Tuesday, 11 December 2018

TUESDAY, 11 DECEMBER 2018

TUESDAY, 11 DECEMBER 2018

The Speaker took the Chair at 2 p.m.

Prayers.

MESSAGES FROM GOVERNOR-GENERAL

Tasman District Council (Waimea Water Augmentation Scheme) Bill and New Plymouth District Council (Waitara Lands) Bill

Tasman District Council (Waimea Water Augmentation Scheme) Bill and New Plymouth District Council (Waitara Lands) Bill

SPEAKER: I have messages from Her Excellency the Governor-General. The first message reads: “Patsy Reddy, Governor-General. The Governor-General, on behalf of Her Majesty, consents to the passage of the Tasman District Council (Waimea Water Augmentation Scheme) Bill to the extent that it affects the rights and prerogatives of the Crown. Wellington, 10 December 2018.” The second message reads: “The Governor-General, on behalf of Her Majesty, consents to the passage of the New Plymouth District Council (Waitara Lands) Bill to the extent that it affects the rights and prerogatives of the Crown. Wellington, 10 December 2018.”

Obituaries

John Gordon Armstrong QSO

SPEAKER: I regret to inform the House of the death on 5 December 2018 of John Gordon Armstrong QSO, who represented the New Plymouth electorate from 1990 to 1993. During his membership of this House, he was a member of the Foreign Affairs and Defence Committee and Planning and Development Committee. I desire, on behalf of this House, to express our sense of the loss we have sustained and our sympathy with the relatives of the late former member. I now ask members to stand with me and observe a period of silence as a mark of respect to his memory.

Members stood as a mark of respect.

Visitors

Kingdom of Tonga—Speaker of Legislative Assembly

SPEAKER: I’m now sure that members will wish to welcome the Rt Hon Lord Fakafanua, Speaker of the Legislative Assembly of the Kingdom of Tonga, who is on my left, and his delegation, who are present in the gallery.

Oral Questions

Questions to Ministers

Question No. 1—Child Poverty Reduction

1. MARAMA DAVIDSON (Co-Leader—Green) to the Minister for Child Poverty Reduction: What is her response to the finding in yesterday’s Child Poverty Monitor report that around 100,000 New Zealand children are “doing it really tough”?

Rt Hon JACINDA ARDERN (Minister for Child Poverty Reduction): To be honest, I would say that probably more than that would be doing it really tough in New Zealand, but I do welcome the contribution that the Children’s Commissioner continues to make, using the Child Poverty Monitor as a way of highlighting the ongoing situation of many children and their families. I am pleased that in the very near future we are looking, with the support of all bar one member of this House, to pass the Child Poverty Reduction Bill. It will lay the foundation for greater transparency, accountability, and action on child poverty.

Marama Davidson: What will her Child Poverty Reduction Bill do to actually turn around the appalling outcomes for kids across education, food, housing, health, and incomes?

Rt Hon JACINDA ARDERN: The member is right to point out that it’s not just about income, although that is the basis and grounding of the legislation. It requires successive Governments to make sure that they gather the data on child poverty. There has been issue with the data available in the past couple of years, so it puts that requirement on Government that they are then recorded as part of the Public Finance Act alongside each Budget, and then that a strategy and action plan around reducing child poverty is set out in the public domain as well. Thanks to the contribution of the Opposition, we will be including additional indicators beyond income, so we will look at things like education, health, and housing as indicators of child well-being and areas of action that we need to lift the well-being of all kids.

Marama Davidson: Is she confident that the work of the Welfare Expert Advisory Group will lead to the transformational changes we need if we are serious about addressing child poverty?

Rt Hon JACINDA ARDERN: I certainly think that there is a lot of expectation around that working group’s eventual report. Of course, we want to ensure that we have a tool and an opportunity to deliver for children who are living in households where the main sources of incomes are benefits. We know that children in poverty are overrepresented amongst that cohort, so I have high expectations and hopes that they’ll deliver some options and opportunities for us to really both improve the system but also improve the lot of children living in benefit-dependent households.

Marama Davidson: Does she then support the Children’s Commissioner’s recommendation of indexing child benefits to wage and price inflation like we do for superannuation?

Rt Hon JACINDA ARDERN: It is certainly fair to say that this country hasn’t experienced the same level of income poverty for our superannuitants and that many who are advocates for children put that down to that indexation. I don’t want to pre-empt what the working group will do and the recommendations that they will make, but, as I’ve said, I do have some hope that they’ll bring suggestions to us that will mean that we can improve the well-being of children.

Marama Davidson: Does she agree that the big increase in the number of food grants being given to families this year shows that incomes, from both benefits and low wages, aren’t enough for families to get by on?

Rt Hon JACINDA ARDERN: It’s definitely an indication of need. What we of course will see over time, I’m sure, is that because of the Families Package, which came in on 1 July—it’s the most significant change to the incomes of those low and middle income earners using Working for Families in over a decade: 380,000 families on average receiving $75 a week once it’s fully rolled out. We’ve also increased the minimum wage. We’ve brought in the winter energy payment. We’ve brought in things like extensions to paid parental leave. There are a number of changes that, in our view, will start having an impact, but we have to be absolutely clear: there is still need out there and there is more work to do.

Question No. 2—Prime Minister

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

Rt Hon JACINDA ARDERN (Prime Minister): Yes.

Hon Simon Bridges: When the Minister of Housing and Urban Development said earlier this year that no one should be sleeping in a car this winter, does she stand by her response, “Absolutely, no one.”; if so, why has the Government not delivered on that?

Rt Hon JACINDA ARDERN: Yes, this Government absolutely stands by that statement. No one in New Zealand should be sleeping in a car, which is why we have come in with an ambitious plan around both addressing the issues of supply—making sure that there is emergency housing, increasing public housing supply by over 6,000 places. We have also told people “If you are in need, our door is open.”, and we acknowledge that as soon as we said that we knew the numbers would go up. We said they would go up, and they have.

Hon Simon Bridges: Does she accept that in fact the cost of living is hurting New Zealand families when the median rents across New Zealand have increased $30 a week in the past year, petrol taxes are costing some New Zealand families an extra $15 a litre—

SPEAKER: That’s two questions.

Hon Simon Bridges: —every time they fill their car, and, to make things worse, electricity prices are starting to rise as well?

Rt Hon JACINDA ARDERN: I do want to bring a few numbers into this debate. Look, no one is denying that we have a supply issue with housing in New Zealand. That’s why we’ve acknowledged there is a housing crisis and it’s why we are building more houses. It is going to take us a bit of time to turn this ship around. Nine years is a long time for there to be both inaction and the sale of State houses, but we’re getting on with the job. I do also want to point out, though, the latest figures from Statistics New Zealand show the average household income in the year to June 2018 was up 5 percent from the previous year, compared to an average rise under National of 3.3 percent.

Hon Simon Bridges: Has she seen reports from Auckland City Mission of a 27 percent increase in demand for food parcels this Christmas; if so, what is her response to Chris Farrelly, the head of the city mission, who says that high rental costs were to blame for growing food insecurity?

Rt Hon JACINDA ARDERN: I’ll be visiting Chris before Christmas. It’s something I frequently try and continue—to make contact with the city mission. It’s why this Government has contributed in the order of $16 million to try and support the building of a project which will help ease the strain on those in housing crisis. I would imagine, though, that those who work in the housing sector will agree that as a Government we have come in with an ambitious plan that includes building more houses. That is the only way we are going to deal with what ultimately is the lack of supply that we were left with by that last Government.

Hon Simon Bridges: What’s her explanation to the Christchurch City Mission, who’ve experienced a 43 percent increase in demand for food parcels this Christmas compared to last Christmas?

Rt Hon JACINDA ARDERN: Again, as I say, and as I acknowledged in the answer to the last member’s question, since July, of course, we’ve put significant changes into our tax transfer system. I can only imagine how dire it would have been if we had National in office giving tax cuts and not putting $75 a week into the pockets of those who need it the most.

Hon Simon Bridges: Does she accept that increasing taxes on residential property investors is increasing rents for low-income households—

SPEAKER: Order! [Interruption] Order! Sorry, I apologise. There’s some commotion happening at the back of the House, and it’s to stop.

Hon Simon Bridges: Does she accept that increasing taxes on residential property investors is increasing rents for low-income households and making things worse in terms of rent costs all around New Zealand?

Rt Hon JACINDA ARDERN: No.

Hon Simon Bridges: How can she say, as she did earlier, that the Families Package will help when it has been in effect since July and yet, compared to last year, demand for food parcels has increased 27 percent in Auckland, 43 percent in Christchurch, and 54,000 more people are receiving hardship grants across New Zealand this year?

Rt Hon JACINDA ARDERN: I’m saying it will make a difference because $75 a week on average, once it’s fully rolled out, is a significant change—the biggest change in over a decade. Add to that the winter energy payment. These are huge changes that were made to our benefit system and far more than the last Government ever proposed or ever did.

Question No. 3—Prime Minister

3. Hon SIMON BRIDGES (Leader of the Opposition) to the Prime Minister: Does she stand by all of her statements, answers, and actions in relation to Karel Sroubek?

Rt Hon JACINDA ARDERN (Prime Minister): Yes.

Hon Simon Bridges: Does she stand by her statement last week that there will be members of Parliament who would quite possibly have been associated with Karel Sroubek and those who made representations on his behalf?

Rt Hon JACINDA ARDERN: Yes. I believe that was an answer given on my behalf by the Deputy Prime Minister, and yes.

Hon Simon Bridges: Has she checked any in her Government fit that description?

Rt Hon JACINDA ARDERN: As I mentioned last week when I was directly asked about my knowledge of those who made direct representations in this case, I do not know who made direct representations as part of this case, and so I simply could not answer that question then and cannot now.

Hon Simon Bridges: Given that I’ve now asked several times in this House, will she find out?

Rt Hon JACINDA ARDERN: I believe the member has an Official Information Act (OIA) request around this question, but when it comes to the direct—[Interruption]

SPEAKER: Order! Order! The Prime Minister will resume her seat. Can I just ask that if members on my left actually want an answer, they listen. [Interruption]

SPEAKER: Order! Amy Adams. Did you interject after my comment then?

Hon Amy Adams: I did.

SPEAKER: Stand, withdraw, and apologise.

Hon Amy Adams: I withdraw and apologise.

Rt Hon JACINDA ARDERN: Just to complete: my understanding is the member has an Official Information Act request in around the representations that were made.

SPEAKER: No. I am going to ask the Prime Minister to—I think she was asked: “Will she find out?”, and I think the fact that that member’s going to find out, unless she reads them, doesn’t mean that she’s answered the question.

Rt Hon JACINDA ARDERN: In answer to the question—the member has repeatedly asked me who made direct representations in the case—I assume he means to Immigration New Zealand as part of the investigation. I simply do not have responsibility—

Hon Dr Nick Smith: Will you find out?

Rt Hon JACINDA ARDERN: —for the decision that was made. I have not been involved in the decision that was made, and nor would it be appropriate for the decision that was made. Hence the fact I do not know who made representations or was involved with Immigration New Zealand.

Hon Dr Nick Smith: Will you find out?

SPEAKER: No. Dr Smith will now stand, withdraw, and apologise.

Hon Dr Nick Smith: What for?

SPEAKER: For making four inappropriate interjections during that question.

Hon Dr Nick Smith: I withdraw and apologise. I raise a point of order, Mr Speaker. What is inappropriate about an interjection that says, “Will she find out?”

SPEAKER: The member didn’t say “she”.

Hon Iain Lees-Galloway: Can the Prime Minister confirm that she asked the Minister of Immigration if any member of Parliament made any representations to him prior to making—

Hon Simon Bridges: That’s not what I asked.

Hon Iain Lees-Galloway: —either of these decisions, and that the answer to that question was no?

SPEAKER: Right. What I’m going to do is ask who made that interjection.

Hon Simon Bridges: I apologise. It was me, Mr Speaker.

SPEAKER: Stand, withdraw, and apologise.

Hon Simon Bridges: I withdraw and apologise.

SPEAKER: Thank you.

Rt Hon JACINDA ARDERN: Yes.

Hon Simon Bridges: Is it a case of see no evil, hear no evil, because, quite possibly—

SPEAKER: Order! The member will resume his seat. He will start a question that is in order and does not contain any irony.

Hon Simon Bridges: Is it the case that the Prime Minister doesn’t want to know about the representations, because, quite possibly, there are associations in her Government with Karel Sroubek?

Rt Hon JACINDA ARDERN: No. And as I have pointed out in the public domain previously before, the first instance that I knew of this case was when it was in the media and once the decision had already been made. It is most appropriate that the Minister deals with these cases and, as he himself has confirmed, no MP made any representations directly to him around this case.

Hon Simon Bridges: Does she accept that New Zealanders need to have confidence in the appearance of things here and decisions and processes regarding Karel Sroubek in her Government, and so she should find out?

Rt Hon JACINDA ARDERN: Yes, I do accept that, which is why I asked the Minister the question. It is important to know whether or not any member of Parliament made any direct representation to him on this case. As he confirmed to me at the time and has done again in the House today, they did not. And, again, as I’ve said, the first I knew of this case was when it was in the public domain.

Hon Simon Bridges: When will we see the representations made on behalf of Karel Sroubek?

Rt Hon JACINDA ARDERN: As I mentioned, my understanding is that there is an Official Information Act request in with the Minister. I understand that that might be available, I think, obviously, within the 21-day window. So in the coming weeks, I would imagine.

Hon Simon Bridges: Does she know any people who made representations?

Rt Hon JACINDA ARDERN: Again, I don’t want to be circular here. I don’t know who made representations with Immigration New Zealand. Obviously, the member’s put in an OIA, and that information will be provided to him. I simply do not know who had contact with Immigration New Zealand in this case, but I have asked whether or not any MPs did, and, as the Minister said, no one made representations to him themselves or on anyone else’s behalf.

Question No. 4—Finance

4. Dr DEBORAH RUSSELL (Labour—New Lynn) to the Minister of Finance: What progress, if any, has been made on implementing the Government’s economic policies?

Hon GRANT ROBERTSON (Minister of Finance): Excellent progress on a number of fronts, which see solid economic growth in the face of some international headwinds. Today I want to talk about our progress in laying the foundations for a transition to a more productive, sustainable, and inclusive economy and away from a dependence on housing speculation and a growing population to drive economic growth. This has included, for this Government, a range of regulatory and systemic changes, including new legislation and policies to help businesses grow and policies to lift wages so that all New Zealanders benefit from a strong economy.

Dr Deborah Russell: What regulatory changes is the Government making to help progress its economic policies?

Hon GRANT ROBERTSON: To make good progress on our economic policies, we did first have to make sure that the underlying regulatory settings would help deliver more productive, sustainable, and inclusive growth. For example, today in the House we are modernising the 30-year-old Reserve Bank of New Zealand Act to ensure that our monetary policy framework provides the most efficient and effective model for New Zealand and contributes to sustainable economic growth. We’ve also introduced changes to the Overseas Investment Act to support fairness in the housing market, and last week the Employment Relations Act changes were passed, which ensure a better balance in our workplace relations. These are important foundation actions to support productive, sustainable, and inclusive economic growth.

Dr Deborah Russell: What other work is ongoing to build the foundations for more productive, sustainable, and inclusive growth?

Hon GRANT ROBERTSON: The Tax Working Group’s interim report was delivered earlier this year, outlining the work they’re doing to make our tax system fairer and more balanced, and we will receive the final report early next year. We’re progressing reform of the State sector and public finance Acts to ensure well-being is embedded and to make sure that Government is able to focus on the quality of our economic growth through a well-being approach, and legislation is before the House to close loopholes to even up the playing field for New Zealand retailers and promote productive investment. I look forward to updating the House over the next few days on other areas of economic policy that are contributing to the serious momentum in the New Zealand economy.

Question No. 5—Housing and Urban Development

5. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: How many ministerial meetings has he had with Stephen Barclay, head of KiwiBuild, and when was the last time he met with Mr Barclay?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): I’ve had 20 meetings with officials of the Ministry of Housing and Urban Development over the last six months, which often included Mr Barclay. There were other meetings outside of regular officials meetings which he may have attended too. My office estimates this could be as many as 20 additional meetings. However, my office does not track attendance of all individuals at those meetings. My last meeting with Mr Barclay was on 12 November 2018.

Hon Judith Collins: What information, if any, has he received as to the reason that Mr Barclay, head of KiwiBuild, is “away from the office”, as stated by the Ministry of Housing and Urban Development?

Hon PHIL TWYFORD: Mr Speaker, given the public interest in this issue, with your permission, I would like to give a slightly longer than normal answer to this question. Stephen Barclay has not resigned as the head of KiwiBuild. There is an ongoing employment issue, which I cannot comment on. While he’s out of the office, day-to-day support of the KiwiBuild programme is being managed by Brad Ward, a member of the senior leadership at the Ministry of Housing and Urban Development. However, I can confirm for the member that Mr Barclay’s employment matter has nothing to do with his relationship with me or my office, it has nothing to do with the establishment of the new Ministry of Housing and Urban Development, and it has nothing to do with the merits of the KiwiBuild policy. Other than what I have said, it is not in the individual’s interest, nor the public interest, for me to comment further. Responsibility for staff at the Ministry of Housing and Urban Development is a matter for the chief executive of that ministry, and it would be inappropriate for me to comment on employment matters. I can assure the House that the chief executive of the ministry is giving this matter priority attention and the KiwiBuild unit is working incredibly hard to build affordable homes for Kiwi families.

Hon Judith Collins: Well, if it’s not a matter that the Minister has become involved in, then why did he comment on 9 May, “Great to have someone of Stephen’s calibre leading the KiwiBuild team.”?

Hon PHIL TWYFORD: Well, I think that most people would recognise that publicly welcoming the appointment of a new chief executive is quite different from a Minister breaking the conventions in the Cabinet Manual and the provisions of the State Sector Act to wade into an employment dispute.

David Seymour: Is it not the case that KiwiBuild is such an illogical, confused, and contradictory dog’s breakfast of a policy that the guy in charge has given up trying to work it out and gone into hiding?

Hon PHIL TWYFORD: No.

Hon Judith Collins: Has he received any advice that Stephen Barclay is still being paid for his time away from the office, and, if so, what was that advice?

Hon PHIL TWYFORD: It’s an employment matter, and I have not received any advice of that nature.

Hon Judith Collins: Does he believe that New Zealanders deserve to know why Mr Barclay has been away from the office and whether or not Mr Barclay is being paid?

Hon PHIL TWYFORD: I think New Zealanders deserve a Minister that will follow the conventions of the Cabinet Manual and the provisions of the State Sector Act, not wade into an employment dispute. I would have thought that the member, who’s a former lawyer and Minister, would understand that.

Hon Judith Collins: Why, then, has it taken six weeks for him to advise New Zealanders that his head of KiwiBuild is “away from the office”?

Hon PHIL TWYFORD: Because there’s an employment dispute going on that’s being dealt with by the chief executive of the ministry.

Question No. 6—Transport

6. Hon PAUL GOLDSMITH (National) to the Minister of Transport: Does he remain committed to light rail from Auckland’s CBD to the airport; if so, how many people does the latest modelling available to him predict will use it?

Hon PHIL TWYFORD (Minister of Transport): Yes. Light rail will be a game-changer for Auckland. The preferred route between the city centre and Māngere has been developed after comprehensive studies based on two central goals: providing better transport access and more capacity to support growth in the CBD and the wider urban areas—particularly the airport precinct, which is home to more than 30,000 jobs. The Transport Agency advises that the latest transport modelling indicates that in 2048, there will be 20 million passengers per year using the light rail line from the city to Māngere, including an estimated 70,000 people per working day.

Hon Paul Goldsmith: When he says the light rail is going to Māngere, does he mean the airport or the Māngere town centre?

Hon PHIL TWYFORD: The plan is for the light rail to go to the airport, but its primary function is to support the job-rich economic centre in the airport precinct. Its primary purpose is to help people get to and from work and education and all of the things that they need.

Hon Paul Goldsmith: If he remains committed to the project, why is everyone in Auckland saying that a link from Puhinui Station will be the primary public transport connection to the airport and that light rail is about urban regeneration in Mount Roskill?

Hon PHIL TWYFORD: Because they’re not.

David Seymour: How long does it take a vehicle travelling at 30 kilometres an hour to travel 20 kilometres from the Auckland CBD to the airport?

Hon PHIL TWYFORD: Well, that depends on how congested the roads are at the time that the person is travelling. But I will say this: our Government’s committed to building a modern rapid transit network across the city that will ease congestion for the next few generations and give people a genuine alternative to sitting in the chronic gridlock—

SPEAKER: Order! Order! Now, I—[Interruption] No, I don’t want a point of order; I want an answer to the question.

Hon PHIL TWYFORD: Well, I can’t answer that question. If the member wants to put it in writing, I’ll happily get the modelling for him. [Interruption]

SPEAKER: No, both members will resume their seats. I will accept the answer, but I think I’ve said to a number of members that I take responsibility for their lack of numeracy as a former Minister of Education, and I would expect a Minister to be nimble enough to work out 20 kilometres at 30 kilometres an hour.

David Seymour: I raise a point of order, Mr Speaker. I seek leave to table calculations showing the answer is 40 minutes.

SPEAKER: I’m not going to accept that, because I think the vast majority of people in the House could do it even if they had to use their fingers.

Rt Hon Winston Peters: Can I ask the Minister: is there any part of Auckland in the area suggested by the primary question that is unimpeded for 20 kilometres, particularly at intersections?

Hon PHIL TWYFORD: There is not.

Hon Paul Goldsmith: Does he regard a light rail tram going down Dominion Road as “rapid transit”; and, if so, how fast does he think the trams will be going?

Hon PHIL TWYFORD: The description of rapid transit is when, through priority lanes or a separate route, whether it’s a bus or light rail or heavy rail, it doesn’t have to compete with cars. That is the intention for the light rail from the city to Māngere. That’s why it will deliver modern rapid transit for all of the people living on the isthmus and a huge swath of South Auckland, and that’s why the former Government, when Simon Bridges was the transport Minister, NZTA, and Auckland Transport all chose light rail as the preferred mode for the city centre to Māngere route. And I don’t know why the current Government is now campaigning against it.

Hon Judith Collins: Current Government?

Hon PHIL TWYFORD: Opposition.

Hon Paul Goldsmith: How would he define rapid?

Hon PHIL TWYFORD: I refer the member to my earlier answer.

Question No. 7—Education

7. RINO TIRIKATENE (Labour—Te Tai Tonga) to the Minister of Education: What announcements has he made about upgrading classrooms?

Hon CHRIS HIPKINS (Minister of Education): More good news. Today, I announced that over $30 million will be spent upgrading three schools in the Tasman/Marlborough region: Collingwood Area School, Golden Bay High School, and Queen Charlotte College. The new funding will upgrade 37 classrooms and provide 10 replacement classrooms. This comes on top of yesterday’s announcement that the Government is increasing the redevelopment budget for Mana College to over $15 million, to give them 17 new flexible learning spaces and a new library.

Rino Tirikatene: How many new builds, expansions, and redevelopments has the Government announced this year?

Hon CHRIS HIPKINS: So far, the Government has announced 62 school property announcements this year. We are committed to investing in warm, dry, and modern classrooms. This consists of five major rebuilds, including Marlborough boys’ and girls’ colleges, Onepoto Primary School, and Paerata Primary School; 11 redevelopments, such as Onehunga High School and Otumoetai College; two expansions of Waterview School and Sommerville Special School; and 38 announcements around roll-growth classrooms.

Question No. 8—Foreign Affairs

8. Hon TODD McCLAY (National—Rotorua) to the Minister of Foreign Affairs: Will the Government sign the United Nations global compact for migration?

Rt Hon WINSTON PETERS (Minister of Foreign Affairs): A final decision has not been made, as we are seeking the best legal advice from Crown Law so that we can make an informed decision on a matter which was started by the National Party on 19 September 2016, and here is the document.

Hon Todd McClay: Is the Minister aware that the United Nations migration compact was adopted in Morocco yesterday by countries who attended, including New Zealand; and, if so, has the Government received the additional advice the Prime Minister said she was seeking at post-Cabinet yesterday before a decision would be made?

Rt Hon WINSTON PETERS: No, I am not aware of that, because it did not happen the way that member said. In fact, it looks like now this matter will be for a decision at the United Nations on Wednesday the 19th in the US, or Thursday New Zealand time.

Hon Todd McClay: Why has the Government still not arrived at a position on this UN agreement when they’ve had the text of the agreement since July of this year and adopted it yesterday in Morocco?

Rt Hon WINSTON PETERS: Again, it was not adopted yesterday in Marrakesh, Morocco—for the umpteenth time; catch up. Here is the fact: the previous Government initiated the process that led to consideration of its adoption. This is the document. However, this Government is famous for getting its facts right and doing the research before making a judgment.

Hon Todd McClay: Why did he say last week that the Government had not received briefings on the negotiation when he himself received an update and was asked to sign off on final negotiating parameters for the agreement on 7 March of this year, and are these the actions of an open and transparent Government?

Rt Hon WINSTON PETERS: It would’ve been very difficult to sign off in March of this year when the final submission was made by the department in July of this year. You see, I mean, we have a certain predilection to be able to forecast, but we’re not that good.

Hon Todd McClay: I agree with the last point, but does he still believe that the US, Australia, Switzerland, Chile, Italy, and others are wrong when they say that they are concerned with the impact this agreement will have on their ability to set migration policy, and, if so, will he be telling the US administration this next week when he goes to the US to personally sign this agreement?

Rt Hon WINSTON PETERS: Again, I am not going to the United States to personally sign this agreement. I can best answer by putting forward the Danish representation overnight at Marrakesh, where this representative said the following: “Migrants who have been invited must be treated fairly and well in all countries, while irregular migrants who have no legal right to stay must be effectively and safely readmitted to their home countries. Let there be no doubt: every human being has human rights, but migration is not a human right, and migration can never be unchecked or uncontrolled.”

Hon Todd McClay: I seek leave to table a statement made yesterday in Morocco by the UN Secretary-General titled “Governments adopt a global migration compact to help ‘prevent suffering and chaos’ ”.

SPEAKER: And I have an assurance that that has not come from a website?

Hon Todd McClay: No, but I’ll send it across to the Minister.

SPEAKER: The member will now stand, withdraw, and apologise for being disorderly.

Hon Todd McClay: I withdraw and apologise.

SPEAKER: I’ll repeat to members that members who attempt to do that in the future will be in more serious trouble, and that includes members on this side.

Question No. 9—Social Development

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

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

Hon Louise Upston: Does she stand by her statement in relation to the Ministry of Social Development (MSD) housing vulnerable families at motels used to accommodate child sex offenders that “Clearly, had the Ministry of Social Development been informed that this offender had moved into the same environment as the children, it would have intervened.”?

Hon CARMEL SEPULONI: I am going to interpret the member’s question as referring to a case where a sex offender had been placed into a motel that was used for emergency accommodation on 30 April, something that I found out about on 30 July. That particular person did make contact with MSD on 3 May when he sought support for a housing assessment. The person undertaking the housing assessment was not the person who had placed that particular person into the motel and did not have access to emergency motel accommodation information, so did not make the connection that this person was staying in a motel where families could be placed through MSD.

Hon Louise Upston: Why did MSD not intervene and move vulnerable families from motels, despite being given a list from the Department of Corrections of motels where offenders were being housed; and why were there still vulnerable families housed with offenders in the same motels more than two weeks later, despite the Prime Minister saying this was a huge oversight and she expects better?

Hon CARMEL SEPULONI: Just reflecting on this question, I need to point out that under the previous Government there was a serious offence that occurred by a sex offender and no follow-up was undertaken by the Department of Corrections or MSD with regards to a serious memorandum of understanding (MOU) to address it. The only time an MOU was introduced was in October this year under this Government when MSD and corrections got together to seriously address this. MSD does not have responsibility for placing serious sexual offenders. Corrections has the responsibility for that; MSD has responsibility for placing families. The good thing is that now, under us, there is an MOU, which means that on a daily basis MSD and corrections are sharing information so that this should not happen again, and, reflecting again, it continued to happen despite what happened under the previous Government.

Hon Louise Upston: I raise a point of order, Mr Speaker. That was a long and interesting answer but didn’t actually address the question that I asked.

SPEAKER: Yes, it did.

Hon Louise Upston: Why was the MOU signed by MSD and corrections in May 2017 not implemented until October 2018; and how many children were put at risk in the intervening 17 months?

Hon CARMEL SEPULONI: If I heard that member right, she referred to an MOU that was written in May 2017 and signed in 2017. They were in Government then; she needs to ask her colleagues why that was not implemented.

Hon Louise Upston: What has the Minister said to the woman and her children who were housed by MSD at the same motel as sex offenders not once but twice?

Hon CARMEL SEPULONI: The assertion that there was a woman with children that was placed in a motel with sex offenders twice is information I did not know about. But I can say with the case that was brought to my attention, there was a thorough investigation. Fortunately, there was no harm caused to those children. The same cannot be said under the previous Government when they did nothing about this during their time.

Question No. 10—ACC

10. ANAHILA KANONGATA’A-SUISUIKI (Labour) to the Minister for ACC: What announcements has he made this week about ACC levies?

Hon IAIN LEES-GALLOWAY (Minister for ACC): Yesterday, the Prime Minister and I announced that the work account levy will be reduced and that the earners account and motor vehicle account levies will be held at their current levels. This will result in an overall reduction in the levies Kiwis pay to ACC of $100 million.

Anahila Kanongata’a-Suisuiki: Why did he recommend this decision to Cabinet?

Hon IAIN LEES-GALLOWAY: Well, New Zealanders expect to get fair treatment and compensation from ACC in return for a fair levy. These levy rates ensure that ACC will always be there when people need it, while making sure that no one is overcharged for that service.

Anahila Kanongata’a-Suisuiki: Why has the Government decided to stop charging variable levies based on vehicle risk rating?

Hon IAIN LEES-GALLOWAY: Well, three reasons: first, there is no evidence that variable registration fees are making the vehicle fleet any safer; second, the variable levy system has been difficult and expensive to administer with no demonstrable benefit; and, third, charging people who can’t afford to buy a newer car a higher ACC levy amounts to a regressive tax on the poorest families, and that is something that this Government will not allow to continue.

Question No. 11—Police

11. CHRIS BISHOP (National—Hutt South) to the Minister of Police: Can he confirm that Alexandra, Balclutha, Helensville, Southern rural, Tasman rural, Wanaka, Wellsford, Wairoa, Rolleston, Taumarunui, Te Kuiti, Thames, Dannevirke/Waipukurau, Dargaville, Kaikohe/Kerikeri, Stratford, Motueka, and Marton police bases will now no longer be upgraded to be 24/7 police bases?

Hon STUART NASH (Minister of Police): Police provide a 24/7 service to the public in every single one of those towns with response times of between 7 and 12 minutes on average. Decisions on opening hours and staffing at these sites are made by district commanders, who are best placed to make those decisions rather than politicians who work in Wellington. I have absolute confidence in our police district commanders, who have, on average, 30 years of policing experience, to deliver in a way that keeps our communities safe. I wish that member would support our police more like we do on this side of the House.

Chris Bishop: Does he agree with the member of Parliament representing the town of Wairoa, who welcomed the 24/7 police announcement in 2017, and, if so, why has he committed to a policy that has resulted in the cancellation of the upgrade of 20 police bases, including in Wairoa?

Hon STUART NASH: The member who represents Wairoa absolutely commends this Government for delivering 1,800 more police over three years.

SPEAKER: Order! The member representing Wairoa is not answering the question; the Minister of Police is.

Hon STUART NASH: When I was last speaking to the “Minister of Wairoa”, as the Minister of Police, he was absolutely rapt that, in fact, the Eastern District got the highest number of police in the 1,800 we’re going to strive to deliver over three years.

Ginny Andersen: What is the Minister’s response to those communities in the Southern District and Northland, who are concerned at the police’s decision not to extend the operating hours of some bases?

Hon STUART NASH: This Government is striving for 1,800 extra police, and Budget 2018 was the biggest investment in New Zealand Police history. Northland is getting 87 extra police; Tasman is getting 55 extra police; Canterbury is getting 121 extra police; Southern, for example, is getting 88 extra police. There will be an additional 520 investigators and technical specialists to be located across the country to deal with serious and organised crime. This Government and the New Zealand Police are committed to keeping our communities safe and feeling safe.

Hamish Walker: Has he seen the comments of the Mayor of Clutha, who said, “Six thousand square kilometres, and for six hours a day, there’s no policing. Guess when the tinny houses open?”, and how can he justify to Balclutha the cancellation of their station upgrade to 24/7 coverage?

Hon STUART NASH: If that member believes he knows more about policing than the Southern District commander, who has 33 years of policing experience, then I suggest maybe he leaves Parliament and joins the police—we’re after new recruits.

Rt Hon Winston Peters: Can the Minister confirm that in the drive to 1,800 new police men and women on the front line, that on Thursday the 1,000th one will be graduating in Wellington, at the attendance of which the Minister and the Minister of Foreign Affairs will be, as well?

Hon STUART NASH: I am very happy to confirm that. It is a wonderful day—over 1,000 new officers into our communities since we became the Government.

Matt King: Has he seen the comments of Federated Farmers’ rural security spokesperson Miles Anderson, who said, “Out in the provinces, people are isolated and probably far more vulnerable than they are in urban settings.”, and why doesn’t he support the target of 95 percent of New Zealanders living within 25 kilometres of a 24/7 police station?

Hon STUART NASH: That member, as a former police officer himself, will know that what really makes a difference in our communities is more police out there, dealing proactively with our communities, and really making a difference. I would expect that member to back Tony Hill, the Northland District commander, who has 28 years of experience in deploying his resources in a way that he sees fit.

Chris Bishop: Why have 20 regional communities around New Zealand had their planned upgrades to 24/7 police coverage cancelled, despite $503 million over four years in Budget 2017 and an additional $298.9 million in Budget 2018, and the alleged, apparently, 1,800 police officers coming on the beat?

Hon STUART NASH: If that member really believes that the best use of police resources is a couple of men and women sitting in a station at 2 a.m. on a Tuesday morning, then I suggest he needs to get out more. This Government is about putting police into our communities and backing our police commissioner and his team to deploy resources in a way that they see fit, to keep our communities safe and prevent crime.

Question No. 12—Whānau Ora

12. JO HAYES (National) to the Minister for Whānau Ora: Has he asked Hon Willie Jackson if he was both a Government Minister and a trustee of the Manukau Urban Māori Authority when it received dividends from Te Pou Matakana; if so, what was his response?

Hon PEENI HENARE (Minister for Whānau Ora): No. This is outside of my responsibilities as the Minister for Whānau Ora.

Jo Hayes: Has he asked the Hon Willie Jackson if he was both a Government Minister and a trustee of the National Urban Māori Authority (NUMA) when it received dividends from Te Pou Matakana; if so, what was his response?

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Normally that question would be allowed, but that question imputes an illegality on a conflict of interest with no evidence whatsoever, and this House should know that that’s going to lead to disorder. If that member wishes to make those sorts of insinuations by way of a question, then we need the evidence, otherwise it’s out of order, in my submission.

Hon Gerry Brownlee: Point of order.

SPEAKER: No, before I deal with that, the two members who interjected while Mr Peters was on his feet will stand, withdraw, and apologise.

Hon Todd McClay: I withdraw and apologise.

Andrew Bayly: I withdraw and apologise.

SPEAKER: Well, there were three.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. With regards to that: firstly, it was a question, and a question about a subject the Minister should know about, but it also came after a series of questions at a select committee, and the transcript, of course, would be available should the foreign Minister wish to read it.

SPEAKER: Yeah. I’m going to ask the member to read her question again. I think it went right up to the margin. It doesn’t have authentication, but I want to listen to it carefully.

Jo Hayes: Has he asked the Hon Willie Jackson if he was both a Government Minister and a trustee of the National Urban Māori Authority when it received dividends from Te Pou Matakana; if so, what was his response?

SPEAKER: Yeah—no, that question’s acceptable.

Hon PEENI HENARE: No, and I have full confidence in the management of conflicts of interest by this Government.

Jo Hayes: Why hasn’t he asked the Hon Willie Jackson that question, considering their disagreements on information that came to light in a One News story last week?

Hon PEENI HENARE: The member shouldn’t believe everything she sees on the news.

Jo Hayes: How can he be certain, then, that the $600,000 of dividends will be reinvested back into Whānau Ora, if his own CEO was concerned about the practice?

Hon PEENI HENARE: I’m confident because the recipients of such a fund are actually charitable entities, and—as Minister for the Community and Voluntary Sector, with purview over charities—they are obliged to reinvest that money into their charitable purpose and into their services in the community.

Jo Hayes: Has he had a word with his colleague for further background on the administrative error which saw him remain as a trustee for NUMA up until February this year, and, if so, what was his answer?

Hon PEENI HENARE: My understanding is that administrative error has been corrected.

Sittings of the House

Sittings of the House

Hon CHRIS HIPKINS (Leader of the House): I move, That the sitting of the House today be extended into tomorrow morning for the committee stages of the Reserve Bank of New Zealand (Monetary Policy) Amendment Bill, the Conservation (Infringement System) Bill, the Earthquake Commission Amendment Bill, the Crown Minerals Amendment Bill, and the Coroners (Access to Body of Dead Person) Amendment Bill, and the second readings of the Crimes Amendment Bill and the Accident Compensation Amendment Bill.

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

Ayes 63

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

Noes 56

New Zealand National 55; Ross.

Motion agreed to.

Bills

Misuse of Drugs (Medicinal Cannabis) Amendment Bill

Third Reading

Hon Dr DAVID CLARK (Minister of Health): I move, That the Misuse of Drugs (Medicinal Cannabis) Amendment Bill be now read a third time.

This bill amends the Misuse of Drugs Act 1975. It is a bill about cultivation, cannabidiol, and compassion. We committed last year to improving access to medicinal cannabis as a Government, and the completion of this bill’s passage through the House is a key milestone in achieving our goal.

From the outset, I want to thank the submitters to the Health Committee, who presented many good ideas, sound suggestions, and thoughts about how the bill should be shaped. I want to thank also the parties of the Government for the suggestions that they brought to the table, many of which were in a Supplementary Order Paper (SOP) that came to the committee of the whole House and made some important changes to the bill before it completed its passage through the House.

I do specifically want to put on record my thanks to New Zealand First, and to Jenny Marcroft and her contribution in adding palliation to the bill. I also want to thank the Green Party, who made valuable policy suggestions around the timing of the regulations, to make sure that they were made a priority and completed within a year, and to ensure that seeds already established in New Zealand could be added to the scheme so that they were not unnecessarily excluded.

As I’ve said, this bill is an important step in making medicinal cannabis more accessible to those New Zealanders that need it. It introduces an exception and statutory defence for people eligible to receive palliation to possess and use illicit cannabis and to possess a cannabis utensil. That is a compassionate clause that allows people to access cannabis products in the final stages of life, as we move to establish a supply scheme that will make high-quality products of a specified nature more readily available and affordable for wider New Zealand. The bill itself provides a regulation-making power to enable the setting of standards that products manufactured, imported, or supplied under licence must meet as a part of that scheme about which I just spoke. It also deschedules cannabidiol so that it is no longer a controlled drug.

I do, again, want to put on record my thanks to the Health Committee and to the parties who made the changes that were implemented through Supplementary Order Paper 177. A key change that I want to say a little bit more about is the expansion of the eligibility for the exception and statutory defence provisions. The SOP removed the term “terminally ill with less than 12 months to live” and replaced it in the provisions with the term “palliation”, which is an approach that is about alleviating pain and suffering for a person with an advanced, progressive, life-limiting condition who is nearing the end of life.

DEPUTY SPEAKER: Order! There just seems to be a lot of noise coming from this part. Can I just ask, if you want to have conversations, can you take them out? Sorry to interrupt.

Hon Dr DAVID CLARK: We believe this is a better description of the group of patients that the compassionate provisions are intended to apply to.

This change is expected to increase the number of people covered by the exception to include up to 25,000 New Zealanders who may be suffering in the final stages of life. Of course, it’s unclear how many might choose to use illicit cannabis, but it is one more arrow in the quiver, as it were, for addressing the issue of pain in the final stages of life.

This bill means that people eligible for palliation will have an exemption in the Act to the charge of using cannabis, and it means that they won’t be prosecuted for using illicit cannabis. They will be able to get a doctor’s certificate to certify that they’re eligible for that exemption. Of course, if they don’t have a doctor’s certificate, they can get that retrospectively and, if they’re in a court of law, use that as a defence. This is a defence that’s written into the bill. It’s a compassionate approach for people nearing the end of life, where the usual concerns, of course, around product safety, quality, efficacy, and any long-term risks really are irrelevant.

The scheme itself that we’re introducing with the bill is currently being established. It will be overseen by an agency and will result in New Zealanders being able to get commercially manufactured products made right here in New Zealand to a quality standard that we would expect. That is likely to mean, when they’re made to that standard, that doctors will be more willing to prescribe them, because, of course, what doctors do is prescribe known products—products where they know what the interaction will be with other medicines they prescribe.

All stages of cultivation, production, and supply of medicinal cannabis will be licensed. The bill allows quality requirements to be set and regulations for products produced under this scheme, and that will ensure that products meet the necessary standards we would expect.

The bill also now includes a requirement that regulations be made no later than one year after this bill is passed into law. That gives a transparency around the time frame in which the provisions will be drafted for regulations, and it also makes it clear that the scheme is a priority for this Government. It continues to be something that has been a priority from the start. The original bill was introduced in our 100-day plan and now will be passed into law within one year.

In addition, we proposed an amendment to address the use of cannabis varieties that are already established in New Zealand, and we didn’t see that it was appropriate to exclude those varieties that are already established in our country. I thank the Green Party of Aotearoa New Zealand for bringing that to the table. The scheme will require all stages of cultivation and production to be licensed. There is no obvious reason to preclude varieties of cannabis that are established.

The ministry will release a paper on the scheme early next year. That will be open to public consultation. We think it’s important that those who are in the industry, those who are users, those who are consumers of products, and those with a wider interest be able to submit their views as the regulations are established, so that we get the highest quality scheme. Indeed, one of the criticisms we had of other proposals brought to the Parliament was that they didn’t have that wider test around them. That was part of the previous debate.

The misuse of drugs legislation already provides a framework for licensing the production of medicinal cannabis products. The scheme makes use of that existing framework and therefore does not add unnecessary extra compliance. We saw no need to do anything in that regard.

The ministry will develop the quality standards in consultation with experts, and we believe that’s the right way of doing things. I will be convening a medicinal cannabis oversight panel to provide feedback and expert advice on the development of the scheme, and I believe that’s entirely appropriate. It shouldn’t be politicians that set the terms for the scheme; it should be experts. So I’m very pleased to be convening that panel, which will include experts such as medical professionals and consumer and industry representation.

Today is a great day. This is the most progressive legislation that has ever been passed through this House for the supply and access to medicinal cannabis products. It’s about cultivation, cannabidiol, and compassion. I’m very proud to commend this bill to the House.

Hon SIMON BRIDGES (Leader of the Opposition): I don’t think I have spoken on a bill in this House this term. As leader of the Opposition—

Hon Dr David Clark: Lazy.

Hon SIMON BRIDGES: As leader of the—well, we’ll get to lazy very soon because this is probably the laziest Minister with the laziest bill we’ve ever seen. But I wanted to come down today and speak on this bill as leader of the National Party to state our position incredibly clearly for the people of New Zealand, for the Kiwis out there who are watching and who have concern for this issue.

I want the people of New Zealand to be crystal clear. We have compassion on this side of the House. It’s not something that’s simply for that side of the House—that they think they have in their righteous virtue-signalling way. We have it over here too. We believe as a party, to an individual member—55 members of Parliament on this side of the House—in medicinal cannabis. I personally have met in my electorate office in Tauranga constituents who are terminally ill who want the ability legally to get medicinal cannabis through appropriate channels to deal with the pain that they have. I understand it. I get it. I have huge compassion for them.

Indeed, Dr Shane Reti, out of his own pocket—and can I say what a remarkable piece of work it is. He went offshore. He went to the United States. He sought out best practice on these issues and he got them. He put forward, and I’ll go through it shortly, the several things that we believe a scheme for medicinal cannabis must, to be remotely responsible, have in this land of ours. But I can only assume that through lazy, petty politics, that side of the House wouldn’t go with it. They literally put their hands over their eyes and passed this skeleton of a law that is grossly irresponsible. I fear, and there is nothing the Minister of Health has said today that tells me otherwise, that what in fact this bill is is decriminalisation of cannabis by stealth in this Parliament today.

The Minister is sitting there, he’s looking down, he doesn’t want to listen to this, but not a single thing he has said in this House over the passage of this bill says anything otherwise: that when this bill passes, when it is signed off by the Governor-General, loose-leaf cannabis will be able to be smoked in public in New Zealand. What do you call that? He’s shaking his head. That Minister has been asked these questions. He’s had the ability every single time he’s spoken to answer the basic questions, and he hasn’t done that. In fact, he’s all but confirmed it. I say to him: what will the police do when they’re outside a school and someone, under this legislation, is smoking cannabis? What will they do? Chlöe Swarbrick’s shaking her head. I’ll tell you what they’ll do. I don’t reckon they’ll do much at all, actually, because today that’s what this Parliament arguably—but certainly there’s been nothing to allay our concerns—has lazily and irresponsibly done in this House.

I also want to be clear about this point: on this side of the House, we are all up for a debate on the merits of decriminalisation of cannabis in this country. I think it’s a debate that New Zealand actually probably wants to have. They want to discuss the issues, they want to understand what it means, they want to weigh those issues, and they want, after that debate has been had—not before it—to have a referendum on the subject. But now, with this bill, I fear that the Minister, with no details and zero answers to basic questions on a responsible medicinal cannabis scheme, has ensured that the debate will be after the fact. The debate will be after we’ve had the issue come before this Parliament and dealt with by stealth—too late, not democratic.

I’ve already mentioned Dr Shane Reti. He’s done the work. He has gone through and, in a schema of several things, ensured that his scheme proposed in Supplementary Order Papers in this House would ensure medicinal cannabis products will be approved in the same way a medicine is approved by Medsafe—no loose-leaf cannabis products approved. Where’s any of that in the bill? It’s just not there. Medical practitioners will decide who should have access to a medicinal cannabis card which will certify them to buy medicinal cannabis products. Where’s anything about anything remotely approaching that? It’s not there, Dr David Clark. David Clark put his hands over his eyes and peaked through, took it to Cabinet, and didn’t deal with the hard questions.

Dr Shane Reti ensured that medicinal cannabis products will be pharmacist-only medicine and that cultivators and manufacturers must be licensed for commercial production. Licence holders and staff would be vetted to ensure that they’re fit and proper persons. There would be a licensing regime that would create a safe market for medicinal cannabis products. Cultivators and manufacturers would not be able to be located within 5 kilometres of residential land or within a kilometre of sensitive sites such as schools and wāhi tapu. There would be no advertising of medicinal cannabis products, and the Ministry of Health would be reviewing this every five years. They are sensible additions. Actually, even if they weren’t sensible—but they are—at least there would be some flesh on the bones of a law about cannabis that people could look at, and I say, in this case, have best practice. None of that is there. None of it is there, and that simply leaves questions in terms of every single part of this.

Can you imagine, while I’m on it—the bare bones of a law with no detail on it—the Cabinet discussion that day when Dr Clark went to Cabinet? It’s really emblematic of how this Government runs. Let’s say it was the Rt Hon Winston Peters—awake at that time—asking, “How does a terminally ill New Zealander get hold of medicinal cannabis?” No answers. “That’s their problem.”, probably said David Clark.

DEPUTY SPEAKER: Order! I’d ask the member to use the correct title: the Hon Dr David Clark.

Hon SIMON BRIDGES: The Hon Dr David Clark. Great question—no answers to the basic parts of this.

So I just have some basic questions on this. Here’s the question: when someone comes to a school to pick up their kids and they have a bag of loose leaf and they smoke some of it, where in this bill is that now illegal or unlawful or not part of the thing?

Hon Shane Jones: Scaremongering.

Hon SIMON BRIDGES: No, no. Basic questions—basic questions on this. How does it interact with the smoke-free legislation? Where does it come from? There is no answer to that. I suggest it probably comes from the house closest to the powerline with the shoes thrown over the top of it. That’s all that’s there. And I say on behalf of this side of the House that we’re all for medicinal cannabis—we believe in it, and that’s the party position. On decriminalisation, there’ll be people who have a vast range of views. I’m against it; others won’t be. But the reality is here today that without the questions answered, I fear we’ve got decriminalisation by stealth.

I say to Shane Jones in my final few moments in this House: what did New Zealand First get in return? I know he agrees that this bill will do nothing to “get the nephs off the couch”. In fact, it very much legitimises the long-term, intergenerational, systemic problems that he agrees with this side of the House on. What has been gotten? Was it the piffling industrial changes that made no difference? Was it some other such deal that we haven’t heard? Nationalisation of ports, I hear someone say. Shame on the House for passing this terrible, unsafe, dangerous bill.

