Thursday, 7 March 2019
Volume 736
Sitting date: 7 March 2019
THURSDAY, 7 MARCH 2019
THURSDAY, 7 MARCH 2019
The Speaker took the Chair at 2 p.m.
Karakia.
Business Statement
Business Statement
Hon CHRIS HIPKINS (Leader of the House): Legislation to be considered next week will include the third reading of the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill, the first reading of the Misuse of Drugs Amendment Bill, the second reading of the Local Electoral Matters Bill, the committee stages of the Local Government Regulatory Systems Amendment Bill, the Accident Compensation Amendment Bill, the Health Practitioners Competence Assurance Amendment Bill, and the Commerce (Criminalisation of Cartels) Amendment Bill. The second reading of the Ngāti Rangi Claims Settlement Bill will take place on Thursday, 14 March.
Hon GERRY BROWNLEE (National—Ilam): Mr Speaker, thank you. I want to first thank the Leader of the House for the outline of the Government’s forward legislative proposals. I have two matters that I’d like to get clarified if we could.
First, can he further inform the House if it’s his intention to seek House time to give effect to the comments by the Minister of Research, Science and Innovation this week that there will be a Taxation (Research and Development Tax Credits) Bill passed and enacted by 1 April 2019.
Secondly, is it the Government’s intention to adopt the members’ bill, Broadcasting (Games of National Significance) Amendment Bill (No 2), in the name of Clayton Mitchell, to ensure that all New Zealanders can watch the Rugby World Cup free to air later this year?
Hon CHRIS HIPKINS (Leader of the House): With regard to the first matter, that bill has already been passed. With regard to the second matter, that’s a member’s bill.
Hon GERRY BROWNLEE (National—Ilam): No, no. You’ve got the wrong bill. The bill I’m questioning about is still in a select committee.
SPEAKER: Right. Well, I do expect—given the clear difference—that if the Leader of the House is inaccurate, he will come back in and correct during the afternoon. Thank you.
Oral Questions
Questions to Ministers
Question No. 1—Finance
1. Hon AMY ADAMS (National—Selwyn) to the Minister of Finance: Does he have responsibility for the Government’s consideration and response to the Tax Working Group report?
Hon GRANT ROBERTSON (Minister of Finance): As a member of Cabinet, I am one of the Ministers responsible.
Hon Amy Adams: He can’t give a straight answer to anything.
SPEAKER: Order! Was that the member who interjected or was it someone else?
Hon Amy Adams: I did interject.
SPEAKER: Well, the member either wants to ask a supplementary or she is going to object. When the Minister finishes his answer she takes the choice.
Hon Amy Adams: Why is Sir Michael Cullen to be paid more than $1,000 a day of taxpayer funds to engage in political debate for four months after the Tax Working Group has been disbanded, including two months after the Government will have announced its own position?
Hon GRANT ROBERTSON: Sir Michael has had his contract extended because it’s necessary to respond to all of the misrepresentation and lies about the report.
Hon Amy Adams: Has he seen the remarks from former Labour Party chief of staff Neale Jones that Dr Cullen wading into the political debate over capital gains tax isn’t helpful and that Dr Cullen’s comments are highly political?
Hon GRANT ROBERTSON: No, I haven’t seen those comments, but I am aware of the last Tax Working Group in 2010 set up by the previous Government where, several weeks after that was released, the chair of it, Mr Bob Buckle, was making a number of comments in the media.
Hon Amy Adams: Was any thought given, then, to extending the contracts of any of the dissenting members of the Tax Working Group to help inform the debate? [Interruption]
SPEAKER: Order! Yes, the member knows exactly who was—if I can hear the member from here he must have been making a very loud noise, Mr Woodhouse.
Hon GRANT ROBERTSON: Sir Michael is the chair of the working group. It’s appropriate that his term is extended.
Hon Amy Adams: Is it appropriate that Treasury officials were used to send out a press release from Sir Michael Cullen on Monday evening attacking the Opposition, and Treasury officials were provided as the media point of contact for follow-ups?
Hon GRANT ROBERTSON: Those officials are the secretariat for the Tax Working Group.
Hon Amy Adams: I raise a point of order, Mr Speaker. That’s a useful statement, but the question was about the appropriateness of Treasury officials being used in that way. To simply state that, I don’t think addresses the question.
SPEAKER: And the Minister will answer it again. I think if he added—all he has to do is add one word to it.
Hon GRANT ROBERTSON: I’m not a person to only add one word when you give me an opportunity. The officials who sent out the press release are those who have worked as the secretariat of the Tax Working Group. It’s appropriate for people who are the secretariat of the working group to work as the secretariat of the working group.
Hon Amy Adams: Was Treasury instructed by either Sir Michael Cullen, the Minister, or his office to send out a political press release attacking the National Party?
Hon GRANT ROBERTSON: No. Sir Michael Cullen is the chair of the Tax Working Group and he’s responding to the misinformation being spread about the report.
Rt Hon Winston Peters: Is the Government’s position that the public should first be consulted from one end of the country to the other—business and workers and unions, the whole country—as a proper way of consultation, rather than opening one’s mouth and letting the wind blow one’s tongue around?
Hon GRANT ROBERTSON: It’s very important that we listen to the views of New Zealanders. One of those views was a farmer who I saw on TVNZ last night, who was one of the few people to attend a meeting that Nathan Guy organised, and when he was asked whether or not income should all be taxed the same, he couldn’t answer, he said, because he might get in trouble with the National Party.
Hon Amy Adams: Isn’t having Treasury officials send out Sir Michael Cullen’s political press releases after the working group has been disbanded just another example of the politicisation of the Public Service that’s happening under that Government?
Hon GRANT ROBERTSON: No, it’s an example of a Treasury official having access to a computer and sending out the words of Sir Michael Cullen.
Hon Amy Adams: Has he had any advice or contact from the State Services Commission about Sir Michael Cullen’s Monday press release sent out by Treasury?
Hon GRANT ROBERTSON: No. [Interruption]
SPEAKER: Order! Come on.
Question time interrupted.
Business Statement
Business Statement
Hon CHRIS HIPKINS (Leader of the House): I raise a point of order, Mr Speaker. I have had some further advice; Mr Brownlee is correct. The tax R & D bill is still before the select committee. It is due to be reported back shortly and it will be passed by early May, but the provisions in it are retrospective and take effect from 1 April.
Oral questions resumed.
Oral Questions
Questions to Ministers
Question No. 2—Housing and Urban Development
2. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: How is he ensuring there is actual demand for the place and type of houses he is contracting for KiwiBuild?
Hon PHIL TWYFORD (Minister of Housing and Urban Development): The ministry advised me that they take 10 key steps to assess the level of demand for affordable housing and the locations in which it builds KiwiBuild homes: analysing the number of registrants on the KiwiBuild register in the relevant location and the typologies for which they’ve registered; analysing census data to assess the number of households with incomes sufficient to service a mortgage at KiwiBuild price points; analysing Ministry of Business, Innovation and Employment data regarding the number of renting households in the area and the dollar value of the bonds lodged to assess how many households in the area can afford to service a KiwiBuild mortgage; analysing recent sales data in the area to assess the volume, value, and type of sales; assessing how many properties are for sale in the area and the average time taken for them to sell; talking to market participants such as valuers and real estate agents; contracting experts to provide opinions on these factors; obtaining a registered valuation; determining how many other KiwiBuild developments are going on in the area; and analysing local government plans and urban development strategies or targeted urban growth areas.
It’s important to note that the housing and urban development ministry is trying to predict demand for something which doesn’t exist in the current market: affordable housing. And, in some cases, the proposals are in new subdivisions, where historic data is either non-existent or not directly relevant.
Hon Judith Collins: Has his demand modelling considered specific demand for two-bedroom houses in places such as Huapai, north-west of Auckland?
Hon PHIL TWYFORD: Yes.
Hon Judith Collins: If a demand model said a house would be sold but it was offered to the market and not sold, would he believe the demand model or would he believe the market?
Hon PHIL TWYFORD: Well, that’s a hypothetical, particularly in the case of Huapai.
Hon Judith Collins: How do taxpayers benefit from underwriting houses in Huapai based on demand that has been modelled?
Hon PHIL TWYFORD: Well, taxpayers benefit and first-home buyers benefit when the organisation that the KiwiBuild unit contracts in Huapai, with one of the country’s leading residential builders, Mike Greer Homes, to build affordable homes at a price and a quantity that otherwise would not have happened, as Mike Greer himself has said in the media. [Interruption]
SPEAKER: The member’s got to call if he wants to—
Kieran McAnulty: I did.
SPEAKER: Oh, well, not very loud, and he sat down afterwards as the Minister of Finance—
Kieran McAnulty: Supplementary, Mr Speaker. What work has the ministry undertaken to work out expected demand in each region?
Hon PHIL TWYFORD: Well, as part of the establishment of KiwiBuild, officials provided an analysis of housing demand in key locations, and this reflects the difference between population growth adjusted for household size and the number of building consents issued between 2006 and 2017. That analysis showed that Auckland, during that period, developed a shortfall of over 44,000 homes; Wellington, 9,000 homes; Hamilton, nearly 6,000 homes; Napier-Hastings, nearly 1,800; and Queenstown Lakes was 1,600 homes short.
Hon Judith Collins: How does the KiwiBuild underwrite increase supply when photos show the houses in Huapai were already clad and roofed in September 2018, two months before he signed the underwrite?
Hon PHIL TWYFORD: Because, as Mike Greer himself explained in the media, he’d been negotiating with the KiwiBuild unit for several months while he put that development together, and, as he said, the KiwiBuild underwrite allowed him to build a larger development with more affordable homes. It reduced his financing costs, enabled him to reduce his margin and build more affordable homes, and that’s why the KiwiBuild homes are at a lower price than the other homes in that development.
Rt Hon Winston Peters: Dealing with the issue of supply-side economics raised by the Hon Judith Collins, is it not a fact that last year the Government and the people of this country built more houses than any year since 1978?
Hon PHIL TWYFORD: Well, it’s true that the Government is building, currently, more homes than has ever been the case since 1978. And the consent numbers—the private sector consenting numbers, a partial indicator of success—demonstrate that we have the highest build rate now since 2004.
Hon Judith Collins: Did he inform the Minister of Finance that the Huapai properties were already clad and roofed two months before he asked the Minister of Finance to sign the approval to underwrite?
Hon PHIL TWYFORD: You’ll have to ask the Minister of Finance. But, as the member says, he signed off the documents.
SPEAKER: No. That answer is not good enough—did he tell the Minister of Finance? Saying you’ve got to ask the Minister of Finance—he might have responsibility for what he hears, but the Minister has a responsibility for what he said.
Hon PHIL TWYFORD: No. I did not tell the Minister of Finance, because he’s aware he signed off all of the documents on that project.
Hon Judith Collins: Well, if the Minister says that the Minister of Finance was aware when he signed off the documents but he didn’t tell him, how does he believe that the Minister of Finance was aware?
Hon PHIL TWYFORD: Mr Speaker, I think I’ve answered that question.
SPEAKER: No. I think, if the member has answered, it’s passed some of us by, so answer it again.
Hon PHIL TWYFORD: So, as I pointed out to the member earlier, I did not directly inform the Minister of Finance, but the Minister of Finance is familiar with that project because he signed off all the documents relating to it.
Hon Judith Collins: How many other times has he approved underwrites for houses to be built when they have been already built?
Hon PHIL TWYFORD: I can’t give a direct number on that, but the member needs to understand that we are in the business of getting affordable homes built, something that that Government never did, for nine years. I point her again to the comments of Mike Greer, who said that he was able to, because of KiwiBuild support, build more homes at a more affordable price than he would otherwise have been able to do.
Question No. 3—Finance
3. WILLOW-JEAN PRIME (Labour) to the Minister of Finance: What reports has he seen on the international view of the New Zealand economy?
Hon GRANT ROBERTSON (Minister of Finance): I’ve seen a range of reports that take a favourable view of recent developments in New Zealand and see a positive outlook for the economy, in particular from the global ratings agencies. Moody’s latest credit opinion for the Government reaffirmed its Aaa stable credit rating. Moody’s said, “The outlook is anchored by its expectation that, even in the face of shocks, New Zealand’s credible institutions with highly effective policymaking and ample policy space will maintain economic and financial stability”. Moody’s commented on the Government’s use of the well-being Budget, saying that the Government’s “Ongoing focus on well-being denotes [its] very high institutional capacity and fiscal flexibility”.
In its latest credit opinion, Standard & Poor’s (S & P) revised its outlook on New Zealand’s AA foreign and AA+ local currency credit ratings up to positive from stable. In its report titled “New Zealand’s outlook revised position”, S & P referenced our solid economic growth and specifically noted New Zealand’s per capita GDP growth continuing to outpace similarly rated peers.
Willow-Jean Prime: What reports has he seen on the outlook for the international economy?
Hon GRANT ROBERTSON: Today, the OECD released its interim economic outlook, in which it downgraded global growth forecast for the next two years. The OECD said that policy uncertainty, ongoing trade tensions, and low business and consumer confidence are all contributing to the global slow down. It also pointed to the risk that the Chinese economy could slow more sharply than anticipated. The OECD is now projecting 3.3 percent global GDP growth in 2019. Its forecast growth was downgraded across most economies, including Australia, Canada, the UK, the US, the Euro area, and Japan. It’s important to note that in New Zealand our own forecasts remain solid, with growth forecasts for 2019 near the 3 percent level, which puts us well ahead of those advanced economies I’ve just mentioned. These global risks do highlight the importance of our commitment to fiscal responsibility to ensure that the Government has options in the face of any shocks.
Willow-Jean Prime: How is the Government ensuring New Zealand is resilient in this global economic context?
Hon GRANT ROBERTSON: We are doing that by our responsible fiscal management, but also by making important—
Hon Gerry Brownlee: Poor tax.
Hon GRANT ROBERTSON: —investments into the—I know you won’t understand investments, Gerry, so listen up.
SPEAKER: Order! Now, the member does know better than that, and he is the senior member of his party in the House at the moment. In fact, I’ll say to both finance spokespeople that neither of them have been providing good examples, including that member interjecting during Ms Collins’ questions earlier. So people will just settle down.
Hon GRANT ROBERTSON: We’re making a number of important investments into research and development through our training and skills programmes, such as Fees-free and He Poutama Rangatahi, through the Provincial Growth Fund, through the establishment of the Green Investment Fund, and through continuing to progress negotiations on free trade agreements. Through these initiatives, and many more, we will continue to deliver on our plan for a more resilient and productive economy that improves the lives and well-being of all New Zealanders.
Question No. 4—Health
4. Hon MICHAEL WOODHOUSE (National) to the Minister of Health: How many DHB-funded elective surgical procedures have been performed in the six months to 31 December 2018, and how does that compare with the corresponding period ended 31 December 2017?
Hon Dr DAVID CLARK (Minister of Health): The previous Government chose a narrow definition for elective surgeries that excluded a range of procedures, such as carpal tunnel surgery, while including others, such as Avastin injections, that could be more appropriately delivered in out-patient or primary care settings. While we continue to count electives as the prior Government did, this distortion is the reason why we are moving away from a narrow set of political targets toward ensuring the best overall value for the taxpayer within the available health dollar. In terms of that measure—that we are still counting—in the six months to 31 December 2018 there were 100,339 elective surgical discharges delivered. In the six months to 31 December 2017 there were 103,041 elective surgical discharges delivered.
Hon Michael Woodhouse: Doesn’t data show that after years of steady increases in both the volume and the case weight of discharges, his first year in charge saw nearly no growth in throughput, and in the year to date the numbers are now going backwards?
Hon Dr DAVID CLARK: No.
Hon Michael Woodhouse: Well, can he confirm that nearly 2,000 fewer case weighted orthopaedic procedures have been done this year to date than what is required to simply be the same as last year?
Hon Dr DAVID CLARK: What I can confirm is that we are looking to see more procedures performed in the appropriate settings. We want to see those procedures that could be performed in surgical settings being performed there—those ones that are more appropriately performed in out-patient and primary care performed in those settings, so we get better value for the taxpayer from the available health dollar.
Hon Michael Woodhouse: Goodness me, he knows how to run a health system. Does he think it’s acceptable that hundreds more women requiring gynaecological procedures—
Hon Grant Robertson: I raise a point of order, Mr Speaker. I just wanted to draw your attention to the fact that we had a little chapeau to that question there from Mr Woodhouse—I’m not sure if you picked it up—and, also, in question No. 1 today we had interjections from Mr Woodhouse as well. I’m just wondering at what point your normal system applies.
SPEAKER: When I decide it will.
Hon Michael Woodhouse: Does he think it’s acceptable that hundreds more women requiring gynaecological procedures are still waiting because of a drop in throughput for those procedures in district health boards?
Hon Dr DAVID CLARK: I have not seen a particular cut of the figures that the member is using. I’m happy to answer questions if he wants to put down a specific question on those issues.
Hon Michael Woodhouse: Can he confirm the Government appropriated $126 million in last year’s Budget to meet growing demand for elective surgery, and what is he doing about the fact that that increasing demand is not being met with any more surgery?
Hon Dr DAVID CLARK: The Government inherited a public health service that has been underfunded for years. I take full responsibility for tackling that legacy.
Hon Michael Woodhouse: In view of that answer, to the Minister: is he telling the House that his response to what he describes as “years of underfunding” is to do less, not more?
Hon Dr DAVID CLARK: No.
Question No. 5—Education
5. MARJA LUBECK (Labour) to the Minister of Education: What feedback has he received during his visits to institutes of technology and polytechnics as part of consultation on the reform of vocational education?
Hon CHRIS HIPKINS (Minister of Education): Quite a lot. During my recent visits to NorthTec and Otago Polytechnic, both of those institutions presented me with detailed proposals for how they think an alternative vocational education system could work whilst improving the connections that currently exist between iwi, industry, employers, and other stakeholders in their region when it comes to delivering vocational education and training. I’ve been encouraging all of the stakeholders around the country who have a view on this to put forward their proposals and their views on the proposals that the Government has released so that we can continue to refine and develop a new system for vocational education and training in New Zealand—something that almost everybody who has been contributing to this debate has argued is necessary.
Marja Lubeck: What other regions will he be visiting over the next few weeks?
Hon CHRIS HIPKINS: Over the next few weeks I’ll be in New Plymouth to visit the Western Institute of Technology at Taranaki, I’ll be in Palmerston North to visit the Universal College of Learning, and where possible I’ll be visiting others around the country as part of the consultation exercise. In total there are 107 consultation engagement events throughout New Zealand over the next few weeks to ensure that everybody affected by, or with an interest in, the planned reforms of vocational education and training can have a say. Many of those, of course, I won’t be at, but we will be ensuring that the people who are there are able to engage, receive feedback, and answer any questions.
Question No. 6—Education
6. JENNY MARCROFT (NZ First) to the Associate Minister of Education: What recent announcements has she made regarding gifted children in New Zealand?
Hon TRACEY MARTIN (Associate Minister of Education): Last Wednesday, I was very pleased to announce, at MindPlus East, a one-day school for gifted learners at Riverina School in Pakuranga, a $1.27 million package of funding that includes support for one-day schools for New Zealand gifted children. There are an estimated 40,000 gifted learners in New Zealand, and restoring support and funding for gifted education is a priority for this Government and is one of a suite of education policies inside our coalition agreement. Along with the funding for one-day schools, we have upgraded the gifted website to help parents and teachers and introduced new awards for gifted students.
Jenny Marcroft: When was the last time funding for gifted children was addressed?
