Tuesday, 12 March 2019

TUESDAY, 12 MARCH 2019

TUESDAY, 12 MARCH 2019

The Speaker took the Chair at 2 p.m.

Prayers.

Visitors

Australia—Senate Committee on Regulations and Ordinances, Senator John Williams and Senator Gavin Marshall

SPEAKER: I’m sure that members would wish to welcome Senator John Williams and Senator Gavin Marshall from the Australian Senate Committee on Regulations and Ordinances, who are present in the gallery.

Oral Questions

Questions to Ministers

Question No. 1—Finance

1. KIRITAPU ALLAN (Labour) to the Minister of Finance: What recent reports has he seen on the New Zealand economy?

Hon GRANT ROBERTSON (Minister of Finance): I’ve seen a number of recent reports that highlight the solid fundamentals of the New Zealand economy as we transition to a more modern and resilient economy. Statistics New Zealand reported on Friday that the volume of building activity rose 2.7 percent in the final quarter of 2018, driven by strength in building work on non-residential buildings. The nationwide 5 percent increase in non-residential construction was the strongest quarterly figure in nearly three years, while residential construction growth of 1.2 percent in the quarter was similar to September. On an annual basis, total building work in place was up 3 percent, with residential up 2.4 percent and non-residential up 3.9 percent. Meanwhile, Statistics New Zealand also reported on Friday a 4 percent rise in meat and dairy manufacturing, led by a 2 percent overall rise in the volume of New Zealand manufacturing activity in the December quarter. I am pleased to see yet more real data demonstrating the solid underlying fundamentals of the New Zealand economy.

Kiritapu Allan: What recent reports has he received from Treasury on the economy?

Hon GRANT ROBERTSON: Treasury’s latest weekly economic update report shows a concerning trend of slowing global economic growth. In Australia, GDP figures for the December 2018 quarter show growth was lower than expected at 0.2 percent in the December quarter and lower than the 0.3 percent growth recorded in the September quarter. Likewise, both Canada and India recorded slower growth in the December quarter. Meanwhile, other reports note that in the US, GDP growth slowed for the second straight quarter, and the economy added just 20,000 jobs in February, against expectations of 180,000 new jobs. Last week, the eurozone recorded 0.2 percent growth in the December quarter and the European Central Bank downgraded its forecast for 2019 GDP growth, from 1.7 percent to 1.1 percent. Despite the more positive news out of New Zealand recently and forecasts of solid economic growth here, this data remains a risk to New Zealand’s outlook.

Kiritapu Allan: How is the Government responding to the economic risks posed by international factors?

Hon GRANT ROBERTSON: The risks posed by the international situation continue to demonstrate the importance of our commitment to responsible fiscal management. We are continuing to manage debt at responsible levels. We are running sustainable surpluses, managing expenses carefully, and making the important investments in New Zealand’s future that will leave us in a position to respond to any potential global downturn.

Question No. 2—Prime Minister

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

Rt Hon JACINDA ARDERN (Prime Minister): Yes.

Hon Simon Bridges: In relation to her statement that the Tax Working Group recommendations are about making the tax system “fairer”, is it fair that every small business, farm, bach, rental property, and lifestyle block will have to be revalued at the owner’s expense if a capital gains tax is introduced?

Rt Hon JACINDA ARDERN: The member is referring to the Tax Working Group report, which the Government has received, not Government policy. The Government is currently considering the recommendations and will refer back to the public any decisions we make in April.

Hon Simon Bridges: Has she considered what it will cost a small-business owner to have their business professionally valued?

Rt Hon JACINDA ARDERN: We will consider the costs and impacts on those decisions that we formally make, and in consideration of any of the decisions that we formally make, we’ll factor those things in, but, as I say, no decisions have been made.

Hon Simon Bridges: Is she aware that if each of New Zealand’s 500,000 small businesses had to have their business revalued at $10,000 each, it would cost the wider economy $5 billion, or about as much money as a capital gains tax would raise over the first four years? [Interruption]

SPEAKER: Order! Order! Just before the Prime Minister answers, there were at least three members not far away from the Prime Minister interjecting during that, and it will cease.

Rt Hon JACINDA ARDERN: The member is using hypotheticals, albeit questionable ones. Again, as I’ve said, we are, as a Government, considering the Tax Working Group report, and we’ve made no decisions.

Hon Simon Bridges: When a top tax expert says $10,000 is very much “an entry point for pricing”, what does she say the cost will be for businesses getting valuations under the proposed regime?

Rt Hon JACINDA ARDERN: Again, we’ll consider impacts on those areas in which we actually make a decision. The member is posing a hypothetical, and no decisions have been made.

Hon Simon Bridges: Is she aware that if each of New Zealand’s 50,000 farms had to have their land revalued at $10,000 a go, it would cost the economy half a billion dollars, effectively doubling the cost of a capital gains tax for farmers over the first four years?

Rt Hon JACINDA ARDERN: Again, a range of hypotheticals; again, I could delve into the sometimes questionable history the member has here with some of the scenarios he’s presented, but, again, these are working group recommendations, none of which the Government has at this stage settled on.

Hon Simon Bridges: In regard to her statement this morning that a capital gains tax should not over-complicate the tax system, does she have a preference for the valuation methods on page 32, volume II of the Tax Working Group report: “Actual value”, “Arm’s-length valuation”, “Comparison with similar properties”, “Ratings valuations”—

SPEAKER: Order! Order! Come to the question.

Hon Simon Bridges: —well, I am—“International Financial Reporting Standards … rules”, a “volume weighted average price”—

SPEAKER: Order! The member didn’t; he’ll resume his seat. Further supplementary?

Hon Simon Bridges: Does she have a preference as to the valuations in the Tax Working Group report out of actual value, arm’s length valuation, comparison with similar properties, ratings valuations, international financial reporting standards, volume-weighted average price—

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Mr Speaker, you stopped the Leader of the Opposition because of the extended nature of his question. You gave him a serious lead as to what was wrong with it, and he’s back repeating himself.

SPEAKER: Yes, I was just going to rule it out at the end.

Hon Simon Bridges: Has she given the valuation methods in the report any consideration at all?

Rt Hon JACINDA ARDERN: As we’ve repeatedly said in this House, we’re considering the report in its entirety, and no decisions have been made.

Hon Simon Bridges: What did the Tax Working Group recommend would happen if an asset was not valued within the five-year window, and is it possible that an asset could be registered in the system at zero dollars?

Rt Hon JACINDA ARDERN: I don’t have responsibility for the recommendations made by the Tax Working Group. Again, as we’ve said, we’re considering the report in its entirety, and no decisions have been made. [Interruption]

SPEAKER: Order! Order! I have a feeling that members want to stay here today for question time. There are two or three who are unlikely to if that sort of noise continues.

Hon Simon Bridges: Isn’t the issue of valuations of the proposed capital gains tax at the very heart of this, the most significant tax reform in decades?

Rt Hon JACINDA ARDERN: All of the matters that the Tax Working Group have put forward will be part of our consideration, but, again, I simply make the point that no decisions have been made.

Hon Simon Bridges: Does she agree that the recommended capital gains tax will hurt a wide range of New Zealanders and not just the wealthy, given Labour list MP Ginny Andersen yesterday said, in relation to the Government’s proposed capital gains tax, “To be honest, it’s probably not the ‘rich pricks’; it’s a whole bunch of people. It’s across the board”.?

Rt Hon JACINDA ARDERN: Again, the Tax Working Group recommended a broad-based capital gains tax for consideration by this Government. We have made no decision, and when we do, we will be informing the public and giving them ample opportunity to have their input as well.

Hon Simon Bridges: Isn’t Ginny Andersen correct—won’t getting valuations and paying capital gains tax affect a whole bunch of New Zealanders, right across the board?

Rt Hon JACINDA ARDERN: Again, no final decisions have been made. I would simply make the point that, of course, a number of other countries which we compare ourselves to have successfully implemented such schemes, but, again, for us it’s a matter of discussion, and when we’ve made our decisions, we will inform the Opposition at the same time as we will inform everyone else.

Hon Simon Bridges: If it’s a matter of discussion, why won’t she discuss it in the most important court of debate in the land—this Parliament?

Rt Hon JACINDA ARDERN: For the same reason as when that Government introduced a capital gains tax, they didn’t say anything for four months.

Question No. 3—Prime Minister

3. DAVID SEYMOUR (Leader—ACT) to the Prime Minister: Does she have confidence in Hon Shane Jones, given that Stuff reported that he was “named as the proposed chairman of Manea Kupe Ltd” in documents provided to the Ministry of Business, Innovation and Employment, and an email dated 16 February 2018 states Mr Jones attended a meeting at which the Manea Footsteps of Kupe project was discussed and in which his comments had reportedly made the Finance Minister comfortable after the finance Minister had raised his concern about the project?

Rt Hon JACINDA ARDERN (Prime Minister): Yes, I have full confidence in Minister Jones’ handling of the Kupe project. The Minister identified he had a conflict of interest and then managed it, based on the guidance he received. I also note the Radio New Zealand story yesterday where the trust confirmed Minister Jones was never part of the Manea project. I also understand that the comment around Minister Robertson’s level of comfort is not an accurate reflection of what the Minister actually said. I understand that the Minister was referring not to the project itself but to ensuring that there were milestones accurately reflected in the roll-out, and a range of other contractual protections. So that would be a more accurate way to reflect his concerns.

David Seymour: Does she stand by his statement made yesterday in relation to Shane Jones that “He knew someone involved in the project … some years ago [and] he’d been told about it and [he] thought it was a good idea”, when new documents released by Stuff today show that he was officially cited as their proposed chair and had helped them prepare their application for Government money under the previous Government?

Rt Hon JACINDA ARDERN: Obviously, the member has noted that this has been a project around for some time and something that, obviously, members on the other side of the House will be familiar with as well. What I’m reflecting is that, yes, the Minister has acknowledged right from the outset that he knew about this project, that he’d advocated around this project. That was the very point of him declaring a conflict of interest. In fact, the member knows about the conflict of interest because the member himself wrote in written answers that it existed, and it was even included in the front page of a briefing document by the Ministry of Business, Innovation and Employment that he had a conflict and should not receive papers on it.

David Seymour: How can she reconcile the standards she applied to Clare Curran, who covered up having a meeting and was eventually sacked from her portfolio, versus the treatment of Shane Jones, who also covered up attending a meeting—the only difference being that in the case of Shane Jones, $4.6 million of taxpayer money ended up being spent?

Rt Hon JACINDA ARDERN: I do want to acknowledge that actually Minister Curran resigned from Cabinet. When it comes to the issue that the member has raised, of course, as I’ve already pointed out, the Minister has documented this issue in his answers directly to yourself around the project. He’s declared his conflict of interest. He’s outlined the meetings that have been held. He even acknowledged the meeting where Minister Robertson raised issues. It’s all in the answers to written questions.

Question No. 4—Health

4. JO LUXTON (Labour) to the Minister of Health: What steps are being taken to manage the measles outbreak in Canterbury?

Hon Dr DAVID CLARK (Minister of Health): Vaccination is the best protection against measles, which is highly infectious and a serious disease that spreads easily from person to person. So far, there have been 25 confirmed cases of measles in Canterbury in the current outbreak. To help contain its spread, the Canterbury District Health Board (DHB) has announced an urgent vaccination campaign. I’m advised that 18,000 doses of the measles, mumps, and rubella (MMR) vaccine are on their way and due to arrive in Canterbury in order to be available for use from tomorrow.

Jo Luxton: Who will be at the front of queue to receive vaccinations?

Hon Dr DAVID CLARK: Those decisions are being taken by clinicians at the Canterbury DHB in consultation with experts at the Ministry of Health and Pharmac. I’m advised that the priority groups are, firstly, children and young adults aged five to 28 years old who are not immunised, children 12 months to five years who have never received any doses of MMR, children and young adults aged five to 28 years old who have only received one MMR dose to date—the four-year-old MMR can be brought forward to no sooner than four weeks after the previous MMR—and, finally, adults aged 25 to 50 years; this group only received one dose of measles vaccine in our previous regime. Measles is highly contagious, and it is in everyone’s best interest that people in these priority groups get vaccinated, both to protect themselves and the wider community.

Jo Luxton: Will this urgent vaccination campaign disrupt routine MMR vaccination around the rest of New Zealand?

Hon Dr DAVID CLARK: It’s important that while we deal with the outbreak in Canterbury, we continue with the usual MMR vaccine elsewhere around the country. I’m advised that we have sufficient vaccine in the country, and scheduled to arrive in coming weeks, to contain the outbreak in Canterbury and to maintain the regular MMR vaccination programme.

Question No. 5—Finance

Rt Hon WINSTON PETERS (Deputy Prime Minister): I raise a point of order, Mr Speaker. I’ve read this question very carefully, particularly the words “Government support parties”. Now, with respect, that is not grammatically, historically, constitutionally, or factually correct, and to allow that sort of question to be asked invites mis-description and misrepresentation, and that should be stopped and it should be ruled out for this purpose.

SPEAKER: Well, I think the member might be being just a little bit pedantic in this particular case. I think it is clear that there are three parties which support this Government on confidence and supply. They all have different positions, they’ve come to it from different positions, and the question as to whether the Minister has been consulting with any of them, I think, is a reasonable question.

Rt Hon WINSTON PETERS (Deputy Prime Minister): I’d like to submit, having heard that: well, that’s fine, excepting that we know what the constitutional arrangements are between the Labour Party and the Green Party. We know that this is a coalition of the Labour Party and New Zealand First. Any mis-description like this, 18 months after the fact of the formation of this Government, is just plain wrong, and we’ll get nowhere unless the lexicon is corrected here and, dare I say it, up there in the press gallery.

Hon GERRY BROWNLEE (National—Ilam): Speaking to the point of order—

SPEAKER: If the member thinks he can add something, have a go.

Hon GERRY BROWNLEE: Well, you never know!

SPEAKER: That’s right!

Hon GERRY BROWNLEE: Well, I think, Mr Speaker, that the point you made was that the Government is an entity in itself—the Government of New Zealand. The parties that make up and form the Government are separate parties, and as you point out, there are three, despite whatever the internal arrangements might be. And I’d make the point, too, that we don’t fully know what those arrangements are, because they’ve never been fully released. But your position is correct; Mr Peters is wrong. The only way to express the question was to talk about the parties that support the Government.

SPEAKER: And I will make it absolutely clear that there are people within this House—there are people within the New Zealand First Party, the Labour Party, and the Green Party—that are not part of the Government; they are backbenchers, and I think it is appropriate for consultation to occur with members supporting the Government from all parties, and therefore the question is proper.

5. Hon AMY ADAMS (National—Selwyn) to the Minister of Finance: Has he had any discussions with Government support parties about including the family home in the scope of any future capital gains tax?

Hon GRANT ROBERTSON (Minister of Finance): No.

Hon Amy Adams: Well, has he discussed with Marama Davidson, leader of the Green Party, her reported interest in including the family home in a capital gains tax?

Hon GRANT ROBERTSON: No.

Hon Amy Adams: Does running a home-based business make someone part of the “wealthy elite” that Marama Davidson said capital gains tax was about?

Hon GRANT ROBERTSON: I’m not responsible for the views of Marama Davidson.

Hon Amy Adams: Well, will he rule out imposing any capital gains tax on the family home just because a part of it has been used for a home office, or if the family just takes in boarders?

Hon GRANT ROBERTSON: We were very clear in the terms of reference issued to the Tax Working Group that the family home was exempt. The Tax Working Group have returned to us with their definition of “family home”. That is among the matters that the Government is now considering.

Hon Amy Adams: So if the Government has made up its mind enough to know it will exempt the family home, why is he hedging on whether that still applies if the family home happens to run a home-based business?

Hon GRANT ROBERTSON: I said in my last answer that in the terms of reference that we set for the Tax Working Group, we exempted the family home. We’re now considering all the matters within the report, including the definitions that the working group have put forward. [Interruption]

SPEAKER: Well, does the member want to ask it, or can we just take it as read from the interjection?

Hon Amy Adams: Why is the Government unwilling or unable to answer basic questions about their own position, such as whether ruling the family home out of any capital gains tax includes family homes that might have a home office? It’s a simple question.

Hon GRANT ROBERTSON: We made our position clear when we set up the Tax Working Group—that we would exempt the family home. The Tax Working Group has now provided a report. We are working our way through that report, just as the previous Government did when it received its Tax Working Group report in January 2010 and didn’t respond until May 2010.

Question No. 6—Housing and Urban Development

6. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: How many times, under the KiwiBuild programme, has he approved a Crown underwrite to build houses that were already being built, and what is the total price of these underwrites?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): The test applied to determine whether a KiwiBuild underwrite should proceed is additionality—does the proposal increase affordable supply for KiwiBuild buyers in the KiwiBuild price range? I’m advised that the threshold can be met in four key ways: by getting a development under way; by bringing forward a development, or the stage of a development that is scheduled for a later time period; or by redesigning part of a development to provide for additional affordable homes, rather than a smaller number of more expensive homes. All underwrites approved by the Ministers meet this test. An underwrite has been approved while construction was under way four times. The expected net cost to the Crown of these underwrites is zero. The homes are valued at $26 million, or 4 percent of the total number of underwrites, and almost 0.5 percent of total KiwiBuild homes.

Hon Judith Collins: Why did he approve a Crown underwrite to build houses in Marshland, Christchurch, in November 2018 when council records show these houses were already under construction in April 2018, seven months before he signed the Crown underwrite?

Hon PHIL TWYFORD: Well, I’d have to go back and look at the details of that particular case, but, as I’ve said, the test that’s applied is that of additionality, and there are a number of ways that that can be provided—

Hon Simon Bridges: Spell it.

Hon PHIL TWYFORD: Well, I’ll give the member the case of Mike Greer, who’s committed to 104 homes in both Canterbury and west Auckland, and, as he himself has said in the media, the KiwiBuild underwrite has allowed him to bring forward that development more quickly than it otherwise would’ve happened and include more affordable homes in the development.

Hon Judith Collins: Why did he approve a Crown underwrite last November to build houses in Somerfield, Christchurch, when council records show the houses were built and clad last September?

Hon PHIL TWYFORD: The answer to that question is exactly the same as the one I just gave. As Mike Greer has said, it has allowed that development to come to fruition more quickly than it otherwise would’ve and for more affordable homes to be included.

Hon Judith Collins: Why has he underwritten already built three-bedroom, one-bathroom houses in Westpark Rangiora, selling for $480,000, while Mike Greer Homes are advertising neighbouring three-bedroom houses with an extra bathroom and a larger floor plate on their own website for $20,000 less?

Hon PHIL TWYFORD: That development is bringing into the market more affordable homes than it otherwise would’ve. This Government is in the business of building affordable homes, unlike what that Government did for nine years—didn’t build a single affordable home and denied there was a housing crisis.

Hon Judith Collins: How many of the Mike Greer homes he has underwritten so far have monolithic cladding?

Hon PHIL TWYFORD: If the member wants to put that question down in writing, I’d be happy to answer it.

Hon Judith Collins: I seek leave to table a council inspection report on failed monolithic cladding at 5 Te Rito Street, Christchurch.

SPEAKER: Is there any objection to that being tabled? There appears to be none.

Document, by leave, laid on the Table of the House.

Hon Judith Collins: What is the purpose of him underwriting the price that a developer gets for a house when that house has already been built and, in some cases, marketed unsuccessfully to the public?

Hon PHIL TWYFORD: Well, if the member has got evidence that properties have been unsuccessfully marketed, I’d be happy to receive it. But we’ve made it very, very clear that in the case of the 104 homes that Mike Greer Homes is contributing, they were brought to market more quickly, he reduced his margins, and there are more affordable homes available through Mike Greer than there otherwise would’ve been because of the KiwiBuild underwrite.

Question No. 7—Trade and Export Growth

7. PRIYANCA RADHAKRISHNAN (Labour) to the Minister for Trade and Export Growth: What progress has been made, if any, on growing exports?

Hon DAVID PARKER (Minister for Trade and Export Growth): Notwithstanding volatility and rising protectionism in some offshore markets, 2018 saw strong gains for our exporters. New Zealand’s goods and services exports increased 7 percent in dollar terms in the 2018 calendar year. A particular highlight was exports to China, with goods exports growing 15 percent and services exports increasing 12 percent for the first year. Two-way trade reached $30 billion for the first time. This Government is helping deliver sound economic growth, and we continue to support our exporters by broadening our trade agreements.

Priyanca Radhakrishnan: What has been the effect of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) agreement coming into force for New Zealand exporters?

Hon DAVID PARKER: The agreement has been in effect for just over two months, but early signs are very, very promising. The quantity of beef exports to Japan, for instance, increased 300 percent in January 2019 from a year earlier, and New Zealand butter exports to Canada jumped by over 600 percent from January 2018 to January 2019. While both of these huge increases may be somewhat inflated by exporters waiting for CPTPP to come into effect, there’s no doubt it has massively helped. I look forward to New Zealand exporters and the many people they employ benefiting from the continuing opportunities that the Comprehensive and Progressive Trans-Pacific Partnership agreement delivers.

Priyanca Radhakrishnan: What progress has been made on negotiating new free-trade agreements (FTAs)?

Hon DAVID PARKER: We’re making good progress on negotiating an FTA with the European Union as we continue to push for significant improvement in market access to the world’s largest trading bloc. Despite the uncertainty around Brexit, we’re poised to negotiate a comprehensive trade agreement with the UK if and when they’re ready to do so. We’re making good progress on the China FTA upgrade, and we hope to soon launch negotiations for an upgrade of the New Zealand - Australia ASEAN agreement. We’re constructively and actively defending the system of the World Trade Organization trade rules by developing constructive proposals for reform with 12 other like-minded economies. This is a Government that continues to pursue new export opportunities, and, with the rising tide of protectionism, we need to ensure we continue to make progress for our exporters around the world.

Hon Todd McClay: Given the statistics the Minister has just informed us of on trade with Japan, can he confirm that he’s pleased he put down his Trans-Pacific Partnership protest sign and has signed a deal that was always comprehensive and progressive?

Hon DAVID PARKER: The member is so “glass half empty”.

Question No. 8—Regional Economic Development

8. Hon PAUL GOLDSMITH (National) to the Minister for Regional Economic Development: Does he stand by all his statements and actions?

Hon SHANE JONES (Minister for Regional Economic Development): Yes.

Hon Paul Goldsmith: How does he stand by his statement in reply to my written question regarding Manea Footprints of Kupe project, “I raised my conflict of interest with the Cabinet Office in November [2018] and indicated I would not be involved in any decision to grant funding to the project under the Provincial Growth Fund.”, when it has now emerged that he provided reassurance to the Minister of Finance on the project?

Hon SHANE JONES: I stand by the remarks that the member has recited. My attendance at the meeting provided some factual reassurance to the other Ministers, and I think that the member is making a mountain out of a molehill.

Hon Paul Goldsmith: Is it right that he declared a conflict of interest but not only stayed in the room but also participated in the decision making by reassuring the Minister of Finance?

Hon SHANE JONES: The member is distorting the facts. The member has not stayed with the true line of what happened. I attended a meeting with other Ministers. I did not influence. I did not sign off the decision. I simply did what other members on the other side of the House have done from time to time: remained in a meeting but not signing or making the decision.

Hon Paul Goldsmith: How is providing assurances on the quality of a project’s governance not advocating for a project?

Hon SHANE JONES: Obviously, after having shown excessive prudence and identifying a historical connection with personalities with that project and informing the Cabinet Office, it does not mean that I am voiceless or tongueless. I did not make the decision, after having myself indicated to other Ministers my historic conflict of interest. The interest, of course, is promoting the region of the north.

Hon Paul Goldsmith: Does he accept, given the wide connection he says he has throughout Northland, that he has to be very careful about perceived conflicts of interest while handing out $100 million to people and groups he knows in that region?

Hon SHANE JONES: Well, I can’t unwind 59 years of a varied, wide, and rich life. And the reality is that there are a host of associations, as a senior Māori leader, that I’ve had. One of those associations was with the Hokianga rangatira Whetu Ngaira and a long-term connection with a host of other identities in Hokianga. Now, whether it was excessively circumspect on my part at the time—but it is what it is.

Rt Hon Winston Peters: Can I ask the Minister, did he, as the Minister, ever have a formal role with a Manea/Kupe Ltd project?

Hon SHANE JONES: No.

Hon Gerry Brownlee: Then what was the conflict?

Rt Hon Winston Peters: So what’s the conflict? Go on, tell us!

SPEAKER: Order!—the pair of you.

Hon Paul Goldsmith: Why declare—

Rt Hon Winston Peters: Go on, Billy!

Hon Paul Goldsmith: —a conflict of interest if it’s not going—[Interruption]

SPEAKER: Order! The Deputy Prime Minister will stand, withdraw, and apologise.

Rt Hon Winston Peters: I withdraw and apologise.

Hon Paul Goldsmith: Why does the Minister declare a conflict of interest if it’s not going to make any difference to how he acts in terms of advocating for the project?

Hon SHANE JONES: I think the first part of the member’s question is sensible: why declare a conflict of interest? And I am interested in what the Herald had to say where it doubts whether or not I should have ever declared a conflict of interest; however, that’s now historical fact, and I did attend a meeting where other Ministers were aware of the historical association that I have adverted to.

Rt Hon Winston Peters: Can I ask the Minister, did he ever sign off on funding for the project?

Hon SHANE JONES: Those decisions were taken by other Ministers.

Hon Paul Goldsmith: How can Kiwis have confidence that the $100 million he spent in Northland, a region that he knows well, he knows a lot of people; where he declares a conflict of interest but he stays in the room and advocates for the project—that he has any concept of how to handle a conflict of interest?

Hon SHANE JONES: Well, obviously, the point at which one identifies a substantial conflict of interest largely lies in one’s own ethics; and, secondly, people know that I as a member, hailing from the North, have wide and varied associations. Just because I am willing to advocate for the provinces, the other side of the House should try to stop this character assassination because of my good work.

Rt Hon Winston Peters: Could I ask the Minister, with respect to the chronology of events, was it a fact that he was in a room after the project had been signed off, not before?

Hon SHANE JONES: As I said, I was in the room. I was with other Ministers. I did not sign the project off. I have acknowledged in my discussions with the Prime Minister as to the appropriateness of staying in the room, out of the room, and obviously the experience that I grew up with professionally was the Institute of Directors, and I am reviewing my knowledge about the Cabinet Manual.

Hon Paula Bennett: I raise a point of order, Mr Speaker. I thought that the member asked a very good question. It’d be appreciated if the Minister actually answered whether he was in the room before or after the decision was made.