LOUISA WALL (Labour—Manurewa): Tēnā koe, Te Māngai o Te Whare. Tēnā koutou katoa. It is my pleasure to speak at this third reading of the Misuse of Drugs (Medicinal Cannabis) Amendment Bill, and I do so as the chair of the Health Committee. I want to acknowledge my deputy chair, Dr Shane Reti, and the other members of the committee. I would like to take the opportunity to congratulate Minister Clark and also our New Zealand First colleagues, particularly Jenny Marcroft, and our Greens colleagues, particularly Chlöe Swarbrick. I think that the work the three of us, in terms of our coalition Government and our support partners, have undertaken, given that this bill was first read on 20 December 2017, to actually bring a bill before this Parliament in less than a year is incredibly well done—should I say—well done. I’d also like to take the opportunity to thank the officials from the Ministry of Health, and also the police and our Parliamentary Counsel Office. They served us incredibly well, and I want to take the opportunity to acknowledge that work.

The Health Committee actually worked incredibly hard on this piece of legislation, and, in fact, all up, there were seven amendments that we actually considered, five of which ended up being included in the Minister’s Supplementary Order Paper, which we discussed at the committee stage of this bill. So I do want to acknowledge colleagues from across the House for their constructive engagement in that process. We wouldn’t have actually come up with those amendments unless we had put the effort in to try to make this bill the best bill that it could be.

I do need to highlight that this was part of the Government’s 100-day commitment, and, essentially, it was about improving access to medicinal cannabis. One of the things I want to put on record is that, actually, medicinal cannabis was available before this piece of legislation was brought to the House. The big issue was about what products were available. There is a product called Sativex, but it can cost up to $1,200 a month for people who need it. The issue that we were trying to address was actually one of supply, and this bill was very much about fairness. So was it fair for people who needed medicinal cannabis to have to pay $1,200 a month? Obviously no, and so, from our perspective, the other part of that process was creating a quality product that was also safe, and we proposed to do that through the development of a medicinal cannabis scheme.

Now, we’ve chosen to do that through the scheme not as an Act of Parliament but via regulation. What I want to highlight is that regulations are not actions of the House, and so, in fact, the process that the Minister has outlined is incredibly important because what it will enable is the medicinal cannabis advisory committee, for example, which will be created under this piece of legislation, which will include health professionals, manufacturers, suppliers, medicinal cannabis users, and, actually, from our submission and consultation process, Māori, who specifically wanted to be included in that group and also the disability sector. I do have to highlight that, philosophically, that is the big difference between the proposition from the Minister—that we are going to create a medicinal cannabis scheme via regulation—as opposed to the Opposition’s.

I do want to acknowledge Dr Shane Reti, who has proposed what would have been a piece of legislation that would have had all the components that we believe, actually, the public should have the ability to comment on. I do say to Dr Reti: given all that work that you’ve done, please make a submission, and I’m being genuine to that end, because I know that the work you have done has been incredibly valuable, and it can actually assist us as we move forward.

The other issue I wanted to highlight was that this bill was also about compassion. When we talk about compassion, it was a recognition that there are many people using cannabis for medicinal purposes that actually don’t have access to it, because, as I said before, we have one product and it’s $1,200 a month.

We did have 1,786 written submissions. Of those, we heard from 158 oral submitters. But I guess the most telling part, in terms of the debate about who should be exempt from prosecution—and the fact that the original proposition in this bill was that it should be people who are terminally ill with less than 12 months to live—was what we found from the 584 submitters who specifically wanted to talk about this exception and statutory defence provision: 174 of those submitters came to the committee because they were suffering from debilitating and chronic pain. We had 22 submitters who either experienced cancer or had loved ones who did. We had 16 submitters who had epilepsy. There were 17 submitters who experience multiple sclerosis. And there were also 74 submitters who actually said anybody should be able to have access or be exempt from prosecution if their doctor says that using medicinal cannabis is actually going to assist. So that discussion about who should be exempt from prosecution until we have a quality, safe, cheap, affordable product available did consume a lot of the time of the committee.

I just want to highlight, for people who are unsure of what we’re talking about, that if you’ve got a malignant condition, it’s mostly people who suffer from types of cancers. If it’s non-malignant, we’re actually talking about people who suffer from motor neuron disease. Now, 95 percent of people diagnosed will die within two to five years. We’re talking about people who have motor neuron disease, people who have Parkinson’s disease, people who have multiple sclerosis, and people who have chronic obstructive pulmonary disease. So, the reality of this particular piece of legislation to members of our community, who we found out through the process are incredibly vulnerable, is something that I absolutely want to highlight, because these are the people who shared their stories—either their personal stories or they were there advocating on behalf of their loved ones. So can I say, from a select committee perspective, thank you for your generosity. Thank you for being so vulnerable, and I hope what you’ve seen actually is a response by the committee to your voices. I know that there were others who thought it should be a bit more broad, but I actually think that the exemption that can be provided by medical practitioners, doctors, and nurse practitioners actually provides scope for people who do have chronic conditions to fit if it is within a palliative regime.

I’d also like to highlight that the research about why medicinal cannabis is so important has started to come to the fore, and particularly I want to point to a piece of research from the European journal of international medicine which was released in May this year, which, essentially, says that medicinal cannabis for people who are suffering actually alleviates pain, and the alleviation of that pain means that people have gone from a pain scale of between eight and 10—for almost half of those in the study—to, after six months, only five percent of those people suffering that excruciating pain. It also means people can sleep, and it also means that people can eat.

I think the last point that I want to make, and it has been really underplayed from the beginning, is actually the economic opportunities that this whole medicinal cannabis scheme is going to create. I want to acknowledge Manu Caddie and Hikurangi Cannabis Co. and the whānau in Ruatōria because, actually, with Minister Jones in the House, I think that there are going to be economic development opportunities for the regions. The global market was valued at US$8.28 billion in 2017. The projections are that, by 2024, this industry is going to be worth US$28 billion, and I want to acknowledge that the reason that the industry is going to grow so much is that there has been an increased acknowledgment of the benefits of medicinal cannabis—

DEPUTY SPEAKER: Yes, I would like the member to come back to the bill, please.

LOUISA WALL: —and also the increased demand.

DEPUTY SPEAKER: This is actually not a wide debate.

LOUISA WALL: So the bill will also enable cannabis cultivation licences to be issued for research purposes and, going back to my highlighting Hikurangi Cannabis Co., they’ve received one.

So I commend the bill to the House. Can I just say that, as a process, this was the first bill that our committee has seen through to fruition. I just again want to thank my colleagues for the way that we conducted ourselves in the committee. At the end of the day, we’re here to serve the people of New Zealand. Kia ora.

Hon MICHAEL WOODHOUSE (National): I would also like to acknowledge the chair of the Health Committee, because she did a tremendous job, and does a tremendous job. Actually, she’s a very effective Labour member of this House, and I am surprised she isn’t further up the totem pole. In, frankly, a shallow puddle of talent over there, I would have thought she was much, much higher ranked, but she certainly did a very good job, in sometimes trying circumstances, because the National caucus started, in good faith, in support of the goals of this bill.

There are three goals: the de-scheduling of cannabidiol, the terminal exemption—the temporary terminal exemption—from prosecution for those who are terminally ill, and the licensing framework. The National Party actually supports all three of those goals, and it’s a measure of the intellectual poverty inherent in this bill that despite being able to support those goals, it can’t support this bill.

As the Leader of the Opposition said, we’re also open to the idea of a conversation in this country about the decriminalising of cannabis more generally. Now, we need to tread very carefully through that—

Hon Shane Jones: Piker—piker.

DEPUTY SPEAKER: Order!

Hon MICHAEL WOODHOUSE: —because, depending on the way in which the conversation is articulated, we’ll have, I think, a very different outcome. So we do need to be cautious.

But the sad thing is we’ve actually started and ended that conversation, in a way, through the passage of this legislation. We have conflated the decriminalising of illicit substances with the licensing regime for medicinal cannabis, and that is to the shame of a lazy Government and a lazy Minister. Let’s go through this. Firstly—

Hon Shane Jones: No plan B—no plan B.

Hon MICHAEL WOODHOUSE: —the temporary exemption from prosecution—

DEPUTY SPEAKER: I just remind the member, there is a Speakers’ ruling that interjection should be rare, reasonable, and witty, and none of those to date have met any one of those three tests. Sorry to interrupt the member.

Hon MICHAEL WOODHOUSE: The memory of H V Ross Robertson has just come back into the House.

Hon Tim Macindoe: And a bit of “contagion” was required.

Hon MICHAEL WOODHOUSE: That’s quite right—

DEPUTY SPEAKER: Actually, it was Braybrooke.

Hon MICHAEL WOODHOUSE: —especially the “witty” bit.

The temporary exemption from prosecution, when this bill is passed, is anything but temporary. The policy statement—the explanatory note—said that this exemption would only be in place until such time as an effective licensing regime and high-quality medicinal cannabis products were on the market. So it follows that there should be a sunset clause on that provision—no. The select committee discussed it. The committee of the whole House discussed it. The Minister rejected it. The Government rejected it. Why? Well, it’s open to speculation about whether the de facto decriminalising of illicit substances through the passage of this legislation is an accident or intended, and—without bringing the gallery in—I noticed the applause when the Leader of the Opposition suggested that was exactly what was happening when we pass this bill. What I describe as an island of immunity—

Greg O’Connor: I thought it was his valedictory.

Hon MICHAEL WOODHOUSE: —in an archipelago of offending will cause no end of trouble for Mr O’Connor’s former colleagues in New Zealand Police, who came along and told us that they aren’t chasing and hunting down and arresting and jailing terminally ill people who have a joint for their pain. But they are interested in the supply chain, so look out for that.

The Minister and the Government still haven’t answered the question of what happens to somebody who’s terminally ill who smokes a joint outside a school or a shopping mall or a movie theatre. What are they going to do? Give them a pass under the Misuse of Drugs Act, but prosecute them under the Smoke-free Environment’s Act? I doubt it—I sincerely doubt it.

In fact, the member based in Invercargill, Dr Liz Craig, did the Minister’s work in committee by pointing out that the Government alternative to a sunset clause was a review: a review in two years, report back in three—on what? On what amendments to these provisions would be required? Not whether the provisions have gone past their sell-by date and should be repealed, in which case we’ve got to come back to this House and do just that because there is no sunset clause. No, it only talks about whatever amendments are necessary. The inference from that is that this is anything but a temporary exemption. So anybody who is terminally ill can smoke illicit substances till doomsday—well, till their doomsday, to put some gallows humour on to it.

Now, the licensing regime—the famous 59 words. We got a few more when we came out of the committee of the whole House, but a paucity of information about what that should be. The Minister’s response was twofold: “Look at section 37 of the Misuse of Drugs Act.” and “Trust us.”

So here are some questions that, at this very eleventh hour, we still don’t know the answers to. What will happen to somebody who wants to put a manufacturing process close to a school in the middle of a residential area? Will the manufacturing entity be an outside process or an indoor process? What is the fitness to hold the licence—no idea. Will it involve—this is crucial—loose leaf? Will that complete oxymoron of a medicine that is rolled up and smoked be allowed under the medicinal cannabis regime? Not the temporary exemption; not the terminal exemption.

Louisa Wall: You’re obsessed about it.

Hon MICHAEL WOODHOUSE: And the Minister—oh, “obsessed”? The member says that I’m obsessed by this question. Well, I’m sorry; it’s a pretty fundamental question. Are we decriminalising loose-leaf cannabis use or not? Because I don’t know; I’m no doctor. Dr Reti can address this; Dr Craig could. But it seems to me that the smoking of what previously was an illicit substance for a chronic condition, and, bear in mind, we’re not talking about terminally ill once this licensing regime is in place; we’re talking about anybody who the GP or the doctor—the prescribing person—deems will benefit from this product, and the ingestion process is relevant. But no—not a dicky-bird on whether or not smoked loose leaf will be part of the licensing regime.

What manufacturing standards will be required for the people who hold the license? No idea—none whatsoever. Well, the answer to the question is, guess what? We’re going to set up another committee, a ministerial oversight group. So this was a high priority for the Government. It was in the 100-day plan. We’ve had a year to think about it and all of the detail is being delegated not only to officials but to another oversight group—add that to the 200-plus we’ve already got.

I have some significant concerns about the relationship between this change and our land transport rules and the effect that this will have on road safety, because while the principal change is a licensing framework, there is no doubt that the effect is the same, whether it’s illicit or prescribed, drugged driving is a massive risk on our road. If we have to look at the jurisdictions, I’m advised that in those jurisdictions where cannabis was decriminalised, deaths from drugged driving went up considerably, and in some jurisdictions are greater than alcohol harm on their roads, and that is going to come to a highway near us. Why? Because we haven’t even engaged transport officials on that crucial question. We haven’t engaged New Zealand Police per se about a test and whether there’s a high enough correlation between the presence of THC and evidence of impairment. It’s been a problem in illicit use. It’s not going to get any easier just because it’s prescribed.

Of course, we did have the nonsense of our—and, indeed, today, the combined select committees of health and Māori affairs have reported back to this House on its progress in achieving the goal of being smoke-free by 2025. Well, we can throw that goal completely out the window. Challenging though it was; it’s gone now.

Louisa Wall: Why?

Hon MICHAEL WOODHOUSE: Because tobacco is deemed more harmful than cannabis. I feel like I’m in a parallel universe. It really is. The Government are about to outlaw smoking in cars with children, but it will be OK to take prescription cannabis. Where are we? What a complete schmozzle. I also want to add my thanks to those submitters, to those members of the medicinal cannabis industry, who are ready, willing, and able to create a safe, high-quality manufacturing process with exactly the sort of rules and boundaries—they want these rules and boundaries—that the Government is not prepared to say should be part of the regime. I wish them all the very best in developing that, and I hope they’re not going to do it in the sort of policy vacuum that exists as we pass this bill. It is bad law, and it should not proceed.

JENNY MARCROFT (NZ First): Thank you, Madam Deputy Speaker. It’s a pleasure to stand on behalf of New Zealand First and take my call and put my contribution to the House on this, the Misuse of Drugs (Medicinal Cannabis) Amendment Bill. It is a pleasure to speak to this bill. I just would like to begin my contribution by thanking the Minister of Health, the Hon Dr David Clark, for working so cooperatively with New Zealand First on this bill. It was a pleasure for me to work with you, so I’d like to thank the Minister.

Also, thank you to the Health Committee for the work on this bill. I make note of the contribution of the chair of the committee, Louisa Wall, and also the deputy chair, Dr Shane Reti. I’ve just recently joined this committee, and it really is a pleasure to be a part of this group of very hard-working members. There were many submitters who spoke to this bill—many hundreds of submitters—and I feel that we heard you, and we have taken a step further than what was originally drafted. Also for laying bare your stories, your mamae, your stories of the pain and the suffering—and we really shouldn’t take that lightly. I acknowledge all of those who made their submissions, whether it was written or they had oral evidence submitted.

Hikurangi Enterprises—it’s been a pleasure to get to know Manu Caddie and to hear about their operation and what they hope for in terms of economic development for Ruatōria. So a thank you to him for helping me understand what they are trying to do inside of this.

Just commenting back to Louisa Wall’s contribution and the seven amendments that were made inside the Health Committee and the five making it to Supplementary Order Paper (SOP) 177. A good amount of work was done in that process. Also too, Sativex, which she mentioned, is a product that is currently available by prescription, and it is, for some, extremely expensive and, therefore, out of reach for many people. Some people are having to pay around $1,200 per month to access this medicinal product. I have a friend. For his daughter, it costs him $500 a month, so that’s on perhaps the lower end and he can well afford it, but it is prohibitive for many. So we set out, as a Government, to make this product more readily available—a good, high-quality product—and easily accessible, because the price point was putting it out of reach for all New Zealanders.

Looking now at what the bill sets out to do, we did find, as a coalition, a common way forward together for our approach to medicinal cannabis. Now, those of us who have watched loved ones pass from the likes of cancer, as I have—I’ve watched my mother, who had breast cancer. It took four years for her to die. That was a long, long number of years to watch the pain and suffering, as eventually she was riddled with cancer. Also too a double whammy for me, because I had a foster mother who also passed from cancer, so I do understand from a personal, lived experience what it is like to watch that end-of-life phase—that process of someone dying in extreme pain, but slowly. And that’s the thing—it can take a very long time. So I’ll talk more to that, about why we added and did a language change around the palliation, in just a moment.

New Zealand First believes that the Misuse of Drugs (Medicinal Cannabis) Amendment Bill shows compassion to those who are dying in terrible pain, and this is why we support this legislation. Currently, yes, we’ve mentioned that there is a legal pathway for people to obtain medicinal cannabis products on prescription from a medical practitioner. However, as I’ve referenced already, access to affordable medicinal cannabis products is problematic for many New Zealanders. So, to address this, the Government agreed late last year—just a year ago—to introduce the medicinal cannabis scheme and to amend the Misuse of Drugs Act 1975.

So this bill sets out to do a few things—important things. It will introduce the exception and statutory defence for people in palliation to possess and use illicit cannabis and to possess a cannabis utensil, it will also provide a regulation-making power to enable the setting of standards that products manufactured, imported, or supplied under licence must meet, and also it will de-schedule cannabidiol—also referred to as CBD—so that it’s no longer a controlled drug.

The scheme will be overseen by an agency that will result in medicinal cannabis products being able to be commercially produced in New Zealand, and it will ensure that all medicinal cannabis products meet quality standards and that all stages of cultivation, production, and supply of medicinal cannabis will be licensed. So there’s going to be great oversight on it.

Looking now at what palliation is—and this is the language change that I referenced earlier. Originally, when the bill came into the House, it referenced “terminal illness” and people having less than 12 months to live would have that statutory defence. However, through SOP 177 from the Minister, we see that is now changed out to “palliation”, and this could affect up to around 25,000 people per year. So that’s extending it to a larger number of people who are suffering and dying in pain.

Looking at the World Health Organization definition of what is palliation: “Palliative care is an approach that improves the quality of life of patients and their families facing the problem associated with life-threatening illness,”. It will provide “relief from pain and other distressing symptoms;”, it “affirms life and regards dying as a normal process;”, it “intends neither to hasten or postpone death;”, it “offers a support system to help patients live as actively as possible until death;”, and it “offers a support system to help the family cope during the patient’s illness and in their own bereavement;”.

I mentioned earlier my mother, who died. It took four years for cancer to take her, and on pretty much her deathbed—she was in Rotorua Hospital by the end—my brother was with her. One of the final things she said was “Why does it take so long to die?”, and that’s a statement that is etched in my heart. It’s etched in my DNA. That is why we are very supportive of extending out the statutory defence for those who are in palliation. It does take a long time to die for some people, and we see that this is a compassionate response to those who need this.

So the Misuse of Drugs (Medicinal Cannabis) Amendment Bill, that we are passing here today, really is a collaborative work across these Government parties. Consensus was reached and, again, I’d like to acknowledge the Minister, the Hon Dr David Clark, for his efforts, and also too the Green Party member Chlöe Swarbrick for working constructively with us on this bill as well. So, finally, I commend this bill to the House.

Dr SHANE RETI (National—Whangarei): Thank you, Madam Deputy Speaker. This is a historic day. Today, New Zealand commences down the path of cannabis reform. Today, cannabis reform in New Zealand will be led by David Clark as the Pied Piper, with, clearly, an empty music sheet. The Greens, dancing aimlessly around—they get cannabis legalisation, and New Zealand First slavishly bringing up the rear, trumped by the Greens and not understanding the harm they will do by agreeing to smoked loose-leaf cannabis in public.

New Zealanders overwhelmingly want medicinal cannabis as another tool in the tool box, as another medicine to ease their suffering. They want a high-quality medicine that is medicinal cannabis. However, New Zealanders did not sign up and are not signing up to cannabis legalisation by stealth. The referendum is the forum for that. Two schemes are created by this bill: a temporary and a permanent medicinal cannabis scheme. The temporary scheme is presented as a compassionate measure for people who have progressive disease, debilitating disease, chronic disease, and near end of life.

Unfortunately, it falls far wide from the mark from what it seeks to do. The temporary scheme is a rushed scheme where politicians have decided which conditions are in and out. This should be left to doctors and experts, not politicians, and in our hands we would do this. This is a rushed scheme that Medical Cannabis Awareness New Zealand says will not provide relief for people with severe, debilitating conditions like Dravet syndrome. This is a rushed scheme where procurement is illegal but possession is legal. In what other legislation do we turn such a blind eye to illegal actions, and, worse, that it should be a drug-related blind eye? The temporary scheme is a rushed scheme that will take some time to set up as a permanent scheme. We could’ve helped with that. With our legislation, we could’ve hurried it along. In fact, I’d contend that we could have the full medicinal cannabis scheme up in the same time it will take to enact and enable the temporary scheme. My predictions for the temporary scheme are these: (1) doctors will find the criteria hard to apply and will not participate, (2) police will struggle mightily to determine who can and who cannot legitimately use cannabis, and (3) the workflow will be unworkable for doctors and police.

The second part of the scheme is the permanent medicinal cannabis scheme. The only thing we know about this scheme is that it will allow the smoking of loose-leaf cannabis in public. We oppose this and deride the lack of details. Talking to the lack of details, an army of workers at the ministry—no details, no framework, no skeleton; just leave it to unnamed officials to work it out over the next few years. No, we will not do that. The National Party will not do that.

Medicinal cannabis is a sensitive issue that demands parliamentary oversight, industry feedback, and community consultation. Unfortunately, there is nothing to oversee, nothing for industry to talk to, and no community consultation on an empty scheme. How is industry supposed to move forward without details? How are prescribers to update and manage workflow without details? How are dispensers to change their work environment without details? We offered a plan. Our bill provided all these details, which we were happy to share, but the Government said no.

The smoking of loose-leaf cannabis is cannabis legalisation by stealth, and there is no question that it is in this bill. Both in written questions and in the committee of the whole House, the Minister of Health was specifically asked these questions, to which he replied, “The bill will not limit the form that cannabis will be dispensed in.” Clearly, loose leaf is in the temporary scheme and in the permanent scheme. Loose leaf is not a medicine. We oppose the smoking of loose leaf. We oppose the smoking of loose leaf in public. We offered in committee, again, the Minister the opportunity to at least restrict the smoking of loose leaf so that it didn’t occur in public. He was not interested in that. We oppose the normalisation of loose leaf in New Zealand society, and we oppose the lack of quality and safety with loose leaf. I say again: loose leaf is not a medicine.

We offered a plan: a licensing regime for cultivation, processing, and manufacture; a licensing regime that describes fit and proper persons; a licensing regime that said no to growing cannabis close to residential areas; a licensing regime that treated medicinal cannabis as just another Medsafe medicine with stage 0, 1, and 2 clinical trials and fast-track approvals. We offered a prescribing regime where doctors and nurses decide eligibility and not politicians, where medicinal cannabis is a medicine based on science and therapeutic benefit. We offered a dispensing plan where medicines are treated as pharmacy-only medicines and dispensed by pharmacists, as happens in the US. We offered certainty. We created a framework for affordability and accessibility, and this Government said no. Their egos could not get them past the media statements that said our bill is clearly better than the Government’s and that the Government’s bill was legislative laziness. As a consequence, we have before us today a bill that legalises cannabis and is empty of detail.

Here are my predictions: (1) loose-leaf cannabis will be smoked in public under the guise of medical need; (2) an already horrendously delayed medicinal cannabis scheme will not be deployed for several years—the regulations may have a one-year requirement for enactment, but deployment will take much longer—(3) while we wait for the details, New Zealand’s fledgling cannabis industry will lose market share to Australia, and some will go under; (4) GPs will have no part of a medicinal cannabis scheme that is not based on sound science and therapeutic benefit; (5) GPs will have no part of a medicinal cannabis scheme that takes no account of their workflow; and, finally, (6) police will have substantial challenges monitoring casual cannabis use from medical need.

Exactly what mandate does the coalition Government have to legalise cannabis? This is the province of a referendum, not back-door legislation pretending to be medical need. What is not collaborated and bipartisan runs the risk of being undone by future Governments. We sought to collaborate. We placed all our work out into public domain for scrutiny and comment. We met several times with Chlöe Swarbrick from the Greens, and I thank her for that collaboration. We met with New Zealand First and pointed out our concerns with smoked loose-leaf cannabis.

Be in no doubt, then, that today the Greens are legalising cannabis by stealth. New Zealand First are allowing the smoking of loose-leaf cannabis. Drug addiction services in Kaikohe and Kaitāia, remember: New Zealand First agreed to smoked loose leaf in your communities, and Labour are tick-boxing a 100-day election promise to placate the Greens. Today, then, the Greens trump New Zealand First. The Greens have hoodwinked New Zealand First into allowing the smoking of loose-leaf cannabis in public, and they will all answer to the electorate for that.

I want to conclude by thanking the National Party and the National Party caucus for understanding the need for a comprehensive, quality medicinal cannabis scheme, and for their support. As independent commentators have noted, this is a big step for the National Party, and together we took that step with dignity, precision, and hard work.

Finally then, the work we have done on our bill is informed by best practice from a number of people and a number of organisations who I’d like to acknowledge. I’d like to acknowledge from Massachusetts, Health Commissioner Kay Doyle and David Blakeman, from New Hampshire, Senator Jeff Woodburn and Health Commissioner Emeritus Nick Toumpas; from Colorado the Director of Marijuana Co-ordination Emeritus, Andrew Freedman; in New York Dr Howard Zucker, the Commissioner of Health, and his medicinal Cannabis team; more locally, the Pharmacy Guild of New Zealand and the Royal New Zealand College of General Practitioners. I’d like to thank Shane Le Brun from Medicinal Cannabis Awareness New Zealand for his wisdom in consultation and in helping us understand better some of the finer details of this legislation. Finally, I’d like to acknowledge Sarah Gwynn from the drafting office for exemplary work and attention to detail.

And so, today this Government is legalising cannabis by stealth. Let us take great care. Thank you.

DEPUTY SPEAKER: Before I call the next speaker, can I just remind the member who’s resumed their seat of the Speaker’s ruling around reading of speeches. I didn’t interrupt, but this is a debating chamber and the Speaker has made it quite clear he expects people not to read their speeches.

CHLÖE SWARBRICK (Green): E Te Māngai, tēnā koe. Tēnā koutou e Te Whare. It’s news to me that the Greens are legalising cannabis by stealth. We actually have a confidence and supply commitment to do exactly that by way of referenda, in which we can expect and hope a positive public outcome occurs. But on 31 January earlier this year, I opened the debate on my—formerly the Hon Julie Anne Genter’s—medicinal cannabis member’s bill, and at that reading I said, “Surely, the point of our laws is to keep people safe and to prevent them from suffering. Where people are already suffering, it is to ensure that they get access to help or relief. So what happens when the law itself is responsible for suffering and prevents people’s access to that help or relief? I believe it is Parliament’s moral obligation to change that law, or at the very least, to be brave enough to listen to those who it is hurting—to open our hearts and our minds. This bill is about how we treat our sick. It is about what happens to all of us when we find ourselves sick. It is about the help that we as a society can give and the help that we deny.”

Now, nearly 11 months later, we are finally closer than New Zealand Parliament has ever been to a legal medicinal cannabis scheme. I want to acknowledge the patients and campaigners, many of whom are in the gallery today, who have spoken actually of their dismay, who’ve said that this is not enough. I want to let them know that this represents a starting point. This represents parliamentary consensus of what this time last year was seen as radical, unfathomable change. This is the closest our Parliament has ever been to this point. Today is historic and it is for you. In approximately an hour—

CHAIRPERSON (Hon Anne Tolley): I don’t think it’s for me.

CHLÖE SWARBRICK: No, Madam Deputy Speaker, it’s for the people in the gallery who I was addressing, but in approximately an hour—

DEPUTY SPEAKER: Actually, you’re addressing me.

CHLÖE SWARBRICK: Apologies, Madam Deputy Speaker. I would address that to the people in the gallery. So in approximately an hour, this bill will pass with a parliamentary majority. After that, it will receive Royal assent, and, from that moment, people who are in palliative care will no longer be turned into criminals for accessing medicinal cannabis. From that moment, the clock will start to tick on a strict 12 month time frame to develop and implement regulations for licensing, production, import, export, prescription, possession, and consumption of medicinal cannabis. And subsequent to the passage of this bill, the public can expect to be consulted with on the development of the regulations, as has been pointed out by the Minister of Health, Dr David Clark.

We have negotiated collaboratively and creatively with both Labour and New Zealand First to achieve that progress for the extension of the criminal defence from terminal illness to palliative care and for the time frame of regulatory development of no more than 12 months. We recognise that patients and their friends and whānau have been waiting for far too long.

We have also worked to see the inclusion of native strains of cannabis and local regulations to be developed. It is with a sense of hilarity that most people realise that despite Ministry of Health data providing ample evidence that approximately hundreds of thousands of New Zealanders are using cannabis on an annual basis, technically cannabis doesn’t legally exist in New Zealand. So to ensure that we create a common-sense framework for legal medicinal cannabis in Aotearoa New Zealand, we will provide a mechanism to fold those local strains into these regulations.

So that is the technical detail, but what does any of that actually mean in practice? Well, I think it is summarised well in an email I received on Friday last week from Emma Helleur: “Today it is my little brother’s 21st birthday. He has been bedridden for the past five months and is slowly and painfully dying. All of the morphine, fentanyl, and painkillers in the world don’t make him feel as calm as the cannabis. His doctors told my parents to get it and now my parents frequently and expensively have to source weed so he’s not in a horrific amount of pain 24 hours a day. And now on his 21st birthday he is dying an incredibly slow and painful death. He will suffer every single moment until his lifelong illness takes him. As his family, we have to stand by and watch him cry because he can hardly move. He can’t even pick up a bottle of water. And this is how he is spending his last days. I would give anything to end his suffering. So I wanted to say thank you. It’s too late for us to do anything about Jacob’s situation, but I hope that in the future no other sisters, mums, dads, or brothers have to stand by and watch somebody that they love suffer.”

I believe that thank you from Emma extends to all of the parliamentarians who have taken off their tribal stripes and come to the table to respectfully and compassionately discuss and progress this issue. That thank you extends to the staunch and tireless campaigners who have extended and placed facts and figures in front of MP after MP after MP in Parliament after Parliament after Parliament. Thank you to the thousands of New Zealanders and hundreds who came before the Health Committee armed with research, who opened their worlds and shared their stories, who organised and advocated for those who couldn’t make it out of the hospital bed or who couldn’t speak words of their pain in front of the characteristically formal and, may I say, sometimes quite frightening select committee process.

I am sorry that we could not make this bill everything that you wanted it to be. We never could. Whilst this is the most that we have managed to shift Parliament’s sentiment on this issue in decades, we’re still far behind other jurisdictions and the public support far outpaced parliamentary action. So today, I am calling on all of those who campaigned and fought to see this happen to not give up on the process. In the future, it should not take Parliament this long to act on the evidence nor with compassion. But it will only happen if New Zealanders continue to push and prod their parliamentarians along. We are accountable to all New Zealanders.

I have a vision for a local medicinal cannabis scheme in Aotearoa which provides us with an opportunity to move away from a reliance on big business, overseas pharmaceuticals. It’s not spurred by moral panic or a fear of anything that isn’t cut or pressed in a lab but informed by evidence in the developing research. It opens up a market that allows those who have been targeted and penalised disproportionately under the war on drugs to use their skills to retrain and to contribute to society. It provides an opportunity to communities throughout regional New Zealand to not just stabilise unsustainable economic decline but to flourish on their own terms. That ability to delve into research and development should not be overlooked, and neither should specialist education. Iwi-led Hikurangi Enterprises, the first company in New Zealand to be granted a medicinal cannabis licence, has worked with local polytech Eastern Institute of Technology in Ruatōria to adapt a horticultural course into a hemp one, and in turn has produced a hugely oversubscribed polytech programme—one of the only polytech programmes in the country, I might add, that is not currently experiencing enrolment decline but an explosion of interest.

Finally, I just want to address the floating red herring in the medicinal cannabis debate: it’s the fear that we have about people getting high. It is the oversimplified lens that we put on cannabidiol’s pain-minimising properties and THC’s psychoactive properties. What exactly do we think that prescription opioids do, except to reduce pain and induce psychoactive responses, not to mention come with much higher risk of addiction, overdose, and negative side effects? No one here is saying that cannabis does not come with harm—that would be irresponsible. Though, what we are saying is that to minimise that harm, we have to recognise that an illegal substance is exactly the opposite of a controlled substance. We get that control through regulation, and the medical profession, we believe, is far better placed to figure out what they should be prescribing than some folks in comfy armchairs in an ivory chamber.

Finally, I just want to say my thanks to all of the staunch campaigners and advocates in the gallery this afternoon. I want to say thank you to former Green MPs who fought long and hard for this issue far before I came before this Chamber, and I want to thank our incredible Green parliamentary advisers, Holly Donald and Ralph Hall. We are incredibly proud to be progressing this legislation today. Kia ora.

Hon NICKY WAGNER (National): It’s my pleasure to stand and talk to this Misuse of Drugs (Medicinal Cannabis) Amendment Bill at its third reading, but I am so very, very disappointed with this bill, and I know that many others are as well, because, in a nutshell, Labour campaigned on establishing a medicinal cannabis regime. I’d like to quote: “We support legalising cannabis products for medicinal use, and we are very clear about that, and will be pleased to do that in our first hundred days.” So we expected that they would have done the work. We expected that, after nine years, they would have done the work to make sure they could introduce a medicinal cannabis scheme, but this bill doesn’t even attempt it; it doesn’t come close. However, and fortunately, National, under Dr Shane Reti, has done the work, and his medicinal cannabis bill is ready and available to go.

Let me explain: all this bill that we’re debating today provides is a temporary statutory defence against prosecution if a patient uses and possesses cannabis—a patient who is very, very ill and close to dying. That’s not what the campaign brochure said. That’s not the well-thought-out, safe, and respected medicinal cannabis scheme that we were expecting. I too add to the other members who’ve spoken in this House to thank the submitters who came to the Health Committee. We really appreciated their candid knowledge and experience and the way that they shared with us. Most submitters—and there were nearly 2,000 of them—and, actually, I think, most New Zealanders want something more from this legislation. They are keen to see affordable medicinal cannabis products supplied to those who are ill, who are in pain, and who have medical conditions that will benefit from the substance. To do that safely and well, it means we need to access a supply of pharmaceutical-quality drugs and in consistent, quantity-controlled doses. They want these drugs to be cost-effective and available under medical supervision and from a legal source. This bill will do none of that.

The Government says that this bill is about compassion; I’m not so sure. It doesn’t guarantee supply. Very ill people will have to source their drugs from illegal sources. How compassionate is that? There’s no quality control. The illegal substances could be almost anything, including loose-leaf cannabis, which is uncontrollable and, actually, not great for your lungs. How compassionate is that? I’d like to repeat what Dr Shane Reti says: loose leaf is not a medicine—loose leaf is not a medicine. Forget about the product, the smoking’s going to do you harm anyway. Affordable cannabis drugs will not be available by prescription, and if the patient is too ill to negotiate with drug dealers themselves and needs a friend or a family member—and we’ve just heard a story from the member Chlöe Swarbrick about that—to source cannabis for them, that person can be prosecuted. How compassionate is that? This bill is a farce, actually.

Now, the National Party believes that creating a medicinal cannabis scheme requires careful thought, detailed technical advice, and, because it is a significant social change in our community, oversight through the parliamentary process. We are keen to see a medicinal cannabis scheme in action, and we were really happy to work with the select committee to make that happen. When we rolled up our sleeves to get on with the job, we even found a way, through the select committee process, to let work begin on designing the scheme, but Labour refused—absolutely refused—to discuss any details. They prefer to delegate and, we would say, abdicate their responsibilities to officials. Actually, we don’t really know why. We can’t see any downside to Parliament having the final oversight on our medicinal cannabis scheme. It’s a complex piece of work. There are opportunities, but there are also threats, and we need to manage that well.

There are several parts of any prospective legislation. We need standards around the products themselves—not in this bill. We need regulation about how those products can be grown, processed, and manufactured safely and securely—not here. We need decisions about who can prescribe and who can dispense the final product—not here. The Government hasn’t done any—not any—of this work, and it’s expecting to take another 12 months for the officials to write something, and that’s what’s so disappointing: it’s an opportunity lost.

Fortunately, as I said, National’s own Dr Shane Reti has been studying medicinal cannabis for some time. He’s travelled extensively, he’s looked at overseas regimes, and he’s produced a thoughtful, sensible, and, most of all, comprehensive medical cannabis bill. We’ve offered to assist the Government, and it could be debated right now. Submitters that we heard from, particularly patients and potential patients, were very keen to see this medicinal cannabis regime set up as quickly as possible. There are opportunities for the medicinal cannabis industry to be developed in New Zealand, and there’s some urgency to get that under way. And Dr Reti’s bill is ready to go.

So, in summary, the Misuse of Drugs (Medicinal Cannabis) Amendment Bill is too little, and it will be too late for so many of our submitters and our potential medicinal cannabis industry. National can’t support that. However, I do commend to the House Dr Reti’s Misuse of Drugs (Medicinal Cannabis) Amendment Bill (No 2). It’s the solution that New Zealand needs right now and, as I said, it’s ready to go. So come on, Minister Clark, do the intelligent thing. National has provided a solution that can deliver on your promises so that New Zealanders can get the medicinal cannabis scheme they want. You only need to swallow your pride just a little bit and we could get a win-win for everybody. Thank you, Madam Assistant Speaker.

ANGIE WARREN-CLARK (Labour): Thank you, Madam Assistant Speaker. Gosh, isn’t it amazing? Nine long years—Dr Shane Reti spends a few months and he comes up with a solution. Where were the Opposition, when they were in Government for those nine long years, talking about how evil this drug was—how evil it was?

It’s a pleasure to take a call on the Misuse of Drugs (Medicinal Cannabis) Amendment Bill. It’s a real pleasure because I believe that this is what the community has been asking for, and also what we made a promise about, and we’ve kept our promise.

Hon Shane Jones: Promise-keepers.

ANGIE WARREN-CLARK: Promise-keepers—absolutely. Look, I would really like to thank the submitters, and I have spoken in this House before about how harrowing some of those stories were, and also how gracious those people were to share those stories with us—their stories of pain and anguish and illness, and about how amazing medicinal cannabis was for those people.

I want to also acknowledge and talk about one of the things that I am particularly pleased about, which is the extension. The original definition that we had was that people were able to access medicinal cannabis with THC in it if they had less than 12 months to live. We had some submitters who talked to us about when they are in that situation where they have a terminal illness, they don’t like to limit themselves by saying that it’s going to be less than 12 months that they are going to live. So it caused a real barrier for people, and rightly so: when you’re fighting for your life, people do not want to say that they have less than 12 months to live. So I’m really pleased that we have had an extension into palliative care, which will increase people’s ability to use cannabis and utensils without fear of conviction—a defence, if you will.

Now, if those people choose to smoke, good on them—good on them. They’re in palliative care. That is very, very different from just saying, “Help yourself to a big fat doobie someday.”

Hon Dr Nick Smith: Well, that’s what you’re saying.

ANGIE WARREN-CLARK: No, I’m not saying that, Mr Smith. What I would like to say is they have the ability to use and access that product in whatever way gives them comfort and use—a lot of people in Nelson.

What I would also like to say is that while the stories were often very traumatic, there was one very light moment, and I wanted to just raise this, because I think it’s important that we keep our sense of humour at times. I asked the question, having come from Northland, what “fruit” and “flowers” were, and I had this young chap jump up. He has a licence to carry hemp. He comes rushing to the table and points out to me what flowers and fruit are. Now, flowers and fruit, for those people who come from Northland—that is bud and seed. It was very interesting to have that description and to talk about the fact that this was not a product—was not a product—that was going to get someone high; it had less than 2 percent THC in it, and therefore I was able to be instructed.

This bill provides an exemption and a statutory defence. It provides a regulation-making power to enable the setting of the standards, and it deschedules cannabinoid—CBD. I think that this is the beginning of a conversation that we are mature enough to have in this country, and I am pleased to commend this bill to the House.

SIMEON BROWN (National—Pakuranga): Thank you, Madam Assistant Speaker. Thank you for the opportunity to take a call on the Misuse of Drugs (Medicinal Cannabis) Amendment Bill—one of the most regressive bills that this Parliament has ever done.

Firstly, I’d like to take a moment to talk about what this bill actually does. This bill is decriminalisation of cannabis by stealth, and one only needs to look up into the gallery to see the former leader of the Aotearoa Legalise Cannabis Party, Michael Appleby, to actually realise that that is the purpose of this bill. It is about legalising cannabis by stealth. This bill is not about trying to set up a regulation regime for medicinal cannabis; this is about legalising cannabis by stealth, rather than leaving that decision to the people of New Zealand, who should be the ones who make the decision around whether we should be legalising cannabis or not.

I’d like to point out that this bill includes no regulation—no regulation whatsoever. This bill doesn’t talk about who can apply for a licence. It doesn’t talk about who can be granted a licence. It doesn’t talk about the eligibility of people who can apply for a licence or the suitability of individuals or corporate bodies who should be able to apply for a licence. It doesn’t talk about safety of locations for licences. It doesn’t talk about restrictions of areas about where you can have licences or where you can produce cannabis. It doesn’t talk about the issuing or the duration of licences. It doesn’t talk about the suitable people who should be involved, the storage, or the undertaking of activities in specified locations. It doesn’t talk about anything. This bill does not have any regulation, but hands that over to another working group, which this Government likes. This 201st working group that this Government has appointed is on medicinal cannabis and it does nothing but legalise cannabis by stealth.

Secondly, this bill is not about medicine. Smoking is not a medicine. As a country, we are pursuing smoke-free 2025, but this bill legalises cannabis to be smoked outside the school gates, outside the social centres, and outside the places where people who are seeking help from addiction services—people are able to smoke cannabis outside those places. I think of all the places up and down our country who are providing amazing services—addiction support, and trying to help those to get off drugs—and this bill does not stop people from smoking cannabis outside those premises. I think that’s a real shame and something this Government has failed to even take into account when looking into this issue.

This bill is not about medicine. Medicine is tested. Medicine goes through a pharmaceutical process. Medicine is prescribed by doctors. It is approved by Medsafe. This bill does not include any of those elements. This bill is empty of all of those elements. This bill is not about medicine; this bill, again, is about legalising cannabis and decriminalising cannabis by stealth, which is, as Chlöe Swarbrick and other members have said, the ultimate aim and what they are trying to do. But let’s be honest. Let’s have that honest conversation as a country. Let’s not try and put that under the guise of something with the use of the word “medicine”.

Thirdly, this bill does not acknowledge the harm of cannabis that is caused in our community. Last year, 432 individuals were hospitalised in New Zealand for behavioural and mental disorders from smoking cannabis—432 people were hospitalised with behavioural and mental disorders from use of cannabis just last year. Seventy-nine people were hospitalised from poisoning from using cannabis just last year. This bill does not take into account the real harm being caused in our communities—the harm which our hospital system has to deal with and grapple with. It does not look into the harm that is caused to children by cannabis and by poisoning from cannabis, and instead it decides to, essentially, open up the floodgates without a proper conversation and give the power to a working group so that they can set up some regulations over the next year. But, essentially, it decriminalises the use of cannabis for personal possession and personal use, without there being a proper conversation, using the guise of medicine when it is not. I stand opposed to this piece of legislation. Thank you.

ASSISTANT SPEAKER (Poto Williams): I call Dr Liz Craig. This is a split call. You have five minutes.

Dr LIZ CRAIG (Labour): Thank you, Madam Assistant Speaker. Today is a really big milestone, not only for the Health Committee that heard the submissions on this bill but for all of those who shared their stories for us. What I want to be really clear about is that this bill is not about the de facto decriminalisation of illicit cannabis use, as asserted by members opposite; it’s actually about ensuring that those who are suffering can access medical cannabis on prescription.

What I want to talk about briefly is just what people told us in that select committee process, because many people came and shared their stories—many people with really severe arthritis, basically suffering from intractable epilepsy, in chronic pain. What they were telling us was that their current medication just wasn’t relieving their symptoms and that they were getting some relief from medicinal cannabis. They were also telling us that if they could access medicinal cannabis on prescription, it was really, really expensive—many families paying over $1,000 a month just for their child or themselves to get that relief. For those who couldn’t access that, it was really difficult to access in other ways.

One of the other things that people talked about was the need for the scope of that exemption to be widened beyond those just with a terminal illness with less than a year to live. But we also received some advice about how much we could broaden that scope, because I think the sense is that if you are using illicit cannabis, it’s very difficult to look at what the strength of those psychoactive components are, and there is a significant side-effect profile for some people. So there were some constraints on how broad we went with those exemptions.

We also heard that the current evidence for the use of medicinal cannabis in things like chronic pain wasn’t quite all there yet. There was some evidence of effectiveness, but it wasn’t completely conclusive, and we’d need further research to really get a sense of what it would be used for, best uses, and what it wasn’t that useful for. That’s an ongoing, evolving field.

Now, having gone through the select committee process, what does this bill actually do? I think the first thing is it allows those regulations to be developed that would set those quality standards for medicinal cannabis products. That’s not only talking about how they should be cultivated locally and manufactured locally but also the products that are imported from overseas. The medical cannabis scheme that’s set up will ensure that products brought into New Zealand or produced in New Zealand will meet those quality standards. As the Minister’s indicated in his speech, consultation will happen on that next year, because, given the urgency of the need for accessing these products for many people, we’ve set that one-year time limit for putting those regulations into place.

The issue we’ve got is that we believe that regulations are the best place for doing that. Unlike the members opposite who want to set that in concrete in the primary legislation, the issue we’ve got is that we’ve got an evolving field, and we feel that regulations and standards are the best way we can adapt and get those regulations and standards to move with research as it evolves. So, for us, we’re very supportive of all that detail being worked out with key experts in the field and in consultation next year. But, as I’ve said, there’s some urgency in doing that. In the Minister’s Supplementary Order Paper (SOP) in the committee stage he introduced that one-year requirement so that we can get on and get that done. But even having done that, it will take a while for the manufacturers to get up to speed in terms of having products accessible and available. That’s where we’ve broadened the scope of that defence so that it includes all those needing palliation. That’s a progressive, life-limiting condition where people are nearing the end of their lives.

So that’s what the bill does; what the bill doesn’t do is it doesn’t de facto decriminalise the use of illicit cannabis, as I’ve mentioned.

Hon Dr Nick Smith: Will loose leaf be allowed?

Dr LIZ CRAIG: The other thing that it doesn’t do is it doesn’t have politicians deciding who gets access to medicinal cannabis, because at the moment, doctors can still prescribe medicinal cannabis to anybody that they believe would benefit from having cannabis. The issue we’ve got is access, and so this bill in no way changes who will be prescribed medicinal cannabis.

Hon Dr Nick Smith: Well, does it allow loose leaf?

Dr LIZ CRAIG: What it is talking about is that exemption for those until that scheme is set up, in terms of the usage of illicit cannabis until that time.

Hon Dr Nick Smith: Can they use loose leaf?

ASSISTANT SPEAKER (Poto Williams): Order! Dr Smith.

Dr LIZ CRAIG: This bill significantly changes the status quo. It sets up a regulation scheme and some standards. It means that people will, in time, be able to access medicinal cannabis products that are produced to a certain standard, and in the meantime provides a statutory defence so that those using illicit cannabis may not fear prosecution. I commend this bill to the House.

DAVID SEYMOUR (Leader—ACT): Well, thank you, Madam Assistant Speaker. I rise on behalf of the ACT Party in support of this bill, and it’s a pleasure to follow a medical doctor in this debate. I was worried that I might have to speak straight after Simeon Brown. I felt like Jerry Falwell, “Mr Moral Majority”, had reincarnated and entered this House. You know, as he leaned forward, I could smell the sanctimony on his breath, and a sense of unreality permeated Simeon Brown’s speech. He said that under this bill, there would be people smoking marijuana outside the school gates.

Well, let me reflect on the transition on this issue that another member of this House went through as she changed her mind on this issue of cannabis prohibition. That was Marama Fox, a very dear member of this House and a good friend of mine, who came in here in 2014. On this issue, she was mugged by reality and she came to me a couple of years into her term and said, “David, I’ve changed my mind. Actually, we have all these problems under prohibition now. There are already people smoking cannabis outside the school gates.”

Then Simeon Brown went on to say, “Oh, there’s so many people being hospitalised because of cannabis.” People are being hospitalised because of the prohibition on cannabis and the ridiculous cat and mouse game of the State trying to keep up with the very dangerous synthetic cannabis. That is the real scourge and the real danger out there.

We’ve got to get a bit realistic in this debate. The debate is not about whether cannabis is good or bad. Personally, I happen to think it’s bad. I tried it once and all it did was make me very hungry and I didn’t try it again. I think it’s a bad drug. I think it’s wrong that when we only have one mind through which to experience the world, we would want to hallucinogenically alter that mind through the use of chemicals. I don’t understand that. I don’t think that cannabis is a good thing, but I say to the Simeon Browns of the world: that’s not the debate. The debate is about public policy. The public policy in place is not whether we moralise and sanctimoniously tell each other whether cannabis is good or bad; it’s about the public policy of prohibition. This bill is a very small concession to those who are most vulnerable in our community, who have the greatest ability to benefit from what in their view—and who am I to judge; as Simeon Brown might say, “There but for the grace of God go I.”—they believe that they can be palliated and helped by access to medicinal cannabis.