Hon TRACEY MARTIN: Gifted education funding was reduced in 2009, from $2.7 million down to $1.27 million. Since 2009, this funding was used solely for the professional development of teachers. This time it’s all about the children. We have redirected the funding in recognition that these children require different interventions to have their needs met; for example, giving them the opportunity to learn alongside like-minded peers in one-day schools. We have developed this package in consultation with a group of experts and practitioners on gifted education. This group will also assist in the monitoring of how well the needs of gifted learners are met.
Jenny Marcroft: Supplementary?
SPEAKER: No, before the member does ask it, I’m going to insist that the Minister answer the question.
Hon TRACEY MARTIN: I believe there was possibly an enlightened Minister of Education in a previous Parliament—I’m not sure I can refer to him by name without actually breaching the Standing Orders—but I understand he was one of the wise individuals that originally noted gifted children needed this support.
Jenny Marcroft: And why do our gifted children need this support?
Hon TRACEY MARTIN: As you possibly well know, every child should be supported to be the best they can be. We recognise that gifted learners are unique and have diverse needs. Just like other students with additional learning needs, gifted learners deserve the extra support to ensure that they receive the right educational opportunities. I am pleased that through this Government’s prioritisation, we have been able to make this happen.
Question No. 7—Energy and Resources
7. JONATHAN YOUNG (National—New Plymouth) to the Minister of Energy and Resources: Does she expect recent high wholesale electricity prices to be reflected in household power bills; if so, when?
Hon ANDREW LITTLE (Minister of Justice) on behalf of the Minister of Energy and Resources: No. Short-term peaks in wholesale electricity prices are unlikely to be reflected in consumer prices. Household power prices are driven by a number of factors, including line charges and customer service costs, as well as power companies’ projections of long-term future demand, supply, and the need for investment. Wholesale price volatility is not generally a significant driver of household power pricing.
Jonathan Young: Considering that answer, does the Minister consider that the long-term wholesale electricity prices, which have increased by 30 percent over this last year, will not be passed through to households at some point?
Hon ANDREW LITTLE: On behalf of the Minister, one can gauge what is happening simply on the facts of the matter, and there has been some commentary in relation to some short-term outage of gas supply and the fact that the hydro lakes in the South Island are lower at this time of the year than they were previously—
Hon Gerry Brownlee: No they’re not.
Hon ANDREW LITTLE: They’re 12 percent lower than the long-term average of those lake levels. Those sorts of things often lead to commentary about pressure on both wholesale prices and household prices, but there is no evidence that household prices are rising because of generation capacity.
Jonathan Young: So is she saying that businesses whose base costs are rising won’t pass that on to consumers?
Hon ANDREW LITTLE: On behalf the Minister, the original question related to wholesale prices. There are then additional costs such as line charges and customer service costs, and I am aware that some of the power companies are reconsidering prices because of customer service charges and line charges that are beyond their control.
Jonathan Young: Will she therefore guarantee that household electricity prices will increase at no more than the same rate as over the last 10 years?
Hon ANDREW LITTLE: Again, on behalf of the Minister, I can’t give any guarantees about what will happen in a market which is widely now accepted as somewhat flawed. That is why we are doing an electricity pricing review. That is yet to come up with a series of recommendations that will improve the market, but measures such as this Government has taken like the winter energy payment are about alleviating the pressure on households.
Jonathan Young: Well, how can the Minister say that the wholesale prices won’t be passed through to households but won’t guarantee that prices will not increase higher than the last 10 years?
Hon ANDREW LITTLE: On behalf the Minister, the member seems to be confusing the different sources of price pressure on electricity. Wholesale power prices relate to generation capacity, and the power companies have it in their hands to make their decisions on projections of long-term demand and supply and the investment decisions they make. We know now from recent commentary that investment in renewable sources of energy is cheaper than fossil - fuel based sources of energy, and we expect power companies to be investing in that. That will, in the long run, bring prices down.
Jonathan Young: So is the Minister saying that the long-term wholesale price out to 2022—that’s currently at just under $92 a megawatt hour, increased from $70 a megawatt hour a year ago—is not going to be passed on to consumers?
Hon ANDREW LITTLE: On behalf the Minister, what I am saying is speaking basic, orthodox market principles, and that is that those who are selling power to consumers, when they set that price, take into account a number of factors. The wholesale price is driven by generation capacity. That is affected by short-term measures such as lower than usual hydro lakes; such as both planned and unplanned outages of, for example, gas supply. That is affecting household prices at the moment, but that is not expected to have a material impact on household prices in the long run.
Jonathan Young: I think I need to ask that same question, Mr Speaker, because—
SPEAKER: Well, the member’s allowed to ask it again.
Jonathan Young: Thank you. So is the Minister saying that wholesale prices won’t be passed through to households yet won’t guarantee that prices will not increase any faster than they have in the last 10 years?
Hon ANDREW LITTLE: On behalf the Minister, there are a number of factors that contribute to the household price of electricity. The member’s original question related to the wholesale price of electricity, and there are a number of factors that go to make that up. What the consumer and the household pays for their price relates not only to household electricity prices but to line charges, to customer service charges, and to other things that the electricity retailers add on to their customers. The member is conflating different aspects of the market to all impinge on the household price, and the member himself is confused about what it is that is relevant to household electricity pricing.
Jonathan Young: So, to make it clear, is the Minister saying that any household increases in electricity prices will be exclusive of increases in the wholesale price?
Hon ANDREW LITTLE: On behalf of the Minister, the market, in the way it operates at the moment—we know from the Electricity Commission’s recent report—is flawed. That is why change is about to happen to it. We know that those selling electricity to households take into account a number of factors when they are setting that price. To the extent that that member is implying that volatility in wholesale electricity prices is a driver, or the main or principal driver, of household electricity prices, he is wrong. There are a number of factors that go into it, but the reality is that for the vast majority of households, when they come to pay their power bill, the price they pay is driven by a range of factors and is not directly impacted by wholesale power prices.
Jonathan Young: So is the Minister, to make it clear, saying to this House that increases in the household price of electricity are completely exclusive to any increase in the wholesale price of electricity?
Hon ANDREW LITTLE: On behalf of the Minister, no, that is not what I have said. In the many answers I seem to have given today, I have said that volatility in wholesale electricity prices is not a driver of household electricity prices.
Question No. 8—Small Business
8. Hon JACQUI DEAN (National—Waitaki) to the Minister for Small Business: Has he sought specific advice on the impact of a capital gains tax on New Zealand’s 500,000 small businesses; if so, what did that advice say?
Hon STUART NASH (Minister for Small Business): No, I have not, but I am aware the Minister of Revenue has seen advice on matters arising from the Tax Working Group report.
Hon Jacqui Dean: Has the Minister of Revenue reported to the Minister for Small Business on those reports?
Hon STUART NASH: Not officially, no, but what I can tell you is the Minister of Revenue has seen a report that says, and I quote, “The extent of additional tax that would be payable by small businesses under an extended tax on capital income is not known.” But I would like to reiterate that no decisions have been made. We’re listening to feedback from right across the community, and we’re carefully considering all options.
Hon Jacqui Dean: Is he concerned about the impact of a capital gains tax on small business?
Hon STUART NASH: That’s a purely hypothetical question. The reason I say that is, I will repeat, that there have been absolutely no decisions made at all. We are carefully considering all the options, and we will do this before we make any decision.
Hon Jacqui Dean: So what does he say to the small-business owner who said about a capital gains tax—I quote—“I just don’t understand why on earth they are looking at crippling small and medium businesses. We make up over 90 percent of New Zealand’s economy, and I’m astounded that Labour don’t recognise that we contribute to New Zealand’s wealth.”?
Hon STUART NASH: What I would say to that small-business owner is that the Tax Working Group listed 19 measures that the Government could consider with the aim of reducing compliance costs to small businesses. Of these, eight are considered a major impact. Then there were three other productivity-enhancing measures, about one of which the Tax Working Group said, and I quote, “The last of these will have significant benefit to small businesses.” But I would like to reiterate that there has been absolutely no decision made on the recommendations put forward by the Tax Working Group. We are carefully considering all the options, and we will make decisions in about April.
Hon Jacqui Dean: Will he guarantee that a small business with a home office will not be subject to a capital gains tax?
Hon STUART NASH: I will repeat, for the third time, that absolutely no decisions have been made on any of the recommendations put forward by the Tax Working Group. We are listening to all sectors. We are carefully considering all the options, and we will make recommendations in good time.
Hon Jacqui Dean: Has he heard from any small businesses about their views on a capital gains tax?
Hon STUART NASH: What I have heard is a lot of nonsense put forward by the Opposition which is simply not grounded in reality. I suspect that that member has actually not even read the report. This is not play school.
SPEAKER: Order! Order! No, before the right honourable gentleman goes, we’re going to have an answer to the question.
Hon STUART NASH: At this point, I’m not consulting with small business on a capital gains tax, because there is no proposal out there to implement a capital gains tax.
SPEAKER: OK. I’m now going to, very directly, ask the Minister to answer the question, and I will ask Jacqui Dean to repeat it so it is clear.
Hon Jacqui Dean: To the Minister, has he heard from any small businesses about their views on a capital gains tax?
Hon STUART NASH: No. [Interruption]
SPEAKER: Order! [Interruption]
Rt Hon Winston Peters: Quiet now. Could I ask the Minister as to whether it’s a fact that, since 21 February, all 500,000 small businesses in this country have had a chance or will have a chance over the next few weeks to get in contact with his office or any member of Parliament, including, if they are desperate, the National Party?
Hon STUART NASH: The Deputy Prime Minister makes a very good point. What I will say is that I have heard a lot of feedback from small businesses on the R & D tax credit, on what we’re doing to tax multinationals, on how we are putting GST on low-value goods—these are the impacts that are making a real difference to the competitiveness of our economy for small businesses.
Hon Gerry Brownlee: I raise a point of order, Mr Speaker. In that exchange on the issue of the capital gains and small business, the Minister first said he hadn’t seen a report, but then quoted from a report. Can he table that report?
SPEAKER: Does the Minister have the report he was referring to in the House?
Hon STUART NASH: No. I don’t have it in the House.
SPEAKER: No, he doesn’t have it in the House. Therefore, he can’t be required to table it.
Question No. 9—Justice
9. GREG O’CONNOR (Labour—Ōhāriu) to the Minister of Justice: What recent reports has he seen regarding victims’ views of the criminal justice system?
Hon ANDREW LITTLE (Minister of Justice): I have seen the preliminary results of the Strengthening the Criminal Justice System for Victims survey, run by the Chief Victims Advisor. The survey shows that, of the participants who responded, 76 percent felt that their views, concerns, and needs weren’t listened to throughout the justice process, while 79 percent felt that they hadn’t had the information or support that they needed. As the survey shows, we have to do better for victims of crime, and this Government is committed to making reforms in our criminal justice system that does just that.
Greg O’Connor: What other results did the survey show?
Hon ANDREW LITTLE: The survey results also showed that 83 percent of participants don’t feel that the criminal justice system is safe and secure for victims. That accords with what victims and their advocates are telling me. They wanted to know clearly where they stand and what their place is in the system, and they want to be respected and treated with dignity in it.
Greg O’Connor: Why is it important that the Government hear from victims of crime?
Hon ANDREW LITTLE: One thing that sets victims apart from every other participant in the criminal justice system is that they haven’t made any choice to be there. I was privileged to attend a workshop this week of victims and their advocates, and their message to me was very clear: victims want their voices heard, they want access to support, and they want to be treated with dignity. Our criminal justice reforms must ensure that justice is done, not just to offenders and the community but also to victims.
Question No. 10—Statistics
10. Dr JIAN YANG (National) to the Minister of Statistics: Which demographics and areas of New Zealand were most under-reported in Census 2018, and what impact does he expect that will have on those areas and demographics?
SPEAKER: The Hon James Shaw—as far as he is responsible.
Hon JAMES SHAW (Minister of Statistics): The member is, effectively, asking me to divulge the results of the census before they have been released by the Government Statistician; to do so would be a breach of the Statistics Act 1975. As has been previously indicated, the Government Statistician will, in April, announce a release schedule for the 2018 Census data. I understand the frustration that the member and others may be feeling in relation to the delay in the release of the 2018 Census data. It is of—
Hon Gerry Brownlee: The next thing you’re about to say is rubbish. It was the Government’s census.
Hon JAMES SHAW: It is of—[Interruption]
SPEAKER: Order! Order! Some members of this House, including me, think this is a very serious issue. And it is not being helped by anticipatory interjections from the Hon Gerry Brownlee. The responses to this question and its supplementaries will be heard in silence, but with that comes a clear indication to the Minister answering the questions that he is to play a straight bat.
Hon JAMES SHAW: That’s a shame! I understand the frustration that the members and others may be feeling in relation to the delay in the release of the 2018 Census data. It is of utmost importance that officials do continue to work through the process of delivering a high-quality data set. This is analogous to asking for the results of an exam that is still being marked.
Dr Jian Yang: What’s his response to a question listed in Statistics New Zealand’s question and answer sheet: “The response rates for Māori are likely to be much lower than other population groups. How will this affect Treaty claims?”
Hon JAMES SHAW: Stats NZ are continuing to build a picture of the impact of lower individual response rates for Māori descent and iwi affiliation data. They are increasing their engagement with Māori interest organisations and with iwi to both confirm data needs and to look to develop complementary strategies where needed.
Dr Jian Yang: Is he concerned that Statistics New Zealand have stated, “Secondary data sources cannot provide some information, such as Māori population statistics and iwi affiliation.”?
Hon JAMES SHAW: The reason why it’s taking longer than normal to report on the output of a census is because Stats NZ are working with administrative data to supplement the results of the census to produce a very high-quality data set. They are doing this very thoroughly. It is taking some time, but I do believe that we’ll be able to give people what they need when they need it.
Dr Jian Yang: Has he seen an article by Tahu Kukutai and Donna Cormack in the New Zealand Population Review that notes Statistics New Zealand may use Census 2013 data to impute who is Māori and who is not, and that this may “undermine rights of Māori to self-identify, [including] the right to refuse, … to, identify to the Crown.”?
Hon JAMES SHAW: No, I have not seen that article.
Dr Jian Yang: Which demographics and areas of New Zealand are most likely to be impacted if the census data is not available for the electoral boundary redraw before the September 2019 deadline?
Hon JAMES SHAW: As I said in my answer to the primary question, I can’t talk about the results of the census before they’ve been released by the Government Statistician. She intends to release a schedule of census data releases in April, and my understanding is that Statistics New Zealand are highly confident of being able to deliver a high-quality data set to the Electoral Commission by the time the Electoral Commission needs it.
Dr Jian Yang: Well, does it remain the case that Statistics New Zealand is not in a position to complete a new census by 2021 and, therefore, Census 2013 will remain the most recent alternative census available for the next two elections?
Hon JAMES SHAW: In answer to the first part of the question, I’ve been advised that running a census in 2021 would be high risk, with less time to submit a business case and to obtain funding, set up the census programme and team, and go through the procurement processes to bring on board suppliers and to build and test changes to collection processes and systems to ensure a successful outcome. In other words, abandoning the results of the 2018 Census before they’ve been completed and running an urgent census would be a higher risk and, actually, probably would produce a worse outcome. It is a large logistical exercise. It takes five to seven years to put together a census, and so running one in three years would simply be inappropriate.
Dr Jian Yang: Given the likelihood of under-report of the Māori population, has the Minister met with the Labour Māori caucus to discuss the implications of the Census 2018 shortcomings?
Hon JAMES SHAW: I’ve not met with the caucus as a group, but I’ve had conversations with a couple of members of that caucus. However, this is one of those areas where the Government’s chief statistician and Stats NZ have operational control, and so I have encouraged them to reach out to Stats NZ to have those conversations directly.
Question No. 11—Education
11. SIMEON BROWN (National—Pakuranga) to the Minister of Education: Does he stand by all his policies and actions around the review of vocational education and his work in the portfolio?
Hon CHRIS HIPKINS (Minister of Education): Yes.
Simeon Brown: Is legislation in the process of being drafted to reform vocational education?
Hon CHRIS HIPKINS: There are a variety of work streams on this, one of which is looking at if the model as proposed proceeds, what legislation would be required to enact that. As part of that, they’re also canvassing other alternatives as well.
Simeon Brown: What functions will be centralised into the proposed single national polytechnic, and has any modelling been undertaken to determine how many jobs will move from local polytechnics to Wellington?
Hon CHRIS HIPKINS: In answer to the first part of the question, decisions haven’t been made on that yet, which means the answer to the second part of the question is no.
Simeon Brown: Will he commit to ensuring any jobs established by the consolidation of back-office functions are kept out of Wellington and kept in the regions, especially given the Labour - New Zealand First coalition agreement, which commits to “relocate Government functions into the regions”?
Hon CHRIS HIPKINS: Yes.
Simeon Brown: Did he listen to concerns from Otago Polytechnic on Tuesday that brand matters for polytechnics, and will he commit to local polytechnics such as Otago polytech retaining their own local brand and brand name?
Hon CHRIS HIPKINS: In answer to the first part of the question, yes. In answer to the second part of the question, that’s something we’re getting a lot of feedback on, and I think they’re making a very compelling case.
Question No. 12—Māori Development
12. RINO TIRIKATENE (Labour—Te Tai Tonga) to the Minister for Māori Development: Is the Ahuwhenua Trophy important for Māori agribusiness; if so, how?
Hon NANAIA MAHUTA (Minister for Māori Development): The Ahuwhenua Trophy is the most prestigious award in Māori agriculture, and it highlights the huge contribution that Māori have made to the agricultural sector. This year, there are three finalists—and, much to the pleasure of our colleague Meka Whaitiri, all from Te Tai Rāwhiti—in the beef and sheep category of this competition. The Māori economy is worth $50 billion to Aotearoa. Over the past three decades, the Māori agribusiness sector has grown exponentially, not only in sheep and beef but also in dairy. I’m pleased to announce that horticulture will be a new category added to the competition and will be recognised for the first time next year. Māori are seeking to move into the value-add space, increasing returns from their whenua and contributing to the well-being of their whānau, community, and the New Zealand economy, and the Government wants that success to grow.
Rino Tirikatene: What is the long-term prognosis for Māori agriculture?
Hon NANAIA MAHUTA: Well, while we don’t have a crystal ball, and while we celebrate the success of Māori in the agricultural sector, we can always do more. Over 40 percent of Māori land is considered underutilised; there are thousands of acres of undeveloped Māori land with no governance structure and many small land blocks with fragmented ownership that inhibits the viability of their development potential. We’re making changes to support a package of reforms that will comprise targeted amendments to Te Ture Whenua Maori Act, an improved data and information base to assist governance and land capability decisions, and support for Māori landowners to organise themselves to plan towards their development aspirations for their whenua and whānau. We want Māori landowners to tap into the potential of their land by encouraging hands-on participation, good governance, and decision making. These reforms will help deliver intergenerational change and better well-being outcomes for whānau.
Rino Tirikatene: What role does the recent $100 million whenua fund announcement play in growing the potential of Māori agriculture?
Hon NANAIA MAHUTA: Fantastic question, and thanks to our coalition partners of the Government, the announcement of the $100 million Whenua Māori Fund within the context of the Provincial Growth Fund (PGF) is designed to support the move towards higher-value land use, complement other whenua initiatives that ensure there is end-to-end support for Māori landowners such as capability building and feasibility work, and enable Māori to access capital required to progress projects which are investment-ready. The PGF funding will not only help Māori landowners who find it difficult to raise mainstream bank finance but also make our regions more prosperous, just like we said we would.
