenants. They want good tenants in their properties, because these, for 90 percent of the rentals in this country, are owned by mum and dad investors. They want their properties looked after, and they want good tenants.
Now, one of the other issues that we dealt with as a select committee was around the cumulative effects of legislation. For some of the landlords that we’re hearing about who are now exiting the rental market, it’s because of the cumulative effect of these legislative changes. So we are hearing about the Residential Tenancies Act, and that’s going to bring in some major change for the market. The Healthy Homes Guarantee Act—that’s a real cost to landlords, and rightly so. There is the risk of the capital gains tax and the recent court decision around the unintentional damage and the consequences of that.
One of the other unintended consequences of this bill—and I know this because I have spoken to people in my electorate just recently, when I took the Hon Chris Finlayson on a trip through Tasman—is that people are finding it is much more lucrative to turn to Airbnb and quit the rental market altogether. This is getting too tough. The regulation is too tight, and they are now finding Airbnb is a very lucrative solution for them, and they are out of it. Even TradeMe—TradeMe is even saying there are 3 percent less rentals year on year that are being marketed on their website. The property investors say it’s too much too soon, and their members have even told them that they are now willing to sell out of their rental properties. Thirty percent have said they would sell out.
One of the other issues that we did deal with on the select committee was around the time frame of enacting this legislation, and we had some concerns. Originally in the bill, it was three months after the date on which it gains Royal assent, which was quite standard. The Government members on the select committee have shortened that to 12 December. We do have some concerns that there will be landlords out there who self-manage their properties who will not be aware of this and may inadvertently fall into the risk of having to pay the $1,000 penalty for charging fees.
In summary, the alternative is to make the letting fees a fee for service. Re-letting—it does take time and it does cost. National does not support this bill.
PRIYANCA RADHAKRISHNAN (Labour): Thank you, Madam Deputy Speaker. I rise with absolute delight to speak to this bill that will ban a practice that is both unfair and arbitrary. This is a bill about fairness. It’s about not allowing two parties that contract to then charge a third party. I mean, how anyone can stand in this House and say that’s fair is beyond belief.
Judith Collins stood up previously and talked about private landlords: “They’re being penalised; they’re being demonised”—she said—“by this Government. It’s too difficult for landlords.” What about renters? Do they not count; or do they have less human rights somehow? This bill actually doesn’t affect private landlords—newsflash. It’s about letting agents and not allowing them to charge a letting fee, even if they then say that costs are passed on to landlords.
There are two points I want to make. Landlords can still seek reimbursement for actual costs, which are not reflected by letting fees as it stands; secondly, even if rents rise, we had submitters who were renters who came to the Social Services and Community Committee and told us that they would prefer that as opposed to an upfront cost. So there you go.
Two quick points: students told us that they are being charged $1,400 just to have two people replaced on a tenancy. How is that fair? Final point: the commencement date that has been changed as a result of the select committee process, Louise Upston says that’s poor process. It’s because tenancy turnover is the highest between November and February. It’s about fairness. More people move into tenancies at that period of time, and so we want to ensure that we maximise the reduction in costs for them. This is a bill about fairness, and I commend it to the House.
DEPUTY SPEAKER: This is a split call, but I just remind the member to use the full name of other members—so it is the Hon Judith Collins. I call Dan Bidois.
DAN BIDOIS (National—Northcote): It’s a pleasure this evening to take a brief call on the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill. I was quite surprised, actually, by the member, Priyanca Radhakrishnan, who has just resumed her seat. She talked about fairness but she sat down with a few minutes to go. We gave her five minutes of fairness, and she only had three minutes of fairness to say.
I must say, it is a sad evening in this House when we move to prohibit something rather than improve the regulations and improve the market behind it. It’s a sad evening for all of those tenants, property managers, and owners who are being punished for the sake of a few rogue property managers. This bill is a bad bill. It’s not going to make life financially easier for tenants. It’s not going to add any more properties on to the market, which is what we actually need, and it’s going to have a lot of unintended consequences, which we all heard in the Social Services and Community Committee hearings.
I want to talk about some of the submissions I heard, and about what this Government could have done to improve the regulations and the transparency of letting fees. One story we heard from the Real Estate Institute of New Zealand said that all property managers should be licensed, they should all have a code of conduct—there currently is none—and there should be a database of those rogue property managers so that they can be banned from charging letting fees.