I think it’s important that in this House, we dispense with the sanctimony, we dispense with the unreality, we confront what is happening out there right now under current public policy, and we abandon the moralising; we actually ask ourselves, “Will this bill make the welfare of New Zealanders better or worse?” I think it should be clear to people that come to this debate without prejudice and with a sober analysis of the fact that it’s going to make it better for two groups of people. The first and the most obvious is that group of New Zealanders who find themselves near the end of their lives and suffering terribly, or terribly ill and in need of palliation, but the other group that is less obvious is those involved in the supply chain. As the regulations are made and it becomes possible to generate cannabis in a legal way to supply those very disadvantaged and vulnerable New Zealanders with what they want, we also remove the underground black market in which some of the poorest kids in New Zealand are being subjected to growing up in households driven by the proceeds of a crime that is made a crime simply for the sake of it, not for any benefit it has for other New Zealanders.

So I conclude that we’ve seen the perfect contrast between unreality and reality, but I’m proud to stand here on behalf of the ACT Party in support of this bill. Thank you, Madam Assistant Speaker.

Hon Dr NICK SMITH (National—Nelson): I came to this Parliament to make policy on the basis of the very best science and evidence, and what’s concerned me, in listening to this debate at the third reading stage, is how little people are prepared to debate the science and the evidence of this issue. People want—whether it be cannabis, whether it be other substances—to live in this simplistic world where it’s either all good or it’s all bad. Actually, if we take an honest assessment of drugs, both those that are used for medical purposes and those that are used recreationally, drugs can be both; that is, if they are tightly regulated, like those that are used in medicines such as morphine, they can provide tremendous good. But, equally so, if ill regulated, they can be the cause of tremendous harm, and anybody that looks at the number of fatalities from drug use in the United States of America, and sweeping through the Western world right now, is concerned about the proliferation of drugs and the harm they are doing in their society.

So my first point is that drugs can do good and they can do bad, and the duty on this Parliament is to regulate it in such a way that it is good for our society. The test for us with this bill, which specifically amends our drug laws, is: is it well-thought-out law that will carefully regulate the use of cannabis so that it does good? The overwhelming answer to that has to be “No.”

I do want to refer to some science, because it concerns me that the sort of touchy-feely politico arguments around the issues of all sorts of psychoactive substances is not based on evidence. I do refer the House to the comprehensive study by The Lancet, one of the world’s most respected medical journals, that goes into the very issue of whether cannabis is, in fact, of great value in dealing with chronic pain. And I can only draw the conclusion from that study in July 2018, when it concluded that there was no evidence that cannabis use reduced pain severity or interference, and that was done in independent trials—that is, blind trials—that actually cannabis was not found to have many of the attributes that have been claimed.

It is equally significant that the Medical Council, the organisation that represents those people who study the human body for years, who are dedicated to the well-being and health of people, submitted so strongly against this bill at select committee. I say to members opposite: why do you find it so easy to dismiss the views of doctors and those who study medicines and human health for so long?

One of the most famous and one of the most thorough medical studies that’s internationally recognised, of which all New Zealanders should be proud, is the longitudinal study that’s being done by the University of Otago, going all the way back to the 1970s. It provides us with very clear data as to the impacts of cannabis use. Let me remind the House of what that concluded. It concluded that people who use cannabis regularly have a far higher risk of mental health. Now, why is it, when we have a Government that’s so focused on trying to reduce the harm of mental health, we would ignore the longitudinal study that shows that cannabis contributes significantly to mental health issues? It is also very clear that cannabis is absolutely associated with lower educational achievement. Do I want to vote for a bill that’s going to result in lower educational achievement, that’s going to dumb down our country? I say, and I express, caution—

Hon Stuart Nash: Go back to Nelson.

Hon Dr NICK SMITH: —and here’s some hard numbers. The Minister of Police is interjecting. Does he know that the Otago University longitudinal study of cannabis shows that people who regularly use cannabis are 10 times as likely to be involved in using those very serious drugs that cause such tremendous harm in society? Are members opposite aware that that longitudinal study shows that people who use cannabis regularly are three times more likely to be unemployed?

Hon Shane Jones: Oh, fake news—fake news.

Hon Dr NICK SMITH: And is that—well, the member Shane Jones, who talks about getting people off the couches—

Hon Stuart Nash: Don’t use the stats disingenuously.

ASSISTANT SPEAKER (Poto Williams): Order! Order!

Hon Dr NICK SMITH: I say to Mr Jones: the medical evidence shows that regular recreational use of cannabis results in more people on the couches and more people being unemployed.

Now, I am not one who is saying that cannabis has no medical use. What I am saying is that it has to be tightly regulated if we are to ensure that there is no harm to society as a whole. That is where I am so disappointed that the hard work that’s been done by Dr Shane Reti, who did the hard work and came up with a regulatory regime that gave, yes, a conservative like me confidence that we could regulate it narrowly down to those areas where we would be able to provide for benefits from cannabis—but, instead, we have this very loose bill from members opposite.

I just want members opposite to answer one simple question: will this bill allow the smoking of loose-leaf cannabis? I’ll ask the question again. I think it’s a question that New Zealanders would want the answer to. Will this bill allow the legal smoking of loose-leaf cannabis?

Angie Warren-Clark: In palliative care.

Hon Dr NICK SMITH: Well, the member’s answered me. She has said that, yes, it does—it does! Here’s the problem. The medical evidence is that loose-leaf cannabis will be allowed to be smoked, with this bill, and yet the evidence is clear that it is not a medicine. So here’s my next question: how does the allowing of the smoking of loose-leaf cannabis contribute to this Government’s pledge of smoke-free New Zealand by 2025?

Hon Stuart Nash: Give him a clip around the ear, Shane. You know better than this.

ASSISTANT SPEAKER (Poto Williams): Order! Order!

Hon Dr NICK SMITH: Well, the member suggests that I get a clip around the ears.

ASSISTANT SPEAKER (Poto Williams): Yes, that’s not appropriate.

Hon Dr NICK SMITH: I think it’s a serious question. Can any member opposite, having confirmed that this bill provides for the smoking of loose-leaf cannabis, explain to me how that fits with this Government’s stated policy of a smoke-free New Zealand by 2025?

Angie Warren-Clark: It is a short-term measure until—

Hon Dr NICK SMITH: Oh, it’s a short term measure! So is the member suggesting that, with this bill, we’re going to allow the smoking of loose-leaf cannabis, but the members sitting opposite are now going to undo that once we have passed this legislation? Because here’s my last problem: when we’re dealing with such a sensitive issue of this sort, it should be Parliament that makes those decisions, and what we are being asked to do, with this bill, is to write out a blank cheque for a bunch of officials, driven by the Greens, who quite openly want to completely decriminalise cannabis use in this country—to write out a blank cheque for the Government without the scrutiny of Parliament. I could recite over 50 times, under the course of our period in Government, when members opposite complained that bills have to mean what they say and say what they mean. Well, this bill is a blank cheque and provides for none of that detail.

This bill is a Trojan horse for decriminalisation of loose-leaf cannabis in New Zealand. Members opposite should be open and honest about that. We are creating an impossible dilemma for the police to ever enforce it. We’ve got this mad situation where it’ll be legal to use cannabis and, as the member opposite confirmed, to smoke loose-leaf cannabis, but actually there being no regime to provide for how it might be grown or supplied. That is a nonsense, that is bad law, and that is why I am so opposed to this bill and why I’m so disappointed that the hard work that was done by Dr Shane Reti, in providing a detailed solution to how we might provide for medical cannabis while at the same time ensuring that we manage the harm, has been rejected by members opposite. This bill will end up as—

ASSISTANT SPEAKER (Poto Williams): Order! I apologise to the member. Your time has expired.

ANAHILA KANONGATA’A-SUISUIKI (Labour): It’s an absolute privilege to be the last speaker on the third reading of the Misuse of Drugs (Medicinal Cannabis) Amendment Bill. Can I just say, I just need to comment to the last speaker, Nick Smith. Could somebody open the window? The rhetoric is just suffocating.

Anyway, before I get on to a summary, I want to honour all 1,786 New Zealanders who submitted and shared their story with the Health Committee. I want to take this opportunity to say thank you. Thank you for your stories, because they have contributed to this excellent bill.

All has been mentioned by all the 11 speakers before me, so what I’m going to attempt to do is summarise some of what has been said. I begin with the leadership of the Hon David Clark. I want to quote exactly what the bill is so that there is no misunderstanding going forward, and I quote—this is from the Minister—“The bill: introduces an exception and statutory defence for people eligible to receive palliation to possess and use illicit cannabis, and to possess a cannabis utensil; provides a regulation-making power to enable the setting of standards that products manufactured, imported, or supplied under licence must meet; deschedules cannabidiol, so it is no longer a controlled drug.”

I want to comment on the Hon Simon Bridges. He asked a question: “What will police do if loose leaf is smoked near a school?” He also commented on the exceptional years of research done by Dr Shane Reti. But, in response to the Hon Simon Bridges’ question of “What will police do if loose leaf is smoked near a school?”, well, all 1,786 submitters never told us that, in their pain and in their dying days, they are outside a school smoking. Can I respond, and I want to quote this from the police who shared at the select committee. When this was put to them, the police said, “Police are currently assessing whether or not to lay charges on a case-by-case basis on evidence and in accordance with the Solicitor-General’s guidelines which state that the prosecutor must be satisfied that the evidence adduced in court is sufficient to provide a reasonable prospect of conviction and that prosecution is required in the interest of public interest. Can I say to those members, “Call 911”—or, in our case, 111.

I want to commend the leadership of the chair of this select committee, Louisa Wall. Louisa Wall shared with us the workings of the select committee. Within a year, we’ve come back with this bill and it’s now at its third reading. Louisa Wall had commended the whole of the select committee, which includes everybody. There were seven amendments that were discussed at select committee, and, out of seven, five were in the Minister’s Supplementary Order Paper (SOP)—five. So in terms of the working of a select committee, I think that that’s commendable, and I want to acknowledge the work of the select committee in terms of the conversations that were held to get five amendments out of seven in the Minister’s SOP. Louisa Wall also alerted us to the fact that this will bring economic benefits to Aotearoa New Zealand—highlighting the work of Hikurangi Enterprises.

The Hon Michael Woodhouse also commented on police actions if they are smoking at a school. I’ve already said enough of that.

Jenny Marcroft from New Zealand First spoke about the need for high-quality and easily accessible medicine for people. She also gave an explanation into how New Zealand First have found a coalition to work together—that New Zealand First believes in showing compassion and that this is about showing compassion in terms of bringing in the word “palliation”, which improves the quality of life with regards to those of our loved ones who are dying.

Dr Shane Reti focused, again, on loose leaf. He focused on his international research. My response to Dr Shane Reti is maybe it was a little too late. There were nine years that he could have brought those in.

Chlöe Swarbrick questioned us that surely the point of laws is to keep people safe, and she further stated along her speech that this bill is how we treat our sick through compassion.

The Hon Nicky Wagner also spoke about how Labour had nine years in Opposition to come up with a detailed bill. Well, it baffles me. National had nine years—National had nine years to come up with Dr Shane Reti’s ideas. I think all speakers of the National Party commented on the excellent research and the dedication of Dr Shane Reti. I think that was an opportunity lost that they could have done in the last nine years. She also talked about requiring careful thought when decisions are made, and I will respond to that later on.

Angie Warren-Clark talked about palliative care—that it’s different and that when you’re in that state of your life, the last thing you want to hear is somebody telling you how long you have to live. So palliative care, when it’s needed, then you take it.

Simeon Brown: well, I’m not going to talk about that anymore, because it was covered by the other speaker. When you’re smoking outside rehabilitation premises—well, if I’m in my dying days, again, the last place I would be is smoking at a school or taking illicit cannabis outside some sort of a rehabilitation place.

I want to talk about Dr Liz Craig. Dr Liz Craig told us that people who came to the select committee shared about the suffering and chronic pain. They shared about how their loved ones or themselves had gone through this. She also alerted the fact to us that this is not a de facto legalising of cannabis. She said, “Doctors can already prescribe medicinal cannabis.” Of course, David Seymour talked about the unreality permeating from the other speaker on the other side and that the real danger here is synthetic cannabis. That is the real danger.

Dr Nick Smith spoke honestly about an assessment, tightly regulated, providing tremendous good. He talked about New Zealand research. He gave us all this research, but I want to end and I want to quote the next steps from the Minister. I can add a lot into the conversation, but I think this piece of legislation needs to actually pass so that those who are in need of palliation can receive what they can under this bill. And I want to quote the Minister, because I think it will clarify what the next steps are, if the Opposition didn’t hear it.

I quote, “The ministry will release a consultation paper on the scheme early next year. This consultation paper will seek feedback on quality standards, licensing system, and the regulations needed to establish the Scheme. The Misuse of Drugs legislation already provides a framework for licensing the production of medicinal cannabis products. The Scheme makes use of the existing framework, and does not add unnecessary compliance costs. The Ministry will develop the quality standards in consultation with experts.” The Minister—as he said—is “convening a medical cannabis oversight panel to provide feedback and expert advice on the development of the Scheme.”

There’s no need for me to delay this any further. It has been an absolute honour. This is the first bill, as a new member of Parliament, that I have gone from inception to now passing in its third reading. I want to acknowledge all the stories that have been shared intimately with the select committee. I want to acknowledge the leadership of the coalition Government and its supportive partner, and I commend this bill to the House.

A party vote was called for on the question, That the Misuse of Drugs (Medicinal Cannabis) Amendment Bill be now read a third time.

Ayes 63

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

Noes 56

New Zealand National 55; Ross.

Bill read a third time.

Bills

Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Bill

First Reading

Hon STUART NASH (Minister of Revenue): I move, That the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Bill be now read a first time.

I nominate the Finance and Expenditure Committee to consider this bill. I’m also making an assumption that that applause was not for this tax bill that is about to be introduced to the House, but it does deliver a number of very important pieces of policy. The bill delivers benefits to the New Zealand taxpayer across the spectrum of the tax and transfer system. For the benefit of members, I will give a brief introduction to some of these proposals.

First, GST. The headline item in this bill is a proposal that offshore websites and other suppliers of low-value imported goods are required to register for GST and then collect GST and pay that to the Inland Revenue Department. Members will remember that this is the second phase of GST reforms which began with a similar requirement for offshore suppliers of remote services. These reforms ensure our tax system reflects our changing world.

It is increasingly common for people to use the internet for a wide range of purchases, whether it be to watch a movie through a streaming service or to buy a new pair of shoes. As this practice becomes more and more common, it means the Government is being denied the GST it should be collecting on those purchases. The consequences of not collecting GST on online purchases are that domestic retailers are at a competitive disadvantage, as they are required to charge GST on goods that they sell, and, in competition with big overseas retailing giants, many small businesses face an unfair barrier to competitiveness. So this is clearly a problem that needs to be sorted in the interests of fairness and equity.

There are a number of ways this could be addressed, but we always need to be mindful of compliance costs and the need for simplicity. This bill therefore proposes that from 1 October 2019, offshore suppliers will need to register for GST when their supplies of goods and services into New Zealand exceed NZ$60,000 per year. This means they will collect and return New Zealand GST on imported goods valued at or below $1,000 supplied to New Zealand consumers. GST on imported goods valued at above $1,000 will continue to be collected by customs when those goods enter New Zealand. In certain circumstances, market places and re-deliverers may also be required to register.

People importing goods and consignments valued at or below $1,000 will no longer pay customs tariffs or border security and biosecurity fees, which will simplify compliance and administration costs at the border. This proposal levels the playing field by ensuring GST applies to purchases from offshore websites in much the same way that it applies to local retailers. We’ve consulted the public on these proposals, and this is the best and fairest option, we believe, to address the issue. It’s not an issue that is unique to New Zealand, of course. As an example, most recently, Australia has enacted legislation covering similar measures to what this Government is now proposing today. Australia’s new rules have been successfully applied since 1 July 2018.

Te Reo: another development is that the bill addresses the growing interest in using Te Reo Māori as an everyday language, including by businesses.

Fletcher Tabuteau: Well done.

Hon STUART NASH: Thank you. It has long been inland revenue’s operational practice to allow tax records to be kept in Te Reo Māori. While this is a good thing, it is not formally recognised in the legislation that taxpayers could hold their records in Te Reo. Instead, they are allowed to do so at the discretion of a Government department. This bill therefore enshrines the right to keep tax records in Te Reo Māori in legislation.

Rental loss ring-fencing: currently, investors with loss-making rental properties have part of the cost of their mortgages subsidised by reduced tax on their other income sources, helping them to outbid owner-occupiers for properties, yet these investors often make tax-free capital gains when these properties are sold. This bill proposes to address this unfairness by introducing new rules which would mean that owners of residential rental properties will no longer be able to offset rental losses against their other income such as salary and wages. This proposal will make the tax system fairer and help level the playing field between property speculators and investors and homebuyers, therefore improving housing affordability for homebuyers and bringing a little bit of fairness and equity into the system.

Child support—Madam Assistant Speaker, let me now turn to a different matter. A humane and effective justice system is one of the Government’s objectives for New Zealand, and the tax system has a role to play in promoting it. We’re proposing to give the Commissioner of Inland Revenue the discretion to consider other information in order to grant the victim of a sex offence permanent exemption from paying child support. In some cases, the person offended against finds themselves in a situation of having to pay child support for a child born as a result of sexual violence. This is wrong and unfair, and there are four letters that have come across my desk in my time as Minister which really are manifestly unfair. This will address that, and it’s fantastic.

Since 2006, a permanent exemption from paying child support has existed for such a parent, but to qualify for that exemption, the rules as they stand require that the offender must have been convicted. The truth is that for a variety of reasons, very few sex offence cases are reported and even fewer result in a conviction. The result is that since 2006, only two individuals have been granted an exemption from payment. The proposal therefore is to loosen that requirement and allow the Commissioner of Inland Revenue to be able to consider other information when deciding to grant an exemption. I’d like to acknowledge the work of my New Zealand Police officials who were consulted and who supported inland revenue in the development of this compassionate proposal. This will make a difference in a few cases where a manifest injustice has been committed.

Student loans: there are also proposals aimed at making life a little easier for some student loan borrowers. The IRD is working towards a future where most people will not have to do anything in order to meet their tax obligations, and their tax refunds, for instance, will be completely automatic. This happy state of affairs is thanks to a system of taxation called withholding taxes, where tax is deducted at source, but some student loan borrowers earn income from which student loan repayment deductions are not made—for example, when they work over the holidays. It means that the borrower ends up with an amount to pay at the end of the year and often may be required to make an interim payment the following year.

As the payments are quite often not as prompt as they should be, the borrowers are more likely to fall into debt and therefore incur late interest payments. That’s one of those sorts of cascading waterfalls that just end in a bad situation. We are therefore proposing that student loan deductions be made from scheduler, election-day, and casual agricultural income. These borrowers will find that their end-of-year repayment obligations will be smaller or not required, and fewer will be required to make interim instalment payments. As these repayments would be on time, fewer would go into debt and incur interest.

The bill also tidies up an anomaly where student loan borrowers based in New Zealand do not pay interest but, because of the limitations of the IRD’s outgoing technology platform, interest has to be initially charged and then reversed out to make the loan interest free. This baffling situation caused confusion and consternation for borrowers. The switch from the old technology platform to the new one allows us to rectify this, and we’re proposing that only overseas-based student loan borrowers be charged loan interest, rather than charging interest to all borrowers.

The measures in this bill bring benefits to different sectors of our community. The tax system must collect the revenue we need to build vital services, but we must do so in a careful manner to avoid imposing undue costs. The tax system can also help to support businesses by providing the environment that nurtures growth. This is a good bill for New Zealand, and I am proud to commend it to the House. Thank you.

Hon AMY ADAMS (National—Selwyn): Thank you, Mr Assistant Speaker. Well, this House should be in no doubt that this is a Government that wants to tax New Zealanders more. This is a Government that promised New Zealand no new taxes, and here we are, with a second tax bill that is imposing more taxes on New Zealanders. In fact, $2.4 billion in additional taxes in the first year of this Government—$2.4 billion that this Labour-led Government thinks that it can spend better than New Zealanders.

This bill absolutely shows the real spots of this particular leopard. The first thing this bill does, of course, is confirm the annual tax rates. Well, I can tell this House and New Zealand that this bill confirms that every New Zealand taxpayer is paying more tax now than they should be and than they need to be.

In 2017, the National Government legislated that the income tax thresholds should go up, recognising that they hadn’t been increased since 2010, because if you’re not increasing tax thresholds in keeping with how the cost of living is going up and the Consumers Price Index is going up, you’re taking more money every single year by stealth. So National made it very clear that the bottom threshold of $14,000, at which New Zealanders paid only 10.5 percent, should go to $22,000. Then we made it clear that the next threshold should go from $48,000 to $52,000. Now, those changes—which should be in place right now but were repealed by this Government, and have been confirmed by this legislation—made it clear that the average taxpayer is paying over $1,000 a year more tax than they need to and than they should. This legislation confirms those rates. Those rates are out of date, they are unfair, and they only remain because Labour cancelled those changes to fund the New Zealand First slush fund, the fees-free tertiary policy, and a raft of other wasteful expenditure. I can tell this House that passing this bill locks New Zealanders in to another year of outdated tax threshold changes that they shouldn’t be paying and that this Government, frankly, is too focused on how much money they can spend, and they assume every New Zealander is a personal ATM for them to help themselves to their pockets.

One of the matters in this bill that I particularly want to focus on, other than the annual rates, which are egregious and are too high, is, of course, the ring-fencing of losses on residential rental properties. Now, again, this is one of the new taxes that this Government have brought in, helping themselves to more of New Zealanders’ money. By the way, we all know there’s a whole lot more coming because they’ve got Michael Cullen and his band of merry men beavering away, coming up to recommend a capital gains tax so that they can have another dive into the pockets of hard-working New Zealanders. This is a group of people who think that hard-working Kiwis get up and go to work every day just to fund their spending—just to fund the Government’s spending—because in the view of this Labour - Greens - New Zealand First Government, Government should have more of your money and you should have less.

Well, on this side of the House, we think New Zealanders deserve to keep what they earn, and we want to see that money in their pocket because they know how to do more with it and better. You want to talk about well-being? Let people keep more of what they earn. The best way you’re going to do that is to keep tax rates low, but not this Government—no, no. They’re putting them up, hand over fist, because they assume anyone who makes a profit is a filthy capitalist and should be punished. Well, actually, people who work hard in this country deserve to keep those taxes.

Now, let’s just look at this ring-fencing of losses on residential rental properties. We have been telling this Government over many months that the changes they are putting in place are going to lift rents, because it’s pretty simple. For anyone who knows even Economics 101, if you put more costs into a sector and if you make the return on that sector less attractive, you will reduce supply and you will increase costs. We said that to the Government. We said, “If you ban letting fees, you’ll see rents go up.” We said, “If you bring in a five-year brightline test, you’ll see rents go up.” We said, “If you bring in a whole raft of new, expensive regulations for landlords, you’ll see rents go up.” And do you know what’s happened over the last 12 months?

Hon Members: Rents have gone up.

Hon AMY ADAMS: Rents have gone up $30 a week, on average, because this is a Government that has no idea how this sector works, and they’ve just assumed landlords are just another group of people you can punish at will, because it’s all about fairness to tenants. Well, how are the tenants better off when they’re paying higher rents than they have paid before? How are the tenants better off when they are having to pay more and more on the cost of living because this Government keeps loading up costs?

Well, this is interesting, because you’ve got Treasury and the IRD both telling the Government that this is what will happen. They’ve said to the Government in the regulatory impact statement, as they have on other changes, that rents will go up, and what’s happened? Rents have gone up.

So what have we got from the Government today? “Well, let’s put more costs on landlords. That’ll help. So let’s put $190 million a year on the landlords of New Zealand.”—who, by the way, are mums and dads. They’re mums and dads who have worked hard and are trying to put a bit of money aside for their retirement—$190 million. Now, if that’s spread over every rental property in New Zealand, just for an example, that’s about $300 a year more that tenants are going to pay. But, interestingly enough, if you just look at the 40 percent of rental properties which the IRD say are loss-making, that’s about $750 a year that will pass through to the tenants of those properties. If anybody on the Government benches seriously thinks this is just going to evaporate in thin air and not be passed through to tenants, I’m sorry, but they’re in lala land.

I would love to see the Minister have the bravery to stand in this House and be very clear that if rents go up, he will cancel this tax, but he won’t. He will simply deny, of course, that it will ever happen, and then when rents invariably go up, either he will duck and dive and dodge or he will come up with some other explanation. But let’s be really clear: putting $190 million of extra tax every year on landlords is going to put rents up and it will lift the cost of living further.

Now, here’s what really interesting: no other asset class in New Zealand has its losses ring-fenced. So the Hon Stuart Nash, in his contribution—all he could say in defence of ring-fencing losses was, “Well, it’s about bringing fairness to the tax system.” Has anyone noticed in this House that when the Government starts talking about fairness, it’s because they don’t have one single, logical reason for doing it—so “Let’s just talk about fairness.” Well, if it’s fair to ring-fence losses on residential rental properties, why is it perfectly fair not to ring-fence them everywhere else? Why is it perfectly fair, for example, that you’ll soon be able to buy a good-looking racehorse which doesn’t make any income and which creates losses, and you can set that off against your income as an orthopaedic surgeon—that’s absolutely fine. That’s fair. But you buy a rental property and, somehow, you’re an evil speculator to be punished, and that must be ring-fenced.

So if, Mr Nash, this is about fairness, why only residential rental properties? I can tell you the answer. The answer is because this is a Government that hates landlords. They hate landlords. They think that anybody who owns a second property is wrong and should be punished, but what they miss is that this is going to hurt tenants. It is the tenants who will suffer the costs as their rents go up further.

The cost of living is already under pressure, thanks to the increased taxes of this Government. They’ve got less money in their pocket already, thanks to the extra taxes of this Government. And now, as a result of this legislation, $190 million every year is going to go into the Government coffers at the expense of the tenants in New Zealand. That is not fairness. That is not looking after tenants. That is a cash grab from a power-hungry, cash-hungry, big-spending Government that can’t control itself and wants to punish the hard-working New Zealanders as a result. This bill is a travesty, and we won’t be supporting it.

MICHAEL WOOD (Labour—Mt Roskill): Very pleased to stand up in vigorous support of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Bill. I want to commend Minister Stuart Nash for the introduction of this bill and the many good policies within it. He could work on some names for these bills that roll a bit more easily off the tongue, though.

This is a Minister who is very active, and what we see within this bill, in addition to the annual process that we go through of setting the annual tax rates—and these will be for 2019-20, so they will have to be confirmed within that tax year in order to ensure that that revenue is appropriated lawfully—are a number of other very important policy initiatives. I want to talk through some of those in a moment. Before I move on to doing that, though, I do just want to respond very briefly to some of the comments from the Hon Amy Adams, because what we really had in that address was about 8½ minutes of a deeply ideological rant against tax, a rant that was entirely devoid of any understanding of the fact that, in fact, all of the public and social institutions that New Zealanders rely upon—our public health system, our public education, system, our justice system, our transport—are reliant on a fair and decent taxation system.

So what we had was the Opposition spokesperson on finance—interestingly enough, not the spokesperson on revenue—standing up and calling the Government’s tax take wasteful. Well, she thinks that $750 million spent on fixing up our neglected hospitals this year is wasteful. She thinks that the investment in over 30 new schools that was announced this year is wasteful. She thinks that the winter energy payment that has been provided to over-65s in this country so that our pensioners can keep the heater on through the winter is wasteful. She thinks that investment in 6,400 new State homes for some of the most needy families in our country, who are victims of the housing crisis unacknowledged under that previous Government—she thinks that the tax revenue collected in support of decent housing for those families is wasteful.

It really goes to underscore the difference between this side of the House and that side of the House. This side of the House actually believes in the public provision of decent housing, of health, of education, and of putting the resources into those public goods to ensure that the people of this country can live dignified lives. After nine years of neglect under that lot, I thought they might have had a bit more reflection on the benefits of that public investment, but on the evidence of Amy Adams’ speech, that is not the case.

This bill does confirm the annual tax rates for the 2019-20 tax year. It is just worth pointing out again that this Government made very different choices to the previous Government. The Government did choose not to proceed with the tax cuts that were legislated for but not implemented by the previous National Government. They held them out there as an election sweetener. They could have, in fact, implemented them during their term of Government, but they chose not to. The choice this Government made was to retain the current tax rate so that we could invest in housing, health, and education for all New Zealanders, rather than tax cuts that would disproportionately benefit the wealthy few—once again, the difference between this side of the House and that side of the House.

This bill makes other important changes, including the application of GST supplies of low-value imported goods, and this has been a change which has been a while coming. It’s a bill that’s supported in many parts of our economy, including from Retail New Zealand, and it’s actually work that was started under the previous Minister of Revenue, the Hon Judith Collins, and I acknowledge her in the House today. She was an active Minister of Revenue, at least in comparison to her predecessors—well, that wasn’t a particularly high bar to clear. She did begin the work in this area, and it’s been continued on by the Hon Stuart Nash.

This is important, because within our tax system what we do all seek is fairness and equity, and this is about ensuring that those goods which are purchased from offshore are not purchased at an advantage compared to those goods which may be purchased from within New Zealand. So we have retailers within New Zealand who currently are disadvantaged because the cost of GST does have to be tacked on to those goods, and it doesn’t get added to the cost of those goods imported from outside. In past years this wasn’t such a big issue, but it’s really the explosion of online purchases which does make this a more significant issue in our economy, and within this bill we are moving decisively to rectify that and create a level playing field.

Other colleagues will speak on the importance of taking action on the ring-fencing of residential rental losses. But, fundamentally, this is about ensuring that once again we get back to having a functional housing market that is driven by the needs of people and not the needs of speculators. At the moment we have a situation whereby people who are speculating in housing have a tax advantage that gives them a leg-up over first-home buyers, the mums and dads that we actually want to support to buy their first home. That’s why this change is important.

I just want to speak very briefly on one more important change within this bill, which is the proposal that allows the Commissioner of Inland Revenue to use her discretion in cases where a victim of a sex offence becomes liable for child support payments. I want to acknowledge this is something that Stuart Nash, the Minister, I know feels passionately about. He’s been driving this change. It’s about justice and decency within our tax system for a small group of people who otherwise face a great injustice, and I certainly commend that change along with the others in this bill. I look forward to receiving the bill on the Finance and Expenditure Committee and working with colleagues on that bill in the months to come. Thank you, Mr Assistant Speaker.

Hon JUDITH COLLINS (National—Papakura): Thank you, Mr Assistant Speaker. Well, a big sing-out and shout-out to Michael Wood, who’s resumed his seat. Thanks for the acknowledgement, Michael Wood.

I found the revenue portfolio to be a very interesting one, and I’m sure it’s testing the Hon Stuart Nash. It’s certainly one which I think is often underestimated because of the fact that our tax system, for it to work, needs a highly organised administration in the revenue department and also it needs to have tax laws that are easy to operate and easy to administer.

So this bill is one which the National Party will be opposing. There are parts of the bill which we can agree with, but the majority—particularly those around increasing tax rates and also the ring-fencing of losses for residential properties that are rented out—are things that we cannot support.

I think it’s really important to remember that the current Government, in Opposition, were very loud about the need to attack speculators of land, and we’ve heard Mr Wood refer to the speculators of land, whom he sees as taking properties that first-home buyers could buy and, therefore, keeping them out of the market. Well, these so-called speculators of properties that first-home buyers might otherwise want to buy are actually, generally, landlords to—guess what?—people who would one day like to become first-home buyers. It’s these landlords that this bill is attacking when it goes after the ring-fencing of losses, which, basically, means that it will become even less attractive for one to become a landlord. What we’re seeing at the moment with these sorts of measures as are contained in this bill is a constant and dedicated attack from the Government against landlords.

So these are the very people who provide the rental accommodation for people who don’t want to or who can’t yet buy their own home. So by taking more landlords out of the market, it’s not that we’re freeing up properties; what we’re doing is we’re actually having fewer properties available for rent, which is why this Government is currently staggering under the biggest increase in State rental waiting lists that we have seen in my lifetime, and certainly in the last, probably, hundred years—that includes Winston Peters’ lifetime. And I actually think it is really important that we and this House understand that there are consequences to what seems like a really good sound bite. The sound bite of going after speculators and stopping them from taking homes that first-home buyers could buy is a great sound bite, but the consequences are that there are fewer homes available for people to rent.

We hear today the Government saying, “Well, you know, it’s such a shame that rentals have gone up in price—that the market is moving.” And the reason the market is moving up in the costs of rentals for people who want to rent properties—this is one of the reasons for it. It’s not only that the Government has taken steps to remove the cost of letting fees being charged to tenants directly, but it’s these sorts of ring-fencing losses contained in this bill that actually make being a landlord significantly less attractive to somebody who has perhaps saved up all their life and has got themselves in a position where they can buy something they want for what they call their retirement income.

Residential rental properties: at the moment, a landlord is lucky to get more than a 4 percent return if we take away the cost of interest, the cost of rates, the cost of maintenance, and the cost of everything else, of having downtime—4 to 5 percent is all that people will generally expect to get on one of those rental properties. That’s barely enough to pay the costs. We already have landlords saying, “We used to be able to say, ‘Well, we’ll get some capital gain.’ ” Well, that’s been taken away. We’ve got a Government that’s now hell-bent on taxing in every way that they can—to do what? I can tell that member who has resumed his seat, Michael Wood, who told us about what he said the Hon Amy Adams was apparently all against—well, I’ll tell you what: we’re against $700,000 a day being spent on inquiries to tell the Government what to do. I would have thought it’d be a lot cheaper for the people of New Zealand to expect this Government just to do its job. If they really need to ask some advice on something, make it something worthwhile, and a few of those inquiries are, but they can’t be when there are 210, I think, at the moment. There may even be more by now, and they’ve been in Government for only a year.

So when I see taxes being spent on things like that, I’m with the Hon Amy Adams. I’m with her saying “Hang on, there’s a bit of waste going on here.” When I look at the billions of dollars being given to our colleague over the way, the Hon Shane Jones, to splash around the particular parts of the country where New Zealand First think there might be some votes for them, I have to say I think that that’s possibly a bit of wastage going on. Some of it, no doubt, is needed, but when I look and consider that we’ve had—what was it?—$160,000 worth of seedlings chopped up and mulched because nobody worked out that the land wasn’t ready for them to be planted into, I’d say that’s a bit of wastage. I’d also say, too, with these tax bills and this particular issue, that paying the head of KiwiBuild to stay at home—so far for 6½ weeks—is probably a bit of wastage. I’m just questioning how much the salary is. How much is the salary? How long is the contract for? Is it a three-year contract? Is it a five-year contract? Is it a salary of $300,000 a year? How much is the taxpayer going to be up for, because that’s what this money—these taxes—is going for.

Alastair Scott: Student fees—they’re wasted.

Hon JUDITH COLLINS: I look at student fees—the first year of student tertiary fees now being completely funded by the taxpayer. I’d say, is this fair? Well, maybe not, actually, when we consider that 70 percent of a university student’s fee for a year was already funded by the taxpayer before this came in, this new fees-free policy for the first year. Many people, when I’m around the country talking to people, and particularly in my electorate, in Papakura, say to me, “Well, if you’re going to give it to somebody for free, why wouldn’t you give it for the last year, once they’ve got their degree—give them a refund?” Why wouldn’t you do that? Why wouldn’t you say to them, “Hey, thank you for finishing.”? Wouldn’t you put an incentive in there?

Kieran McAnulty: Does the member support that?

Hon JUDITH COLLINS: And the answer is, coming from the other side—somebody is calling out, I’m not sure of the name; somebody will tell me—that, actually, you said something about “Well, because they need some money.” or something. Well, there are student allowances, there are interest-free loans—there’s almost everything.

And what about the plumbers? We need more plumbers, we need more builders, we need more electricians, we need more gib-stoppers, we need more people who do things—something this Government doesn’t seem to understand. None of this bill is about helping people to do things; it’s all about taking away from anybody who actually wants to supply housing to people who need to rent it, taking away from people who were getting $1,060, on average. The average earner and their tax cuts—“Take that away because we don’t want people having their own money.” Why can’t people have more of their own money? Everything in here is all about taking more money from hard-working New Zealanders who are trying to save up for their retirement—hard-working New Zealanders—and spending it on things that this Government thinks it’s best able to spend money on.

I say to this Government that there has to be an end to constantly taxing everything that moves. There has to be an end to this, because people are getting sick and tired of it. They’ve already got fuel taxes, basically, for Africa, frankly, and in Auckland, fuel taxes for Phil Goff and Phil Twyford to sort themselves out and try and get themselves something built—fuel taxes and other taxes going in to pay for a trolley up Dominion Road that nobody so far, apart from Jacinda Ardern, wants to ride on. Nobody’s asking the taxpayers, “Is that a fair use of your money?” We on this side will continue to stand up for taxpayers and we are going to hold this Government to account, and we will not agree if we don’t agree that it’s in the best interests of New Zealand. This party will stand up against further tax increases and further attacks on landlords, who are, by the way, providing the houses and the housing for people that this Government has left behind and will not provide for them because they simply can’t.

FLETCHER TABUTEAU (Deputy Leader—NZ First): Thanks, Mr Assistant Speaker, for this opportunity to speak on this legislation. I’d first like to address some of the nonsense put up by the Opposition this afternoon, using this legislation as some kind of mouthpiece on their ideological fantasies and talking about this Government as if we were not doing exactly what we set out to do. We are fixing the problems of nine years of apathy, where a party on the opposite side of the House refused to do anything in case it affected their poll ratings. They didn’t want to be seen to be doing anything that was controversial for fear of upsetting those focus group polling numbers. This is the same Opposition party, when they were in Government, that decided—talking about houses and ring-fencing losses—to not only get rid of our Government housing stock for those most in need but they refused to build or upgrade any more, and then they accuse this side of the House for the increase in costs for rental properties. Go figure, Opposition—when you take supply away, it puts pressure on the market, and prices are going to increase.

That is the legacy from the Opposition over there. That is what we’re dealing with now as a Government. I commend not only this Minister in charge of this good and sensible piece of legislation but, for example, the Minister of Housing and Urban Development, who’s trying incredibly hard to work with industry.

Alastair Scott: Trying, is that—trying. He’s trying.

FLETCHER TABUTEAU: Well, here’s a fact for you guys: he’s built more houses in his time now than you did in the last three years. How’s that for a factoid, right? Apologies if I brought you into the debate, Mr Assistant Speaker.

As for those who spoke about ring-fencing losses on rental properties, I think those speakers were quite selective in their interpretation of what this might mean for rental property owners. Already, rental property owners are able to ring-fence losses into future incomes so that they tie any losses now to that rental and are able to offset against profits into the future so that they can compensate themselves, as it were, for the creation of that rental property that is being used by people who need rental properties. That is being done now, and that is what is in this legislation right now, so that rental property owners are able to use ring-fenced property deductions from one year against residential income in future years on their property. So that is in this legislation. I’ve seen it first-hand being done in the market already, and, yes, long may it continue. So, look, there are so many things that were said on the other side that were just—well, “annoying” is a polite way to put it.

But to this piece of legislation, I’d like to commend the Minister. It’s quite a hefty bill; it covers a wide range of issues, not least the fact that we’re setting the annual tax rates and they will remain the same. This bill will improve and speed up administration of Working for Families, student loans, and child support administration processes, and it outlines how, as I said, the ring-fencing of rental properties is set out going forward. It ensures that a transaction involving the sale and compulsory buy-back of pre-1990 property forest land emission units is treated as a loan for tax purposes. The Minister pointed out—and I commend him for this—that it is a practice currently, but, actually, what we’re formalising in this legislation is the use of Te Reo Māori in terms of record-keeping for the purposes of this legislation and IRD communications. I think that’s fantastic, recognising one of New Zealand’s official languages. Yes, it will put challenges on the system, I’m sure, but I know of a few good accountants in Rotorua who are already doing great work in this space.

The area I wanted to focus on today is around GST on goods. Back in, I think it was, mid to late 2016, we debated—

Andrew Bayly: Who’s “we”?

FLETCHER TABUTEAU: Parliament, Mr Bayly. Thank you for your—how about you be quiet, eh mate? We were debating the tax on services, the remote—I don’t know, what does everyone call it? The “Internet of Things”—you know, buying services online, like movies and that kind of thing.

So at the time, what New Zealand and businesses were telling that side of the House when they were in Government was “Yeah, that’s a good start, but it’s only half the issue. You’re not addressing the real problem.” That side of the House were not addressing the real problem or the bulk of the problem, the majority of the problem, with the fact that our New Zealand-owned businesses, our retailers especially, have been competing against international big business for quite a number of years with this kind of built-in disadvantage around GST. That just made business incredibly hard, and those supposed advocates for business on that side of the House there were told repeatedly by advocate groups, individual businesses—I know business owners went into their offices repeatedly to try and tell them the message “That’s only half the issue. We need to do something about the goods side of the goods and services equation.”

This is what this legislation is doing. It’s complicated and it’s going to take quite a bit to enforce at the margins. Actually, to be fair to IRD, what they’ve presented to the Minister and what the Minister has worked through is quite a good, comprehensive piece of work where the bulk of those purchases will be identified and be able to be taxed. So not only is that a good thing for the Government in terms of a small increase in GST returns but, primarily, this was always about evening the playing field for New Zealand businesses.

Mark Patterson: Fairness for Kiwi businesses.

FLETCHER TABUTEAU: Yes, fairness for Kiwi businesses—exactly.

So that’s all I really wanted to focus on in my contribution in the House today. We will have plenty of opportunity to discuss other aspects of the legislation, but it is a sensible bill that does everything that we set out to. There are a few minor and technical fixes as well, which I’m sure others will touch on, but going forward, this is absolutely good for business, good for transparency and efficiency in our tax system, and I do commend it to the House. Thank you.

ANDREW BAYLY (National—Hunua): Thank you, Mr Assistant Speaker. It’s a pleasure to be talking on the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Bill, first reading. I agree with Mr Michael Wood that the name could have been improved.

I think this is a case of “quack, quack, quack”—sorry, “tax, tax, tax”. This is a Government that all it wants to do is rapaciously grab more money from hard-working New Zealanders—hard-working New Zealanders. Even though it came into power saying it would not put any more taxes on, do you know what the result is? The result is $2.3 billion so far and this piece of legislation is going to add another $200 million to that total. It’s outrageous. It’s all about taxing hard-working mums and dads and I don’t believe that is in the best interests of New Zealand.

I am just going to say that the speaker who just sat down started off very well, I thought—Mr Tabuteau—but he sort of drifted off. I thought he’d lost interest in his speech, but I think the salient and pertinent point he was talking about was the Amazon tax—the Amazon tax. Of course, this is our bill. This part of it was designed by the Hon Judith Collins, actually. Actually, it was our piece of legislation, so I took heart that Mr Tabuteau was actually commending the National Government for thinking and doing the hard work, designing a good system so that this Government now in power can nick it and impose it and put it in place.

And, yes, he’s right. It is about making it fair for shop owners in New Zealand. It’s about making sure that they can survive increasingly digital procurement arrangements. And, of course, what it does is it lifts the threshold from $400 to $1,000 per item, and any international supplier or foreign supplier now has to register for GST if they supply more than $60,000 of goods and services a year to New Zealand people. I think that’s good. The big issue I’m going to be asking the Minister is how he’s going to undertake the compliance of this, as it’s quite a big issue, and I think if you’re going to put in legislation, you need to make sure that you have the right compliance framework to monitor it, otherwise it just becomes a sham. I think that will be one of the issues we will be following up with the Minister on this aspect of this bill.

The other one is around ring-fencing. As some people talked about, although some less clearly than others, what the bill proposes to do is to ring-fence—i.e., stop the ability to offset tax losses against other income. When you think about it, 40 percent of the housing stock in New Zealand is owned by mums and dads—40 percent of the housing stock is owned by mums and dads—and what this bill does is cut to the core of it. Many of them have a house, a rental, where they have rented it out to people often more vulnerable or not in a position to buy a house. They spend the money upgrading that house under the healthy homes guarantee that’s been imposed and all the other things that go with it to provide a nice house for those people, and what happens is that they can offset some of the interest costs and other costs associated with renting that property.

What this bill does—and Mr Tabuteau didn’t actually highlight the key issue—is it says that you may only claim up to the maximum income that you receive on that property a year. So if your rental income’s $30,000, you can’t claim deductions of more than $30,000. Then there’s the ability to carry forward, which he referred to. But what he didn’t refer to is the black hole that happens. The black hole is if you don’t make further profits in the future or, in fact, if you sell that property in the future, that is black hole expenditure that you cannot claim back for, and what this is—what this bill is doing—is another nail in the coffin for people wanting to rent houses to vulnerable New Zealanders.

It’s interesting. I’ve been to a couple of property management firms in the last few months, and one of them told me they’ve got a portfolio of 3,000 homes they own, and over 10 percent of their houses—i.e., 300 of those 3,000 homes; the property owners, the mums and dads—are saying “This environment imposed by the Labour - New Zealand First Government is too difficult.” and they are selling their properties. I went to another one recently in Pukekohe—same issue: over 10 percent were selling their properties.

What’s happening is that we are seeing people selling their properties, making it harder for vulnerable New Zealanders to find properties that they can rent and live in and be happy in, because, simply, the property owners are selling them. That is why this is not a good bill and that is why we will not be supporting this bill. We will be looking to have the strong and hard conversations during the course of the select committee, but it is a bad bill from that perspective.

GARETH HUGHES (Green): Kia ora, Mr Assistant Speaker. Ngā mihi nui ki a koutou. Kia ora. I rise to support this legislation. But, look, I’m worried about the National Party—I really am—because what we’ve seen just in the last week is a party that isn’t competing on leadership. It’s not competing on policy, it’s not competing on solutions—in fact, they’re looking to some of the worst political actors around the world. What we’re seeing is a party that’s not embracing intellectual integrity. We’re seeing ridiculous statements in the House. Just in the last 10 minutes, we heard Judith Collins say this Government is taxing everything that moves. That’s patently ridiculous. We see Amy Adams saying the Government hates landlords. That’s patently ridiculous. It’s a party that’s dog-whistling on international migration, and that’s jumping the shark and avoiding a cross-party solution on medicinal cannabis by coming up with these ideas of legalisation by stealth. There is no intellectual integrity from this party. It’s the fake news we decry, but we’re seeing it on this side of the House.

When it comes to tax, I wish this party just had the intellectual honesty to point to the evidence. The OECD says we are a low-tax country—in fact, we’re ranked 25th in terms of our tax to GDP ratio. This isn’t a country that taxes everything that moves—in fact, we’re a low-tax country, a country where the burden falls on the bulk of New Zealand workers. Now, remember, it was the last Government that was quite prepared to lower the tax rate for the rich. You know, you look across the Ditch: a top tax rate of 45 percent. Look at the United Kingdom under a Conservative Government: a top tax rate of 45 percent.

The last Government lowered it to 33 percent, so the highest earners, including many in this House, got a tax break. But what did they do to the poorest, most vulnerable Kiwis? They saw an increase in the regressive GST tax.

I’m not going to be lectured here on tax from this party that doesn’t have the intellectual honesty to tell the truth, to point to the experts, or to point to the research, because what we know is that the result of their policy decision was to see rubbish running down the walls of Middlemore, our schools in a funding crisis, and a lack of investment in infrastructure for our country to go forward. So that’s my challenge to the National Party: put aside the fake news, put aside the slogans and making stuff up, and let’s have a debate about the actual issues.

That’s why I’m proud to support this legislation, because there are five key highlights—five key benefits—for everyday New Zealanders and the New Zealand economy. Now, the first is the GST changes for low-value items, for products less than $1,000. I was only five when the Goods and Services Tax Act was written back in 1986. Then, Kiwis weren’t importing low-value items, so it made sense, because the cost of compliance would have been ridiculously high for someone importing a product of, you know, $400 or $800. What we do know is that thanks to the internet economy that’s come along since then, Kiwis are importing a huge amount of products from overseas, so it makes sense not to have a tax break for that. What we know is it is going to raise about $80 million to $140 million a year. That gives you a sense of the scale of how many products Kiwis are now importing under that threshold. This makes a huge amount of sense. It’s going to help those 60,000-plus workers in our retail sector. It’s going to be great news for them.