Bills
Social Security (Winter Energy Payment) Amendment Bill
First Reading
Hon PEENI HENARE (Associate Minister for Social Development) on behalf of the Minister for Social Development: I move, That the Social Security (Winter Energy Payment) Amendment Bill be now read a first time. I nominate the Social Services and Community Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 1 April 2019 and that the committee have authority to meet at any time while the House is sitting, except during oral questions, during any evening on a day on which there has been a sitting of the House—
Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Noting the report-back date, at what point does that become debatable—at the end?
SPEAKER: There’s a separate motion. The member’s been here for a long time. He knows that there’s a separate motion for a referral after a bill has been read a first time, if it is.
Hon Gerry Brownlee: Just being helpful to those who don’t know.
SPEAKER: No. The member is being most unhelpful and is deliberately—
Hon Member: He’s getting out before he goes. Ha, ha!
SPEAKER: I’m pleased he is, because he might have been anyway. Now, we’re going to start the time again and we’re going to start the motion again. Thank you.
Hon PEENI HENARE: Thank you, Mr Speaker. I move, That the Social Security (Winter Energy Payment) Amendment Bill be now read a first time. I nominate the Social Services and Community Committee to consider this bill. At the appropriate time, I intend to move that the bill be reported to the House by 1 April 2019 and that the committee have authority to meet at any time while the House is sitting—except during oral questions, of course—during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House and outside the Wellington area, despite Standing Orders 191, 193, and 194(1)(b) and (c).
This is not a very large bill but it contains important amendments. The bill ensures that the winter energy payment can be lawfully paid to all people who were intended to be eligible. In particular, the bill amends the Social Security Act 2018 to ensure clients in two specific scenarios are able to be paid the winter energy payment as intended. The winter energy payment was introduced as part of the Government’s Families Package, the legislation for which was delivered in December 2017 as part of our 100-day plan. The winter energy payment helps older New Zealanders and many of our poorest families to heat their homes during the winter months.
The Families Package is a transformational package providing targeted social assistance to improve incomes for low- and middle-income New Zealand families with children. It is part of this Government’s focus on reducing child poverty and ensuring children get the best start in life. As a result of the Families Package, it is projected that the number of children in poverty will be reduced by around 64,000 children once the package is fully implemented. Those 384,000 families with children will gain an average of $75 a week, and 652,000 families without dependent children will gain an average of $14 a week. As part of that package, the winter energy payment plays a significant role.
As a form of financial assistance, it has the largest eligible population within the benefit system. It is available to all those who receive a main benefit, New Zealand superannuation, or a veterans pension during the winter period. Single people without dependent children receive $450 over winter, and couples and people with dependent children receive $700. The payment is in recognition of the increasing cost of living that often leads to those on fixed and low incomes struggling to heat their homes throughout winter. The importance of warm, dry, healthy homes over winter cannot be overstated. Around 1,600 New Zealanders die each year due to living in cold homes and thousands more end up in hospital. This simply is not acceptable.
In 2018, approximately 774,000 people per month received the winter energy payment at a cost of $265 million. When you add in those with partners, this is close to one million New Zealanders benefiting from being warmer and safer as a result of this payment. In 2019, the winter energy payment will be paid from 1 May through to the end of September, and is expected to be paid to 807,000 recipients per month on average.
We have received positive feedback from New Zealanders far and wide following the introduction of the winter energy payment, reinforcing the importance of what the payment is intended to achieve. We have had reports of people being able to maintain a warm environment and thus avoiding trips to the doctor and A & E. People have told us that they can better manage their health conditions such as asthma. People have also said they are recovering from illnesses more quickly, helped by their warm, dry homes. The winter energy payment has had a positive impact on the lives of many New Zealanders. We want to make sure that this continues.
After the Families Package (Income Tax and Benefits) Bill 2017 was passed, the Ministry of Social Development identified minor errors in the winter energy payment legislation. The errors relate to two specific scenarios where the legislation does not align with the original policy intent. Those scenarios are (1) when people are absent from New Zealand for longer than four weeks at any one time during the winter period, and (2) when people receive Government funding for long-term residential care or residential care services but are not eligible for a residential care subsidy or a residential support subsidy. Although these scenarios represent a very small number of the overall population eligible for the winter energy payment, if the Ministry of Social Development cannot pay the winter energy payment as intended, clients in these groups would be adversely affected. We want to make sure that those intended to receive the winter energy payment can indeed do so.
In the first scenario, if an eligible individual is absent from New Zealand for more than four weeks, then currently under the legislation that individual is not entitled to receive the winter energy payment on any day during this period of absence. This does not align with the policy intent, which is to pay the winter energy payment for up to four weeks even where the individual is absent from New Zealand or longer than four weeks at one time. However, with other forms of supplementary assistance, such as the accommodation supplement, it is intended that clients can be absent from New Zealand for more than 28 days and still receive their supplementary assistance. Provided that they still remain eligible for a main benefit, they can receive their supplementary assistance for the first four weeks of that absence. This was also the intention for the winter energy payment.
The second scenario relates to some people being unintentionally excluded from being eligible to receive the winter energy payment. The winter energy payment is unique in that its eligibility is based on receipt of a main benefit: New Zealand Superannuation or the veterans pension. Everyone who receives these benefits automatically receives the winter energy payment. However, a person receiving a residential care subsidy or residential support subsidy is ineligible for the winter energy payment. This is consistent with other forms of supplementary assistance. These groups therefore are excluded from receiving the winter energy payment because the cost of their care, including heating costs, is already being met by the State.
However, under the Social Security Act 2018 currently, some other recipients of long-term residential care or residential care services are unintentionally caught by these exclusions despite also being recipients of a main benefit—New Zealand Superannuation or a veterans pension—because the payment is not directly administered by the Ministry of Social Development. One of these groups, for example, comprises people who do not qualify for a residential care subsidy, pay the maximum contributions towards the cost of their care, and receive a Government top-up.
To ensure that the winter energy payment can be paid in a way that is both practical and lawful, clause 4 of the bill tightens the wording for the groups that are not entitled to receive the winter energy payment due to receiving a residential care subsidy or residential support subsidy. These two errors need to be corrected to ensure the Government’s policy intent can be upheld and that all people intended to be eligible for the winter energy payment can be paid lawfully. Clauses 6 and 7 of the bill also validate the previous practice of the Ministry of Social Development during the 2018 winter period to pay the winter energy payment to people covered by the two scenarios. This ensures decisions made to the benefit of these clients are lawful.
The winter energy payment was a new payment introduced as part of the Families Package and provides financial assistance to beneficiaries likely to have the lowest incomes and to older people who are more often susceptible to ill health during the winter. The amendments in the bill are technical and are in line with the original policy intent for the winter energy payment. We want to ensure that the winter energy payment continues to positively impact the lives of New Zealanders by helping eligible people and families heat their homes over the winter months. This bill helps to achieve this and I commend this bill to the House.
SIMON O’CONNOR (National—Tāmaki): I oppose the motion. I had written notes here actually that I was both delighted and dismayed about this bill. But now I actually am actually—if one can be “actually” and “actually” at the same time—outraged. This bill is an affront to the parliamentary democracy of this House. It’s an affront for two reasons: (1) it’s an amendment, an amendment to a bill—and I will expand on this further—that this side of the House warned the Government about, and now what we find is the Associate Minister for Social Development stands in the House and says that this amendment, this bill, is going to be rushed through the House so that even less than one month from now it must be reported back, and I’m going to take the next few minutes to outline why this side of the House is absolutely outraged.
This bill is fixing a problem—or actually two problems—which this side of the House in an earlier sitting of the Parliament noted, pointed out, cajoled; we spent hours, hours in this House pointing out that they, the Government, had it wrong around the 28 days. We pointed out there were issues around retirement villages and aged care. The Government, and the Minister in particular, ignored it—ignored it—and that sits on a further affront to this Parliament: that what started out as a social welfare rewrite bill, agreed to in principle by all parties in the House, was trumped at the last minute, literally the last minutes, with a 500-plus - page Supplementary Order Paper, fronted to this Parliament with an array of changes, including this winter energy payment, which took what was a bill agreed in principle to now something highly political, forced through—forced through—with no select committee oversight whatsoever. In other words, the Act we were amending had no—and particularly for people at home it had no—oversight whatsoever by this Parliament and select committee.
And this side of the House stood up time and time again and reminded the Minister, whose ears clearly were closed, that there were going to be problems—going to be problems. And lo and behold—lo and behold—possibly a little earlier than we thought, here we are wasting the Parliament’s time by putting through an amendment bill which could have been solved by going to select committee to allow the New Zealand public to come in, to allow those in retirement villages to say “Hey, there’s a problem here.”, to have the people of New Zealand come in and say “Hey, we might be overseas for more than 28 days. Can you actually look at the legislation?”
But, no, there was an arrogance on behalf of this Government that, first and foremost, thought they should politicise a rewrite bill that didn’t need to be. They were arrogant enough to dump 500-plus pages of amendments with no time—no time—for this Parliament to scrutinise, and to deny the right of New Zealanders to speak. And then here we are today, on a Thursday afternoon of all times, to then drop an amendment bill with two changes. And I wonder how many more mistakes this Government has made, so that we’re going to end up with another amendment on top of another amendment, because this is only two. We spent hours in this House pointing out a number of problems. So we will oppose this firmly, and as I said at the start, part of me was delighted; part of me dismayed—delighted because it’s a case of “We told you so.”—or “We told them so.”, being the Government. The National Party, probably with the experience of Government and actually experience, foresaw that there were going to be problems. So I am sort of delighted that we have a sort of gotcha moment here, but I’m dismayed because we don’t need to waste the Parliament’s time, and in fact what we don’t need to do is retrospective legislation.
And that’s the other side of this bill: it’s retrospective in a number of areas. And, oh my, for nine years in Government were we lectured to—lectured to—by the other side. In fact, Chris Hipkins, the Leader of the House, said “simply imposing this”—being legislation that is retrospective—“by way of a legislative override … It is manifestly unjust. It is simply not right. Retrospective legislation is not right.” Lectured to for years and now the Government is adding retrospective legislation so early on. But that’s not the worst part—that’s not the worst part. The Minister had the audacity to stand in the House 10 minutes ago and ask that this Parliament pass a shoddy piece of amending to a shoddy Supplementary Order Paper in under one month to, effectively, again deny the rights of New Zealanders to speak. That’s what’s happening here. It’s an absolute affront to the parliamentary process of this House, and it’s unfortunately becoming a little bit of a thing, if it’s not questions in the House which are sidestepped or denied to legislation which appears at the last moment, to legislation actually that has to be pulled back.
In fact, it was only two weeks ago, on another social welfare bill—there’s a bit of a theme developing in this ministry—that we had to have a bill return back to committee because there were errors. And lo and behold, yet again this side of the House had said—had warned helpfully—the Minister: “Check it out.” But we were told, “No, no. We know it all; we, this Labour - whatever other party Government, are going to just ram it through.” There’s a theme developing here right across the legislative process, and certainly within the Ministry of Social Development, that shoddy legislation has been brought to this House. It’s been rammed through with no scrutiny, and we would not have to waste the time of this House today to go through this amendment bill if the work had been done properly in the first place.
So we oppose this bill. We oppose it strongly in principle and, Mr Speaker, as a signal, we’ll be back towards the conclusion of this debate to argue strongly for the right of New Zealanders to have their rightful, normal period of time to speak about this bill, not to have it rammed through in order to hide the incompetence of this Government.
Hon TRACEY MARTIN (Minister for Seniors): So let’s just get back to the facts, shall we? Let’s just calm things down. And while Mr O’Connor is perfectly happy, for his own benefit, to try and create some sort of drama about this, let’s just talk to what this amendment bill is about.
So, in the first hundred days of this Government, we put through a Families Package, and part of that was the winter energy payment. So this is an amendment bill to the winter energy payment. Let’s be clear: the winter energy payment and the intent of it have been implemented since that legislation passed. What Mr O’Connor is attempting to inflate and conflate and all sorts of other things—he’s talking about a Supplementary Order Paper on something that was slightly different from what was the Families Package, but that’s all right; Mr O’Connor is well within his rights to decide that he’s going to dramatise this. These are what are called “drafting errors”. Drafting errors are where the highly skilled New Zealand public servants, who do an awful lot of work, spend an awful lot of hours here at the service of their country, putting together pieces of legislation, made a couple of mistakes. That’s what happened. That’s why the report back day is 1 April.
Suddenly, Mr O’Connor is quite happy to say that they already knew it was wrong; so I’m not quite sure why they feel that they need a longer period of time to be more right than they were right before—according to Mr O’Connor. He also says that this is wasting the House’s time; so, therefore, I cannot understand why they would argue against the 1 April report back date if they believe it’s so important not to waste the House’s time. This is a simple drafting error. It’s two pieces of wording that were not 100 percent correct because the very hard-working public servants, who serve our nation for extreme hours, got a couple of bits wrong, and the winter energy payment—the intent of it—is being paid. Nobody has missed out. Let’s be clear: nobody has missed out. These payments are being made; hence why we want to make it retrospective. We want to make sure that the payments that have been made, quite rightly through the intent of the policy, due to a couple of wording issues, legally have received their payments. That’s what this piece of legislation is about. That’s why we want to pass it by 1 April.
Mr O’Connor says the National Party knew all along it was wrong. He should be celebrating that we can put this through quickly. They should be supporting it, they should be supporting the report-back date, and that’s all this is about. This is not dramatic. This is not a large and difficult issue. The Opposition can grandstand as much as they like, but New Zealand First will be supporting just these small amendments due to drafting errors around the winter energy payment. Kia ora.
NUK KORAKO (National): Tēnā koe e Te Mana Whakawā, huri noa i Te Whare nei e mihi atu ki a koutou katoa. I’d like to take a short call on the Social Security (Winter Energy Payment) Amendment Bill first reading. Actually, that previous speaker, Tracey Martin, should be called “Teflon” because of the fact that it’s really easy, isn’t it, just to sort of push that aside. Particularly, if we come back to what Simon O’Connor actually said in his speech about this kind of legislation—travesty, legislation by stealth, time wasting, retrospective legislation, shoddy legislation, and denying New Zealanders the right to speak on this bill—when we think of all of that, that’s exactly what it is.
The bill actually looks like a couple of minor technical changes, but, when you look at it, it’s actually more of a case of cleaning up after the Government’s efforts last year. The previous speaker just tried to actually blame officials for their mistakes when this is actually about shoddy legislation.
I think the other part of it, though, is actually, when you look at the result of this, this comes around because the Minister dumped a 500-page Supplementary Order Paper (SOP) last May into this House, 24 hours out from the Social Security Legislation Rewrite Bill. What we have here is that they failed to get the details right in regards to the winter energy payment. So it’s very, very clear on this side of the House that we oppose the SOP which introduced the winter energy payment into the Social Security Act and we continue to oppose this particular legislation also today. Nō reira e mihi atu ki a koutou katoa.
SPEAKER: Priyanca Radhakrishnan.
Hon Kris Faafoi: Two minutes of outrage.
SPEAKER: Order! I called one member. One member had the call, and another member started talking. I think members of the Government need to sort out which of them is going to take the call, and that’s the person who should speak, not Mr Faafoi.
PRIYANCA RADHAKRISHNAN (Labour): Thank you, Mr Speaker. I rise to take a short call as well on the Social Security (Winter Energy Payment) Amendment Bill. Frankly, I’m not too sure what members opposite are going on about. They’re so impassioned that they speak for two minutes, as well! But, anyway, it is just a technical bill.
Kieran McAnulty: It’s such an outrage!
PRIYANCA RADHAKRISHNAN: I know—so much outrage! Anyway, it is a technical bill. Basically, all this amendment bill does is tweak the Social Security Act 2018 to ensure that those who fall into two specific categories are able to be paid the winter energy payment as the policy intended.
As we’ve heard before, by the Minister the Hon Tracey Martin as well, this is just a technical drafting error. What we’re doing here today is speaking at the first reading of this bill so that we can amend that and ensure that for everyone who deserves to be paid the winter energy payment—and in fact is being paid the winter energy payment—we can make sure that we do so appropriately and properly. So, anyway, that’s what this bill does. It’s a very straightforward bill.
It’s a technical bill, but, actually, at the heart of it lies people, and that’s the point that I want to make in today’s contribution: the people—about one million of them—who have been affected or whose lives have been improved by the Families Package that this Government passed at the end of 2017, which was a targeted payment. It was actually part of the Government’s 100-day plan. It provides targeted social assistance to improve the lives of people, to improve the incomes of families with children who earn low to middle incomes. Part of that package was the winter energy payment, and I know that many of us, like I have, have sat with people: people on a main benefit, people getting the NZ superannuation, those on a veterans pension, older New Zealanders who can’t afford to pay for heating, people whose living rooms I’ve sat in, whom I’ve spoken to, who have said to me that they put on jackets, that they put on sweaters and cardigans because they can’t afford to turn their heating on. Those are the people that we’re talking about today when we talk about this little, straightforward bill that will actually ensure that those who need to get this payment do get the payment that they deserve in a way that is lawful. That’s all that this bill does.
Now, clients can’t get the winter energy payment if they don’t get a main benefit, NZ super, or veterans pension; if they get an overseas pension; if they already get the State-sponsored residential care subsidy or the support subsidy; or if they live overseas. But there are two groups of people who should be getting this winter energy payment, based on the policy intent of it, who have been, and now we’re just tweaking the legislation to make sure that they do so in a way that is lawful.
I think the Minister the Hon Peeni Henare outlined the two groups of people who will be getting this payment, and that’s, basically, those who have been absent from New Zealand. If they’ve been away for longer than four weeks at any one time over the winter period, then they get the payment for the first four weeks, and that just aligns this particular subsidy with others like the accommodation supplement as well. The other group, of course, are those who receive Government funding for long-term residential care or residential care services but who aren’t eligible for the residential care subsidy or the support subsidy.
That’s really all that this bill does. I too don’t understand why members opposite feel the need to dramatise this so much. It’s not about an entire long Supplementary Order Paper or anything like that; it’s just a technical drafting error. This will put that right and make sure that we do right by everyone who is eligible to receive this benefit. Thank you, Mr Assistant Speaker.
JO HAYES (National): Thank you, Mr Assistant Speaker. I stand to take a short call on the Social Security (Winter Energy Payment) Amendment Bill. It’s quite entertaining listening to the Government side of the House trying to justify why they have brought this bill—this retrospective piece of legislation—back to the House when it could have all been sorted and they could have done the right process back in May of last year when the winter energy payment clause was in the Social Security Legislation Rewrite Bill. If the Minister had actually done the work correctly and, as my colleague Simon O’Connor said in his contribution, had actually done the work and given the 500-plus page Supplementary Order Paper for that particular bill back then back to the select committee for oversight and also for public scrutiny as well, then we would not be sitting in this House going over this piece of legislation that really does—and I support what Simon O’Connor said—waste the House’s time.
Why should we be debating this when the Minister knows full well that her scrutiny of all the pieces of legislation that come through this House under her name must be correct. It must follow the same process. And we’re arguing process here, Mr Assistant Speaker. We are arguing the process that Government—
ASSISTANT SPEAKER (Adrian Rurawhe): Don’t bring me into the debate, thank you.