What about another submission, I hear you say, Madam Deputy Speaker. Well, the Independent Property Managers Association said that we should focus on raising standards in the sector rather than banning letting fees. There’s another one: IQ Property Management, in their submission, said that both tenants and landlords benefit from letting fees. So when they hear the members opposite in the House saying that only landlords benefits, well, that is a shame, because these submissions that we’ve had clearly state a different matter.
So the consequences of this bill are, to be clear, that landlords will start to look for long-term tenants, because that is going to be much more financially viable for them. We know that rents under this Government have already gone up by $25 a week, and we have told this Government—and they’ve heard it loud and clear—that by banning letting fees, you’re simply going to pass those costs on to tenants through increased rents.
And tenants are going to be worse off. Let’s just say that the fees are going to be passed on to tenants through an increase of, say, $2 a week, which is pretty minimal. But that’s $700, on average, a year. And if you’re there for two years or three years, then that’s $1,400 or $2,100 that you’re paying extra, in the pocket, just because there is no letting fee. So the result of this is that the rents will go up. It’s going to get harder for people to go into rental properties. There are going to be more properties taken off the market, which is exactly the opposite of what we need to be doing.
So what we need to be doing is focusing on building houses. We need to focus on things like improving the transparency of the rental market, and we need to regulate these rogue operators—of which there are few—so that we can have overall transparency in the letting fee market.
I also want to say this has been rushed through the House, both from a select committee perspective but also the date at which it commences, 12 December—that was despicable. I want to express my dissatisfaction at the members opposite for wanting to rush this through the House just so they can go away and make sure that this process has been done before Christmas-time. So I will oppose this bill rigorously in the House, as will my National colleagues.
GREG O'CONNOR (Labour—Ōhāriu): This will be a very short call, and I hope my voice does actually last long enough. This is simply a no-brainer. Take this situation: you’ve got two houses for rent. As a result of neglect—
DEPUTY SPEAKER: I don’t.
GREG O'CONNOR: —and, I have to say, an admission by those opposite that we do now have a housing shortage, you are likely to get up to a hundred people on each house. Now, one of the houses is privately owned by one of those mum and dad investors—that you seem to be so keen on over there—who isn’t using an agent—
DEPUTY SPEAKER: Don’t bring me into it.
GREG O'CONNOR: —and the other is using an agent. So the best of the tenants are actually going to win the race to get the tenancy. One of them is going to be punished and the other one won’t, and that just shows how ridiculous this is.
There is only one person who should be paying this fee. It’s the one who’s going to benefit from it, and that is going to be the landlord. It is a no-brainer, and I commend this bill to the House.
JO HAYES (National): Thank you very much, Madam Deputy Speaker. I just want to say that I’m really pleased that the Prime Minister has given that member permission to speak in the House after his little—a few weeks ago. Anyway, I’m pleased to stand and give a contribution on the Residential Tenancies (Prohibiting Letting Fees) Amendment Bill. I must say, this is the dumbest, most ill-thought-out bill I have ever seen come to this House. It’s the dumbest because it’s getting rushed through really quickly.
I mean, the letting fees that people have to pay—yeah, for some it is prohibitive. But, as my colleague Maureen Pugh said in her contribution, it is mainly the bond—the upfront three-week or four-week plus GST rental that people have to pay in the bond. That is actually more prohibitive than a letting fee, to be honest. I know. I’ve had to pay it several times when I’ve been renting, and it is very prohibitive to actually pay all that money up front.
I want to say that this bill targets all landlords. It assumes that all landlords are rogues, that they are crooks, and I can tell you that they are not. My mother has been renting for many years in Masterton, and she has the loveliest landlord. I can tell you right now, he has said to me that he is getting out of his rental because of this particular bill and the things that this Government is doing. That’s actually prohibiting his business from flourishing, and he is a very, very good landlord. Even the landlords that I had in Christchurch were very good. Even though, yes, there was that letting fee, I was happy to pay for it because I was getting a very good deal from them in being able to rent their properties.
I just want to talk a little bit about some of the contributions that have been in this House tonight. The Hon Clare Curran said that this bill attempts to address—to address what? To address what exactly? I sat there, and I thought, no, what it’s trying to do is trying to address landlords as if all landlords are rogues. It doesn’t do that—it doesn’t do that. There are so many loopholes in this particular bill. By taking away that letting fee, by prohibiting letting fees, there will be people that will find a way around it, and tenants will pay and they will pay. There will be no restriction on how much they will pay, for however long they pay.