SPEAKER: Well, I think he said both, actually—if you translate it.

Question No. 9—Health

9. Hon MICHAEL WOODHOUSE (National) to the Minister of Health: What steps has he taken to ensure sufficient doses of the measles vaccinations are available?

Hon Dr DAVID CLARK (Minister of Health): Measles is highly contagious, and the outbreak in Canterbury has developed swiftly in recent days. Over the weekend, I contacted the chair of the Canterbury District Health Board (DHB), seeking assurance that the DHB had a plan in place to deal with the outbreak. Following that call, I spoke again with the chair as well as the DHB chief executive. I then contacted the Director-General of Health and the chair of Pharmac to ensure a coordinated response to this outbreak. As I told the House in answer to question No. 4, I’m advised that 18,000 doses of vaccine are on their way to Canterbury and will be available for use from tomorrow.

Hon Michael Woodhouse: If 18,000 vaccinations are on their way, how long will the other 82,000 Cantabrians who need a vaccine or vaccine boost have to wait?

Hon Dr DAVID CLARK: Vaccinations are dependent upon a cold chain process—which the member will, I’m sure, well understand—and the integrity of that process is critical. There are examples, of course, under previous Governments where that fell down. But I’m assured that the vaccinations will continue to arrive in sufficient numbers that there will be more vaccinations waiting than are able to be delivered through the emergency clinics.

Hon Michael Woodhouse: As at 31 December 2018, what percentage of 8-month-olds were fully immunised against measles, and is that a higher or lower percentage than when he became Minister?

Hon Dr DAVID CLARK: Sorry, I think the member said 1 December 2018—I have the chart in front of me, conveniently. The broader immunisation target that the member has often referred to, and I’m not sure whether that’s the one he wants to—

Hon Michael Woodhouse: I didn’t in my question.

Hon Dr DAVID CLARK: He wants the specific answer on measles. I don’t have that specific number in front of me. I’m sure that if the member puts it down, I’m happy to find an answer for him.

Hon Michael Woodhouse: Well, can the Minister confirm that under the previous National Government, immunisation rates went from under 80 percent for measles to 94 percent and that the Ministry of Health announced in October 2017 that measles and rubella was “officially eliminated in New Zealand”?

SPEAKER: And the Minister has no responsibility for that.

Hon Dr DAVID CLARK: Mr Speaker, I’d like to answer that. Mr Speaker?

SPEAKER: No. I’ve said the Minister has no responsibility.

Hon Michael Woodhouse: Does he believe that this outbreak could have been prevented if 19 out of the 20 district health boards hadn’t failed to meet their immunisation targets on his watch?

Hon Dr DAVID CLARK: What I would like to say about the immunisation targets, firstly, is that I’m a bit surprised the member is wanting to play politics at this time, when my chief concern is making sure that people get the vaccinations they need. But the second thing I would say is that since the current immunisation target was introduced in 2012 by the previous Government, it has never been met, at 95 percent; it has hovered stubbornly in the early 90s. It ticked up in the last quarter, but, as a country, we do need to do better in terms of immunisation. Those targets are available still on the ministry’s website for anybody who cares to pick them up, but if the member is somehow trying to suggest that there is any link between the decision to stop publishing the previous Government’s narrow health targets in the newspaper and the current measles outbreak in Canterbury, I reject that utterly.

Question No. 10—Prime Minister

10. GARETH HUGHES (Green) to the Prime Minister: Does she stand by all her Government’s statements, policies, and actions?

Rt Hon JACINDA ARDERN (Prime Minister): Yes, in the context in which they were made.

Gareth Hughes: When the Prime Minister says she wants to bring kindness back to Government, does that extend to animals forced to perform in rodeos who are scared, hurt, and killed for entertainment?

Rt Hon JACINDA ARDERN: I am concerned to have read and heard about the death of several animals that have occurred this season. I have, in fact, raised this issue directly with the responsible Minister. He’s advised me that the Ministry for Primary Industries is looking into the deaths that have occurred, and I intend to continue to stay in contact with him on this issue.

Gareth Hughes: Thank you. Does the Prime Minister agree with the position to ban the use of animals under 12 months old and the use of flank straps, as called for by former Labour Party leader Andrew Little in 2017?

Rt Hon JACINDA ARDERN: Yes. Actually, the Labour Party’s position was one of the reasons why the then Minister Meka Whaitiri fast-tracked some of the work that went to the National Animal Welfare Advisory Committee (NAWAC). I believe that happened in March of last year. They reported back in October. They’ve reported that some areas of concern are already covered by a range of protocols, but they also made some recommendations around industry-led non-regulatory improvements. To be honest with the member, I’d be really interested, in the aftermath of this season, in hearing the feedback from the advisory committee and their reflection on what has happened over the past season.

Gareth Hughes: So no more animals die, will the Prime Minister support my member’s bill that outlaws the worst rodeo practices as identified by NAWAC and as was the very position of the Labour Party advocating before the last election?

Rt Hon JACINDA ARDERN: Yes, and as I’ve said, that was one of the reasons why the then Minister did ask the National Animal Welfare Advisory Committee to look into those very specific issues. Again, they reported back, and they’ve sat down with the industry. I would actually like to hear from the committee again. They are our experts that provide that advice. They have been working alongside industry, and I do want to hear their reflections on the last season.

Gareth Hughes: Given that these animals can’t consent, they can’t complain, and they’re actually being killed for entertainment, will the Prime Minister commit to re-establishing a specific Minister for animal welfare?

Rt Hon JACINDA ARDERN: Look, that’s obviously something that has existed within this term of Government, and I wouldn’t rule that out. I do have to say that, actually, the ongoing role of the National Animal Welfare Advisory Committee is one of the most, probably, important features that we have within our system. We have to make sure that we have great representation there, that they’re feeding into the Government on a regular basis, and that they have that oversight of industry, and I just want to hear back from them after this season. But I wouldn’t rule out bringing back that portfolio, no.

Question No. 11—Agriculture

11. Hon NATHAN GUY (National—Ōtaki) to the Minister of Agriculture: Does he stand by all of his statements?

Hon SHANE JONES (Minister of Forestry) on behalf of the Minister of Agriculture: On behalf of the Hon Damien O’Connor, yes.

Hon Nathan Guy: Does he stand by his statement to the New Zealand Herald over the weekend in reference to the Tax Working Group, and I’ll quote, “I’ve not had an opportunity to read the whole report”?

Hon SHANE JONES: On behalf of the Hon Damien O’Connor, he reflected that he is aware of the content of the report but has not gone bookend to bookend.

Hon Nathan Guy: What official advice has he received to back up the statement he made on Rural Exchange on Sunday in reference to the Tax Working Group report, and I’ll quote, “It probably won’t affect the vast majority of farmers.”?

Hon SHANE JONES: On behalf of the Minister, the Minister is incredibly accurate. At this stage, it remains a bunch of recommendations offered by Dr Cullen and his grandees, and until such time when Cabinet makes a decision, the Minister’s statements are entirely accurate.

Hon Nathan Guy: Has he read recommendation 11, which “recommends introducing input-based tax instruments, including on fertiliser,”; if so, what position does he take?

Hon SHANE JONES: On behalf of the Minister, yes, the Minister and other Cabinet Ministers are aware of that recommendation, which is why it’s out there in the ether. Until such time when Cabinet deliberates and forms a position, it remains a part of the broader atmosphere.

Hon Nathan Guy: What does he believe a natural capital enhancement tax to be?

Hon SHANE JONES: On behalf of the Minister, as I said, obviously the member is referring to either the recommendations or the content of Dr Cullen’s report—something which is not the business, or the Cabinet-mandated business, of this Government.

Question No. 12—Small Business

12. Hon JACQUI DEAN (National—Waitaki) to the Minister for Small Business: Does he stand by all his statements and actions?

Hon DAVID PARKER (Minister for Economic Development) on behalf of the Minister for Small Business: Yes.

Hon Jacqui Dean: Then is the Minister saying he didn’t receive an email from a small-business owner on Thursday morning before question time, on the capital gains tax, which said, “A capital gains tax on the sale of a small business could be particularly devastating to small-business owners, who remain the backbone of the New Zealand economy.”?

Hon DAVID PARKER: That was not the member’s question last week. I, of course, receive correspondence as the revenue Minister. The member needs to better understand the Standing Orders.

Hon Gerry Brownlee: Well, in that case you should have said you were speaking on behalf of the Minister, if you’re such a clever fellow.

SPEAKER: Come on, come on—which of you?

Hon Jacqui Dean: Does he also recall hearing from a small-business owner who said, “Not only do you not listen to us; you and your party don’t seem to value the contribution we make to New Zealand’s economy.”?

Hon DAVID PARKER: On behalf of the Minister, I haven’t seen that particular statement, but I do know that small-business owners are predominantly middle-income earners. I do know that they do better under Labour-led Governments because economic growth under Labour coalitions is, on average, since World War II, higher than growth under National-led Governments.

Hon Jacqui Dean: Is he, then, concerned about the impact of a capital gains tax on a small business?

Hon DAVID PARKER: It’s settled economic theory that distortions in the tax system which encourage speculation instead of investment in productive businesses, including small businesses, hinder productive economic outcome. But any hypothetical changes to the tax system are subject to both coalition discussions and wider consultation, and no decisions have been made. It pains the member to know that economic growth for small businesses is higher under Labour coalitions than under National.

Hon Jacqui Dean: Has he been alerted to any negative impacts on small business in the many emails he has received?

Hon DAVID PARKER: On behalf of the Minister, I’m advised that the emails that he has received as Minister of Revenue include a range of perspectives; many of them know that Labour delivers higher growth rates for the economy than National coalitions have done, on average, since World War II. It is a long-term record of failure.

Hon Jacqui Dean: I raise a point of order, Mr Speaker. The Minister didn’t address my question. I asked: had he been alerted to any negative impacts on small business—

SPEAKER: I will ask the Minister to—

Hon DAVID PARKER: I raise a point of order, Mr Speaker. I actually said I hadn’t read that particular piece of correspondence on behalf of the Minister.

SPEAKER: Well, it was a question of “any”, and the member better answer on behalf of the Minister again.

Hon DAVID PARKER: On behalf of the Minister, acting on his behalf, I have not read any correspondence that has been negative in the way the member suggests, and I am aware that since World War II, economic growth rates under Labour have averaged higher than under National.

SPEAKER: OK, OK. That’s getting to the point of tedious repetition.

Hon DAVID PARKER: Point of order, sir—so had the question.

SPEAKER: Mr Parker will stand, withdraw, and apologise.

Hon DAVID PARKER: I withdraw and apologise.

Hon Jacqui Dean: Is the Minister confirming, then—does he stand by his statement just now that he has received no correspondence from small-business owners on any negative impacts of a capital gains tax?

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. This line of questioning goes something like this: about impacts being received—or notice of impacts being received by the Government. Now, the fact is we all know that on 21 February, the report was put out to the public of this country for consultation. There cannot have been any impacts—

Hon Simon Bridges: He doesn’t like it.

Rt Hon Winston Peters: —and won’t be any until a decision is made on the tax, and that member should be stopped from just wasting this House’s time.

SPEAKER: OK. I’ve got about four things to deal with now. The first is that the Hon Simon Bridges should know that when a point of order is being made—

Hon Simon Bridges: It was frivolous.

SPEAKER: I’m very, very tempted—when I’m reprimanding the member, he will be silent, he will not interject, and he will not reflect on the ruling that I’m making. I’m very tempted—other than the fact that there’s a matter of some interest to him coming up—he’s very lucky not to be tossed and, given his recent record, not to be named. He will stand, withdraw, and apologise twice.

Hon Simon Bridges: I withdraw and apologise. I withdraw and apologise. I raise a point of order, Mr Speaker. My submission: the point made by the Rt Hon Winston Peters was both frivolous and likely to bring the House into disrepute and disorder. He was using it as a thinly veiled attack on the Opposition. It was clearly a debating point. He’s been here a very long time. He should know all that.

SPEAKER: And the member has been here now about a decade and should know that that was a very reasonable response to the point of order. If he’d made it standing up after the right honourable gentleman had finished, it would have had a lot more credibility rather than from his seat by way of interjection. I’m not going to deal with the matter that Winston Peters raised. I am going to ask Jacqui Dean to ask her question again to remind me of the reason why I was going to rule it out.

Hon Jacqui Dean: Is the Minister now confirming that, as he just told the House, he has received no negative feedback—

SPEAKER: I remember now. The member will resume her seat. That’s not what the Minister told the House.

Hon Jacqui Dean: Did the informal briefing he received from the revenue Minister include any mention of receiving any negative impacts of the capital gains tax on small business?

Hon DAVID PARKER: On behalf of the Minister for Small Business, I don’t know the answer to that question. If she wants to put down an answer in writing, I’m sure it can be answered.

SPEAKER: Even a question in writing.

Urgent Debates

Hon Shane Jones—Provincial Growth Fund, Conflict of Interest

SPEAKER: I’ve received a letter from the Hon Paul Goldsmith seeking to debate under Standing Order 389 the involvement of the Hon Shane Jones in a decision to fund a project in which he had identified a conflict of interest. This is a particular case of recent occurrence involving ministerial responsibility. It is very important that the public has confidence in the conduct of Ministers and, to this end, that any conflicts of interest they have are well managed. Answering for the management of such conflicts is at the core of executive accountability to the House.

In considering this application, I took account of the fact that Mr Jones identified the conflict of interest in the project funding application, gave undertakings including to this House that he would not and had not been involved in meetings that involved decisions on the project, but did in fact participate in a meeting about the application. At that meeting he reportedly gave an assurance about the governance of the project. I make no judgment about whether that assurance influenced the decision of other Ministers. In making this decision, I’m applying as precedent the decision of my predecessor, the Rt Hon David Carter, on the application by Grant Robertson exactly five years ago today. Having carefully considered the application, I have decided to allow the debate. I therefore call on the Hon Paul Goldsmith to move that this House take note of an urgent matter of public importance.

Hon PAUL GOLDSMITH (National): I move, That the House take note of a matter of urgent public importance.

So, here we have Shane Jones saying it’s all a beat-up. He’s like Mr Schultz: “I see nothing. I see nothing. I went into the room. I was part of the debate. I gave reassurances to the Minister of Finance. But I had my fingers in my ears and I didn’t hear a word I was saying.” That’s the approach that he is taking. He cannot seem to fathom the basic idea that if he is given responsibility for spending $3 billion of taxpayers’ money around the country, including $100 million in the Northland electorate—where he is based; where he claims to know everybody, to have deep connections across the community—he should be absolutely focused on ensuring that there is no perceived conflict of interest in the way that he hands out that money. What we’ve seen in that response—in his answers today in the House and in the press—is he has no concept of what a conflict of interest actually is and how to manage it, and that is why it is important that this House considers this fully.

So let’s go back, by way of background, to what we’re talking about here. So in November 2007, Shane Jones declared a conflict of interest with the Cabinet Office relating to a proposed cultural centre in Ōpōnoni, called Manea Footprints of Kupe. The nature of the conflict wasn’t publicly disclosed at the time. We weren’t quite sure what it was. So what is this project? It’s a proposed cultural centre and museum in Ōpōnoni, north of Auckland, to tell stories about the Māori ancestors of Northland. It’s a worthwhile thing, wonderful to see. A charitable limited liability company, Manea Footprints of Kupe Ltd, was established to own and run the centre, and that company is owned by Te Hua O Te Kawariki Trust.

Now, following this, on 23 February 2018, that project received $4.6 million of funding from the Provincial Growth Fund. Now, when we asked the Minister a question in the House on 5 April about it, Minister Jones stated that he had delegated responsibility to Minister Davis where the project was concerned, but written questions further confirmed that Minister Jones had withdrawn fully from the decision-making process, and he further stated he had not attended any meeting at any point in relation to the project. Then, in reply to the question which I quoted into the House, he said, “I raised my conflict of interest with the Cabinet Office in November 2018 and indicated I would not be involved in any decision to grant funding to the project under the Provincial Growth Fund.” Well—and then to our great shock and surprise and horror, we discovered, in Ministry of Business, Innovation and Employment (MBIE) documents released to the Sunday Star-Times this weekend, that Minister Jones had indeed attended a meeting relating to the project, and he had reassured Minister Robertson, the Minister of Finance, and the other Ministers on matters relating to the project, to the point that the funding was approved.

Now, obviously, this doesn’t align with the answer that he’s given. We don’t know the details of the conflict and we don’t know the extent to which the Minister was involved in the funding decisions, and just saying that “I didn’t sign the document and hand over the money” is no answer. Being in the room—it is a reasonable question to assume that if the Minister wasn’t there and hadn’t given the reassurances to the Minister of Finance and the others in the room, that the project wouldn’t have got the funding.

What would have happened if he hadn’t have been there? The likelihood is that—the briefing from Treasury and the advice from Treasury was not to fund it because it didn’t stack up for a whole host of reasons. So if he wasn’t in the room, providing that reassurance, it probably wouldn’t have been funded.

Darroch Ball: Stop guessing.

Hon PAUL GOLDSMITH: Well, we don’t know, and it will be interesting to know. But the point is: he was there.

Darroch Ball: You’re making it up.

Hon PAUL GOLDSMITH: So there are two key issues here—

SPEAKER: Order! The member will resume his seat.

Darroch Ball: I withdraw and apologise.

SPEAKER: Well, the member will do it when I sit down and he will do it clearly, and it’s a ruling that I want to reinforce to members in the House. Members cannot use that expression.

Darroch Ball: I withdraw and apologise.

Hon PAUL GOLDSMITH: Thank you, Mr Speaker. So, there are two key issues that I wanted to traverse this afternoon. One is the nature of conflicts of interests and how Mr Jones manages the perceived or actual conflicts of interests in doling out $3 billion, especially $100 million in Northland, where, as he’s said so many times, he has deep connections, knows everybody, and also has political goals. How does he do that while maintaining the confidence of New Zealanders that he is not acting in a way that is conflicted? Secondly, the second issue is about his truthfulness to this Parliament when he answers a question saying he wasn’t involved, wasn’t there, and we find out that he was.

So let’s go through the first. Ministers should always, of course, be careful when they’re spending taxpayers’ money. When you’re spending $3 billion you have a great burden of responsibility on your shoulders that you’re going to spend that money wisely. But the first burden that you have is that you’re going to spend it more usefully than the people of New Zealand would have spent it themselves, if they had not had that money taken from them in the first place. So he has a burden of responsibility to ensure that it’s going to be spent wisely. He said that four or five years ago he once met the chief of Waimamaku, Whetū Naera, and he has since died. That is his explanation for the conflict of interest that we are supposed to be talking about here, and that’s what the Prime Minister explained as well.

So an interesting question that I’d love to hear some more detail from the Minister himself is: well, is that the extent of his conflict of interest? Because we don’t know. We know that there was a meeting in the Ōpōnoni pub, where the whole thing was discussed. That was back three or four years ago, and we’d be interested to know who was there. Was it any of the people that have subsequently become directors of the company that will now run the Manea Footprints of Kupe museum or institution that will be established? Two of them are very well-known. We know, for example, that Anton Haagh, the co-owner of the Duke of Marlborough, is now one of the directors. Was he at that meeting at the Ōpōnoni pub? I don’t know. Or Shane Lloyd, the owner through a trust of the land that was sold for the project and now also a director of Manea Footprints of Kupe Ltd—was he also at the Ōpōnoni pub meeting? I don’t know. We need to get to the bottom of the extent to which the nature of the Minister’s conflict is fully understood. So we want to get to the bottom of that.

What exactly was his involvement in the formation of the project? He says that it’s all been made up by Wayne Hutchinson, presumably when he wrote to MBIE in January 2015 saying, “Te Hua O Te Kawariki trustees and the proposed directors of Manea Footprints of Kupe Ltd, under the chairmanship of Hon Shane Jones, have met and discussed the funding application over the Christmas period giving guidance to your response to your letter on 22 December 2014.” So in black and white, Wayne Hutchinson, who is now also, I believe, a director of the company, has said that they all met, they all got together, Shane Jones was the chair, and “We discussed the funding application and we’ve worked away on it.” So Shane Jones says that Wayne Hutchinson was wrong, presumably, in saying that. He’d misunderstood and he’s likened himself to Sonny Bill Williams—as being so famous that everybody wants to have him involved. Well, let’s find out about that.

But what is his exact involvement in the formation of this project, and who does he know, and how is he connected to it—these are the questions, so that we can get a full understanding of why, indeed. He seems genuinely confused in the House. He seemed genuinely confused at question time as to why on earth he declared this conflict of interest. He seems to think that there isn’t actually one; he’s not sure: “Is there a conflict? I don’t know. I don’t know what all the fuss is about.” So that’s a legitimate question for us to get to the bottom of.

I don’t sort of imply that any of the other people involved are doing anything improper in any way, shape, or form. I’m sure they’re all publicly minded people, but it is a question of perception, and it comes to others. The Provincial Growth Fund has also handed out millions of dollars—$6 million to Ngāti Hine’s forestry works. The ones that weren’t mulched are still going to be owned by that Ngāti Hine trust, and the acting CEO of that trust is none other than Pita Paraone, a former New Zealand First MP and on their list. Now, again, I’m sure he’s got the best motivations of heart and he’s doing a great job, and I don’t have any complaints about his efforts, but it’s about perceptions. How is this money being spent, and how is the Minister managing perceptions around conflicts of interest?

Again, we can think of the roundabout: there are roundabouts just down the road from Shane Jones, the $11 million roundabout. Now, there are roundabouts all around the country; there’s a country full of worthy roundabout projects. I’ve been to many of them. I go around a roundabout just about every day myself, in Greenlane, and I’m sure it could be better. So if the whole country—

SPEAKER: Order! Order! I feel like the member’s on a roundabout now. I think it would be good to get back to the matter which he put before the House.

Hon PAUL GOLDSMITH: Thank you, Mr Speaker. The point I was making about the roundabout was that the nature of spending $100 million of taxpayers’ money in one region—the Northland region, where the Minister says he has deep connections throughout the community—is a challenging matter in terms of maintaining integrity in the system and Kiwis’ belief in the robustness and appropriateness of that spending. That is the point that the Minister doesn’t seem to be able to grasp, when he thinks it’s all a beat-up and he doesn’t really know why—he indicated that—he should be making some kind of reference to a conflict of interest. So how we manage the conflict of interest is a question. There are serious questions to answer, and we need to know how he’s actually going to manage those conflicts going forward.

The other point is in relation to political ambitions, and that’s slightly unrelated, but he has made no bones about the fact that he’s interested in winning the seat—and good luck to him on that score—but when you talk about spending—[Interruption]

Matt King: Don’t like the way he does it.

SPEAKER: Order! Mr King can have a call later.

Hon PAUL GOLDSMITH: —$100 million in a particular region, then, again, you have to be able to justify that this is what we’re getting. So the first point is: what is the nature of the conflict of interest exactly, and why did he think that it’s appropriate to be in the room, part of the discussion, reassuring, and, essentially, advocating for the project, having made that conflict of interest?

Then, secondly: why was he so misleading in his answers to Parliament? I’m sure he might come up with some sort of explanation, but it’s very difficult to explain how you can say, “I raised the conflict of interest, and indicated I would not be involved in any decision to grant funding to the project”. Now, we took him at his word when he made that response.

Hon Chris Hipkins: I raise a point of order, Mr Speaker. I was just reflecting, for a moment, on the comment the member just made about deliberately misleading the Parliament.

SPEAKER: No, I don’t think he did say “deliberately”.

Hon Chris Hipkins: Well, he said the Minister had given answers to the Parliament that were misleading.

SPEAKER: That’s right, and that’s different. It’s a question of deliberately or accidentally, and it is quite an important question. If the member had said “deliberately misleading”, I would have pulled him up.

Hon PAUL GOLDSMITH: There you go. So he was misleading, and the question that we have that he has to answer is: what was going on in his mind when that misleading answer came through to me, in response to my trying to understand his involvement in this case?

The final point I wanted to make is the way that the Minister has conducted himself throughout this whole process, because he has been prepared to answer trickily and “slipperyly” in the way that he’s responded to what his involvement was. So the slow trickle of detail coming out of MBIE—and it has been slow, and it has taken an enormous amount of work from my office. We get abused on a regular basis by Shane Jones for asking too many questions. Well, this is what happens when you finally start to put the pressure on for people to be actually open and transparent: eventually, the details come out, and they point out where the Minister has not been full in his explanation and open and transparent about how he’s been engaging in this process.

But the other way that he’s responded, of course, is to go out on full attack with the media. I don’t know why he thinks it’s appropriate to go around attacking journalists and calling a well-respected journalist, Hamish Rutherford, a “bunny boiler”. I’m not quite sure what he’s referring to, but it’s a shocking way to talk about people who are trying to ask basic questions. The only assumption that you can draw from that kind of response from the Minister is that he’s trying to intimidate and bully the press gallery, as he tries to intimidate my office and me, in terms of asking questions to try and get us off the—

SPEAKER: Order! Order! The member will resume his seat. The member is making a serious accusation of a breach of privilege. He is not raising it in the proper way. Any attempt to intimidate a member with regard to questions is a clear breach of privilege and it is to be raised properly at the time.

Hon PAUL GOLDSMITH: Perhaps that was not quite the right word then. Bullying is another word, I suppose, and if you’re always saying “Don’t trouble me and irritate me by asking all these questions.”, then the clear message is to shove off. That has been the approach that he has taken with the media. To go—in such a personal way—attacking a member of the media over them just doing their job, trying to ask some basic questions around conflicts of interest, and calling them a “bunny boiler”, I think, is a new low for New Zealand politics, frankly. So this Minister has a lot of explaining to do. He needs to take it seriously, and the broader point is that he needs to take the basic issues around conflicts of interest, particularly in Northland, much, much more seriously than he is at the moment. Only time will tell whether he comes up with some reasonable explanations, but he hasn’t shown a good start to it today in the House. Rest assured, we’ll be asking more questions over this week to come. Thank you, Mr Speaker.

Hon DAVID PARKER (Minister for Economic Development): Thank you, Mr Speaker. I rise on behalf of the Labour Party to respond to the issue that is under debate. The subject matter of the funding application was for a cultural heritage and education centre named Manea Footprints of Kupe, to be sited in Ōpōnoni on the banks of the Hokianga estuary.