JO HAYES: OK. So what we’re doing is arguing about process—whether or not the Government did the right process—and this is a great example of them again not doing the right process. A short report-back time—why? Why can’t this bill have public scrutiny? Is it because they are trying to ram through this piece of legislation, like they did the previous legislation in May of last year? Is it too much to ask this Government to stop showing their arrogance by ramming these types of bills through? They’re very important bills, but they continue to ram these down the throats of New Zealanders, and that is actually an insult to the people of this country.
When the previous speaker, Priyanca Radhakrishnan, talked about how we are getting quite dramatic, well, that’s our job. Our job is to actually ensure that this Government keeps to parliamentary process. It’s there for a purpose. It’s not there to be scorned, to be laughed at, and to show that much arrogance about. That’s all we’re asking, but, no, this Government is not listening. It is not listening.
So I cannot support this bill. I, along with the rest of my colleagues, oppose it. We oppose this bill. Get a life and get the practice of parliamentary process correct, Government. Thank you.
GARETH HUGHES (Green): Kia ora, Mr Assistant Speaker. Ngā mihi nui ki a koutou. Kia ora. I’ve got three words for the National Party: pot, kettle, black. I can’t believe the faux outrage we’re hearing from that side of the House tonight when there are countless examples where they did just this—ram through legislation. What for—what for? To take away Kiwis’ human rights when it comes to protest activity. What for? To take away Cantabrians’ rights to vote. What is this Government doing it for? To heat Kiwis’ houses. Here, National—in none of their contributions have they actually talked about the substance. This is a Government that wants to heat Kiwis’ houses, that doesn’t want to see Kiwis die every winter, and what you’ve heard today is a bunch of National MPs who would rather die on a particular hill of parliamentary hypocrisy than actually heat Kiwis’ houses.
We are here today to fix a minor technical drafting error around Kiwis who travel overseas for 28 days or pay for part of their own residential care contributions, and National is voting against those people getting the winter energy payment this year. That’s the question in front of the House today. Should those people, this winter, get the winter energy payment? And no, National spent all their time talking about parliamentary process and not talking about the people of New Zealand.
Now, we’ve seen this faux outrage around the fact it was passed in the 100-day plan of this Government. They say it wasn’t a good enough process. Now, they asked us: “What was the rush? Why was the Government rushing?” It, for me, just shows how incredibly out of touch National is when it comes to the real-life, on-the-ground situation of New Zealanders. What’s the rush? How about the 1,600 Kiwis that die every winter—which doesn’t happen in the bulk of other developed world countries—because of housing and higher power prices? Sixteen hundred deaths a winter—that’s the rush. What’s the rush? Maybe it’s the 41,000 Kiwi kids that are hospitalised every year in this country because of the poor state of our housing and the growth of energy poverty. What’s the rush? It’s the 100,000 Kiwi households which, as we saw in the independent report, are in energy poverty. These are households that are spending 10 percent of their weekly disposable income just to keep the lights on, just to keep the heater going. It shows how out of touch it is, because if you talk to regular people in this country, they’re actually facing the choice: this week, do I heat or do I eat?
Now, when people are living in multiple houses across New Zealand, they don’t understand the real, lived experiences of Kiwis. That was the rush. What this Government wanted to do was make a difference, and $265 million a year helping people over winter to heat their house, to avoid energy poverty, to spend money on the important things like their kids—well, that was the rush. Now, we haven’t heard any talk from National members about the actual impact of the winter energy payment scheme. Now, I’ve been around to Kiwis’ houses, right? And I’ve seen the black mould on the roofs. I’ve seen the literal wood you can rip off the mouldering walls. I’ve seen families living in the only room they can heat, the lounge—a whole family, a huge number of people crammed in one room. This is the reality and this is why the Government was doing it, and they were doing it in a rush because of the crisis facing this country.
Now, National is saying they’re voting against it because it’s retrospective. I called it “pot, kettle, black” because they did retrospective legislation a huge number of times, but the difference is that this is about helping people this winter. It’s autumn, right? The leaves are coming off the trees. We’re counting down to winter. We know that this winter, if we don’t act, more people are going to die than in the rest of the year. So my message to National and anyone voting is: why on earth should we vote against helping Kiwis this winter just because National thinks retrospective legislation isn’t right when someone else does it?
There’s the issue of urgency. Now, this bill needs to be reported back by 1 April. It’s no secret that the Green Party isn’t a fan of urgency. In this case though, there is an actual urgent rationale, which is to give money to people who need it this winter. I urge National to go to residential care facilities around this country and tell them that they voted against those people getting the winter energy payment this winter. I challenge them: do it. Go to those residential care facilities and say why you voted so people would be poorer and colder this winter. I challenge them to actually get people to come to the select committee and make a submission, and the Green Party made sure there was a select committee process—I challenge National: go find anyone in this country who’s going to come to a select committee and submit that no one should get $265 million of winter energy payment support. I bet you they won’t be able to get anyone to come, because it’s incredibly popular, as we heard from the Minister. Kiwis need the help and they’re getting the help from this Government.
Ultimately, that is the question for National as they consider their votes tonight. Are they really going to vote against Kiwis getting help this winter? Do they want them to stay cold? Do they want them to stay paying more than 10 percent of their income? That’s the real choice. So let’s actually talk about the people and the real lives, not just this, I think, petty politics and partisanship we’ve seen from this side.
MAUREEN PUGH (National): Thanks very much, Mr Assistant Speaker. There’s been certainly plenty of passion attached to this debate this afternoon, and it’s no wonder. I recall the Hon Tracey Martin’s contribution first up, where she literally threw the officials under the bus because they had made a drafting error. A tiny tweak is required to fix a really small drafting error. Well, the reality is that it is the role of the select committee to scrutinise the wording, to scrutinise the bills that come before this House, to go through the wording, to question those officials, and to seek more information if that is what is required. But when you do not have the ability to scrutinise a bill because there is no select committee process, it’s the very reason that we are here today trying to fix up the mess that this Government has created. That is the job of the select committee, that is the democratic process, that is what has been robbed from the people of New Zealand, and that is why we are here in clean-up mode.
I have to say that when it comes to the committee stage, I’m going to suggest that we even change the title of this bill so that it is actually called the “Clean Up the Mess Bill” or the “We Told You So Bill”, because it was articulated more than once that we were going to end up in trouble in this House because the wording was so badly put together. So here we are.
I mention the contribution from Gareth Hughes here, who said, “Find me somebody that will not take $265 million in contributions for a winter energy payment.” The reality is this is a winter payment. It’s not necessarily for energy, and I can tell you that the people I have spoken to in the people’s houses I have been into are very grateful for this payment. In fact, one couple told me that they filled their wine cellar as a result of this payment last winter. Other people also took their summer holidays and loaded the credit card from this winter payment. It is not an energy payment, and had we proceeded with the tax reform that this Government put in place, they would have been even more better off than they were with the $31 a week that these guys want to give them.
We are going to vote against this bill and, for this House’s information, the committee was told yesterday that the submissions for this piece of legislation close on Tuesday. Thank you.
ASSISTANT SPEAKER (Adrian Rurawhe): This is a split call. I call Greg O’Connor—five minutes.
GREG O’CONNOR (Labour—Ōhāriu): They used it to fill the wine cellar—they used it to fill the wine cellar. If ever you wanted to hear how out of touch some of those privileged people across the aisle are, I refer you to that expression, “They used it to fill the wine cellar.” Excuse me, Mr Assistant Speaker, sometimes I just feel that it has landed on me.
Can I just bring the Opposition back to what we are talking about here. We’re not talking about wine cellars, we’re not talking about having black BMWs in the driveway; we are talking about 1,600 people who die each year from living in a cold house. If you look at the article by Ruth Nichol in the Listener in 2017, you’ll see it was 1,600 people. OK, the National Party has 40 electorate members—40 people have electorates. That means 40 people in each of those electorates will die this year if this bill doesn’t go through. Just think about that. Those of you who may have been brought up in State houses, those of you who—
Hon Ruth Dyson: Not on that side.
GREG O’CONNOR: No, some were—some were—and you might note that when some of them talk about it, they immediately talk about how well they were treated and how good those things were—but shouldn’t we sell them? That’s what I hear.
But back to this bill. This is something that I think it’s actually quite good that we’re back here for, because it allows us on this side of the House to focus on what we’re doing and how important what we’re doing is, and I just hope that somewhere on the benches across there, someone will sit and think that the fact we’re back talking about this is actually a very good thing. I hope they will just think there is more to life than the year of your wine—that this is actually a life and death issue for many of the people who deal with it.
In fact, it’s a life and death issue for people who live on their own, and I just think that one of the best things that’s happened now is the fact we’re back talking about this—the 1,600 people who will die this year as a result of living in cold houses. Can I just leave you with that and ask you to compare that with the other side of the argument we’ve just heard—compare that with wine cellars. Thank you, Mr Assistant Speaker.
SIMEON BROWN (National—Pakuranga): Well, what a terrible contribution we just had from the other side of the House. This piece of legislation, the Social Security (Winter Energy Payment) Amendment Bill, is a piece of legislation which is not necessary to be going through this Parliament if the Government had actually done their job the first time. I heard Tracey Martin talking about drafting errors. She was throwing the bureaucrats under the bus, throwing the officials under the bus, because they, as parliamentarians and as legislators in this House, failed to do their job the first time. That’s what this bill is about.
Ultimately, we as parliamentarians, we as legislators, take responsibility for the laws in this land. It is us who put our names to the legislation that we pass, and what the members on the other side did—what Tracey Martin, on the other side, did—was throw the bureaucrats and the officials under the bus for their hard work, and she should be taking responsibility for the decisions that they made.
So we will be opposing this piece of legislation. The Government should be doing its job properly and, furthermore, the tax cuts which National had legislated, and which were repealed, would have ensured that the same people who qualify for this now so-called winter energy payment, which is neither a winter payment nor an energy payment, would qualify for an increase in their superannuation—and that would also increase with the median wage as it goes up.
So this legislation is opposed by this side of the House. It is retrospective legislation. More importantly, there are better ways to ensure that we look after the incomes of those who are on superannuation, rather than trying to dream up other types of payments which aren’t specific and don’t actually meet the ends which members on the other side of the House are trying to achieve. We will oppose this legislation. Mr Assistant Speaker, thank you.
JAN TINETTI (Labour): I was going to actually stand here and say, well, there’s not a lot to add to this debate, because we’ve got such a small piece of legislation and, again, as has been reiterated, it is actually just looking at the drafting errors and fixing those drafting errors.
Chris Bishop: Yeah, that’s right. If you’d done your job properly, we wouldn’t be here.
JAN TINETTI: You’re quite right there, Mr Bishop. I’m so pleased you can read the legislation and add to the debate as well. But I was so taken by the passion of my colleague here, Mr O’Connor, beside me, talking about wine cellars. I just have to add here as well about—
Kieran McAnulty: He nearly lost his teeth.
JAN TINETTI: I did think that too, Mr McAnulty. I thought that Mr O’Connor’s teeth were going to go flying at that stage, with that passion. I just feel that I need to add to that. You really reminded me of quite a number of things that can come into this debate here. It is a small piece of legislation, but the overall piece of legislation that this is adding to means so much to so many New Zealanders out there. To hear that people fill their wine cellars—how out of touch is that? That has to be the most out-of-touch comment that I have ever heard.
I have sat with a number of children—in fact, in 2016, 11 children—at their bedsides. They had been hospitalised because they had been in houses that weren’t fit for purpose. They had respiratory complaints. In fact, one of those particular 11 children that I sat with had rheumatic fever. That is not a situation that I ever want to repeat again.
We are in this House because we have the ability to do something about that, and that is not just this side; that is that side as well. We have the ability to change that and make people’s lives better. Some say, “Oh, we’re outraged because it’s being pushed through.”, but there is an urgency with the 1 May payout. We need to get this right. Let’s work together and make this right for all New Zealanders here. To sit there and be outraged that this is being pushed through means that that side are completely out of touch with what is happening. People are dying—people are dying—and I have had experience of that because of inappropriate housing. We can get this right for every single one of those people and make a difference.
Many people have come to me—we hear that they’ve come to fill wine cellars; I still think that is an unbelievable comment and a shocking comment—to say how much difference the energy payment has made in their lives. Seeing people coming into one room, a family of six coming into one room, for months over the wintertime is really heartbreaking. Seeing those families now actually in warm, dry housing because of a simple winter energy payment is really heartening. As a Government, as an actual Parliament, as this House, we have the ability to change people’s lives. Let’s work together on this. I commend this bill to the House.
AGNES LOHENI (National): It is about the people. I’ve heard that a number of times from members across the House. It is about the people—it is about the people. But the reason we are here today discussing this is because the Government overlooked those people. They overlooked the vulnerable, the elderly in our community. In their haste, in their rush, and in their arrogance to push this process through, they did not allow decent time to hear from the community, to hear from the people, and so this is what has happened. Let us think: if these are little, minor changes, what else has been overlooked? Has there been consideration of the fact that, for example, some New Zealanders live in extremely colder climates than, say, in the northern parts—for example, the Chatham Islands? Is there consideration of that or other things that may come up over time? Again, the rush, the haste, rushing the process—this is what happens: it punishes the very people that we are here to serve. It is particularly interesting to note that the proposed retrospectively applied amendments appear in this to be in conflict with their own previous Labour Party stance, and I refer to the Hon Chris Hipkins when he stated, “Retrospective legislation is not right.” The fact that our kaumātua who happen to be in care facilities were overlooked by this Government is a lack of attention to vital detail that is becoming all too common with this Government, I fear.
On the one hand, I can at least understand the Government’s attempt to rectify this oversight, but it doesn’t address the fundamental problem with this bill, and that is its lack of fair, due process with the community. I cannot support this amendment. Thank you.
Hon KRIS FAAFOI (Minister of Broadcasting, Communications and Digital Media): It’s been an absolute delight to listen to the members opposite read their passionate speeches of outrage this afternoon about this piece of legislation, which, I concur with my colleague Gareth Hughes, is simply about making sure we keep people warm in their own homes. That’s what this piece of legislation is about: to make sure all the people that the Government intended to stay warm—so they don’t go cold, so they don’t have a horrible winter—can do that this winter. I would like to reinforce the challenge that Gareth Hughes put to the Opposition to hold public meetings, to hold street corner meetings, and to go out and put a pamphlet together to say “We voted to keep you cold this winter.”, because that’s what this is doing. All of you guys over there who have got your blue House boxes can put a pamphlet together and say “We want to keep you cold this winter.”, because that’s what you’re doing.
Your faux argument of outrage around the process doesn’t hold up, because I’ve heard some passionate speeches read by the Opposition this afternoon about how this side of this House should be perfect in its process, and, again reinforcing the message of my learned colleague Gareth Hughes, look in the mirror, because guess who was one of the worst offenders of having to come back to this House to clean up pieces of legislation in the last Parliament? Your leader. How many times did we come back—
ASSISTANT SPEAKER (Adrian Rurawhe): Not my leader.
Hon KRIS FAAFOI: Oh, sorry, not the Assistant Speaker’s leader. The Leader of the Opposition was the worst offender of coming back to this House and cleaning things up. So it’s back on the record that the members opposite want perfection from this House. Maybe they should demand that of the person who is the leader of the National Party. As Minister of Energy and Resources, I think we came back to this House not once but twice to clean up not minor amendments but major pieces of legislation where he had stuffed it up. So, hey, look in the mirror, guys. This is a piece of legislation with two minor amendments to keep people warm. Your leader, who you should demand perfection of—
ASSISTANT SPEAKER (Adrian Rurawhe): Please don’t bring the Speaker into the debate.
Hon KRIS FAAFOI: I’m sorry. I can imagine how you would be offended, Mr Assistant Speaker.
ASSISTANT SPEAKER (Adrian Rurawhe): No—order! Order! Members need to take care not to bring the Speaker into the debate and then not to comment after that’s been pointed out.
Hon KRIS FAAFOI: If you’re going to demand perfection from this Government—
ASSISTANT SPEAKER (Adrian Rurawhe): Again, don’t bring the Speaker into it.
Hon KRIS FAAFOI: Sorry—if the Opposition is going to demand perfection of this Government, then have a look at the person who will temporarily occupy that seat, because he came back to this House not once but twice. So just have a good look in the mirror there. I’m really looking forward to Simon Bridges maybe having another tour of the country, and all the billboards through regional New Zealand saying “National will keep you cold.”, because that’s exactly what is going on here. So put away your faux outrage, put away the process, because these amendments need to happen in order to make sure that the heaters can stay on this winter to keep old people warm.
Now, I’m looking around the House at the moment, and I’m just wondering who would be against that, and the record will show, when we take the vote on this bill, that every member of the National Party is against that. They’re about to stand up and talk about the process when this is actually about the people. The speaker who just took her seat, Agnes Loheni, is absolutely right, but she shouldn’t be beholden to the party lines that they’ve been reading out with such passion today. Get over it; keep people warm. I’m looking forward to the next debate when you’re going to talk about the process, but at the end of the day—and I think Nick Smith is probably going to lead us off. Nick Smith is quite happy with the people of Nelson who are over 65 staying warm. He’s a good local MP, and I’m looking forward to those public meetings and those pamphlets where he says that blue is best—not necessarily political, but keeping his constituents cold.
A party vote was called for on the question, That the 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 Social Services and Community Committee.
Hon PEENI HENARE (Associate Minister for Social Development) on behalf of the Minister for Social Development: I move, That the Social Security (Winter Energy Payment) Amendment Bill be reported to the House by 1 April 2019 and that the Social Services and Community Committee have authority to meet at any time while the House is sitting (except during oral questions), during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 191 and 194(1)(b) and (c).
Hon Dr NICK SMITH (National—Nelson): If this Parliament ever needed an example to show the shambles and the incompetence of this Government, it is in respect of the motion that that member, Peeni Henare, has just moved.
Let’s be clear about what the Government’s doing. Firstly, in the 2017 Budget, our Government provided for a tax cut for all New Zealanders. That would have provided an extra $778 for every superannuitant, and what the Government did was patch up and invent this winter energy payment so that they could repeal that tax cut. Just coincidentally, the amount of money that New Zealanders needed to be able to be warm in winter was $778.73—exactly what they would have got in the tax cut. Then, somehow, they come into the Parliament, as my colleague said, and claim the high ground.
Here’s where it gets worse. When they’ve had nine years in Opposition to sort their policy out, they fumble together this policy and they introduce a bill into the House to introduce the winter energy payment, except, after they’ve introduced the bill, after it’s gone to the select committee, it’s such a botched-up mess that they table in the Parliament a 500-page Supplementary Order Paper (SOP). Then the Minister—
Kieran McAnulty: I raise a point of order, Mr Speaker. I thought I would give the speaker enough time to make his point, but this is clearly, in my opinion, in breach of Standing Order 290(3), which states that “Any debate on the question for a motion under this Standing Order is restricted to the special powers or instruction set out in the motion.” I would argue that thus far, Mr Nick Smith’s speech—
Hon Dr NICK SMITH: “Dr” to you.
Kieran McAnulty: —has been a commentary of the original bill. I apologise: Dr Nick Smith. It has been a commentary of the original bill, rather than speaking directly to the motion.
ASSISTANT SPEAKER (Adrian Rurawhe): I think you’ll also find that that’s the sole decision of the Speaker. There is a little bit of latitude, but this is a narrow debate, as I’m sure the father of the House fully knows, and he will restrict his further comments to the motion.
Hon Dr NICK SMITH: Well, the extraordinary part is that the Government is saying today that the select committee should have to report back this bill by 1 April. Now, that’s three weeks away. The Standing Orders, as you well know—
Greg O’Connor: From a man who won’t let the select committee do their work.