When it comes to our rental market, the ring-fencing of losses for residential properties really redresses the tax benefit that those investors have. Really, it’s a subsidy, right? It’s the renters who are paying more in their income tax to make up for the tax benefits the landlords get when they do the losses. Now, it’s not going the whole hog—in fact, it’s only making sure that the losses are only up to the income for the year—but what it is going to mean is we’re going to redress the uneven playing field to make sure that those first-home buyers aren’t being pulled down. This is a Government focused on giving first-home buyers a leg-up, so a level playing field is going to help those first-home buyers. This is so important for young New Zealanders because what we have seen after nine years of National, a party that ignored the housing crisis and that said it wasn’t a housing crisis—it was selling State houses in the middle of a housing crisis—is the dream of Kiwi homeownership, particularly for young New Zealanders, fade away. This is a Government which is acting, which is making a difference, and it’s by doing it in a fair, reasonable manner.

Now, the third thing—and I think this is a great step forward, and I hope it acts as a precedent in other legislation and Government department practices—is it enshrines the use of Te Reo language in the Inland Revenue Department records. Now, this is updating the Tax Administration Act 1994 and the Goods and Services Tax Act 1985. I think this is a wonderful step forward, and I’d love to see the day where a citizen can walk into any Government department and any record the Government takes can be given in Te Reo Māori—a great legacy, a taonga which exists here and nowhere else. This is a fantastic step forward.

When it comes to student loans—again, I don’t want to keep playing politics and taking it back to the problems of the last Government, but they did have nine years to sort out the problem of the IRD’s antiquated, old-fashioned technology. Now, they spent $1.5 billion, I believe it was. They absolutely mismanaged the process. It took much longer than needed, and it cost lots more than was needed, but what it meant was that every year, the hundreds of thousands of Kiwis with student loans would get a letter in the mail saying how much interest they had to pay on their student loan. That was despite the policy of this country changing all the way back in the mid-2000s—2006, I believe—and still, on every New Zealand student loan recipient’s bill, it had the interest. Now, this was incredibly, I think, distressing for people, who couldn’t understand why on earth the interest was there. Now, it was wiped subsequently, but simply because of antiquated technology, we were giving Kiwis confusing and, frankly, troubling information. So it’s wonderful now that thanks to modern IT systems, we can literally do what the Government’s policy is, which is to not apply interest on student loans—a fantastic step forward for reasonableness and common sense.

Now, lastly, this won’t affect many Kiwis, but for those it does affect, it affects them in a deeply personal and visceral way. What the bill does is exempt child support payments for those who had a baby and were a victim of sexual offences. Now, there have only been two cases in the last 12 years, because a conviction had to be levied for those exemptions to be applied by the Commissioner of Inland Revenue. What this is doing now is giving the commissioner the discretion to apply it without a conviction but where it’s not reasonably in doubt. This is a tremendous step forward, because we know that the scourge of sexual violence and abuse which, sadly, afflicts our country—often these cases don’t go to the police, and often they don’t go to court. So this is a very positive step forward for a few people, but it will be deeply felt and it will deeply benefit them.

So, look, this is a bill which the Green Party wholeheartedly supports. What we want to do is have a fair tax system which sees New Zealand have enough money to invest in education, to invest in housing, and to invest in the services we have, and also one that respects the first language of New Zealand, Te Reo Māori, and that gives students a fair go. So, all in all, this is a fantastic bill, and I just urge the National Party to be honest, to be measured. What we don’t want to see is the type of politics which is afflicting other countries. Let’s have a debate about the issues and the facts, not about some of the made-up stuff.

IAN McKELVIE (National—Rangitīkei): Well, I’m not going to say the name of the bill, because it’s so long it would take the first couple of minutes of my speech, but as a taxpayer of long standing—probably of the longest standing of any taxpayer in the House at the moment—I think I need to comment on a couple of comments by the Government.

Firstly, on the last one. Gareth Hughes often makes very measured speeches; he talked a lot of nonsense in the first minute of that one. But I also want to pick up a couple of points Michael Wood made in respect of the speech of the Hon Amy Adams. He talked about her being ideologically opposed to tax, and then went on to criticise the National Party, or the Opposition, for its lack of care and whatever else. Well, I think that’s a gross misstatement on his behalf, and we certainly aren’t opposed to tax and people paying their share or taking their responsibility in respect of paying tax. I think that was an offensive thing to say, and particularly to the Hon Amy Adams, who is, of course, our finance spokesperson. I think it was quite unnecessary.

I want to talk about the bill and the fact that it’s a fair and it’s an unfair bill, so you could rename it, in fact, the “Fair and Unfair Bill”. There are some parts of this bill which I think are eminently fair and do some very good things. One of them is the fact that we’re trying to even the playing field a little bit with respect to tax on imports, or, as Mr Bayly called it, the Amazon tax. I think that’s a very good system. It’s trying to level the playing field with respect to our retailers and the ability to import things without paying GST. If we can get to the post with that and perhaps even, in due course, get it to a lower level than it currently is being able to be set at, it would be wonderful, but, of course, that’s an international issue and a very complicated one. But I do think that’s a very fair part of this tax bill, and I think it’s well worthwhile.

Now I want to talk about a couple of things that I think are unfair—and I think it is the ideological difference between the two sides of the House—and that is that we think people are better at spending their money themselves, and the Government clearly think that they are better at spending our money for us. That always will be an ideological debate, and one that’s worth having at all times. So I agree with Mr Hughes on that point, that we certainly do need to have a debate on the sensible and un-sensible bits of this discussion, because it is a major difference between, I guess, the National Party and the Government.

The other thing I want to talk about very briefly is the rental losses situation, and the reason I want to raise it is because it’s really a sign of a Government interfering—well, you could say it’s a Government interfering—in a process to try and alter behaviour. Now, the problem with that—and we’ve seen it many times in the past in New Zealand, where you get involved in trying to influence behaviour—is that you sometimes influence that behaviour in a negative manner. When you think about the changes to this taxation around rental losses, it could have the impact of distorting the market, and not in the manner that the Government intends—we don’t know that—but it also could have an impact on changing the investment market in New Zealand. Now, that might not necessarily be for the better. So it is dangerous for Governments to get involved in this kind of, I guess, singling out one area for different treatment from another area, because it will change the behaviour of investors. I think that our rental market in New Zealand has been very well served by landlords, and the other thing, of course, when you start to put pressure on landlords, is that it makes it very difficult for them to upgrade the properties in a manner that they clearly need to, in some cases. So I think we’ve got to be careful how we manage that part of the thing.

The other thing I want to talk briefly about, because it’s only a very small part of this bill but becomes part of every taxation bill that the House considers, is the changes to the IRD. The changes they’re making—I think they’re great, if they work. The challenge we’ve got with some of the changes to the IRD—there are two I want to identify very quickly. One is that there are hundreds of thousands of New Zealanders who are going to suddenly be required to correspond with the IRD, in one form or another, who have never had any association with the IRD before. I’ve got great concerns about that, because I think it would be intimidating for people. People will not grasp that very easily, and I think it’s going to be a great challenge for the IRD to ensure that where they do need to transact with those people, they do it in a manner that those people can get a grip on, because I think that is a concern.

The other thing that I think is also of great concern—and particularly in rural New Zealand—is that a lot of these transactions are done through the internet and through technology. That is very challenging for some parts of New Zealand still, and very challenging for the demographic that I come from, interestingly: the kind of over-65s. A lot of us have challenges with that. So there are a few things that I don’t think are entirely good.

That’s my contribution. I think it’s kind of unfair in some ways, this bill, and it’s grossly unfair in others. Thank you.

ASSISTANT SPEAKER (Adrian Rurawhe): This is a split call—five minutes.

WILLOW-JEAN PRIME (Labour): E Te Māngai o Te Whare, tēnā koe. He tū poto tēnei ki te kōrero e pā ana ki tēnei pire, kātahi anō ka uru mai ki roto i Te Whare Pāremata nei. E hiahia ana ahau ki te kōrero mō tētahi wāhanga o tēnei pire, arā ko te wāhanga mō Te Reo Māori.

Ki ahau nei tino pai tēnei wāhanga hou, tēnei kaupapa hou, i roto i tēnei pire. He aha ai? Nā te mea ka whakauru atu Te Reo Māori i roto i te ture. Kua roa te wā Te Tari Taake e whakaari ana kia tono atu, kia tuku atu ngā rīpoata, ngā whakamau nama, i roto i Te Reo Māori, mēnā e whakaae ana te kaikomihana. Engari ko tēnei, ko te whāinga kia uru atu tēnei ki roto i te ture, hei ture. Ka taea e te tangata, te kai, a te tangata, kaiutu tāke te tono atu, te whakamau nama i roto i Te Reo Māori. Nō reira ko te kaupapa i roto i tēnei pire, ka tīni ngā ture e rua, kia taea ai ngā tāngata, ngā pakihi, ngā kamupene, ngā umanga anō hoki ō rātou whakamau nama. Nā, he mea nui tēnei nā te mea kua roa te wā Te Reo Māori e noho ana he reo motuhake, he reo e whakamana ana i te ture i roto i tēnei whenua o Aotearoa. Engari kua roa te wā, āhua 20 tau, Te Whare, ā, Te Tari Taake e whakaae ana, engari kāhore anō kia ture.

Ā, nō reira e tino tautoko ana ahau i tēnei tūāhuatanga. He aha ai? Nā te mea he reo motuhake o tēnei whenua. Tuarua, he nui ake ngā kaikōrero, ngā tāngata e mōhio ana ki te kōrero Māori i roto i Aotearoa nei. Tēnā pea he hiahia nō rātou ki te tuku ō rātou pepa, ō rātou whakamau nama ki Te Tari Taake i roto i Te Reo Māori. Ā, kua kite ahau i runga i te kāinga, i te pouaka whakaata i ngā wiki kua pahure ake nei, te maha o ngā pakihi Māori e hokohoko ana ō rātou taonga mō te Kirihimete i tēnei wā. Nō reira e whakaaro ana ahau tēnā pea he hiahia nō rātou ki te tuku ō rātou pepa ki Te Tari Taake i roto i Te Reo Māori. Koirā te tūmanako me kī. He aha ai? Kia ora ai te reo, kia kaha Te Reo Māori.

Nō reira he tū poto tēnei ki te tautoko mārika i tēnei wāhanga i roto i tēnei pire. Tēnā koe.

[I will stand briefly to speak about this bill, which has just entered into this Parliament. I want to speak about a particular clause of this bill, namely the clause about the Māori language.

In my view this new clause is excellent, this new initiative, in this bill. Why? Because it inserts the Māori language into the law. The Inland Revenue Department has long proposed to request, to send out reports and bills in the Māori language if agreed to by the commissioner. However, this, the goal is to include it in the law, as law. People, the taxpayer, will be able to apply for and be billed in the Māori language. Therefore, the initiative in this bill will change both laws and will enable people, businesses, companies, and agencies to get their bills in the Māori language. So, this is important because the Māori language has long been a special language, a language which is recognised in law in this land of New Zealand. However, it has long been—approximately 20 years—that the Inland Revenue Department has been agreeable, but it has not yet become law.

So, accordingly, I strongly support this aspect. Why? Because it is a unique language of this land. Secondly, there are more speakers and people who know how to speak Māori in New Zealand. Perhaps they have a desire to send their papers, their bills, to the Inland Revenue Department in the Māori language. And I’ve seen at home on television in recent weeks that many Māori businesses are selling their goods for Christmas at this time. Consequently, I am wondering whether they wish to send their papers to the Inland Revenue Department in the Māori language. That is the hope indeed. Why? So that the language thrives, and so that the Māori language is strong.

Accordingly, this was a short speech to unequivocally support this clause in this bill. Thank you.]

ALASTAIR SCOTT (National—Wairarapa): Thank you, Mr Assistant Speaker. It’s with pleasure that I stand and oppose this bill. This bill should be called the “Increasing the Cost of Living Bill”—increasing the cost of living for all New Zealanders—because that’s what it does.

I just want to point to a couple of points. First point: it increases the taxes that Kiwis pay. That’s what it does. It sets the tax rates, and, as we’ve heard before, if National was in Government, the tax rates would be lower. The tax rates would be lower, enabling taxpayers to have more money—their money—in their pockets to do as they wish, to spend as they see fit. By implementing this bill, by supporting it, what we’re doing is endorsing an increase in the rate of tax. We’re endorsing money to be taken out of taxpayers’ pockets for the purposes of this tax and spend Government. We know that it goes on wasteful projects, and I’d be here all night if I started, but, obviously, the most obvious and blinding one is the free tertiary education fees—total, total waste of money.

Now, the Government doesn’t understand how investors, and property investors particularly, think. What this bill does is it disincentivises investment in housing. It punishes people who wish to build a house for the purposes of rental. They say they’re speculators—that’s a bad word—but we are short of capital in the housing market. We need more capital in the housing market, not less. We need more international capital into the housing market. I grant the Government that they do allow foreigners to buy apartments off the plans. They’ve realised, finally, that we do need international capital in the housing market—or in the apartment market, specifically—which, of course, increases supply, which is, of course, what we want to occur.

This bill taxes the landlord. It treats the landlord differently from any other investor. It does not allow the landlord to deduct costs against income across any number of investments. So if we’re going to ring-fence landlords and their rental properties, why not ring-fence farmers or orchardists or any other investments? What we’re doing here is we’re picking on—

Andrew Bayly: It’s coming.

ALASTAIR SCOTT: Well, it is coming, actually, in the form of a capital gains tax—again, a tax that will tax capital—and that’s exactly the thing that we do not want to have. We want to incentivise capital investment in New Zealand. We want to incentivise capital investment in the residential property market, and, by ring-fencing, it’s only going to increase the cost to the investor to participate in that market. They will demand a higher rental to compensate them for the negative cash-flow that this bill is going to give, and it’s estimated to be 300 bucks per household—another $300 per household just because this Government does not understand the investor’s thinking, the way they think. We’ve seen it already—they’ve banned letting fees, not understanding that that directly increases the cost of rent to the tenant. They say they support tenants, they want to support the housing market, but all they’re doing is setting up barriers and regulations and disincentives and taxes to create a lesser, smaller housing market.

I mean, here’s another example showing you how little they understand about the housing market. The Government builds houses in Wānaka that no one wants to bid for. They don’t even want to ballot. No one wants to put a name in a ballot. There are four houses sold out of 20 in Wānaka, built by that Government, that no one wants. So it demonstrates that this Government does not understand how an investor thinks, does not understand what will drive increased housing supply, and that is why I will be voting against this bill.

Dr DUNCAN WEBB (Labour—Christchurch Central): Kia ora, Mr Assistant Speaker. Thank you. It was interesting to hear yet another ideologically charged speech from the member for Wairarapa based in Ōhāriu. This really is no more than a straightening out of the rules around GST and rental properties. We know we have a brightline rule in place, and what that rule means is that gains on houses are taxed if they are sold within a particular period of time. If at the same time we allow the cross-subsidisation of income in other areas, we simply encourage gaming. So what this is, the ring-fencing of losses on rental properties, is no more—

ASSISTANT SPEAKER (Adrian Rurawhe): Sorry 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.

Matt Doocey: I raise a point of order, Mr Speaker. As you’ll be well aware—[Minister enters Chamber] Thank you very much, Mr Assistant Speaker.

ASSISTANT SPEAKER (Adrian Rurawhe): That was close, wasn’t it?

Dr DUNCAN WEBB: Tēnā koe, Mr Assistant Speaker. As I was saying before the dinner break, really this is ironing out some wrinkles. The members for the other side protest that this is, in fact, new tax. It’s not. What it’s doing is really just closing some loopholes that some of the smarter taxpayers have been using to minimise their obligations and deprive the New Zealand people of the money they need for the projects that this Government is undertaking.

Really, when we look at the ring-fencing of losses in respect of residential properties, the fact of the matter is that it’s entirely inappropriate on the one hand for us to have a brightline test and at the same time have tax losses which are being used to offset against other income. So what we have here is an entirely sensible approach. Let’s just remember this is not saying that losses cannot be claimed. It’s not even saying that losses can’t be claimed across years.

In fact, if the members of the other side read the bill, they would see that the losses can always be claimed against the property even when it’s sold. So that is the ultimate point at which these losses can be claimed, if, indeed, there is an overall loss in the business enterprise of the residential property, and the legislation allows for a portfolio approach where you club all your properties together or a property-by-property approach. That’s entirely up to the taxpayer to manage their own taxation affairs. So what we have here is really just saying that, look, a few taxpayers have been gaming the system in a way which is entirely inappropriate. They have been minimising their taxes in a way where it’s not appropriate because there’s no long-run evening out, and that’s really what we’re achieving here—nothing more and nothing less.

Of course, the same is the case in respect of the GST reforms. What we’ve seen is a massive growth in small cross-border transactions. We all know—some people have referred to it as the Amazon tax, but it’s not just a tax on large suppliers. There are many suppliers all around the world, and anyone who makes the GST threshold of $60,000 of turnover in New Zealand will be expected to register for GST. What we’ve seen is about a tripling over the past few years of the amount of transactions that meet this threshold. What that has meant, and quite unfairly, is people in New Zealand, retailers in New Zealand, hard-working mums and dads in New Zealand, have been paying GST as part of the prices of their goods, whereas someone overseas in Australia, the United States, or elsewhere has been able to sell their goods tax-free—an entirely inappropriate tax advantage. That means that New Zealand businesses aren’t getting a fair crack; they’re bearing more of the tax burden than they should.

So, once again, this is a sensible ironing-out of what is essentially a loophole. Previously, it was thought the costs of collecting the tax probably outweighed the benefits of it because the internet business was so small. But what Minister Nash has identified and, in fact, what I understand the previous Government was looking at is the fact that the amount of this tax is now sufficiently significant to warrant the taxation, the Inland Revenue Department putting resources into it, and, of course, it will have the collateral positive benefit of evening out the tax position for overseas suppliers and also for New Zealand suppliers.

Another great thing: the tax bill, of course, does another important thing that I want to mention before I close, and that is it tidies up the tax legislation. Every year, we try to make this legislation more workable, more understandable, more consistent, and more plain English—believe it or not—and a lot of the bill actually goes to that. It’s something you won’t hear talked about in the House very much, but it’s ongoing maintenance. It’s going round and painting the house every year to make sure that it’s still fit for purpose. So what we have here is a great piece of legislation. Minister Nash has brought it to the House. Yes, it will bring in some more revenue, but what it’s really about is making sure the tax rules are fair and consistent across the board for all players, whether it be in respect of rental properties, GST, or some of those smaller things like student loans and sexual abuse victims. So that’s a great piece of legislation. I commend this bill to the House.

Rt Hon DAVID CARTER (National): Thank you, Mr Assistant Speaker. For those who are just tuning in after the dinner break, National will oppose the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Bill.

I’ve been here a while, and this bill typifies the greedy attitude that this Government has to tax. I want the next Labour member who takes a call to tell me whenever before we’ve had the tax bill setting the rates for 2019-20 going to a select committee while it’s still working on the tax bill for 2018-19. That’s how keen this Government is to keep—

Hon Dr David Clark: Patience.

Rt Hon DAVID CARTER: —taking taxes off the poor New Zealanders so that they can spread them around like confetti. Hon Dr David Clark is laughing at this. But he probably didn’t have the chance to watch the TV ONE news tonight where, again, the Hon Shane Jones has been caught giving millions of dollars to his nephs in Gisborne against Treasury advice. It’s mum and dad taxpayers who are paying their legitimate taxes so this Government can spray it around, thinking it’s about buying votes. I’ve got a message for the Hon Dr David Clark and for the Hon Shane Jones: if they think New Zealand taxpayers are going to be fooled by the largesse of the Provincial Growth Fund as money is thrown around, then I think they’ve got another thing coming. So the select committee will continue to work on the tax bill for 2018-19. It will then start work on the tax bill for 2019-20.

I was very intrigued with the contributions from the Green member Gareth Hughes when he said, “It’s time for a bit of honesty about the tax debate.” The very next speaker, Dr Duncan Webb, said, “This is not about any new taxes at all.” Well, it is about a new tax. It’s about an Amazon tax. It’s about a tax on GST for online purchases. I support that bit of the bill, because it’s the work that National did prior to the general election. It is totally unfair on the retailers of New Zealand having to put GST on to their products and then have somebody else being able to go on the net, import it from the likes of Amazon or eBay, and dodge the GST component, putting the New Zealand retailer at a huge disadvantage. So I congratulate the Government for that part of the legislation, but I will be interested in the select committee process to hear how it’s going to be complied with, because I think the concept of a threshold—$60,000 turnover—means that these overseas companies must then register for GST purposes. Let’s see the compliance. I think that will be a challenge for the work around the select committee.

The next thing that Dr Duncan Webb got wrong was around ring-fencing rental property losses. He tries to justify that by saying it’s about fairness to the tax system. Why are we ring-fencing losses on rental properties for mum and dad apartment investors, mum and dad home investors, when at the same time the legislation before the select committee allows this to be opened up for wealthy horse-breeders? Give me an explanation, Dr Duncan Webb, or, in fact, the next Labour speaker—I think she’s also a doctor—Dr Deborah Russell. Tell me why we close it down for property owners and open it up in the other legislation for wealthy racehorse-breeders. There’s no logic at all apart from the fact that some promises were made during the last election campaign by the Rt Hon Winston Peters to his mates in the racing industry and those need to be fulfilled.

The final point I want to make is, again, a comment from Gareth Hughes, when he said it was time to be honest about this legislation and then went on to argue that National had proposed cutting taxes for the wealthy. That is not right. It is completely wrong. In fact, it’s dishonest, because what National proposed at the last election campaign was to leave the top tax rate at 33 percent—to leave it there. It was about delivering tax cuts to middle New Zealand—the people who needed it. But what the Government did was abolish National’s good tax proposals and instead spend $2.8 billion on buying some student votes with tertiary fees being free. That was going to see more university students enrolling in our tertiary education, and there are now fewer enrolled than before the policy change of Labour. So Labour wasted, effectively, $2.8 billion that, if we had managed to secure an election victory, we would have delivered to hard-working New Zealanders; not, as Gareth Hughes said, to wealthy New Zealanders. Their tax rate would not have changed. It would have been delivered to middle New Zealand, and that’s what it should have been for.

So I want to conclude my comments by reminding people of a very good comment that was made by Ian McKelvie, that wonderful colleague of ours on the National side, who said to me, just before the dinner break, “Ideology doesn’t work in politics.”—ideology doesn’t work in politics. So for the Labour Government to continue—and I’m pleased that the Hon Grant Robertson has come to listen to this final point—to think they can treat the taxpayer as an ATM machine and then spray money around recklessly, as the Hon Shane Jones is doing day after day, let me tell the Hon Grant Robertson that it won’t work. New Zealanders are sharper than that. They’ll pay their tax legitimately if it’s fair, but they will object to being ripped off by a Government that imposes a higher and higher tax burden on New Zealand taxpayers so that the Hon Shane Jones can chuck it around the country with a huge amount of largesse.

National will oppose this legislation going to the select committee. It will work hard to make it better legislation at the select committee, but it will certainly be opposing it when it comes back for the second and third readings.

Dr DEBORAH RUSSELL (Labour—New Lynn): Several of the members of the Opposition have proposed alternative names for this bill, which is always an entertaining thing to do. So I am going to propose an alternative name for this bill as well: “Taxation”—we’ll keep the “Annual Rates for 2019–20” because that’s a straightforward constitutional requirement. So “Taxation (Annual Rates for 2019–20,”—and then I would call it—“A Practical Response to a Changing World) Bill”, because that is what this bill is about. It is a practical, pragmatic tax response to a world that is changing.

Let me talk about how that works. Let’s start with the GST measures—the GST measures that are supported across the House. When GST was first introduced, when it first became something that New Zealanders had to deal with, on 1 October 1986, the internet barely existed. The internet was barely there. It was nothing like the world we live in today, where we can go online and, at the drop of a hat, buy 20 ties at a time by sheer chance by pushing a button, or go and buy books, buy records. The world has changed, and now it is very easy for New Zealanders to buy goods from overseas, GST-free.

It’s not happening just to New Zealanders. It’s happening in any place in the world where there is a value-added tax of some sort. So the Australians are facing this issue as well as we are. Other countries are facing it—the issue that they’re not being able to collect the value-added taxes on goods and services that are consumed within their country. So, like the Australians, we are introducing some rules around the collection of GST—not a new tax. GST existed already—a tax on consumption in New Zealand, and the consumption is indeed happening in New Zealand. All we are doing is collecting the tax.

It’s a straightforward, practical response, and just like other countries around the world, we will be requiring overseas retailers who sell more than $60,000 worth of goods and services into New Zealand a year to register for GST and remit that to us. In Australia, it’s a little bit different. They are going to impose it on goods and services above $75,000 because that’s their GST threshold. It’s a very practical response to a changing world, and it is an idea that is supported across the House. May I suggest in response to the previous speaker, perhaps somewhat tongue-in-cheek, that the rules around racehorses are also a practical response to a changing world—a changing world for the racing industry.

But let me move on to another practical response to a changing world. I intend to remind members of the House about the Taxation (Budget Measures) Act of 2010. Colleagues, which party was in power when that particular Act was passed—the Taxation (Budget Measures) Act 2010? Who was in power? It was the National Party. And the interesting thing about that particular piece of legislation is it contained a very practical response to a changing world—a practical response that in the parlance that is used across the other side of the House, “introduced a new tax” to the rental property market. They are not shy about doing it. They are not shy about taking a practical response to a changing world.

What it did, that particular Taxation (Budget Measures) Act 2010, when the National Party was in power, was it removed depreciation on buildings, and it had a direct effect on the rental property market. It increased the amount of tax that rental property investors had to pay. They are not shy about it. They are not shy about taking practical responses to a changing world, and the changing world was that building values were going up and up and up instead of down and down and down, so they took a practical response. So if they are so fond of practical responses to a changing world, why then are they opposing the rules around ring-fencing?

Kieran McAnulty: Now, that’s a good question.

Dr DEBORAH RUSSELL: And it is a good question. So let me tell you what is going on with this ring-fencing. The way I want to talk about this is to focus on something that the Hon Amy Adams said and that other speakers from the other side have repeated, saying that no other asset class has its losses ring-fenced. Why, the Opposition speakers are saying, is the Government imposing special rules—very special rules, they think—for rental properties? In order to answer that question, I need to go back a step or two.

Look, anyone is entitled to run a business. Anyone is entitled to run a business and to make losses. The interesting thing is that the IRD doesn’t require people to be good business people; it just requires them to be in business, and if they make losses, then those losses can be claimed against any other income that the business person might have. So there’s no need to be a good business person. But in most circumstances there is a natural barrier to the amount of losses that can be claimed year after year against any other income, if it might exist. The business person who is making losses year after year eventually runs out of money—kaput, gone; sad event—and it’s pretty rough; there’s no doubt about it. But there is a little bit of a difference when it comes to rental properties, because at present there is no natural barrier to the losses being claimed.

At present, what is happening is that asset values have been going up and up. So someone who invests in rental properties can incur losses year after year after year and expect to recoup them when they sell the rental property for an untaxed capital gain. So there is no natural barrier to spending more and more and more on a rental property and getting the taxpayer to subsidise those losses through writing the losses off against your other income.

So we are taking a simple, practical, pragmatic measure to limit the amount that ordinary taxpayers have to subsidise rental property losses. We aren’t denying the deductions altogether. A person who makes a loss on a rental property can carry that loss forward and set it off against future profits on a rental property, or, if they’re operating within a portfolio of rental properties, they can set it off within the portfolio. So the deductions are not being denied. All that is happening is that they are expected to make a profit in the long term. They are expected to at least break even or to make a profit. Isn’t that what you want an investment to do? Surely, someone makes an investment in order to make money, not in order to claim tax losses.

So this is a very practical response. It’s a pragmatic response. All it is attempting to do is to ensure that those who invest in the rental property market will in the longer term look to make a decent return off that, and good on them if they do that. That’s tremendous. We’re just not going to let other taxpayers subsidise it. This is a practical response to a changing world, and that is why I commend this bill to the House.

A party vote was called for on the question, That the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Bill be now read a first time.

Ayes 63

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

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Bill read a first time.

Bill referred to the Finance and Expenditure Committee.

Bills

Reserve Bank of New Zealand (Monetary Policy) Amendment Bill

In Committee

Debate resumed from 5 December.

Part 1 Main amendments

ANDREW BAYLY (National—Hunua): Thank you, Mr Chair. Well, I was just starting out and now I note we’ve got the Minister of Finance in the chair, which is very good. The point I was making last time is that the Reserve Bank of New Zealand and its framework is world-renowned for being independent, for being robust, and, actually, over time it has proved to be very, very successful.

I think the reason why international commentators look at New Zealand and go “That is a great model to follow.” is that they know that the Reserve Bank has a very clear mandate—and I’ll talk about that in a second—that it’s highly professional, and that it lacks any politicisation of the way it operates. That is the greatest travesty of this bill, in my view. At the moment, the Reserve Bank’s primary mandate, because it has some other roles, is, essentially, around how it conducts monetary policy. Of course, it has an objective to achieve price stability and the general level of prices over the medium term, and we know we’ve got this target of 1 to 3 percent. What this bill does is introduces a second target: namely, that the bank is now required to also have consideration of the maximum sustainable employment of New Zealand. Of course, that now cuts to the core of the clarity around the bank’s objective.

The first question is: why do we need this change? I said before that, actually, there is no one calling for this change. There is no one internationally calling for this change, and until we had the new Minister of Finance take over this role last year, we had no one baying for that change except for, perhaps, Treasury. The Reserve Bank, in my view, doesn’t want this change, and there is no real reason why we need to have this change.

The thing about this that I find most upsetting is that whilst it sounds good, the Reserve Bank already has regard to sustainable employment when it is considering official cash rate changes. The issue is that during times of recession, when the Government starts to get into problems and the Government wants to see certain financial outcomes or monetary outcomes from the Reserve Bank, it can influence—I’m not saying it will, but I’m saying there is now a process for it to influence—through either the remit position or the charter system. That is through the Minister of Finance actually specifying to the Reserve Bank Governor or the Reserve Bank what the arrangements are and what the objectives are for the Reserve Bank.

So when we have long periods of recession, how do we know that the Minister is going to start writing out changes and try to put more emphasis on one outcome, such as reducing unemployment levels, as opposed to maintaining price stability? I think that is one of the crucial parts of this bill that I find most offensive. I think the other thing about this is the Reserve Bank has absolutely no influence over unemployment rates.

Hon AMY ADAMS (National—Selwyn): Thank you, Mr Chair. I want to follow on from my colleague Andrew Bayly and pick up some of the same themes that he’s mentioning, because there are a number of matters in the Reserve Bank of New Zealand (Monetary Policy) Amendment Bill, and in Part 1, which we’re on, that are of significant concern to the Opposition, and they are worth just taking a moment to reflect on, because the Reserve Bank of New Zealand Act and the Reserve Bank are a fundamental pillar of our economic and financial system. And, actually, we’ve got even Michael Cullen, back in his era as finance Minister, making the point that it’s so important that changes to the structure of the Reserve Bank and the Reserve Bank of New Zealand Act be made only with bipartisan support, and we don’t have that in this case, because these changes will weaken the independence and the clarity of function of the Reserve Bank that have served us so well for such a long time.

I would urge the current Minister of Finance to heed those words from Sir Michael Cullen and reflect on the fact that when you are making changes to legislative instruments like the Reserve Bank, to do so without bipartisan support is a serious error because it makes the Reserve Bank, frankly, a political football. And that is one of the major concerns about this legislation that this side of the House has been expressing repeatedly and without, frankly, any interest or involvement or willingness from the Government to take on board our concern. This legislation runs the risk of seriously weakening the independence of the Reserve Bank, and even Adrian Orr, the current governor, has made the point on a number of occasions that a central bank’s independence is critical to its operation and to its success.

Now, when you have a situation where the monetary policy committee is made up entirely of appointments made by the Minister of Finance and is able to be removed by the Minister of Finance, you lose the very purpose of having a decision-making committee, because a decision-making committee, when the only reason for having it is being better than an individual making the decision because you get diversity of thought and diversity of opinion and contestable ideas and a real contest of the issues, when the appointment process is such that it can all be products of the same ideology, that very purpose is destroyed. Not only do you then have a committee and a governor who are appointed and owe their tenure entirely to the Minister, you’re now going to have a senior Treasury official—in fact, we understand it will be the most senior Treasury official to begin with, the Secretary to the Treasury—sitting and partaking in all monetary policy committee meetings.

Now, again, the Government has said, “Well, it’s so that the Reserve Bank can be better informed.” but there’s no evidence that the Reserve Bank has any issue getting information about Treasury’s or the Government’s policies. In fact, both officials and the bank have been quite clear with us that there is no problem to be solved. The only reason to have such a senior Treasury person in those meetings is clearly to influence the Reserve Bank—to influence their view of Government policy. Treasury are bound to give effect to the Minister’s and the Government’s policies. They’re bound to put the spin on things that the Government wants. And now they are very clearly trying to reach their tentacles of control into the Reserve Bank to stop issues like we’ve seen with KiwiBuild, where the Reserve Bank dares to come out with an opinion that cuts across the Government narrative. Well, this Government doesn’t want that. So what do they do? They ensure that they have full control over the processes of appointment of the Reserve Bank and that they have a Treasury person sitting in the room making it very clear the message that the Government wants to see return. That is not an independent central bank. That is not going to serve the institutions of this country well.

I would say to the Minister that to have a situation like this, where there is, as I say, total control from the Minister in terms of the Reserve Bank board, the monetary policy committee, and the governor—and, yes, I know there is interplay with recommendations between them, but when the Minister controls the appointments of all of those, that interplay is very quickly shown for what it is, which is a complete fallacy. Then, even if the Minister carries out those roles responsibly and with good ethics and impartiality in seeking contestability of views—even with that—the perception will always be there of political influence. Now, I worry deeply that the perception will go further than perception and we’ll actually see a drive to politicise the Reserve Bank and see people put in place for 10 years, which will quite possibly survive this Government. But even if that isn’t the case, then I would say to the Minister that perception matters, and the perception, under this legislation, is a clear watering down of the independence of the Reserve Bank. It is not done on a bipartisan basis. There is no clear evidence of a problem they’re trying to solve. This is a very, very poor way to go about reforming what is a crucial piece of our legislative framework.

Now, the Minister, early in the process, certainly reached out to me, and I appreciate that and I acknowledged that in my first reading speech. I indicated that the Opposition would work constructively with him and try to find good changes, and we think there are good changes to be made. I’ve told the Minister my view that I see there is merit in a monetary policy committee. I think there are changes that can be made. This is not a case of the Opposition opposing the legislation because it’s Government and we’re Opposition. I think there are absolutely areas where we could have worked together to come up with a good suite of reforms. But, while I’m happy to work with the Minister, of course, that doesn’t guarantee our acceptance, and, unfortunately, the changes in these two respects go further than this Opposition is able to agree to.

The second aspect of that is around this dual mandate. Now, you know, I’ve been in umpteen meetings with officials and hearings and briefings where we have asked time and again: what is the problem we’re trying to solve? What isn’t working well with the mandate the way it is expressed at the moment, bearing in mind that the Reserve Bank has, for many years, already taken into account a basket of wider economic considerations in setting their monetary policy framework? They already do this. In fact, when we’ve asked the governor—and we’ll ask him again tomorrow, no doubt, at select committee—he has said repeatedly, “It’s not going to change much. We can already do this.” So what is the point of making the change?

Here’s the risk, however, of making the change. First of all, you’re playing with a framework that is well established and that has held New Zealand in very, very good stead for a number of years. There have been a number of reviews of our monetary policy framework since the 2000s, and they have found that New Zealand has best practice set up in our framework. So why would you take a system that has served New Zealand well, that has delivered a very stable economic environment, and that has been held up as best practice worldwide and change it with no description at all of what the problem is you’re trying to solve and the bank themselves saying it won’t change the way they operate?

Actually, the risk goes further than that, because not only is it a case of uncertainty and “What might this do?” and “Why do we need it?”, actually, you now have the very real risk, and, again, officials have confirmed this, that the Minister will now be able to direct the Reserve Bank not only to treat price stability and maximum sustainable employment on the same level—which we think is risky enough, because how on earth do you reconcile them if they pull in different directions?—not only will that be permissible; the Minister will be able to direct the Reserve Bank to prioritise employment over price stability. In fact, the Minister could go so far as to direct the Reserve Bank, through Order in Council, to ignore price stability totally for a period of time.

Now, what would that do to our monetary policy framework? This is a very real risk that the Minister has made no case for and, actually, will create further uncertainty and weakening in our economic framework. We’ve already got a business environment where there is rampant uncertainty, and to now pull a rug out from one of the few non-political, well-functioning, bipartisan, non-argued pieces of our economic framework without any real reason is sheer madness. I really think it is sheer madness. What on earth will world markets make of a situation where our monetary policy framework can be reversed and thrown on its head by the direction of the Minister of Finance without reference back to the Houses of Parliament?

I mentioned before that there is no clarity in the legislation or in anything officials have been able to give us on exactly how a governor or a monetary policy committee can and should reconcile those two competing aspects of their mandate should they find themselves in conflict. And it’s interesting, isn’t it, because right now you could say we have a situation where the inflation forecasts over the forecast period in the latest monetary policy statement show that the bank expects inflation to be higher than the 2 percent midpoint. So they’re almost forecasting that they’re going to fail to meet that target, and yet no move in the official cash rate. So then you start saying, “Well, why is that?” Well, the question will always be there: is it because the governor now feels obliged to run the economy a bit hotter to keep the employment numbers up? Well, who knows? I can only speculate, of course, what’s in the governor’s mind, but that question will always persist. Is this the best thing for price stability and the stability of the economy, or is the Reserve Bank now going to be delivering on its political imperatives?

Rt Hon DAVID CARTER (National): Thank you, Mr Chairman. I have quite a number of questions for the Minister, but first I want to say how saddened I am that we’ve even got this legislation before the House. The Reserve Bank of New Zealand Act is 29 years of age. It is well regarded all around the world, and I think the aspect of it that is most well regarded is its true independence. It is independent of politicians and it’s independent of the Government of the day.

My first question to the Hon Grant Robertson is: why change? What’s the problem that we’re trying to fix? Now, I know that every election campaign, New Zealand First has always argued on changes to the Reserve Bank of New Zealand Act, and they’ve always argued for a dual mandate—one that focuses on inflation and the other one that focuses on the exchange rate. So my second question is: why hasn’t the Rt Hon Winston Peters got his wish—or has he now realised there’s a nonsense in trying to have a dual mandate of exchange rate and inflation?

Then my third question to the Minister is: what is meant by maximum sustainable employment? During the select committee process, I asked the now Governor of the Reserve Bank, Adrian Orr, what is meant by maximum sustainable employment. He honestly answered and said that he didn’t know what was meant by maximum sustainable employment. So it’s a worry when we’re giving a new law to the Reserve Bank when it’s almost impossible to define what maximum sustainable employment is.

The fourth question, I think, is around the politics or the politicisation of the Reserve Bank of New Zealand Act. The dual mandate will mean that at some stage, there will be potential conflict between focusing on inflation and focusing at the same time on maximum sustainable employment. So in that situation, Mr Minister, what’s going to win? Are we going to then focus more on maximum sustainable employment rather than focusing on inflation, because if they are in conflict, in that situation, Minister, you can’t ask the Reserve Bank or the monetary policy committee to try and grapple with two targets. One will have to win. So I’d like the Minister to rise to his feet.

The final point—and I think there’s about six questions, so this is the last one, but I’ll look forward to them—is that the Minister of Finance, under this legislation, will have the power to appoint the board of the Reserve Bank and the power to appoint members of the monetary policy committee. I want an absolute assurance from the Minister in the committee tonight that as he goes through his process of selecting suitable people with expertise, we’re not going to end up with political appointments in those positions, because—

Hon Damien O’Connor: Oh, ha, ha! Ha, ha!

Rt Hon DAVID CARTER: Well, the Hon Damien O’Connor laughs, and he probably has already lined up three or four dairy properties for Westland, who are enjoying huge largesse from the Government already—we’ve bailed all the Westland dairy farmers out. But he’s probably got a few mates who will be put on the monetary policy committee, and I just want to know whether they’ve got the expertise to do the job, because it’s not a job for lackeys, Hon Damien O’Connor.

So those questions are important. I look forward to the Minister being involved in this discussion tonight. Rather than us on the National side raising genuine concerns and genuine questions, we will have a far better debate if the Minister’s prepared to get to his feet and answer legitimate questions that I didn’t feel were satisfactorily answered by officials as we went through the select committee process. At the end of the day, Treasury has been trying to take over and dominate the role of the Reserve Bank from the time the Act was passed in 1989. I think this is an occasion when they’re finally going to get their wishes, and that is a shame.

ALASTAIR SCOTT (National—Wairarapa): Thank you, Mr Chair. I do have a couple of questions for the Minister as well.

Rt Hon David Carter: Well, I hope he answers them.

ALASTAIR SCOTT: I’m sure, Mr Carter, that the Minister will stand—and I’m not going to go over the same questions, but my question is: why employment? Alongside price stability and inflation target, why employment, as opposed to, say, GDP or GDP per capita, which the Minister talks a lot about, or where the level of currency is at at a particular time, whether it’s against the trade-weighted index or against the US dollar or against the Australian dollar, or the renminbi, for example—our trading partners—or whether it should be something else that is important to the livelihood or the well-being of New Zealanders?

But the Minister has chosen employment, and I know why he hasn’t chosen GDP or GDP per capita or immigration or any of these other things, and it’s because the Reserve Bank Governor can’t control those things directly, or even slightly—indirectly—because those things are a consequence of a whole lot of other factors. They’re a consequence of policy, they’re a consequence of business confidence, and they’re a consequence of global economy and global confidence.

So my question is: why full employment when full employment—that factor, that number—is a derivative, like those others, of a whole bunch of other stuff, whether it’s employment policy, whether it’s industrial relations, or, particularly, whether it’s the amount of immigration that we have coming into New Zealand? For example, a loose immigration policy should see increasing unemployment and a lower employment rate. That hasn’t been the case, but one would expect that to be the case, all things being equal.

So my question is: why employment instead of all these other things when the Reserve Bank Governor cannot control the rate of employment? He cannot control what an employer is thinking when the employer takes on another employee, because that is what affects the employment rate. The employment rate is only affected by—it has to be affected by—the employer. They’re the only ones that can change the employment rate, because they decide on whether to take someone on or not. As I say, all those things that go through the employer’s head before they take on an employee affect employment. The Reserve Bank of New Zealand (RBNZ) and the setting of interest rates is only a sliver, a very small fraction, of what is in the employer’s mind.

So I think I can say that I’ve demonstrated that employment is not a good measure for the RBNZ to measure itself when, and we’ve already talked about—even if it was, this is not about the conflict that those two things might have. This is just about the fact that employment, in my view, is just an inappropriate measure, when, particularly, we want incomes per capita to rise—put that in as a target.

The second question is: what is full employment? It’s already been touched on. David Carter talked about it. What is it, and what happens when it gets to 72 percent? Is the economy necessarily too hot, and do we need to raise interest rates because of that? But that would be a mistake. If imported inflation was higher and if deflation was occurring in the economy because of lower offshore prices, that would be a mistake. So that demonstrates the conflict that the RBNZ Governor has when measuring those two factors, and we still haven’t heard which is more important. Is it price stability and targeted inflation, or is it the employment rate? I’d be interested to hear from the Minister.

Hon JUDITH COLLINS (National—Papakura): Oh, thank you, Mr Chair—what an excellent choice, might I say. Look, I would like to follow on from that excellent contribution from Alastair Scott MP, and I think one of the reasons that I’d like to continue with that—

Kieran McAnulty: Ha, ha! Say it like you mean it.

CHAIRPERSON (Adrian Rurawhe): Order! When—

Kieran McAnulty: I apologise.

CHAIRPERSON (Adrian Rurawhe): I haven’t said anything yet. How can you apologise? And he will be apologising. Don’t bring me into the debate. The Hon Judith Collins.

Hon JUDITH COLLINS: Thank you, Mr—

Alastair Scott: I raise a point of order, Mr Chairperson. Is he going to stand, withdraw, and apologise, or not?

CHAIRPERSON (Adrian Rurawhe): I didn’t ask him for—the Hon Judith Collins.

Hon JUDITH COLLINS: Thank you, Mr Chair. I must say, we’re getting lots of knee exercise. Well, I think one of the things that I would like to speak about tonight is the fact that this bill is even being discussed in Parliament. In the National Party, we oppose this bill, because I think we should always work on the basis that if something is not broken, then why would we try to fix it?

So, tonight, we’ve been hearing from the Government about the need for us to fix the Reserve Bank of New Zealand Act, and the reason for doing this, they say, is for things like unemployment. Well, unemployment is at historically low numbers, and that is thanks to an excellent amount of work that was undertaken in nine years of a National-led Government and the fact that this Government has now inherited that. So one would have to ask oneself why this is such an important issue for the Government? Why would they want to now get the Reserve Bank to take into account unemployment when they’re setting interest rates and everything else that they do—what is it? Well, the answer would have to be because that’s what New Zealand First wanted. It has nothing to do with fixing unemployment or the Reserve Bank acting in a way to help unemployment or to decrease unemployment, because it’s already at historically low levels, so what’s the point?

When I think about this bill, particularly Part 1, I think about the fact that this is a meddling bill. It is a bill put together for a constituency that has been fooled into thinking that there’s something dreadfully wrong with the Reserve Bank. Some of us on this side of the House will well remember a certain candidate for a certain political party saying that the Reserve Bank was owned by foreigners. Well, some of you might remember that one. I think it may have been a candidate from New Zealand First, anyway, saying that this was a bank owned by foreigners. I well remember that New Zealand First and the new Government, they said, were going to buy it back. Well, to that person I’d say, “Would you like a bridge I could sell you?” They are truly, truly ridiculous to think that. The Reserve Bank of New Zealand (Monetary Policy) Amendment Bill—

Hon Members: You’ve got Bridges to give away?

Kieran McAnulty: What price for Simon Bridges?

Hon JUDITH COLLINS: That would be a singular not a plural, Mr whatever your name is over there. Ha, ha!

I think it is really very important to remember that this House and the very valuable time that the taxpayers are paying for should be used for bills and discussions that make a difference. This bill is going to make not one scrap of difference other than to enable Treasury and the Minister of Finance to be able to interfere in the very careful deliberations of the Reserve Bank of New Zealand.

When we think back to the times before we had things like a National Government in the 1990s, when in fact interest rates were around 18 percent, or 28 percent if one was borrowing for business, those are the days when, actually, if only the Reserve Bank had been allowed to get on with their job, they might have been down to the rates that they are now. But, instead, there was a lot of political interference with the Reserve Bank. What I’m concerned about, and on this side of the House we are, is the level of political interference that may well come to the Reserve Bank now.

They are always people who are trying to do their best. They are the experts. I wonder at the level of political interference that’s going to be meted out to the Reserve Bank and to have the Reserve Bank not able to make the decisions that it needs to make without having to wonder whether the Ministry of Finance is going to be happy. Actually, that shouldn’t be their role.

Hon GRANT ROBERTSON (Minister of Finance): It’s a pleasure to take a call in this debate and respond to some of the questions that have been raised by members of the Opposition.

The first thing I’d like to say is there is a bit of a logical flaw in the questions that have been asked, which is either—this is something in terms of the monetary policy objectives—considering maximum sustainable employment alongside price stability is something the Reserve Bank is already doing, or it’s a total catastrophe that is going to end the world. Those arguments are being advanced in the same speeches tonight by Opposition members, and so it is a little difficult to unpick that particular logical flaw.

What we are trying to do here in terms of broadening the objectives of the bank is ensure that the thing that has indeed served New Zealand well over many years—the fact that we have a greater level of price stability than we would if we didn’t have a clear objective in the principal Act to maintain price stability—is added to by what, as we’ve already heard from members tonight, has in fact been part of the practice of a flexible inflation targeting approach, which is to take into account the impact of monetary policy on the real economy. What we’re interested in doing is codifying that and ensuring that it is part of the objectives of the bank, lest there be any doubt that monetary policy does have an impact on the real economy.

We only needed to see in the wake of the global financial crisis—and one of the earlier speakers on the other side asked where the calls for this were coming from. In the wake of the global financial crisis, right around the world people began debating the role of monetary policy in a situation where the economic cycle turns the way that it did. We picked up on that, and it is vitally important for all members of the House and those listening tonight to understand that New Zealand, in taking on a second objective for our Reserve Bank of New Zealand Act, is actually doing what the United States does, what to an extent Australia does, and what to an extent Norway does, among others—countries that have been perfectly able, through their monetary policy, to balance these two objectives.

A question asked by a couple of members has been, “Well, how do we do that? How does that happen?” That is dependent on the circumstances of the time and the ability of the bank and its decision makers. It, again, is somewhat contradictory, because it’s asking us as politicians to say, “How do we do that?” That would be interfering in the independence of the bank if I were to sit here and say, “This is the way in which it will be balanced.” It is up to the Governor of the Reserve Bank and the monetary policy committee (MPC) to make those decisions. One of the pieces of work that we looked at when we were preparing this policy was a study done by the Reserve Bank of Massachusetts, I think it was, who looked at who was better at controlling inflation: those countries with a dual mandate or those countries with a sole mandate. And actually, it turned out that countries with a dual mandate were generally doing better at controlling inflation than those with a single mandate. So I don’t believe that the concerns being raised on that are at all legitimate.