The background to that, which the Minister, the Hon Shane Jones, has already stated to the media, is that some period earlier he knew some of the people who were in support of that proposal and, not because he was conflicted because of having a personal financial interest or a family interest in it, he chose to contact the Cabinet Office because he knew particularly well one of the deceased proponents of the scheme but he was uncertain as to how he should deal with that association. He contacted the Cabinet Office, and the Cabinet Office, effectively, didn’t tell him he must declare a conflict of interest, but said, “Look, if you’re feeling uncomfortable about this, maybe you want to.”

Now, I’ve got to say that if this is the test for a conflict of interest, then I think lots of people in this House, including me and the Hon Nick Smith, breached that standard in respect of the Waimea dam. We were aware of that, we knew proponents for it, we advocated for it in Government and in Opposition, and, actually, we both took part in the decision in respect of the funding of the Waimea dam.

But the Hon Shane Jones, in part because he has been under attack and he’s been concerned to protect the reputation of the Provincial Growth Fund against accusations of self-interest, decided that he didn’t want to partake in the decision-making process for this particular application. Now, I was one of the decision-making Ministers, and I have before me—and, at the end of this, I will table it—the document that came to me. It somewhat surprisingly bears the date of 8 April, because it came to me on 31 January, when it was signed out by officials from the Ministry of Business, Innovation and Employment (MBIE), from the Provincial Growth Fund, who forwarded me the briefing on the issue of whether there should be an investment in the Manea Footprints of Kupe, and that’s proven by the signature of the official from MBIE, dated 30 January 2018.

The meeting that the member, the Hon Paul Goldsmith, complains of was after I’d actually already approved the investment. My approval of the investment was on 7 February 2018, where I agreed to approve the proposal for funding of up to $4,600,000 for the Manea Footprints of Kupe Cultural Heritage and Education Centre from Vote Business, Science and Innovation’s Regional Growth Initiatives’ multi-year appropriation. So the idea that there’s somehow some terrible influence on Ministers in respect of this issue—even if there were a conflict, and, to be perfectly honest, I don’t think that there was a conflict of interest here, but let’s just assume, for argument’s sake, that there really was a real conflict, I certainly wasn’t influenced by the Hon Shane Jones’ comments at a later meeting, because I’d already taken my decision.

I do make the point that we need to be a little bit careful here that we don’t become unrealistic as to what amounts to a conflict of interest. I can understand why the member Shane Jones didn’t want to become involved, because I think he had a feeling of some loyalty to the deceased man who had been one of the people behind this. Now, I know the Hon Shane Jones’ motivation in respect of the Provincial Growth Fund, and I know why he has argued for it to concentrate its efforts in three regions in New Zealand that, for slightly different reasons, have been on hard times.

There are three regions in New Zealand where the Provincial Growth Fund focuses its investment efforts. I’m raising this because the Hon Paul Goldsmith has made assertions that there is undue investment into the North because of the private interest or the political interest of the Hon Shane Jones. Now—

Hon Gerry Brownlee: That’s right.

Hon DAVID PARKER: Well, there we go again; the Hon Gerry Brownlee says that. Now, I don’t know how the National Party can be blind to the fact that the Far North is bedevilled by the highest rate of violence in New Zealand, probably the highest rate of intergenerational welfare dependency, and probably the highest rate of imprisonment of any populations in New Zealand. The other area that’s bedevilled with that particular curse is, actually, the Tai Rāwhiti region, the region around the East Coast. These are two of the three surge regions for the Provincial Growth Fund.

Now, what do you do if you’re trying to overcome a disadvantaged part of New Zealand and you just want to break with the neo-liberal tradition that we’ve had for 20 or 30 years? Actually, you focus a bit of attention on the region. Now, the level of sophistication of what’s going in in the North, I would suggest to the House and to those that are listening, is quite high. We’re supporting not just burgeoning tourism—that’s what this addresses. There is, no doubt, an untapped tourism potential in the North. The more wealthy parts of New Zealand already get more tourism than some of the less wealthy parts. The Far North is one of the most interesting and beautiful and culturally diverse parts of the country, and yet it’s under-serviced by tourism infrastructure, and that’s what this project was intended to address by effectively creating a destination somewhere between, you know, Tāne Māhuta—the great kauri forest as you head up towards the Hokianga—and then as you head further north up to—

Hon Gerry Brownlee: That’s not the point.

Hon DAVID PARKER: Well, the member says, “That’s not the point.” Actually, it is the point of the fund. In respect of the point that the member raises as to somehow misleading either members of Parliament or people who were involved in the approval of this venture, he’s just got it wrong. If he wants me to quote further from the paper that I’ve just quoted, that I signed on 7 February—

Hon Gerry Brownlee: Why didn’t he leave the room?

Hon DAVID PARKER: —in advance of the meeting that you complain of, Mr Brownlee—recommendation A was that I note that the Minister for Regional Economic Development has declared a conflict of interest and will not receive this proposal for consideration. So I (1) defend the Minister—

Hon Gerry Brownlee: Why was he in the room?

Hon DAVID PARKER: The member was in the room because we were having a broader discussion about how we were going to make the initial announcements for investments through the Provincial Growth Fund and other approvals that he was interested in. As he has said, and as the Prime Minister has said, given that he did declare a conflict of interest, it probably would have been less controversial if he had stepped outside the room. But I can assure the House, and those who are listening, that that made absolutely no difference to the outcome on this particular application as far as I was concerned, because I had already approved it. Thank you, Mr Speaker.

Hon GRANT ROBERTSON (Minister of Finance): I rise to take a call in this debate to clarify two or three main points. The first of those is that the process for deciding upon projects within the Provincial Growth Fund over the $1 million mark involves a group of Ministers assessing those projects and then making final decisions on them. In the case of this particular project, that is the subject of today’s urgent debate on the Manea Footprints of Kupe, it is quite clear that the Hon Shane Jones had no decision-making role—

Hon Paul Goldsmith: Rubbish.

Hon GRANT ROBERTSON: That is the critical element. Mr Goldsmith says, “Rubbish.” With respect, Mr Goldsmith, the Ministers who made the decision know the answer to that question. Minister Jones was not a decision maker on that project. His role in the decision making was taken by the Hon Kelvin Davis.

The second clear point that I want to make is that the Cabinet Office give advice to Ministers on the question of conflicts of interest. Just declaring a conflict of interest doesn’t mean that there is a single, blanket response to how to manage that conflict of interest. Conflicts of interest can be managed in a number of different ways. He went along with the advice that he was given. So the management of a conflict of interest does not require a specific and particular outcome. In this case, Mr Jones acknowledged that conflict of interest, it was known to Ministers who were making the decision, and he did not take the decision himself.

The third point relates to the role that I have in this particular set of circumstances—which is the role I take, I might add, in most of the discussions about the Provincial Growth Fund—which is to ensure that issues like governance and the overall commercial arrangements that surround a project are ones that we can be satisfied with. The issue that I raised was around, for example, milestones for the project—who would be managing; who would be looking after those milestones? As has been recorded, Minister Jones provided information about the role of Far North Holdings Ltd—or the Far North District Council, of which Far North Holdings Ltd is a company related to that—

Hon Gerry Brownlee: Oh, it gets worse.

Hon GRANT ROBERTSON: It doesn’t get worse, Gerry. This is the actual thing that’s in the media. So Mr Jones provided information about the fact that they were involved in the governance side. That was not information about the proposal or the project; it was about an issue around the governance of the project. That information was received by Ministers and then I made the decision that I would be comfortable to move forward with supporting the project.

Hon Gerry Brownlee: So the information was helpful? The member was influenced.

Hon GRANT ROBERTSON: I raise a point of order, Mr Speaker. I believe it is disorderly to accuse a member of being under outside influence when making a decision.

SPEAKER: I confess to being rapt in the comments that the Minister was making and didn’t take notice of the interjection. I don’t think it’s a problem of being under the influence of someone. The suggestion that someone’s under the direction of someone—if that accusation was made, it will be withdrawn and apologised for; otherwise, we’ll continue.

Hon GRANT ROBERTSON: So, provided with that information, I was able to support the project, ensuring that there were accurate milestones and the proper organisation and governance around it.

This is the way that a conflict of interest can be managed within all of the work that Ministers do. I know, and you made the point, Mr Speaker, earlier today, that we are on the fifth anniversary of another occasion on which issues of conflict of interest came up. Now, I’m not going to go deeply into that—

SPEAKER: No.

Hon GRANT ROBERTSON: —because I’m sure you won’t allow me to do it, but given that you introduced that material when you were announcing that, there are, obviously, different ways of managing conflicts of interest. For example, if one were in a situation where there was direct commercial advantage likely to flow to a person or a close member of their family, the management of that kind of conflict of interest would be quite different from the management of a conflict of interest where a person simply knew people involved in a project and those people wanted that person to continue their involvement but it didn’t happen. That is a quite different matter entirely from a conflict of interest that involves potential commercial gain for a person. As such, those two conflicts will be managed in different ways. This conflict here was managed by the Minister concerned making those involved in the decision making aware of that and then not participating in the decision making. That is an appropriate course of action to manage a conflict of interest.

It is very important to note that Minister Jones had no personal gain from this project—none whatsoever—and to hear Paul Goldsmith in the House assert today that somehow or other Minister Jones cannot be involved in making decisions about an entire region of New Zealand reflects exactly the perspective you would expect from a regional economic development spokesperson coming from the Epsom electorate and not understanding that, in New Zealand, we have regions that for years were ignored by the previous Government. On this side of the House, we have made a commitment to the people of Northland, the people of Tai Rāwhiti, the people of Bay of Plenty, the people of Manawatū-Whanganui, and the people of the West Coast of the South Island that their regions are ones we are prioritising because they are regions that actually deserve a fair go. They’re regions that, once and for all, the Government is actually going to be able to support, so projects like this one are actually part of a Government taking responsibility for widespread regional development in New Zealand.

We know why the National Party want to put up urgent debate requests like this one: because they don’t want to admit or focus on the fact that, right around New Zealand, people are seeing, finally, a Government that is investing in the regions, that is actually seeing practical projects being started, not another one of Steven Joyce’s glossy booklets or strategies but practical projects on the ground. That’s what the Provincial Growth Fund is about, and that is why a project like this is appropriate. This is a situation where a Minister declared a conflict of interest, followed the advice of the Cabinet Office, and took a particular course of action as to how to manage that conflict of interest. That is entirely appropriate.

Hon DAVID PARKER (Minister for Economic Development): I raise a point of order, Mr Speaker. I said during my contribution that I would seek leave to table the document that I signed out on 7 February before the meeting that is contentious.

SPEAKER: Is there any objection to that process? There is none. It will be tabled.

Document, by leave, laid on the Table of the House.

SPEAKER: I’m going to call Andrew Falloon, but just to indicate that according to the agreed rosters, there is not a position for the ACT Party as part of this debate. Of course, if other members don’t take a call, then I’m sure the Speaker will recognise Mr Seymour.

ANDREW FALLOON (National—Rangitata): Thank you, Mr Speaker. It’s a pleasure to be taking a call this afternoon on this urgent debate. I was just interested to see that Grant Robertson took the call that would otherwise be taken by a New Zealand First MP, and I hope that doesn’t indicate that the Hon Shane Jones doesn’t intend to take a call this afternoon and answer some of the questions that have been put forward to him by Paul Goldsmith, by myself, and, shortly to come, I hope, Jonathan Young, because there’s some very serious questions around the role that he’s played in this fund and, in particular, with this project.

David Parker spent the first five minutes of his contribution essentially saying that there is no conflict of interest in this case—there is no conflict of interest in this case. Well, if that’s the case, then why did Shane Jones declare a conflict of interest? If there was no conflict to declare, then why would Shane Jones put up his hand and say, “I have a conflict here in relation to this project, and I need to step aside from the process.”? The fact that he did that shows that David Parker is quite wrong—there is a conflict of interest to be declared. Grant Robertson continued on with that line. He said there’s no conflict because “There’s no monetary gain”—no monetary gain. Well, if that’s his test for what is a conflict of interest, I have grave concerns about other decisions that happen in that Cabinet. If his test for a conflict of interest is only where an MP or Minister is making money on the deal, then that is a scary representation of what might go on in that Minister’s Government.

If there was no conflict to declare, why would Shane Jones declare one? If there was no point in declaring a conflict of interest and delegating responsibility to another Minister in terms of being actively involved in that decision-making process, then why would he have declared one? The Minister of Regional Economic Development apparently withdrew himself from the process. But we now know that he didn’t do that. He claimed in written questions earlier this year that he had “withdrawn fully from the decision making process” and further stated he had not attended any meetings. Well, we now know that’s not true—that’s not the case. He did attend a meeting, and so the question that we have, on this side of the House, is: why would he try and cover up that fact? Why would he suggest that he hadn’t been to any meetings in relation to this project when we now know, through the release of documents on the Ministry of Business, Innovation and Employment website, that he did attend a meeting?

Grant Robertson made some comments—unfortunately, he didn’t address the one concern that we have, which is that Grant Robertson was “reassured by Shane Jones in that meeting”. So the fact is we know that if Shane Jones hadn’t been at that meeting, hadn’t spoken on behalf of the project, it wouldn’t have been funded—it would not have received $4.6 million of taxpayers’ money if Shane Jones had not been at that meeting. That is where the problem lies. The fact that he declared a conflict of interest in this project and still went to that meeting, spoke on its behalf—and therefore taxpayers have put up $4.6 million to this project—shows that there has been a conflict of interest. Parliament has been misled—Parliament has been misled by the answers that Shane Jones has given to written questions.

The concern that we have, on this side of the House, goes back to how the fund is being operated. There’s a huge lack of clarity around the entire project. Ministers have said that they have great sway in deciding where money will go. I think it’s less than $1 million will be decided by officials, but anything greater than that is decided by Ministers. That means that Ministers—and Shane Jones is one of those Ministers—have great say over where that money goes. It’s become a highly politicised fund, and I only have to look as far as something like Westland Dairy, where $10 million of taxpayers’ money has gone.

The problem that we have on this side of the House is that because it has been such a political fund, because there’s no clarity released on why funds are put into certain things—we have concerns around the Westland Dairy one in particular, because, in that case, we don’t even know the terms of the contract. We don’t know how much the interest rate is, for example. We don’t know what the key performance indicators are. There is no clarity around Westland Dairy’s $10 million or, in fact, most of the funding applications that have been approved by the Government. So I ask the Minister—and I hope he’ll take a call shortly to answer some of the questions that we have—if it’s good enough to give Westland Dairy $10 million, then why not give $10 million on the same terms to a company like Synlait? Synlait, for example, don’t know the terms of the loan that was given to Westland Dairy. They don’t know that, for example, if they’d been given $10 million, they might have been able to do a much better drying plant or something like that—produce far more jobs. But because there’s no clarity around the fund and how it’s allocated and what the interest rate is, they don’t know what they don’t know.

I want to now turn to the regional breakdown of the fund, because that makes for quite sober reading. This goes back to Shane Jones—“Matua Jones”—his position as a Minister from Northland, and if we look at the regional breakdown, we see that $100 million of taxpayers’ money has so far been allocated out of the Provincial Growth Fund for Northland. Now, compare that for a moment with Canterbury, which has received just $8 million; 8 percent of the funds that have gone to Northland have gone to Canterbury. If we’re talking about conflicts of interest—

Kiritapu Allan: Canterbury doesn’t need as much assistance as surge regions like Northland, like Tai Rāwhiti.

ANDREW FALLOON: —which we are this afternoon, we have to ask: why is it that 8 percent of the fund—or 8 percent of what Northland’s received—has gone to Canterbury and $100 million has gone to Northland? Now, David Parker said, in his contribution, that that was quite innocent, and we all appreciate that Northland could use some investment. My colleague Kiri Allan across the hall has said has been talking about the Tai Rāwhiti as well. But when we’re talking about such a dramatic difference in figures—of $8 million for Canterbury and $100 million for Northland—and if we’re talking about conflicts of interest, the question that has to be raised is: where is Mr Jones running? If it was as innocent as David Parker’s suggesting, I’d like him to speak, perhaps later on today, and confirm for us that, no, Shane Jones won’t be running in Northland—

Hon Tracey Martin: I raise a point of order, Mr Speaker. Just seeking guidance, sir. This sounds remarkably close to a line suggesting something that should never be suggested in this House.

SPEAKER: The member will resume his seat. I think we’ve seen over a period of time suggestions from both sides of the House, or various corners of the House, including in the time of the last Government, of pork-barrelling approaches. I think that’s the suggestion we’re having here now. I’m listening very carefully to what is being said but, so far, the member’s come up to the line and not gone over it.

ANDREW FALLOON: Thank you, Mr Speaker. So I come back to the $8 million that Canterbury has received, and we again have to ask ourselves: apart from perhaps electoral advantage, why is it that Canterbury has received such a small number? I have to say, as a proud MP and a proud Cantabrian, that there are a lot of issues around the process—there are a lot of complaints around the process in Canterbury, and a lot of those complaints come back to the point that I’ve been making, which is around clarity and the ministerial decision-making, that there’s no published parameters about what Ministers will look at. There’s no suggestion of why Ministers will choose a certain project over another one.

A lot of that $8 million actually has come to my electorate, so I have to thank Mr Jones very much for that, but $7.5 million has been allocated for the thermal pools in Methven, which is a great project—but $7.5 million has been approved. Interestingly, though, they only ever asked for two. So the project came to Shane Jones, they said, “We’d like $2 million for this project.”, officials approved it around the middle of last year that $2 million should go forth to this thermal pools project, it then landed on the Minister’s desk, where it sat for round five and a half months, and then the Ministers came back and said, “Oh well, I know they’ve asked for $2 million, but, actually, let’s give them $7.5 million.” So there are real questions around how the money is being allocated and why Ministers are making the decisions that they are.

I do want to come back to Northland, though, because what’s interesting in that $100 million is that nowhere do we see, in that $100 million that’s gone to Shane Jones’ region of Northland, the Northland motorway. The members opposite—we heard them, for about three or four or five years, talking very negatively about the so-called Holiday Highway. I found that quite offensive, actually, because the so-called Holiday Highway, the four lanes to Northland, would have unlocked the potential of Northland. If you look at the Tai Tokerau Northland Economic Action Plan, which was worked on not just by MPs but by stakeholders, by local government, by businesses and industry in Northland, the No. 1 recommendation from that report was for a four-lane highway into Northland to unlock the potential of Northland.

The fact that the Government has given $100 million on projects where the Minister is highly conflicted—he’s declared that conflict—and has not put money into something that would unlock the economic potential of Northland, I find quite outrageous. The fact that he would put money into pet projects where we now know he’s conflicted, because he’s declared that conflict—he’s gone to meetings which he said he hadn’t been to. He’s gone to those meetings, sat in those meetings, pulled his friend Grant Robertson aside and said, “Oh, actually, mate, can you just throw these guys $4.6 million? I know them; they’re really good—but, hey, there’s no conflict of interest here.”

GARETH HUGHES (Green): Kia ora, Madam Deputy Speaker. Ngā mihi nui ki a koutou. Kia ora. Look, it’s not my job to defend Shane Jones. He’s called me plenty of names over the years, including “that squawking mollyhawk from the Greens”, but this isn’t about our colourful relationship; it’s about the important issue in front of the House, and I would like to outline the Green Party’s perspective on the issues. Now, first, at the highest level we absolutely support the investment in our regional economies. For too long, we weren’t investing in regions that were really struggling, like my home region of Tai Rāwhiti.

I want to put on the record the Green Party’s acknowledgment of the Speaker’s decision to grant this urgent debate. I think it is important that these issues are given a transparent hearing in Parliament. I think it’s important we get to canvass the issues, but I think what’s most important for anyone watching, for the media, is the opportunity to hear from the Ministers, who have outlined their role, their experience, the time line. What this Parliament and what this country has heard is that there was no conflict of interest, as the Hon David Parker said. What we heard from the Hon Grant Robertson is that it didn’t influence the decision.

Now, I acknowledge those members for their contribution. The fact is that we heard from the National members “Well, why?”. Now, I think every member in this House probably has examples where they’ve used the term “conflict of interest” without actually meaning the technical term. It’s quite a cut and dry legalistic term, “conflict of interest”—you have it or you don’t—but I think many of us actually want to go above and beyond the requirement because you simply want to publicly acknowledge a relationship and that’s what the situation is. The Minister simply knew people in the room. He didn’t influence the decision, and we’ve heard that from the Minister. So Minister Parker is correct: there was no conflict of interest.

Now, why I said it’s important we have this debate is that this is one of our strongest strengths as a country, which is the institutions which mean we don’t experience the corruption we see in many other countries. Kiwis can trust Government institutions, and it’s important that we have this opportunity to put it on the record. The Green Party is glad that these facts have been outlined, and we stand by the comments we’ve heard that there was no conflict of interest.

JONATHAN YOUNG (National—New Plymouth): Thank you, Madam Deputy Speaker. Shane Jones said, “I asked my ministerial colleagues to make the decision on that project in order to manage a conflict of interest.”—he said this in a written answer two months after attending the meeting—“As such, I have had no formal meetings regarding the Manea Footprints of Kupe project since receiving my ministerial warrants.” I’m not sure that turning up to a Provincial Growth Fund (PGF) Ministers’ meeting would be considered an informal meeting—that’s a formal meeting. So this answer, in reply to Paul Goldsmith’s written question No. 8264 (2018), is false and incorrect. Then, specifying “no formal meetings” leaves one definitely of the view that there were informal meetings since he received his ministerial warrant. We’ve heard of meetings at the Ōpōnoni pub.

I guess the Minister would say, as he travels about in Northland, that he has a wide variety of informal meetings all across the region, as one would expect. I have lots of informal meetings myself. To say that those informal meetings don’t count when it comes to a conflict of interest is incorrect, because the Minister was able to say to my colleague the Hon Paul Goldsmith, in one of his questions on 27 June, “I have been very loud on the marae in my own area in my community after I was approached by someone who I felt I should have no fear or favour following his advice encouraging me to meet with [certain people]”. That was an informal meeting, and the Minister would have gone on to meet those people, and, of course, that became a whole series of questions in the House that came from that. So to hide behind “I’ve had no formal meetings” is not good enough and not strong enough. It influences people’s actions, and I have no doubt at all that when the Minister attended this meeting with the other provincial growth Ministers and they wanted to have a reassurance, you can’t get much more formal than that. To state that he was there informally is so incorrect, and so it is a conflict not only of his interests but also of his statement in a written question.

You’ve got to ask, “Well, what are the perceived conflicts?” The Minister has said his relationship with the key proponent of the project, Whetū Naera—the chief of Hokianga—and his past advocacy and support for the project as a Labour MP. But you’d also have to say, as many MPs would know in their constituencies, that when you have worked with a kaumātua, when you have supported a project, there is a strong interest in you causing that project to succeed, otherwise your mana and your reputation is affected because you have not delivered on your support—

DEPUTY SPEAKER: Not mine—not mine.

JONATHAN YOUNG: —other MPs, I’m referring to—have not delivered on their support and their advocacy, as has been suggested by my colleague Andrew Falloon. Not just from in this House and not just from this side, but the conjecture of the media is that if New Zealand First are to succeed in the 2020 elections, then they need an electorate seat. If the Hon Shane Jones was going to stand in Northland, then his mana and his reputation are absolutely vital, so perhaps there is an implied conflict in that particular area.

To hide behind “I have had no formal meetings regarding the Manea Footprints of Kupe project” is absolutely just an obfuscation, creating suspicion that more is at stake here. But why did he arrange for Kelvin Davis to make the decision? He said, “It’s necessary for me to seek advice from time to time from the Cabinet Office.”, etc. Obviously, the Minister has worked with Mr Davis in the past when it came to decisions regarding Northland. I do recall, back in February 2018, in a discussion that’s been raised here today regarding the State Highway 10 roundabout, that here we see there was an obvious cooperation or collusion at its finest.

Earlier in the year, the State Highway - Waipapa roundabout project near Kerikeri received the go-ahead for $9 million of provincial growth funding, and I raised this in a question in the House. I questioned the appropriateness of this, considering the Cabinet minute stipulated the Provincial Growth Fund couldn’t be used to fund any projects already funded by the New Zealand Transport Agency (NZTA). So Mr Jones said the chief executive of NZTA came to him asking for the money, although Shane Jones, in reply to one of my questions, said, “NZTA has provided me with details of specific projects in response to requests for information from myself about projects that may align with the PGF criteria.” It was interesting, and I raise this issue because—

DEPUTY SPEAKER: It might be interesting, but it actually—

JONATHAN YOUNG: No, no—madam, it does have context, and it’s around this conflict of interest, and particularly in the Northland area. It was Northland MP Kelvin Davis who suggested, through his own question at that particular point in time, that the PGF fund was given because of the huge number of serious accidents and fatalities. Well, as we found out later through the parliamentary research unit, over 15 years there had been no fatalities. I raise this point because in my area, from Bell Block to Waitara there is a piece of road that has three intersections in the country’s top 20 that are deemed as incredibly dangerous, and we have had 12 fatalities in the last 10 years. Why is it that one roundabout gets funding and another doesn’t—one has no fatalities and the other has 12 over a decade?

So what I would say is that this is pork-barrel politics at its worst, where New Zealand lives are at stake. When we want accountability and probity and transparency around the Provincial Growth Fund and how it’s administered, and that it’s not a political slush fund, it’s because New Zealanders’ lives and welfare are at stake. I believe that is a very important issue that we need to understand here, that it’s not just a conflict of interest because Shane Jones says he knows a kaumātua; it’s not just a conflict of interest because it’s a project that he supported. I say it’s a conflict of interest because it’s to do with his mana and his reputation in a region that he has made many promises to, to the point when in a formal meeting—not informal; a formal meeting—of PGF Ministers, when there was a question around reassurance, that Treasury was saying they don’t back this project that he was involved in, he participated in a decision that went his way.

So I believe that we do need to call this a decision, this process, into the clear light of day, and there needs to be accountability. People all over this country are recognising more and more and more that this Provincial Growth Fund is being misused at times. It’s doing a lot of good things. It’s doing a lot of good things, but at times it’s been misused for purposes which I think New Zealanders would be very upset about and disagree with.

That’s the point I wish to raise, and I thank you for the opportunity to bring these matters to the House.