Hon Dr NICK SMITH: —require the normal period of six months—the normal period of six months, Mr O’Connor, and you want three weeks. There is a provision in the Standing Orders that says that if you really want to speed the process up, you can do it in four months. Is it four months that the Government wants the select committee to do its job in? No, it’s three weeks. Why should this Parliament trust this Government to get it right in three weeks when they’ve had two cracks at it and made an absolute hash of it? The only reason we’re having this debate is because, not once but twice, the Government has completely stuffed up the detail of the law on this winter energy payment.
Now, members opposite have said that this is all about making sure New Zealanders are warm. Well, I say: not quite. They’re saying this urgency is required because of that. Actually, I haven’t heard a Labour member acknowledge that there’s a new law coming into effect on 1 July this year that requires every rental property to be insulated—a bill that I put through this Parliament—or that our Government insulated 430,000 houses during our term in office. So let’s not, Mr Faafoi, have a game to pretend that the issue of warming up homes is not something which members on this side of the House take very seriously.
But here’s the important part: the provision for Parliament to consider at select committee this bill for only three weeks is for provisions that the Government wants to apply retrospectively. Now, I just heard—and you will remember, Mr Assistant Speaker—that we had this long argument from members opposite, just last week, that retrospective law was wrong and that retrospective law that tries to patch up things in the past should not be done. Well, why is it that one week members opposite say retrospective law is wrong; the next week, they come into the Parliament and say, “Not only is it so right; Parliament and the select committee should only have three weeks to consider the extensive retrospective provisions that are provided for in this bill.”?
So I say to members opposite: sorry, twice bitten now shy—“twice bitten” because this is the third attempt for the Minister to get this legislation right. They got it wrong the first time because they rushed it. They got it wrong a second time because they rushed it. Why on earth should Parliament, a third time, then say, “Well, let’s rush it again.”? We’ve got such a good track record. We botched it up the first time we rushed it, we botched it the second time we rushed it, and now members opposite say, “Oh, let’s rush it again, because this time—this time—we’ll get it right.” Members on this side of the House say, “You keep getting it wrong. You’re not learning the lesson. You need to take the time to get this legislation correct.”
Then I come to the issue of what sort of public submissions process can there be if the select committee has only got three weeks. I would like the next member to say what opportunity there is going to be for the public to have a say on this quite extensive bill—it’s got over 30 clauses. What possible opportunity can there be for the public to have a say if the select committee is going to have only three weeks to consider its content? For those people that are affected by the retrospective provisions, is it fair for Parliament to be saying, “Well, you’re not even going to get a chance to have a say.”? So we’ve gone from the Government saying, one week, that retrospective law is bad and that you shouldn’t do it, to next week saying that retrospective law is so good that we should power it through in three weeks and we shouldn’t even give the public a say. Do members opposite really treat the New Zealand public and this Parliament with such disdain that they will not give them an opportunity to even have a say on the bill that’s patching up their botch-ups?
Do you know what this is really about? This is really to try and minimise the embarrassment for the Government. New Zealanders know that they’re incompetent. New Zealanders know, whether it be KiwiBuild, whether it be the Provincial Growth Fund, that it’s just one botch-up after another, and so too with the winter energy payment. The reason members opposite want this bill to be considered by the select committee for only three weeks—not to have any public submissions at all, not to have time for very competent colleagues like Simon O’Connor and others on the select committee to really scrutinise this bill around—is because it will only show up the level of incompetence that is exhibited in this legislation by Labour having to have a third crack at trying to get its winter energy payment law straight. Parliament shouldn’t have a bar of this process. We should not be in the business of covering up mistakes that are made by Government Ministers.
This bill is in the name of Carmel Sepuloni. This is a Minister that only a couple of weeks ago had to do the extraordinary part of recommitting a bill. That was after it had been through its committee stage—
ASSISTANT SPEAKER (Adrian Rurawhe): Yeah, we’re not doing that bill; we’re looking at this bill.
Hon Dr NICK SMITH: We are, but this Minister has got form, Mr Assistant Speaker. This is a Minister that keeps botching up her laws
Hon Clare Curran: How many botch-ups did you have?
Hon Dr NICK SMITH: She puts it through the committee stages—I’m happy to answer the question. I’ve been responsible for putting 50 bills through this Parliament—50 bills through this Parliament—and do you know how many of those bills I’ve had to recommit because I cocked up in the committee stages? Absolutely none. The Minister in charge of this bill, her very first bill, stuffs it up in the committee stages and has to recommit it, and that is an embarrassment. We should not be having a bar of this process that enables her to be able to continue to hide her embarrassment and her sloppy laws.
The last part that I want to deal with is the issue of arrogance. During the reading on this bill, did we ever hear from the Minister, “I’m sorry we got this wrong. I’m sorry that Parliament is having to waste its time, a third time, on trying to get the detail of this legislation correct.”? Was there ever an apology to the Social Services and Community Committee: “Hey, I’m sorry. We botched this up. You’re going to have to have a third bite at the cherry and trying to get this right.”? So I say to Government members: show a little humility for your stuff ups. Come down to this Parliament—and I see Clare Curran giving me the eyeballs. She should get to her feet and say, “Yes, we’re sorry. We’re sorry that we stuffed up this law. We’re sorry that there are thousands of New Zealanders that have missed out on their winter energy payment because we couldn’t get the basic detail right.”
Members on this side of the House would take a little bit of sympathy, would perhaps be a little bit more cooperative on fixing up the Labour Party’s mess, if it just admitted that it got it wrong, that it didn’t listen to National when it tabled a 500-page SOP in a mad rush, because then I might be satisfied that members opposite are learning from their mistakes. What we are seeing from this Government is not just one mistake after another but complete arrogance around the dealing with those mistakes and incompetence that just has them being repeated over and over again.
This Parliament should not—should not—constrain the hearing of this bill to only three weeks. We should reject this motion.
SIMON O’CONNOR (National—Tāmaki): Thank you, Mr Assistant Speaker. I stand in support of Nick Smith, the honourable member who’s just taken his seat, to speak against the motion of the Government’s attempt to rush this amendment bill through the House. I’m asking, actually, the Minister, if not to rescind the motion, to ask his side to vote it down. It would be just one more incompetent action on top of a whole lot that we’ve seen in recent hours and weeks. The reasons are very simple: the New Zealand public have a right to be heard. They wish to come to the select committee. It’s been pointed out somewhat, in an earlier contribution, that previous opportunities to speak on what is now an Act of Parliament were denied—an Act of Parliament through, particularly, a major change in Supplementary Order Papers (SOPs). There was no opportunity for the New Zealand public to engage. We have now found ourselves in a situation where the errors within that and within that process have made themselves manifest, and we on this side are saying, “Fine. Let’s then have a proper conversation.”
In some ways we hear many, many times from the other side “to be on the right side of history”—whatever that actually means. But if you want to be on the right side of history, then you look at history and you don’t make the same mistakes. We tried, in previous discussions around what this bill is related to, to be helpful, and, believe it or not, we’re trying to be helpful again to the Government in saying, “Give this bill the time that it needs, proper time in select committee, and allow the public of New Zealand to have their say so that the Government doesn’t make the same incompetent mistakes again.”
The reason we have this amendment bill is we have these two errors—two known errors; there will be more. I put that prediction on the table right now. There’ll be more errors, but, of course, they’re not willing to face that. Take this to select committee, give it full time, allow the public to come in and comment on these two changes, and, I would also say, if we had the right and full amount of time, other errors would come forward, we’d be able to amend the amendment bill and process, but no—no—this Government doesn’t care. They don’t want to hear from the public. They are moving the motion in this House to rush it through.
We’ve heard from members in their earlier speeches of why we need to rush this through. One said it was about life and death issues. Well, if it’s about life and death, perhaps New Zealanders would like to have a bit of a say. They might just like to come in front of the select committee for more than a couple of hours and have their say. We had—unfortunately, it’s becoming a bit of a theme—a Minister stand up and blame officials. That’s the second time in as many sitting weeks a Minister has basically thrown water at their officials, blaming the officials for the problems. Well, I would like those officials to come before the select committee. I’d like a full amount of time to sit down with those officials and have a conversation not just about why their Minister threw them under a bus but to understand how did we end up with these drafting errors and how do we stop that from happening?
I also think we need a further and proper—actually, not even a further; I should correct myself. We’re asking here just for the normal amount of time—just the normal amount of time. Another member stood up and said, “Who will think of the children?”—classic progressive go-to. Well, I’d like to think about the children, because I suspect some of those children and their families might like to come to the select committee during a full process to be heard. It doesn’t seem to really resonate with the other side. They’re not terribly interested. Their heads are going down. So if they believe this is an officials’ problem; if they believe this is a life and death issue; if they believe this is about the children, then, well, let the public come. In fact, let the elderly come, because this is a winter energy payment. Let them come, and let the Government take some responsibility for its legislation.
A last couple of points on why we should not be truncating: this is not just shortening; this it shortening it to 1 April. To the public listening, of course, what’s 1 April? April Fool’s Day. Well, it’s symbolic. It’s symbolic—why? I mean, look, that’s just another incompetent mistake. If you are going to truncate it, make it 2 April. Don’t cause yourselves heartbreak, guys on the other side. April Fool’s Day: it’s not a joke. The bill is not a joke. The amendment is not a joke. The winter energy payment is not a joke. Looking after our families is not a joke. Do not treat this House as a joke, and that’s what’s happening here. Three sitting weeks—three sitting weeks—and within that there’s only three sitting days of the Social Services and Community Committee. I have to say, they’re a hard-working committee—all of them. It doesn’t matter if they’re Labour, National, or Greens; they work hard. There’s a huge workload—and three days. And they don’t even sit all day; they sit for a couple of hours. They are racing this through. It is the wrong thing to do. This party has fought the whole way through to work with the Government, to make what is now an Act of Parliament right. We warned them then that mistakes would come through. Here are the mistakes. Do not repeat history. Let the New Zealand public have their say. Give this a full select committee process.
Last point—last point: there’s all this talk that people will miss out on payments. Guys, read the bill. You’re already paying out all those winter energy payments. This amendment retrospectively makes it legal. In other words, people will still get their money; the money that you’re, effectively, bribing them with, with their own money, but that’s a separate point. So they’re already getting the money. You don’t need to rush this through. We must return this to a full select committee process.
Rt Hon DAVID CARTER (National): Well, I do want to take a brief call on this and only because it’s a process that we shouldn’t be observing in this Parliament. I do also want to state right at the start that I do have a vested interest in this legislation, of course, being one of those poor people that shivered all last winter, ever grateful for the $750 that Mr Faafoi gave me. Thank you very much, Mr Faafoi. So I don’t want to hold it up again, but I guess that’s one of the arguments we had right at the start about sharp process. This legislation—in fact, we’ve heard our colleagues talk about it going to a select committee for three weeks. Well, it actually doesn’t get three weeks, because this committee now needs to receive this legislation after it’s been read today in the House, and then it needs to determine how long it will open for submissions, and I guarantee not much time can be given for that. So the opportunity for any person to have a fair input into this legislation and to try and get it right is considerably less than three weeks.
The Hon Peeni Henare, who had the unfortunate task of introducing this legislation—I noticed the Hon Carmel Sepuloni didn’t want to introduce it herself. Mr Henare is embarrassed to have to do this—I accept that, and I guess he could have done one worse process than what he’s attempted to do, and that’s to rush it through under urgency with no consultation at all. But to open it up to three weeks, which, effectively, becomes two weeks, for people to prepare submissions and then put them before the select committee is a farce.
We all remember when the legislation was introduced into the House, and then a 500-page Supplementary Order Paper was presented on the day the House was to debate the legislation. I remember the debates clearly. In fact, I think I spoke in one of them, saying to the House that mistakes will occur because of rushed process. I’m far from convinced that rushing this process now and trying to slam it through before 1 April will not again lead to further mistakes.
This Government needs to get its act together, it needs to consult properly, and the worst aspect of the debate we heard on the first reading today was the Hon Tracey Martin having the arrogance to come down to this House and say “It’s not the Government’s fault. It’s the officials that got it wrong.” That is not appropriate.
The Government mucked it up, the Minister mucked it up, and the National Opposition warned the Minister at the time it went through that it would be mucked up. I’ll go so far as to say today in this House that because the process has been rushed like it is, almost unconstitutionally—because it’s being rushed, I will guarantee we’re back again, amending this legislation, and ironing out further mistakes because a bumbling, incompetent Government is not doing the job properly.
A party vote was called for on the question, That the Social Security (Winter Energy Payment) Amendment Bill be reported to the House by 1 April 2019 and that the Social Services and Community Committee have authority to meet at any time while the House is sitting (except during oral questions), during any evening on a day on which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 191 and 194(1)(b) and (c).
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
Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Bill
First Reading
Debate resumed from 5 March.
Hon PAUL GOLDSMITH (National): Thank you, Mr Assistant Speaker, and I do want to say a few more comments about this piece of legislation. Ultimately, what we’re talking about is the Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Bill, which amends a number of Acts to remove impediments to compliance with foreign margin requirements for over-the-counter derivatives, which will enable relevant New Zealand entities to continue to enter into certain types of derivatives and international counterparties, following changes to the EU and G20 countries’ rules around this kind of financial market activity. It also establishes a new licensing regime for administrators of financial benchmarks under the Financial Markets Conduct Act 2013.
So, ultimately, we are broadly supportive of the policy intent. We are aware that most of the market players are keen to see this happening so that they continue to have access to these instruments. It will go off to select committee now and, of course, the devil is always in the detail when it comes to this kind of legislation. Many things can go wrong and, quite often, you can achieve exactly the opposite of what you’ve set out to achieve, so we’ll go through the select committee process in detail.
The only point I wanted to make was that, fundamentally, this bill is doing something quickly in order to maintain our access to capital, international capital—our access to international flows of money in order for us to invest and to grow our economy. We support that and we’re glad that the Government is doing something about it. But I do make the point that it stands in stark contrast to everything else that the Government is doing. Here, they’re maintaining our access to capital, but at the same time, they are considering a capital gains tax, which would increase taxes on investment, and nobody believes that taxing investment more will lead to more investment. So I can’t believe for a moment that that would lead to New Zealanders having more access to international capital coming into this country, and also domestic savers investing more and growing this economy.
So we’ll support this bill, but we just wish they were more consistent in their thinking around investment and attracting investment to this country in order to grow our economy and to provide jobs and opportunities for New Zealanders. Thank you.
Hon CLARE CURRAN (Labour—Dunedin South): Thank you, Mr Assistant Speaker. Such welcome, if grudging, support from the other side for this bill, the excitingly named Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Bill, otherwise described by me—with apologies to Minister Kris Faafoi—as a boring but bloody important bill! Really, though, in my short contribution to this debate—and I may be sitting on the select committee, but I’m not sure; I’m waiting with bated breath—I say that this is actually pretty important.
As Paul Goldsmith, the previous member, said, it is about ensuring that there is access to international capital and a whole lot of other things, actually. While this is a technical bill, it’s critical because it will allow New Zealand’s major financial institutions to continue to transact with those overseas parties to manage financial risks, to raise capital, to continue to engage effectively in international markets and bring us into line with international standards, and, proactively—as a good Government does—to avoid potentially substantial economic damage.
It wasn’t magicked up out of thin air. Over the past year, the Ministry of Business, Innovation and Employment (MBIE), the Reserve Bank, and the Financial Markets Authority have undertaken a comprehensive review of what’s required to bring New Zealand into line with the international reforms, and MBIE and the Reserve Bank undertook public consultation on foreign margin requirements for those over-the-counter derivatives in 2017. That consultation identified specific impediments to compliance in New Zealand law and it proposed a number of targeted legislative amendments to address them.
So there are two essential, main changes that I think this bill makes. It will ensure that our flow of capital and international standards between New Zealand markets and the international markets will ensue, and it’s pretty important that we’re doing this.
The second one, which I’ll just briefly talk about, is the introduction of the licensing regime for administrators of financial benchmarks. In June 2016, the European Union responded to concerns about conflicts of interest and the manipulation of financial benchmarks. It published new benchmark regulations, and those new regulations set standards around the processes by which the financial benchmarks were set. They apply from 1 January 2020, so I imagine that that is the timetable that this legislation is working to, to make sure that we’ve got that in place.
The regulations have got effect outside the EU as third countries and benchmark administrators in those countries must meet the new standards if the benchmarks they administer can be used in financial contracts with parties located in the EU, and, of course, our banks and other large private and public sector organisations such as the Reserve Bank, ACC, the New Zealand Superannuation Fund, and the New Zealand Debt Management Office rely on the contracts with EU counterparties that reference New Zealand benchmarks and access EU financial markets for risk management investment and capital-raising purposes.
So this is pretty obvious. It might sound dry to those listening, but it’s extremely important. It’s the hallmark of a responsible Government that we’re getting on and doing it, and it’s great that we have got the support from across the House to do it. So, with that, I commend the bill to the House.
Hon JUDITH COLLINS (National—Papakura): There’s a few things—I’m going to make a couple of predictions here, and if I lose, we all get a peppermint. So one prediction is this: this first reading will pass with overwhelming support and be sent to, hopefully, the Finance and Expenditure Committee. The other point will be: this will get no coverage whatsoever in the mainstream media or any other media. It will, however, cause problems if it’s not passed. We will have a select committee process. The only people to come along and be interested in submitting on it are people who actually know about it, so there will be about three people or organisations that will come along, and we will nod and we will listen and we’ll all learn, and we’ll have a great time in that committee.
Hon Clare Curran: Will you do baking?
Hon JUDITH COLLINS: Clare Curran says, “And will I do the baking?” This is not a sexist comment—no, no. Ms Curran knows that I quite like to produce some nice home baking from time to time for committees.
Chris Bishop: What do you bake?
Hon JUDITH COLLINS: Oh, well, it just depends, Mr Bishop, on what I feel like. I’ve even made gluten-free for my colleague over here. So coming back to the bill, which, of course, is far more important than my baking and gluten-free—but it woke everyone up, didn’t it, Mr Assistant Speaker? Actually, instead of a peppermint, I’ll do some home baking. Good idea. There’s a lot of you, though.
Greg O’Connor: Finally, some common sense.
Hon JUDITH COLLINS: Amazing common sense—finally. So I thought what we would do is—this bill reminds me a bit of the anti - money-laundering legislation. I’m sorry to say, it has caused a number of law firms—because, of course, as you know, I’m a lawyer as well—to complain to me about it, and I have to look embarrassed and say, “I’m so sorry. I was the Minister of Justice who had to bring it through.” Actually, quite often it’s because the European Union has decided something. We were being told then that we would not be able to have a lot of business with the European Union because of the anti - money-laundering legislation that we hadn’t quite yet passed, so we had to do that. It causes a lot of extra cost to everything and to everyone, but we have a similar situation here, where the banking system has to cope and comply now with the EU regulations. I mean, imagine what it’s like if you’re actually part of the EU. We’re not even part of it and we’re having to comply with it. Of course, the fact is that we do because we are just a mere little trading nation with our 4.8 million people—I mean, if Statistics tells it, it’s probably 3.5 million—out there trying to do business with the world. So we just, essentially, have to do as we’re told on this unless we want to say goodbye to the European Union as a trading partner. So that’s why we’re doing it. It’s for our banks, and it’s for us to be able to get capital into New Zealand through that system.