Rt Hon David Carter: Rubbish.

Hon GRANT ROBERTSON: No, it’s not rubbish. I’ll get the Rt Hon David Carter a copy of the report. I might have this wrong, but I think the author’s name was Eric Rosengren, and so I will get hold of a copy of the paper for David Carter so that he can rest assured on that.

We want to make sure that maximum sustainable employment is part of the decision-making process. Just as with price stability, that gets defined in time by, in the previous incarnation, the policy targets agreement; in this incarnation, the remit that will be agreed. What we know and what is fully acknowledged in all of the documentation building up to this bill is that the role of the Reserve Bank is to help, through its monetary policy, influence maximum sustainable employment. There’s a reason why we didn’t put a rate of employment or a rate of unemployment in this bill, because we absolutely recognise that the direct control of that does not lie entirely in the hands of the bank. But by signalling that maximum sustainable employment—not the same thing necessarily as zero unemployment, because it’s about a number of factors in the economy being weighed against each other. By making sure that when we have sustained periods of unemployment, when there are times in the economic cycle when there is pressure on those areas, that being considered openly and outwardly in the decision making of the Reserve Bank is, I believe, a very, very important thing for us to do.

The other major set of concerns being raised by members of the Opposition in their questions is around the question of independence. It is vitally important we maintain the independence of the bank in making the decisions it makes on monetary policy. That has been an important part of the stability of our economy, and it’s maintained by this bill. What this bill does is set up a committee to make the decisions for monetary policy—again, completely commonplace around the world, and, in fact, something the Reserve Bank itself, again, in practice, has been doing internally inside the bank.

This is actually a change welcomed, I think, pretty much across the board, perhaps apart from the Opposition. In terms of the way people are appointed to that committee, if there’s somehow a suggestion that the Minister of Finance making those appointments on the recommendation of the board is somehow a terrible outrage in terms of independence of the bank, that’s exactly the process for appointing the Governor of the Reserve Bank right now.

Hon Ruth Dyson: Is that new?

Hon GRANT ROBERTSON: No, it is not. It is not new. It has been in place for the whole time that the Reserve Bank of New Zealand Act has been there, and so if there’s some huge problem with the role of the Minister in appointing the MPC, it’s the same process as appointing the governor, and I’m sure members of the Opposition are not arguing that the Reserve Bank Governor is somehow or other not independent, or beholden to the Minister, when they are quite clearly not.

The other issue being raised is the question of the Treasury observer on the monetary policy committee. To be clear, that observer has no voting or decision-making rights. They are there to be able to contribute to the discussion, to be able to make sure that the different parts of economic policy, the fiscal policy and monetary policy, are communicating with one another. The Bank of England does this. It is, again, a perfectly normal way of ensuring we’ve got better communication and more understanding of those two parts of the way in which our economic policy works. It is a guarantee that there will be the governor, who will be the chair of the monetary policy committee, the deputy governor, and two members of the Reserve Bank staff on the monetary policy committee—that is a guarantee that is written into Part 1 of this bill—and three external appointments. So the majority decision-making remains, but we get diversity of voice at the table.

Again, when we go to places like Australia and visit the Reserve Bank of Australia, they make the point that the diversity of voices at the table makes for better decisions. It connects the Reserve Bank better to the real economy, and I think in time we will see that, with the protection of the fact that the majority of members of the committee are those inside the board.

So I think I’ve answered the questions that have been raised. It’s quite clear that the scaremongering here around independence has absolutely no basis whatsoever, and if that argument has been advanced, then perhaps the Opposition should be proposing wide-ranging amendments to the Reserve Bank Act to change the way the Governor’s appointed, if they think that this somehow or other limits the independence.

These are amendments that modernise the operation of our monetary policy. Something done in 1989 isn’t necessarily, completely and fully, still the best thing we can do in 2018. We do have to make sure we modernise monetary policy while maintaining the important independence that has been put through under the Reserve Bank Act. This piece of legislation maintains that balance.

IAN McKELVIE (National—Rangitīkei): Thank you, Mr Chair. It gives me pleasure to take a short call on the Reserve Bank of New Zealand (Monetary Policy) Amendment Bill, and I want to comment on one or two things before getting into a bit of detail on one or two pieces of the bill. You know, if you think about life in my electorate, for some time now, or some years ago—for three or four years, in fact—every farmer in New Zealand was calling for changes to the Reserve Bank of New Zealand Act and the way it operated. I can assure you, none of them have been calling for that in the last three years, because the world’s changed. But the point I’m making is that we go through cycles in life and we always seem to come back to the same spot. The Minister of Finance just said a minute ago that this Act’s been in place since 1989 and the world’s not the same, but, fortunately for us, the people running the Reserve Bank are not the same either. So I think that’s an interesting point. They, of course, bring themselves up to date pretty quickly.

We’re opposing this bill not because we don’t think change is appropriate but because I think we’re probably a little uncertain as to whether the changes proposed will, in fact, have a positive impact or not. As I said earlier tonight on a previous bill, the problem with changes like this is you don’t really know the impact they’re going to have, and I guess that’s the excitement of life, but when you’ve got something that appears to be working pretty well, I think that, perhaps, changing those things isn’t always a sensible thing to do. So whether it makes sense for us to alter the conditions under which the Reserve Bank acts or not will remain to be seen.

I guess that the point the Minister just made as well was that, in fact, the people who are making the decisions in the form of a committee are very much the same people who will have been feeding into the information that arrived at those decisions anyway. So there wouldn’t be a great deal of change there; it’s just formalising a committee and, of course, making it accountable to the Minister. I guess one of the fortunate things about that is that if we’re introducing Treasury to this equation, the Government doesn’t have a great track record of believing what Treasury tells them anyway, so we’re probably half safe there. So perhaps the information that’s fed into that committee won’t necessarily make a great deal of difference.

Now, there’s one other thing that I think is interesting—and I’m not saying it would happen, but if you think about the last year or so, the security of the Reserve Bank decision-making process is very important. I just hope that by extending the number of people involved in this—and it’s certainly no aspersion on the people involved, but, none the less, it’s a very important issue. I wouldn’t mind the Minister answering a question or perhaps having a comment on that, because the security of the Reserve Bank decision-making process is absolutely vital for New Zealand and for the future of that decision-making process to have integrity. I just hope that by extending the mandate and extending the number of people involved in this, that has an impact, and that it, in fact, will retain its integrity as it moves forward.

Now, I don’t know whether including employment in the Reserve Bank decision-making will, in fact, have an impact or not. We don’t know the impact it will have on the eventual decision. We don’t know whether the impact of introducing any other measure around foreign exchange rates or whatever may have an impact on where the Reserve Bank gets to in the future. What we do know is that aside from the fact I mentioned earlier in my contribution tonight, about the fact that there are sectors of our economy over the years that have wanted change to the Reserve Bank Act, it’s come back to where it was originally and they no longer require those changes. Whether those changes are positive or not for the future, we don’t really know that.

So that’s my brief contribution, and I think the thing that I’ve introduced, probably, that no one else to date has, is whether in fact having a large group of people involved in the decision-making process, as opposed to where we’re at at the moment, will impinge on the security of that decision-making process, and whether that integrity’s going to be retained. Thank you, Mr Chair.

The question was put that the amendments set out on Supplementary Order Paper 176 in the name of the Hon Grant Robertson to Part 1 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 55; Ross.

Amendments agreed to.

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

Ayes 63

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

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Part 1 as amended agreed to.

Part 2 Repeals and schedules

ALASTAIR SCOTT (National—Wairarapa): Thank you, Mr Chair. I’m also pleased to stand. I still have a couple of questions, believe it or not—believe it or not. I’m pleased to be standing here this afternoon, and I have a couple of questions for the Minister in the chair, Grant Robertson, which I don’t think he’s quite asked. He may say that it’s the responsibility of the Reserve Bank of New Zealand (RBNZ) to do this and that, but my question is: given the limited number of tools available to the RBNZ, other than interest rate—other than changing interest rates. We know that the RBNZ have used loan-to-value ratios (LVRs), for example, to create some price stability, if you like. There was also a discussion around the RBNZ using an income test to restrict people from taking up bank loans, and, again, that was aimed at price stability—not targeting inflation, but really around the mandate of price stability. That seemed to work, and that has worked, and the LVRs have been reduced or eliminated.

So those extra tools—or that one particular extra tool was useful and, as I say, we were discussing the use of another tool for the purpose of price stability, which we didn’t get round to using, and I haven’t heard the Minister raise that possibility in recent times. So I assume he would agree with me that that particular tool wasn’t especially useful, but nevertheless, we shouldn’t assume.

My question is: given the limited number of tools that the RBNZ has, what levers does the RBNZ use to focus on full employment or full, high, sustainable employment, whatever that means? I accept that these things can change depending on the parameters that the economy finds itself in—you know, the Minister mentioned the global financial crisis, for example. So, accepting that the employment level may rise and fall, I’m interested in knowing what tools or even additional tools the Minister expects the RBNZ to use to focus on that one parameter of full employment, given that we’ve talked about two other tools that were available—one’s available; one was possibly available—to the RBNZ for the purpose of price stability. All those things are separate from the ability of the RBNZ to influence the overnight cash rate, which of course affects a whole lot of other things. A whole lot of other things flow from the official cash rate being set, whether it’s the forward curve, the futures curve, the futures interest rate curve, or foreign exchange levels expected in the economy.

So a brief question: how is and what tools does the RBNZ have to use to focus on the one particular parameter that he now says has always been considered but has to be legislated because that is some definition of the “real” economy. I would challenge that assumption. The real economy does not necessarily have to be prioritised around employment. There’s GDP per capita we’ve discussed a lot before: GDP nominal, GDP in itself—those things are the real economy, as well as full employment. So how is the RBNZ supposed to manage this parameter and what levers does the RBNZ have to focus on the full employment target?

Hon GRANT ROBERTSON (Minister of Finance): I’ll put the member who’s just resumed his seat, Alastair Scott, out of his misery on Part 2 of this bill. He did a reasonable job of trying to find a way to relate what he said to Part 2. It actually didn’t, but that’s OK; I’ll help him. One of the things that’s in Part 2 is the process around the issuing of the remit for the monetary policy committee, and the remit for the monetary policy committee is the replacement for the policy targets agreement, which is the place in which the Reserve Bank and the Minister of Finance will agree on exactly how that will play out in practice. So I’ve connected it up for you. It’s no different, actually, than the previous thing.

What we could do is talk about what’s actually in Part 2 of the bill, and it is a reasonably brief part. What it does is some repeals—and I just want to come back to those in a moment—and then, as I say, in schedules 2 and 3 is the process for the establishment of the remit. This is the replacement of the policy targets agreement. This is the way in which we’ll agree on how the monetary policy objectives are actually put into practice and also the creation of the charter. The charter is a very important part of this process. It’s the agreement around how the monetary policy committee will work, and it was a question asked towards the end of the last part around how the monetary policy committee—I think the word Mr McKelvie used was “security”, but how we will be confident in the accountability arrangements.

That’s exactly what the charter does. The charter will establish that. It will be around some issues around the expectations of members and how they’ll behave. Some of the things we’ve discussed in public about this will be, for example, that minutes of meetings will be published, as they are in other jurisdictions. We’ve made clear we won’t necessarily attribute who said what in those minutes, but we will have the level of accountability that’s available for people. It also, in schedule 2, looks at how the observer from Treasury will be appointed, which I covered in my last contribution, and also some details around transitional provisions for office holders.

I do just want to point out one policy change that is contained in Part 2, and this is the section in the Act which disqualifies a governor or deputy governor if they are 70 years of age or over. This is outdated, and I want to acknowledge the Minister for Seniors in this particular moment. It’s not a good way of—

Hon Damien O’Connor: What did the Tories do?

Hon GRANT ROBERTSON: Mr O’Connor, it’s not a good way of deciding if somebody is capable to judge them by their age. [Interruption] That’s right. Isn’t it, Mr O’Connor? That is not a good way to do it, and so that policy change is covered by Part 2 of the bill.

A number of other redundant provisions have been repealed which confer powers on the bank to do certain things like opening branches, which they don’t do. However, expressly providing for these powers is unnecessary because the bank is, in fact, a body corporate with all the rights and powers and privilege of a natural person to carry on the business of banking, and the transitional provisions that actually date back to the 1989 Act have been repealed.

Rt Hon DAVID CARTER (National): I hadn’t realised until that contribution from the Minister of Finance that we had a particular clause in here about making sure that somebody capable and interested in these things can continue with the work after he or she reaches 70 years of age. I now just wonder whether this is the reason why this legislation’s before the House. The Rt Hon Winston Peters has argued for many years on changes to the Reserve Bank of New Zealand Act every election campaign, and I suspect this time he’s argued for it again, so of course that’s why it’s before the House. The de facto Prime Minister’s got his wish, and we’re now amending the Reserve Bank of New Zealand Act, and maybe it’s because he needs a job at the end of 2020—he needs a job. Maybe that’s the reason for the legislation. So I just want the Minister in the chair to rise to his feet shortly and assure us that that’s not the reason for the particular amendment that he’s just alerted the committee to.

My second question relates to clause 23 of replaced schedule 2 set out in schedule 3, “Treasury observer”. I want the Minister to answer a question here, because we raised this issue at the Finance and Expenditure Committee with some concern, but as Opposition members we’re in a minority at that select committee and the chairman does a very good job as a lackey of the Labour Government, so our amendments go absolutely nowhere and the bill gets returned, effectively, unchanged despite very valuable, constructive comments from Opposition members. At clause 23, we, as Opposition members, were worried about the wording, “(1) The Secretary to the Treasury must ensure that the Secretary, a Deputy Secretary to the Treasury, or any other Treasury officer or employee is nominated to be a Treasury observer.” We felt this, after Treasury’s argued for so long to have the opportunity to be more involved in the Reserve Bank decisions—we argued that to put the words “any … employee” was actually downgrading this position.

We suggest it should be the secretary, or it should be a deputy secretary, and we argued therefore for the words “any … employee” to come out, because I don’t want a new, fresh-faced graduate from Victoria University coming in with a minor economics degree and then suddenly finding, because he’s a favourite of the secretary or the deputy secretary, that he or she’s in this position. So I want the Minister to assure us that after Treasury having argued so long—29 years, in fact—to get more influence over the Reserve Bank, the appointment of the Treasury observer will indeed be somebody senior. I want an assurance from the Minister of that, and I think we should actually be moving an amendment and making sure that the words do change, so it should either be the secretary or one of the deputy secretaries. This is an important position. Treasury has argued for it for years, and it should not be some junior, fresh graduate who gets into this position of being the Treasury observer. So I’d really appreciate an answer to that.

While I’m on my feet, I do point out I did ask another question earlier of the Minister, which he didn’t answer, and it’s probably because he can’t answer it. I want to know what maximum sustainable employment is.

Hon Grant Robertson: I did answer it.

Rt Hon DAVID CARTER: Well, he said he did answer it, but I don’t think anybody on this side understood it, and I’d be very grateful if—

Hon Tracey Martin: It’s not our fault.

Rt Hon DAVID CARTER: “Well, it’s not our fault.”—the shrill from the Hon Tracey Martin comes across. If it’s explained in plain English so that we could understand it—and I do bear in mind we’re in good company here, because Adrian Orr, the current Governor of the Reserve Bank, couldn’t understand what maximum sustainable employment is either. So if Grant Robertson could elucidate that, we’d be very grateful, even though I do acknowledge it’s Part 1 and not Part 2.

Hon GRANT ROBERTSON (Minister of Finance): I won’t dwell on that. It’s in the publicly available material that’s been released, so I won’t breach the rules of the House; I’ll just point the Rt Hon David Carter to the Cabinet paper that establishes it. It’s available; all of those papers have been released, and you’ll be able there to delve deeply. I’m more than happy to perhaps, you know, go out, have a cup of coffee, and dig our way through that issue for the member.

He did, however, raise two points that are relevant to Part 2 of the bill. The first of those is around the age, and he was seeking my assurance that the Rt Hon Winston Peters is not looking—or that’s not the reason that this is here. I can confirm that is not the reason that this provision is here. I do know that there are some members of this House who are looking to retire in the near future and, quite clearly, given the contribution of the Rt Hon David Carter tonight, this is a topic of great interest to him. All I can say is that if I have to weigh him and the Hon Chris Finlayson up together for this position, you know, we’ll have a fair contest between the two of them, and his membership of the Finance and Expenditure Committee could easily weigh in his favour.

In terms of the Treasury observer role, I think it’s pretty clear, and, certainly—I’m sure the Reserve Bank Governor has mentioned this to the select committee—they’ve already trialled having the secretary of the Treasury present at the monetary policy process, and it would certainly be my expectation as Minister that it will be a very senior person from Treasury who is there. But, like all legislation, it’s always good to have a certain amount of flexibility in the law.

MICHAEL WOOD (Labour—Mt Roskill): I just rise to take a brief call. I was planning on taking a call in Part 1, but the speeches on the other side of the House just sort of dropped off very suddenly. I thought they’d go on for a little bit longer. So I missed my opportunity there, but I would like to make a contribution to this part.

The first thing I’d like to say is that we had a good select committee process around this bill. The ideas were vigorously discussed by members of the Finance and Expenditure Committee on all sides. We were well serviced by officials, and I acknowledge and thank them for their support for the committee. We had a wide range of submissions from people in the community, some people who thought the bill should actually go further in its reforms, a few people who thought it should pull back a bit, but, actually, the vast majority were in favour of the key thrust of the reforms, including the establishment of the monetary policy committee.

In respect of Part 2, I just wanted to draw the House’s attention to one of the changes that is in schedule 3, Part 1 of replaced schedule 2, which is one of the quite important changes that was made at select committee, and that is to open up the charter to public consultation. One of the things that I don’t think has been commented on too much in this debate is that, actually, one of the underlying objectives of this bill—and I think one of the really positive things—is that it does somewhat open up the slightly closeted citadel that is the Reserve Bank to greater public input and scrutiny.

So we have a process of public consultation around the remit, and that is what will, effectively, replace the current policy targets agreement. So there’ll actually have to be public consultation about what should be set out in that remit, and we will also have public consultation on the charter—this is the change in schedule 3, Part 1, clause 3. The charter is going to be quite an important part of the whole set of arrangements, because the charter will provide rules and guidance for how the monetary policy is going to conduct itself. This will be things like the publishing of minutes and the degree of detail which might be provided in respect of how the committee makes its decisions, and this will be really important information that will help the public to better see how the monetary policy committee actually works. Given some of the speeches we heard on the other side of the House earlier on about what an important institution the Reserve Bank is in the economic life of New Zealand, isn’t it right that we actually give it some greater oversight?

The other aspect that I wanted to point out, too, in this part—in clause 5 of replacement schedule 2, set out in schedule 3 of the bill—is that a copy of the remit will actually be presented to the House of Representatives for debate and discussion as well. So, once again, what we see coming through in Part 2 of this bill are changes which will actually open up and democratise the workings of the Reserve Bank. I think members would be wise to remember that over the 29 years of the Reserve Bank of New Zealand Act’s existence, while it’s enjoyed pretty broad support in Parliament, and most of the institutional structures actually do remain intact through this bill, and pretty wide support in the community, there have been concerns about, sometimes, a lack of oversight, a lack of scrutiny, a lack of accountability. So once again we have a couple of key measures in this part which do actually open up the bank to that scrutiny and to that democratic accountability. I think that’s a good thing. Thank you very much.

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

Ayes 63

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

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Part 2 agreed to.

Schedule 1 agreed to.

Schedule 2 agreed to.

The question was put that the amendments set out on Supplementary Order Paper 176 in the name of the Hon Grant Robertson to schedule 3 be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 55; Ross.

Amendments agreed to.

Schedule 3 as amended agreed to.

Clause 1 agreed to.

The question was put that the amendments set out on Supplementary Order Paper 176 in the name of the Hon Grant Robertson to clause 2 be agreed to.

Amendments agreed to.

Clause 2 as amended agreed to.

Clause 3 agreed to.

Bill to be reported with amendment presently.

Bills

Conservation (Infringement System) Bill

In Committee

Hon EUGENIE SAGE (Minister of Conservation): I seek leave for all provisions to be taken as one question for the purposes of debate, with the questions to be taken separately at the end of the debate.

CHAIRPERSON (Poto Williams): Leave is sought for that purpose. Is there any objection? There is none.

Parts 1 to 9, and clauses 1 and 2

SARAH DOWIE (National—Invercargill): Thank you, Madam Chair. It’s a pleasure to take a call in the committee stage of the Conservation (Infringement System) Bill. I’m not going to labour the points too much in this debate; I’m simply going to go over our objection to the departure of this bill, especially in Part 1, from the original intent of the bill, which was introduced under National and under the Hon Maggie Barry.

First of all, I would say that, as outlined in Part 1, we do support that the Department of Conservation should be given the tools, basically, to be an enforcer to make sure that people are held to account if they commit offences on the conservation estate; however, what we don’t support is the extension of the powers of infringement to Fish & Game as a non-governmental agency.

Now, that is detailed in Part 1. As such, I refer to an amendment that is under my name, which I have placed before this House, that seeks to delete all references to giving Fish & Game rangers the powers of issuing infringements, especially in Part 1. It also refers to those deletions in Part 8, but mainly relates to Part 1 of this bill. That’s because we believe that the infringement system should be fair and objective across all of New Zealand, and given that there are 12 local Fish & Game offices that loosely report to a national body, we are not confident that the system can be maintained in that fair and objective manner. So my amendment looks, basically, to delete all references to Fish & Game and to bring the bill back to its original intent, which was first brought to the House by the Hon Maggie Barry and devised by the previous Government.

Look, the bill—all of the parts—looks to extend an infringement system across the board, over a number of different Acts in which the Department of Conservation has powers and regulates. At the moment, the Department of Conservation has two options: obviously, to give warnings to people who allegedly commit an offence, or to continue to prosecute if they have sufficient evidence. Obviously, giving warnings if it’s a non-serious alleged offence is acceptable, but often when there is a serious offence that occurs on the conservation estate or near threatened or endangered species, then a prosecution is warranted—but, again, you need sufficient evidence. That takes time, and it’s quite costly. Often what rangers will find is that they do need a midway point, and this infringement system will certainly give that to rangers to apply to offences that would not have significant policy ramifications but are, of course, that midway point between warning and prosecution. It means that those issues can be dealt with swiftly. It doesn’t necessarily go on people’s records as a criminal offence; it’s a summary offence and can be dealt with with a fine—a reasonable fine—that will often deter people from offending again when they are recreating or going about their business on the conservation estate.

While this was a National Party bill and we do support the Department of Conservation as an enforcement Government agency, because this is a departure from the original, to give Fish & Game rangers the powers of issuing infringement notices, we simply cannot support this. It will take the system away from an objective nature.

CHAIRPERSON (Poto Williams): Just before I give the call, I just have to apologise to members. The question I should have put was: the question is that Parts 1 to 9 and clauses 1 and 2 stand part.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Chair. That’s a good decision, and I appreciate you giving me the opportunity to take the call.

Look, I want to, in this committee of the whole House debate, speak in support of the amendment that my colleague and friend Sarah Dowie has on the Table. This would, as she’s already indicated, essentially return this bill back to a format that the National Party could support in this House. When the original bill was first introduced by the Hon Maggie Barry in the last Parliament, there was no extension of this infringement regime beyond those members of the Department of Conservation (DOC)—those rangers who are members of the State services regime in terms of State employees—and there was no thought that that should be extended beyond to a group of independent non-State sector employees: namely, the good folk at Fish & Game.

So this amendment is not in any way a criticism or an objection to the good work that Fish & Game people do, but it’s simply based on the, I think, very sound and fundamental principle of our legislative framework that, actually, it should be duly warranted and educated, trained, and properly professional people who fall within the auspices of the State Sector Act and the strict controls that are imposed upon them—those are the sorts of people that should be operating an infringement regime of the sort intended by this bill. That was certainly the intent of the bill when the Hon Maggie Barry introduced it in the last Parliament. Subsequently, an election took place and the new Government now sits on the Treasury benches, and they’ve decided to extend this bill to include Fish & Game rangers.

So I think that this is a fundamental change. It’s the sole sticking point that prevents the party on this side of the Chamber supporting what otherwise is, in every other respect, I think a very sound and good bill. It’s very obvious that there are offences that occur in our natural environment that require swift and urgent action, and DOC rangers should be able to initiate remedial action when an event or an infringement crime or offence is being committed—and the bill basically sets that out—but to extend it to Fish & Game rangers, we think on this side of the Chamber, is one step too far.

I do want to just also, in this contribution, make a brief reference to Part 3 of the bill, and this is where amendments to the Marine Reserves Act of 1971 are made. In terms of the amendments to the Marine Reserves Act, there will be an extension for DOC officers, and presumably now also Fish & Game officers or rangers, to be involved in setting about and commencing infringement offence notices for matters that occur in our marine reserves area. Now, that’s actually a very extensive piece of marine footprint in our natural habitat, and there are some questions that I think the Minister Eugenie Sage may be able to address by way of response to this.

Firstly, I’m keen to know what training and what background and support rangers will have in terms of applying the infringement notice regime to those people who speak foreign languages. There are some quite significant numbers of people who are recreating and using the marine reserve spaces that we have available to us, and many of them don’t speak English. I’m keen to know what resources DOC are putting into that aspect of it.

The powers that the infringement offence regime under this bill extends are actually very powerful. So in new section 18GA(2), inserted by clause 20, there is reference to the infringement offences being sufficiently powerful that they could include the confiscation and forfeiture of “any vessel or vehicle or other conveyance,”. If that was to occur, then those conveyances, vehicles, or vessels would be forfeited to the Crown. That strikes me as being, in some cases, a pretty weighty penalty for an infringement regime, so if the Minister could address that, I’d appreciate it.

Dr DEBORAH RUSSELL (Labour—New Lynn): Thank you, Madam Chair. I just want to address—I guess it’s because of the Supplementary Order Paper proposed by Ms Sarah Dowie—some of the issues around the Fish & Game rangers. I would like the Minister Eugenie Sage to elaborate a little on the clauses in the bill which actually give the New Zealand Fish & Game Council, I guess, the powers to act. They’re asked, first of all, to develop a policy. So they have to first of all develop a policy, and then the Minister has to approve the policy, and, if the Minister doesn’t approve it, then no one is warranted on behalf of the Fish & Game Council.

So just a short call to say I would appreciate the Minister explaining how the Minister thinks that will operate in practice. Because there have been some interesting questions raised about the issue, I do want to understand the protections that are in there given that we do think that Fish & Game Council can do a good job here. But just exactly what are the protections in there? So if you could address that, that would be very helpful—if the Minister could. Thank you.

Hon EUGENIE SAGE (Minister of Conservation): Thank you, Madam Chair. I am pleased that there is support from National members for parts of the bill, saying that it is a good bill apart from the Fish & Game issues. It was, of course, the Government which made sure that the bill had its first reading.

I think there are some misconceptions in some of the calls from Opposition members. First of all is Ms Dowie with her amendment and the desire to have consistency. Well, of course, it is the bill with the additional provisions inserted by the majority of the select committee which will ensure consistency, because it means there is a consistent regime across the whole of New Zealand in relation to the management of sports fish. Of course, in the Lake Taupō area, sports fish, the trout fishery, is administered by the Department of Conservation because of an agreement with Ngāti Tūwharetoa. Elsewhere, New Zealand sports fish and gamebird hunting are administered by Fish & Game because that is their statutory responsibility. So this bill will actually ensure a consistent regime across New Zealand in terms of infringement offences in the sports fish and gamebird area.

A misconception by Mr Simpson in relation to marine reserves—Fish & Game has powers in relation to gamebird hunting and trout and salmon. It has no powers in relation to the management of marine reserves, so it won’t be called upon to issue infringement notices in relation to any offences under the Marine Reserves Act.

The other issues that Mr Simpson raised in terms of training and support for rangers who may not speak English—that already happens, if the department comes across people who are offending against legislation. There is increasing diversity amongst Department of Conservation staff and rangers. But I would also make the really important point that these infringement notices won’t be issued in the field. The information will be passed to a specialised team within the Department of Conservation, probably of about three people, and they will make the decision about whether an infringement notice is issued, whether proceedings are commenced in terms of a prosecution, or whether there is a recommendation that there be just a warning given. So it’s that specialised team that has the expertise there.

Then going to the questions that Dr Russell raised in relation to Fish & Game, there are a number of safeguards in the legislation around the provisions that are provided in clause 4A, which inserts the provisions around the national Fish & Game compliance and law enforcement policy. As Dr Russell noted, there will be no Fish & Game rangers or honorary rangers who get this power to issue infringement notices unless a national compliance and enforcement policy has been developed by Fish & Game and approved by the Minister of Conservation. There’s a requirement that Fish & Game report annually to the Minister of Conservation, so there’s that safeguard that there’ll be annual reporting on how those enforcement infringement notice powers are exercised. There are also quite detailed provisions in new section 70V, inserted by clause 64 of the bill, which only allow the director of the New Zealand Fish & Game Council to authorise Fish & Game rangers in writing to issue infringement notices under the Act, and the director of Fish & Game cannot delegate that power. So there are a lot of safeguards in the bill in relation to Fish & Game.

As Dr Duncan Webb noted in the second reading, there are a number of organisations, like the plumbers and gasfitters board, which can issue fines to people. So if the National Party is saying that it supports the work of Fish & Game, then it should take that next step and support the power of Fish & Game to stand up and issue infringement notices to those who offend against the provisions in the Conservation Act. So the councils already have quite significant enforcement powers under both the Conservation Act and the Wildlife Act. It seems that the National Party is expressing no confidence in Fish & Game by its criticisms of the ability of the 12 regional Fish & Game councils to have this power to issue infringement notices.

SARAH DOWIE (National—Invercargill): Thank you, Madam Chair. I rise to take a second call on this Conservation (Infringement System) Bill. I’m pleased that the Minister got to take a call to give us some answers on this bill. I’m not sure what the whips are doing over on that side of the Chamber, but Deborah Russell should have given the Minister the call and yielded to her in the first instance.

Hon Ruth Dyson: I think it’s the presiding officer’s call, not yours.

SARAH DOWIE: Well, yes, but you’ve got to show a little bit of respect for a Minister, in my opinion.

CHAIRPERSON (Poto Williams): Order! Order!

Hon Ruth Dyson: Lectures on morals. Yeah. Don’t get her started.

CHAIRPERSON (Poto Williams): Order! Let’s carry on with the bill.

SARAH DOWIE: Thanks, Miss Dyson. Thank you.

CHAIRPERSON (Poto Williams): Order! Order to the House. Let’s carry on, thank you.

SARAH DOWIE: Thank you to the Minister for making that call and giving us some answers with regards to her views as to how the infringement system will work. It still doesn’t allay our concerns with regards to making sure that this infringement system is consistent and is fair across the board. As Mr Scott Simpson alluded to, Fish & Game rangers are not State sector employees. They’re not subject to the same codes of conduct as Department of Conservation (DOC) rangers.

Notwithstanding that Fish & Game does some very good work, again, as my colleague Mr Scott Simpson said, it’s not about Fish & Game per se; it’s about a non-governmental organisation having the powers to issue infringement notices.

I was interested to note the Minister said that these infringement notices won’t be issued in the field. Details will be taken, and that information will be brought back to the office, and then decisions will be made. But, regardless, decisions will be made with Fish & Game at their end and the department at their end. That doesn’t necessarily convert to consistency between the two. So I would put it to the Minister, with respect to her development of the policy, that it will need to be tested, moving forward, and that objective parameters will need to be put around the administration of this infringement system and measured as time goes forward should this bill complete its progression throughout the House. So that is our concern: that there will be people out recreating, spending their time on the conservation estate, going about their business, perhaps in the North Island, and the same in the South Island, and that there may not be consistency in regulating with respect to offences within New Zealand. So we want to make sure that any infringement system that is given to the Department of Conservation is fair and reasonable.

We do support the Department of Conservation with respect to enforcement, but it must be completed and administered in a very measured way. That is our concern with regards to extending that power to Fish & Game, and hence my Supplementary Order Paper to take that away, in this instance to delete references to extending that power, to make sure that this infringement system is first of all given to the Department of Conservation, that it is put in place, that the administration of it is completed with due diligence, and that it is administered fairly and objectively.

As I mentioned before, in my first call, this bill cuts across a number of different legislation that relate to Department of Conservation functions. Quite frankly, the logistics of the work that the Department of Conservation - run rangers undertake does lend itself to an infringement system. That’s why we introduced it in the first instance under the previous Government. That’s why it was introduced by the Hon Maggie Barry. Again, bringing it back to our concerns, this system must be fair, it must be reasonable, and it must be measured and consistent throughout all of New Zealand.

ERICA STANFORD (National—East Coast Bays): Thank you, Madam Chair. I’m pleased to take a short call on the Conservation (Infringement System) Bill at committee stage. I’m going to be talking to the tabled amendment that Sarah Dowie has put on the Table as well. I want to thank the Minister Eugenie Sage for taking a call to explain her position. I guess the crux of all of this comes down to fairness and consistency, and you’ve heard those words a number of times.

The National Party’s position around the Department of Conservation (DOC) having the power to issue infringement notices is that we’re quite happy with them doing that. In fact, as you heard, Maggie Barry instigated all of this in the first instance because DOC are one of the only major compliance agencies without an infringement system, and we believe that they have the ability to issue notices in a fair manner, objectively, and with consistency over the country. They are State sector employees, they are under one umbrella, they have training, and they are able to control their officers and monitor them so that they are issuing notices in a fair and consistent manner.

The problem that we’ve always had right from the beginning is with Fish & Game, a completely different organisation, having the same ability to issue an infringement notice. The issue that we’ve always had is with fairness. We are concerned with the confidence that the public have when they are out on the estate, when they’re going about their recreational activities—the confidence that they have in DOC and in Fish & Game being fair and consistent across the infringement system. We don’t believe that with two separate organisations issuing infringement notices, you will get that.

The Minister explaining to us today about the safeguards in the bill and having the national policy statement is not enough, we don’t believe. We still think that the Fish & Game rangers are not State sector employees. They don’t have the same training. They don’t have the same level of consistency across the country, and we are worried about the fact that the public will lose confidence. So you may have some instances where DOC are applying the rules consistently about people who are camping in the wrong place, and Fish & Game officers, you know, might take that a completely different way. So we’re worried about the public and how they feel about the infringement notices being issued in a fair and consistent way.

I know that Minister Sage said that there would be a review after a year, but I can imagine that there are going to be many complaints during the first year that this is implemented—for example, where we get people who are on one hand being issued an infringement notice and another being issued a warning—where we can see inconsistencies across the country and how that’s going to be dealt with.

This amendment brings us back to a position that we can all agree on. We are quite happy with DOC in their ability to have an infringement system and to issue those notices fairly and consistently. They have long advocated for this, and the Hon Maggie Barry instigated all of this. We’re quite happy with them. The issue that we’ve got is with Fish & Game, and this amendment will bring us back to a position where we can agree on the legislation.

This addition of Fish & Game is the main sticking point. It was in the select committee. We don’t believe that the safeguards in the bill are good enough. We do think that there is going to be an erosion of public confidence in the system. I think that there are going to be lots of complaints, and I’d like to know how the Minister is planning on handling that. The amendment that’s on the Table will remove all of the references to Fish & Game, taking it back to what we had in the first instance, which is a bill that we can all agree on. If the Minister could get up and let us know how she’s going to handle the complaints and the potential before that end-of-year review, that would be much appreciated.

Hon EUGENIE SAGE (Minister of Conservation): Thank you, Madam Chair. I think there are still some misconceptions around the Opposition and their views on this bill. Ms Stanford talked about concerns about camping in the wrong place. Fish & Game does not have the power to issue infringement notices in relation to things like camping or any of the other matters in relation to the Marine Mammals Protection Act or the Reserves Act. It’s only in relation to the management of the sports fish and game-bird hunting.

In the Taupō fishery, for example, which the Department of Conservation manages, I asked the department for some information on the types of issues that were arising there. There were things like fishing in the closed season, and fishing without a licence. So it’s those sorts of offences that it would greatly assist Fish & Game councils around the rest of New Zealand to be able to issue an infringement notice for. They’re not the sorts of offences that you would take all the trouble to go and do a court prosecution for, but they’re probably more serious than just simply issuing a warning. So what the bill does by bringing Fish & Game councils within its ambit, just in relation to sports fishing and game-bird hunting and their ability to use infringement notices, is create consistency.

Ms Stanford raised the issue of complaints. It’s the annual report to the Minister of Conservation—in the bill, it requires that any complaints be listed in the annual report. So, obviously, if the Minister sees a number of complaints coming through, which Fish & Game must put in the report, then there would be questions asked about the compliance and enforcement policy and about the way the infringement notice system was operating. So that is a fairly significant safeguard.

The other safeguard, of course, is that any of the revenue from infringement notices issued by Fish & Game goes to the Crown. So there’s absolutely no incentive for Fish & Game officers to use infringement notices just as a revenue generation tool. So I think there are sufficient safeguards, which the majority of the select committee, chaired by Dr Deborah Russell, put in the bill to ensure that they will be used effectively and that the system will be a fair one. It is being fair to those people who mightn’t take their licence with them, or who might fish outside the season. It’s more appropriate that there’s the option of having an infringement notice issued rather than just simply being warned or a prosecution being taken. So I think that it will lead to a fairer system.

I’m intrigued by the comments of the National members in terms of their very positive comments about State servants and the State sector and wish that that applied in relation to other legislation before this House. I’m really pleased that they have that confidence in the department but should remind them that Fish & Game councils have significant statutory powers in terms of enforcement. They are a statutory organisation, and I’m confident that they have got the skills and ability and that there are the checks in this legislation to ensure that these provisions around infringement notices are properly applied and that those notices are properly issued.

I should also note that there’s a Supplementary Order Paper (SOP) 183, in my name, and this just ensures that a lapse in the bill, which didn’t refer to regulations under the Marine Mammals Protection Act, is corrected because there are regulations under the Marine Mammals Protection Act which deal with things like harassment of marine mammals, and we wanted to ensure that the infringement notices could be used in those circumstances where someone was harassing a marine mammal, getting too close to a marine mammal. So this SOP 183 simply ensures that it can apply to those offences which are implemented by regulations.

The question was put that the following amendments in the name of Sarah Dowie to Part 1 be agreed to:

delete clauses 4A to 4D;

in clause 5, new section 40A(1), delete “or a fish and game ranger”;

in clause 5, new section 40A(2), delete “or a fish and game ranger”;

in clause 9, new section 51L(2)(a), delete “or a fish and game ranger”;

in clause 9, new section 51(2)(b), replace “, the Director, or the appropriate Fish and Game Council” with “or the Director”;

in clause 9, new section 51W, delete subsections (2) to (6); and

in clause 9, new section 51X(1), delete “or fish and game ranger”.

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

Ayes 56

New Zealand National 55; Ross.

Noes 63

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

Amendments not agreed to.

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

Ayes 63

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

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Part 1 agreed to.

The question was put that the amendment set out on Supplementary Order Paper 183 in the name of the Hon Eugenie Sage to clause 14 be agreed to.

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

Ayes 63

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

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Amendment agreed to.

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

Ayes 63

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

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Part 2 as amended agreed to.

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

Ayes 63

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

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Part 3 agreed to.

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

Ayes 63

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

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Part 4 agreed to.

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

Ayes 63

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

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Part 5 agreed to.

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

Ayes 63

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

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Part 6 agreed to.

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

Ayes 63

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

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Part 7 agreed to.

The question was put that the following amendments in the name of Sarah Dowie to Part 8 be agreed to:

in clause 61A, delete subclause (1);

in clause 64, new section 70I, replace subsection (1) with

(1) This section applies to a person to whom the Director-General gives an authority under section 53.

in clause 64, new section 70V, delete subsections (2) to (6).

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

Ayes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Noes 63

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

Amendments not agreed to.

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

Ayes 63

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

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Part 8 agreed to.

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

Ayes 63

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

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Part 9 agreed to.

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

Ayes 63

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

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Clause 1 agreed to.

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

Ayes 63

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

Noes 57

New Zealand National 55; ACT New Zealand 1; Ross.

Clause 2 agreed to.

Bill to be reported with amendment presently.

Bills

Earthquake Commission Amendment Bill

In Committee

Part 1 Amendments commencing on day after assent date

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. I’ll start out by saying that the National Party will actually be supporting this bill—with one very fine Supplementary Order Paper to go with that as well, which will put this bill into shape and make it fit for purpose, which it isn’t at this stage.

First of all, in Part 1 is the collection of information, which is a major part of this bill, which is just to tidy up and make sure that the Earthquake Commission (EQC) is acting within the law and can collect information and share it so that the community gets a greater good out of that. That’s right and proper. The National Party is certainly in full support of that.

But clause 7 was one area that we did have quite a bit of concern about, which is extending the period that a claim can be made. It goes into replacement clause 7(2) to schedule 3, where “The notice under subclause (1)(a) must be given to the Commission—(a) not more than 3 months after the damage occurred (or any longer period prescribed by [the] regulations under [the] Act);”. So under (b)—that is, replacement subclause (2)(b)—“subject to subclause (2B), after the period set out in paragraph (a) has expired but not more than 2 years after … damage [had] occurred (or any longer period prescribed by the regulations [in] this Act).”, you can put a claim in. In fact, under regulation-making power, the commission can make it as long as they need to make it, however long that is.

The concern we had, and still have, is that, really, insurance companies have a set period where, if a house is abandoned or a property isn’t being lived in or visited for 60 days, and you haven’t notified your insurance company, some insurance companies put a significant excess in—one’s a $10,000 excess. Others just won’t cover you in the event of an insurance event. So it’s a sort of long-held tenet, if you like, that that would occur. The risk here with EQC is, of course, people might think they’ve got plenty of time to put in an insurance claim. How anyone could go two years without knowing that they had an insurance issue that they needed to deal with—an EQC issue—is beyond me.

But there is of course a caveat in new clause 7(2B) if notice is given after the time limit expiring: “the Commission may decline the claim if [the lapse of time] before the notice was given materially prejudices the Commission’s ability to assess the claim.” And that is the risk here: that delaying a claim makes it very difficult for the assessors to pin down what earthquake—if you get a complex sequence of events like we had in Christchurch, it’s quite difficult to ascertain which one it is. Is it one event; is it two events; is it three events? And that can have quite a significant difference to the amount of money that could be claimed by a claimant, and it also puts them in such a position that if there is damage over and above that, their insurance company might not cover that either. I can’t see how they would not know they’d had an insurance claim unless they were out of the country or completely incapacitated.

But to put some numbers around it, in the case of the Christchurch event, 99 percent of the earthquake claims were in within a year; in the Kaikōura event it was 99 percent within 3 months, and that was down to—which will be in the next part, so I won’t discuss it in too much detail now—the arrangement between insurance companies and EQC, where a claimant could put in a claim and not go through the very inefficient process of making two claims: a claim going through EQC, once it’s determined to be above the cap, then having to go to the back of the queue with the insurance company, which makes an already stressful situation much more so.

So the time limit is something that we had concerns about. In the end, we decided to support it anyway—we were in a generous mood. It is a bit sloppy. I think it’s got some real fish-hooks in it, and I think it’s incumbent upon EQC to get the message out there that you are putting yourself at great risk if you don’t put your claim in within the prescribed period of three months.

Hon Dr MEGAN WOODS (Minister responsible for the Earthquake Commission): I’ll just take a very quick call here to answer the question that the member has raised there. He asked the question of how people can go two years without knowing they had lodged a claim. Well, I think this very much speaks to the genesis of this bill, and that is to the experience of the Canterbury earthquake sequence. I think anyone that has been doing constituency work in Christchurch over the last seven or eight years has had experience of people for whom a various number of circumstances mean that a claim was not lodged within the three-year period. I know that I’ve certainly had situations where there may have been the death of an elderly person, and it’s only when the family come to clean up the house and empty it out that, indeed, damage has been found.

As the member Stuart Smith identified, 99 percent of claims are filed within the statutory period under the old provision, but what we do know out of the extraordinary circumstances that we’ve been through in Canterbury is that we actually do have to have legislative flexibility around some of those extraordinary circumstances that do surface when there is an event such as we went through there. So this is very much—it’s not sloppiness in drafting, I’d like to assure the member. It is actually born of lived experience of people on the ground doing constituency work and understanding the needs of those that need to use those services.

I’m sure that is a feeling that is acknowledged across the House by members from any party in this House that have been working on the ground with that. So I hope that answers the member’s question about that, but I would like to thank the Opposition for their support for this bill.

ALASTAIR SCOTT (National—Wairarapa): Thank you, Madam Chair. It’s a pleasure to rise in this committee stage on the Earthquake Commission Amendment Bill. It is good to see—and the Minister’s already mentioned it—the cross-party collaboration, if you like. We’re all supporting this bill. It is a bill that had to come about—well, it’s been a number of years since the Christchurch earthquake, and I’d like to put it on record and thank the Earthquake Commission for all the work that they have done in those intervening years. It has not been easy for them, and, of course, it has not been easy over these years for the victims or for those who suffered damage to their houses and buildings and so forth during the earthquake. This bill makes some changes. In hindsight, you might say, “Well, should it have been done earlier?” But it is a very good bill in that we are here today supporting these changes.

A couple of questions I do have for the Minister: the threshold is being moved from $100,000 to $150,000. That hasn’t quite kept up with inflation, and I wonder why—

CHAIRPERSON (Poto Williams): That is—I think that’s in Part 2.

ALASTAIR SCOTT: Oh, Part 2—OK.

CHAIRPERSON (Poto Williams): Yeah, we’re on the Part 1 debate.

ALASTAIR SCOTT: I’ll leave that till Part 2.

CHAIRPERSON (Poto Williams): Thank you.

ALASTAIR SCOTT: The next question I had was on the ability to go over the three-month period. It’s good that it is able to be—

Hon Ruth Dyson: Which part’s that in?

ALASTAIR SCOTT: —flexible—sorry?

Hon Ruth Dyson: Which part’s that in—which clause is that?

ALASTAIR SCOTT: Part 1. Part 1—that’s the time. The three months and the two years. I think the Chair has got the lead on this. So that is a good thing, because it enables people to claim after the old limit of three months. Also, the clarity around what is an event and what is not an event is not clear, as far as I can see, at least, and what happens when an earthquake happens today—claimable at four months—and then there’s another earthquake, another event, after that claim. Is there an ability to consecutively claim a number of claims?

It is good that there’s a lot of other legislation coming forward regarding earthquake management in towns, provinces, safe areas, and corridors. All that stuff is excellent, and that is stuff that we will support on this side of the Chamber.

IAN McKELVIE (National—Rangitīkei): Thank you, Madam Chair. It gives me a great deal of pleasure to take a call on Part 1 of the Earthquake Commission Amendment Bill. Having spent a lifetime, or half a lifetime—a lifetime for some in the House—in the insurance industry, I have a bit of an understanding of how insurance works. Unfortunately, it’s not the best thing always to have an understanding of, but, none the less, it’s interesting. This bill, of course, is a very important bill not only for, I guess, the reasons it’s been brought back to the House, which primarily relate to Christchurch and Kaikōura, but also for the fact that the Earthquake Commission really is a unique entity by world standards. It is hugely important for New Zealand because of the fragile nature of our ecology and the constant events we have.

So this part of the bill obviously enables the collection of information. One of the interesting things about insurance, of course, is establishing information, whether it’s legitimate or not, whether it fits with what’s going on or not, and whether it is actually relevant to the claim that’s being made. So I think that the way in which we gather information, the way we use that information, and the way that’s used for the resolution of claims and things like that is hugely important to it.

So the first part of the bill primarily deals with the regulations that permit the commission to accept notice given for the time limit applying, and that relates to the natural disaster that occurs. I think it would be really interesting for the Minister responsible for the Earthquake Commission to perhaps address the fact as to whether she considers this as a reasonable or appropriate way to deal with things.

So one of the challenges that we have with natural disasters, I suppose, is that they are never predictable, the results of them are never predictable, and the outcomes of those results are not predictable either. So it is very challenging, I think, for the Earthquake Commission, but particularly for the insurance industry in general, to match what the Earthquake Commission needs to deal with, to match the information that the insurance companies have, and where that then gets to with respect to the resolution of those claims.

Of course, the interesting thing that’s come out of the two major events—that the two earthquakes established—is that Christchurch for the Earthquake Commission was very testing, because they never anticipated, I don’t think, and were never set up in a manner that was able to deal with a disaster of that magnitude. They’d clearly dealt with a number of other disasters throughout the history of New Zealand but nothing of the magnitude of Christchurch. So the process that was gone through in the course of that event was, I guess, a learning experience for all and not necessarily dealt with particularly well.

The interesting thing about Kaikōura was when that came along and the insurance companies took a lead in the resolution of those claims, it changed completely the way those claims were answered, and I think that that’s a much better process. When you think about the resource that insurance companies have on the ground, they are automatically equipped to deal with the need for, I guess, very swift resolution to claims and also with the ability to be able to assess that sort of damage. So I think for them to take the lead in this process is eminently sensible and makes a much bigger difference to the experience of those people making a claim. So the provision of information between those two entities is very important, and the use of that, obviously, speeds those claims up, expedites what goes on, and enables it to happen in a much better manner.