Hon TRACEY MARTIN (Minister for Children): Kia ora, Madam Deputy Speaker. Thank you very much. So I think what we have seen in the contribution from the last member, Jonathan Young, and the contribution from Mr Falloon, is that, actually, this is not about the urgent debate topic that was put forward. What we have seen in the previous contributions from the two National Party members is an articulation of “We didn’t get some money, so how come Northland did?” What I find very interesting about the contribution particularly from Mr Falloon is that sitting next to him is Matt King, the member for Northland, who has just sat next to the gentleman who has argued that Northland, one of the most neglected areas in New Zealand, should not—should not—get any economic development funding. There is a suggestion that this is all because a member, a Minister, may or may not stand in a particular seat. That line was glided to very closely by Mr Falloon. He completely ignored, of course, that Tai Rāwhiti has had over close to $200 million worth of provincial growth funding. I do understand that Mr Falloon somehow is very sad that his area—his area—that he, obviously, advocates for has only received $8 million to date—to date. The whole of the Provincial Growth Fund is still running.

But let’s get back to—

DEPUTY SPEAKER: Yes, so the member now has taken a minute and a half debating things that she didn’t think should have been debated. So I would ask her to come to the topic on the floor.

Hon TRACEY MARTIN: So let’s get back to what, supposedly, this urgent debate is about, which is actually about the disclosure, the actual disclosure, by Minister Jones of a perceived conflict of interest. Let’s make sure we identify this correctly. There is no direct benefit to Mr Jones from the project that is being discussed—there is no direct benefit to Mr Jones from the project being discussed. There is a perceived conflict that he took advice on in October 2018 from the Cabinet Office, who said to him that there is not necessarily any perceived conflict just to know somebody, which—we all know lots of people in a small country around New Zealand. Just to know someone is not a perceived conflict. There is an error that has been repeated in this House by the Opposition: Mr Jones was never the chair of this particular organisation, and they should stop repeating incorrect information, because the Speaker has previously warned, only last week, about the ability to provide evidence, should one continue to make such statements.

Hon Gerry Brownlee: I raise a point of order, Madam Deputy Speaker. It was not the Opposition who made that allegation against Mr Jones. It was stated as a fact by the Rt Hon Winston Peters.

DEPUTY SPEAKER: In fairness, that is not a point of order; that is a debatable point, and I’m sure that the next speaker will take that up.

Hon TRACEY MARTIN: I think people should go and actually go and check the Hansard.

DEPUTY SPEAKER: That might apply to all of us.

Hon TRACEY MARTIN: Yes, that’s right. It applies to all of us. People should go and check the Hansard. So let’s get to the other process, then. So the Minister sought advice. He was told he didn’t need to actually declare any perceived conflict of interest, but because he knows that the Opposition is so incredibly jealous of the fact that there is a Provincial Growth Fund, and for the fact that it is incredibly popular and doing good things for New Zealand, he erred on the side of extreme caution. He erred on the side of extreme caution and declared. He not only declared; he removed himself by asking another Minister to sit in on the decision-making part of this process.

Let’s now come to the question that Mr Goldsmith put down in writing—and words matter. They’ve always mattered. The Opposition is manipulating the words continually around this particular issue for their own benefit. The question was: had the Minister gone to or attended any meetings on this specific project? Technically, Mr Jones did not attend any official meetings on this specific project. He attended a meeting of 16 projects with four other Ministers and did not take any part in the decision making on that particular project.

Now, these are the facts for New Zealanders to digest. They need to go and check the Hansard around the comments made by the Opposition and marry that with the reality of what went on here. A Minister, who is determined to grow—and there is a terrible undercurrent coming around any project funded by the Provincial Growth Fund for Māori in this country, and the people should go and check the Hansard around those comments. It would appear that if there are predominantly Māori in an area, the Opposition will object to there being any Provincial Growth Fund money spent.

MELISSA LEE (National): Thank you, Madam Deputy Speaker. I’d just like to take my stance against what Tracey Martin was actually saying. She was trying to correct something that doesn’t actually exist. It was the Rt Hon Winston Peters during the 2015, I believe, by-election of Northland, where he actually said and stated and campaigned, saying that Shane Jones was in fact the chair. So I would like to correct the member on that. I think she should go and check her facts.

Once again, we are in this House debating about the secrecy, the shambles, and the shoddy deals of the most, I quote, “open and transparent” Government in New Zealand history. This Government has claimed to be that, a pledge that they have actually given to New Zealanders, which lies in tatters. We thought that they may have learnt something from last year’s events. I’m reminded of those events that actually happened in this very House during oral questions that I personally had given to a Minister, a former broadcasting Minister, where she had failed to tell the truth. This Minister has also done similar things, where written questions were asked of him and he had declared that there was nothing to see here, and we find out today—well, I find out today—that we do have something to question him on.

The Minister should come to this House—and he is in the House—and should actually answer questions on why he was present at that meeting. He declared a conflict of interest. Actually, it was Grant Robertson who said that he was a little bit concerned about that. He was concerned about it so much that he actually got assurances from the honourable gentleman sitting at the back of the row, the Hon Shane Jones, and it was Shane Jones who actually gave the Minister of Finance the reassurance of this group. What would you call that, Madam Deputy Speaker? I’d call that influence.

DEPUTY SPEAKER: Don’t bring me into it.

MELISSA LEE: I’d call that influence. It was Shane Jones who reassured the Minister of Finance about this group. If it wasn’t about Mr Jones’ convincing the Minister of Finance, this group would not have been funded to the tune of millions of dollars, and we have a Minister who is responsible for hundreds of millions—actually, $3 billion.

The issue is particularly critical for the future in my own portfolio. I’m quite worried because this Minister is responsible for the regional digital hubs and the rural connectivity. I am really worried that this Minister will be getting into all of these meetings when he has actually declared a conflict of interest himself, identifying that he does have a conflict. I mean, he’s not a silly man. He’s a learned man who knows the difference between a conflict or not, I would guess—I hope. He laughs at the back of the room. If he has actually declared it, then he knows that there is a conflict.

There might be family members who are involved in this project. He should have removed himself from the meetings where the decisions were being made. Where the decisions are being made and where the discussions are actually happening, this Minister, having declared a conflict, should not be in the room, where he is actually influencing the other Ministers who are making the decision to give the group millions of dollars.

So, Mr Jones, I say that I think this Government is actually not very transparent, nor is it open, and this Minister certainly has not been open about his relationships. He should come clean about what kind of an influence he had and what kind of a role he played where the decision was made to fund this group. I certainly believe that there was influence. I certainly believe that he had a conflict of interest, and he should not have actually been in that room and convincing the Minister of Finance or giving reassurances to the Minister of the Finance that there was nothing to see there, because there certainly was. He himself declared the conflict.

KIRITAPU ALLAN (Labour): If there’s anything that just came through really clearly from Melissa Lee, the previous speaker, it was that she clearly had no grasp with the factual narrative, because if she had have, she would have realised that at the very first opportunity, the Minister colloquially known as the first citizen of the provinces made the declaration of a perceived conflict of interest at the earliest possible opportunity.

In 2014, the factual narrative goes—just to assist some of those members in the Opposition—that the Minister, who was at that point a Labour member of Parliament, met with the Manea group. Due to his gravitas, they approached him to be the chair, which he declined. Now, coming to 2017, he became the Minister responsible for the regional economic development fund. He was then presented with a proposal from Manea. He turned to the Cabinet Office for guidance. The first thing that the Minister did at that point was declare the perceived conflict of interest.

Now, I turn to the good practice guide that was published by the Controller and Auditor-General. Now, what they say is that “In a small country like ours, conflicts of interest in our working lives are natural and unavoidable.” A small country like ours—New Zealand. Not some other country; here in New Zealand. “The existence of a conflict of interest does not necessarily mean that someone has done something wrong, and it need not cause problems. It just needs to be identified and managed properly.”

So, what happened? What happened was that the Minister, the first citizen of the provinces—and as the junior citizen of the provinces, I’m very proud of the way that he managed that conflict—turned to the Cabinet Office. He made the declaration. He then informed and he gave off his vote to other Ministers—not even of his own party, might I add—and they managed that application.

Now, what is really interesting is that if you listened to the speeches from every person from the Opposition, including the person that called for this debate—who could barely make up his time when it came to giving his offerings, because he had to turn to saying how sad, mad, and bad it was that particular regions weren’t getting funding for their provinces. What is that? That’s got nothing to do with the Minister for Regional Economic Development. That has everything to do with the fact that the Opposition knows that the Provincial Growth Fund is having an immeasurable impact in the provinces and in the regions, so much so that the provinces are, rightly, saying that they were left behind for nine long years by the guys that they’d been voting for for so long. What are they doing? They are withdrawing their support, and your polls are showing it, absolutely.

So it’s a little bit rich, as well. We turn, and we listen to the Leader of the Opposition. Just yesterday, on Morning Report, he goes on and he says, “Oh, that Jones’ behaviour was serious and wrong.”, and then he goes on to say, “And, you know, Jones, he says, ‘Oh, it’s sweet as, bro. It’s sweet as, bro. We just go about and we just grant all the applications, because it’s sweet as, bro.’ ”.

What a horrible articulation of the way that the Hon Shane Jones conducts himself. I have never ever heard the Hon Shane Jones speak in that way, and I’m very disappointed to hear a Leader of the Opposition articulate our fine, articulate, Māori Minister in charge of the regional growth fund to be characterised in that way. That’s my first point.

My second point is that he said that it was serious and wrong that there is this egregious conflict of interest. Now, let’s turn to, I don’t know—in his time in Government, there was this little issue of a wee company called Oravida, and his other mate, who’s on—what is it? Six percent or 7 percent, is she riding at about now? Judith Collins. Now, there—

ASSISTANT SPEAKER (Poto Williams): Order! Order! Come back to the matter at hand. Thank you.

KIRITAPU ALLAN: Sure thing—sure thing. But I do think it’s rich that when we had these egregious actual conflicts of interest under the previous administration—when they need to, they bark at every passing car because they’re trying to get attention. This debate is, well, in the interests of justice, it’s fine—like let’s all have this constitutional dialogue. But the substance of the debate and the issues that are giving call to this debate are absolutely egregious, and I’m really proud to support our Minister for Regional Economic Development and the way that he’s conducted himself alongside the other Ministers responsible for the regional economic development fund.

ASSISTANT SPEAKER (Poto Williams): I didn’t realise this was a split call, but I guess it is.

Hon KRIS FAAFOI (Minister of Broadcasting, Communications and Digital Media): Thank you very much, Madam Assistant Speaker. It’s a very sad day when the Opposition gets a prime opportunity to debate an issue that is, obviously, making some headlines at the moment and really fluffs their lines, because that is what has happened. I’ve been watching this debate and it’s my pleasure to wrap proceedings up, because I can’t make head or tail of what the Opposition’s argument has been today. Is it that they love the Provincial Growth Fund—because I heard Andrew Falloon saying “Give us more. We love it—give us more.”, and then I heard another speaker call it a slush fund.

So it’s a sad and sorry day when the National Party can’t even get the basic—I don’t know what’s happening to the person putting their notes together, because they used to be disciplined. But the lack of key messaging that has come through in today’s debate really disappoints me, because the National Party used to be a party that was disciplined and right on message. But, today, when given the opportunity of a debate, I see them floundering. Paul Goldsmith made a decent first attempt, but, really, those after have really, really struggled.

I want to pay homage and respect to the Hon Shane Jones, someone who on both sides of the House has had great respect, because the previous Government saw fit to make the Hon Shane Jones a roving ambassador in the Pacific, with distinction around our fishing. So they saw the great talent of the man and the relationships that he could have and the value that could have to New Zealand. That’s why we saw the great potential in him in making sure that as Minister for Regional Economic Development, he could take the coalition agreement around the Provincial Growth Fund and do something with that and make sure that the nine years of neglect under the previous Government was actioned, to make sure that those people in those regions like Northland and like Tai Rāwhiti—could make sure that there was hope and opportunity for them.

So, back in 2014, when the Hon Shane Jones was a hard-working Labour member of Parliament, he visited this outfit, the Manea trust, who were advocating, obviously, for the project that they had, and Mr Jones wrote to the Ministry of Business, Innovation and Employment, saying, “Hey, look, this is a really worthy project. We should look into it.” Now, when, in November 2017, Mr Jones became the Minister for Regional Economic Development, having already had a relationship with the trust, he said, “Hey folks, because of this, I’m going to step back.”, and he declared a conflict of interest perceived.

Now, as my colleague Kiri Allan has pointed out, there are different conflicts of interest. In this case, because Mr Jones had actually been to this outfit before, had seen the merit of it, and had said, “We should take this and do something with it.”, he said, “Because I’m a decision maker in the Provincial Growth Fund process, I’m going to recuse myself from being in this decision-making process, and I’ll remove myself.”—which is absolutely the right thing to do—after he got some advice.

Now, the Opposition has been “barking at cars” around what Mr Jones has reportedly done or not done, and I think he has already said himself that maybe it could have been a little tidier if he had recused himself from a specific meeting that wasn’t specifically about the Manea trust but was a broader Provincial Growth Fund meeting. So in the big scheme of things, knowing someone, having engaged with them five years ago, and then declaring a conflict of interest perceived after getting advice from the Cabinet Office isn’t the big drama that the Opposition would lead people to believe. I think once people figure out the facts of that case, they realise that this is actually nothing about nothing—which brings me to my final point.

My final point is that the Leader of the Opposition himself was on Morning Report, I think either today or yesterday morning, when he said, “Oh, look, we don’t want to be barking at every car.”, and that’s the problem with this: they are. It’s not getting any resonance because this issue is a big pile of nothing.

Hon Gerry Brownlee: Then stop talking about it.

Hon KRIS FAAFOI: Well, I’m quite happy to take up the next 45 seconds, Mr Brownlee. So the Leader of the Opposition can continue to bark at cars. His colleagues know that that barking at cars isn’t giving them the resonance that they need out there in the public, and, certainly, this issue isn’t going to be the big game-changer that they know they need—the big game-changer that happens to be the person that is sitting in that seat.

The debate having concluded, the motion lapsed.

Bills

Appropriation (2017/18 Confirmation and Validation) Bill

First Reading

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Appropriation (2017/18 Confirmation and Validation) Bill be now read a first time.

A party vote was called for on the question, That the Appropriation (2017/18 Confirmation and Validation) 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.

Points of Order

Leave for Setting Down as Government Order of the Day No. 2—Psychoactive Substances (Increasing Penalty for Supply and Distribution) Amendment Bill

Hon PAULA BENNETT (Deputy Leader—National): I raise a point of order, Madam Speaker. I seek the leave of the House for the Psychoactive Substances (Increasing Penalty for Supply and Distribution) Amendment Bill in the name of Simeon Brown to be set down for third reading as Government order of the day No. 2.

ASSISTANT SPEAKER (Poto Williams): Leave is sought for that purpose. Is there any objection? Unfortunately, leave is not granted for that purpose.

Bills

Misuse of Drugs Amendment Bill

First Reading

Hon Dr DAVID CLARK (Minister of Health): I move, That the Misuse of Drugs Amendment Bill be now read a first time. I nominate the Health Committee to consider the bill. At the appropriate time, I will move that the committee report the bill back to the House by 22 July 2019.

The bill amends the Misuse of Drugs Act 1975. The use of synthetic drugs is a major public health problem. Since June 2017, there has been a total of 50 to 55 deaths provisionally linked to the use of two dangerous synthetic drugs, 5F-ADB and AMB-FUBINACA. To address this problem, we need a public health response that focuses on prevention, harm reduction, and early intervention.

This bill makes three key changes. It will classify AMB-FUBINACA and 5F-ADB as class A drugs. It will reaffirm the existing police discretion and specify that when considering whether a prosecution is required in the public interest for drug possession and use, consideration should be given to whether a therapeutic approach would be more beneficial. This discretion exists for all drug offences. It will enable temporary drug class orders to be issued to better control emerging and potentially harmful substances.

This bill provides immediate measures to reduce the supply of drugs in New Zealand right now. Classification of AMB-FUBINACA and 5F-ADB gives police and customs greater search and seizure powers, meaning that they will be better able to disrupt supply and reduce the availability of these drugs to people who use them. Police already use their discretion when deciding whether to prosecute for personal possession and use drug offences. The bill reaffirms this approach, which is consistent with current operational policy and is supported by the police.

This amendment aligns with the Government’s intent to treat drug use as a health issue and help people stop their drug use. The synthetic drug market is rapidly evolving, with new drugs constantly emerging. Temporary drug class orders mean that we will be able to respond more appropriately and more quickly to potentially harmful new synthetic drugs. Temporary class drug orders are substantially similar to a previous provision, the temporary class drug notices, which operated well for several years prior to the passing of the Psychoactive Substances Act.

The bill will ensure that enforcement powers and penalties are focused on those who import, manufacture, and supply dangerous drugs, and not the people who use the drugs themselves. We want to make sure that those who are in the web of addiction are supported to give up the drugs that they are dependent upon. The report of the Government Inquiry into Mental Health and Addiction has recommended reforming drug policy and laws with a focus on minimising harm and promoting health while increasing addiction services. Our response is consistent with these recommendations, ensuring that people aren’t unnecessarily criminalised for using drugs and instead can access the health and social support services that they need. We’ve seen too many drug-related deaths and hospitalisations over the last few years. Action is needed to prevent and reduce further drug-related harm.

In closing, I want to thank Jenny Marcroft and Darroch Ball, the respective health and justice spokespersons for New Zealand First, and Chlöe Swarbrick, spokesperson on drug law reform for the Green Party of Aotearoa New Zealand. They’ve been highly willing and constructive contributors to this bill, and the bill is consistent with both of their parties’ coalition and confidence and supply agreements with the Labour Party of New Zealand.

This bill is important as we tackle drugs which have caused deaths and harm in our community. It is a response that we need to progress urgently but also thoroughly to ensure that the war on drugs approach, which has failed our communities and seen too many die, is not allowed to continue, and that instead we continue with an approach that gets tough on the suppliers of these drugs and puts them in face of the full force of the law but also treats compassionately those who are caught in the web of addiction to ensure they are given the support they need to beat the drugs that are bringing them down. I commend this bill to the House.

Hon PAULA BENNETT (Deputy Leader—National): Thank you for the opportunity to take a call on this bill. Finally, we’re getting into changing the classification of two drugs in particular around synthetics, which I’m sure everybody in this House will agree is an absolute scourge on our society and it’s time it was done.

I noted that the Minister talked about urgency. It’s a shame that, actually, they did block the third reading of Simeon Brown’s bill, because that would have actually made that happen today. So if that had gone through—

Darroch Ball: No he didn’t.

Hon PAULA BENNETT: Well, we took a point of order, Mr Ball, and we actually did call out for that third reading to happen today, and it was voted down by the Government. But if you’d like us to put it again, Mr Ball, we would really like to, because that would mean that it would be in straight away, and that’s important, because if we are talking urgency, we wouldn’t need to wait for that to go through yet another select committee process and go through a discussion. I think there would be immediate agreement in this House that those two drugs in particular should be made class A. We should be increasing the penalties that go alongside of that for those that are supplying this sick drug, quite frankly, that is killing our young people and others that are in a really desperate state to be taking something that’s so insidious and dangerous.

So we support that part of it—there’s no two ways about it. Twelve months is too slow. So we’re 18 months in; 12 months ago, they talked about making these changes. We now have to wait about another six to eight months for it to go through the House process. As I say, it’s a real shame that that third reading of the bill couldn’t come in. We’ll be bringing that in via Simeon Brown’s bill. It’s already been through the process, and I hope that it does.

I would also like to agree with the temporary drug class orders. So there are different drugs coming on the market all the time. Unfortunately, our suppliers and manufacturers make so much money out of it that they are finding different ways to actually manufacture it and use different chemicals. As such, I think it makes sense that you can have a temporary order that can come in, and, as a consequence, that means—it’s for 12 months, is the way I read the bill—that while they work through the process as to whether or not it should go into the system and be made a regulation completely, immediately the police can react to it. Also, I reckon it might help with some of those health aspects of it—that by identifying it legally and through the system as a temporary class, it also means it might help those medical practitioners that are dealing with people.

Now, I come to what I want to spend the bulk of my few minutes talking about and the bit that I have some issue with. It is important that we get the kind of actual wording of this right. But the Minister talked about the measures that are being introduced to address the harm being caused by synthetics, and addressing the other requires a health-based response rather than a punitive one so that people can access the health and social support services that they need. The actual wording for the bill is, from Part 1, clause 6, new section 5, “To avoid doubt, it is affirmed that there is a discretion to prosecute for an offence against this section, and a prosecution should not be brought unless it is required in the public interest.” So a prosecution should not be brought for those that are supposedly either addicted or just taking all classes of drugs. And that’s a big call, right? That is different than what the police currently do. In some respects, it might be all right as far as a health—it might be, actually.

So this is decriminalisation, in effect—this is decriminalisation. Let’s go through this. So, effectively, now, in law—so, actually, this is not normal, for this to be in law. Normally, the way that the police operate is not ever written in legislation like this, and particularly police having discretion around certain areas is not written in legislation like this. So this is completely different, right? Let’s not underestimate how different this is.

Greg O’Connor: Anti-smacking bill—got through because of John Key.

Hon PAULA BENNETT: This is different, and it’s in the same actual part of the Act as the anti-smacking. So that’s about what it is like, and it’s very rare, and it is not usual, and it means that Parliament is now instructing the police as to how they want them to act. And that’s all right. That might be where we end up—it might be where we end up, but decriminalisation of drugs is huge, and we’re talking all drugs.

Let me give you some examples of what that actually means. So in Portugal, for example—as many in this House will know—they actually decriminalised all drugs and have gone for a 100 percent health response. You know what, depending on which bit of evidence you want to read and which way you want to do your argument, there’s evidence for all sorts of different stuff, but for some, you’ve got to say, it’s working. What they have done, though—let’s be really careful—is they took eight years to bring that in—eight years. So they went through an eight-year process of making sure that they asked the right questions, had the right services.

They have set up what they call their panels throughout—sorry, they don’t call them panels, but they’ve got the whole treatment model, and what they have there is a referral that goes from police to those panels. It’s compulsory that people go to them. At that panel are three health experts that genuinely sit down with the person and look at their health needs and what they can do to help them, and whether or not it’s a one-off recreational or whether or not it is someone that has got a true addiction. They then make sure and back up that the right services are there for them over a two-year period as a minimum. We’re not proposing that.

We are proposing that a front-line police officer looks at someone who is either taking P or taking marijuana and decides whether or not they have an addiction problem or that this is a one or two - off recreational, whether or not they need full health assistance—they then might suggest them to them. There is not the back-up to make sure. Well, I don’t know what the regime is that is being proposed. It is a sentence in a bill that is absolutely important. We are talking about health and addiction and, actually, we do all care about that. All of us have actually had examples and extended friends and family and people we love who have been hooked on insidious drugs that have destroyed lives, but you can’t do it by putting a sentence in a piece of legislation that the country doesn’t understand, that hasn’t got health professionals actually making a call on, and that is putting more strain on our police officers in an area that they are not experts in.

So if decriminalisation is what the Government thinks this country should be heading down the path of, well, let’s talk about it. Let’s make sure we don’t put $16.6 million in; let’s make sure we put $100 million in, because that’s what it will take to actually even start to get to the length of care that some people are going to need when they’re hooked on this stuff. Let’s actually debate the real—because this, in my mind, could be more dangerous. This could actually see people not going up in front of the right experts and getting the right help.

In Portugal, for example, there’s a certain amount that you can be carrying that means that police will not prosecute you because that’s personal use. What is the amount? So what’s the difference between someone that is supplying—and is manufacturing and supplying—and someone that is carrying for personal use? So we don’t have that kind of detail or anything in it. Actually, that is really important. It is really important. So where are the differences if you are going down a whole other regime of how we treat this?

As I say, I’m not against it and I think there is something in it for a health response, but it cannot be done by stealth. It cannot be done by two sentences in a health bill that is going through that is raising synthetics. The country deserves more. Our health people and our health experts deserve more, and certainly those people that are caught in addiction deserve more as well.

How are we going to get the police now making the kinds of calls on “A bit of heroin’s OK on you, but I’m carrying a bit and I think you might be supplying it to someone else.”? So that police officer will now make that kind of call, but they’re not sure because they’re put in such a very rare occurrence, having Parliament actually putting it in legislation. If we are, then let’s put up health panels. Let’s make sure we’re putting in the absolute tens of millions of dollars that are needed to provide the kinds of services that people will need, and it’s in that vein that I just can’t support this bill and the National Party won’t be.

CHLÖE SWARBRICK (Green): E Te Māngai, tēnā koe. Tēnā koutou e Te Whare. I hope that I can address some of the concerns raised by the Hon Paula Bennett in my contribution to supporting this Misuse of Drugs Amendment Bill. This Act is over 40 years old and it requires, quite frankly, a complete overhaul, which is something that I think both myself and Ms Bennett can agree with, because instead of reducing drug harm, what we’ve actually seen is a colossal increase in it.

I didn’t come to Parliament to advocate for drug law reform. To be honest, it wasn’t even really on my radar. I came in here to advocate for constitutional reform, because I was passionate about that. But then the Greens helped to form the Government, Julie Anne Genter became a Minister, and, as a backbench MP, I inherited her medicinal cannabis misuse of drugs amendment member’s bill. I began digging into the detail and the lives and stories of those who were affected by the Misuse of Drugs Act. I found that some people are prosecuted and other people aren’t. I found that different police use different criteria to decide to use their discretion. I found that different people use different drugs for different reasons. And I found that the war on drugs is disproportionately a war on the poor. Imprisoning drug users to bring about sobriety is like bombing for peace. It does not work. In fact, it actually makes things far worse; it causes irreparable generational damage.

I continued my research down the rabbit hole and learned about countries like Portugal, raised by Ms Bennett, which, 20 years ago, removed criminal penalties for the use and possession of drugs in response to a spate of heroin deaths. All negative statistics associated with drugs—overdose deaths, hospital admissions, problematic use, substance dependency, even youth usage—have gone down as a result. More than 50 people died in Aotearoa New Zealand as a result of using synthetic drugs last year. They were among the poorest and most vulnerable in our society. I spoke to those who work in housing the homeless and they estimated that this death toll is just the tip of the iceberg. In the meantime, politicians have bickered about going hard on drugs.

I participated in the debate because I felt like I knew the research and the evidence, and I knew that the Greens had an alternative rational solution for drug law reform that could save lives. And then Tyrone died. Tyrone Smith was an artist. He created a cartoon series called Happy Space, with characters like Peng Peng, the penguin strapped in a spacesuit and a jetpack that I have worn on my lapel for the past few months in Tyrone’s memory.