As we all know, New Zealand is a beautiful country full of lovely people—well, actually, not full at all; there’s hardly anybody here, but we’re all lovely. The issue is that we don’t have enough money—we don’t have enough capital—so we need to have this. This is an excellent bill, and it is one that we will of course support on the National Party side. It’s the sort of thing that responsible Oppositions do when it’s something in the greater good, for the good of the country, which is—so seldom do we see a bill coming into this House these days that we can support, but this one, we can. So, having really exhausted what there is in this bill, apart from the fact that we’ve solved child poverty, we’ve got world peace, and the European Union will let us trade with them—fantastic, Mr Assistant Speaker; great bill. I commend it to the House.
Hon JAMES SHAW (Associate Minister of Finance): Thank you, Mr Assistant Speaker. I rise to speak on the first reading of the Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Bill on behalf of the Green Party and in support of the bill. I just wanted to pick up on where the Hon Judith Collins left off, which is that this is, obviously, a highly technical but, actually, fairly significant bill, and it is in the public interest. It is good to see that the Opposition is supporting it, and I hope that they also support another important piece of legislation coming up soon, also in the greater good—
Chris Bishop: What’s that one?
Hon JAMES SHAW: The zero carbon bill. So returning to the Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Bill—the purpose of the bill is straightforward. Now, what’s proposed in the amendments in this bill are a number of changes to pieces of legislation that will, basically, keep New Zealand’s financial institutions connected to the global economy.
Andrew Bayly: You must be reading this.
Hon JAMES SHAW: I am. The changes will allow our financial entities to access capital, as other speakers have said, most recently the Hon Judith Collins, but also alluded to by the honourable Minister Faafoi in his introductory remarks. Now, I think this is a really important point, which is that if we don’t make the changes to this bill—if we don’t make those changes—it will actually cost all New Zealanders in the form of higher cost of borrowing. So while, as Judith Collins noted, it’s not going to get a great deal of press attention, the title of the bill obscures its intent, and it’s a pretty niche bill, it does actually have a material impact on the lives of all New Zealanders if we don’t pass it.
So what we’re now considering under this financial markets reform amendment bill are changes that will help keep us in line with international regulation reform. We’re not the only country that’s introducing these reforms; there are a number of countries that are lining up around this. These are changes, I want to point out, that have been prompted in part by the very painful lessons that were learnt in the global financial crisis (GFC), and that’s some of the context that we’re debating. Last year, of course, was the 10th anniversary of the Lehman Brothers bankruptcy, and, I have to say, that met with a lot of reflection about how the financial world has changed in the 10 years since. What that reflection showed, I think, was that whilst there has been a lot of progress that’s been made over the last decade in securing and making more stable and more resilient financial markets, it also showed that debt levels now are actually higher than they were when the GFC hit us 11 years ago now.
Now, I have to point out, obviously, the New Zealand context there is a little different. We’re carrying less debt than many other OECD countries, but we’re still highly exposed to the global situation. So I think that while things have changed, there are some things that have outstanded, and some of the lessons that ought to have been learnt may not have been learnt. So I think it is important that we keep going with these kinds of reforms. While we are in relatively strong shape by international standards, it is important that we maintain and build on this regulatory regime.
So the amendments in this bill really are towards that end, and without them, again, as my honourable friend Kris Faafoi has pointed out, and the most recent speaker, the Hon Judith Collins, we won’t be able to comply with relevant commitments and the kind of new international rules that are aimed at keeping more resilience and protection against manipulation in the global financial system. As anyone knows, that is a system, and the players in that system are very fast-moving; they’re very sophisticated. Every time a wave of regulation comes through, they’re usually able to get ahead of that and work out how to create new instruments and new ways of getting around it and create yet more levels of risk and uncertainty into the system, and so it is quite a job for us to keep up with that in the national and international regulatory system. So what that means is that once a regulatory regime has been put in place, it can’t stand still. You kind of have to keep monitoring and learning and evaluating and seeing what trends are out there. Again, that is, I think, where the amendments in this particular bill come from.
The amendments in this bill will ensure that New Zealand banks and other financial entities in New Zealand can continue to access offshore funds with the kind of safeguards that they need. I notice that without the amendments in this bill, certain aspects of New Zealand law as they currently stand would restrict New Zealand’s financial entities from complying with rules around foreign margin where those rules would give our financial institutions protection when parties default or become insolvent. So that does carry with it some risk.
I want to acknowledge the consultation that the Ministry of Business, Innovation and Employment (MBIE) did, the Reserve Bank did, and the Financial Markets Authority did as this bill was being put together over the course of the last year. I do want to acknowledge that they were operating under time pressure to complete their consultation and analysis and subsequent advice. I note that MBIE felt satisfied that the time pressure didn’t unduly compromise the process, but I do know that when you’re dealing with something this complicated, it can be hard for people to participate in that. But I think that where we’ve landed is pretty good.
So I want to highlight some of the concerns from some of the consultation documents that it picked up around the over-the-counter derivatives aspect of the bill—derivatives, of course, being financial contracts that banks and other institutions enter into in order to protect against exchange rate risks. In relation to those, where exchange of collateral—the margin—is involved, submitters to the consultation were worried that under existing law, there would be some impediments that this bill needs to address. So those impediments related to the fact that under existing law, there are no margin requirements in over-the-counter derivatives, but there are several banks that are registered in New Zealand which would likely have to comply with margin rules that are being implemented overseas.
The consultation process also pointed out that some features of New Zealand laws which cover statutory management and creditor priorities could prevent or impede the prompt and free availability of margin provided in New Zealand banks. The possible result of that is that there could be difficulties for New Zealand banks across derivative products in markets used for funding and hedging. Minister Faafoi, in his speech, pointed out the example of the kind of implications for the big four banks in this country if we were not to bring the amendments proposed in this bill. Those implications estimate $1.1 trillion of gross exposure just for those four big banks to parties in the European Union if we don’t align with the over-the-counter derivatives reforms being established by the G20.
So it is one of those, kind of, quiet bills but I think it’s lit, and I think it’s great that everyone’s supporting it, and I commend this bill to the House.
Hon JACQUI DEAN (National—Waitaki): Thank you, Mr Assistant Speaker. This bill is supported by the Opposition through the House—the Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Bill. There have been a number of contributions around a fairly narrowly defined piece of legislation. So I don’t propose to go through it all again. I don’t think that would add much to a debate where everyone is in support of the banks having a more appropriate regime in place to continue and ensure continued access for New Zealand benchmark users to access European financial markets.
So this was originally a National Government Bill. We’re happy now to support it in Opposition, and congratulations to the Hon Kris Faafoi for progressing it. I do see that the Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Bill is enjoying quite steady stakeholder support and feedback. So ACC and super fund, who submitted jointly; the New Zealand Bankers’ Association; Russell McVeagh; Chapman Tripp and Buddle Findlay also did a joint submission; and then RITANZ, which is Restructuring Insolvency and Turnaround Association of New Zealand—all wrote and submitted in support of this very narrow bill.
I just want to do a shout-out to the Hon Judith Collins and her baking with the Finance and Expenditure Committee (FEC). I was not aware that there was baking going to FEC. That’s a bit of a challenge to the rest of us. Challenge accepted. I commend this bill to the House.
ASSISTANT SPEAKER (Adrian Rurawhe): This is a split call. I call Paul Eagle—five minutes.
PAUL EAGLE (Labour—Rongotai): Thank you, Mr Assistant Speaker. It’s my pleasure to take a split call—five minutes—on this bill, the Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Bill, and it is the first reading. Can I acknowledge the Minister—he’s no longer here—for introducing this important piece of work. In terms of what I thought I would cover—I didn’t want to double up—I would just mention various things from the regulatory impact assessment for the financial markets, because I thought there was some good work in there. Some of the work done by the Ministry of Business, Innovation and Employment has certainly contributed to making this bill what it is today. So can I thank the officials for that.
One of the points for those who, like myself, are not entirely knowledgeable about this bill was really understanding what is the policy problem, or what is the opportunity—everything from the way that New Zealand’s banks use offshore and domestic finance to fund their activities. They enter into these derivatives contracts to protect or hedge against the exchange rate risk of raising money in foreign currencies. For example, other large public sector asset managers like the Accident Compensation Corporation and the New Zealand Superannuation Fund also use derivatives for hedging purposes.
In terms of banks and the public sector asset managers, they are facing a barrier to accessing international derivatives markets due to the Group of 20—the G20, as it’s been mentioned before—and those rules for certain types of derivatives. Those rules include the requirement for parties to over-the-counter—or OTC, as a colleague mentioned—uncleared bilateral derivative exchange securities, also known as the margin, under a contract to support the performance of it. If one party fails to honour its obligation—for example, if it’s financial distress—then the other party can call on a margin to shield it from any losses that might result from its counterpart’s non-performance. That’s a good basis for developing this bill. Part of their advice too talked about the need for more Government intervention.
So this, I guess, targeted amendment legislation was deemed to be required to ensure or enable those affected entities to comply with the foreign margin requirements and continue to access international derivatives markets. A non-regulatory response was said not to be possible as the impediments to compliance are contained in the legislation. Who’s affected? These amendments are not intended to change the behaviour of entities that are affected by the new derivative requirements, rather preserve the status quo of the industry behaviour, but instead the amendments are intended to ensure that affected entities have the ability to enter derivative transactions that comply with new requirements and market practice.
One of the most important things, I think, is the stakeholder views, and they were tabled around what they thought that problem was. So agencies were consulted over a six-week period in 2017, between July and August, and they were all in agreement, essentially, on the nature of the problem, and they were supportive of what’s being proposed. So I think that’s commended, and can I commend this bill to the House.
ANDREW BAYLY (National—Hunua): Thank you, Mr Assistant Speaker. It’s a pleasure to be talking on the Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Bill. It’s an interesting bill, isn’t it, because derivatives are actually a fundamental part of our financial systems, but, unfortunately, not many people know about them. They’re the glue, as financial systems got more sophisticated over time, in terms of how you allocate risk and how you manage risk. That’s essentially what they’re about.
So derivatives take a number of forms. Many people talk about futures and you can buy futures for gold. You can talk about buying an option or warrants that are issued or swaps, and traditionally in the financial market setting, you have swaps as an example that covers foreign exchange movements or interest rate movements. The reason why these are so crucial in terms of managing risk is that for many players in the financial markets, and banking in particular, where they want to make sure that they capture a certain profit and they don’t want to be at risk of changes in the value of the currency or changes in the interest rates, what they will do is disaggregate parts of the financial instrument and sell or trade that part. They might be wanting to buy a fixed-rate instrument even though they’ve offered a floating mortgage rate to New Zealand house owners. Or they might agree to sell currency at a certain price at a certain date, and they don’t know what the price is and they’re not prepared take the risk, so they buy that in advance. Those are traditional types of derivatives and it’s a huge market.
I presume most people have been quoting from the same report, but the reason why it’s so large in terms of the value—and the report talks about $8.7 trillion worth of trades—is most of these arrangements only have a 90-day lifespan. So in fact, you’re having to roll them over regularly, although, of course, many of these have a longer term. But a great portion of them have quite a short term and therefore the issue is around how they are treated and how when you buy one—and if you’re out of the market, which happens during the course of the period if it’s a 90-day one, at some point you might be in the market; at other points you might be out of the market—that is where a margin call comes in. And this is what this bill is about: how you manage that margin and how you keep sufficient amount of margin, those financial institutions, that ensures that the financial markets are secure. That is what this bill is principally about.
The other bit is around licensing of the financial benchmarks, and, again, this is a new area driven by the EU. And I think it is vital that there’s a record of it and how it’s benchmarked and obtain the records behind it. It’s going to be a fascinating discussion in the Finance and Expenditure Committee. I’m looking forward to working with the members in the Government circles because I’m sure many of them have a good grasp of this detail. I commend the bill to the House, Madam Assistant Speaker.
Dr DEBORAH RUSSELL (Labour—New Lynn): I would like to begin my contribution to this debate by praising the Hon Judith Collins. As earlier speakers have noted, Ms Collins sometimes brings home-baking to the Finance and Expenditure Committee, and I can attest that it is superb. So thank you, Judith Collins. We appreciate it very much.
In terms of this bill, what this bill does is deal with some of the way that we put our financial markets together, and I’m grateful to the immediately previous speaker, Mr Andrew Bayly, who explained, I think at quite a high level, some of the nature of what is going on in financial markets. But what I would like to do in the course of this speech is try to bring this to life for people who may be watching at home. I guess dealing with financial markets is one of those topics where people’s eyes do glaze over a little. Some of the stuff that we are talking about is highly complex and it doesn’t often relate to people’s everyday lives. Most of us never have to deal with what’s going on in the highly complex financial markets. So I do want people to understand why this bill is important and why we are trying to engage in regulating our financial markets—a worldwide effort.
I ask you to cast your mind back to 2008 and what we now call the global financial crisis. It’s hard to say exactly where it started but the world was primed for it. The world was absolutely primed for it, and it was primed for it because there had been an astonishing growth in what are now called, broadly, derivatives. Something that had been going on in various countries was what they call poor-quality lending. There had been a whole lot of lending—mortgage lending in particular; lending to people on their homes—and it was quite risky lending, risky in the sense that banks and other mortgage issuers were lending something in the order of 100 percent of the value of homes to people.
The assumption was that people would be able to cover the costs of the interest on their mortgages, and so on. But they were risky and, in particular, when one looks at some of the stories of what went on at that time, some of the lending that went on went on where families with very low incomes were nevertheless given mortgages, which possibly at the time of the borrowing they might have been able to cover the interest on, but if anything went awry in their lives then they simply couldn’t cope. So if mortgage rates went up just a little, that could be enough to sink those people on their mortgages.
Now, as it turns out, the financial institutions knew that they were risky instruments. They knew that they were risky mortgages—the financial institutions—and of course all mortgages are somewhat risky for both the lender and the borrower. There is always a chance that the borrower won’t be able to make the mortgage payments. But then from there what happened was financial institutions, quite properly, spread the risk. Now, that idea of spreading the risk is that they would take the value of a particular mortgage and they would ask other financial institutions, other banks, to participate in it. So they would sort of sell a bit of the mortgage to another institution, then they’d sheer off another bit and sell it to a third institution, and then hive off a little bit more to a fourth institution. No, it wasn’t a matter of chopping it up, but this all operated through pretty complex financial instruments.
What happened was that banks and other institutions—the big merchant banks—built up complex layers of very, very complex financial instruments. Let me give you an idea of how complex these financial instruments are. Look, if we’re talking about something like a swap, people say, “Well, what’s a swap?”. Well, a swap is when one entity, one organisation, has a debt, it has an investment, it has some borrowing which has a particular stream of interest payments. They’ve got to make a series of interest payments over a series of months. And then another institution likewise has some sort of financial instrument on which there is a series of interest payments due, and, literally, they swap them. And what that does is it enables each institution to get a better cash profile to plan their cash flows, to plan their interest flows, to plan their risk profile. That swap enables them to stabilise what’s going on in their own borrowing and lending profiles.
But most people don’t really understand swaps, and fair enough; they are complex—and that’s just actually a very simple sort of financial instrument. And then from there it’s not just having the swap. [Interruption]
ASSISTANT SPEAKER (Poto Williams): Order! We won’t be having conversations across the Chamber, thank you very much.
Dr DEBORAH RUSSELL: Well, I’m just having the swap—but the valuing of the swap is very difficult. How do you put a value on those streams of interest flows out into the future? Well again, there are ways of doing that, but it takes quite a bit of financial knowledge and expertise and finance to do that. So what happened during the build-up to the global financial crisis was there were a whole lot of these complex financial instruments being built up all over the world, and the risks and the interest flows and the streams of money being swapped and dealt with and sold, until it became an incredibly complex structure that almost nobody could understand and nobody could value, and no one knew where the risk actually lay. In fact, institutions could virtually get rid of all the risk. They had no skin in the game.
Then the house of cards came tumbling down, and what we saw—and I’m sure that members of this House will recall this—was people literally living in tents and tent cities because they had lost their homes. Now, this didn’t so much happen in our own country, but I have a clear memory of the tent cities in various places in the United States. Ordinary people eventually lost out. Actually, a lot of the big banks got bailouts because they were “too big to fail”. It’s hard to go back and recreate that situation, but ordinary people—ordinary mums and dads—lost their homes and often lost their homes because the house of cards came tumbling down. And it happened because so many of those institutions didn’t have skin in the game.
So, as the world started to recover from the global financial crisis, around the world regulatory authorities started to put in rules to regulate that kind of behaviour, and this is what this bill is actually about. I refer in particular to the margin. It’s referred to as a margin but what it is, essentially, is that when institutions engage in these kinds of complex financial deals, they have to leave some of their own money on the table. As we all know, when you’ve got some of your own money on the table, you take much more care. That’s a really straightforward thought, and that’s a common sort of thing. When we want someone to take care, when we want real care taking, we make sure that people have skin in the game, and this is what these margins do.
So the EU has brought in those regulations, and now we need to do that too in order to maintain our access to the EU financial markets and, in fact, to the worldwide financial markets. That’s why this bill is so important. It represents our institutions having some skin in the game, and they want to have some skin in the game. It represents big financial institutions worldwide having some skin in the game. And that, ultimately, protects all of us, and that’s why this bill is important not just for the handful of people in this country who will understand the complexities of these financial instruments but for the ordinary, everyday people on the street. And in the Finance and Expenditure Committee, where, we’re told, this bill is going to come, we will do our best to examine the detail of this bill and make sure that we look after the ordinary people. I commend this bill to the House.
ANDREW FALLOON (National—Rangitata): Thank you, Madam Assistant Speaker. It’s a pleasure to be taking a call this afternoon on the first reading of the Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Bill. The reason it is such a pleasure is that I was sitting in my office and I heard someone refer to this bill as “a bit dull”, and that disappoints me a little bit, actually, because I’m quite excited about it. And the reason for that is that before I came become an MP, I worked on this issue for a fair while, actually. So it’s a real pleasure for me to be seeing it come to this House, and I want to commend and thank Kris Faafoi for doing that. I am excited, and when I think about the bill, I think back to probably three or four conversations I had on it and on this issue with a very friendly lawyer. It took him about three conversations, I think, for me to finally understand it, and so I apologise to Anthony if I do get any of it wrong this afternoon in trying to explain it to members across the House and, I’m sure, the many people who are watching at home.
So, at present, New Zealand banks use offshore finance to fund their activities, and those banks enter into derivatives contracts to hedge against the exchange rate risk in raising money in foreign currencies. Due to a change in G20 rules, banks are facing a barrier to accessing those international derivatives markets, and so it’s really important for us to now tidy up our legislation to ensure that banks can still access those offshore markets, because the effect if we didn’t do that would be quite simple, and it would be increased interest rates. And that would, obviously, lead to a huge cost on families and to businesses. So this is a fairly small and technical bill. I do look forward to hopefully sitting on the Finance and Expenditure Committee while this bill is being considered. It’s a worthy change and one that needs to happen; if we didn’t, it would lead to additional costs for families and businesses. I commend it to the House.
Hon RON MARK (Minister of Defence): Thank you, Madam Assistant Speaker. Actually, it’s been quite interesting that the passage of this debate has gone from being sort of those of us who are not particularly versed in financial derivatives and in financial markets listening to the odd speaker—Andrew Bayly and Deborah Russell, who has just left, I think—talking about some of the finer detail. It did actually tweak my mind to some things that I had seen and observed in international media, going back to that time of the global financial crisis.