So we’re certainly supporting this bill. I think that there were a number of resolutions or decisions made leading up to the formation of this bill, of which the Government have picked up about a half, I think, of the total number of recommendations made, but, none the less, I think the bill will progress through the House. I think it will be positive. I guess we can only hope that there’s no need for the use or for action from the Earthquake Commission in the near future, because the longer we go, of course, between these major events, the better off it is for New Zealand. We certainly don’t want to see too many of them.

JO HAYES (National): Thank you. I stand to take a call on this very important piece of legislation. I digress just a little bit, because I was quite interested to hear at a meeting that I was at on Saturday for the opening of the Anzac fire service that it was the Ballantynes fire that caused restructure throughout how New Zealand dealt with fires. As I stand here, it was the Christchurch earthquake that actually helped to inform this piece of legislation, followed very closely behind with the Kaikōura earthquake. I too work in the East, along with your good self, Madam Chair, and with the issues that some of the constituents there have had over some of the Earthquake Commission (EQC) claims, I think that what the Finance and Expenditure Committee have done—I believe they’ve done a pretty good job at being able to kind of rally everything together into this bill.

I think that even though you heard nine submitters at the hearings around the collection and the disclosure of information in Part 1, there was one area that I was really pleased that the select committee looked into quite clearly because of the wording and through the Office of the Privacy Commissioner also recommending replacing clause 5 in the bill to insert new section 31A. So as I read through the select committee report of this bill, I was heartened to see that the select committee did take up the recommendations from the Privacy Commissioner, because it was closing a gap that would give out wrong signals or be misinterpreted by the claimants, and I think that the work that has been done to close that gap has been very good.

Then, as I move through extending the claim deadlines to two years under clause 7—“would extend the initial period of notice to allow claimants to give notice within 3 months of damage occurring. EQC could also accept claims [for] up to 2 years after damage [had] occurred”. As the Minister in the chair, Megan Woods, said in her contribution, some of the damage from the earthquakes and the aftershocks—people didn’t know until they went to do their house up to put it up for sale. You don’t know these things, and even where I stay in Burwood, there’s always these little things that have shown up, where I stay with Diane. She has said to me that as each earthquake and aftershock happened in 2011, there was a lot more damage underneath the surface of her house that she had no idea had happened. I also had visited a number of constituents where, whilst on top the window was a bit skew-whiff, underneath, the whole base of the house was virtually off its piles. So they felt that they were outside the time. They still have some issues that need to be addressed, and I think that this bill will give some sort of comfort to those that find these faults and need to put forward their claim.

I think EQC, considering the issue that they faced in the 2011 earthquakes and then the Kaikōura earthquakes, did an amazing job. I think that when you have these disasters, the Government agencies are then put to the test. So I think that EQC did very well, and I think this bill is quite timely to actually help them. And it wasn’t just about Christchurch; it’s for the future of the whole of New Zealand. We know that—

CHAIRPERSON (Poto Williams): I apologise for interrupting the member. The time has come for me to leave the Chair.

Debate interrupted.

Sitting suspended from 10 p.m. to 9 a.m. (Wednesday)

TUESDAY, 11 DECEMBER 2018

(continued on Wednesday, 12 December 2018)

Bills

Earthquake Commission Amendment Bill

In Committee

Debate resumed.

Part 1 Amendments commencing on day after assent date (continued)

CHAIRPERSON (Poto Williams): Good morning members. When we rose for the evening, we were considering Part 1 of the Earthquake Commission Amendment Bill. Jo Hayes has the call and has 40 seconds remaining if she so wishes—if we get a Minister in the chair.

JO HAYES (National): Thank you very much for allowing me to complete my discussion last night—my debate on the Earthquake Commission Amendment Bill. As I said last night, there needed to be some shaping up of the role of the Earthquake Commission. A lot of people in Christchurch needed something like this bill. We can’t get it right all the time, but I think that with National supporting this bill, we can make sure that it is really fit for purpose. As I said last night, Christchurch seems to have horrible disasters that end up affecting and making stronger the pieces of legislation. The Christchurch earthquake—

CHAIRPERSON (Poto Williams): I apologise to the member. Your time has expired.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. I’d firstly like to congratulate the Hon Willie Jackson, who seems to have been able to set his alarm clock very well this morning! So it’s great to see you in the chair, Minister.

I want to talk about the collection of information and I’d like to—and while I accept this is a vital part and a role for the commission to actually utilise the information that they have and that can be gathered by them and other agencies to help inform for future disasters and the management of the disaster that they’re in at that time. However, I would point to the evidence given in the Finance and Expenditure Committee by the Privacy Commissioner. Their role, of course, is to scrutinise—or one of their roles—legislation and to consider how that may or may not affect the privacy of individuals. In their submission, firstly, they pointed out they weren’t able to see the legislation before it was entered into the House, and I think that is not a good thing in the first instance.

I think really what’s been happening with this Government’s been quite schizophrenic in some ways—where it’s rushing headlong in with great haste to do some things and with other things they’re putting all of these commissions and inquiries in and so on. But a little bit more care would be much more helpful, I think, to ensure that we get good legislation, because we all accept right across the House that the Earthquake Commission (EQC) has a vital role to play, and that being set up as a good organisation is underpinned by legislation. And if we don’t get the legislation right, then we’re not doing a good service to those people who were badly affected in Christchurch and will be in the future, if we don’t get this legislation right.

Their comments on the bill relate solely to new section 31A in clause 5. That was where their big concerns were, and they were very concerned they didn’t have the opportunity to review the bill prior to its introduction. So they said there was “unintended consequences for privacy and lead to greater complexity for EQC.” And I think those are things that we should be concerned about. We want this organisation to be able to run smoothly and provide the service that we all expect. And so they proposed that new section 31A be removed. So I’d really like to have the Minister tell us what reaction the Minister has to that. What does the Minister think would be achieved for the greater good without impacting on the privacy of individuals? I think it’s vital that we don’t trample on those rights of individuals.

It says in new section 31A(4)—they don’t support the new section as it departed from the definition of personal information under the Privacy Act. They think that “Creating a bespoke definition for EQC’s specific circumstances is unnecessary” and, once again, we support EQC. We support the whole premise of the legislation. However, we have to be mindful of people’s privacy. And so a little more care, I think, in the work behind drafting this legislation would have been well rewarded and would have made things much simpler for people in this situation. I know the select committee spent a lot of time going over these issues and I think that we owe it to ourselves, when entering legislation on to the books, to do a good job. A select committee process is part of that, but getting things before institutions such as the Privacy Commissioner ahead of the introduction of a bill would short circuit a whole lot of these issues.

So I’d really like to hear from the Minister in the chair on his reaction to that. He looks bright and sparky this morning. I’m sure he’s ready to answer the question and ease all of our concerns on this side of the Chamber so that we may go further through with this bill with a greater sense of confidence that New Zealand is going to be well served by this legislation. Thank you, Madam Chair.

IAN McKELVIE (National—Rangitīkei): Thank you, Madam Chair. I wanted to take a brief call—and it probably will be brief—on that Part 1, clause 7(2), inserting clause 7(2A) into schedule 3, and it points to the fraught difficulty of this type of legislation and the challenges that the commission will inevitably face despite the cleverness of our legislative ability in this Chamber.

So if you look at 7(2A), it talks about time limits and things like that on claims. I can point to evidence, even in the Manawatū, of a building that was damaged in the 1931 Napier earthquake, patched up, and re-damaged again in recent earthquakes. The issue that this part of the legislation brings out is the extreme difficulty that will occur in places where we’ve had major earthquakes, such as Christchurch, in the event of another event, and then the dissemination of the information that’s required to point to whether that damage was created earlier or later and which event it was part of. And whilst I think that this is as good as you could do with the legislation, it none the less will inevitably lead to significant arguments.

So 7(2A)(b), for example, points to the time that notice is given, and it gives the commission, I think, something like three months to accept or decline that information. And that will be very difficult, because it will take some understanding of the time that the damage occurred, and it is inevitable that there will be significant amounts of damage—it might not be significant damage—that have never been detected as a result of earthquakes of the magnitude of either Kaikōura or Christchurch.

Of course, the methods by which we build now are so different than they used to be. If you looked at Napier in 1931, the wooden buildings in Napier survived very well—probably in Christchurch they did as well—but there’s none the less some significant structural changes to those buildings, but not obvious damage. Whereas, with our modern building standards and using brick and concrete and all that sort of stuff as we do, the opportunity for damage to have occurred and be obvious—it’s relatively simple, because they crack, whereas old wooden buildings don’t crack, but the foundations move. So you can have all sorts of different damage occurring in these events.

So I think that whilst the select committee’s done a good job of the regulations, it’s very difficult to see how you could ever restrict the potential for the contesting of these types of regulations. So that was the point I wanted to make, and I don’t think it’s a serious one, and I don’t think it’s a big issue, but none the less it will rear its head again in the future. So thank you, Madam Chair. That’s my contribution.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you for this call. I just wanted to comment on a couple of matters that have been raised in the House this morning. Firstly, the privacy issue. It’s right that the Privacy Commissioner did express some concerns around the gathering of personal information as is entirely appropriate. It’s important to remember, however, that the function of the Earthquake Commission here is really to ensure, importantly, preparedness in respect of an earthquake, and a lot of the information will be risk-based: about where loss is likely to occur and to ensure the commission can discharge its functions in terms of informing members of the public what steps to take to protect themselves against those issues.

In respect of the time limit issue raised by Mr McKelvie, the balance struck here is an important one because, in fact, by regulation, the Minister can extend time limits where certain circumstances occur. Mr McKelvie pointed out hidden damage, and, under clause 2A(a)(i), the insured person who couldn’t know that the damage existed, even acting reasonably, may have that time extended. The Minister can, in fact, extend that time not only outside the three months but even beyond the two years. So, as is in fact sometimes happening in Christchurch and Kaikōura today, damage may be hidden and only discovered when someone pulls up the floorboards or whatever; the Minister can still extend the time for those kinds of things. So this has been a very good process. These matters have been addressed.

The other final thing I’d say is that this piece of legislation came out of work of the previous Government in fact. It is the low-hanging fruit. It is the things we can immediately address. There is a commission of inquiry which is currently being undertaken under the guidance of Dame Silvia Cartwright. There are other things in this Act which will be able to be addressed, and that will no doubt be an entirely separate and more comprehensive piece of work. Thank you.

Part 1 agreed to.

Part 2 Amendments with delayed commencement

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. Well, in Part 2 I want to concentrate on Supplementary Order Paper (SOP) 156 in my name, which actually sets out a process and would add in new clause 11A, which states: “(6) An insured person’s private insurer—(a) may be given notice and be delivered a claim and particulars under subclause (1) by the insured person; and (b) for any claims that are received under paragraph (a), is to be considered as having been appointed an agent of the Commission—”. This is, effectively, putting in what was the memorandum of understanding (MOU) between the Earthquake Commission (EQC) and the insurance companies which was brought in for the Kaikōura earthquakes. It was brought in hurriedly; it worked extremely well. In fact, the claim rate was far faster in Kaikōura than it was in Christchurch, albeit that Christchurch was a more complex series of events rather than a single one.

However, having said that, under the MOU, that allowed for the insured just to contact the insurance company and everything else would fall into place. There are, of course, the issues of getting your claim settled, but that’s always the case. However, in Christchurch, what was required was a claim to be registered with EQC, to contact your insurance company, EQC would then check you were insured, and then you would go through the process where the claim was assessed. In some cases, some claims are only now being passed on to insurance companies as being over cap. Then, once the claimant is informed that they are over cap, they then go to the back of the queue with the insurance company—an unnecessary, bureaucratic step that really was pointed out by everybody—everybody agrees it’s unnecessary and not really workable. You can understand why it was set up that way in the beginning. However, we’ve learnt a lot now and some of the claims—I’m going to go through some of the issues.

But, first of all, I want to point out in the letter of expectations that was sent by the Minister, the Hon Dr Megan Woods, to the Hon Dame Annette King on 6 March 2018. I’m just going to quote from that: “I recognise that EQC is trialling a new approach with private insurers to respond to the Kaikōura earthquakes and I expect a detailed report on the board’s review of this pilot.” Now, there has been a report that’s come back and said it was a very good operation in the way it worked. Then she goes on to say: “I expect [the] EQC to work with the wider insurance industry to ensure that if another significant natural disaster event were to occur, there is a commitment to ensuring that appropriate mechanisms are put in place as a priority to ensure that claims can be resolved in an efficient and timely manner, prior to any legislative change that may be made.”

That’s good. It’s got great intentions. It wants to move on with the process. So why isn’t it in this legislation? Well, of course, they’ve got a review, which Dr Webb just referred to earlier. That will come out and say exactly the same thing: that we need this in the legislation and we’ll have to wait an undetermined amount of time to have this other bill come up, but, unfortunately, mother Nature doesn’t wait for bureaucratic processes. Mother Nature could throw another disaster at us, whether it be a tsunami, a major event like Edgecumbe, or a Kaikōura event or a Christchurch or Wellington event—something of that nature. Then we have people scurrying around trying to come up with an MOU and move on into the process. I think that’s a totally unnecessary waste of time.

My SOP will cover that off. It slips into the bill very seamlessly and achieves exactly what is needed. Interestingly, I contacted the other parties on this and the Greens said, “Well, yeah, we think it’s a great idea, but the Minister would like to wait for the new legislation.” I got an even more glowing response from New Zealand First. They say it’s a good idea but their hands are basically tied. So I want to go through—Madam Chair, with your indulgence—the responses I’ve gone through. The Government and EQC came up with reasons why this would not work and what the issues were.

They came up with five areas they had great concerns with. The first one is that there would need to be robust audit and accountability mechanisms to manage the financial costs and risks of outsourcing claims handling. An absolutely valid response and a valid concern that EQC might have; however, all insurance companies have reinsurance and they have the same issues they have to go through. They have to be audited and accountable to the reinsurers, because they’re acting as agents, effectively, for reinsurers. EQC also acts as agents—it has reinsurance as well. So this would actually work in the same way it does with others, so it really just seems quite strange that that would be thrown up. Under the MOU, EQC in the Kaikōura event had an opportunity at any time, by providing reasonable notice, to audit, observe, test, or inspect any information to ensure insurers complied with their obligations under the MOU. So all of that’s laid out there in those MOUs, and the Supplementary Order Paper would ensure that EQC entered into those sorts of arrangements. So that is a non-issue. It’s just simply spurious.

Their second concern was that they would need clear agreements about the quality of service provided to EQC claimants, as well as ongoing accountability arrangements. I think a lot of people in Christchurch would think that was quite ironic coming from EQC, quite frankly. But, none the less, it is something that should be tied off in an MOU or in the contract that they would negotiate with the insurance companies. Once again, that was already covered under the MOU in the previous arrangement. So it’s quite easily accounted for within my SOP. I think, really, they are raising red flags that are not needed at all. Insurers acted as EQC agents, as I mentioned, and in accordance with the Earthquake Commission Act and guidelines provided by EQC—so worked within EQC’s own guidelines. Quite a spurious claim, yet again.

Actually, after the Kaikōura earthquake, there was a 70 percent customer satisfaction with insurance claims, and that’s compared to 43 percent with the Canterbury earthquake sequence and 51 percent with the non-Canterbury earthquake disaster sequences. People are always unhappy with their insurance companies, but, in the long run, 70 percent customer satisfaction is a pretty damn good number, I think.

Their third concern was there are robust arrangements between EQC and private insurers for sharing relevant customer and claims data in a timely and secure way. Well, under the MOU, insurers would first obtain a privacy waiver from a customer to allow information sharing between EQC and the insurer—so that was already in place—and that insurance could also seek exemptions under section 54 of the Privacy Act in respect of certain information sharing. All of that was covered under an MOU. It all could be arranged under my SOP, so it’s a fine piece of legislation—it’s not too late, Mr Webb. I can see he’s wavering.

The fourth point was that the insurance industry has the ongoing capability and quality of preparation to manage future events, particularly large-scale events. I mean—come on. The insurance industry has a far larger standing army than EQC will ever have, and it has international links to other insurance companies around the globe. They are in a far better position to gear up for large events than EQC is. We’ve seen that in the past. That’s why the MOU was signed in Kaikōura—because it was recognised. I’m simply building on that.

The final point was that there are appropriate and robust arrangements, either with insurers or elsewhere, to replace any loss of adaptability or flexibility in natural disaster response as a result of EQC no longer directly participating in claims handling. This is nothing more than patch protection by EQC, and the reality is, we deserve better than that. New Zealanders deserve the best service that they can get. This SOP actually will ensure that, and I implore the members on the other side of the Chamber to see some good sense and get in behind it. Thank you.

IAN McKELVIE (National—Rangitīkei): Thank you, Madam Chair. It’s a pleasure to take a call on Part 2 of the Earthquake Commission Amendment Bill, and I want to make a couple of comments before getting into one or two of the details I want to talk about. Obviously, we support this bill. It’s a piece of legislation that gives a little bit more power to the Earthquake Commission (EQC), and it certainly will ensure it’s shored up in there for future generations.

The EQC is unique by world standards of insurance, and because of the nature of our geology and the way this country’s shaped, it’s a pretty essential part of the protection of our citizens, basically, or our citizens’ privilege to live in New Zealand and to both borrow money and ensure that they can house themselves. Obviously, when you’re borrowing money to house yourself, these insurance factors are very important, and given that, a little like Australia with their fires, we do have earthquakes as a challenge for our insurance industry, it’s most essential that we have a very secure and sound insurance base to ensure that those people can continue to borrow money and continue to own houses and to carry on with their businesses.

I just want to talk about a couple of things. One is the lift in replacing the $100,000 monetary cap with $150,000. In my view, that’s a very good move, and I think it’s essential, really. It’s also sensible because it, basically, sets us a level of guarantee, I suppose—for want of a better word—and the other one that I want to speak positively about is removing cover for contents. I don’t think there’s ever any need—and hindsight’s a great thing, of course—for cover for contents to be covered by the EQC. You can insure for that anywhere, pretty much, under any circumstances. So I think that those two moves are both good ones.

I did want to spend a little bit of time just on Mr Stuart Smith’s Supplementary Order Paper (SOP) 156, because I think—like he does—that it’s a very sensible way of dealing with this stuff. When you think of the challenges that the first Christchurch earthquake caused with respect to the inspection of damage and things like that, it was a massive challenge for the EQC to put insurance assessors on the ground, and insurance companies are equipped for that. They weren’t entirely equipped for that prior to Christchurch, but many of them—well, many of them were, actually. Since then, they’ve all, basically, got themselves up to speed and can deal with these disasters very quickly, and Kaikōura, to some extent, proved that.

I think that the eminently sensible thing about that SOP is the fact that if you use the complementary strength of the private insurance sector, they could manage all of this stuff pre-EQC very easily, and EQC then just becomes, effectively, an administrator and, I suppose, to some extent a bank—well, an insurance company in this case, I guess. But I just think it’s so sensible and I don’t understand why it’s not included in this bill. I’m sure that if it doesn’t get proposed today, it will be included in the very near future because of the sensibleness of it. The opportunity it provides for the rationalisation of the industry and consistency as well—because those insurance assessors that are out in the street every day are very good at their job. They do things very quickly. They understand it well, and they don’t have to be retrained every time another event comes along.

So the industry now—it didn’t before Christchurch, but it does now—has the capacity, in my view, to support this type of activity. It would mean that the EQC could concentrate on their core business, which is basically to, effectively—and I’ll use the term “bank” again—use it to run a bank that then underwrites the ability of New Zealanders to get insurance, and that’s its key role. Its key role is not to then inspect and worry about the damage that’s been created as a result of a disaster, because that’s always dealt with by the insurance company concerned.

The other issue I want to touch on briefly is the fact that there are a large number of New Zealanders who don’t insure, and that’s a major challenge not only for this piece of legislation but for almost every piece of legislation we put through this House, because it doesn’t matter whether you’re levying the industry or what you’re doing, if you’ve got a percentage of the people that aren’t participating, it becomes a major challenge for the Government and for governing bodies because someone’s then got to prop up that damage. Someone’s then got to support those people that don’t get to the post.

So that’s really my contribution to Part 2. Madam Chair, thank you.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Chair. I just wanted to speak to Supplementary Order Paper 156 of Mr Stuart Smith and, as he’s pointed out, the Government doesn’t support that. That’s not to say that what was done in Kaikōura was not a good innovation. However, the fact is that it’s not necessarily a wise thing to ossify that into legislation.

This is, essentially, an operational matter, and we know that one of the good principles of legislative design is to ask: is legislation the only remedy? The fact of the matter is that that’s not the case, and it’s a much better idea to take an approach that says let’s continually innovate with ways in which we can best deliver the service of the Earthquake Commission (EQC) to homeowners. Whilst this has been used in Kaikōura, there are still other innovations that EQC is undertaking. The Greater Christchurch Claims Resolution Service is another example of trying something new that seems to be working.

So look, as Mr Smith pointed out, this bill is simply making some straightforward changes that were easy to do and very obvious, and that’s what we’re doing here. An amendment like this brings in a new complexity. I mean, for example, it automatically and by default appoints an insurer as an agent of EQC, whether or not there’s another agreement in place. Now, we can’t make an insurer agree, so that would be a real concern to go down that road. So look, yes, there were some good improvements in the Kaikōura model, but not appropriate to put in this piece of legislation.

The protocol in Kaikōura was itself renegotiated recently. That can happen again and again. It must be remembered that there are a number of different insurers with different capacities and that what might be appropriate with IAG might not be appropriate with a much smaller insurer, so we need to have an insurer by insurer approach. Again, we need to make sure that what we’re putting in place doesn’t have unintended consequences and that if it needs to be adjusted or unwound, we can do that, and once it’s in legislation, that wouldn’t be the case.

So yes, the Government will consider what has happened in Kaikōura in the review being undertaken by Dame Silvia Cartwright, and that is where that should really take place. So yes, it’s been useful in the Kaikōura earthquake, but no, it’s not an appropriate place to put that into this legislation, to essentially fix it in place and stop any improvements of it. Let’s have a wider look at how EQC works and make sure that if we’re making these changes, there aren’t any unintended consequences, and that’s the next piece of work: to make sure we have the best possible insurance and EQC response for the next event. Thank you, Madam Chair.

Hon NICKY WAGNER (National): Thank you very much, Madam Chair. I’d like just to take a short call on Part 2, particularly the issue about caps. Now, in this piece of legislation we’re talking about lifting the Earthquake Commission (EQC) cap from $100,000 to $150,000, and so for those people who may be listening today or who may be in this House who haven’t been involved in a natural disaster, I’d just like to explain that the cap determines the responsibility of the Earthquake Commission in terms of paying out insurance and where that is passed on to the responsibility of insurance companies. So it determines who pays and, actually, who pays beyond the earthquake insurance and the insurance companies, because, of course, those companies are reinsured as well.

The cap is the first part that in this case, under the Christchurch earthquakes and the Kaikōura earthquakes, was $100,000 plus GST, and then, after that, it passed over to the insurance companies. So it was a gateway, and there was a huge amount of debate around this gateway—this $100,000—because I think the issue was that, as a gateway, it became a bit of a bottleneck. So a lot of people were very concerned—“Would I be dealing with the Earthquake Commission, because the amount of insurance I needed was less than $100,000, or would I be dealing with my insurance company?”—and to get through that gateway was the first decision that had to be made before people went on and got some action out of the insurance companies.

Of course, this was further complicated in Christchurch because there were multiple seismic events, and in lots of cases the $100,000 started again. So there were incredibly complex issues. It was complex for the people who were insured, it was complex for the Earthquake Commission itself, and it was complex for the insurance companies, but it was also complex for the reinsurers. By lifting it to $150,000, at least you move it a little bit further out, and it makes it a clearer situation to have happen.

So, generally speaking, of course we support it. This was part of the discussion document that we started back in 2012, and this is one of the first recommendations to increase the cap. Originally, that $100,000 cap was settled right back in 1993, and, of course, costs have escalated since then.

So that deals with the cap. But I’d also like to talk about Stuart Smith’s Supplementary Order Paper (SOP) 156, and this is about how you organise earthquake claims in the future. It’s relevant to the cap because, as I’ve said, the Earthquake Commission was the gateway to making a claim originally in Christchurch—and it still is now, under this legislation—but what Stuart Smith is introducing is another method, and this is a method that we learnt from Christchurch. It was a method that has been tested in Kaikōura and it has tended to work well. What Stuart Smith is putting in his SOP are the results of the learnings from Christchurch and some of the things that have worked well in Kaikōura. So what he’s suggesting is that instead of the Earthquake Commission taking that claim, working their way through it—whether it’s $100,000 or not—and then, after that time and past that bottleneck, passing it on to the insurance companies, the insurers’ private insurers begin the claim, and if that claim is under $150,000—it would be in this case—then it goes back to the EQC.

So it’s turning the whole process round the other way. It’s giving the process, to begin with, to the insurance company—who has the biggest exposure, generally speaking—and then passing it back to the EQC if it’s only a small claim. I think that makes good sense. It makes good sense simply because everybody does have an insurer in New Zealand—actually, that’s because the EQC gives them the first amount of money, and we’ve already talked in the past about how fortunate we are to have an Earthquake Commission, because people are insured. So that gives them the opportunity to work with the insurance company. They have the resource, they have the experience, they have the expertise, and they can start that claim. We believe that that would be a much more streamlined process, and it has actually proved to be in Kaikōura.

So I’m very keen to see this SOP supported. I think it’s the right thing to do.

JO HAYES (National): Thank you, Madam Chair. I too want to add my support for Stuart Smith’s Supplementary Order Paper (SOP) 156. As I’ve been sitting in the back here listening to the discussion around this SOP, I hear words like “by adding this SOP into the bill, it will add more complexities to the bill.” I don’t think it will add many complexities, if any complexities, actually. What the SOP is trying to do, which worked well in Kaikōura, is trying to actually help the Earthquake Commission (EQC) with the number of insurance claims that they got, as an example, through the Christchurch earthquakes. This memorandum of understanding (MOU) with the private insurers is a good stance to take. If it worked in Kaikōura, then it should be able to work everywhere else in the country. At the end of the day, when we in Christchurch have to sit and listen to constituents’ complaints around not having their EQC claims settled in a timely manner, whereas their insurance companies could have come in and helped out with that process because of what’s happened, I think that this is a very sensible, well-thought-out SOP to be included in the bill.

When we start to look at EQC, it should not be about EQC being everything to everybody. I think that if we’re going to be effective for the people of this country, organisations like EQC should be able to reach out and get as much help as they can, because at the end of the day, when somebody’s property is broken, when they are in stress, they need that help immediately. They don’t need to sit there and wait and wait and wait for their claim to come forward through EQC; they need to be able to move forward and move forward rapidly. I think that’s what happened in Kaikōura, and it would’ve been great to have happened in the Christchurch earthquakes, as well. However, we live and we learn with all the processes that are going on.

As I look at this SOP 156, it states “After clause 11 (page 7, after line 29), insert: 11A Schedule 3 amended: In Schedule 3, clause 7 … (6) An insured person’s private insurer—(a) may be given notice and be delivered a claim and particulars under subclause (1) by the insured person; and (b) for any claims that are received under paragraph (a), is to be considered as having been appointed an agent of the Commission—(i) under subclause (5); and (ii) under section 73(1)(d) of the Crown Entities Act 2004; and (iii) subject to any other agreements between the Commission and the private insurer. (7) Any claim delivered to an insured person’s private insurer under subclause (6)(a) is to be deemed to have been delivered to the Commission under subclause (1) or (2).” That is a very good schedule. It doesn’t upset the current bill. It adds robustness to the current bill, and that’s what we’re looking for. As parliamentarians, as legislators, we are looking for robust pieces of legislation, and this particular SOP will give it that robustness.

I was very interested in hearing what Stuart Smith had to say around a letter that he read out around robustness of audit systems and accountability systems to manage claims—that EQC MOU with private insurers—and I agree with him. The reinsurers have really good systems—really good systems. I have a cousin-in-law who used to work for a reinsurer, and he is quite an anal person, actually, being an accountant, but he actually said to me, over the Christchurch earthquakes, because he was still working for a reinsurer at the time—he said so many good things could’ve happened. However, they didn’t. So he is quite happy. I’ve shared some of the information with him, and even though he lives in Ireland, he said that it’s a good way forward: clear agreements of quality of service from the private insurer. And they do. We’re with FMG, my husband and I. We have a business, and the FMG proposals with us, the insurance—they are actually very responsive. They respond within hours of our claims being received.

So I can only see good coming out of this SOP. I would encourage the other side—the Government and support parties—to support Stuart’s SOP 156. It’s not written as an intervention or anything; it’s written from experience.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. I’d like to start, actually, with a comment that this is the first time that I can recall, in my time in Parliament, that there are no advisers present. I’m not quite sure what the reason or the need is for that. Perhaps we have an all-knowing Minister! Or perhaps they’re trying to tell us something? But I’ll leave that with you.

I’d just like to respond to Dr Webb’s contribution. He made a comment about my Supplementary Order Paper 156 and that insurers might not agree with it. Well, I’m pretty sure he sat on the select committee that heard all the evidence, and they were universal in their praise of the memorandum of understanding (MOU) arrangement and did want it in legislation. So I’m not quite sure where he might get that view from. I’m sure he would appreciate that, in legislation, you don’t have to please everybody. If we tried to please everybody, we wouldn’t get any legislation passed. So I don’t think that’s a very valid point. He did say that legislation is not always the answer, making the point that, clearly, an MOU might be sufficient and we could go out on an ad hoc basis from time to time and sign up these MOUs. Well, that’s not what the insurance industry wants. It’s not actually what the policy holders want, either. They want a seamless operation of the Earthquake Commission (EQC). They and their insurers want to know when they’ve had a natural disaster. They’ve got enough on their plate without having to worry about other arrangements to be made. And I’m very concerned that it would take that attitude.

I want to now turn to the cap and lifting the cap from $100,000 to $150,000. It’s absolutely obvious that lift is required in the cap, and we saw quite a bit of work done through the select committee process. It was an original recommendation in the work that the previous Government did: that the cap be lifted to $200,000. But when we looked at the shifting of the risk—because, effectively, you’re shifting the risk between EQC and the insurance industry, and if you put too much on the insurance industry, they’re getting a free ride. If you put too much the other way around, EQC is getting a free ride. It’s a balancing exercise and, on balance, $150,000 was the best, and the removal of the contents insurance is absolutely also the right thing to do. And I think everybody who’s had an EQC claim would recognise that when you’re dealing with an insurance company, they are dealing with these things all the time. EQC is not set up to, as I said before, have a standing army to react to these sorts of issues; whereas insurance companies are dealing with claims every day. It’s not their first rodeo; they know what to look for and how to get through these processes smoothly with the best outcome for everyone.

But I do think that Dr Webb made a valid point that legislation isn’t always the answer, and so my question to the Minister in the chair is “Can the caps and the building amount per square metre not be in regulations rather than having to go into legislation every so often to try and catch up on the inflation component when that could be done by regulation?” We saw a bill yesterday on medicinal cannabis giving carte blanche ability in the regulation-making power. Surely, a simple thing like lifting the cap from $100,000 to $150,000 and then, at some point in the future, lifting it up again as inflation moves on and the building amount, more importantly, per square metre changing as inflation dictates over time—you would think that would be far simpler to be managed in a regulation-making power situation rather than having to go through the costly and timely procedure, which will always be late. You won’t do it ahead of time. Parliament doesn’t legislate well ahead of time. So we will always be behind, whereas using regulations, that would be a far simpler, more reactive process and we wouldn’t end up getting things so out of whack over time, as we have done with this, because it’s quite some time since that occurred.

The question was put that the amendment set out on Supplementary Order Paper 156 in the name of Stuart Smith to Part 2 be agreed to.

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

Ayes 56

New Zealand National 55; Ross.

Noes 63

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

Amendment not agreed to.

Part 2 agreed to.

Schedule 1 agreed to.

Schedule 2 agreed to.

Clause 1 agreed to.

Clause 2

The question was put that the amendment set out on Supplementary Order Paper 154 in the name of the Hon Dr Megan Woods to clause 2 be agreed to.

Amendment agreed to.

Clause 2 as amended agreed to.

Clause 3 agreed to.

Bill to be reported with amendment presently.

Bills

Crown Minerals Amendment Bill

In Committee

Part 1 Amendments to Parts 1 to 1B of principal Act

ANDREW FALLOON (National—Rangitata): Thank you, Madam Chair, for the opportunity this morning to speak on the Crown Minerals Amendment Bill. I sat on the Economic Development, Science and Innovation Committee, which considered this bill, which was very ably chaired by Jonathan Young. We took our time with this bill. We certainly gave it a lot more consideration than other Crown minerals amendment bills that have passed through this Parliament in recent months.

I wanted to ask the Minister some questions, and I’m sure the Minister who has just taken the chair, the Hon Phil Twyford, will be able to discuss with officials my questions and find out some responses to those. I wanted to specifically start with clause 14, which inserts new section 54A into the Crown Minerals Act, and it relates to access to schedule 4 land. We did make some amendments to this new section 54A at the select committee just to clarify its purpose, but it goes on to say that “Despite sections 53 and 54, if a permit relates to land in the common marine and coastal area that is described in Schedule 4, the permit holder may exercise the permit only—”, and then it runs through a series of requirements.

So my first question to the Minister in relation to that is: that discussion of schedule 4 and permits on schedule 4 land intrigued me a little bit, because, as members probably on both sides will call quite strongly, a few years ago there was a very loud debate about what activity should occur on schedule 4 lands. So I went off and did a bit of my own research and found that there are at least three mining permits that I could find for mining permits on schedule 4 land. The first one is in relation to a public recreational gold mine on a river on the West Coast. Then, in 2000, there was another one—obviously, under the previous Labour Government—underground mining for quartz, gold, silver, and clay at Broken Hills in the Coromandel. And then, in 2005—another one under the previous Labour Government—gold and gemstone stone mining in the Hutt River and the Paparoa National Park.

So I was able to find those three. So my first question to the Minister is: what other mining permits do exist presently on schedule 4 land, or what mining permits have been granted previously on schedule 4 land? Because if we’re going to be discussing schedule 4 in relation to activity about mining permits, it would be useful to know from the Minister what mining permits do currently exist on schedule 4 land.

The second question I had for the Minister is in relation to his powers over consent to change of control of a permit operator. Again, it’s new section 41AE in clause 8, and it refers to “When Minister may consent to change of control of permit operator”. Subsection 1 refers to the permit holder, given the proposed change in control—they’re required to, first of all, have the financial capability to meet their obligations under the permit. So the Minister has to be satisfied that they have the financial resources or capability before he is satisfied that a permit can be changed. So my first question in relation to that, to the Minister, is: how will he determine that, or how will she determine that, in this Government’s case? What is the metric that they’ll look at to decide whether or not they have that financial capability? Is it around the business nous or the qualifications of the people who run that organisation or company or entity, or is it in relation to sufficient capital—is the business sufficiently capitalised that if there was to be some sort of problem that arose, they would have financial resources sufficient enough to throw at the problem to fix it?

There’s also a couple of other requirements that the Minister needs to be satisfied with: first of all, that they’re likely to comply with and give proper effect to the work programme for the permit, which is sensible; and the third is that they’re likely to comply with the relevant obligations under this Act or the regulations in respect of reporting and the payment of fees and royalties, which, again, is quite sensible.

The next part, though, goes on to talk about the Minister needing to be satisfied that they’re likely to meet health and safety requirements under the Health and Safety at Work Act 2015. So my last question to the Minister is: how will that be determined? How will that be assessed? Will it be by the Ministry of Business, Innovation and Employment (MBIE), as the agency that she is responsible for in this respect, or will it be an organisation like WorkSafe? And if it is WorkSafe, will they be resourced, or is she satisfied that they are sufficiently resourced to be able to go into those businesses and assess that they are likely to live up to the obligations that are required by them under this new part—that they can meet the health and safety requirements under the Health and Safety at Work Act? Will it be MBIE or will it be WorkSafe or will it be another organisation? Thank you, Madam Chair.

JONATHAN YOUNG (National—New Plymouth): Thank you very much, Madam Chair. I’m pleased to stand and speak here on the committee stage of the Crown Minerals Amendment Bill. This is a bill which commenced its life and journey under the previous Government and is carried on by the current Government, and it does address some pertinent issues. We have received Supplementary Order Paper 182 from the Minister of Energy and Resources, which seeks to bring alignment between this bill and the Crown Minerals (Petroleum) Amendment Act that passed just recently, in order to bring just a correct alignment, because the petroleum amendment bill—well, the Act now—is in play and we need to ensure that this is aligned.

So in regard to this particular stage, some questions that we would like the Minister to consider are in terms of the change of ownership of operator. We would certainly be keen to hear around the provisions that create an exclusion for OMV, who were in the process of change of ownership from Shell to themselves prior to the bill coming to the House, and we would seek assurance that that exclusion and provision is still robust or continues as they go through their final stages of their change of ownership. The change of ownership, of course, is a very important aspect in the petroleum space, in particular to have Government oversight, and it’s pertinent that this bill actually addresses that and, in particular, focuses on those transitions of operator. So it’s pertinent to understand that the Economic Development, Science and Innovation Committee have spent considerable time looking at this bill. Even though it’s particularly short, it does address those issues.

Just in regard to the previous speaker Andrew Falloon’s question regarding financial capability of new operators who come in, and the question about what the test is of that, I would also like the Minister, if possible, to answer the question around the financial but also operational capability of those companies that take operator control when it comes to the end-of-life decommissioning of a field. Of course, we have an example of that in offshore Taranaki, where the interests of AWE have been passed through to Tamarind, and Tamarind have specialist capability around decommissioning end-of-life fields. They have that ability because of their niche operations and because of their expertise to be able to bring further resources and capability on those fields and to bring those further resources to market.

So I would be interested to hear from the Minister, if possible, just around decisions, particularly for companies who take over operator control who have a specialist field in end of life or the decommissioning of a field, just what the criteria are and how they ascertain that they have that capability. The reason why this bill came to this House was because there was a concern that if a company did take over operator control of a field and they didn’t have that capability to do the decommissioning as required, then the costs of that would fall to the Crown. That, of course, is a concern, and it’s also a concern to other companies in the sector, in the industry, because they did not want to suffer reputational risk regarding that. So, if possible, can the Minister please give us some greater clarity on the assessment when there’s a change of operator, particularly around an operator coming and starting to work on a field that’s at the end of life.

So there are a number of fields, of course. There’s the Tūī Area field. There’s the Māui field. Those would all be considered to be mature fields. They’re all offshore fields. So there are considerable—[Time expired]

MAUREEN PUGH (National): Thank you very much, Madam Chair. As I start my call on Part 1 of the Crown Minerals Amendment Bill, I’d just like to make note of the process that has been followed by the Economic Development, Science and Innovation Committee, in particular the work done by the Ministry of Business, Innovation and Employment (MBIE) prior to the preparation of this bill. Quite often we see, as the select committee process progresses, that there are issues raised that quite often set back the process and require further information. So I congratulate MBIE on the thorough work that was done in preparation of this bill, in particular the work that they did in consulting with the various sectors that are responsible for Crown minerals—even the Department of the Prime Minister and Cabinet—but they also went on to consult with the Petroleum Exploration and Production Association of New Zealand, Greymouth Petroleum, and Straterra regarding certain clauses in the bill. So I just wanted to acknowledge that before I started. Thank you for the opportunity.

I wanted to also bring up the point raised by my colleague around new section 54A in clause 14 of the bill. New section 54A talks about schedule 4 land. Part of the consultation that was done—I’m not sure it covered off the implications of the schedule 4 land. In particular, I want to point out the parts that refer to accessing coastal areas.

As a big part of the gold mining industry on the West Coast, black sand mining is quite a lucrative but also a fickle arrangement given that you are always battling with the tides. So I just wanted to make sure from the Minister in the chair, Phil Twyford, whether the implications of dealing with machinery and any of the, perhaps, biosecurity issues that may be as a consequence of having this heavy machinery on beaches in the coastal areas were a concern that was raised.

I did note also in the report from the select committee that the issue was also raised about biosecurity, and I note from the report that the transport of machinery around various mine sites was seen by some submitters to be of concern, yet the Crown Minerals Amendment Bill did not address any of those biosecurity issues. I just take the point that when you’re moving from, perhaps, one beach site or one bush site and you’re taking heavy machinery to another site—one of the points raised was around kauri dieback and transmitting those biosecurity risks around the country. So the bill did not address that, and I just wonder if the Minister could perhaps shed some light on the rationale for that not being part of the discussion at the time and whether he does in fact think that there should be some attention paid to that as part of this bill.

The bill makes very small adjustments to the existing Crown Minerals Act of 1991. One of the major considerations and changes that have been made is the cost of the penalties now going up to $800,000, and I just wonder whether the Minister could enlighten us about some of the considerations or perhaps provide an example of what might attract the maximum penalty. I do note that it is up to $800,000, but it does seem a high price to pay for, perhaps, an administrative error or non-compliance in terms of notification to the ministry. I just wonder if we could get some clarification around the types of misdemeanours that might attract that high $800,000 fine. Thank you.

LAWRENCE YULE (National—Tukituki): Mr Chair, thank you for the opportunity to speak at the committee stage of this bill. I thank us for having a Minister in the chair, Phil Twyford, although some of the technical things, even with the greatest capability of the Minister, may be beyond him.

I am going to specifically focus on new section 41AE, inserted by clause 8, which is really about when the Minister may consent to a change of control to a permit operator. This side of the House, and, I believe, the whole Parliament, is supporting this bill, but there are some really technical issues that this provision, in my view, really gets to the nub of, and they are how a permit holder may be changed and given the proposed change in control. As my colleague Jonathan Young has previously said, in my view, the biggest risk in this space is that the permit holder, in the long term, does not satisfactorily meet the requirements for aftercare and other things such as that. Of course, that relies on all the things that are in this new section 41AE(1)(a), subparagraphs (i), (ii), and (iii), and they are that the permit holder “(i) has the financial capability to meet its obligations under the permit; … (ii) is likely to comply with, and give proper effect to, the work programme for [that] permit; and (iii) is likely to comply with the relevant obligations under this Act or the regulations in respect of reporting and … payment of fees and royalties;”.

If you go further down, under that it says, “Section 29A(3) and (4) applies for the purposes of subsection (1)(b) with all [the] necessary modifications.” I draw to the Minister’s attention a submission that, with the greatest respect, the Minister won’t have seen but is from the New Zealand Law Society. It relates to new section 41AE(1)(b), and it “imposes a test related to the health and safety capabilities of a permit operator that is framed in similar (but not identical) terms to those that apply to the initial [granting] of a permit under section 29A of the [Crown Minerals Act].” It goes on to say, “The provisions of section 41C(3)(b)(i), as they relate to health and safety capabilities, are different again; [and] the latter is framed in more general terms and does not refer to legislation operating in parallel with the Health and Safety At Work Act 2015”. It then goes on to say, “(such as the Maritime Transport Act 1994).” I understand that reference to the Maritime Transport Act 1994 has been deleted, but I’m asking the Minister to confirm that he or she is satisfied that there is complete consistency. I’ve read the report from the Ministry of Business, Innovation and Employment, who believe that a change to the Maritime Transport Act and removing that would ensure some consistency, but I’m just mindful that under the New Zealand Law Commission’s recommendations on 2.18, they say, as I’ve just previously said, it’s “framed in a similar (but not identical) way to the initial [granting] of [the consent]”. Then it goes on to say that “The provisions of section 41C(3)(b)(i), as they relate to health and safety … are different again”.

So we have a number of differences, and what I’m wanting an assurance on from the Minister is that those differences have been tidied up, as has been amended, 41AE. This is about consistency, and it’s about certainty. One of the things we got from most of the submitters in the select committee—and I arrived late on the select committee in this process—was the consistency that needs to apply to give them certainty about investment decisions, and this particular provision and what their roles and responsibilities are under the Health and Safety at Work Act, in my view, falls into one of those inconsistencies. While we’re in the committee stage of this bill and in Part 1, I just want to be absolutely assured by the Minister or his officials that there is complete consistency in terms of how 41AE is handled, because, as we’ve heard previously and we heard in the select committee, a whole lot of things have been done to reduce churn and to make sure that these permit changes and changes of ownership of these permits are done as seamlessly and as timely and as risk-free as possible, both to the company and to the environment. Thank you, Mr Chair.

ANDREW FALLOON (National—Rangitata): Thank you, Mr Chair. This is my second call in this debate, and I intend to take a couple more, hopefully. I want to continue on a line of questioning I had previously with the Minister in the chair, Phil Twyford, and I hope he takes the opportunity at some point to address some of the questions that we’re raising this morning.

I want to turn to new section 41AA, inserted by clause 8, and particularly subsection (1)(a) of that section, which refers to “a person … obtains the power (whether directly or indirectly) to exercise, or control the exercise of, 50% or more of the voting rights in the corporate body”, and that refers to a change of control. So my first question to the Minister in relation to that is: will he treat a change of control differently if, for example, someone who is a 49 percent shareholder and is already well established with that entity was to increase their shareholding to, for example, 51 percent? The ownership of the company doesn’t change very much compared to, for example, an entirely new entity coming in and purchasing that entity outright—so that would, obviously, be a substantial change in control. So my first question to the Minister is: when he’s considering if there’s been a change of control and whether or not to grant a new permit to that permit holder, will he differentiate between a substantial change in control versus a relatively minor change in control?

The second question around that is: will he treat a change of control differently if it is a domestic purchaser versus perhaps an international purchaser? If you look around the oil and gas sector at the moment in particular, there is a small number of quite large players in New Zealand, but many of them have quite deep and strong international partnerships with other companies around the world to be able to finance their operation.

So my question to the Minister is: if there is a change of control, will he treat a domestic purchase of that entity differently to an international purchaser of that entity? The question that comes out of that is: if he does treat an international purchase of that entity differently to a domestic one, will he consider, for example, international or things that have occurred offshore perhaps in the environmental space? And, unfortunately, we have seen a number of—a relatively small number of—catastrophic incidents around the world in relation to things like oil and gas. So if he is considering something with the Crown Minerals Amendment Bill where there is a change of control and there has been some sort of problem overseas with an international entity and they are looking to purchase a domestic entity, will he treat them differently if they’ve had a problem somewhere offshore?

While we’re on that same page, I just want to have another brief question to the Minister, which is in relation to new section 41AF(4), set out in clause 8. It says the following applies: “the Minister may, by serving a written notice on the permit holder, revoke the permit with effect on a date specified in the notice if the Minister is satisfied that … (b) the permit should be revoked.” So the Minister has very broad powers under this particular part to be satisfied that a permit should be revoked. And so my question to him, on behalf of his colleague Megan Woods, is: would it be her intention to enter into some sort of discussion with that entity before he decides to unilaterally, shall we say, revoke their permit? Will he enter into correspondence of any kind?

The final question I have for the Minister before he, hopefully, takes his first call this morning is in relation to new section 41AC, set out in clause 8, “Application for consent for change of control” and specifically new section 41AC(2), which says, “If the Minister is satisfied that there are compelling reasons why a … person could not comply with subsection (1)(b), the Minister may receive an application by a later date agreed by the Minister (which date must not be later than the date on which the proposed change of control takes effect).” So my question to the Minister is: what is his definition of “compelling reasons”, because I think members on all sides would agree that there’s quite a difference between what one person would regard as compelling reasons and what someone else would. Obviously, in a lot of laws and regulations we have reference to a “fit and proper person”, but, of course, that definition can be very different from one person to the next. And so my question to the Minister is: what does he consider are compelling reasons why a person could not comply with subsection (1)(b)? I’d be very interested to hear his thoughts, and while he perhaps asks his officials those questions, I’ve come up with some more questions for him. Thank you.

Hon PAUL GOLDSMITH (National): Thank you, Mr Chair. It’s my pleasure to speak on this bill here that we’re looking at: the Crown Minerals Amendment Bill in the name of Dr Megan Woods. What we’re trying to achieve through this legislation is to amend the Crown Minerals Act to maintain the effectiveness and efficiency of the permitting regime established by that Act. Dealing with Part 1, there are a number of specific measures, which we have broad support for, which are designed to give more clarity around different elements of this legislation.

One example is late applications for consent to change of control. So this is to make it clear that a late application for a change of control must be made before the change of control is complete. Now, there have been lots of arguments about this particular instance over the years, and so this legislation, or this change, makes it clear that a late application cannot be made once a person is already in breach of the rules. So in respect of general regulations and laws that govern the economy and different parts of the economy throughout, the most desirable thing is to have clarity around what the law actually means. Poorly drafted legislation leads to uncertainty, and in this industry, like many industries, when we’re talking often about millions of dollars of investment over a very long period of time, the importance of certainty and clarity around what the law is requiring and saying is important.