The coroner deemed Tyrone’s cause of death as pneumonia and pharmaceutical drug toxicity. He was 49 years old. He left behind a loving partner, friends, and whānau. We sung “Anchor Me” at his funeral. Tyrone used to joke to his siblings that all of his ducks had lined up. He didn’t mean what most people do when they say that. He had three ducks that he often spoke about: a problematic birth; dyslexia, meaning he found it difficult to engage in school and get his qualifications; and his dad’s death when he was 11 years old.

Tyrone first tried drugs—cannabis to begin with—at the age of 15. He said he liked the way it made him feel numb. He said it took away the pain. So he looked for harder drugs. Tyrone went through rehab after rehab. He was lucky and had unconditional love from his family, but the broken system and the stigma our society upholds with the mantra of this war on drugs saw Tyrone slip through the net, and as a result he left us too early. Tyrone’s story is not an anomaly. I want to thank him and his family for allowing me to tell it. This bill is for Tyrone and for other substance-dependent people and their whānau who don’t know where or who to turn to for help and cannot navigate a system that demonises and ostracises and doesn’t want to touch them.

Politicians have said for years and years and years that we have got to be hard on drugs. But what on earth does that mean, because what we have seen is more drugs and greater harm proliferation throughout communities across this country and, indeed, across the world. What we have seen is people die. What we have seen is our prisons clog up. And what we have seen is good money thrown after bad and the situation getting worse. What we’ve seen is that this hard on drugs line is nothing but a nice piece of virtue signalling. But worse than signalling virtue, worse than doing nothing, this moral posturing has cost lives and communities and generations of whānau and their well-being.

Yesterday, I was in Northland speaking to police and the district health board officials involved Te Ara Oranga. In conversation, we really tried to drill down into the reasons why decent but often downtrodden people get involved in drug dealing. It turns out, basically, that a lot of the time the gangs are offering our kids better prospects than we are. Put yourself in the shoes of rangatahi in a regional town that’s been ravaged by the retreat of economic opportunity. Maybe there’s been some trouble at home. Your future offers a fork in the road. On the one side you can grind, you can get a minimum-wage job, and try and scrape together enough to build a life. That is indeed the admirable path, and one that many take. But the other path is offered by the guys in cool clothes who ride up and down the street on flash motorcycles. They tell you that you can make money like they do, they recognise them, they’ll give you a place to belong, and they offer what feels like winning the lottery. Gangs are offering our kids a greater and more meaningful future than we often are.

Drugs aren’t just a justice issue; drugs are a social issue, they’re an education issue, they are a mental health issue, they are a housing issue, and they are a well-being issue. We know that police are using their discretion at the moment when they’re choosing whether or not to prosecute people who they find using drugs. Indeed, when they are choosing whether to prosecute those people dealing in small amounts at the bottom of the pyramid scheme designed to trap them, they choose not to. We can continue to shadow-box at the bottom of that supply chain for ever, but it won’t make a dent in supply or demand, and we know that because the evidence proves it. Our failure over the last 40 years proves it.

So we can demonise and alienate people like Tyrone, threatening them with a prison sentence or pushing them into so-called therapy that asks “What’s wrong with you?” instead of “What happened to you?” We can watch that system fail time and again and we can watch people die. We will not address the drug crisis until we address trauma, isolation, inequality, opportunity, health, and education outcomes. We can stand here in this fancy Chamber and fight with words because it is far removed from the reality of drug-ravaged communities and it is far removed from the victims of the war on drugs and their funerals through addiction that didn’t receive treatment, or gang violence that spreads like a virus when control is left to the black market.

This bill represents a tangible change that will save lives through taking prosecution out of guesswork and creating a formal structure around it. It focuses our resources at the top of the supply chain, where substances come across our borders and cruel, greedy people make money off the lives of our poor and vulnerable. It will focus resources on treatment for people who use drugs and recognise that they are people. But we need to go further, because, as has been raised already by the deputy leader of National, the Misuse of Drugs Act is broken. We can to continue with these carve-outs for things like medicinal cannabis, for the synthetics crisis, for festival drug testing, but we all know that it is broken and it will take a lot more to address any of this.

Finally, I want to just correct the record, because none of this—none of what I have said—is pro-drugs, because if it is the outcome of our respective approaches that is the measure of the terminology with which they are dubbed, then the war on drugs as a result of its outcomes is the biggest pro-drugs movement we have ever seen. The Greens and I are on the side of compassion. We are on the side of evidence-based drug harm reduction. We are on the side of well-being. I commend this bill to this House.

Hon MICHAEL WOODHOUSE (National): Thank you, Madam Assistant Speaker. It’s a pleasure to take a call in this reasonably passionate debate, and I certainly cannot fault Chlöe Swarbrick for her passion; but, equally, exactly the same speech, and word for word that speech, could have been given in opposition to this bill, not in support of it, because she criticises parties that promote some kind of tough on crime, virtue signalling rhetoric, and then supports a bill that does exactly that—that purports to get tough on crime. If the Minister of Justice would recall his interventions in the committee of the whole House, I think it was, or the second reading of my colleague Simeon Brown’s member’s bill, that does, effectively, a much better job at achieving the policy goals than this bill does, by taking the reality that all psychoactive substances are unlawful until they are licensed and made lawful, and then increasing the penalties to—I think, after it came out of committee—14 years. That’s tough on crime. That’s the same kind of approach as the Government is now taking.

But, despite that, the Minister of Justice stood in this House and said that that was a fundamentally flawed approach and that it should not be wasting the House’s time with it, and now we have the Government doing exactly the same thing, only slower. It’s going to take much, much longer to deploy the changes in the licensing arrangements and in the making unlawful, under the Misuse of Drugs Act, the sorts of new drugs that we know are going to come into the country once these derivatives become unlawful. So we will constantly chase our tails, whereas Mr Brown’s approach was to start from the presumption that those substances are unlawful and make the supply of them a very serious offence.

Now, I fear there’s a pattern emerging here, where the Minister of Health comes down with grand ideas but very little detail. That was certainly the case in the Misuse of Drugs (Medicinal Cannabis) Amendment Bill, when my colleague Dr Shane Reti came in with a vastly improved regime—the Misuse of Drugs (Medicinal Cannabis) Amendment Bill (No 2), it was. Indeed, that happened after the Government’s bill. Now the Government is coming in after another member’s bill—Simeon Brown’s bill—and is doing the same thing: taking a good bill and making it poorer. We could live with that. We could live with their approach if it wasn’t for the second part of this bill. This is the area where I have a considerable concern about the calls by Ms Swarbrick to have these conversations and to treat it as a health issue and to somehow decriminalise these substances in the minds of the user, and yet that’s exactly what we’re doing here. By a de facto process, we are instructing the police, in law, not to prosecute.

Now, this is a really interesting use of language, because the explanatory note and the words in the bill are quite heavily mismatched. The explanatory note talks about discretion and talks about the inconsequential nature of the offence as if it were the same as section 59(4) of the Crimes Act. Indeed, it’s not, because when we get to the actual words in clause 6 of the bill, there is no discretion. The words are very clear: “a prosecution should not be brought unless it is required in the public interest.”, and the public interest is not served if consideration “should be given to whether a health-centred or therapeutic approach would be more beneficial.” It would be hard to find a particular user of illicit substances that would not in some way benefit from a therapeutic approach or a health-centred approach.

There’s no reference here to recidivism, to the seriousness of the crime, to the fact that there may be other crimes committed around the possession offence—perhaps burglaries, perhaps disorderly conduct. I can’t imagine the police being confined to not prosecute here, but then going to much more minor offences and taking them before the courts. It seems absolutely ludicrous that they would now be forced by law to cherry-pick from a basket of offences that includes possession but not prosecute the possession. That just shows what a complete dog’s breakfast this is.

The Hon Paula Bennett talked about the fact that Portugal, which was mentioned by both her and Ms Swarbrick, took eight years to get to this point; it sounds and feels like the Minister of Health has taken eight minutes to get this point: “Let’s just apply discretion. They should not prosecute.”—as if that’s going to be the salve for all drug possession ills. A defence counsel worth their salt will drive a bus through every single Misuse of Drugs Act possession offence from now until doomsday, once this bill is passed into law. It will be simply impossible to say, for any other relevant matters, if consideration should have been given to whether a health approach should apply.

There is no diversion here. There is no requirement for that person to actually be sent to a therapeutic community or a health-centred approach or an addiction service—no reference to that—and the Prime Minister admitted today that there were going to be no more resources put into the health system as a consequence of this bill when it’s passed. So a heavily, heavily, under stress health sector is not going to be able to respond to drug possession referrals that don’t go before the courts but go before the health service. So we simply don’t prosecute. We are in a legal and policy limbo as a consequence of this very lazy piece of legislation.

I still don’t know now why on earth we’re having a referendum next year on the possession and use of marijuana, because with one fell swoop the Government is decriminalising that. We’re going to go through a whole charade, frankly, of trying to work out words in a referendum that is functionally obsolete once this bill is passed. What a waste of time—what a big load of virtue-signalling nonsense. Let’s have the conversation that Chlöe Swarbrick wants to have—that’s not what’s happening here. It’s as if we’ve had it and it’s all over, and that is a great shame.

DARROCH BALL (NZ First): It’s not surprising that the member who has just resumed his seat, Michael Woodhouse, didn’t take his full 10-minute call. He didn’t make it to the bell at eight minutes. What’s not surprising, unfortunately, is that every time that I stand up in this House on bills such as this and the likes of this, the first thing I say is that it’s quite obvious that the National Party are playing politics with this, and that is obvious for anyone that has been watching Simeon Brown’s bill go through the House and the speeches from the National Party on why everyone should be supporting Simeon Brown’s bill. And now they turn around and say they’re not going to support this bill.

Why? Well, there’s a choice that we’ve got here. Right now, the Government is putting a choice for the National Party. Does the National Party want the status quo or do they want change? Do they stand by what they have said over the last few weeks about how these psychoactive substances are such a scourge on society, or do they not? It’s been made quite clear in the first couple of speeches that it’s the latter. It’s unfortunate that if it’s not the latter, then they’re playing politics. They should have a look in the mirror. [Interruption]

I just had a comment from one of the backbenchers, I believe, from the National Party, and a couple of members who previously spoke from the National Party actually said it as well. They said that this Government didn’t accept the third reading and we should’ve gone through a third reading of Simeon Brown’s bill. Then the question is: why did Simeon Brown postpone the third reading of his bill in the first place? If that’s not the definition of playing politics, I don’t know what is. Then they stand up here and accuse this side of the House of virtue signalling, when they’re the ones that are doing the very thing. They’re the ones that are doing the very thing.

Before I go into the detail of what this bill actually does, what it will achieve, I want to address a couple of the things that previous speakers have said. It’s quite clear that Michael Woodhouse doesn’t know—

ASSISTANT SPEAKER (Poto Williams): Refer to the member with the member’s full name and title, please. Thank you.

DARROCH BALL: The Hon Michael Woodhouse doesn’t know what he’s talking about in regards to the current legislation and his own colleague’s member’s bill. He said that Simeon Brown’s bill makes it a presumption that they—“they” being the psychoactive substances—are initially illegal until they’re proven so. That’s exactly what the Psychoactive Substances Act does now—that’s what it does now. Let’s get this straight: there’s only one thing that Simeon Brown’s bill did. It changed one number. It went from two years, as a maximum sentence, to eight years.

Hon Michael Woodhouse: It went to 14 in the end, didn’t it?

DARROCH BALL: And why did it go to 14, Mr Woodhouse?

ASSISTANT SPEAKER (Poto Williams): Order! Order! Can I just ask the member—we’ve traversed Mr Brown’s bill quite well, and I understand the arguments. However—

DARROCH BALL: No, this is essential to this argument, Madam Assistant Speaker.

ASSISTANT SPEAKER (Poto Williams): Excuse me, Mr Ball. You will not answer me back when I am making a ruling. I am asking you to return to the first reading of this bill. You’ve made sufficient arguments as to the difference between this bill and Mr Brown’s bill—

DARROCH BALL: This is—Madam, Assistant Speaker—

ASSISTANT SPEAKER (Poto Williams): No, I am not asking—

DARROCH BALL: I raise a point of order, Madam Speaker. This is essential information of the pathway of why this bill was in this House in the first place, and the entire premise of—

ASSISTANT SPEAKER (Poto Williams): That is a debate. That has been a matter for debate, thank you, and I’ll ask you to return to—

Chris Bishop: Oh, so Simeon prompted it?

ASSISTANT SPEAKER (Poto Williams): Order! Order! I am making a ruling. We’ll settle down. This is an important piece of legislation. I’ll ask Darroch Ball to continue with his call.

DARROCH BALL: Thank you, Madam Assistant Speaker. I would like to reiterate a few of the key points that this bill does achieve, and will achieve, once it’s passed through this House. It does, as some of the National Party members have mentioned, take two of the most deadly strains that have killed upwards of 60 people in our country, and put them into class A. It does it for a couple of very good reasons—which are not achieved in the current legislation, and would not be achieved if any other legislation, or changes to legislation, were put through.

First and foremost, it takes the maximum sentence for the dealers and suppliers to life in prison. How on earth the National Party—who are beating their chests about being tough on crime, and especially these drug dealers and manufacturers; just like the speeches on their colleague’s member’s bill—don’t want to come down hard on crime with it, I don’t know. I don’t know why they’re not supporting this bill. It takes two of those most deadly, and puts them into the Misuse of Drugs Act as class A. What that also does—and it is the reasoning and the logic behind why this Government wants to put them into the Misuse of Drugs Act—is it gives powers and resources to the police and the judicial system. It gives the police the ability to search and to surveil those who they suspect are dealing, and the manufacturers of this deadly poison. That is not occurring in the status quo, and that would not occur under their member’s bill. It is as simple as that. So, in turn, what the bill does is it actually gives the police the ability to stop the drugs getting on to the streets and into the hands of vulnerable people in the first instance. That is a key factor to this legislation.

We also are creating a temporary classification of class C1, which is, by the way, also a maximum of up to eight years in prison, which is equivalent to what Simeon Brown’s bill was doing. I, for the life of me, do not understand why the National Party is not supporting this bill. Now, one key point that it sounds like the National Party is going to harp on about for the rest of the passage of this bill is this ridiculous notion that this is semi-decriminalisation. If it is anywhere near decriminalisation, then how on earth do the police still have the power to prosecute?

Hon Michael Woodhouse: They don’t. Read the bill.

DARROCH BALL: The police have the discretion.

Hon Michael Woodhouse: It’s not discretion.

DARROCH BALL: The police have the discretion that they use now, and that’s another key point. The National Party think, or they’re spouting and trying to convince the public, that this legislation is bringing this brand new concept that the police are going to start using discretion and putting down a health pathway, and there’s not the possibility of prosecution, like they don’t do it already—like they don’t do it already. Those members over there know that. They’re experienced enough to know that. They were in Government when the police were doing exactly the same thing. The police want this in legislation to remove any doubt as to what their role is—because it is solidifying in legislation what the police already do.

Now, that says one of two things: one, like I said before, the National Party are playing politics with this; or, two, they don’t listen to the police. They don’t know what the police want, because police want the certainty in legislation of what they are already practising—what they are already practising. This is about giving the police what they want, which is certainty in legislation—certainty in legislation.

The important note under this topic is the fact that under current laws, synthetics and other dangerous drugs are killing people. They’re fuelling crime and devastating our communities. The status quo would not solve that problem, nor would Simeon Brown’s bill.

There was a question asked by the Hon Paula Bennett about how a police officer would know who was dealing, and who was supplying, and who was using—where would that limit be? It’s in legislation already—it’s in the Misuse of Drugs Act already. The irony of it all is that the current legislation, the Psychoactive Substances Act, doesn’t have the limits. So the argument that Paula Bennett is making is moot. She’s actually arguing against the status quo, because the police have no idea and no measurement whatsoever on who’s using, and who’s supplying, and who’s dealing in regards to quantity. Bringing it into the Misuse of Drugs Act gives that certainty to the police.

I am disappointed and a little bit surprised, to be honest, that the National Party isn’t supporting this bill. By the sounds of it from the two speeches that have already gone through, they are in support of the vast majority of the bill and they only have a question around one sentence in the bill, or one piece of the bill that they believe is ambiguous. If that was the case and if they stand behind what they’ve been pounding on about, about psychoactive drugs and the scourge that they are in society, they’d take it through to select committee. I challenge any member that’s going to stand up today in this first reading to give a clear answer about why that’s not going to occur—why the National Party won’t take it through to select committee to debate it, to listen to the experts, to listen to those who have been affected by this, to listen to the families. Come up with a straight answer.

New Zealand First will continue to support this bill, and we’re happy to support this bill, because it’s a bill that not only targets the dealers and manufacturers of this poison but also brings some certainty into legislation about the role of the police and how we can treat those who are affected by this poison differently. Thank you, Madam Assistant Speaker.

Hon MARK MITCHELL (National—Rodney): Thank you, Madam Assistant Speaker. It’s a pleasure to stand and take a call on this, the Misuse of Drugs Amendment Bill. If I could just start by debunking a myth—and I want to acknowledge the Green Party member Chlöe Swarbrick. She made a genuinely passionate speech in this House about the bill, but there are a couple of things that she raised. The first one: when we talk about the failure of the war on drugs—I just don’t accept that. The war on drugs is tough and it was here last decade, the decade before, and the decade before that, and we’ll be continuing to deal with the issues that harmful substances and drugs bring to our communities. It’s something that is not going to go away overnight. That is a fact. It’s not a war that’s been lost; it’s an ongoing war. It’s difficult, it’s hard; it doesn’t mean we throw up our hands and say, “It’s too difficult. We’re just going to turn this into a health issue now.”

Of 9,000, or 10,000, there’s about 25 people in our prison system at the moment that are there, predominantly, because they have been caught with class A drugs for personal use. So the amount of people languishing in our prison service—because we keep hearing from the Government that this is a big driver of the legislation, and the changes that are being made relate to people languishing in our prison system because they’re being captured for personal use of drugs—just does not stack up. The facts do not support that. It is not true. The fact of the matter is most people are in our prisons because they’ve committed violent offences, they’ve committed property-related offences, they’ve committed multiple offences with, normally, a long line of victims lining up behind them. It’s true: a lot of that offending is created through drug use. The use of drugs—methamphetamine, especially—you could probably tie back into a lot of the violent-type offending that we’ve seen in our communities in New Zealand at the moment.

This bill makes such a fundamental change. I hope that the last speaker, Darroch Ball, because I think that he is genuine about wanting to make sure that New Zealand is a safer place and that we don’t actually introduce more harm into our communities, really looks and really studies this bill, because the funny thing is that 90 percent of the bill—actually, the bill is pretty good when you’re dealing with psychoactive substances, without a doubt. We’ve seen way too much harm, we’ve seen way too many deaths, and actually it sends a positive message that I think the whole Parliament would support in terms of we’re going to get harder on dealers, the manufacturers, organised crime, the gangs, the ones that are peddling this stuff. They’ll look at that and they’ll say, “Yeah, OK. Parliament’s getting tougher.” You know, they’ll note that.

But the one thing they’ll really note—do you want to know they’re really going to have a look at? They’re going to have a look at clause 6 and they’re going to say, “Right, our customer base—what does it mean for the people that are actually buying the drugs off us?” What it means, if this bill passes, is this Government is going to send a very clear message that it’s going to be much harder for our front-line police officers to be able to arrest someone that is using or in possession of a class A drug.

Fundamentally, as a country, we’ve said that methamphetamine, cocaine, heroin, and loose-leaf cannabis are actually harmful. We don’t want people taking them. We don’t want people using them, so we’ve made laws to send a very clear message to us as a country. And you know what? For most law-abiding citizens, most law-abiding Kiwis, that’s enough. Just being told by our Government, by our Parliament, by our country that they’re dangerous and you shouldn’t take them—that’s enough. But what we are starting to say here, what we’re starting to say in this bill, is that, actually, the threshold now that the police have to reach is much higher.

Let me read new section 7(5) in clause 6 again: “To avoid doubt, it is affirmed that there is a discretion to prosecute for an offence against this section”. The police have always had discretion, right? To say that you need to standardise that, that’s a stupid proposition, and I’m sure that I’d get agreement from my colleague on the other side. When I was policing in central Auckland, I used a very different type of policing style to when I was policing in Ruatōria on the East Coast in New Zealand. Those powers of discretion will be used in a different way. To try to say you need some ridiculous statement about standardising those through legislation, that’s the stupidest thing I’ve heard in a long, long time. You cannot do it. Every district commander around this country will have their own plan and they’ll be dealing with their own issues that relate directly to that area that they’re policing.

It says that a “prosecution should not be brought unless it is required within the public interest.” It says that it should not be brought. Then it goes on to say, “(6) When considering whether a prosecution is required in the public interest, in addition to any other relevant matters, consideration should be given to whether a health-centred or therapeutic approach would be more beneficial.”

So let’s think about that. I can’t think, in my own 14 years—actually, I’d go broader and say 20 years—in law enforcement, both here in New Zealand and overseas, of ever having dealt with one case of drug use where a health-based or therapeutic approach would not be beneficial. It’s ridiculous. So what are the defence lawyers in New Zealand going to see? They are going to see that this Government here has just given them a free licence. You’ve just handed them a ticket to get it into court, to defend the case, and say, “Actually, officer A and officer B, they didn’t consider a health-based or therapeutic approach for our client.”

This is setting the bar so high now, in terms of a front-line police officer being able to take action and use their powers of arrest that we’ve given them, that I believe, and I think this will happen, that it’s going to become tougher and tougher for them to deal with these cases on the front line. What the dealers are going to say, what the people that are manufacturing are going to say to their clients, their customers—the ones that they want addicted to their product—is, “Don’t worry about it, guys. The Parliament’s just given you a free ticket. They’ve set the bar much higher now for you to be arrested and charged with possession of a class A drug, with methamphetamine.”

That’s what we’re saying. That’s what we’re doing. And if we’re not, then I’d like someone to stand and take a call and actually address that and prove me wrong and tell me why that’s not going to happen, because if you read clause 6, that’s exactly what this bill is proposing. It is quite simply proposing that now the New Zealand police, the front-line police officers, should not bring a prosecution unless it’s in the public interest, and their decision should be based on whether they can take a health-centred or a therapeutic approach.

Someone get up and give me one example where you couldn’t say you could take a health-based or a therapeutic approach to someone that’s got—give me one example. That’s the threshold that you’re setting.

Darroch Ball: Nonsense.

Hon MARK MITCHELL: That’s the threshold. You haven’t thought this through, Mr Ball—you have not thought this through. Give me one example where that threshold would not be met for a police officer that’s trying to make decisions on the ground at the time. So I’m willing to hear if you can give me one. I don’t think you’ll come up with one.

I certainly, in my experience, have never seen where there’s someone that wouldn’t benefit from a health-based approach. We all want a health-based approach for people. When they come into our prison system, we want to make sure that they get the therapy, the support that they need to get them off their addictions, to get them back into the community, and to be, you know, integrated back into the communities they came from. But stand up and give me one example where that wouldn’t apply, because that’s what you’ve said in this bill. So they’re going to fail—they’re going to fail—right from the start, which means the suppliers of these drugs have now got a whole lot of customers that you have just given immunity from prosecution.

ASSISTANT SPEAKER (Adrian Rurawhe): Order! Order! Don’t bring me into it.

Hon MARK MITCHELL: Sorry, Mr Assistant Speaker. Mr Ball, by supporting this bill they have got, effectively, immunity from prosecution. It’s to be a great marketing tool for them. They can go out and say, “Come and buy our methamphetamine—come and buy our methamphetamine! The Parliament have just legislated that the police now have got a much higher threshold that they have to try and get past to actually arrest you. So it’s far less likely that you’ll be caught and it’s far less likely that you’ll be prosecuted.” So it’s a great marketing tool that you’ve just provided to the people that actually manufacture this stuff. If you don’t agree with me, stand up, take a call, and explain to me why that won’t happen. It’s perverse. You’re creating a perverse outcome in the bill that you’ve brought to this House.

ASSISTANT SPEAKER (Adrian Rurawhe): Order! Again, please don’t bring me into the debate.

Hon MARK MITCHELL: Sorry, Mr Assistant Speaker, you’re right.

So anyway, this is just the start of the debate. Unfortunately, it’s gone to the Health Committee, but, you know, the Hon Michael Woodhouse will do an outstanding job with that team. There’s a big justice part of this. It’s been quite clever, the way it’s sort of been slipped through with, you know, a clause in here that is going to make a massive fundamental change in the way that our police are able to actually police not just Class C drugs but Class A and Class B drugs as well.

I think, just finally, the point that the Hon Paula Bennett made was we’re not ready for this. Get up and explain to us, if they’re going to refer them to health services: where are they going in our communities? There is nowhere for them to go. Actually explain to us how that’s going to work. It’s a bad bill for that reason, and we’re not supporting it.

Dr LIZ CRAIG (Labour): Thank you. It’s a pleasure to rise and speak in support of this bill, because of the huge impact that synthetic drugs are having in our community. Having worked in A & E in the past, I was just reflecting on a story from Radio New Zealand in October last year. What they were talking about was the struggles that Christchurch Hospital was having in dealing with synthetic drug admissions. They interviewed an emergency department specialist, and he was just describing what he was seeing, you know: patients coming in with seizures, some of them needing CPR on arrival. He was talking about patients being in trance-like states, and just the agitation and how, you know, on occasion they’d have to call the police in to deal with that agitation and that behaviour, and also the impact that that was having not only on patients and their families but also on emergency department staff. He also talked about the fact that, at the time of the interview, they had had a couple of patients there in ICU, in intensive care, and they’d already been there for two weeks and they were still seriously unwell.

The problem we’ve got is that, you know, since mid-2017, we’ve had at least 50 to 55 deaths from synthetic drugs. Basically, this has to stop. What this bill does is it provides that balanced approach, because what it simultaneously does is it provides greater enforcement and penalties for those who are importing, manufacturing, or supplying dangerous synthetic drugs. These drugs are wreaking havoc in our community.

It also takes a health-based approach, because what it does is it affirms police’s ability to have discretion, when they’re considering whether to prosecute, if a health-based approach would be better. I think when you listen to the stories of people talking about their experiences with getting hooked on this stuff and just the huge impact—once they’re addicted—it has on their lives, and what they have to go through to fuel and fund their habits. This is a really, really important balanced approach to a very significant issue.