Dr Deborah Russell is quite right to point out what occurred in that time. I think, if you go and google up and have a quick look, at around that time, when we were talking about swaps and Andrew Bayly raised the issues there, members might recall one of the things that occurred that gave the EU such concern. If we go back to that time, JP Morgan were fined $65 million, Cargill were fined $10 million dollars, Commerzbank were fined $12 million, and then there was a bigger action taken against JP Morgan, I think, and Deutsche Bank. There was a partnership arrangement in some dealings with swaps, and that incurred a €485 million fine. Deutsche Bank—another fine of about 7.8 million. And all this comes back to the way in which swaps were being managed and deemed by the courts of those jurisdictions to have been improper and were punished accordingly.
If members want to get a look as to what was going on at that time, I’d probably recommend that they watch the movie The Big Short, which was an excellent movie showing how players at this very high end of the financial markets made considerable amounts of money dealing in things that most of us mere mortals of modest income and modest investments just only dream of. So I guess it’s with that backdrop that New Zealand First wholeheartedly and wholesomely supports this legislation that’s before the House.
It actually has also got me reflecting somewhat on the circumstances and trading and the way certain financial transactions were managed and decisions were made in this country that were highlighted by the Rt Hon Winston Peters when he exposed the dealings in the wine-box; different to this, I know, but it does serve to remind us that unless we keep our eye on the ball in some of these areas where most of us don’t have a lot of understanding, there are very high risks of penalties and consequences being foisted upon the average New Zealander, who does end up paying through increases in banking charges and increases in interest and increases in insurance and all the rest of that.
So this bill, from a New Zealand First perspective, brings us to meeting the requirements set by both the G20 and the EU. This bill aligns New Zealand with international best practice and will improve the integrity of our financial system. This bill is an omnibus bill. It brings New Zealand into line with other countries who have, over recent years, made changes to address significant risks in global financial markets, specifically the G20 and the EU. With these changes, New Zealand entities can continue to access these international markets. Our legislation must put us in a position to be able to meet the requirements of the reforms made overseas and particularly, as we know, in the EU—somewhat critical if this Government is hoping to secure a free-trade agreement with the EU, and something I am looking forward to our wonderful Ministers Parker and Rt Hon Winston Peters successfully concluding in this term of Government. I have my fingers crossed, and I look forward to something of that nature happening.
If we are shut out internationally through not passing this legislation, the disruption to businesses and the increase in funding costs may be very significant, including through the impact on the banking sector and the possibility of increases in interest rates. The big picture is that without these amendments through this bill, there is the potential for significant risk to the New Zealand economy, and we can’t as a trading nation afford for that to happen. New Zealand First wholeheartedly supports the passage of this bill.
Bill read a first time.
Bill referred to the Finance and Expenditure Committee.
Hon PHIL TWYFORD (Minister of Housing and Urban Development) on behalf of the Minister of Commerce and Consumer Affairs: I move, That the Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Bill be reported to the House by 22 July 2019.
Motion agreed to.
Bills
Local Government Regulatory Systems Amendment Bill
Second Reading
Hon NANAIA MAHUTA (Minister of Local Government): I move, That the Local Government Regulatory Systems Amendment Bill be now read a second time.
The bill is an omnibus bill which will make minor and technical changes to the legislative framework under which councils operate. Its purpose is to carry out maintenance on local government legislation to keep it up to date and fit for purpose. It’s an opportunity to tidy up and correct aspects of law that would be beneficial to improved functionality and implementation of their respective Acts. The bill as reported back from the Governance and Administration Committee amends seven principal local government Acts administered by the Department of Internal Affairs. The Government recognises the importance of finding time in the parliamentary calendar to undertake repairs and maintenance to existing legislation.
This approach was endorsed by the Productivity Commission in its 2014 report on regulatory institutions and practices. The amendments contained in this bill support the Government’s vision for an effective system of local government operating under legislation that is clear, modern, and does not introduce unnecessary costs. I’d like to thank the select committee for its careful consideration of the bill and for conducting its business in a timely manner. This gives the House the opportunity to pass the bill with enough time left in the financial year so that those affected by the amendments to the Rates Rebate Act, in particular, have time to submit an application to their local council and receive the rates rebate for this rating year.
The committee received and considered 18 submissions on the bill from interested groups. The two key local government sector groups, Local Government New Zealand and the Society of Local Government Managers, submitted in support of the bill’s purpose. The committee’s report recommends the bill be passed with five main amendments, and I support these amendments.
I’d like to draw the House’s attention to some small but important changes we are introducing in this bill to improve access to information for communities across New Zealand. We’re introducing a new requirement for local authorities to publish public notices on their websites as well as in the traditional community newspaper. We’re introducing a new power for the Secretary for Local Government to prescribe the form of documents and information which local authorities make public. This is to ensure that the information is accessible and reusable by all, including those with a disability. We’re introducing a definition of “Internet site” into the Local Government Act so that council websites are a place where the public can find all important council documents.
In and of themselves, these are minor amendments. However, taken together these changes will make the information held by local authorities more readily available, accessible, and reusable and help support greater transparency in the sector.
I’d like to highlight another amendment in the bill. The amendment is to the Local Electoral Act and introduces a new duty to facilitate and foster representative and substantial electoral participation. The committee recommends that this duty be placed with the chief executive rather than electoral officers. I tend to agree with the committee’s recommendation and think chief executives will be well-placed to ensure the principle of facilitating and fostering electoral participation is reflected throughout their organisation and in their approach to elections. The current low level of participation in local elections means that membership of councils is often less diverse than the communities they serve, and we should always try to do more, which is why improving civic participation in local government is one of my key focus areas for the local government portfolio. This change to the Local Electoral Act will provide councils with a clear mandate to improve participation across our communities.
Finally, the committee recognised that there was some overlap between matters raised in submissions on the bill and the Justice Committee’s inquiry into the 2017 general election and also the 2016 local elections. While those matters were out of scope for the bill, I commend the submitters for raising these issues and support the Justice Committee considering the issues.
The bill contains a number of minor and technical changes which will strengthen the local government legislative framework. The changes are non-controversial and have cross-party support. I commend the bill to the House.
Hon JACQUI DEAN (National—Waitaki): Thank you, Mr Speaker. I’m very happy to support this bill. In fact, it is an excellent bill which was inherited from the former Government, and a number of the clauses in this bill were developed under our watch. None the less, the bill achieves a number of efficiencies in the regulatory system across a number of statutes, and the Minister—thank you very much, Ms Mahuta—has outlined those to the House. As a collection, they don’t seem, perhaps, that significant. Who, really, is concerned about minor tweaks to the Dog Control Act? Well, maybe some are—I am. But, taken as a whole, these are another step in modernising, simplifying, and clarifying the regulatory regime around local government regulatory systems.
Before I just go through one or two of those clauses in the bill, I do reflect that one of the challenges that the local government sector does face is a low reputational score, and that is a score by their own measure, and a part of that low reputation is because local governments are regulatory bodies and must administer regulation. If we can simplify and clarify those for local government, then that can only have a beneficial flow-on impact on people who need to go up to the council door, knock on it, enter, and wish to transact with some council somewhere in New Zealand.
If I go to the Dog Control Act, one of the aspects of the Act which was a bit of an impediment was around the definition of a disability assist dog, and the Local Government Act really noted which organisations are authorised to certify dogs which are disability assist dogs. Because the legal definition of disability assist dog does include a list of organisations which are authorised to certify a dog as such, we need to do legislative change each time an organisation is added to or removed from that particular list. Clunky—very clunky.
So one of the clauses in this bill allows for organisations to be, through regulation, added to or removed from the Dog Control Act. It’s sensible, and so regulations can now—or will, on the passage of this bill—be made by Order in Council by amending Schedule 5, which is the new schedule, and so those new certifying organisations can be added and those removed.
That’s just an example of how Parliament can smooth out processes for an organisation. And, if I stick with this example, formerly a new organisation that was formed to certify disability assist dogs had to really wait until there was a bill that would enable that, and so wait for a piece of legislation. That could take up to several years, by the time a minor piece of legislation was scheduled for debate, or just not be certified. And now, of course, they can then by Order in Council be added to Schedule 5. So it smooths it out.
So amendments to the Local Electoral Act is another part in this bill, and the changes are to empower councils to improve representative and substantial participation in local elections. We do have a problem in New Zealand with a declining rate of participation in local body elections. There are many reasons why this could be so. It could be that because there is postal voting, there is no election day as such. It might be that the voting papers, when they arrive, contain so many items on which we are to vote that people get confused, maybe get a bit fed up by the whole thing, and then go, “I can’t be bothered.” Whatever it is, we’ve got to address it, because what we need in our communities is strong local representation.
So, again, I absolutely support the clauses in the bill which make changes to the Local Electoral Act, and so it goes. There are a number of speakers to follow me in this debate. I have highlighted two of the clauses for consideration. I commend the bill to the House at this reading.
Hon PEENI HENARE (Labour—Tāmaki Makaurau): Thank you, Mr Speaker. I rise in support of this particular bill. The member who has just finished her contribution makes some very good points. I wish to elaborate a little bit further on some of those and also point out, and support, the words of the Minister, who, in the second reading of this bill, mentioned some of the substantive changes in the bill. There are all-up approximately, I think, seven changes to the bill but, in particular, five substantive changes to the bill. And I think what this does too is it shows that we can make some very good transitions into a far more democratic environment to engage our people. As we know, as locals in Tāmaki Makaurau, voter participation is particularly low, and that’s the case across many local governments across the country.
Little things can actually go a long way. This bill attempts to tidy up some of those things and takes away the focus—because most of my neighbours that I talk to always say that the council only ever concentrates on the three Rs: roads, rubbish, and rates. What we do know is there is so much more to the beast of council. Some of the things that are addressed in this bill actually go quite a long way to making sure that voter participation rises, and one of them—and it sounds rather mundane—is the definition around “internet” and allowing councils to post notices electronically on the internet.
Given that the internet’s been with us for quite a number of years now, the mind boggles at why we didn’t move to this earlier. It makes us question what has been missed, because readership of papers has been declining at the same time. So when public notices go into the paper—I, for one, certainly don’t read the paper, and the last time I checked on apps, quite often public notices are hard to access there. But we know that with this particular move in this bill, we can, number one, define internet, and, number two, provide a framework around which notices should be advertised on the internet, as well as your standard forms of the paper—because I know quite a number of offices in this institution still receive papers.
It’s important that if we want to increase, in particular, the younger generation to become more civically minded and more involved in civics generally, it’s important that we speak to them on the platforms that they access the most, and the internet is one of those simple forms. I guess, at some point in time, there’ll be some consideration given to far more varied social platforms such as Facebook and whatever else it might be, like Instagram—it seems that the only way my 22-year-old son will talk to me is via social media or on the internet. So it stands to reason that a move like the definition around “internet” and allowing public notices to be advertised through the internet is just one of those smart moves that should have happened a long time ago, yet here we are. It’s some of those little minor things that came through, in particular, in the submissions around this particular bill. Some of the submissions were outside of the scope of this bill, but I won’t talk to those.
Also, on the point of public notices, the Minister raised some good points around transparency and accountability—the ability as a ratepayer, or as someone involved, or as someone who takes an interest in local government to be able to access the portal of those councils to make sure that they can access past information which sounds, once again, a rather mundane thing, but they’re all important steps to make sure that our people are informed and engaged.
I recall another bill in this House where attempts to find old records through local government actually always came up against so many hurdles and barriers. That didn’t help the process for the locals, nor did it in fact help the process that this House was using. It was a local bill; namely, the New Plymouth District Council (Waitara Lands) Bill. But the fact that the general public couldn’t access information raises questions about whether or not the council is hiding something or simply weren’t just fit for purpose to make sure that information was readily available to the general public—and that’s a good thing.
One of the parts gives some powers, indeed, to the Secretary for Local Government. Part of that feeds on from, sort of, the last bit I mentioned about public notices, which is about growing civic engagement, diversity, and accessibility for the disabled, in particular, to be a part of civics within their local government. But more importantly, it actually appoints a task to somebody, a particular role, to make sure that this happens.
At the moment, most of the general public will look at the legislation or will be told to look there to see how they can participate. What this actually does is it says to the chief executives of local bodies, “Actually, it’s your role and your duty to make sure that participation across all sectors, all communities, increases.” Therefore, accountability, I think, is a good thing whereby we can measure whether or not that person is actually delivering that. And there is one other thing—and there has been a number of bills, and I recall, on a separate bill, a submission by a past member, Mojo Mathers, but I still think it’s related. It was around the ability of people who are hearing impaired or disabled to participate. They couldn’t fully participate in either debate, or in voting, or as a potential candidate. I thought it was a powerful submission.
But when she and others sought a remedy or sought a way to actually increase their participation, they were always told, “Go back to the legislation.” Well, we’re doing that now. We’re assigning a role to the chief executive to make sure that participation increases, and I think it’s a fantastic move forward to make sure that actually local governments, and this particular bill, reflect our communities wherever they may be, right across the country, and involve those who have felt locked out for so long.
One of the other parts too is, of course, the legislative framework, and it’s important because while these changes might be rather non-controversial and have support across the entire House, it’s important to note that while making some minor technical changes, there are some more significant changes that affect the legislative framework, and that’s important when we consider an omnibus bill. I say that because there have been a number of omnibus bills in the five years that I’ve been a member of Parliament, and for the most part a lot of the detail is lost on a lot of people. But it’s important that as we consider this bill, those legislative frameworks are spelt out, and I believe that is certainly the case here in the second reading of this bill and, of course, the work that’s been done by the select committee.
In conclusion, I wish to support this bill and, of course, thank the select committee for the work that they’ve done. I know—and if people read the notes, they will see—that this has taken a long time. There are productivity reports from a number of years ago that have been mentioned in this. There has been mention of the last term of Government, and now this term of Government. Well, all I can say is that it’s about time. It’s about time that this bill arrived into the House. The sooner this gets through, the better, and I commend this bill to the House.
Dr JIAN YANG (National): I rise to speak briefly on the Local Government Regulatory Systems Amendment Bill. As I said in the first reading of the bill, New Zealand has a very complex and large regulatory sector made up of 200 or so regulatory regimes, and more than 10,000 people work in the regulatory roles. So the regulatory regime is a very important piece of Government infrastructure. The regime or systems need to be updated from time to time, simply because over time you will find inconsistencies, gaps, outdated paths, or errors. So such bills, the regulatory systems amendment bills, are efficient vehicles for us to address such problems. In that sense, these bills are a tool for us to repair and maintain existing legislation.
Such bills also can reduce costs. For example, in this particular bill, we redefined the definition or replaced the definition of “disability assist dog” in the Dog Control Act 1996. The original Act has a definition which includes a list of organisations authorised to certify a dog as a disability assist dog. But every time you had to add one particular organisation or remove one organisation from the list, we had to actually legislate. So this bill will simply remove that list, and also could actually have a list by adding or removing an organisation from the list through regulations instead of through legislation. So this will actually reduce the costs.
Also, the Governance and Administration Committee made a further change to the bill by asking local government to make publicly available all the reports related to dog control matters—matters like the number of registered dogs, or the number of complaints about those dogs, or prosecutions taken. So this is a bill which we believe is important, although it’s not a major policy bill.
The Productivity Commission has found that it’s difficult to find a time on the parliamentary calendar to deal with repairs or maintenance of certain legislation. For that reason our regulatory agencies often find it hard to deal with legislation, because legislation can be out of date or not fit for purpose. So this bill is a step in the right direction. For that reason, I commend the bill to the House.
Hon RON MARK (NZ First): Thank you, Mr Speaker. Look, I do rise to take a short call on this bill and to commend the Governance and Administration Committee: the chair, Brett Hudson, and Ginny Andersen, Kanwaljit Singh Bakshi, the Hon Jacqui Dean—who spoke in the first reading and who had been a Minister overseeing the initial writing of this bill at the time, and I want to acknowledge her for that work that she did in the previous term of Government—Paul Eagle, the Hon Peeni Henare, Jamie Strange, and Dr Yang, who just concluded. It is a technical bill and, going through the select committee report—not having sat on the committee—I think the committee has done the legislation justice.
I want to acknowledge Minister Mahuta, because she has taken on board those issues raised by the select committee during their deliberations and clearly factored those changes into the legislation. Bills like this can be a little bit technical. Some of us who have served in local government can get a little excited sometimes to finally see some things tidied up. This is like a repair and maintenance session on the bill. It is a little interesting that it’s taken so long for some of these technical adjustments to be put right, but put right they will be over the next few weeks as the House moves this legislation through all stages.
I think some of the things that were covered off—in fact, I think I spoke about it in the first reading—were matters that were raised by the Productivity Commission back in 2014 that were impediments to the more efficient operation of local government. Being a mayor in local government, I was acutely aware at times that the legislation was out of date, was clunky, was not using the tools available, and did not, as the Hon Peeni Henare said, take into account the fact that time’s moved on. People now use their devices in their hands. They use their laptops—they go to the internet to access public information from the councils. I think requiring the councils to make some reports more publicly available, and to actually publish them—and I see the information around dog control—are good things.
Often when councils don’t proactively publish information, it does raise suspicions and concerns, and conspiracy theorists start talking about councils hiding information. Most often it’s not that at all. Most often it’s just that the council hasn’t thought to publish that sort of information, or make it readily available, and I refer specifically to those aspects covered under the public notices. The part I would’ve actually enjoyed sitting in on at the select committee and listening to, had I been allowed to, was the discussion around the changes to the Local Electoral Act and how the council goes about encouraging, enticing, more participation. Those matters were dealt with quite ably by the select committee, and I congratulate them for that.
I can’t say a lot more. The bill is pretty simple, actually. It’s astonishing it’s taken this long to get to the House. But I compliment all members of the select committee for the way in which they have studiously handled this legislation. Thank you.
DENISE LEE (National—Maungakiekie): Thank you, Mr Speaker. It’s my pleasure to take a call. Like others before me, I intend for it to be brief. We do support this bill, and it’s good to hear the previous speaker, Ron Mark, refer to the Productivity Commission and their July 2014 report. This bill does emanate from that particular report and was, of course, started by the previous National Government.
Sometimes, you don’t get chances to tidy up, and the chances don’t come around too often, especially when you have a very full Order Paper, and that described the last Government. When we first debated this, the Order Paper wasn’t so full, under this Government. So here we are, still many months on, finally getting round to a tidy-up. That Productivity Commission report, of course, addressed that exact topic, where they found that the parliamentary calendar doesn’t always leave time for repairs and maintenance, if we can put it that way.
As we know, the bill amends seven statutes, and I found one bit fascinating from commentary from the Governance and Administration Committee, and that was how they covered—and great work from the select committee—a lot of modernising and the need for publications to be digitally available, but they went so far as to also mention how to spruce up newspaper publications as well. Where they refer to clause 15(2) in amending the definition of “public notice” and in clause 29, amending the definition of “publicly notified”, there was support for that, but the committee wanted to note that they would wish for further gains to be achieved in updating the form requirements of public notices in newspapers—yes, the old-fashioned newspaper form. So while we’ve heard some contributions tonight on online and digital access, the committee had the foresight to also look to spruce up how newspaper notifications are presented, and they went so far as to say, “Can we get a plain explanation of the subject matter in those newspaper notices, and can we have reference to a source where you can find more detailed information.” So my congratulations to the committee—you certainly got into some detail on many different topics.
We commend this bill. It’s a bill that started under our tenure, and the Productivity Commission might be proud that we’re getting around to repairs and maintenance. Thank you.