This is why I say it’s one of the dumbest bills I’ve seen, because all of those things that I’ve just said, around landlords finding ways to get around this—they will find it. It’s a business. They’re running a business, an investment business, and that’s what people do when they’re running their business. I heard the Hon Ron Mark talk about that, about the way that landlords divest their business, they sell it off, and they reinvest. Well, some of them may not. Some of them may keep their rentals and may look at another way of recouping some of the letting fee. I’ve heard the letting agents actually talk to me about that. They said “What can we do?’, and I said, “Well, wait for the bill to come out and then have a good look at it.”
Tonight, as I sat here, I listened to the contributions, and I can tell you that I was really disappointed in the ones from the Government because the Government has not looked at all the possibilities that will actually penalise the brand new tenants that are going into these rentals. People are going to pay and pay and pay, and it’s the people that can least afford it who will do that. They will be the least able to afford it, and this coalition Government will sit there and pat themselves on the backs and go, “Gee, we did a good job tonight. We wiped out that letting fee. Gee, we did a good job. Our people are going to suffer, but, hey, we did a good job. We’re doing our thing.” For those that are downtrodden, though, it’s not really. What’s happened in this bill is that you’ve actually added more penalty to them.
When I look at the work that the previous Government had done in the heat up New Zealand programme in agreement with the Green Party—that’s where the landlords and everybody had access to some funding to actually put in heating models into their house, and they were given some funding to help them do that—that heat up New Zealand programme was a smart idea. It was a smart idea, and, whilst it added value to the landlord’s property—it added value—what it also did was it gave the tenants inside those homes another form of heating. I don’t know of very many—other than the normal increases that go along with the rental—rental properties that have had these heat pumps, etc., installed into them, where their rents went up astronomically high. But I think that with the wiping out of this letting fee, there will be ways and ways that a landlord will be able to find to add more to the actual weekly rent, and it’s not fair.
This is not a fair bill. I don’t agree with what the previous speaker has said around fairness. It is something that will penalise, with all the other costs of living that are going on with the policies and the legislation that this Government is actually handing out willy-nilly. We are having those that are the hardest people to get work, they suffer health issues—these are the people that are actually going to suffer from this particular bill.
The letting fee actually gives some protection around the types of houses, etc., and, yeah, as I’ve said, I agree that there are some rogue landlords out there. But, at the end of the day, you can do other things to actually track them, rather than put a blanket piece of legislation in there that gets everybody. It gets absolutely everybody, and I do feel for them.
I am actually pleased that I’m moving my mum out of her rental and into a nice place where she will be able to be looked after and cared for. I’m pleased, because the concerns that her landlord has around this particular piece of legislation do concern me. They concern me a lot. He is a good man, and he is going to go out of the market. He is going to sell his house. And, yes, some nice person is going to end up having their own home, but his house—his mother was in it, his sister was in it, and, now, my mother’s in it—it was all around family.
Yes, some of the landlords, as I’ve said, are rogues, but there are also family people—mums and dads—who have had those rentals. They’ve had them as a family business to help with their superannuation, or even to actually help set their children up so that their children can actually buy homes. With this letting fee getting prohibited right throughout all of this piece of legislation, what’s going to happen with those? They’re going to sell up.
I had a great landlord in Christchurch—this American guy. I remember that when he realised who the new Government was going to be, he came to me. He rang me up and he said, “Who did your lawns? I want them to come in. I also want to know who is the cleaner of the house”—it was me, so I said, “Oh well, you don’t need to get the cleaner, because I did that”—“because I’m getting rid of all of my properties.” He owned 10 properties in Christchurch, and he put them all on the market.
Marama Davidson: Oh, the poor dude—10 properties!
JO HAYES: He did them all up and he put them on the market, and I can tell you now—well, actually, why does that member sit on the side and yell out horrible things about people who have worked hard, who have worked very hard, to get where they are? Why do we penalise those hard workers? Why do we stand in here and penalise—
DEPUTY SPEAKER: I’m sorry to interrupt the member, but the time has come for this debate to be interrupted.
Debate interrupted.
The House adjourned at 10 p.m.