I just want to go through a little bit of the three key things that this bill actually does. The first thing is it reclassifies the two major synthetic drugs that have been linked to these recent deaths as class A drugs. For those not really familiar with the classification of class A, these are the drugs which pose a very high risk of harm either to individuals or to society by the impacts that they cause. So by classifying them as class A, what it’s going to mean is that police and customs have much stronger search and seizure powers, so they can intercept the drugs before they hit or cause harm in the community. It also means much tougher penalties for those who are supplying or manufacturing the drugs, and that’s up to life imprisonment. So this is a very significant enforcement in terms of those that are bringing this stuff into our community.

The other thing, though, is that these drugs are always evolving, and so what the bill does is it creates a temporary drug classification called class C1 for new and emerging drugs. What it means is that once something’s classified as C1, police can come in and they’ve got the search and seizure tools that they need to interrupt the supply. That’s particularly important where we’re seeing, you know, clusters—some of the cases we’ve seen where you get clusters of hospital admissions or deaths—allowing people to come in and take that health approach and to interrupt that before we get further severe harm to our community.

How it works is it allows the Minister, by order published in the Gazette, to specify any substance as a temporary class drug if they’re satisfied that the substance poses, or may pose, a risk of harm to individuals or society. The undertaking is that that will only be a temporary classification so that it lasts for up to one year. The understanding there is that in that meantime, the Minister will go away and he or she will seek further advice as Minister on what the final classification of that drug should be, so that eventually it may end up being classified as A, B, or C as appropriate. If they need more time, then you’re allowed one extra renewal of that. That’s critically important as we start to deal with, you know, emerging threats within our community.

The thing that people have been talking about a lot is the health-based approach and the fact that what this bill does is just affirm what is happening in the community already, and that police should have discretion in terms of prosecuting or not prosecuting someone if they’ve got drugs for personal use. So the understanding there is that if there’s no public interest in prosecution, then we shouldn’t go ahead, but that when they’re weighing that up, it’s important to consider whether that health-based approach would be more appropriate.

As I was saying before, a large number of people were talking about the sheer addictiveness of these substances and the lengths that they’ll go to to acquire these substances, to the detriment of their own and their family’s lives and well-being. So, as part of this as well, this is why the Government has talked about putting extra resourcing into addiction treatment services but also extra resourcing in terms of those emergency surge responses, if we are indeed seeing these clusters of hospitalisations and deaths occurring in the community. So, basically, the wording is: “When considering whether a prosecution is required in the public interest, in addition to [anything else, they should be considering] whether a health-centred or therapeutic approach would be more beneficial.” So this is not decriminalisation by default; what this is is just affirming the discretion that’s already happening in the community. It’s affirming that in the legislation.

The other issue, though, is to avoid that perverse incentive that may be created by making people switch from one class or group of drugs to another in terms of thinking about that discretion of prosecution. This will apply to all drugs, not just the synthetics, and I think that that’s important in terms of making sure that we’ve got a balanced approach. But, as I say, it’s about reaffirming the existing discretion that’s already there. Police can still prosecute if they think that that is necessary.

So, just summing up, this is a huge issue in our community—it affects many, many families—and what this bill is doing is taking that really balanced approach. By classifying two of these synthetics as class A drugs, it’s giving the police a lot more ability to, basically, search and seize, and also it’s imposing much heavier penalties on those involved in the manufacture and supply of these drugs. But, from a health perspective, it’s actually channelling people much more to that health service delivery in the context of addiction and treatment services. So I commend this bill to the House.

CHRIS BISHOP (National—Hutt South): Thank you very much, Mr Assistant Speaker. This is a shocker of a bill. It’s the bill that you get when you actually really want to decriminalise drugs but you’re just not quite sure where the public is at on it and you’re not going to go quite that far. So, in other words, we’ve got this totally inadequate halfway house where they can look like they’re cracking down on the suppliers and the users of drugs—or the suppliers at least—in the first part of the bill, and then we’ve got the sop to the Green Party in the second part of the bill, which claims to affirm that the police have discretion around prosecution for individual use and possession. So it’s a kind of halfway-house bill. It’s a very strange beast.

Darroch Ball’s speech actually summarised exactly how strange this approach is, because, on the one hand, we had Chlöe Swarbrick, in her contribution, heralding the brave new world of drug decriminalisation and how this is part of a sea change to the way in which New Zealand deals with drugs, and the war on drugs is a failure, and the Green Party are at the vanguard of this health-based approach that the Government’s going to adopt—all very powerful words, some of which I happen to agree with. But then, if you listen to Darroch Ball’s speech, that was a speech in which he was at pains to play down that this bill does anything. He kept saying over and over again, and quite contemptuously towards National Party members, that the police already have discretion. “What are you talking about?” he said. “This is just the status quo.” He kept saying, over and over again, “There’s nothing to see here—nothing new. This is just the police. They already have this power. They already have this discretion.”

Well, both statements can’t be true. It can’t be, on the one hand, the brave new world of drug decriminalisation, in which New Zealand’s in the vanguard of adopting a health-based approach to drug policy, and simultaneously the status quo, in which nothing is changing and the police just have exactly the same power and exactly the same discretion as they had before. Both can’t be true, and it’s incumbent upon Government members to sort out exactly what’s going on here. Is this the brave new world, or is this just what we have always done, which is to allow the police to prosecute in the public interest? Because Darroch Ball kept saying it’s exactly what we have now; there is no change.

It’s a curious thing, isn’t it, when you have to legislate to affirm something. Parliament doesn’t actually do that. Clause 6 in this bill is very strange: “To avoid doubt”—and Parliament does that sometimes because Parliament wants to make very clear, but it doesn’t often say things like this: “To avoid doubt, it is affirmed”. It is affirmed? No, Parliament legislates to do something. Parliament legislates a change to the law. Parliament legislates things that are not currently the status quo. It puts the later state into being—that’s what Parliament does. Parliament doesn’t, in a separate piece of legislation, affirm an existing law. It’s a very peculiar phrase. So maybe Darroch Ball’s right; maybe it is actually just the status quo. Maybe we’re just affirming the status quo. Maybe he is right. But then, of course, we get this other phrase: “prosecution should not be brought unless it is required in the public interest.” We’ve had this interesting discussion between Mr Mitchell and Mr Woodhouse about exactly what change that will create. Then, of course, we get new section 7(6) around “health-centred or therapeutic approach”.

Well, this bill is going to go to a committee. We’re going to invigilate and investigate those issues very closely at the select committee, because, on the one hand, we may be making a massive change—certainly what the Greens think we’re doing—and on the other hand, apparently, we’re just not doing anything. Apparently, we’re just putting in place what exists right now.

Darroch Ball says the police want this. Well, I draw him to the remarks of the Police Association. Now, the Police Association represent police members. Well, he might say the police want it—well, police top brass might be OK with it. I suspect that’s actually not true. We’re waiting for the advice on that. But I’ll read to you the statement of the Police Association: “[This] has an air of drug reform on the fly, rather than a more considered debate and informed legislation. I am worried that by codifying police discretion the Government is potentially asking officers to be the spearhead of decriminalisation.” I note a former Police Association president over the other side of the House, and I suspect Mr O’Connor agrees with every single word I’ve just said, because, let’s face it; what the Government is doing is subcontracting out, to police officers, decriminalisation.

My message to the Government is: if you want to have a debate about drug decriminalisation, and if you want to have a debate about making sure that people who are addicted to heroin are not prosecuted, OK, maybe there’s a role for that debate. Maybe there is a debate we need to have about that. But to do it in this dishonest, halfway-house solution, where you put police officers at the front line of drug decriminalisation—frankly, police officers who are under-equipped and ill-equipped to deal with the hard, vexed decisions around this—then you are mistaken.

I haven’t even mentioned, as my other colleagues have, the lack of support out there in the community around community treatment and addiction services. Jacinda Ardern was asked “Will there be more money in the Budget on Monday?” by Jack Tame. She was asked “Will there be more money in the Budget for these much-needed services?”, and she refused to commit to it. So what we’ve got is a situation where the Government is going to subcontract out to police their attempts to decriminalise drugs, and they’re not even going to provide the services to make sure that all the people who aren’t going to be prosecuted, and all the people who are going to be referred to these drug services, are going to have the necessary treatment and support that they need. It is a disgrace. This Government should be honest about what it’s actually trying to do and have the legitimate debate, rather than try and subcontract it out to the police.

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

ANGIE WARREN-CLARK (Labour): The hyperbole—the disaster that is coming our way—is breathtaking. Let us just for one moment talk for a small moment about the discretion that our very able Police Force currently have. The discretion sits in law and also in operation—it is a normal process. Let us also look at what it should refer to—personal use. It is the personal use of drugs—the smallest amount of drugs that a person might be found with—in which this description applies. Let us not talk about these huge and amazing things. This is what the police do on a daily basis, as we well know. This piece of legislation very clearly ensures that the police know that they have that ability to do that. So whether they are actually making a decision or not is based on what they always do, but this makes it very clear.

Let us go back to the purpose of this bill. The purpose of this bill is around the health of people. It is around a compassionate approach. It is important that we don’t continue to make this huge issue about someone who is caught with a small amount of illegal substances. They are actually needing help as opposed to being prosecuted. So as a consequence, I commend this Government, and the Minister of Health, for changing the conversation—which the Opposition has tried to switch back—from penalties and punishment to viewing addiction as a health issue.

However, this legislation proposes to get ahead of a very fast-moving drug manufacturer industry. Let’s be clear—let’s be clear about the harm that these drugs do. Let us be clear. None of us—none of us here in this House or across the country—believe that these are good things or things that we should continue to support. Interrupting the supply chain is so important, and it is a really important part of this bill that we do that.

Before I speak to the bill in detail, I thought I would discuss, from a perspective of someone who’s worked on the front line, around working with women who came to our Tauranga Women’s Refuge and who had been impacted by synthetics. Remember the time when legal highs occurred and we had a plethora of men who switched from marijuana to synthetics? What happened was we had a floodgates situation occur. We had women flocking to refuge in abject fear—the paranoia that was around the poverty driven by the purchasing of these legal highs. Then, of course, it became illegal again, and the addiction remained.

We know that there has been purported to be about 55 deaths from this—this filth, let’s be honest—filth, this disgusting and, I guess, soul-destroying drug. A scientist friend of mind told me that using this drug is like huffing flyspray. It’s poison that’s spread on weeds, and it’s pressed into drugs.

Make no mistake, while our Government is absolutely focused on enabling people to break their shackles of addiction, we are very clear that people who profit from such misery must face those consequences, and this bill, therefore, supports and does both. It’s not a mismatch. It’s not that we are not clear about this process. It is about, on one hand, a health response, a well-being response, and a response of compassion and addiction and, on the other hand, stopping the scourge that is manufacture, import, and supply. I commend this bill to the House.

ASSISTANT SPEAKER (Adrian Rurawhe): I call Matt King—five minutes.

MATT KING (National—Northland): Thank you very much, Mr Assistant Speaker. This bill, it’s the good, the bad, and the ugly. It’s good in one respect, but why is it before the Health Committee and not the Justice Committee? It’s all about criminality, drugs, and giving police codifying instructions. It should be before the experts on the Justice Committee. But, for some reason, they’ve slipped it through into health.

But the good, the bad, and the ugly. The good part of it—the good part of it is Simeon Brown’s contribution to this bill about psychoactive substances. That’s the scourge on society, that’s the killer. So that part of the bill we support, so don’t get us wrong.

The part of the bill that I have concerns about—the bad part of it—is the way that clause 6, inserting section 7, has been snuck into this bill. This should be a stand-alone part of it, and I’ve heard speakers from the other side of the House talk about how the police have discretion—and, yes, we do have discretion—but what this is doing is it’s creating a document that a defence lawyer is going to pull out in court and point to and get every one of his clients off. It’s going to be a defence lawyer’s dream, and I am dead against that—I’m dead against that.

So what we’ve got is a bit of legislation here that is de facto decriminalisation. It’s a poorly thought-out law. I’ve seen a few poorly thought-out laws brought before this Parliament by this Government. A 500-page Supplementary Order Paper after select committee, just before we decide what the bill’s going to be—I mean, this is crazy. So this is the sort of thing they’re doing. So it says here, “affirm the existing discretion to prosecute for possession … for all drugs”—for all drugs. That is de facto decriminalisation and, hey, if that’s where we’re going, where’s your mandate? This is a big deal. Take it to the people and have a referendum on it. But this Government is just sneaking this through, and this is going to have unintended consequences. Dealers are going to roll around town—because dealers and users are interchangeable—and they’ll have small amounts in their possession to avoid prosecution. The police will not be arresting—it will get around amongst people that the police won’t arrest for possession of drugs, basically. It’s going to be de facto decriminalisation. It’s wrong. We don’t support it. The consequences haven’t been thought through. I advise caution.

GREG O’CONNOR (Labour—Ōhāriu): I sit listening to this debate and politicians on either side of the House, and I think there’s no one who’s participating in this debate, whatever their political hue, who doesn’t want to do the right thing. I think those of us who are MPs would have to walk around with our eyes closed not to see the effect of drugs on the day-to-day lives of so many of those who we represent.

It causes me to think about my own time in the police in particular, and I acknowledge my two ex-police colleagues Matt King and the Hon Mark Mitchell. I sit here thinking “What in my time in police”—and I challenge those two members to do the same thing—“has really made a difference at any stage to the amount and use and the effects of drugs in our time in police?” Actually, there were two things that did make a significant difference. As a younger police officer, I policed in Wellington here. We had a major heroin problem, and that manifested in a large number of overdose deaths. That’s generally when you know you’ve got a heroin problem—it’s pretty much measured by the number of overdose deaths.

Wellington had a major problem here in the late 1970s—I’m showing my age there slightly—and there was considerable change to the legislation. It became life imprisonment, the effect of being caught dealing with that, and there were considerable powers given to police to deal with it. None of those things made any difference. The only thing that made any difference was actually when the Mr Asia syndicate collapsed, which had become a very successful international conglomerate at that stage. They had become so efficient at bringing heroin into New Zealand that all the opposition had gone, and then when they did collapse, when their supply lines collapsed, there was no heroin in New Zealand. If you had an addiction in New Zealand, basically you had to go cold turkey or you got on a plane and went to Australia, which is the time when we got a bad reputation in Australia as New Zealanders.

The second thing that made a difference—this is probably a little bit more pertinent to this debate—was in about 2011 or 2012, when we did have a major problem with synthetic cannabis. I was, as has been mentioned by one of the previous speakers on the other side, the president of the Police Association at the time. We were being inundated by complaints, particularly from youth aid officers around the country who were concerned that they were unable to do anything about this drug—what it was causing, the problems it was causing, particularly with young people. Parents were coming to their offices, saying, “You’ve got to do something about this.” It was actually pretty much legal at that time. It was legal and it was being supplied legally.

Virtually all the supply of synthetic cannabis at that time was through local dairies, local legal-high shops, and you could actually get hold of it legally. As a result, when the Psychoactive Substances Act went through, it was actually, in the short term, incredibly successful. Those who were supplying at the time were legitimate people—people who didn’t want to fall foul of the law, although they had perhaps been legally adventurous up until that time—so they got out of the business, and, actually, my phone stopped ringing. It was actually, in the short term, for about a year, not an issue. It became an issue again. My understanding is that the Christchurch earthquake and the influx of people down there who were seeking to avoid drug-testing at the time brought about the increase again, and a market that had virtually collapsed was reinvigorated, and that is the market we have now.

It’s just important to remember what the difference with synthetic cannabis is, because that is one important difference with it. It is a class of molecules that bind to the cannabinoid receptors in the body, which essentially means it’s a chemical that does the same thing as cannabis. It does it, and, without going into the medical details, it actually is a considerably more potent drug. It causes many more issues—unknown issues, because it hasn’t ever really been properly studied, despite the fact it was actually invented by a scientist in, I think, South Carolina, who actually did it.

So those are the only two times that anything we’ve done has actually made a difference. Actually, I do remember the big debate that took place when heroin was being made—the life imprisonment for dealing it. There was a considerable debate, if you look at Hansard at the time, and, really, I have to say, as a police officer at the time, it made no difference.

That brings me to now. When we look at the situation we find ourselves in today, particularly with synthetic cannabis, no one—and, again, I come back to the fact we all hear “No, we have a problem.” There’s probably no electorate here that hasn’t had a death or someone seriously impaired or impacted on by the drug, so we really do want to do something about it. I think that if we’re honest with ourselves—again, I would invite the Opposition to think about this: do they really believe that anything that only deals with the sentencing option of it is going to make any difference? I have to say, I don’t. I’m not saying that sentencing, good use of the courts, and good use of prison are not actually good tools in dealing with these things—sensible use of the same.

This is what brings me back to this discretion argument. I can understand some of the concerns being expressed on the opposite side of the House around this discretion argument, but what discretion does allow—and I’ll take you back. The Hon Paula Bennett mentioned that nowhere in any legislation are police given this sort of discretion. Actually, she’s wrong, because it is in the anti-smacking bill. I know from my personal involvement in it that the Rt Hon John Key was responsible for allowing that bill to get across the line, because he introduced as an amendment the whole discretionary part of it. It’s that discretionary part of it that has actually allowed that bill to work, because what it means is that when police do take a case into court, the courts know that it has already passed a threshold test and that they would not be there unless it was serious.

What discretion allows is that police still can use—and, look, believe me, there are those who believe that the courts are terrible. Actually, the good use, the sensible use of sentencing—the sensible use of imprisonment, even—can actually be a very good tool, because what it does is gives leverage. So where the warnings haven’t worked, where someone has gone through a system where they have been not prosecuted and continue to do so, if they then end up in court, the effect of that is the court will understand that we’ve got a case that we can deal with seriously, that it has gone through some sort of threshold system on its way to where we are. Now, you may say that in other systems that have been introduced, there have been pre-charge warnings, diversions, and various other things. These are, actually, simply other versions of the same thing. What it does, particularly with drugs, those that we’re dealing with—so, often, having an encounter with the police, having an encounter with the authorities, is enough to deter people from what they will do.

Look, just think of this addition to the Act, or the bill as it stands at the moment, as something that actually does give a tool that if used properly—look, I can understand those that would be afraid that it may be misused. But, actually, what it does—and those two members opposite who have been in the police will understand that the most effective interventions that they—and I know, myself—have been able to employ are often those that involve considerable discretion. I personally am opposed to prescriptive sentencing. I think we should leave much more discretion to our judges, because prescriptive sentencing, which hasn’t worked overseas—I look at those that go to the Northern Territory. See what happened when they brought in mandatory imprisonment for property offences, and see how long that lasted and the perverse outcomes that that actually brought about.

What I would say in relation to this is that this is something that so much else of what we have done hasn’t worked. I mean, we have a major P problem. Again, as someone who has been and watched and been part of seeing that P problem increase, and seeing now the involvement in organised crime—nothing that has been done along the way, unfortunately, has made any difference. One thing that didn’t make it, that was reclassified: we banned pseudoephedrine sales. There’s been attempts—genuine attempts—on the way to actually try and reduce the impact of methamphetamine on our society, and I have to say it hasn’t worked. Even Matt King, in his own electorate—when we had a seizure of hundreds of kilos of methamphetamine on the beach in the Far North, it made no difference to the price and availability of methamphetamine on our streets. That’s how rife, how rampant, our methamphetamine problem is.

Essentially, I would have to say that nothing anyone has done or suggested has made any difference. The time comes when we do have to look at alternative methods, because simply, I have to say and persuade the Hon Mark Mitchell, saying the war on drugs—look, to sit here and say it has worked; I’m afraid that we may disagree on many things, but that’s something that I don’t think anyone looking at it would say that that has worked. I commend this bill to the House.

Dr SHANE RETI (National—Whangarei): Thank you, Mr Assistant Speaker. It’s a pleasure to speak to this bill, and I am wanting to, in this contribution, speak to three points. The first point would be the aspects of the bill that deal with synthetic cannabis, and in that respect I think across the House there is a large degree of common thinking. Personally, I’d like to acknowledge Simeon Brown for the work he’s done, and I believe that the contribution he’s brought to this discussion has been substantive in many areas and very thorough—indeed, more thorough than parts of this bill.

The second point I’d like to talk to is the way that this bill starts with synthetic cannabis and then morphs to cover all drugs in various parts of the bill. We were very happy to be supportive of synthetic cannabis, but it’s over embracing with encompassing all drugs that makes that a problem for us. As my third point, I too would then like to talk to section 7 in clause 6 and this issue of discretion—the ability for police, or, more specifically, that police should not prosecute for possession and use in three instances: when a health approach might be beneficial, when a therapeutic approach might be beneficial, or with what the legislation says, “any other relevant matters”. I’d echo the point: when would a health approach not be beneficial? I can’t imagine any circumstance like that. When would a therapeutic approach for someone who has possession and use not be beneficial? I can’t imagine a circumstance of that type and this very nebulous “any other relevant matters”. So it’s very easy to see why we can consider this as decriminalisation—I mean, those are all the arguments why you would not prosecute, and there’s no instance, therefore, when we would not prosecute. That is decriminalisation.

But it actually gets better, because in the regulatory impact statement it confirms that this is decriminalisation. So let me move on to that. Let’s look at, sort of, how well-crafted this bill is and whether it achieves its objectives. In the very first point in the regulatory impact statement is the quality assurance summary, which says, “The panel considers that [these] Synthetic Drugs Response Regulatory Impact [statement] … does not meet the Quality Assurance criteria.” Well, what a great start to a bill like this, to have its own internal assessors saying that this impact statement doesn’t meet the quality assurance criterion.

It goes down into limitations and says that one of the limitations is that the range of options was limited to taking a health approach - only to drug use. Well, remember, the bill talks about three approaches: a health approach, a therapeutic approach, and an “other relevant matters” approach. But this bill, the regulatory impact statement, only looked at one of them. The summary then goes on to say, “The Panel considers … that the [regulatory impact statement] does not provide sufficient information for Ministers to make an informed decision about the regulatory proposals.” So again, the Government is looking at itself saying that, well, you don’t actually have enough information to make a decision on this, but the bill appears here in the House.

Now, there’s been some discussion across the House whether it is decriminalisation or not. We believe it is. Some of our colleagues across the House have said it’s not. I draw their attention to page two of the regulatory impact statement that says, “This will go some way to achieving the Government’s objective of not criminalising users.” That is decriminalisation. Let me read it again. “This will go some way to achieving the Government’s objective of not criminalising users.” This is a decriminalisation bill. The tragedy is the bill does it very poorly. We know that, because later down the impact statement says, “The [regulatory impact statement] is not convincing that emphasising discretion will be sufficient to avoid criminalising users.” So the intention is there to decriminalise, but the bill does a very poor job of it.

Other risks, while identified, are insufficiently addressed, and this question of possession and use, whether the bill also picks up supply, is highlighted in the risks. An option that included setting a very high presumption of supply in order to target importers and manufacturers could have been considered—oh yes, it could have been considered, but clearly it wasn’t.

I also want to point to the consultation around this bill, and, as the regulatory impact statement points out, other than Government departments, the only other NGO or community organisation that was consulted was the Drug Foundation, and the regulatory impact statement says, “Broader public consultation might have gained feedback from experts in health and social services, for example.” What a poor bill. How embarrassing, when the Government’s own team—the Ministry of Health, in this case—are saying that yes, this bill’s about decriminalisation; but, sorry, it does poorly.

Secondly, we haven’t identified all the risks. It doesn’t meet the quality assurance criterion, and, by the way, the only group we’ve consulted with is the New Zealand Drug Foundation, and you really should have spoken with health specialist and social services.

So it is really hard to support this bill, and it looks like the Ministry of Health have really struggled to support it, as well. So we’ll see where this progresses. But for any number of reasons, which I’ve outlined here, we won’t be supporting this bill.

LOUISA WALL (Labour—Manurewa): Tēnā koe e Te Māngai o Te Whare. Tēnā tātou katoa. I rise to speak in favour of the Misuse of Drugs Amendment Bill. I want to highlight as the chair of the Health Committee that we are delighted to receive this bill. Why are we delighted to receive this bill? Because, actually, it takes a harm-minimisation, treatment-prevention approach to what has been an issue that has traditionally been dealt with by our criminal justice system.

I want to, firstly, also acknowledge that this whole process started in July 2018. I want to acknowledge the Chief Coroner at that time, who reported that between 40 and 45 people had died as a result of taking synthetic cannabis. The Acting Prime Minister, the Rt Hon Winston Peters, actually asked the Ministers of Justice, Corrections, Police, and Health, and officials, to consult and to come up with solutions to this problem. So I want to acknowledge his leadership, and also that the process that outlined the current approach was not working. So this piece of legislation is a direct consequence of that.

I also want to acknowledge Simeon Brown, who does have a bill in the ballot. His solution is just to increase penalties, and that sellers should go to jail. From our perspective, that isn’t a solution, but he did bring that kaupapa to the House and I want to acknowledge him for that. So this whole definition of who is a seller is an issue. Currently, if you have more than 56 grams, which is the threshold, you’re deemed to be a seller. But what we’ve discerned through the process, in fact, is that 56 grams isn’t a lot for a heavy user of these drugs—actually, it might last them only a couple of days. So from our perspective, having a response that will enable the police to use their discretion is absolutely the intention of this bill.

The other intention of this bill is to provide the police with the tools so that the manufacturers and distributors of these drugs actually pay the penalty. They’re the ones we want to see in prison, not those who have health issues. So the police discretion to prosecute, which people have talked extensively about tonight—I want to fiercely highlight that the police currently do have a discretion about whether or not to prosecute, and I particularly want to focus on a programme or an initiative called Te Ara Oranga, which is based in Northland. So I’m hoping that the people who represent our constituents in those areas understand that there is a current programme based in Northland that has seen the police refer 257 people to the district health board for addiction treatment.

So this is an existing recognition within our system that we need a different response, other than putting people through the criminal justice system. We actually need a health response, and so far this year an organised crime operation in Auckland has resulted in 32 referrals to addiction services—again, as opposed to going through the criminal justice system. Why might we want to do that? Because, actually, people going through the criminal justice system and ending up in prison costs us $110,000 per annum, per prisoner. That is not an investment. It’s not an investment in those individuals or their whānau. What we’re trying to do is absolutely, completely reorient the system to make sure that people who are caught in possession of these drugs get the help and support that they need.

We need look no further than the alcohol and other drug treatment court, and I bring this up at this time because that has been—I’ll call it—a disruption in the system. What that process did—and I want to acknowledge Judge Lisa Tremewan and Judge Emma Aitken—was, in fact, provide a mechanism within our justice system to support users who want to break their addictions.