The interesting thing, though, that I find about this is—and I’ve been looking at the departmental disclosure statement, which is very thin, and it deals with the impact analysis that’s been done on this legislation in Part 1 that we’re looking at the moment—is there analysis available on the size of potential costs and benefits of the change? And the answer to that is no. So one of the obvious questions I have for the Minister is why there was no analysis done of the costs and benefits of the proposed changes in Part 1 and throughout the bill, because, you know, I think that’s a basic practice that we should have, and it may be that it didn’t cross a particular threshold requirement—I’m not sure.

The potential for any group of persons to suffer substantial unavoidable losses—the answer to that is no, so maybe that’s the issue, but I’d like some clarity from the Minister around that. Also, it says, “For the policy to be given effect by this Bill, are the potential costs or benefits likely to be impacted by: … (b) the nature and level of the regulator effort put into encouraging or securing compliance?”. And the answer to that is no, and I just like some clarity around that from the Minister as to why that is the case. I would’ve thought, if we’re making a new law in this area which is intended to clarify what the law actually means, that it will have consequences.

The other point I wanted to draw attention to was the external consultation that went on, because the department has made it quite clear that the departmental consultation on the draft bill has taken place within various ministries—and that’s all very well; you’d expect that—but also targeted stakeholder consultation has taken place with the Petroleum Exploration and Production Association of New Zealand (PEPANZ), Straterra, Greymouth Petroleum, and other areas. Of course, this is what we would expect—that if you’re having legislation that affects an important industry for New Zealand, the Government and ministries would consult with the people most directly affected by it.

I just can’t help but make the obvious observation that this is in marked contrast to the way that the Government handled the broader oil and gas changes that have been brought through this House in previous months, where a massive change to the industry was brought through in the absence of any meaningful consultation with the sector that was affected by it, and that was an appalling piece of legislation. This particular legislation, which is much more minor, much more targeted and focused on dealing with a couple of particular aspects in relation to the Crown Minerals Act, has been dealt with, it appears, in the normal way of actually consulting with the industry, and I’d just like some clarification, if I could, from the Minister, that indeed that when we talked about targeted consultation—[Time expired]

ANDREW FALLOON (National—Rangitata): Thank you, Mr Chair, and I’m pleased to see we’ve had a change of Minister in the chair, because, unfortunately, the previous Minister, Phil Twyford, didn’t take a single call. We’ve put in, I think, quite a few very important questions to the Minister this morning in relation to this bill, and the Minister hasn’t taken a single call yet to clarify the queries that we have and to answer the questions that we have, which I think is very disappointing.

I just want to take issue with what my colleague the previous speaker, Paul Goldsmith, actually said. He said this was quite a minor bill. Well, I actually think it’s quite important. There are a number of very important questions that we have in relation to this bill which I think are important for the Minister to respond to, because if he doesn’t, then it doesn’t have the adequate process around it, and that’s a very, very disappointing aspect for democracy. So I do just want to put a couple more questions to the Minister this morning, and I hope he takes the time to respond.

The first one of those questions is in relation to new section 41AB(4), set out in clause 8, and this says, “The permit [holder] must notify the Minister in accordance with subsection (5) if—(a) subsection (2) is contravened; and (b) the permit [holder] knows, or ought reasonably to know, that it has undergone a change of control.” So my question to the Minister is in relation to the word “reasonably”, because I get very nervous when I see reference to “reasonable” in legislation. As I was referring to in a previous contribution, it is very difficult for us to know what the definition of “reasonable” is, because “reasonable” can mean many things to many different people. So my first question to the Minister is: in relation to that word “reasonably”, how will that be determined and by whom? Will it be solely by the Minister, or will it be solely by officials, or will it be by officials providing advice to the Minister who then, ultimately, makes the decision?

As we know, in Government there are a range of processes—immigration, as an example—where some of the decisions are, essentially, delegated by the Minister to other officials. That could be the case here with the Crown Minerals Amendment Bill, or it might be that they have to go to the Minister for final sign-off, as we saw with a recent decision by the Minister of Immigration, which I won’t refer to because it doesn’t relate to the Crown Minerals Amendment Bill or the Crown Minerals Act. But it does raise a query or question, which is: how will it be determined, by whom, and what process will the Minister go through to get there? So I’d like an answer to that question this morning. It is a very important one.

There have also been a number of other questions raised by me in relation to the change of control, which I think is really at the heart of this, because the change of control element is what this legislation’s all about. It was, in fact, the very reason that this legislation came into being. There are a number of other aspects, contained particularly in Part 1 of the bill, which is the essential part, but the change of control is at the heart of the bill. There have been a number of questions put to the Minister in the chair this morning about how the change of control will be determined and whether there will be differences between a domestic purchaser and an international purchaser, for example. So those questions are very important questions, because they do go to the heart of Part 1 and to the heart of the bill.

So I hope that the Minister takes the opportunity to respond this morning not just to my questions that I’ve put to him but, I think, to the very good questions that particularly the Economic Development, Science and Innovation Committee chairman, Jonathan Young, has put to him. As Jonathan said, we did take a lot of time with this bill. It was a very lengthy process over quite a few months, which is in stark contrast to another Crown minerals amendment bill that’s passed through Parliament in recent months, and so we gave it the scrutiny it deserved. We took several months to assess that bill, and so I think it’s beholden on the Minister to acknowledge that process, actually, that we took to go through the Crown Minerals Amendment Bill, and to take a call this morning and respond to some of our questions. Thank you, Mr Chair.

JONATHAN YOUNG (National—New Plymouth): Thank you very much, Mr Chair, for the opportunity to speak again on the Crown Minerals Amendment Bill. Look, we understand if we look at section 41AC, inserted by clause 8, “Application for consent for change of control”. In section 41AC(2), “If the Minister is satisfied that there are compelling reasons why a relevant person could not comply with subsection (1)(b),”—that (1)(b) refers to notification or application for consent from the Minister must “be made at least 3 months before the date on which the proposed change of control takes effect;”.

There are times when the control of a company takes place quite quickly and it’s often unknown by the directors of that company, such as a takeover where shares are traded. Some of the companies that operate around New Zealand are not publicly listed, so they’re not on the share market, but some are. Obviously, around the world, they’re publicly listed petroleum exploration production companies, and they are subject to potential takeovers through the share market. So a change of control can happen that is not, essentially, foreseen or planned or in a methodical fashion and manner, and, if that does occur, then they are in breach of this bill, because they have not, obviously, and could not have, informed the Minister and applied for approval to do that change of control.

So there needs to be an opportunity for a retrospective application. Obviously, when that takes place, and I believe that in this subsection 2: “If the Minister is satisfied [that] there are compelling reasons why a relevant person could not comply with subsection (1)(b),”—that is three months’ notice—“the Minister may receive an application by a later date agreed by the Minister (which date must not be later than the date on which the proposed change of control takes effect).” So what I’d like to know is that those changes of control can happen so quickly, and, if the letter to the Minister needs to be before that change of control takes effect: what if it takes effect through the sale and purchase of shares on the stock market and there is this shift of control?

So we obviously need clear provisions—and I believe there is discretion in this Act, because it’s something that we raised at the committee with the officials. But it would be good if the Minister could be quite precise and bring some clarity around this, around: is that a compelling reason why a relevant person could not comply, and what sort of discretionary process takes place—especially if that change of control has already historically taken place through that sale and purchase of shares? Is there a time frame? Is there a responsibility to, forthwith, in the fastest possible way, process that? Because we do not want to find companies who, in all good faith, see these sorts of activities take place in terms of a share sale and purchase, who then come into breach of the Act, as it will be, who then can have their permit revoked. We need all of those processes clarified as best as possible—that there is going to be a provision for those sorts of processes and, probably, abnormalities of what normally would happen in the sale and purchase and the change of control of, especially, a petroleum exploration and production company.

Hon DAMIEN O’CONNOR (Minister of Agriculture): Thank you, Mr Chairman. I appreciate that the previous speaker was asking legitimate questions, and I think I’ll try and take the opportunity, even though I’ve come into this relatively late. It’s a piece of legislation the previous Government brought forward in an attempt to clarify the whole process, and I can vouch for the fact that it’s been imperfect, the Crown Minerals Act permitting regime, for many years, so we believe this is progress on it.

Can I address the issue of compelling reasons. I understand that the Act, at the moment, has a definition of “compelling reasons” in it, so we’re not inventing something new here, and the Minister will probably take guidance from the same set of criteria—that is, what is compelling or not—when making the decisions. One of those reasons is, of course, if the information wasn’t available. So that’s a fairly legitimate one. If the Minister can be convinced that that was the situation, clearly it would be a compelling reason.

Can I say that in terms of his reference to a change of ownership happening very, very quickly, if anyone is to buy shares or buy a company and not do some kind of due diligence, then they deserve what they get, quite frankly. If they haven’t looked at the company and all its potential and its permits and the status of those permits, perhaps, then maybe they shouldn’t be so quick to make the purchase—take some more time. So I think it’s fairly legitimate to ask of someone that they, you know, prior to the end of consent, then request a change of ownership. I think that’s perfectly reasonable.

If I can, without specifying particular cases, say that, you know, there’s been a bit of gaming and wheeling and dealing around these permits over the years, and I think that Government—previous Governments, and probably ours, too—is to have legitimate utilisation by legitimate companies of the access to the Crown’s minerals. So the gaming that has sometimes occurred, the wheeling and dealing in permits that has sometimes not been very clear, I think needs to be eliminated. We want people to be able to mine minerals for legitimate reasons in a legitimate way and to have access to them in a way that is overseen by Government in the proper way.

I think there have been a few questions asked prior to me coming into the chair. I’m not sure that I’m in a position to answer each and every one of them, other than to say that, you know, there has been thorough consideration. The ministerial oversight, which is pretty important here, is guided by the existing Act, and I think by, I guess, due diligence and by jurisprudence over other parts of the Crown Minerals Act in its history.

I don’t think there’s anything else that I can clarify for the member, other than, I guess, access to legitimate credibility for operators in terms of finance and health and safety. I think it would be fair to say that if anyone has a track record that is not up to spec—that is that they have abused the health and safety system or they’ve gone broke a number of times—then I think it would be fair enough for the Minister to take that into consideration when they are allowing a permit to be transferred. So, fair questions, but I have to say you have to trust the parliamentary system and the Minister in charge at the time, and I’m sure that as long as it’s a coalition Minister, there will be sound judgments made all the way through the Crown Minerals Act.

MAUREEN PUGH (National): Thank you, Mr Chair. I just wanted to take a short call and refer my contribution just now to clause 9 in Part 1, amending section 41A, and in particular to subclause (2) in there. I find the numbering and the references in there quite confusing. Subclause (2) talks about repealing section 41A(1) and then, in subclause (3), replacing “section 41A(2) with:”. So section 41A(2) is replaced with “(2) A permit participant must notify the Minister in accordance with subsection (3) if—”, and subsection (3), I presume, is the section prior, which has replaced section 41A(2). So I found myself in a bit of a circular debate around tracking those numbers, but just wondered if there could be some clarification around that.

Also, I would like to get some clarification on exactly what the “permit participant” is that’s being referenced in this particular clause. I’m assuming that it is in reference to tier two permit holders, but I’m just not clear if that is indeed the case. I do note that a tier one is covered elsewhere in this particular bill, being those permits that are of higher risk, likely to be higher returns—we would hope—but also a lot more complex in terms of the oversight that is required from the ministry, but where tier two is lower returns expected, more likely to be requiring less management, a more pragmatic approach to the operation, and likely to be very small and perhaps even hobby operations. So I’m just really requiring the Minister Damien O’Connor, if he could, just to clarify whether this clause does indeed strictly apply to tier two permit holders.

I also take up the point around notification of the Minister, and could we perhaps get some clarity on the time frame around this in this particular clause, if it does indeed apply to tier two permit holders. In clause 9(3), it just simply refers to “(2) A permit participant must notify the Minister”, but, as I said, I found it difficult to track the numbering in there to refer me back to the appropriate part of that clause. Thank you, Mr Chair.

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

LAWRENCE YULE (National—Tukituki): Thank you to the Hon Damien O’Connor for his call. I think—just to go back to a question I asked previously, which I’m going to restate—my question was not around whether the health and safety Acts were complied with; my question was around whether in fact, under the rewording of new section 41AE(b), inserted by clause 8, and the striking out of the Maritime Transport Act, all the relevant provisions, as was talked about by the New Zealand Law Society, were now complied with. It was not about whether the Health and Safety at Work Act was complied with; it was about whether there was total consistency with this change and the health and safety Act now that the Maritime Transport Act has been removed. So I would ask the Minister whether he could try and answer that question. It’s probably a simple yes or no answer, but at this stage, I’d just like to understand whether that’s the case.

I also wish to talk briefly on the comment the Minister made about gaming and around the fact that the Minister has some discretion under the compelling reason clause. One of his views, and his comments, was that there is a compelling reason if the Minister doesn’t know or if the entity doesn’t know. I think the issue that was raised by Jonathan Young, which I strongly agree with, was that sometimes power and control changes, particularly in the sharemarket, for a whole lot of commercial reasons. I think the Minister and this Parliament need to be careful that we do not detract from value-based decisions that are made on behalf of entities and shareholders, because somehow they’re going to be trapped later on by this call that they didn’t get prior advice on.

The issue I challenge the Minister with—or “ask him to respond to” is probably a better term—is: if in fact it is known to people and to the market ahead of time that this type of thing is going on, or that there could potentially be a change in control, then that ultimately will get reflected in uncertainty in the market, and then in the value for all the various parties, who may be current shareholders or future shareholders. So I think all we’re trying to get to is if the Minister—and I haven’t seen the version of what a compelling reason is, but whether it’s a valid definition or not, the issue that we’re trying to raise is that sometimes control of an organisation changes at very short notice. If you give people a whole lot of notice or you give people a whole lot of information ahead of that time, the mere fact of that information being known has a fundamental impact on shareholder value and therefore share prices.

I think what we’re trying to get to is to make sure that if there are commercial transactions that occur in a public entity, like through a sharemarket, they are somehow done in an orderly way that means that approval can be obtained late. I notice in the Ministry of Business, Innovation and Employment report, as it was originally written, that they did consider the terms too harsh. There have been some changes to what is suggested now, and we support those, but in reality, we know how markets work. We can sit in this committee and we can make decisions, but at the end of the day, there will be value associated when these transactions occur, and what this side of the committee and what I’m suggesting is that we need to be very clear that we are not undermining or compromising commercial transactions or value.

I accept there is a fine line between that and gaming, but there could be consideration given to specifying in more detail the provision that relates to publicly listed companies and the sharemarket and changes of control that might occur in that way. Without that, it is my view that there could be a distortion in value and market share prices. I would like the Minister to further explain to me that it is a compelling reason—the fact that nobody knew this was going to happen before that day—because if that is in fact the case, then I think it should be spelt out in more detail.

As I’ve said previously, we support this legislation; we’re just trying to make sure there aren’t unintended consequences of what’s going to occur here. In particular, my contribution at this stage is really around publicly listed companies and a degree of change and control in the sharemarket.

JONATHAN YOUNG (National—New Plymouth): Thank you, sir—just some matters which I don’t believe are repetitive but I would like some clarity around. New section 41AE, inserted by clause 8, where the Minister may consent to a change of control of permit operator—in there, it gives us some criteria by which the Minister needs to be satisfied, and here they are here. The Minister may grant that “if the Minister is satisfied that—(a) the permit holder, given the proposed change in control,—(i) has the financial capability to meet its obligations under the permit; and (ii) is likely to comply with, and give proper effect to, the work programme for the permit; and (iii) is likely to comply with the relevant obligations under this Act or the regulations in respect of reporting and the payment of fees and royalties;”. So, in essence, what the Minister is able to do is cast his or her eye across the capability of the new operator as if it were a new permit application. So it’s putting the ruler across them.

What I would like, in terms of that point—who “is likely to comply with, and get a proper effect to the work programme for the permit;”—I’m assuming in this that it is going to be under the work programme, particularly if it’s offshore but it also applies to onshore operations, that the aspect of decommissioning is fully appraised. I understand that under the Petroleum Programme 2013 in section 8.9 on decommissioning, and I just want assurance from the Minister in the chair that that aspect—because there are, as we know, a number of fields that are coming to end of life. And it’s important, because there’s been some wells in New Plymouth around Ngāmotu where hydrocarbons were first discovered in New Zealand. Only in recent years has there had to be—not decommissioning—further testing around the capping of those wells. There’s been concern in some of the neighbourhoods.

It’s quite amazing that on the shore of Ngāmotu Beach back in the 1860s and further 1890s, in particular, oil seeped up through the sands. So that’s why Taranaki is such a rich hydrocarbon basin. But it has been nearly 100 years later that some of these concerns have arisen around some of the wells. And I was there on site with the regional council and Ngāti Te Whiti as they were looking at some of their land where they were proposing to build a marae where there had to be some assurance and some investigation and certainly some investment to find out the answer—whether that well that was there was now safe and secure nearly 100 years later.

So what we need to have the assurance of is that, when there is a change of ownership, there is the capability not just to do business as usual but also, if there’s going to be a decommissioning of a well, whether that’s onshore or offshore, that that company has thorough capability or, if not, that they have the financial capability to bring in those experts who can do that work. We certainly want to know that when a field comes to the end of life, it is finally closed down and decommissioned to the satisfaction of all environmental concerns and health and safety concerns and there’s not going to be issues that come back years later. Certainly, as a field comes towards the end of life, I know that the Ministry of Business, Innovation and Employment, the Government, and the Minister are engaged with exploration and production companies to discuss and plan that process that often takes many, many years.

So I am assuming—it would be good if we could have clarification whether in new section 41AE(1)(a)(ii) the Minister can approve a proposed change of control if that company “is likely to comply with and give proper effect to the work programme for the permit;”. I think “is likely to comply with” is a bit loose. I think that we would like something a bit firmer than that, perhaps “shall comply with”. Thank you, sir.

Hon PAUL GOLDSMITH (National): I just want to focus here on clause 11, which is a good example of the way in which changes in this sort of legislation can lead to unexpected consequences. So the original bill, which was introduced by Dr Megan Woods, said that “An authorisation granted under the section is subject”—this is for authorisation of geophysical surveys on land next to land that somebody has got a permit to do drilling on or some sort of activity. So the original bill suggested that “An authorisation granted under this section is subject to the provisions of this Act as if the authorisation were a permit of the same type as the permit held by the permit holder and referred to in subsection (1).”

Now, the problem with that is that, say you’ve got a permit to do prospecting on land and you’re looking for an authorisation to do geophysical surveys on land next to that land or water, the bill as proposed would have allowed you to do prospecting or mining on that area instead of geophysical surveys. It was very poorly drafted. So the Economic Development, Science and Innovation Committee heard submissions on that, and we’ve changed it now so as to say that the authorisation “(b) does not authorise any activity other than the carrying out of … geophysical survey[s].” I raise this as an example of the dangers of getting this sort of legislation wrong, which is why it’s so important that effective external consultation be carried out on bills such as this.

We see, as I’ve said before, that targeted stakeholder consultation was carried out with the Petroleum Exploration and Production Association of New Zealand, Straterra, and Greymouth Petroleum on this bill. I would point out, though, that no stakeholder consultation has been carried out on the remaining proposed amendments, particularly Supplementary Order Paper (SOP) 182. That worries me, to be honest. It worries me that more mistakes will be made. So I’d be very keen to hear from the Minister in the chair, Damien O’Connor, and for him to explain to us why he is confident that the SOP changes brought in by the Minister of Energy and Resources, and the different elements of this legislation that we’re debating here in Part 1 right now—have they or have they not had effective consultation with stakeholders, and are we sure that we’ve got it right? I’m not at all confident, and this is an area where, quite frankly, the Government has not been consistent in its consultation with the broader sector. It has brought through very significant changes in this sector without any consultation in the broader oil and gas front.

On this particular legislation, which deals with some minor technical issues, there has been some consultation, but even that led to some mistakes in the initial draft bill. So there are parts of this legislation that we’re debating today that haven’t had decent consultation, and I’m worried about the consequences, and I’m asking the Minister to give us some reassurance that a genuine effort has been made to talk to the affected stakeholders in this area. If we go right back to it, I mean, how does New Zealand make its living in this world? Well, there are all sorts of elements to the New Zealand economy, whether it’s the productive sector in agriculture, or the services industry—which is going strong—or tourism when the planes are not on strike, and all those sorts of areas, but the extractive industries, such as minerals and mining, are an important part of this economy.

There are some people who will turn around and say, “Oh, don’t worry. We need to get modern. We shouldn’t be relying on mining—that’s old fashioned and part of the history.” Well, I’ll just say that the United States, the most sophisticated and successful economy in the world, still has a very major part of its economy focused on minerals and extraction, and we’re not so rich that we can avoid doing that. So it’s important that we get this legislation right.

The question was put that the amendment set out on Supplementary Order Paper 182 in the name of the Hon Dr Megan Woods to clause 11 be agreed to.

Amendment agreed to.

Part 1 as amended agreed to.

Part 2 Amendments to schedules of principal Act

MAUREEN PUGH (National): Thank you very much, Mr Chair. I’d just like to refer in my contribution on Part 2, which is the amendments to the schedules of the Act—in relation to royalties. Now, we know that the royalties that are collected on mining in New Zealand are quite significant. You know, we’re talking multi-millions of dollars in terms of income for this Government and therefore multi-millions of dollars for redistribution into the country, into investment and social services.

Under schedule 1 in clause 20(1), it refers to: “Despite anything in clause 3, [this] new section 105A … any royalties to be calculated under a permit or a subsequent permit that is granted in exchange for an existing permit must continue to be calculated in accordance with—”. It goes on to mention the various other paragraphs 20(1)(a) and (b).

I was just wondering if we could get some clarification on those calculations to be included in the schedule, just for clarification for anyone that is reading the bill so that it is clear what those royalties are. And even, perhaps, the permit holder’s obligations under this schedule to pay those royalties back to the Crown. So just a short contribution here, thank you.

LAWRENCE YULE (National—Tukituki): On Part 2, I wish to ask a question of the Minister, really, under schedule 1 that was amended. It really relates to clause 20(1B). It relates to royalties and it’s really around, “The chief executive, on application by a permit holder who opted in as referred to in subclause (1)(b), may refund an overpaid royalty, or reduce a royalty amount payable, for a reporting period that applied … on or after 24 May 2013 until the commencement of this subclause …”. Then I’ll come on to the new subclause.

My question is, I suppose, that I’m trying to understand the rationale or the basis for a chief executive being able to reduce a royalty amount payable. Maybe the Minister could explain for me, for my understanding, the conditions that would allow or lead to that occurring, because I’m struggling to understand—a royalty is either a royalty, and on what basis would a person or an entity be allowed to have a reduced royalty payable?

Then I come to new Part 2, inserted into schedule 1. It says, “Existing transactions not affected”, and then it goes on to further list amendments made to “sections 7 to 10, 18 and 19 of the Crown Minerals Amendment Act 2018 apply only to transactions entered into on or after commencement [date]”. I accept that—so that is any new transaction. And in clause 23(2), “In this clause, a transaction must be treated as being entered into before commencement even if, immediately before commencement, the transaction is subject to a condition precedent.” I want to make sure and be absolutely assured by the Minister that when this new Act is passed and when this new Part 2 is inserted we have the change of control mechanisms sorted to the point that there are going to be no unintended consequences.

It says in the next subclause that “change of control means a change of control (within the meaning of section 41A(1) and (8) of this Act (as in force immediately before commencement)”. I’m trying to understand where it says “as in force immediately before commencement”, when we’re actually talking about an Act after commencement that has a different provision around change of control. I want to understand the difference between the change of control mechanism immediately prior. This Act will be passed in the next few weeks. It will get Royal assent. What’s going to happen in the meantime and what’s going to happen now versus what’s going to happen after this Act is passed?

It then goes on to say a transaction means “a contract or an arrangement that has or will have the effect of a corporate body undergoing a change of control.” I come back to my previous question: if there are changes that occur in the uncertain period between now and the Royal assent being given to this Act, what does that actually mean and how is that going to be covered in a practical sense? Because in this House, we are brought here to make legislation and to make changes, but I’m just trying to understand in a practical sense and from my own knowledge what this actually means in terms of change and how this new part will assert that. Thank you.

The question was put that the amendment set out on Supplementary Order Paper 182 in the name of the Hon Dr Megan Woods to clause 20 be agreed to.

Amendment agreed to.

Part 2 as amended agreed to.

The question was put that the amendments set out on Supplementary Order Paper 182 in the name of the Hon Dr Megan Woods to the schedule be agreed to.

Amendment agreed to.

Schedule as amended agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

Clause 3 agreed to.

Bill to be reported with amendment presently.

Bills

Coroners (Access to Body of Dead Person) Amendment Bill

In Committee

KIERAN McANULTY (Junior Whip—Labour): I seek leave for all provisions to be taken as one debate.

CHAIRPERSON (Adrian Rurawhe): Leave is sought for that purpose. Is there any objection? There appears to be none.

Clauses 1 to 4

NUK KORAKO (National): I want to take a short call on the Coroners (Access to Body of Dead Person) Amendment Bill, and, obviously, this side of the Chamber agrees with the fact that this should be taken as one debate. I think the important thing is just to say with regard to this particular bill that kotahitaka is very prevalent right across the House for this bill, so it does make perfect sense to update the coronial legislation and, particularly, section 26 of the Coroners Act to require explicitly that the coroner considers tikanga Māori and the expectations also of other ethnicities when determining who can touch, view, or remain with the tūpāpaku, or the dead body.

There was also the recommendation from the Māori Affairs Committee—well, first of all, a lot of the heavy lifting and work was done in the 51st Parliament by the Komiti Whiriwhiri Take Māori, but also to reinforce what we’re actually doing here at the moment—of the 52nd Parliament, who also noted that the bill should be passed without amendment. I think that just a point of consideration is that from the 51st Parliament, there was a full list of recommendations for this particular bill, and when we look at those recommendations, there was a consideration, first, around the code of best practice that balances cultural considerations with the public interest in finding the cause of death. The second consideration was to consider implementing a formal communication process between the first responders and coronial services with whānau that incorporates tikanga Māori and the expectations of other cultures.

There was another part around considering amending section 26 of the Coroners Act 2006 to require the coroner to also consider tikanga Māori and the expectations of other cultures when determining whether someone should be allowed to remain with the tūpāpaku, and it’s actually that particular part of this bill which was the amending of that section 26. So the other parts were considering implementing a national standard for assessing and managing tūpāpaku that supports tikanga Māori and the expectations of other cultures in Aotearoa New Zealand. There was also a recommendation to consider increasing the resources allocated to coronial services and associated agencies in implementing minimum standards in the mortuaries.

The next part was to facilitate the establishment of an appropriate place for whānau to initially receive tūpāpaku entering New Zealand international airports. Now, this particular recommendation was only acknowledged, actually. It wasn’t accepted, but it was actually acknowledged. The other one which was rejected—and I just want to have this recorded in the Hansard. There was a recommendation also that we consider a review of the practice regarding co-sleeping situations resulting in sudden unexpected death in infancy and the current decision-making process followed by the police when deciding whether to prosecute these cases. This one was actually rejected.

So, on that note, I think we have all come together in that spirit of kotahitanga to ensure that this bill can actually continue its journey through from this process to the third reading. Can I acknowledge also Andrew Little, the Minister in the chair, as well for the excellent work that he has done in shepherding this particular legislation through.

Nō reira, huri noa i Te Whare nei, tēnā koutou, tēnā koutou, e mihi atu ana ki a koutou katoa. Āpiti hono, tātai hono, rātou ki te hunga mate, ki te hunga mate ki a rātou. Āpiti hono, tātai hono, tātou ki te hunga ora, ki te hunga ora ki a tātou. Kia ora.

[Therefore, right around this House, greetings, greetings, greetings to you all. Let the connections be made, and the deceased remain with the deceased. Let the connections be made, and we living remain with the living. Thank you.]

RINO TIRIKATENE (Labour—Te Tai Tonga): Tēnā koe, Mr Chair. I do want to acknowledge the contribution from the previous speaker, Tutehounuku Korako, who chaired the Māori Affairs Committee in the 51st Parliament, which conducted the inquiry which has led to this bill. As we’re in the committee stage, this bill is a very short bill. It specifies to the coroner that there are certain matters which must be taken into account in terms of the decision to allow family members to be with their deceased loved one who is under coronial care. Section 26 outlines those matters, and we’re inserting this new clause.

What has become very clear is that we have this amendment bill to the Coroners Act, and we also have a code of practice which specifies that tikanga Māori and respect for the spiritual beliefs, customs, and those sorts of matters must be taken into account. We’re putting this now into law through this bill, and I just want to remark that I certainly hope that this will lead to a change in practice.

This is an example. I’ve just been recently dealing with a constituent who lost a loved one in tragic circumstances—a young man. It was a shock to the whānau. The issues that the whānau had to deal with, being with the district health board (DHB) and the mortuary, and then also with trying to communicate with the coroner, who was in Auckland—it was just a hellish exercise for that family. Had it not been for the fact that a support person for this whānau was previously a member of the DHB and another close associate of the whānau knew the coroner in Auckland, it would have—this family was utterly distraught. They just felt entirely shut out, and I think the lesson from their experience was that the district health boards are not conducive—they’re not very welcoming places in situations where there is a tūpāpaku. With the way that the DHB treated them, it was just a terrible experience for the family to go through, and they came to me because they were concerned. What about whānau that don’t have connections, who don’t know the DHB members and chairs, and who don’t know people high up in the coroner’s office or the coroner? They’re powerless—they’re powerless.

So I guess it was a lesson that they wanted to impart to me that things aren’t right at a practical level within the district health boards when the jurisdiction of the coroner is called upon. Things aren’t right, and their example, I think, is just a case in point. Those are the things that we want to try and eliminate through this bill, and those are the matters that I think the coroner must take into account. It will be more timely to those sorts of concerns, and I think the district health boards have a part to play in that as well.

So I certainly hope that by this bill, we can see some practical changes at the coalface which are impacting on whānau, and that is definitely what we intend to do by this bill. I commend it, and I certainly hope that we can get those practices happening right from the legislation all the way through to the operational side, where families come in to interface with these organisations. Nō reira, kia ora tātou katoa.

Hon ANDREW LITTLE (Minister of Justice): Thank you, Mr Chairman. I just wanted to take a brief call, first of all, to thank members for their continued support and both Mr Korako and Mr Tirikatene for their contributions to this bill. As they have eloquently acknowledged, this is part of the journey that this House and this country is on to make sure that the legislation that we have that deals with the interface between our public services and all citizens of the country is sensitive to the varying cultural needs that people have.

This recognises the right of families when they are dealing with the tragic circumstances of losing a loved member that, where there are cultural requirements for close proximity to the body—to the tūpāpaku—funeral directors and others involved in that process must respect those cultural requirements. It is encouraging to see also that the various professional bodies involved in those processes will support the legislation by preparing practice notes and the like, and by giving good guidance and advice to it.

So, in my brief call, I just wanted to acknowledge that this is a bill that I think is small in size but its significance is very far-reaching in a practical sense, in a spiritual sense, and in what this nation represents towards all its people. So I thank the House for the ongoing support for this legislation.

JO HAYES (National): It is a privilege to stand and give a brief contribution on this part of the Coroners (Access to Body of Dead Person) Amendment Bill in the committee of the whole House. I want to acknowledge Metiria Turei, because it was Metiria Turei from the Green Party, the former co-leader, who actually brought this petition to the Māori Affairs Committee that I was on at the time in the last sitting period. At that time, because I had not personally experienced issues over tūpāpaku, my loved ones, and the issues around that with the mortuaries and the coroners, it didn’t really resonate with me until we delved more into the issues facing whānau. As I sat and listened to the contribution from our chair, Rino Tirikatene, around the issues that some of the families who have approached him have had around access to their tūpāpaku, their loved one, it dawned on me the importance of what I thought was only a small thing, which has blossomed into one of the most significant issues for whānau: accessing their loved ones in the morgues and the mortuaries.

I want to thank the Hon Andrew Little for shepherding this through; taking this right through this part of the legislative process. I do look forward to its Royal assent after the third reading. I think it does clearly outline and pays respect to cultural beliefs and the way that Māori—I can only speak for Māori—care and look after our loved ones. We treat them almost like they were still alive and with us all the way into their grave, and I’ve experienced it a few times in my whānau. I think that this is going to help other whānau who don’t have access to the right people, as Rino Tirikatene spelt out in his speech, or people that aren’t—how would you put it?—confident in going forth and asking, or those that get really upset and do cause some trouble around trying to get access, because that’s emotional. Emotions run high; I get that.

So I do want to thank Metiria Turei for bringing this to our notice and for the petition that she put forward to the Māori Affairs Committee. As I have said when I started my contribution when I stood up, my korero will be quite short, because both my colleagues Nuk Korako and the chair of the Māori Affairs Committee, Rino Tirikatene, have covered the key areas of this particular bill, so I won’t go on any further. I just want to say thank you to the members of the Māori Affairs Committees of the 51st and 52nd Parliaments for working on this bill and getting it to this stage and for everybody supporting this bill across the House, because it is so very, very important. Sometimes pieces of legislation like this—yes, it’s only a few pages, but the impact is far and wide for a number of our families. So it is without any further ado, I just want to say thank you again, and I do commend this bill to the House. Thank you.

HARETE HIPANGO (National—Whanganui): Kia ora to the Minister of Justice, seated beside you, Mr Chair; I acknowledge you both in addressing the committee today on the Coroners (Access to Body of Dead Person) Amendment Bill. It’s said that there are two certain things in life: taxes and death. This bill is to ensure that it is a least taxing experience for those with a recently deceased person or member of their family/whānau.

May I just turn to the time line in the passage of this bill. It’s noted that the Māori Affairs Committee initiated an inquiry into whānau access and management of tūpāpaku, the deceased’s body, during the period of 2 March 2016 through to 26 July 2017. I was elected as a member of Parliament and didn’t join the Māori Affairs Committee until the end of last year, so I’ve come in this rather belatedly with the discussions that have been before the select committee. On 14 August last year, the inquiry report was presented to the House, so things had been very much traversed as a foregone conclusion by the time that I did join those discussions, noting that on 10 April 2018 this bill was referred to the Māori Affairs Committee and I was part of those discussions, with eight submissions heard and two of those orally presented.

I’m just going to turn to the detail outlined here in the bill and just state that the Coroners Act of 2006 is what this bill is seeking to amend, particularly section 26 in terms of those matters as has been submitted or proposed under clause 4 of the bill to be factored in as considerations to be balanced against all of those other, I believe, eight considerations. But the context of this coronial framework is around a certain type of death, and those deaths are specific to sudden or unexplained deaths or deaths in special circumstances. So that is the ambit or the reach that the coroner must factor and take into account in whether or not a post-mortem or an autopsy is to occur.

Section 3 of the Coroners Act itself details the purpose of the Act. I think it’s important that we do reflect and turn to what the purpose is about, because it details there that, in so far as preventing deaths or promoting justice through the investigation and identification of the causes and circumstances of, as I said, sudden or unexplained deaths, section 3(2) outlines how to achieve that purpose. That’s where there is first mention, under paragraph (b), of a recognition for both the cultural and spiritual needs of the family alongside public good factors. So there is mention within the Coroners Act around the significance of cultural and spiritual needs. I’m going to address other sections within the Coroners Act before I do get to clause 4, because it is relevant.

Clause 4 is making the amendment by way of this bill to section 26, specifically with an amendment to insert section 26(2)(ea), and that reference is specifically to take into account where a coroner must, before authorising whether or not a person who under section 25 would be permissible to either view, touch, or remain with or near the body, the tūpāpaku—it is about whether or not it is deemed the significance of “(ea) the ethnic origins, social attitudes or customs, or spiritual beliefs of the person”—and it’s further detailed there that that particular relationship to the deceased person is balanced up and taken into account alongside all of those other factors. So it doesn’t give specific priority; it’s a balancing act as that being one of the interests in whether or not, alongside all of those other interests, it takes priority.

I’m just going to quickly turn to what I’ll address in the third reading before the House: that the other factors specific to cultural spiritual significance are section 32(f) and section 37(2)(c). This bill is specific not to tikanga Māori practices but to spiritual and cultural beliefs. Thank you, Mr Chair.

MARAMA DAVIDSON (Co-Leader—Green): Tēnā koe e Te Māngai o Te Whare. Ata mārie tātou katoa i tēnei Whare Pāremata.

[Good morning to all of us in Parliament House.]

I wanted to take a short call in this before the final reading of the Coroners (Access to Body of Dead Person) Amendment Bill, firstly, to absolutely congratulate Minister Little for picking up this particular part of the recommendations of the Māori Affairs Committee and showing a confirmed and committed way forward to how we can start putting in place the recommendations that came from the Māori Affairs Committee through the inquiry into the management of tūpāpaku. Now, I wanted to acknowledge the previous members of that select committee when former co-leader Metiria Turei raised the issue of the stress that whānau go through in one of the most stressful times that any person can imagine in their lives, at a time of grief and shock.

When Metiria Turei proposed this inquiry to the select committee, it was absolutely clear that every single member of the select committee could relate to the issue of the difficulties and the challenges that arise for, actually, any family but particularly those just wanting to manage and deal with their tūpāpaku in a way that upholds their tikanga and their culture.

Every single person on that select committee, and I think that included—I was just talking to Tutehounuku Korako—Pita Paraone, Marama Fox, myself, Nuk Korako, Jo Hayes. Chester Borrows—we all were keen on getting this inquiry through, but he was particularly keen, coming from his police background, and he acknowledged where processes could be done better in dealings with whānau so as not to add hurt to grief. We were all very clear; we all acknowledged instances—Pita Paraone, I think I said his name. Every single member was very enthusiastic. I was very proud to be able to pick this up and hold the torch for Metiria Turei once I became a member of that Māori Affairs Committee. What the Minister Andrew Little has done here is pick up one of the specific recommendations, one of the most—well, they’re all important, let me be clear, but one of the recommendations to start with that will make a very significant difference, if we think about what we heard in the select committee, is that there will be a requirement of the coroner, when determining whether a person should be allowed to remain with the tūpāpaku, to also consider tikanga Māori and the expectations of other cultures.

I was reminded of visiting, I think it’s called, Papatoetoe crematorium and cemetery in South Auckland some years ago, when I learnt about the leading ways that that crematorium has worked out how to make things more respectful across a broad range of cultures, and I look forward to coroners and all agencies involved increasing their learning to be able to uphold this amendment to section 26 of the Coroners Act 2006. Taking cultural considerations into account will absolutely require an openness and eagerness to learn, to be informed, and to form relationships across leadership in the community and agencies. That will hold us in good stead throughout what I hope will be ongoing follow-up of putting some of those other recommendations from that inquiry into place. There were others around improving cultural considerations at the time of death, but also the capacity of the coronial system was something we heard a lot about.

So I’m just really pleased to stand and make a grateful and appreciative contribution in this, the committee stage, acknowledging everyone for the work that has brought us to this place and particularly acknowledging clause 4, amending section 26 of the Coroners Act to insert that importance of upholding tikanga values across cultures, and what we know from evidence is that that will actually make it easier for agencies and whānau alike. So this is a win-win situation. I commend this to committee. Kia ora.

Clauses 1 to 4 agreed to.

Bill to be reported without amendment.

House resumed.

The Chairperson reported the Reserve Bank of New Zealand (Monetary Policy) Amendment Bill with amendment, the Conservation (Infringement System) Bill with amendment, the Earthquake Commission Amendment Bill with amendment, the Crown Minerals Amendment Bill with amendment, and the Coroners (Access to Body of Dead Person) Amendment Bill without amendment.

Report adopted.

Bills

Crimes Amendment Bill

Second Reading

Hon ANDREW LITTLE (Minister of Justice): I move, That the Crimes Amendment Bill be now read a second time.

Before I come to the substantive measures of the bill, I want to place on record my out-of-scope Supplementary Order Paper (SOP) 185, which was introduced earlier today, which addresses the scourge of livestock rustling, which is hurting our rural communities. Subject to the deliberations of the committee of the whole House, that SOP contains two new offences to be added to the Crimes Act. Those offences are theft of livestock or other animal, carrying a maximum penalty of seven years’ imprisonment, and, secondly, unlawful entry to land used for agricultural purposes where the offender intends to steal livestock or act unlawfully against unspecified things such as buildings, machinery, and the like that are on that land. That offence carries a maximum penalty of 10 years’ imprisonment.

I want to particularly acknowledge the work of the Primary Production Committee and, especially, the National Party’s Ian McKelvie and Labour’s Kieran McAnulty for their work in putting this together and their bipartisan assistance so that that now may be considered as part of the Crimes Act. I know that will go a long way to meeting a lot of the concerns from the rural community. As the whips will be aware, there’ll be a procedural vote to bring that SOP into scope during the committee stage of the bill. I want to thank all parties represented in the House for their very positive indications about that so that we get to debate that as part of this bill.

But now, turning to the bill as reported back from the Justice Committee, this bill reflects the Government’s ongoing commitments to keep the New Zealand statute book up to date and current. The Crimes Act 1961, which is our principal criminal law legislation in this country, should not contain archaic laws that do not reflect contemporary societal needs and our values as a modern, forward-looking nation.

I’d like to take this opportunity to thank the Justice Committee for their work on the bill. Forty-two submissions were received on the bill, mostly commenting on the repeal of blasphemous libel. Those submissions, including those who presented in person both for and against the repeal of that provision, were given very careful consideration by the committee.

However, the issue that came under the most intense scrutiny by the committee was the repeal of the year and a day rule. I want to return to this issue shortly. The committee has recommended one small technical change to the transitional provision in the bill, which is for clarification only. It ensures that Acts and omissions currently referred to in section 162 of the Crimes Act are those to which the transitional provision applies. Turning to that year and a day rule, section 162 of the Crimes Act provides that no one is criminally responsible for the killing of another person unless the death takes place within a year and a day of the cause of death—that is to say that the action by the person charged that leads to the death all happens within a year and a day.

The Justice Committee was particularly interested in this aspect of the bill. There were some robust discussions about the nature of the transitional provision in the bill as it applies to the repeal. As I noted in the first reading, the rule has its origins in medieval times, when there was a distrust of science. There have been calls for its repeal in this country for decades.

The rule simply has no place in New Zealand’s statute book today. There was no disagreement from any member of the Justice Committee that the rule should be repealed. However, there was some concern about the effect of the transitional provision in the bill, which preserves the rule for any actual remission which occurs before the repeal date. I understand the unease shared by some that for a historical case where the cause of death occurred, say, 30 years ago and the death occurs after the repeal date, the person responsible will still be able to rely on the rule. However, as I publicly stated earlier this year, the repeal will not be made retrospective. It would be unjust to deprive people of the law as it applies to them before the repeal date. That is a basic constitutional convention that Westminster democracies apply around the world. Under the existing law, the clock starts ticking from the time of the cause of death. In my view, it would violate a fundamental principle of criminal law to backdate laws to remove a bar on prosecution.

The repeal of such a provision should not remove the right of a person to claim the benefit of the law as it exists before the legislature removes it from the statute book. Where a person is liable to the ultimate criminal sanction, which in our country is life imprisonment, it is very important to respect a law, whether we like the law or not, that can be relied on by a defendant. Let me be very clear. For those responsible for death whose acts occur before the repeal date, if death occurs at any time within a year and a day, prosecution will of course be possible, whether or not the death occurs before or after the repeal date. That is the case for historical cases as well. For example, if the cause of death occurred in 1980 and the victim or victims died in 1981 but within a year and a day, the rule does not currently and will not under the bill preclude prosecution. It’s important to note that for those whose conduct is responsible for deaths after the repeal date, they will never be able to claim the year and a day rule to prevent prosecution.

I’m pleased that there was unanimous support for repeal of the year and a day rule from the Justice Committee, and I’m satisfied that the transitional provision in the bill is appropriate. The legislature in this country should be extremely reluctant to retrospectively change the substantive criminal law by removing statutory bars to prosecution that have already accrued.

Turning to other parts of the bill, I just want to make it clear that following the deliberations of the committee, section 71(2) of the Crimes Act 1961 provides that no person whose spouse or civil union partner has been a party to an offence can become an accessory after the fact to that offence, even where they assist the other to evade justice. There were a couple of submissions to the Justice Committee on this issue. Concerns were raised about repeal undermining the sanctity of marriage and the potential impact on children of the relationship. I’m not satisfied that those reasons justify retention of a law which is discriminatory in that it does not apply to others in a close personal relationship with the offender, including those in long-term de facto relationships. Children of the relationship are not only an issue where the parents are married or in a civil union. Further, the law is anomalous in that the protection afforded by this outdated law is not reflected in other criminal laws. For example, a husband or wife may be charged as a co-conspirator or a party to an offence.

The law reflects an outdated notion that husbands and wives are, in essence, one and the same, and neither has individual autonomy to make their own decisions, good or bad. That is not the world we live in today, thank goodness. The repeal of section 71(2) of the Crimes Act will ensure that all people who help someone, including those with whom they’re in a close relationship, to break the law can be prosecuted as an accessory after the fact.

In relation to blasphemous libel, as I thought would be the case when I introduced this bill, there were some strongly and genuinely held views expressed both for and against repeal by submitters on this provision. Submitters were pretty much split down the middle with 22 submitters opposing repeal and 20 submitters supporting repeal. Themes that emerged from those opposed to repeal included that it would encourage hate speech, that it would incite violence, and that it would remove a protection for religious freedom. While I have no doubt that those views are sincerely held, I do not share them. The retention of a provision which has not been prosecuted for nearly a century and which criminalises certain conduct against only one religion has, in my view, no place in the criminal law of New Zealand. To presume that the repeal of a hitherto little-known law will suddenly result in a wave of anti-Christian sentiment in this country seems completely untenable to me. I agree with the submission of the Human Rights Commission that section 123 of the Crimes Act is out of date, is based on English law that has been abolished, and is inconsistent with New Zealand’s human rights obligations.

One of the most compelling submissions received on the bill came from a minister of religion who was in favour of repeal of blasphemous libel. The good reverend noted that laws protecting free speech are an important part of the common good and they must not be weakened by antiquated blasphemy laws, which are actually so unnecessary that there has not been a prosecution under them for a hundred years. So that provision, as reported back by the select committee, remains unchanged.

I want to thank all those who submitted on any aspect of the bill. While all will not agree with the repeals, you’ve all played an important part in the democratic process. Your views have been heard, but it is ultimately the role of Government to determine those laws that are most appropriate and relevant in contemporary New Zealand, and ultimately the role of Parliament to decide on what stays and what goes.

I commend this bill to the House. It will modernise and improve the criminal law in New Zealand and bring New Zealand into line with like-minded countries that have abolished, or are in the process of abolishing, their laws on blasphemy and the year and a day rule. I commend the bill to the House.

Hon Dr NICK SMITH (National—Nelson): Large parts of this bill are agreed with by the National Opposition. I wish to speak briefly on each of those three provisions and then to focus on an issue where there is a difference of view. Firstly, this bill provides for extending the protections that are provided in the Crimes Act to those persons or spouses that are in a civil union as though someone was married. That it is a common-sense tidy-up of the law that Parliament has been systematically working through over the last couple of decades of establishing an equality of relationships, whether people are married, whether they are civil unions, and that makes good sense.

The second provision in the bill deals with the issue of blasphemous libel. And as a political party that believes in freedom, that believes in the importance of people being able to express themselves without constraint, it is an anomaly in the law that it is a criminal offence to make a blasphemous comment. Now, some might argue that it’s been a very long time—I think it is nearly 90 years—since someone was prosecuted, and I suspect it is not 90 years since someone somewhere, perhaps even in this Parliament, has made a blasphemous comment. However, it’s my view that the law should reflect what we intend, and whether the police and Crown Law have not determined to prosecute such cases is no reason for Parliament not to bring the statute into line with practice. I’ve actually got a constituent right now that is in another jurisdiction in another country being prosecuted for blasphemous comments facing a serious prison sentence, and it is difficult for New Zealand in the international arena to be able to promote the free expression of religious views abroad if at home we still have this law on our books.

I do want to make the point that if we are going to support freedom of speech, we do need to be consistent, and I do note there are some other proposals where the Government is looking to constrain freedom of expression, including those people that have strong Christian beliefs. I would urge that Parliament, in repealing this blasphemy law, equally applies and respects the right of people that have deep religious views to be able to continue to express those.

The most significant of the provisions of this bill I feel very strongly about and commend the Minister for bringing to the House, because I have been at the front line of dealing with some of the angst and frustration of people who had not been served well by our justice system in respect of the one year and one day rule. My first ministerial appointment was as Minister of Conservation following the tragedy that occurred at Cave Creek. There was a deep sense of both frustration and injustice that no person was ever prosecuted for constructing that death trap, and one of the reasons that the authorities gave for no prosecution being issued was the existence of this “one year, one day” rule. It actually was not that much longer than one year from the time when the Cave Creek platform was constructed. It was one year and six months to that tragic day when those young people lost their lives, and I don’t think there would be a person in this House that really believes that the passage of that time should exempt people from being responsible.