MARAMA DAVIDSON (Co-Leader—Green): Kia ora, thank you. The Green Party is absolutely voting in support of the Local Government Regulatory Systems Amendment Bill. I do congratulate the Governance and Administration Committee for putting through what appears to be a bit of a tidy-up, as others have mentioned, to get the machinery a bit of an all-over service, from what I can gather.
It’s an omnibus—I learnt that word when I came into this place—which really just means that it’s taking, in this case, I think, seven pieces of law, giving them all a bit of a tidy-up, a bit of a spruce-up, and also a bit of consistency work across the seven statutes—gaps, errors, duplications. So a good thing for this House to be doing, making sure that—I guess the word is efficient—the local government regulatory systems are doing their work in a way that is streamlined and common-sense and modern and up to date, has also taken into account the various changes in those specific bills that have happened over the years to make sure we bring that legislation into play, and making sure that we are getting good bang for the buck as well, across local government work in particular.
I know that these amendments are largely technical and administrative, but I did pique my interest a little bit on—so it is the “Fostering participation in local elections”. I think that talks about, in the bill, “clause 10 would amend the Local Electoral Act” and it talks about placing a duty on the “electoral officer of a local authority to facilitate and foster representative and substantial electoral participation.”, something I would hope we all want. I am not part of the committee, so I’m actually unsure what was already in place around that responsibility to improve people wanting to take part in, well, not just local government elections but all parts of how ordinary citizens can make their voice heard in all of the different decisions that are made. I’m not sure what the legislation was previously to this amended change. If it is just an administrative change—actually, the committee seem to have gone even further, where the committee felt that the duty for encouraging better participation in these local electoral—you know, that part of our democracy—absolutely should be placed on “impartial public servants rather than … incumbent elected representatives.” to try and keep it fair.
But the committee went further to say that it should be the CE, the chief executive, of local authorities who are better resourced to carry out that duty. So I think that’s a wise change from what was originally introduced. I’m interested in knowing what was beforehand, because we know that we could do a lot better in making it sexy to participate in anything to do with voting in democratic—and especially in local government. I mean, a lot of our ordinary citizens don’t always understand how much power and resource and decisions are made that affect our daily lives. So that did pique my interest a bit in whether it would actually make any impact on really improving it or whether it was really just an administrative change.
I also picked up, just like my colleague Denise Lee, who spoke before me, that the committee—bless them—went further around the definition of public notice and being publicly notified by local government activities and talked about plain language explanation. Well, that in itself actually is how we encourage and improve participation from citizens. Often, cumbersome, heavy processes and clunky processes and language can just turn people off straight away, so I think bless them. Bless the committee for being able to go a bit further and try and look for other ways of making the suggested improvements even better.
Apart from that, it appears that this is long overdue, from what I heard in the House tonight. This came from the productivity report that was in the previous Government, and we’re finally bringing it into now the second reading in this place. So I’m all for seeing if we can improve our systems, seeing if we can get things a bit streamlined, cutting out some of the unnecessary stuff. I was going to use a car metaphor, but probably not good for the co-leader of the Green Party, so I will go with gardening: a bit of weeding, nourish the soil, plant a few extra things. I think that’s how I’m coming to terms with what we’re doing with this omnibus bill in this House. Thank you, Madam Assistant Speaker.
DAN BIDOIS (National—Northcote): It’s a pleasure to rise in the House today in support of the Local Government Regulatory Systems Amendment Bill. I would like to acknowledge, first and foremost, the Minister the Hon Nanaia Mahuta for bringing this to the House today. I would also like to acknowledge the previous Minister of Local Government, the Hon Anne Tolley, for the work that she put into this bill, which started under the previous National Government.
I rise in support of this bill because of the importance of local government. As a local MP in Northcote, I just want to say that local government has extreme importance to people’s lives. As an MP, the amount of time that people come to me with local government - related issues is large, and I spend a lot of my time as a local MP dealing with local government issues. The essence of this bill, which is about improving the effectiveness and the efficiency of local government processes and systems and structures, I think cannot be underestimated on this front.
As the previous speaker mentioned, this was arisen through the 2016 Productivity Commission report on regulatory systems and Government administration. The Acts that this bill affects—these seven Acts—have been traversed quite extensively, so I won’t go into each, but I will point out one Act which is amended under this bill, which is the Local Electoral Act 2001. This bill essentially seeks to empower local governments around improving the engagement and participation in local government elections. We know in Auckland that that is an issue, where only about 40 percent actually vote in local government elections. So we understand the importance of improving the engagement and giving councils the tools and the authority and the mandate to do that for our civic society.
Again, these bills have been traversed quite substantively, and the reason that we’re supporting it is because we want local government to work well. We want to improve participation in local government elections. We want to remove unnecessary compliance costs for business and for residents. We want to clarify existing provisions in the bill and also update any small areas, as well. So this is an omnibus bill, and I very much support this bill in the House. Thank you.
ASSISTANT SPEAKER (Poto Williams): I understand this is a split call. Paul Eagle, you have five minutes.
PAUL EAGLE (Labour—Rongotai): Thank you, Madam Assistant Speaker. I could take more, but five is enough on Thursday afternoon. Look, can I just start by acknowledging the Minister of Local Government, the hard-working Nanaia Mahuta—I think she’s done an outstanding job to date and will continue to do an outstanding job for those in local government—and also the hardest-working select committee on earth, the Governance and Administration Committee. It just so happens I’m a member of that committee—no coincidence. Someone’s got to do the hard mahi, as others might say. But look, it is a good committee. We look after local government, and this and other bills that are coming to the House soon have been the focus of our energy to get right.
Look, they say all politics is local, and the member for Northcote certainly reinforced that with the fact that many of you who have electorate offices will know that many who come in or email, and other ways, will raise local issues. I’m really proud that this is contributing to the small stuff, the little bits and pieces, but also the big stuff. The big stuff, really, for me, if I can focus on one aspect, is really about helping to get more people to vote in local elections. They’re this year. Most people won’t know. They’ll start seeing a clutter of hoardings at a reserve near them and go, “What’s going on?”, and that’s when the confusion really starts.
Simeon Brown: They’ll miss your face this year.
PAUL EAGLE: No, the Eagle won’t be appearing on the streets of Rongotai this year, young Simeon. Instead, it’s—
ASSISTANT SPEAKER (Poto Williams): Order! You need to refer to members by their proper names please, Mr Eagle.
PAUL EAGLE: The member for the mighty Pakuranga—sorry, Madam Assistant Speaker. No, there won’t be any red Eagles around the streets of Newtown and other parts of the southern area this year, but don’t worry: they’ll be back next year with a vengeance. There might be a couple of blue ones this time around.
Hon David Bennett: You won’t have to wait until next year for it, mate.
PAUL EAGLE: I could put them up early. I mean, there are really no rules. There’s so much love for the red in the southern area; it’s just unbelievable.
But look, let’s get some focus back on—
ASSISTANT SPEAKER (Poto Williams): That would be good.
PAUL EAGLE: —what is an important—no, no, this is really important. I mean, there’s always lots of love when I talk about local government, but the real love needs to happen with the voting public. When they turn on the tap and they can’t get water, or the bin’s not there or they have some other issue with a cycleway or two, then they can talk to their local councillor and know who that is and actually vote. I mean, it sits around 40 percent—and the Minister of Transport is looking at me with some evil eyes. It sits around 40 percent, but I think we can do a whole lot better than that.
If the smaller but important change to the principle of the Local Electoral Act goes, it means that more marketing and promotion of the actual election itself—in fact, many people don’t know that it’s a decentralised, localised campaign. So it depends on where you are in New Zealand and who the electoral officer is as to whether it’s been effective or not. Unlike the orange thing that wobbles around and goes around New Zealand, and it promotes the general election, you don’t get that at the local level, even though people think that you do.
So I’m stoked that that’s going to get the attention that it needs to ensure that more marketing is done. And, look, it is a tough gig, because, as the member for the mighty Pakuranga will know, you are voting for much more than just the city or district councillor; you’ve got the health board members, regional councillors in most areas too, but also you have energy trust boards and other things that will come up, as well, in some areas. So it is a smorgasbord of things to vote for and people to vote for, and if this is one of seven amendments to go through, then that will make a major change to the people of Aotearoa New Zealand. That’s the five minutes. What a pleasure, as per usual. I commend this bill to the House.
SIMEON BROWN (National—Pakuranga): Thank you, Madam Assistant Speaker. It’s great to be speaking as the member of Parliament for the mighty Pakuranga, and it’s great to be taking a short call on the Local Government Regulatory Systems Amendment Bill. I just want to start by acknowledging the good local government representatives who represent the Pakuranga electorate, the members of the Howick Local Board, and our Howick councillors Sharon Stewart and Paul Young, who do an excellent job advocating on behalf of people in the Pakuranga electorate and making sure their voices are heard.
I do want to just make a few comments. This is a bill which amends a number of bills—it’s the Local Government Regulatory Systems Amendment Bill. I just want to acknowledge the Governance and Administration Committee for the work that they have done and also to acknowledge those who made submissions to the select committee, as well—I think five people came and presented and gave evidence—for the time that they took to be able to input into making sure this legislation was fit and proper.
Now, there have been a number of comments on the different pieces of legislation that this bill amends, and I would like to just make a couple of comments in relation to the amendments to the Local Government Official Information Meetings Act 1987. This piece of legislation, in my view, is a very important constitutional piece of legislation. It gives the public the rights to be able to know and to be able to hold to account those officials who do represent at local government level, and it also ensures that the affairs of local governments are held in a public, open, and transparent process. The amendments which are being proposed here ensure that meetings are publicly notified in a more efficient way.
I think at the moment when you open up your local paper and you generally go to the last page, you generally see these half-page adverts with a whole lot of information, and that’s where the detail is placed. Often they’re in the daily newspapers, and not everyone gets the daily newspapers. So this allows for more of that information to be required to be put online and more of it to be required to be put into the local papers, which people do get if those ones are available and they are frequent enough to be able to be made available. I think that will allow more people to be able to actually get the information that they need and then to be able to be made aware, whether it’s a notification for a meeting, or a notification for consent, or whatever that notification might be.
So as I said, this bill is making small amendments but important amendments. I hope that it can be part of a continuous cycle of improvement to our local government regulatory systems so that we can continue to ensure that local government becomes more productive. I commend this bill to the House.
JAMIE STRANGE (Labour): Madam Assistant Speaker, thank you for the opportunity to make a contribution. Peace and harmony have broken out at 10 to six on a Thursday afternoon.
Simeon Brown: Quarter to 6.
JAMIE STRANGE: Wonderful—wonderful. Quarter to 6. This bill, as we’ve heard, addresses a few key issues, and I’m looking forward to touching on those. So the first one is around requiring local authorities to make various reports about dog control matters publicly available. The second one is about placing a duty on the chief executive of local councils to facilitate and foster representative and substantial electoral participation, rather than the council’s electoral office. There are a few others as well that I’ll touch on, but I’m just going to focus particularly on those first two. Before I get into the aspect around the dog control matters, as a member of the Governance and Administration Committee, I’d like to acknowledge our chair, Brett Hudson. He does a wonderful job, and our deputy chair, Ginny Anderson, does as well, and also Paul Eagle and others, who may or may not be in the House tonight.
ASSISTANT SPEAKER (Poto Williams): Order! Don’t refer to members not in the House.
JAMIE STRANGE: My apologies, Madam Assistant Speaker. So moving on to the first point there: the Dog Control Act. So, basically, what the bill does is it requires councils and local authorities to make public their dog-related complaints and prosecutions taken. So at the moment, if there’s a prosecution or if there’s an issue around something to do with the dog, the council record it, they log it, but they don’t have to make it public. The key reason this is in here is because there is a lot of public interest in dog issues—issues around loose dogs, unregistered dogs, and dog safety. I live over the road from a dog park and we regularly see people walking dogs. Generally, we don’t see many issues; however, there are certain issues. The Opposition members are helping me out with a few dog anecdotes—thank you.
Hon Andrew Little: They bark at every passing car.
JAMIE STRANGE: Indeed they do that. The key point here is that there is public interest—
ASSISTANT SPEAKER (Poto Williams): Fun times on a Thursday afternoon.
JAMIE STRANGE: —in dog issues.
I would like to acknowledge Ian McKelvie’s member’s bill, which addresses some of the unintended consequences around dog control. He’s done some good work on that, and this bill links in with that, as well.
So, at the risk of letting the dogs out, I’ll move on to point No. 2. Point No. 2 is around fostering participation in local elections, and—
Hon David Bennett: Oh, go back to the dogs.
ASSISTANT SPEAKER (Poto Williams): All right, all right—OK.
JAMIE STRANGE: —this is very important.
ASSISTANT SPEAKER (Poto Williams): Let’s settle now, shall we. Thank you, and let—
JAMIE STRANGE: Ten minutes to go—come on, team.
ASSISTANT SPEAKER (Poto Williams): Please, Mr Strange, carry on.
JAMIE STRANGE: There are a number of reasons why people don’t vote in elections. Some people feel like their vote won’t count, others are simply disengaged from the process, and others say, “Politics doesn’t affect me.” There’s a disproportionate amount of young people who don’t vote, and it concerns me, and I know it concerns members of this House. The Hamilton City Council, in their local body elections recently, had a 40 percent turnout—which is very low—compared to a central government election, which is 80 percent, and we’re working on improving that, of course, as well.
Now, what this bill does is it puts the onus and responsibility on the chief executive officer of council, rather than on the elected members. Now, why is that? The key point is that if you leave it to elected members to improve voter participation, there can be biases involved, whereas a CEO is impartial.
Let me give you an example. Some councillors would benefit from a low turnout. Other councillors would—[Interruption]
ASSISTANT SPEAKER (Poto Williams): OK, OK—we’ve got 10 minutes. Can we just try and get through the next 10 minutes? Please, can we just come to order. If you can’t hold it in, then can you perhaps take it out into the lobby. Please, Mr Strange, will you continue. [Interruption] Yeah, we’ve had enough now, thank you.
JAMIE STRANGE: Thank you, Madam Assistant Speaker. So, building on the point around participation in local body elections, only 40 percent of Hamiltonians voted in the recent local body elections, which is something that concerns me greatly. If we leave it to the elected members to decide whether to increase participation, then there can often be a bias there. However, the bill puts the onus on the CEO, which is fantastic, because the CEO is impartial. So one of the CEO’s responsibilities will be to increase voter turnout.
Let me give an example. If we leave it to the councillors, there could be biases involved. For example, some councillors will benefit from low turnout. Others would benefit from high turnout. So those councillors who benefit from low turnout would be incentivised to keep the turnout low, others who benefit from high turnout would be incentivised to have it high, and, depending on the make-up of the council, situations will ensue. So the CEO, who is impartial, has been given the mandate to increase participation.
Now, one of the ways the CEO may or may not choose to do this is through online voting. There’s been a lot of talk about online voting over many years, particularly among young people. A lot of people think that this will increase voter turnout. I think that it probably will. I’m not sure it’s a silver bullet, but I believe it will make a difference. So if we’ve got a council who are predominantly made up of elected members who benefit from low voter turnout, are they going to move to online voting? Probably not. However, the CEO, who is impartial, has been given the mandate, and so he may well go “Online voting, I believe, will improve turnout.”, and hence move on that.
Another key aspect around increasing turnout is diversity of councils. Many of the councils around New Zealand don’t have a lot of diversity. I’m talking about ethnic diversity and I’m talking about youth—there are not a lot of young people on councils. So the higher turnout will increase diversity, and diversity makes the councils more representative of society.
I stood for council myself, in 2013. Unfortunately, I missed out and I ended up here, but I still have aspiration.
So, when I was standing for council, the turnout was very low. As a young person, I believe I would have benefited from a higher turnout. We heard a number of submissions on this bill. [Interruption]
ASSISTANT SPEAKER (Poto Williams): Order! Settle.
JAMIE STRANGE: We heard a number of submissions, and I’m just going to touch on a couple of those submissions, particularly as they relate to voter turnout. So we heard from an organisation—good friends of mine: Federated Farmers. I regularly engage with the Waikato president of Federated Farmers—excellent, excellent, excellent man. Federated Farmers, in their submission, stated here: “It is well known that interest in local authority elections overall is in decline.” So Federated Farmers made this point very strongly. They said, “This trend, in our view, represents a growing disconnection between local authorities and their communities and a decline in mutual trust.” So Federated Farmers support this bill in order to increase voter turnout, and I think that that aspect there will have widespread agreeance right across the country.
Next one: Local Government New Zealand. They also talked about this aspect. They said, “Electoral officers themselves do not currently have [the] capacity to undertake the type of work involved in promoting participation. Neither will they be able to fulfil that duty if a local authority fails to provide adequate funding.” Hence, Local Government New Zealand “recommends that the ‘duty’ is placed on the council itself”, and in this case, the CEO. So we had submitters certainly in support of this.
I’ll touch on one more point in my final minute here, and that’s about public notices. It has been touched on before by a number of speakers. I’d just like to add to their contributions by mentioning a submission—excellent submission—from Auckland Council around public notices. I won’t read it, because it is reasonably long, but the Auckland Council highlight the importance of public notices being made online. At the moment, as we’ve heard tonight, they can be in newspapers. We heard from Simeon Brown previously that newspapers are not always delivered. Someone may have a “No circulars” sign, you know, to stop circulars coming, but that in turn stops newspapers coming. We have that example in our street, for example. So society is moving to an online platform, and it’s important that Government keep up with that.
I appreciate the opportunity to share my views on this bill and commend it to the House.
MAUREEN PUGH (National): Thank you very much, Madam Assistant Speaker. I have to congratulate and acknowledge Jamie Strange for his dogged determination to stay on task with his speech. I will make a very short contribution to the Local Government Regulatory Systems Amendment Bill. It’s quite ironic that we’re talking about this as the local government stakeholder function gets underway.
It is, as Denise Lee said earlier, a bit of repairs and maintenance to seven statutes that we’ve got before us today. Ironic as it may seem, I do want to turn my mind to the Dog Control Act and the work that the Governance and Administration Committee did around the legal definition of “disability assist dogs”, and it may come up again in the committee of the whole House stage, but definitions also around special-purpose dogs—so dogs that have been trained for special purposes, such as search and rescue dogs, or dogs that have been trained to detect cancer, for instance, in the medical profession. So I think there is an opportunity there to further expand the definitions that we’ve got inside the Act.
I do note and I acknowledge former mayor and colleague the Hon Ron Mark. We know that central government policy, as it trickles down into local government, does create some ambiguity and often some inconsistencies. So this is a very good bit of repairs and maintenance to make sure that we do make this fit for purpose in today’s day. Look, that’s my contribution. I commend this bill to the House.
GINNY ANDERSEN (Labour): Thank you very much for the opportunity to speak on the Local Government Regulatory Systems Amendment Bill. As a member of the Governance and Administration Committee, it was really good to hear 18 submissions on this bill in terms of the changes it makes, and it enables New Zealanders really to have a better access in participating in their local democratic structures. So the main point, really, is that this is an omnibus bill that really brings a lot of that legislation up to date. It’s good to take the time out of the busy legislative programme to make sure that all of our pieces of legislation are fit for purpose.
This particular omnibus bill amends seven different Acts, and some of those key changes that we see are really important to make sure that we’re doing things in the proper way. One of the interesting changes is the different way in terms of notifying public notices. So we’ve seen a big change away from print media, and not very many people would read the public notices in the Dominion Post or the New Zealand Herald on a daily basis, so it’s good to be able to see a new requirement for local authorities to publish notices on their websites as well as in traditional community newspapers.
Debate interrupted.
The House adjourned at 6 p.m.