I want to highlight what that particular kaupapa was called. It was named by Dr Pita Sharples, and I’ll give him a bit of a shout-out. They called it Te Whare Whakapiki Wairua—the house that uplifts the spirit. I actually think what this piece of legislation is, and I’ve just decided to title it myself as “Te Pūnaha Tuma Tau”—sorry, I can’t even read my own writing—“Te Pūnaha Tūmā Tānui Whakapiki Wairua”, is the public system that uplifts the spirit.

So I think this is actually the beginning of addressing issues such as unconscious bias, and why do I label it unconscious bias? Because what we have found out from a lot of the research done in this area is that those most affected by incarceration and engagement in the criminal justice system are Māori. One of the things I want to highlight is that of those people who are captured within the criminal justice system, if you are Māori and aged between 17 and 25, you make up 37 percent of those convicted of the possession and use of illicit drugs. So this piece of legislation is, fundamentally, going to change the trajectory of those individuals. What we are attempting to do is to provide a health recourse for people who are found to have possession of drugs, as opposed to putting them in the criminal justice system.

Just some context for people: in the 2016 New Zealand Drug Harm Index, our investment in the health system to provide people who needed treatment and addiction support was $78 million. Our investment in the justice system, which includes police, customs, courts, and prisons—as I’ve already highlighted—was $273 million per annum. If we can shift those two figures around we can actually provide an investment, because what we know from our alcohol and other drug treatment court is that 60 percent of people who have gone through that process don’t reoffend. It works. For people who have drug and alcohol addiction issues who get treatment, it works.

So we want that for everybody who is currently captured within a drug and alcohol addiction phenomenon, for whatever reason that may be. I know from my own community experience that that’s a lot of people who are homeless, people who have mental health issues, and people who have got unresolved abuse issues, and one of the things that we’ve never admitted as a country is why people end up using drugs and alcohol and become addicted. A lot of them have never had an opportunity to be supported, and so they take these drugs and alcohol and live in the situations they do because that is their existence. That has been their only life outcome.

So what we’re trying to do is shift the emphasis out of the criminal justice system, and—I want to say explicitly and specifically—for Māori. People have talked about the disproportionate number of Māori in the criminal justice system, and I actually think that the reorientation that this bill is going to implement through the development of, for example, guidelines that the police and the Ministry of Health will work on together—so it’s not going to be random. The Opposition have made a point of saying that everybody’s going to get off being prosecuted, but that is not true, because part of the process will be what services do these people need—these individuals who are caught with drugs—and how responsive is the system to meet those needs. But, as I said before, it’s also going to help reorientate what currently is a non-investment.

Putting $273 million into a justice system that incarcerates people is not an investment. What this bill is is an investment, but it also—as I’ve highlighted—is starting to address why so many Māori and so many young Māori get trapped in these cycles of coming in and out of prison. I mean, the most disgusting figure that I’ve seen is that after five years, if you’re a Māori, 80 percent of you are back in prison. So what’s the solution? This: keep them out of prison in the first place. I challenge the National Party to actually have a closer look at this bill, because if that’s what this bill does, your not supporting it is actually treachery, because you’re assigning people to a life—

ASSISTANT SPEAKER (Adrian Rurawhe): Order! Please don’t bring me into the debate.

LOUISA WALL: —of misery. Kia ora.

A party vote was called for on the question, That the Misuse of Drugs Amendment 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.

The question was put that the Misuse of Drugs Amendment Bill be referred to the Health Committee.

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

Ayes 63

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

Noes 56

New Zealand National 55; Ross.

Motion agreed to.

Hon STUART NASH (Minister of Police) on behalf of the Minister of Health: I move, That the Misuse of Drugs Amendment Bill be reported to the House by 22 July 2019.

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

Ayes 63

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

Noes 56

New Zealand National 55; Ross.

Motion agreed to.

Bills

Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Bill

Third Reading

Hon STUART NASH (Minister of Revenue): I move, That the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Bill be now read a third time.

For the benefit of the members, I’ll use this opportunity to recap the objectives and the content of this bill. The core measure in this bill is a significant improvement in how tax returns of individuals are assessed.

The Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act passed in March last year laid the foundation for a smarter, more responsive tax system by ensuring that the payers of employment and investment income provide better and more timely information to the Inland Revenue Department. With that in place, inland revenue is now able to ensure the right amounts are deducted or withheld from individuals to meet their obligations and to more accurately determine entitlements such as Working for Families.

This bill simplifies tax obligations for individual taxpayers. The changes will help individuals to use the right tax code during the year.

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

Hon STUART NASH: Thank you, Madam Deputy Speaker. Well, as I only spoke for about a minute, I might as well reiterate from the beginning. For the benefit of members, I will use this opportunity to recap the objectives and the content of this bill. The core message in this bill is a significant improvement in how tax returns of individuals are assessed. The Taxation (Annual Rates for 2017-18, Employment and Investment Income, and Remedial Matters) Act, passed in March last year, laid the foundation for a smarter, more responsive tax system by ensuring that payers of employment and investment income provide better and more timely information to Inland Revenue. With that in place, Inland Revenue is now able to ensure that the right amounts are deducted or withheld from individuals to meet their obligations and more accurately determine their entitlements, such as Working for Families.

This bill simplifies tax obligations for individual taxpayers. The changes will help individuals to use the right tax code during the year so that about the right amount of tax is deducted from their income during the year. It will remove unnecessary compliance obligations. It will simplify filing obligations and help refunds be paid out automatically for most wage, salary, and investment income earners.

The changes to the secondary tax codes are intended to address this Government’s concern about secondary tax. These changes will enable Inland Revenue to more closely identify workers with more than one job who’ve been overpaying their tax. Inland Revenue will then be able to suggest a more appropriate withholding rate for an employee’s second job. In this way, we’ll remove the negative impact of secondary tax for those employees. In fact, these tailored tax codes are available at the moment, but a taxpayer has to proactively contact IRD. This is going to make it pretty much automatic.

Another key benefit is that most people won’t have to engage with a third party to ensure they get a tax refund—great news. The changes in this bill will mean that many people will get their refunds automatically—

Angie Warren-Clark: Yay!

Hon STUART NASH: —and as a result—it’s a great idea, isn’t it?

Angie Warren-Clark: I like that.

Hon STUART NASH: Yeah, so do we—actually, so will 440,000 extra taxpayers, as the Government expects to pay out refunds to that many Kiwis. Ensuring people are paid—

Andrew Bayly: Good thing we initiated that reform.

Hon STUART NASH: Oh, it’s fantastic. Ensuring people pay the right amount of tax and also receive correct social policy entitlements will further build people’s trust in the New Zealand tax system. Taxpayers expect the Government to be a good steward of their contribution to New Zealand’s public services, and I think this bill contributes significantly to our tax system’s reputation as fair and simple.

I’m grateful to the Finance and Expenditure Committee for considering these enhancements to the tax system and suggesting further improvements—well done. In the spirit of simplifying the tax system, the Finance and Expenditure Committee recommended clarifying that a taxpayer’s information can be amended so that information can be corrected, and easily, without penalties or interest, and also recommended simplifying the proposed write-off rules. The end result of the consultation and select committee process is that we have a better bill that enhances the simplicity of our tax system while not compromising its integrity.

The full benefit of those proposed changes will be realised in the 2021 year, when, for the first time, people will be able to see a full year of pre-populated information for PAYE and all of their investment income. Most people will pay what they need to and get what they are entitled to during the year without having to do anything. Inland Revenue will make it easy for customers to see what they’ve paid and what they owe, and will be better at detecting errors. However, it is important to note that while more customers will have income reported on their behalf, people will remain responsible for reporting other income and deductions, assessing their liabilities, and, of course, meeting their obligations. But, generally, people will spend far less time and effort ensuring they meet their obligations and receive their correct social policy entitlements, as tax will be correctly withheld and assistance provided at the time it is needed.

This is the key thing: developing a tax system that responds in near real-time to changes in circumstances without requiring a wash-up at the end of the year.

Angie Warren-Clark: Hoorah!

Hon STUART NASH: It’s fantastic, isn’t it? The people of Tauranga will just love this. These improvements to how individuals have their tax assessed constitute the main part of this wide-ranging suite of measures to modernise and simplify the tax system. Go this Government.

As well as improvements to how tax obligations and entitlements are assessed for individuals, this bill makes several other key improvements to our tax system, which I am pleased to summarise. We’ll improve how Inland Revenue collects and manages its information. Inland Revenue takes its role as a steward of the taxpayers’ personal information very seriously, which is critical to retain taxpayers’ trust and confidence in the tax system. The bill modernises and clarifies rules to better provide confidentiality and sharing in the future, and more clearly balance the trade-off associated with information sharing.

In respect of collection, the bill will also clarify in legislation that information collected for one Inland Revenue purpose can be used for the department’s other functions. The bill also proposes a regulation-making power for repeat collection of third-party databases in order to provide greater transparency when this collection is to be done on a regular basis. These proposals will make the information management rules more efficient and transparent, and better focus confidentiality rules to clearly protect taxpayers’ information.

Binding rulings—as the Minister for Small Business, I’m pleased that the bill also proposes a new type of binding ruling called a short-process ruling, designed to be more accessible to small to medium sized businesses, and individuals. The ability for a wider range of taxpayers to obtain binding advice from Inland Revenue will help more taxpayers get their tax positions right the first time. Of course, with a binding ruling, it does bind the commissioner, but it doesn’t actually bind the taxpayer, but it certainly provides a level of certainty.

KiwiSaver—I’m also excited about proposed changes to KiwiSaver. The bill contains measures to introduce additional employee contribution rates of 6 percent and 10 percent—

Hon Member: Brilliant.

Hon STUART NASH: —it’s fantastic—removes the five-year lock-in period for KiwiSaver, which currently affects members who join KiwiSaver between the ages of 60 and 65; and it actually opens the scheme up to those Kiwis over 65, so age should be no barrier to saving.

In conclusion, these are the main features of this bill, and it is a bill which will improve taxpayers’ experience of tax administration and make the system fairer, which is what we’re all after, after all. As well as these major tax policy improvements, the bill proposes a number of remedial measures to tighten our current tax legislation and ensure it remains fit for purpose. I would like to thank the policy officials and drafters who worked on the detail of the bill, the organisations and individuals who made submissions on proposed legislation, and the Finance and Expenditure Committee for its consideration and recommendations to improve the workability and fairness of the provisions. I commend the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill to the House.

ANDREW BAYLY (National—Hunua): Thank you, Madam Deputy Speaker. It’s wonderful to be talking on this third reading of the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill. I want to congratulate the Minister on a beautifully read summary of the bill that we’re about to debate. You know, there is a lot of good stuff in this bill, I’ve got to say, and I think the underlying tenet of this is that I’m just so grateful that my colleagues initiated that major wholesale change at the IRD that brought about the Business Transformation programme that is leading to a lot of these changes. Of course, we’re now seeing the fruition of that coming to pass, and, of course, what this bill does is pick up on some of those issues—and I’ll come back to that in a moment. But the reason why we cannot support this bill is that it is a continuation of this rapacious Government—that all they want to do is grab money from those hard-working New Zealanders.

That’s all they want to do, and this bill enshrines that by making sure that the tax rates remain as they are. That is the worst thing about it. That’s why I am so bitterly disappointed that—when my colleague, the Hon Amy Adams, put up that wonderful Supplementary Order Paper (SOP) which has now been picked up by the Hon Simon Bridges, which is about protecting New Zealanders so that they don’t pay more tax than they need to. We want everyone to pay what they should have to pay but no more.

This bill enshrines high rates of taxes on people, and that is the reason we can’t support it. Of course, the SOP that Amy Adams put up was about making sure the four thresholds at which you kick over into the higher tax rates are enshrined by making sure that they are linked to CPI. So your wages may increase but the tax rates mean that you would stay in the same bracket, provided you don’t actually increase greater than that. And that means it is fairer and it is fair for people. Tax creep is the issue—fiscal drag. That is the worst thing about this bill because this Government, which has already imposed $2.6 billion of additional taxes in the 16 months they’ve been in power—they’ve already imposed that. All they’ve done is enshrine in this bill that they’re going to allow people to pay more tax than they should otherwise have to. That is the issue. That’s the issue.

The only other issue that we have a fundamental disagreement on with this bill is the issue around bloodstock. I know my colleague, Mr McKelvie, is going to speak at length on this issue. We support the thoroughbred industry. In fact, in my electorate, and where I live, there are lots of horse-racing operations. We would have liked to have seen something that actually did some good for the thoroughbred industry. What we ended up with was the Winston Peters flop for the racing industry, because this bill includes a bloodstock mechanism that doesn’t work. We tested the officials at the select committee. And even at the Karaka sales this year it would not have resulted in one single horse getting any benefit, or any owners or buyers thereof. That is why it’s a sop to the racing industry. Those are the worst things about this bill: those two elements.

I’m going to leave it up to my other colleagues to talk about some of the other stuff but I think the one thing that the Minister missed in his summary was the issue of backdating of ACC payments. This is one that the select committee thought about for some time, because often you get ACC payments that span financial years. Of course, people receiving those payments don’t always know about them; they don’t plan for them because the payments are made by ACC as an organisation. What this does is to make sure that those ACC people do not actually end up being disadvantaged by receiving a payment right at the end of the year which would otherwise go towards their assessable income. I think that’s quite a crucial but small step in terms of recognising them.

I think, as a bill, there’s a lot to be commended, but those two issues are fundamental and we, on this side, remain implacably opposed to anything that enshrines the tax rates as they are at a personal level because New Zealanders should be able to keep what they earn, as much as they should earn, and pay only that amount of tax which is fair and reasonable.

MICHAEL WOOD (Labour—Mt Roskill): What an interesting thing it is that on the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Bill—a bill which the Opposition has determined they will vote against on the basis, apparently, that it is a deep injustice that we are retaining the income tax rates that remained for most of the term of the previous Government—that the lead Opposition speaker could only manage five minutes. I was expecting a little bit more—some more well-developed arguments around what the alternative proposals might be, getting into the detail of the bill a bit more, but we on the side of the House will be very happy to provide that for the benefit of the House and those people who are watching and engaging in this debate.

I doubt that there is a member of this House who hasn’t had a constituent or met a voter who hasn’t complained to them about the impact of secondary tax. It’s a very, very common complaint that we hear from people. And, of course, it’s an interesting one because the nature of secondary tax is that we have the system set up in order to avoid a situation in which a taxpayer might underpay the tax and be faced with a very big tax bill at the end of the year.

And the sort of logical and measured explanation and response you can give to someone who is complaining about secondary tax is “Well, you can seek a refund at the end of the year, if you go through the process, and you work with IRD, and it’ll all sort of end up where it should be in the wash.” But, of course, the reality for many taxpayers—and we’re talking about people often on low and middle incomes who perhaps are doing multiple jobs to try and make ends meet—is that actually, it’s pretty tough from payday to pay date, and those people would much prefer to actually be getting paid the correct amount of income and paying the correct amount of tax at the time rather than waiting for a refund process that they might feel a little bit uncomfortable about engaging with in any case.

The outstanding news about this bill is that, in most cases, we will be able to do away with the need for taxpayers to engage in that process. That is extraordinarily good news. I want to pay tribute here to the Minister Stuart Nash, because I know that he, over many years, has been someone who has pushed and campaigned on this issue in order to make sure that we have a tax system in which taxpayers pay the right amount of tax and don’t have to go through that process of seeking a secondary tax refund. And here as Minister, he has brought this bill to the House, and we are going to achieve that outcome.

Mr Bayly is right: we’re able to achieve this outcome because there has been a significant investment in the IRD’s capacity through the Business Transformation project—that’s both as a result of the investment in the technology and also the processes that IRD is setting up internally. And credit goes to many people in the previous Government for putting the initial investment into that process, but, most importantly, to the good people at IRD, including the commissioner, who have been driving that process through.

It’s also interesting because on the Finance and Expenditure Committee we see this process going through the different bills that come before us. So in the previous annual rates bill, which we actually only finished up with in the House relatively recently, a big focus of that was around the provision of payday and investment income from employers. I was speaking at a payroll conference last week about this actually—we’re asking employers to provide payday information to IRD far more regularly. Actually, the reason for that is that if we have more timely and more accurate information, then we can do this kind of stuff because the way in which we are dealing with the secondary tax issue is by ensuring that IRD have the correct information, which means that the commissioner can look at a taxpayer’s situation and recommend, effectively, what will be a tailored tax rate to that person to ensure that they are paying the correct tax rate, given the different jobs they might be doing at any one point in time. The person will have the right to respond to that, and not take that tailored tax rate if that is what they wish to do, but it gives the ability to give that tailored tax rate and, for many people and many situations, do away with that secondary tax scenario. So that is an enormous step forward for many taxpayers and for IRD, and I commend everyone who has been involved in that process. Many, many New Zealanders will be very happy with us indeed—it’s great news.

A couple of the other key things in the bill that I think are worth talking about—and these were some of the issues that we spent time on at the Finance and Expenditure Committee. One I do want to talk about a little bit is the short-process rulings changes in this piece of legislation. What we have at the moment is a scenario in which larger taxpayers can go through a process of what is called getting binding rulings, where they have a significant tax problem or question and they can seek a binding ruling to give them certainty about how they arrange their tax affairs. But the reality is that for smaller and medium enterprises that is an extraordinarily difficult and time consuming and costly and complex process to go through. So it doesn’t really work for them. It works for the bigger players but not the smaller businesses who we actually want to be assisting as much as we can.

So the short-process rulings is a sort of truncated, simpler way in which those businesses can try and get some certainty, get a ruling from IRD about a particular tax problem or question to give them certainty about their investment or how they’re going to be making decisions within their business. That was very much welcomed from the community when this bill went out to submissions, but the feedback that the select committee did receive from many people was that the initial threshold in the bill was perhaps a little bit too low. It was available to businesses with a turnover of less than $5 million. In response to those submissions—which were really well argued at select committee—we’ve agreed to increase that to a $20 million threshold. So that’s going to give many more businesses access to that short-process rulings facility, and that is going to make life a lot better for them.

There are also changes in this bill around KiwiSaver, and look, on this side of the House we are just immensely proud of KiwiSaver, and every single advance in KiwiSaver from its establishment through to this point has been led by members on this side of the House.

Kieran McAnulty: Did they support it?

MICHAEL WOOD: Well, this is one of the interesting things. The member Kieran McAnulty asks if the Opposition are supporting it, and the Opposition have tied their colours to the mast on this bill: they are voting against it. But what are we doing for KiwiSaver in this bill? They’re voting against it; Mr Bayly told us that. We’re giving Kiwis more flexibility to engage in KiwiSaver by introducing new contribution rates of 6 percent and 10 percent, and that is going to give people—at the moment, say you are contributing at maybe 4 percent, you’ve got to double it and go right up to 8 percent now if you want to increase your KiwiSaver savings. This is going to give many more people a kind of a staircase to increase their contributions, to grow their savings, and have greater security in their retirement years. That is a really good thing.

This bill also does allow over-65s to join KiwiSaver, and that’s a good thing as well. We know many people continue to work past that traditional cut-off date and we think that those people should have the right to be improving their savings for the time at which they do retire as well. One of the changes select committee made in this area is that at the moment we’ve got a five-year, lock-in provision. We’ve sort of envisaged a situation where maybe someone starts contributing to KiwiSaver a little bit after they’re 60, they retire after less than five years—we do want those people to be able to access their KiwiSaver. So provisions that were enacted at select committee will remove that five-year, lock-in period for people in that situation.

So what we’ve had through this process, if I can really summarise, is a good bill coming to this House that makes many improvements to our tax system. We had a very good process at select committee, and strong support from officials from the Inland Revenue Department—I want to acknowledge and thank them. We had submissions from across the community, which certainly grew our understanding of the issues within the bill and enabled the select committee to engage with officials and make a series of very practical improvements to this bill. I really want to thank everyone who’s been involved in that process. From my point of view this was a bill, as is often the case with the Finance and Expenditure Committee, where we as a committee were able to engage with the issues and we took a good bill and turned it into a really good bill. And I want to thank the Minister of Revenue for his support in that area.

One area I will touch on is that the Commissioner of Inland Revenue’s care and management powers, which were in the original bill, are not proceeding in this bill. This is an excellent example of the way that our parliamentary democracy works. There were some concerns that were raised at the select committee around how these powers might work: they, effectively, allowed the commissioner to address anomalies that might be there within the bill. There were some concerns around where the appropriate delineation of powers between the Parliament and the commissioner were. As a result, those changes are not proceeding in this bill and the discussion was that there’ll be further consultation and dialogue around this. Now, the committee in the next tax bill, which will be coming back to the House sometime a little bit later in this year, has received a revised set of proposals in this area, which are currently going out for public consultation. And I just want to point out what a good example that is of how our system works in this Parliament—that actually, at the select committee stage, we have the ability to engage on these issues; we have Ministers who respond really well to these issues; and we can actually look to adapt legislation to deal with concerns, to listen to submitters, and get the best possible legislation at the end of this day.

So this is a really, really good bill. It makes a lot of changes that are very, very positive to taxpayers. The parliamentary process has worked. The Minister is to be commended for steering this bill through the House and for the significant workload that he has in terms of bringing tax legislation to this House to make life better for taxpayers. And I certainly commend this bill to the House on this its third reading. Thank you, Madam Deputy Speaker.

DEPUTY SPEAKER: Just before I call the next speaker, the last two speakers have brought to my attention the contributions to KiwiSaver for those over the age of 65. Just because I’ve had a birthday that does not mean I need that sort of advice.

Hon AMY ADAMS (National—Selwyn): Thank you, Madam Deputy Speaker. I thought you might like to declare an interest—but OK, thank you, Madam Deputy Speaker.

There are some things in this taxation—I won’t repeat the whole title; we’ve heard it enough—bill that we think, on the side of the House, are good changes. We’re not disputing that. We’ve certainly heard from members previously in this debate about some of those changes and I actually would agree with the speaker who’s just resumed his seat, Michael Wood, that actually the committee, I think, worked well at improving some of the aspects in the bill. So there are certainly components that on this side of the House we think are meritorious: changes to KiwiSaver certainly, the direct refund ability provided for in the bill, the binding ruling changes, and also, following on from the last speaker’s contribution, the pushing back on the extra powers of the Commissioner of Inland Revue was seeking to address anomalies in legislation.

We can all see the merit. And yet when you are giving a delegated, quasi-legislative—well, certainly a tertiary-level, decision-making power to an official in an area like tax law, I think we do have to get that right and be very careful with it. And I would actually agree that the committee worked very constructively across party lines on some of those issues and on those we’ve got to a good place. So I certainly don’t want the fact that we are voting against this bill to take away from the fact that there was some very good work to improve some aspects of the bill that we thought—as I say, without party-line divisions—weren’t quite right and that also there are some aspects of the bill that we think are certainly worth advancing.

But—there was always a “but” coming; and it is a “but”—we will oppose the bill because the core part of this bill fundamentally is still setting the annual tax rates. It’s all right there in the title. As it says on the tin, it sets the annual tax rates. And this side of the House is not going to vote in favour of legislation which overtaxes New Zealanders. That’s what fundamentally this does. It says to New Zealanders that because the Government can’t control the loose spending of Shane Jones and others who occupy the Treasury benches, New Zealanders will be paying more tax than they should and more tax than they need to, and of course New Zealanders know—you’d have to be under a rock not to know—that there’s a whole bunch of even more taxes coming, but we’ll have plenty of opportunity to discuss those. But think of this bill as the beginning of this Labour - New Zealand First - Greens Government taking more money from New Zealanders than those New Zealanders should rightly be paying. And we are not, on this side of the House, going to vote in favour of that.

The first aspect in that regard is that the tax thresholds in this bill at which the tax rates apply now haven’t been adjusted since 2010. Now, National adjusted the tax thresholds in 2010 to make sure they were continually being updated for inflation and they did again in 2017. But of course the first act of the incoming Government was to cancel that. So we are now back at New Zealanders paying tax on thresholds that were last set in 2010 because this Government is content to let inflation mean they can take more and more money from New Zealanders. And that is not something we’re going to turn a blind eye to, to fund loose, poorly targeted, poorly overseen, and low-accountability spending.

But it isn’t just that issue of keeping up with inflation, which tax rates absolutely should. In fact, the IMF in Australia just came out and told the Australians, “You should have a system for automatically linking your tax thresholds to inflation. It is bad practice not to.” And I look forward to their next review of New Zealand, when I’m sure this Government will get a similar message. But there’s good news: do we have a solution for them.

But it goes further than that, because in those changes that I have mentioned that were legislated in 2017 and then cancelled by the incoming Government, New Zealanders would have found themselves getting more than $1,000 a year more in their own pockets. Now $1,000 a year might not be much to Michael Cullen who gets that a day, but it is a lot to the average worker. And again, if it wasn’t for poorly-targeted, pork-barrel spending from Shane Jones and others, New Zealanders could have had that money and the country would have been better off as a result. But no, no, this is a Government that said, “Let’s overtax New Zealanders; let’s take more money out of the pocket of every hardworking New Zealander, and we’ll use that to funnel money through weak, poor-spending programmes that aren’t going to help New Zealand, but it keeps us sweet with New Zealand First and others.” That is not a bill and that is not an approach that the side of the House will support. We will be opposing this legislation.

FLETCHER TABUTEAU (Deputy Leader—NZ First): Thank you, Madam Deputy Speaker. A pleasure to rise on behalf of New Zealand First to speak to this fantastic legislation.

I’d just address some of the comments made by the Opposition members, if you’ll allow me. The comment around fiscal drag is farcical. For eight years the National Government did nothing around the changes to inflation and the subsequent drag on the income tax rates—eight years. Eight years they did nothing, and then they decry the fact that they had proposition tax cuts for New Zealanders. Yet they sit there and watch this Government spend absolutely appropriately, studiously, and wisely on hospitals, schools, and infrastructure across the country, and they—anyway. Let’s talk about the legislation because I could spend 10 minutes on what they didn’t do—

DEPUTY SPEAKER: No, you wouldn’t.

FLETCHER TABUTEAU: But you wouldn’t let me.

DEPUTY SPEAKER: No, I wouldn’t let you.

FLETCHER TABUTEAU: So let me begin by wishing you a happy birthday, Madam Deputy Speaker.