Equally so if we reflect on the two great tragedies that afflicted our nation in a very short period, both at the Pike River mine and the collapse of the CTV Building in the Christchurch earthquake—again, this one year and one day rule, effectively, meant that because the act of neglect that may have occurred in Pike, where there was a reckless regard for health and safety that led to the tragedy of the death of 29 men, or the 113 people that were killed in the CTV Building—because the negligent design occurred back in 1987 but the building did not collapse until the date of that earthquake in February of 2011, it restricted the capacity to prosecute. That is why, quite rightly, this Parliament is universally of a view that section 162 should be repealed.

But here’s the interesting question: if Parliament accepts that the “one year, one day” rule is an anomaly, the very real question for this Parliament is when should that anomaly be removed? This issue is particularly pertinent to my own profession as a civil engineer and the thousands of buildings that are constructed in the country each year. The Government’s view that they’ve taken on the transitional provisions means that any building that has been built prior to 2018 will still enjoy the protection of the exemption of the “one day, one year” law. Can I give a practical example: we have a major building—hundreds of them that have been built in Christchurch. If any of the engineering of those buildings that have been constructed is deficient, and let’s say there is a further earthquake in this country in 2050, 2060, maybe even 2100, the designers of those buildings, under the Government’s approach, would not be able to be prosecuted. They would still enjoy the benefit of the “one year, one day” provision that is proposed here. I think that is wrong. I think that is taking the purity of retrospectivity too far.

Here’s the madness: if, just by chance, you’re an engineer and within 10 months of you building the building, you are fully—and we all know that earthquakes are random events; we have no control over them. The engineer that is responsible for the design of that building will be fully legally accountable, but just by accident of the timing of when the building is constructed, that person will be able to walk free. Now, in my view, the argument that the Government has taken on this transitional provision is one that is very legalistic and pure, and it says that for Parliament to pass a law today that says that buildings that have been built in the past continue to enjoy the “one year, one day” law, in my view, will be an insult to many of the families aggrieved such as those from the CTV Building. I know it is their strong view that this bill should not carry through that exemption into the future.

National’s position is not that the law should be applied retrospectively. It is our view that from the date that this bill is passed, if there is anybody killed in a building collapse, then the designers of that building should not be able to enjoy the “one year, one day” rule, and that is where this Parliament needs to actually take a practical view of justice and not a theoretical view. Here is the essence of the question for Parliament: if a building collapses and kills 50 people in the year 2030, is it a greater injustice that the victims of that building have no accountability, or is the greater injustice that the designer of that building is not able to enjoy the “one year, one day” rule exemption? It would be my common-sense view to this Parliament that the far greater injustice is for those families that are not able to enjoy it. This is the nature of engineering, where there is the widest application of this particular issue, and I would urge members opposite to reflect on the common-sense dimension and ensure that if there is a future tragedy, whether it be a Cave Creek, whether it be a Pike, or whether it be a CTV Building, that from the day this law is passed, people are not able to escape accountability by the continued application of this “one year, one day” rule.

I note with interest that, actually, the Institution of Professional Engineers New Zealand and many others take the view that the sooner that provision is removed, the better, and we should note that there will be tens of thousands of buildings in the next century that enjoy this anomaly and this protection inappropriately if we do not change the transitional provisions in the committee stage, which National will be attempting to do. We do commend the bill, but we would like to see that anomaly resolved so that this law can be right and correct these historic injustices.

RAYMOND HUO (Labour): Thank you, Madam Deputy Speaker. This must be the thirteenth bill that the Justice Committee has sent back to the House for the second reading, and the extraordinarily busy Justice Committee has considered 20 bills this year, as well as Estimates, annual reviews, inquiries, and petitions. So, on that note, and in my capacity as the chair of the Justice Committee, I’d like to thank all the members of the Justice Committee. I thank the clerk and his team, and I thank officials and advisers and especially the submitters, who have taken the time to get involved and played a very important part of this legislative process.

As well as the Supplementary Order Paper 185 that Minister Little has just introduced, this Crimes Amendment Bill seeks to repeal three sections in the Crimes Act 1961, relating to immunity for spouses as an accessory after the fact, the offence of blasphemous libel, and the year and a day rule. This is a relatively small, straightforward, but very important bill. We have received 42 submissions from interested groups and individuals. Most submitters commented only on the repeal of the blasphemous libel offence. A small number of submitters also raised issues about the repeal of the year and a day rule, as well as issues concerning the basic principles of retrospectivity.

Immunity for spouses as an accessory to a crime after the fact is out of step with modern society. There is no justification for such a protection. Being married or in a de facto relationship or civil union relationship provides no reason to protect those who intentionally obstruct justice. What is worth noting is that this kind of immunity does not apply in New Zealand anyway. For example, under the Evidence Act 2006, all eligible witnesses are compellable to give evidence no matter their marital status.

The blasphemous libel provision—namely, section 123 in the Crimes Act—is little known. No prosecutions for blasphemy have occurred since 1922. We have heard submitters who expressed a view that we may need to protect protection against anti-religious conduct. But the majority of submitters believe that the current provision is an unwarranted restriction on the right to freedom of expression and that it does not align with the values of modern New Zealand.

The year and a day rule has attracted much attention. The rule in section 162 of the Crimes Act 1961 is that death must be within a year and a day. The repeal of this section would allow the prosecution of an alleged offender for his or her act or omission that resulted in death more than a year after that cause of death. The repeal could mean, in future cases similar to the CTV Building collapse, that there would be no bar to prosecution after a period of, say, 25 years. The Government announced in March that we would remove the year and a day rule from the Crimes Act. The Prime Minister, the Rt Hon Jacinda Ardern, was quoted as saying in the staff reports that she had made an undertaking to the families of the 115 people who died in the CTV Building collapse, in that 2011 quake, that changes need to be made. And we have honoured our promise.

There are other cases that illustrated the problems with the rule. The issue came to light in New Zealand following the 2017 death of a victim 15 months after he was assaulted. In the United States, during the attempted assassination of President Reagan in 1981, the White House press secretary James Brady became permanently disabled from a gunshot wound. He died some 33 years later, and his death was ruled a homicide caused by the gunshot wound. However, the attempted assassin could not be prosecuted and the year and a day rule was cited as one of the reasons.

Other comparable jurisdictions, notably the United Kingdom, the United States, Ireland, and Hong Kong have respectively abolished the rule, and in other countries such as Germany, Scotland, and France the rule has never applied. One thing that we would need to be mindful of is that in the United Kingdom there was no statutory basis for such a kind of a rule as it is purely judge-made common law. But in New Zealand we have codified the rule, so there are strong cases that we must make such a change through the legislative process.

There are some issues regarding the timing of the year, as Dr Smith’s just outlined, more specifically around issues concerning the basic principles of retrospectivity. The short answer is no. Minister Andrew Little outlined his reasoning behind the conclusion. It is fundamentally a principle that is widely accepted. It is also in breach of the New Zealand Bill of Rights Act 1990, because section 26(1) of the New Zealand Bill of Rights Act spells out very clearly as to the reason why retrospectivity shall not apply.

We have heard from some of the National members, and Dr Smith in particular, who have said that they would view that sort of a year and day rule and the repeal of which as a kind of a loophole. With due respect, they were in Government and there were plenty of different ways of closing such a kind of loophole—if they genuinely believe it’s such a case. They were in Government for nine years and they didn’t do it. We have been in Government for just more than 12 months and we have done that. Thank you, Madam Chair.

Hon MAGGIE BARRY (National—North Shore): Thank you, Madam Deputy Speaker. I rise to speak at the second reading of the Crimes Amendment Bill. I think the issues that have been discussed around the means of this bill achieving modernisation, achieving some streamlined improvements, really, to the way justice is delivered in New Zealand have been well made.

I would make the point, though, to the speaker who’s just resumed his seat, Raymond Huo, that the reason we didn’t complete this in nine years was not through want of trying. The Hon Amy Adams and her predecessors have spent a great deal of time, effort, and energy combing through irrelevant, outdated, anachronistic legislation, much of which is now coming through the House. So to say that we didn’t do it in our time is factually incorrect, and the fact that it is happening now within one year is due to the good work that we have done in combing through it. I think, in the spirit of cooperation, I won’t dwell so much now on the things that we disagreed upon—except the one year and one day rule I will come back to.

I would like to talk about some of the submitters that came before the Justice Committee and the points that they made, because when we reflected on the 42 people who made submissions, everybody who came before the committee to orally submit was exercised by the blasphemous libel—either in favour of it or not in favour of it being repealed. So when I looked at the 22 people who came in and who spoke about that particular clause in some detail, there were six main themes, and I think it is worthwhile to take the time of the House for a moment just to recap on those, because there are some very deep, fundamentally held beliefs that would indicate that this is an important safeguard of the standards of language and the way we conduct ourselves not only through the law but in society as a whole.

There are of course a lot of people who point out that in 122 years, there has not been a single conviction under it, and therefore what has it achieved. But the main and overriding theme of the six that came up—of the 22 who protested about the blasphemous libel being repealed—was that it would encourage hate speech around and against God. That feeling was deeply held and explained in some detail, because, again, it led to the second theme, which is that it would remove a safeguard for religious freedom. So even if it didn’t encourage hate speech, it might be seen as an effort to liberalise the way in which people would speak of God, and in a way that many would consider disrespectful.

The third theme was that it would disrupt the maintenance of the wholesome boundaries of the media. There aren’t too many present for this morning’s descriptions; I think “wholesome boundaries” and “the media” are not often found in the same sentence. I do feel that when we examine the sincerity of the people who made that point, there was no questioning their sincerity but, with respect to them, I don’t think it’s made a very big difference to the way that the media have conducted themselves—the presence of this blasphemous libel—and I don’t think it would make a huge amount of difference if it were repealed, either.

Insulting the Christian founding of New Zealand was another very deeply held conviction, along with inciting violence in the American model. It was brought to the committee’s attention that this is the kind of thing that happens in the United States and that by keeping the blasphemous libel in, it would stop that violence occurring. The insulting and dishonouring of God or God’s believers was also something that came before the committee. So while I feel that both Labour and National considered these things carefully and respectfully within the submissions hearing process, it was generally agreed that, with respect, we didn’t feel that the repealing of this would actually lead to the things that those 22 submitters were fearful of. But I would say that it is useful to have a conversation around that, because what it has done is sparked a great deal of better-informed debate about what hate speech really is and whether we need to be fearful of it or protective of it in New Zealand, and where that respect should best be really addressed.

So, ultimately, the committee decided that the repeal of blasphemous libel would not change the way that we do things, but there was dissent around this idea of one year and one day. I think that my colleague the Hon Dr Nick Smith, who is of course an engineer by profession and who understands the structure and the design of buildings—he is somebody who believes very strongly, having been the Minister of Conservation immediately after the Cave Creek disaster, and having taken over that responsibility with Pike River as well. We see two outstanding examples, as well as the CTV Building, where the one year and one day rule enabled people to evade and sidestep any kind of conviction or scrutiny of the law.

We are deeply uneasy about the timing of the implementation of this, and we will, at the committee of the whole House, certainly present a number of Supplementary Order Papers, where we hope that the committee of the whole House will understand that this is a risk. Buildings last for a very long time, and one year and one day is not very much time in the lifetime of a building. Why should people not face scrutiny and prosecution if the building, ultimately, at a random and uncalled for event like an earthquake—why should they not be held accountable in years to come? I think that for those of us who have been involved in the submissions around the CTV Building, and ways to improve the way that we as a nation, actually, conduct ourselves in earthquake recovery, and how we make things come right—we have an obligation, I think, to look very closely at that side of things. So we will be, certainly, pushing back pretty hard on that, the section 162: “Death must be within a year and a day”. Perhaps after this legislation is passed—and we do support it, of course—then that could be the moment at which it is triggered. So there will be more discussion to come on that.

We were all agreed, as well, that we need to make some changes to the protection of spouses and civil union partners, and this is a little bit like the blasphemous libel. This is something where, really, the law hasn’t kept pace with the times and the social and modern family dimensions that occur. So, essentially, section 71(2) needs to be repealed because it is offering protection to spouses and to civil union partners in cases where they would otherwise be an accessory after the fact to an offence. By giving immunity to a person who assists their spouse or civil union partner, we feel that that is outside the spirit and intention of what the law ought to do, which is provide justice. This protection really does—we all felt as a committee, all eight of us—create an anomaly in the law, because it doesn’t apply to other classes of people who are protecting someone in a close personal relationship, like a brother or sister or cousin or family member.

So there are a number of things that we agreed on and some that we did not. But I come back to where I started, which is that this bill is a broad-ranging examination of a series of elements within the Crimes Act, and we needed to put through an amendment of this sort to tidy it up and make justice better served. I think that it is really important, as well, for the people of New Zealand that they understand that they are able to see justice done if there are wrongs that have been done, particularly in a construction sense, by engineers.

I would have to say that in the number of omnibus bills that we have done to try and tidy up anachronisms in legislation, this one has been the most straightforward. I think that by repealing these three provisions in the Crimes Act, we will make the law more fit for modern purpose. We will, I think, encourage more confidence in the minds and hearts of the public to know that they will get satisfaction from the law if there are issues such as earthquakes and deaths that arise from those.

So I won’t take up the time of the House any longer on this, but I would say very firmly that, come the third reading and the committee of the whole House, there will be some very robust discussions about a year and a day. But in a broad sense, the Justice Committee—which is not always, let it be said, in absolute agreement over every issue that has come before us. The chairman, Raymond Huo, has pointed out that we have done 20 bills this year. There has been no shortage of annual reviews, petitions, and so forth—all of which have been fairly hotly contested. So I think that when we do see a bill of this kind which, in the engine room of the select committee, has really gone through the detail of the bill, made it a better bill, and made it, I think, really fit for modern purpose, that’s the Justice Committee doing good work. So I commend this bill to the House.

DARROCH BALL (NZ First): Thank you, Mr Speaker. It’s a pleasure to rise on behalf of New Zealand First in support of the Crimes Amendment Bill. I just intend to take a short call, because it’s quite a simple bill, but it is none the less important. Those main provisions in the bill have been canvassed quite a lot from both sides of the House. The bill repeals three main provisions in the Crimes Act, which cover three things: spouse or civil union immunity from prosecution for accessory after the fact, blasphemous libel, and the year and a day rule. So the main intent of this bill is to ensure that the confidence of the public in the justice system is maintained, and one of the ways that we do that through legislation is ensuring that this legislation is applicable to modern day technology and relevant to modern day society and values. So that’s the main intent of this bill and the changes and repeals in the bill.

I just wanted to mention a couple of main points in support of this bill, and on two of the sections. First of all, the year and a day rule and the injustice that, in today’s society, it does reflect when someone cannot be prosecuted for someone’s death just because a year and a day has passed. We’ve heard a couple of examples: the CTV Building collapse—

Hon Mark Mitchell: Cave Creek.

DARROCH BALL: —the Cave Creek disaster. Just because a year and a day has passed, the person or people that were responsible for the structure and the issues that created it and caused multiple deaths were not able to be prosecuted for those deaths, and that’s obviously an injustice, and that’s one of the reasons why this is being repealed.

Another example—I’m not sure if it was mentioned in the House today, but definitely through the first reading it was—was the example of someone who died from a coward punch. I think that’s a direct example of how the law does not reflect modern-day society’s medical ability to be able to maintain someone’s life past a year and a day, and also the legislation and the developments in the sciences and forensic sciences as well, where an individual dies more than a year and a day later, and the individual who committed the crime could not be punished for their death, when rightly, and for justice reasons, they absolutely should have been. So New Zealand First supports that.

Additionally, actually, we’re not the first country that will be taking away those provisions. We’ve got like-minded countries that have already done so in the past, including England, Wales, Canada, Ireland, and, actually, most of the Australian states as well. It’s important, also, to note on that section that that law won’t be retrospective. I know that there’ve been a couple of opposing views from the National Party, but New Zealand First understands why the Minister has brought this forward in the way that he has, and we support him on that.

This bill also removes the blasphemous libel. I won’t labour the point on that—it’s quite a simple one. We’ve also heard that there have been no convictions since 1922 for this, so we support that removal—also, the concerns that it brings for the New Zealand Bill of Rights Act.

Lastly, there was only one technical amendment that went through the Justice Committee, and the committee recommended amending the proposed new schedule 1AA “to clarify [that] the nature of acts and omissions to which the transitional provision applies are the same as those currently specified in section 162”, and New Zealand First supports that amendment.

New Zealand First supports this bill and the changes that it brings to the Crimes Act. We’ll be looking forward to the progress of this bill through the House and the debate through the committee of the whole House stages on the Supplementary Order Papers (SOPs). Thank you, sir.

Hon MARK MITCHELL (National—Rodney): Thank you, Mr Speaker. It’s a pleasure to stand and take a call on this, the Crimes Amendment Bill. Could I acknowledge the Minister in the House who has brought the bill to this House and shepherded it through. We do support the bill. I think that previous speakers have already spoken about the fact that we’d like a more nuanced approach around the year and a day, but the committee of the whole House will have a chance to talk about that. Can I acknowledge the chairman of the Justice Committee, because he’s quite right: we’ve had a heavy workload this year—20 bills, and, of course, we’ve been listening to very important submissions around the Privacy Bill and the End of Life Choice Bill, as well, and getting around the country. So can I just acknowledge him and the other members of the Justice Committee. I’ve enjoyed working with you this year. I hope that you have a great Christmas break, and we’ll be back into it in the New Year, I’m sure.

Just very quickly, this bill covers off section 71(2), which protects spouses and civil union partners in cases where they would otherwise be an accessory after the fact. I think this is a really important part of the bill in terms of the repeal, because, although I recognise that wives and spouses in a relationship are always subject sometimes to coercion or force or threats that can affect their behaviour, I don’t actually think that we should, as a country, accept the fact that they are able to actually assist a spouse and they’re somehow immune from the justice system like everyone else is. So I think that this is a very, very good move. I think our agencies now are able to work out some of those complicated cases and deal with them appropriately, but we should not be using laws in New Zealand to say that we’re going to give you protection to help actually facilitate a crime and somehow give you protection from our justice system. So I think that that’s a very good move.

In fact, me personally, I would go further—and this is for another discussion, another bill—in terms of when we see young Kiwis killed, when we see children killed, and you see the family come around them and this cloak of invincibility and silence comes up. I actually think, as a Parliament and as a country, we should be doing something about that, and we shouldn’t be allowing people not to give information to the police, not to help with an inquiry, not to assist in finding out what happened to that young person or that child. The Minister Andrew Little is in the House, and maybe that’s a further discussion that we could have, because I think there could be some very good work done around that.

Hon Maggie Barry: The Kāhui twins.

Hon MARK MITCHELL: Well, the Kāhui twins are a great example—that’s absolutely right.

Blasphemous libel—this was fairly simple. We did hear quite a few submissions on this. We did listen very carefully to those submissions. We heard concerns that the repeal would encourage hate speech against God, incite violence, and remove a safeguard for religious freedom. It was suggested that the repeal would disrupt the maintenance of wholesale boundaries in the media and would insult God and the Christian foundations of New Zealand. We listened closely to that, but we actually just felt that this legislation is well and truly outdated. It didn’t reflect a secular society in terms of where we are as a country, whilst also remembering, actually, that Christianity and religion have been a big part of our country’s history as well and will continue to be.

Arguments in support of repeal included the idea that the current law is an unwarranted restriction on the right of freedom of expression.

SPEAKER: Order! The member suffers from some disadvantage because I’ve got a copy of the speech that he’s reading. The member is not allowed to read speeches, and he’s especially not allowed to read the explanatory note. He’s read a whole paragraph out, and now he’s just started again.

Hon MARK MITCHELL: Yeah. Mr Speaker, I’m trying to reflect on the submissions that were made to us, bearing in mind there were 24.

SPEAKER: The member’s own words—the member’s own words.

Hon MARK MITCHELL: I’m trying to sort of condense those for the House and reflect the submitters’ submissions to us, because I think that it is important, when we get up in the House and we speak to these bills, that we are able to do that. But I will condense it, and I will say that after hearing all the submissions around the blasphemous libel, fundamentally we did as a committee listen to that very carefully. We did have a debate in the committee about it, but we felt that it was not necessary to make any changes to the proposal in the bill and the shape in which the bill was being reported back to the House.

Kieran McAnulty: There you go—that wasn’t that hard, was it?

Hon MARK MITCHELL: Sorry, what was that? Sorry, what was the comment?

Kieran McAnulty: Get on with it.

Hon MARK MITCHELL: Get on with it?

Hon Maggie Barry: Rude rabble-rousing.

Hon MARK MITCHELL: Yeah, that’s right.

SPEAKER: Can I just say that was not that helpful. Now that the member has been interrupted, I will tell him that he mustn’t reflect on my rulings after I’ve made them in the way that he did. He’s a highly competent debater, he can speak very well without notes, and he certainly doesn’t need to read out whole tracts of printed material that’s already on the Table of the House.

Hon MARK MITCHELL: Thank you, Mr Speaker. So if I come to the final repeal, to section 162, in clause 6 “(Death must be within a year and a day)”, this has been well canvassed in the House. The previous speaker, Darroch Ball, addressed what we’ve been talking about in the House today as very good examples: the CTV tragedy and also the Cave Creek tragedy. I think that it’s a huge anomaly. I’ve never been able to understand the year and a day rule, especially when you reflect back on modern times now. We live in a golden age in terms of medical science, and we can probably all reflect back and think of a situation where someone may have been involved in a car accident that wasn’t their fault and they’re being kept alive and kept on life support for easily a year or over a year. Or let’s take the case, I think someone raised it, with a coward punch—I think it might have been Darroch Ball in his address to the House—where someone is punched, they fall, they hit their head on the kerb, and actually they’re kept alive for up to a year or over a year. Well, actually, the act of that coward punch is still just as relevant a year and a day later than it was at the time of the assault; so I actually think that this, too, is a very good repeal of this bill.

Finally, I just want to acknowledge the justice Minister again for making sure that this comes through the House. I want to acknowledge the comments that were made by the Hon Maggie Barry in recognising the Hon Amy Adams, because she’s the one that did a lot of work on this and the architect around the bill that we actually currently have in the House. So can I acknowledge her and the team that put that work and effort in. Finally, I’m very happy to take a call, very happy to recommend the bill to the House, and I’m looking forward to it coming back to the committee. Thank you.

GOLRIZ GHAHRAMAN (Green): Thank you, Mr Speaker. I rise in support of this bill and congratulate both the justice Minister and the Justice Committee for bringing this to the House but also for unanimously supporting all the much-needed updating of our criminal justice system and the Crimes Act that this bill represents.

I will begin with the first of the three key aspects of this bill, because I think it’s probably the most shocking to most laypersons and New Zealanders out there, which is the year and a day rule, which we are repealing through this bill. It is a rule that precludes prosecutions being brought for deaths if a prosecution is being brought after a year and a day of the act that caused that death. It does seem incredibly arbitrary, but more than that, it’s just so short.

Now, ordinarily, statutes of limitation for prosecution in the criminal justice system exist because we recognise that unfairness arises if too long has passed since the act alleging the cause of death has occurred—memories fade, witnesses pass away, and evidence is difficult to find in defence against charges. So that is something that our criminal justice system rightly recognises, and natural justice does require that prosecution is brought within a reasonable time for fairness to occur, but a year and a day in the age of DNA evidence—and, of course, as most who have risen in support of this bill thus far have pointed out, in terms of things like building code violations causing death, which may cause deaths years later and investigations may take a long time—doesn’t seem fair and doesn’t seem very practical.

I do want to mention the CTV case, because this is a case that’s fresh in most people’s memories. One hundred and fifteen people died, and I think most of us didn’t quite realise, when that great tragedy occurred—the Christchurch earthquake—that most of the victims who died in this one building had, in fact, died as a result of negligence by those who had built the building, who had chosen profit over safety. The police investigation, rightly, was done with great care. It took three years. There was a commission of inquiry, and in a very rare finding, the police said that negligence—criminal negligence—was very clearly made by their investigations, but that criminal charges were not brought because of legal advice based largely on this rule.

That was an opportunity lost. Justice was lost for those victims and the families of the victims, and something else was lost, which is that it could have been a very important precedent case for corporate liability in a real sense—not just fines, but the actual architects of this building, the corporation who decided to take those risks, could be individually held criminally liable. So the true ambit of their wrongdoing could be captured not just through a fine or a civil case that can be curtailed through bankruptcy—companies do declare bankruptcy when they’re being held liable for things like this, or even if they pay, it’s the company who pays. So it would have been an important moment where we say, “Actually, you can’t put profit before human lives.”, and that was stopped because of this rule—a very arbitrary limitation that we are getting rid of through this bill.

Next I will turn to another arbitrary rule that we are amending, or repealing, and moving forward from, which is the immunity of spouses, civil partners, or spouses through marriage from prosecution, which seems strange given that we have “accessory after the fact” rules and that perverting the course of justice is a crime. Those types of crimes are almost always committed by people in a very close relationship, familial or otherwise, with the principal party. So it seems a bit weird to say that the closest relationships are excluded from liability, and we’re getting rid of that because it is an arbitrary rule and it does curtail most of those accessory-type crimes where we are talking about perversion of the course of justice.

Thirdly, the final aspect that I’ll address is something that the Green Party very much welcomes, which is that we’re repealing the law against blasphemous libel. I do want to acknowledge my colleague and friend Angie Warren-Clark from the Labour Party, who brought a member’s bill to this effect that’s been carried over through this Government bill and looks set to pass unanimously in this House. This is a much-needed updating of our law, and it reflects New Zealand’s commitment to be a secular society committed to freedom of religion and freedom from religion, which, I was very happy to find, as the Minister has pointed out as well, was supported by submitters who included a minister of religion who, I think, called the law antiquated. That is something that should be reflected.

As others have pointed out, of course, freedom of speech wins through this particular repeal, but, of course, that always does have to be measured and balanced against the kinds of exercises of that right which actually, in fact, undermine and attack religious freedom too. So it’s always a balancing exercise, and we’re not saying that any right is absolute when it, in fact, undermines or threatens others’ rights, and we certainly would want to protect religious communities from that kind of attack guised as the exercise of free speech. But in this particular example, we are moving toward representation of our secularism and our commitment to human rights, which is also supported by the submission made by the Human Rights Commission, who called for this change to be made.

So I am very happy to have risen in support of this bill and the updating of our criminal justice system. I congratulate everyone on that committee and, of course, the Minister.

CHRIS BISHOP (National—Hutt South): Thank you very much, Mr Speaker. Look, the House has canvassed this bill in quite some detail now. We canvassed the bill in quite a lot of detail at the Justice Committee. Members will be aware that it makes three reasonably small but significant changes to the Crimes Act, and it looks like it’s going to pass through the House unanimously, which is very good.

Other members have commented on the year and a day rule and the spousal immunity to a crime after the fact. I want to make a brief contribution about blasphemous libel and freedom of speech. It is interesting times for freedom of speech in New Zealand. I’m not sure if the House is going pass this bill before the rising this year. I suspect we won’t, given that we’re on the second reading, but at some point in the next few weeks and months the House will pass this bill, and I think it’s a good thing that we’re doing that this year, or at least close to this year, because it has been quite an odd year for freedom of speech, and in some small, symbolic way the House is sending a message about the importance of section 14 of the New Zealand Bill of Rights Act 1990, which, of course, codifies international human rights instruments and their commitment to freedom of speech.

This year we’ve had the debacle of Don Brash being banned from speaking at Massey University. We have had the imbroglio over Mr Molyneux and the woman whose name I forget trying to speak at a venue in Auckland, and I think it’s good that the Parliament will send a message that religion is not immune to criticism, basically. I note that the law hasn’t been enforced, or at least hasn’t been used, since 1922. You need the Attorney-General’s permission to use the law anyway. It hasn’t been used since 1922.

Religion should not command respect because of the force of the law. Religion should command respect because of the precepts, because of the faith and the fellowship that it provides, because of the spiritual sustenance and nourishment it provides for those who have particular faiths. And, of course, blasphemous libel back in 1922, when the Parliament of New Zealand—or before then, when it was enacted on to the statute book. Back then, religion would have meant the Christian God, because the people who came to New Zealand first of all were predominantly of the Christian faith—the Church of England, I suspect; “C of E”, as they call it—and, of course, we live in a pluralistic, multicultural, multi-religious society these days, with people who worship all sorts of gods and all sort of deities and all sorts of faiths. I think this is the Parliament sending a small, subtle—

Hon Andrew Little: Don’t forget Julius Vogel.

CHRIS BISHOP: Don’t forget what?

Hon Andrew Little: Julius Vogel.

CHRIS BISHOP: Julius Vogel was correct—

Hon Andrew Little: The Jewish Prime Minister.

CHRIS BISHOP: Yep, the Jewish Prime Minister; very well said. We’re a country of many faiths and have been for quite a long time, as Andrew Little points out. Just as we head towards Christmas, which is a Christian holiday, it’s quite a nice, I think, subtle but important message for Parliament to send—that religion shouldn’t command legal protection to be immune from criticism. It should command respect on its own merits, and no one of the Christian faith or of any faith has anything to fear from removing this small section from our statute book. It’s a good thing to do. It looks like it’s going to pass the Parliament unanimously, and I welcome that. I look forward to its passage through the House.

GREG O’CONNOR (Labour—Ōhāriu): I rise as a member of the Justice Committee. Many have spoken about how busy the committee is—the clerk told me that that committee met two-thirds of the time of all the other select committees put together; I’m just reinforcing the comments from both sides of the House on what a fine committee we have, and well chaired.

This bill, really, is a journey through history to how we arrive at this place. These three provisions, the main provisions, that we’re repealing here have great historical context. Blasphemy: one only has to visit the great democratic institutions, the art institutions, the music institutions of Europe just to understand the role that religion and the Church played in society leading up to, really, the time that many of our European ancestors came to this land. So as we are now regarded as one of the more secular countries in the world, we now are removing what is something that would have been highly relevant at the time it was introduced simply because of the hold that the Church and religion had on our society. And I can’t help but reflect that, as we mature as a society, those new New Zealanders who come fresh from their homelands, as all our ancestors did—whether it was Hawaiki, or Ireland, in my case—will bring their beliefs and their religions with them. And what a good example to show that in the new world perhaps the relevance of those old ways can be forgotten and that we embrace being part of the Pacific. We quite happily talk about someone from Argentina being a South American. Do we happily call a New Zealander a Pacific Islander? I certainly think that the day will come when we will.

Likewise I look at the year and a day provision. What that was historically was that if you were to receive a wound—in fact, the World War I centenary has just finished, and we can look at the number of people who died from very minor wounds because of infections and various other things. We’ve fixed that, and people who would’ve been expected to die of relatively minor wounds in the past now will survive major trauma and may actually go on for up to five years. As a good example of that, police have been revising the wall at the college for those who were slain on duty, killed by a criminal act. A new name will go on there because when they did it historically they found that people had died about five years later from wounds that they sustained on duty.

And, of course, the third part about it is the removal of accessory after the fact, where someone who did assist their spouse to escape a crime, as an accessory, could claim immunity. That is no longer the case, and, again, what better reflection of New Zealand society than the number of people who actually do not enjoy what we would consider marriage, or the sanctity of marriage, having relationships that last a lifetime without actually being formally part of marriage.

So it’s a great walk through history, looking at these provisions, and I’m very happy to recommend this bill to the House.

MATT KING (National—Northland): It is a pleasure to speak briefly, very briefly, on this Crimes Amendment Bill. I’d like to acknowledge Amy Adams, the previous Minister, for her body of work, and I can see that the Hon Andrew Little has taken on three aspects of it, so that’s great. These three are pretty minor but also very archaic pieces of legislation.

I’d like to acknowledge the Justice Committee, which I was formerly on for a brief period of time—a very hard-working select committee, and I think I dodged a bullet when I got shifted off that. They work so hard under Raymond Huo, so a credit to them.

Look, in terms of the blasphemous libel, I think any law that hasn’t had a conviction or prosecution for nearly a hundred years warrants a look at, and it also, obviously, conflicts with our New Zealand Bill of Rights Act, so it’s a no-brainer in terms of getting rid of that law.

The year and a day rule—I think back to my experience in the police where we had a case where a man was seriously assaulted—quite badly assaulted—but he survived. He received injuries that could have killed him, but he survived. Basically, the injuries he suffered were debilitating, and he never recovered. So he was hospital-bound, basically, until he died, and it took him a year and a bit to die. He was a healthy, fit man prior to that, and the injuries that he got led to his body breaking down, and he eventually died. The year and a day rule meant that he couldn’t be charged, and I just felt that it seemed unjust. So credit to Andrew Little and his team for pushing this through.

In terms of the CTV building and Pike River and Cave Creek, yes, those cases now, if this law gets passed—people will be held responsible in those situations, and I think everyone in New Zealand will agree with that.

Finally, the spousal immunity—I was a detective in a detective training school, and we covered this particular law, and it always struck me as odd that just because you were married to someone, you couldn’t be prosecuted for offences. It just didn’t seem right. You could be anything other than in a marriage and you could be prosecuted, but for some reason spouses got immunity, and it just seemed like an oddball law.

I see that during the select committee process, we disagreed slightly—National and Labour disagreed on—

Ian McKelvie: Slightly!

MATT KING: —slightly, yes, I guess—the retrospectivity side of things and who gets to face the music, and I see that one of the main themes of the New Zealand Bill of Rights Act is that you can’t be charged with an offence that wasn’t an offence prior to—that’s a fundamental law, so I can see that we’re sticking to that.

Finally, section 10A of the Crimes Act explains that criminal enactments cannot have a retrospective effect, so if you take those criteria into account, there’s a good argument. I guess the other argument is that some people don’t end up facing justice. So it’s quite a dilemma to be facing and weighing it up. I’m sure the select committee and the House will come to a good decision at the end of the day. We’ll be fighting out of our corner, and they’ll be fighting out of theirs. In saying that, I commend this bill to the House.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Mr Speaker. I do want to really have a short call in respect of the matter just touched on by Mr King, which is the year and a day rule and the question of when it comes into force. I just note that, yes, there were some pretty vigorous exchanges, robust exchanges, at select committee on that point, and we pressed the advisers to provide us the best advice they could on that, and we got very, very good advice indeed, which informed the position that has been taken.

I can absolutely understand the sense that someone who committed a wrong in 1990 that causes a death in the future should be held to account for that. That’s a very real and appropriate sentiment, but the rule against retrospectivity runs very deep, and for good reasons. Dr Smith used the Cave Creek tragedy, a huge tragedy where 14 died due to defective buildings, and he also mentioned the CTV Building, an even greater tragedy, where 115 people died—both of which may be sheeted home to poor engineering, which may be laid at the door, possibly, of particular individuals. Now, because the wrongs themselves occurred more than a year before the tragedy itself occurred, the year and a day rule kicked in. The other situation where it’s come up in recent times was with George Siaosi, which was the coward punch—as it’s called—event where the young man was punched outside a Denny’s and he died 15 months later, meaning that the wrongdoer could only be charged with an offence which was less than the murder, which might otherwise have been the case.

Now, there are, essentially, three situations here. There’s no suggestion from any side of the House that we embark on some retrospectivity where both the wrong and the death occurred historically. And we all agree that looking forward, where the wrong and the death occur in the future, the law will now capture it because we’re doing away with the year and a day rule. Where we disagree is that narrow band of cases where the wrong occurred historically, but their death occurs after this comes into force. Now, that would be retrospective because when the wrong occurred, the law provided this defence.

Mr King referred to the New Zealand Bill of Rights Act. It is a fundamental precept; these are the words of the Act: “No one should be liable to conviction [on] any offence on account of any act or omission which did not constitute an offence by such [a] person under the law of New Zealand at the time it occurred.” That is absolutely fundamental—that people, when they’re engaging in conduct, do so under the law as it stands on that day. We don’t look backwards in time and think, “We should have captured that by the law; let’s change the criminal law retrospectively.” Indeed, the Crimes Act itself, section 10A, reiterates that by saying that there’ll be no criminal liability in respect of any offence which was not an offence at the time.

So the position in respect of retrospectivity is entirely appropriate. In fact, it’s more than that; it’s constitutionally required. So that’s really the only contribution I wanted to make on this bill: to make very clear the discussions that went on, the advice that was given, and the reasons for having a piece of legislation which is forward-looking only. I commend the bill to the House.

IAN McKELVIE (National—Rangitīkei): Just an opportunity to take a brief call on the Crimes Amendment Bill. One of the things that I kind of like in this place—I’m a bit unusual, because I’m not someone who loves to make more legislation, but I’m quite excited about getting rid of a bit that’s no use. And I think that’s the thing that appeals to me about this bill—well, there’s another thing that appeals to me about this bill, but that’s one of the things that really does appeal to me about this bill.

I listened to the debate led by Nick Smith, actually, earlier on, on the year and a day rule, and then the previous speaker, Dr Duncan Webb, just referred to the exact same point. It will be an interesting debate during the committee stage, to just see where that lands, or where some of the commentary on that lands, because I have a bit of difficulty myself with being found guilty of something that I wasn’t guilty of, at the time I wasn’t guilty of it, and I think that that’s going to be an interesting discussion as we go through it. But you can see that the law really is a bit of an ass, and particularly in the modern day and age, with medical science being where it is and the fact that we can, whether we like it or not, be kept alive, even against our will, for considerable periods of time.

And so, whilst there’s that aspect to it, there’s also the aspect to it of things that we built and did in a bygone time, really, and they then fall down as a result of a modern event. There’s a great argument as to whether that is a criminal offence or not, as to whether it should be included in this kind of bill. So I think that debate will be really interesting as we go along.

The other thing that kind of intrigues me is the blasphemous libel thing. There was a time, of course, when New Zealand was made up of a few Presbyterians, a few Catholics, a lot of Anglicans, and one or two atheists, and it was pretty simple in those days—the atheists weren’t allowed to be miserable about the rest of us, and that’s how it worked. But nowadays, of course, our society’s hugely diverse, and so what was thought of as blasphemous libel, I suppose, 150 years ago, really, anyone could take offence at that sort of thing nowadays, but we are such a diverse society and such a diverse community that the way we deal with those sorts of things—I think it comes down to a lot of things in life—really results in mutual respect, basically. So I don’t mind what anyone else wants to do, as long as they don’t want me to do it for them or with them, and I think that’s the kind of issue that we’re dealing with—that blasphemous libel thing. And I think to get rid of it is absolutely appropriate.

The other thing that I think is an ass—and we’ve seen a number of examples of this in recent times, too—is where people are protected against prosecution because of their association with the guilty party. There’s no question in my mind that that’s a law that no longer should exist. And, again, that’s because society has changed dramatically, even in our lifetime—it’s certainly changed dramatically in the last hundred-odd years. So getting rid of that, I think, is an appropriate use of this bill, as well.

I think those people who have done the work on this bill should be congratulated. It does tidy up a few things that are untidy, and two of them have, interestingly, been quite topical in the last few years in debates in this House; so to tidy that up, I think, is really good. I think it keeps the statute book up to date; it’s pretty positive.

The only other thing I just want to very briefly touch on with the Minister—I want to congratulate him on his great taste in bringing a very good Supplementary Order Paper to the House, which, no doubt, will be dealt with during the course of the committee stage, and I want to thank him for that. Thank you, Mr Speaker.

KIERAN McANULTY (Labour): It is an absolute privilege to speak, for a very short time, in support of this bill. There’s a lot of work gone into this and, on the whole, I agree with pretty much everything that’s been said. I want to acknowledge the work of the Minister, Andrew Little, and his officials to get us to this point. I also want to acknowledge the previous speaker, Ian McKelvie from Rangitīkei. His member’s bill that has been absorbed into the Minister’s Supplementary Order Paper (SOP) that he mentioned in his speech is a good bill. It was unfortunate that it got stalled at the Justice Committee process but I acknowledge him for working alongside myself and the Minister, for using this opportunity through an SOP to address the issue and fix the problem that we faced at select committee. I very much look forward to discussing that SOP at the committee of the whole House. I see no point in holding up proceedings when we all agree. I’m looking forward to seeing this bill pass through to the next stage. Thank you.

Bill read a second time.

Bills

Accident Compensation Amendment Bill

Second Reading

Debate resumed from 6 December.

Hon CLARE CURRAN (Labour—Dunedin South): Mr Speaker, thank you. As I was saying, this bill is making a series of changes to boundaries. I think that’s probably a good way of referencing it, which the Associate Minister for ACC Hon Peeni Henare said in his speech at the beginning of this reading, rather than at the core of the scheme. It does two things. It’s looking at addressing that gap in ACC coverage for families of employees who were posted overseas in the course of their employment, which is a vital change. It might seem like a small change, but it’s a vital change because it’s about not discouraging people from representing New Zealand’s interests abroad and about the impact that it has on their families by not being eligible for ACC.

The second thing that I want to touch on is that interface between the weekly compensation and superannuation, and the choice that is forced upon people who are injured close to retirement age. What this bill is doing is responding to a declaration by the Human Rights Review Tribunal that was forcing surviving spouses or partners to choose between New Zealand super and ACC’s survivors’ payments. They said that was discriminatory on the basis of age. What they did when responding to the changes that are proposed in this bill is that the Human Rights Review Tribunal expressed its approval, and I do just want to reference this. They said that a person injured in a non-fatal accident is compensated for loss of earnings. Those earnings will necessarily come to a natural end on the retirement of the individual from the workforce, and, logically, compensation must end at the same point. In this regard, they said this change was an appropriate proxy for the fixing of that point. It was also backed up by the Ministry of Justice, which, in a report on consistency with the New Zealand Bill of Rights Act, said that this policy may have a discriminatory effect on the basis of age for a small group of people, but that they consider it justified, and they went on to explain why that is.

I think we all agree in the House that this is a sensible bill. It is making changes around the boundaries. It is not going to the core ACC changes—those things will come down the track. This is a significant bill. It’s at the boundaries.

NICOLA WILLIS (National): I rise to speak on the Accident Compensation Amendment Bill. I had the pleasure of sitting on the Education and Workforce Committee as we considered this bill. As previous members have discussed, what was very clear to us in hearing submissions on this bill was the depth of feeling about the ACC scheme in New Zealand. It was a shame that a large number of the submissions we heard were formally outside the scope of the bill, and therefore the committee was unable to respond to those. However, I do want to put it on the record of this House that, as a committee, we recommended that the Minister for ACC note those submissions in the substantive review that is being undertaken. And I want to thank all of those who did submit and who shared with us sometimes harrowing stories of the fights they have had to go through to access compensation under ACC.

This bill, of course, goes to address some of the anomalies that have occurred in the legislation that have excluded some people from accessing ACC compensation which Parliament would have rightly expected them to be able to get.

Hon Clare Curran: What did your Government do about any of that over nine years?

NICOLA WILLIS: We have had agreement across the sides of the House and I’m not quite sure, therefore, why Clare Curran is addressing me now as I speak, because we have had agreement across the House that these are issues that should be addressed. These are loopholes that should be tied up and that we should ensure fairness in these provisions.

Hon Clare Curran: They could have been tied up in the last nine years.

NICOLA WILLIS: Clare Curran is addressing me again and I find this most flattering that my speech draws so much attention from her. She sat on the committee, of course, alongside me for the latter stages of consideration of this bill and we did work in a productive, cooperative manner, and I’m sure that this is the spirit in which these interjections in my speech are given.

In terms of the specifics of this bill, of course we have the removing of the requirement for ACC clients and their dependants to choose between weekly compensation and New Zealand super or the veterans pension. This was an issue that we did discuss in some detail and that officials were able to advise on—a long-standing issue that this bill carefully resolves.

Also the issue of the gap for those who have been posted overseas—that their spouses or those in New Zealand can actually get access to ACC—and I think this is very important because across the Parliament we have a view that those who are serving our country overseas are doing us a great public service; that these are people who are, in a sense, being our great patriots, representing New Zealand offshore, being the flag-bearers, the representatives for our people, and often serving us in ways that are brave and further the interests of New Zealand. So it has been a shameful anomaly that in some cases those people’s partners, spouses, and dependants have had difficulties accessing ACC, and it is positive that this can be addressed through this bill.

We then, of course, have the provision allowing surviving spouses to receive up to five years of weekly compensation, regardless of age. Similarly, this goes to the issues that we have heard about, where there was the blurring between superannuation entitlement and ACC entitlement. The simple principle here that Parliament agrees on is that you shouldn’t have your compensation from ACC curtailed in these circumstances. And, as the member Clare Curran has addressed, this bill disestablishes the Accident Compensation Appeal Authority.

I think, in considering this bill on the select committee, the reflection that I had was that when it comes to a scheme as complex as ACC and as far-reaching as ACC, actually there will always be loopholes and things in the legislation that Parliament must be prepared to address, as we are in this bill. And that’s because we can never, in this House, predict the individual circumstances, tragedies, and events that will unfold in people’s lives, or the particular circumstances in which they find themselves. So as we see ACC in action, in effect, it’s appropriate that we take the opportunity to review it to ensure that it’s living up to our intentions of providing compensation to those who have suffered accidents. These amendments, as proposed in this bill today, achieve that, and I think also go to the willingness of Parliament to work in a cross-party way on issues of this gravity.

So I commend this bill to the House. I again thank my fellow members of the select committee for their due consideration of it; I thank the officials who advised us as we considered this bill; and, in particular, I thank those submitters who, with significant passion, came and spoke to us about their experiences of the ACC scheme. We offered them our compassion, but in the future it is beholden on this Parliament and it is beholden on the Minister to ensure that there are further opportunities for their concerns to be addressed, as they lay outside of the scope of the bill. I commend the bill to the House.

Marja Lubeck: Mr Speaker.

Erica Stanford: Mr Speaker.

SPEAKER: Erica Stanford—a five-minute speech. We’re sort of doing a slightly different order.

ERICA STANFORD (National—East Coast Bays): Mixing things up—thank you, Mr Speaker. I’m pleased to take a call on the Accident Compensation Amendment Bill at second reading. The bill, obviously, makes some technical changes to the primary Act, the Accident Compensation Act, to ensure it’s up to date and fit for purpose—a bit of a tune up, if you like. It’s been pointed out across the House during this debate and at different readings that our ACC scheme is the envy of the world, so of course the National Party is supporting these very sensible and straightforward changes to the Act.

I wasn’t a member of the select committee that considered the bill, the Education and Workforce Committee, but I read the select committee report that came back to the House and hear Parmjeet Parmar did a great job at chairing that committee and taking us through the process. The select committee made a minor change to the commencement date, the timing of the bill, to ensure the timing of the changes to the Act is aligned with the funding allocation of Budget 2018.

I just want to focus on the one thing that I think is of particular concern to New Zealanders, and especially people in my electorate that I have spoken to, and that is the anomaly under the existing legislation whereby a person who is at or above the age of superannuation who is eligible for both super and ACC payments has to choose between those two payments in the second year of their injury. In most cases, they forgo their superannuation and collect just the ACC, forgoing the superannuation payment that they should be entitled to. So currently, if you’re working and receiving super and you get injured, you get both ACC and super entitlements for a year, and then in the second year you have to choose which of those entitlements to take. Most people choose to take ACC and therefore forgo those super payments, and in the third year they go back to super.

There’s no rationale for having to make this choice between the two payments in year two, and it’s not in line with the premise that superannuation is a universal benefit and not means-tested. If a person is working past 65, they’re entitled to both superannuation and their working income, so there’s no logical reason why, in year two of an injury, a person aged over 65 must choose between those two payments. The current legislation also has an anomaly whereby, if a person is injured prior to their 64th birthday, they’re actually worse off than if they were injured prior to their 65th birthday, because they’re not eligible to collect both payments. So this bill tidies that anomaly up, and I think there will be many people out there who will be quite pleased about that.

There are a number of measures included in the bill—other measures addressing the gap in coverage for family units in dependence on New Zealand employees posted overseas, allowing surviving spouses to receive up to five years of weekly compensation regardless of their age, and abolishing the Accident Compensation Appeal Authority. One of the things I’d note from select committee that I’ve heard a lot about through my colleagues who sat on that committee were the submissions that were out of scope. I get a lot of those through my electorate office—people who have concerns about the way that ACC operates and works. I understand why so many people submitted to this process, and I understand why it was out of scope, but I can see where there are a lot of changes that we need to make to ACC. There were a lot of heartfelt submissions, and I hear there were a lot of tears and people wanting to have their say.

I know that there are more changes coming. I look forward to debating in the future a more comprehensive reform to ACC that the Minister for ACC I think has talked about delivering in the new year, and I hope that the reform will consider and address some of the concerns of those submitters that brought up issues that were outside the scope of the bill. But this is a sensible and positive piece of legislation to improve our ACC scheme. I endorse it, and I commend the bill to the House.

MARJA LUBECK (Labour): Thank you, Mr Speaker. It’s an honour to speak on this second reading. It’s a very short bill, so I’ll be very short as well. Basically, we’ve heard that this bill is not changing any of the core of the Accident Compensation Act; it’s just changing some of the inconsistencies, tidying it up. I do want to also mention the 25 submissions we received, 13 being out of scope, but the majority of those, as we have heard from previous speakers, having very heartfelt, deep concern about the ACC Act and the scheme. As we’ve heard, we have a commitment to do some further work on this Act, and I’m looking forward to being part of that. Thank you.

Bill read a second time.

The House adjourned at 12.55 p.m. (Wednesday)