So I think I will take a short call because those of us who have spoken already have enunciated quite well what this legislation is about. But there are some highlights for New Zealand First, for me personally. This is a legislative package where New Zealanders are witnessing right now the modernisation of our tax system. They are seeing it through this legislation that we are passing through this House tonight, through this third reading. They’re seeing it in the technology being applied in the IRD. Basically, in summary, what that means for New Zealanders is a simpler and more efficient tax system that they will notice first hand. One of the statistics that comes to mind is in the last financial year there were 750,000 taxpayers who could’ve received a refund but they didn’t proceed with that. They didn’t seek to get that refund from IRD. So this modernisation, this upgrade of technology, of implementation around data management, collection of information, means a timely response from inland revenue. And what’s quite amazing is that for the first time New Zealanders will receive a refund automatically if they are so due. Ironically the efficiency also means that these refunds are probably less and less likely to occur because IRD will become that much more efficient in understanding what people’s tax obligations are with their salaries and other incomes. Conversely, there’ll probably be less tax bills sent out because IRD will get that right as well. So that, I think, is a tangible measure of what this modernisation of the legislation will mean for people.

I just wanted to commend the work of the Minister and the select committee, but I wanted to focus on the KiwiSaver provisions to do that because I think it’s quite exemplary that we have taken the issues, known issues, with KiwiSaver and worked on them and put them in this legislation, so that those tax income earners between the age of 60 and 65 who used to have a five year kind of block on accessing their KiwiSaver savings can now do that when they turn 65, which is great. What we’ve also done now is ensure that anyone working who’s over 65 and who wants to can use the KiwiSaver system, the structure here, as a means of savings. Some of our KiwiSaver providers are really good at providing returns for savers. So you know, that’s to be commended in terms of providing options.

The other thing I wanted to touch on was probably one of the most fundamental things for me coming from the Rotorua electorate and that was around the secondary tax rates. It was a common conversation amongst the people of Rotorua in my office, and the frustration of having these multiple tax rates. People will be so pleased to know that if they work with inland revenue, discuss their income for the year and they both understand what their likely income is to be for the year, they will be taxed on those incomes at that one rate. The simplicity of that and the helping people with their day-to-day lives in terms of money management will make a big difference for many of the people in Rotorua. So this legislation is significant in that.

Alastair Scott: All your own work. All your own work.

FLETCHER TABUTEAU: Yeah, yeah. I would probably end it there because it’s just too easy to attack the other side. Not in the mood for it tonight. So may I please commend this legislation to the House, and thank all those involved. Thank you.

Hon JUDITH COLLINS (National—Papakura): Thank you, Madam Deputy Speaker. Hey, isn’t it wonderful the way that Fletcher Tabuteau, who’s resumed his seat, gave a big shout out to us for the great work we did in Government to actually bring about the opportunity for inland revenue to work with people so that they can, where they have more than one taxable income, work out what their tax should be so they don’t have to pay a secondary tax as well. And that is something which over some years and with different ministers we were able to do. It’s good to see it’s finally going to come into law. That is the best thing, of course, out of this particular bill.

Obviously I’d like to acknowledge that the Hon Stuart Nash—who’s now the Minister of Revenue, following on a particularly fine couple of Ministers of Revenue—was able to continue with these changes and did not cut the funding or cut any, let’s say, drive and impetus that inland revenue had for this change. Because unlike some ministers, I have to say, who have done silly things like just cut programmes because they weren’t that particular person’s name—and I’m not looking at the Hon Phil Twyford that much when I say that.

I would like to say that we are not going to support this bill in the end, That’s not about the good things in it, which obviously also include the changes to KiwiSaver that increase flexibility. We think that’s a good thing. We think that the removing of the five-year look-in period, opening up KiwiSaver to over 65s—which, I have to say, was a National Party Papakura electorate remit at a conference just a couple back—that was a good thing, and also increasing the number of contribution rates. We think that’s all good.

What we do not think is good, and we cannot vote for, is the increase and cementing of the higher tax rates that New Zealanders need to be paying. We see a lot of nonsense talked about energy payments, winter energy payments to millionaire retirees. At the same time this Government took away the thousand dollars extra that people were going to get because of the tax cuts that we legislated for. So in essence we do not support this bill even though there are parts of it which do have the genesis in our work, and that we do agree with. But ultimately no, the tax is too much and we should have less of it.

Hon JAMES SHAW (Minister for Climate Change): Thank you, Madam Deputy Speaker, and I’m not sure if I have the day right but if I’m correct, well, happy birthday.

DEPUTY SPEAKER: I said recent.

Hon JAMES SHAW: Recently. Belatedly happy birthday.

The Green Party supports this Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill—snappily titled—through its third and final reading. I do want to note, of course, the irony that this bill is going to pass roughly 10 days before the end of the tax year that it covers. But I’m glad that we are getting to it.

There are, as has been noted, three main objectives: reform of administration of individuals income tax; addressing key aspects of the Tax Administration Act 1994, including information collecting and shareholding of taxpayer information; and, setting the annual rates of income tax for the 2018-19 tax year. I just wanted to draw out a few points in particular in relation to the debate and the fact that this is not passing with the support of the other side of the House. First of all, in addition to those main objectives the bill does propose amendments to simplify and clarify key aspects of our tax law, for example, as Mr Tabuteau just said, removing the need for people who only earn employment or investment income to file a tax summary to get a tax refund. So what that means, for the folks at home and I know that there are tens of thousands of you, is that that change will automatically give around 750,000 New Zealanders tax refunds without them having to file a tax return. I just want to note that the National Party is voting against that. So the National Party are voting against removing paperwork from the lives of three-quarters of a million New Zealanders.

They are also voting against changes that will help individuals to use the right tax code in the year to avoid tax overpayments. The National Party are voting against that. Also, they are voting against removing the unnecessary compliance costs which this bill gets rid of. So the party of regulatory reform and small government is voting against unnecessary compliance costs. This is about the modernisation of our tax system, and the National Party are voting against that, preferring the old, outmoded tax system that this bill helps to replace.

So the amendments here are part, obviously, of the ongoing process, the multi-year—in fact, multi-Government process—of inland revenue’s Business Transformation process that links the department’s ability to operate with its technology upgrades, and to implement a range of measures that help to modernise and simplify the tax system.

I just wanted to highlight, also, the changes to KiwiSaver here, which are based on material that occurred under the previous Government and the Retirement Commissioner’s report in 2016 on retirement policies. I just wanted to note that at the time, or earlier in this process, the Green Party did express concerns to Minister Nash about the amendment to reduce the maximum contribution holiday period from five years to one year, because we were concerned that that could be a burden, particularly for some vulnerable people whose circumstances, leading to a savings holiday or a suspension, might not get resolved in a year. We know that people who are in those kinds of circumstances, if they are feeling that they need to take that holiday because their current circumstances require it, then they might, essentially, end up getting ejected from the system because that period of time is too short. However, I want to say that we have been assured that as part of the IRD’s Business Transformation programme, there are ways that would be included to reduce compliance costs for KiwiSaver members who are looking to renew a suspension and come back into the system. So we feel that that concern has been assuaged.

Now, as I said in the first and second readings of this bill, few of us enjoy paying tax, especially people on the other side of the House. Some spend a great deal of money with, you know, rooms full of tax lawyers finding new ways and exciting ways of paying less tax, and as little tax as possible, but as I’ve previously said, tax is a social contract that allows us to pay our fair share to pay for the public services that we all need for a functioning society. Now, in return, obviously, a tax system should be based on fairness, it should be simple, and it should operate efficiently, and the reforms that are in this bill, the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill, aim to meet those criteria to ensure that we do have a fair and simple and effective tax system that is fit for the 21st century. So, therefore, on behalf of the Green Party, I do commend this bill to the House.

ALASTAIR SCOTT (National—Wairarapa): This bill is a missed opportunity, an opportunity that a lazy Government could have taken up to reward taxpayers, who deserve to have more of their money in their pockets. After nine years of real growth in the economy, it would only be reasonable to allow the tax rates to be adjusted to enable Kiwis to have more money of theirs in their pockets. That is what we proposed, despite Mr Tabuteau’s assertions, in 2017, when we wanted and legislated for a change in the tax brackets. Those tax bracket changes would have enabled $1,000-plus to be in taxpayers’ pockets.

Priyanca Radhakrishnan: Which ones?

ALASTAIR SCOTT: In every taxpayer’s pockets over a minimum amount—an average income earner was going to take home $1,000. But, no, this Government has missed the opportunity and has set the tax rates unnecessarily high, because they are a lazy Government who does not do the thinking before just saying, “Let’s just keep the tax rates the same. We’ve got no interest in being innovative. We’ve got no interest in giving to Kiwis more money in their taxpayer pockets”.

The other opportunity that was missed was in KiwiSaver. Again, speakers across the House have acknowledged the KiwiSaver changes were done from this side of the House. Nothing new from that side. Another example of a lazy Government: not thinking about the opportunities that existed to do something more for KiwiSavers. There are not enough people in KiwiSaver. We know that. The Government had an opportunity to do something about it, and they did not. Those two reasons are why we are not supporting this bill.

KIERAN McANULTY (Labour): “There’s not enough people in KiwiSaver”—what an amazing statement from a very, evidently, angry man. It’s quite incredible that Alastair Scott—I had to take a moment to remember his name—could stand up here after his Government made changes to KiwiSaver that would disincentivise people from joining and then make comments to say, “There are not enough people in KiwiSaver”. What a disingenuous statement. It just goes to show that some people in this place here wish to play politics instead of actually standing up and acknowledging when things are a good idea. They just still—they can’t help themselves and they’ve got to make silly statements that, actually, just make themselves look foolish.

What this bill does, in terms of KiwiSaver, is actually address the concern that Alastair Scott said about people not joining KiwiSaver, because what it does is it makes those changes to make it easier for people to join. It incentivises people to make the most of KiwiSaver—because what we have here is a system brought in by the previous Labour Government, which, I understand, the National Opposition of the time did not support—because it brings in new saving rates. It brings in saving rates of 6 percent and it brings in the saving rate of 10 percent, and I, for one, would encourage any new worker—particularly those young workers who are just starting out; they might be starting out in a new job, they might be starting out in their first job—if they can, they should go for the highest possible saving rate they can. This is because 10 percent over a long period of time—the intent of KiwiSaver is to allow for workers to have a nest egg in their retirement; to be able to actually have a benefit from a lifetime of contribution, a lifetime of work; and to have money put aside for their retirement.

Another aspect that is an absolute positive to KiwiSaver, in this bill, is the ability for people over the age of 65 to join. It is no longer a barrier for those very valued citizens in our society who are over 65. And because you’re 65—I don’t agree with that side of the House, Madam Deputy Speaker; 65 is not old these days. People at 65 years of age can do anything, and it shouldn’t matter what age you are. If you are working you should be able to—

DEPUTY SPEAKER: Don’t bring me into it, please.

KIERAN McANULTY: You’re dead right, Madam Deputy Speaker. You are dead right. I should not have brought you into this, even if, in this instance, it is applicable. The point is that those workers who are over the age of 65 should not be discriminated against, and this bill allows them to do it.

Now, earlier, I mentioned about those young workers—perhaps they might be starting out, and I think of those in the area where I live, Wairarapa. I think I am—actually, I look around and I am the only MP here that lives in Wairarapa, so I’m looking around and I talk to those people on the street. Now, often when they’re starting out working. they might get one or two or three jobs, and those people are affected by secondary tax. They’re not 100 percent sure why, but they know that if they get a second job or a third job secondary tax kicks in. It is a burden. It is a burden because at the end of the day, at the end of the tax year in fact, the vast—well, actually not the vast majority; around 750,000 people do not follow in the process of collecting a refund. Now, for those who know about the system, they know that the tax is collected just in case they—to avoid having a tax bill at the end of the year. But for those who don’t understand the system and for those that it is a burden, this bill is going to make a good positive change to their lives, because this allows the IRD with the appropriate technology to be able to track the rate of tax that they pay across their various jobs. So the intent of secondary tax, to avoid a tax bill, is enabled through this technology and through the provisions in this bill to allow them to do it.

Those that I’ve spoken to on the streets, and the street corners of Wairarapa, from the areas of Featherston all the way to Waipawa, those that work more than one job—when they hear that this Government is going to remove the burden of secondary tax, it is like a weight is lifted off their shoulders. They are delighted at the provision in this particular bill. So it is great that the other side are acknowledging particular aspects of it. They’re making a lot of noise around—oh, they would have made tax cuts. They wouldn’t have increased spending in health and education, but they would have made tax cuts. It is a shame that politics is getting in the way of a bill that is going to benefit the vast majority of New Zealanders.

BRETT HUDSON (National): Oh, it’s a pleasure to rise and speak on this, the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill. This is an opportunity lost for New Zealand. I just want to take up on comments Mr Shaw made. Fairness—how many times did he say “fairness”? Yet he voted against Amy Adams’ Supplementary Order Paper that would have indexed tax thresholds to inflation, ensuring that we wouldn’t be increasing the tax burden on people by stealth, through increasing taxation through inflation. He thinks that’s fair. He’s voting for a bill that’s going to retain tax rates that take more tax by stealth. He calls that fair.

But then there’s Mr McAnulty. He said KiwiSaver—it’s going to make it easier, easier for people to join. Mr McAnulty, there are two new rates in this bill for KiwiSaver, both of them higher than the minimum. There is nothing in this bill that is going to make it easier for people to join KiwiSaver and start contributing—not a single thing. In fact, the other thing Mr McAnulty fails to mention is while there are 2.9 million people enrolled in KiwiSaver, there are 1.2 million of them that are not making contributions. What they should have been doing is looking at a lower threshold, maybe 2 percent. They could have been looking at maybe having employers still make contributions when employers are on contributions holidays. I swear, I looked over at Mr McAnulty wondering where the wires join at his wrists, because whatever this bill is doing, it certainly is not making it easier for people to join KiwiSaver. This is an opportunity lost. We oppose it.

DEPUTY SPEAKER: Can I just make it clear to this next speaker that she has the full 10 minutes, because we do not have anyone else. So I call Dr Deborah Russell.

Dr DEBORAH RUSSELL (Labour—New Lynn): Thank you, Madam Deputy Speaker. I’m delighted to have a full 10 minutes to speak on this bill.

DEPUTY SPEAKER: I thought you might be.

Dr DEBORAH RUSSELL: The Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill is a thick and heavy bill. As so many tax bills are, although it contains matters of real policy change which have already been discussed at length in this House, it is also a workhorse bill. It is a bill which contains changes which are there just to keep the tax Act in order, to keep it functioning well. The Income Tax Act is a long and dense Act, but one of the interesting aspects of our tax system in this country is that in large part there is a great deal of agreement about how to run it. We have very few special concessions in the tax Act. We have very few special little rules for special groups of people. It is largely free of the loopholes that exist in other countries where some special rules have been put through to benefit a particular group of people. The attitude of the tax community in this country, and indeed the attitude across the House, is one of getting the Income Tax Act right, to measure income accurately, to measure tax liabilities accurately, and to make sure that each person contributes their share according to the law.

As a workhorse bill, this bill contains many provisions which are just there to tidy the Income Tax Act up and to make sure that it keeps on working as it ought. They might not seem like significant changes, but they are real changes. So, for example, I want to turn to a particular change which is to do with changing or adding to the definition of the market interest rate for fringe benefit taxes. Now, in the Income Tax Act, as it stands, market interest is very important because when an employer gives a loan to an employee, that could be a fringe benefit if the rate that is charged on the loan is quite a bit lower than the ordinary rates that are available to the ordinary punter on the streets. This is particularly important for, say, banks and the like. So in the Income Tax Act as it stands, the market interest rate is charged at the arm’s length rate—so the rates that would be set by an ordinary lender, lending to a person who has the characteristics of the person borrowing the loan: the particular income, the particular liabilities, the particular demographics, what kind of interest rate would be charged for that person.

That definition of a market interest rate has worked pretty well for a large number of years, but in recent years there has been somewhat of a shift in the way that interest rates are set. In particular, people have been able to go in and negotiate interest rates. So as it turns out, if a person is a good negotiator, they might be able to obtain a somewhat lower interest rate.

So what we’ve done in this bill is ensure that that lowest interest rate can be available as the market interest rate that is used for the purpose of the fringe benefit tax legislation. It simply ensures that we are being fair to employers and to employees and we are trying to get the Income Tax Act right. That’s one example of what this bill does just in order to get the right rates of income tax.

Let me talk about another issue here that’s a change that’s in the bill. It’s just one of the other policy matters that wasn’t much discussed during the select committee processes, and, actually, no one really had any issues with it. It turns out that businesses often incur expenditure in order to reduce noise. So they want to mitigate noise problems. The trouble is that often that particular bit of expenditure can’t be deducted for tax purposes. It becomes what’s known as black hole expenditure, and it falls into a, sort of, no person’s land: it can’t be deducted and it doesn’t really add to anything. That creates a disincentive for businesses to spend the money to reduce noise.

So this bill contains a rather clever measure—and I think it’s really rather nicely done—saying that, in actual fact, if we bring noise mitigation expenditure in under pollution provisions, under pollution remediation provisions, then the businesses can obtain a tax deduction for it. It’s a simple little rule change, and it’s a rather nice one because it ensures that businesses get a perfectly reasonable deduction, and it removes a disincentive to engage in reducing noise.

So by these two provisions, which I’ve discussed in a little bit of detail, what I’m showing is just exactly the nature of the work that goes on year in, year out to ensure that our Income Tax Act remains fit for purpose. I commend the officials who work on such matters. I know the hard work that goes into it. I also commend the Ministers who year in, year out, through Minister after Minister, have worked on these sorts of changes, and, of course, the select committees who have worked on them as well.

Let me turn to the issues that have been raised at length by the Opposition tonight; that is, the issues of the income tax rates. Despite all the great work that is done in this bill, the Opposition is going to vote against it because they don’t like the tax rates that are set in the annual rates part of this bill. They don’t like those tax rates. They claim that we are taking too much out of New Zealanders’ back pockets and we are taking too much tax out of the economy. They say that we should have put tax rate changes in effect; we should have chosen to reduce the amount of tax that is collected in this country.

I challenge the Opposition on this. Tax is critical for the good functioning of our society. It is through income tax that we fund all of the activities that we enjoy in a civilised society. It is through income tax that we fund our health system. It is through tax that we fund our education system. It is through tax that we build our roads. It is through tax that we fund our welfare system. It is through tax that we pay our police. It is through tax that we have a defence force. The list goes on and on and on. Tax is not just imposed for the fun of it; it is imposed because it funds the society that we want to live in. It is imposed because we need to fund a certain way of living in this society.

The interesting thing is we have a large part of agreement in this country. By and large, we are committed to health; by and large, we are committed to education; by and large, we are committed to welfare, we are committed to roads, and we are committed to defence and police. We argue about the extent of it but not whether we do it at all.

But we were described as a lazy do-nothing Government. I say: what about the lazy do-nothing former Government? What about the lazy do-nothing former Government that let the hospital buildings crumble? What about the lazy do-nothing former Government that allowed a huge crisis to build in mental health? What about the lazy do-nothing former Government that failed to build any more State housing? These are all activities that are funded through our taxes. So I say to the Opposition, that if the Opposition wants to cut tax rates, what else are they going to cut? What else will they cut? Because that’s the simple equation: if taxes are cut, then necessarily the expenditure must be cut too.

We’ve had many cries from the Opposition for more expenditure on roads, but how can we spend money on roads if we do not collect an adequate amount of tax in the first place? That is why cutting tax rates, as the Opposition have suggested again and again and again this evening, is simply not an appropriate response. Yes, we can always think about the amount of tax that we ought to be collecting, but at the same time we need to think about what we want to do with those taxes, and at the same time we need to think about how we fund our society. That is why this bill, as it is written, is so important, because it has a fundamental commitment in it to funding our Government and to funding the good of a civilised society.

On this side of the House, we support all the excellent provisions in this bill and we support the tax rates in it because they are the price of a civilised society.

IAN McKELVIE (National—Rangitīkei): Well, the only thing that Shakespearean performance of note failed to recognise was that we on this side of the House believe that people are better at spending the money themselves than the Government is at spending their money, and that is the critical reason we oppose this bill. But I want to take my short time, rather than talking about that, because enough has been said on that tonight, to talk about a couple of other things in the bill.

One is the racing industry, and we had great hope for the changes in the racing industry, of course. Unfortunately, they did not work out as they were intended, and our mutual concerns were, I guess, recognised when, in fact, I don’t think one single thoroughbred qualified for the benefits of the tax changes made. Ironically, a number of harness horses may well have qualified, and the interesting thing about it, of course, is that if in the future those price thresholds are changed, it may well have some benefit.

KiwiSaver has been talked about at great length tonight, and I think those changes are very positive, particularly opening that up to people over 65 years of age. I agree with my friend Mr Hudson, who said that it doesn’t make it any easier at all to join KiwiSaver, because there’s nothing I’ve seen that makes it any easier. The only thing that will make it easier is if they reintroduce the $1,000 and put it in the account before people start. That will certainly make it easier. It leaves it up by a thousand dollars.

And, finally, I want to talk briefly about the transformation project, which I think is very positive. It will be intimidating for some people as we work into it, and it won’t be quite as easy as Government members have alluded to to change the secondary tax situation, because, in fact, the secondary tax will still be paid on this. The only difference will be that people will have the ability to calculate those rates, and the IRD will help them to do that, midway through a tax period. So, instead of paying too much or too little tax, they should end up paying the same amount. So I dispute the fact that secondary tax will disappear; it won’t. It will just make it more equitable in some cases.

So we certainly don’t support the bill, but there’s only one reason we don’t support it, and that is, as I said at the start of my little contribution, that we believe individuals are better at spending their money than the Government is.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Deputy Speaker. It’s with a real sense of sadness that I hear the same old story again that we need to leave money in the pockets of New Zealanders, and let’s lower the tax rates.

Brett Hudson: Well, it’s their own money, Dr Webb. It is their own money.

Dr DUNCAN WEBB: You may say that, but it’s about fiddling around the edges—

DEPUTY SPEAKER: I didn’t say that.

Dr DUNCAN WEBB: —and I’m glad that we are part of a Government that’s looking at the equity of the whole tax system and not looking at just giving a bit more money to the same old few. We need to look at the system as a whole, and this bill is part of doing that. We’re looking forward, though, to a much broader examination of it, and I’m looking forward to that—a real adjustment, real equity in our tax system.

I’ll tell you one thing that I think’s really good about this, and that’s secondary tax, because true hard-working New Zealanders have been suffering under secondary tax for some time. It’s those people who are working, often on very low wages, with two or sometimes three jobs, who have been working across these jobs and who, in their second and third job, are paying an increased tax rate. They’re paying it and they’re not getting it back until the end of the year, when they put their return in. Now, you know what? A lot of these people—people who might be doing cleaning jobs or working in a factory and then as a security guard after—they can’t afford to bank that money and wait till the end of the year. They desperately need it. So making our tax system administratively fair for those people is really, really important, and the ability to have more nuanced tax codes that are more responsive so that people get to keep as much of their money as they can is a really, really good thing.

Of course, one of the things that this means is that there won’t be a tax refund industry—an industry which really preys on the apparent complexity of the system, a system which, in fact, is not as complex as it’s made out to be. But those tax intermediaries, those industries out there who take 30 or 40 percent of a tax refund, really for filling out a very simple form—well, that industry will shrink significantly. They won’t need that large tax refund; they’ll pay only the right amount of tax. That’s a very, very good thing, and I know that a lot of really hard-working New Zealanders in several low-paid jobs are really looking forward to and appreciate that initiative.

Of course, the other thing that’s going on there is the automatic filing of these returns. Can I just say that the Business Transformation project is a great project, a project which is streamlining information and making the tax system administratively much more simple. But one of the things that it does do, and is picked up in this bill, is it automatically calculates tax liability, which means it may require adjustment further down the track. And one of the questions that is addressed here is whether, when we come to correct that, interest or penalties should be payable. In the select committee, I consider it a significant improvement—and, I must say, officials were quizzed at length on penalties and interest and how just they are, and we got to the conclusion that if there’s automatic filing going on, if the return is, essentially, generated within the IRD, then it’s not appropriate to be imposing penalties if it needs later adjustment. So penalties and interest aren’t appropriate there, but it was a good discussion and one where we really moved forward.

Of course, the other important thing for small business—small and, I must say, medium sized business as well—is the binding ruling process. Now, the fact of the matter is that no matter how hard we try to make our tax system simple, to make it fair and simple at the same time is a challenge, and where we get into complex financial transactions and complex business arrangements, we don’t always know exactly how the tax system interfaces with what’s going on, and business people need certainty. So the binding ruling process is a great idea but it was expensive and long. So the introduction of a short-form process is a great innovation here, but it’s not just for genuinely small businesses. Businesses with a turnover of $5 million—it’s easy to think of a business that might have only five or 10 employees. We wanted to push that out so that for businesses that are significantly larger than that—I can think of professional services firms with 100 employees who turn over around $20 million—a binding ruling process for them is a great innovation.

So that’s another innovation here, where taxpayers can go to the IRD in an expedited process and find out their tax position without having to engage in any conflict process. It’s not litigation. It’s very much determining what the best tax position is and it’s binding—that is to say, even if a later decision of the court determines that it wasn’t appropriate, it’s binding as regards the parties to it and those that relied on it. So that again is a very good process.

The other good thing, of course, and it’s another administrative simplification, is the write-off rule, because quite often there’s a lot of small tax bills floating around and, really, the cost of administering them, the costs of putting in returns, exceed the benefits from it. Whilst the IRD accepted this, it had a relatively complex process, a relatively complex set of rules. And, again, always for simplicity, the Finance and Expenditure Committee looked at those issues and said, “No, no, we don’t want a whole lot of rules. Let’s have a pretty brightline approach—50 bucks. If it’s a tax bill of 50 bucks or less, we’ll write it off.” And that’s going to affect thousands upon thousands of New Zealanders who won’t need to go and file a return. Their tax is not worth collecting and it’s a very good write-off rule. So another win for hard-working New Zealanders out there who won’t have to engage.

I just have to say, though, we do need to keep our eye on the fact that our tax system remains one that is based on taxpayer honesty and taxpayer compliance. Whilst a whole lot’s going on inside IRD, and a whole lot of automatic filing’s going on, it is up to the taxpayer, the onus remains on the taxpayer, to ensure that their tax position is correct, and the integrity of the tax system relies on the integrity of New Zealanders who are fair, decent people, know that it’s appropriate to pay their tax and do so in full and on time. These systems are really supportive of that, but they don’t replace it.

Of course, with KiwiSaver, we’ve heard already the fantastic improvements to that, and I really didn’t understand the suggestions that these, in some way, were anything other than outstanding innovations. The additional amounts that can be contributed—6 and 10 percent—just more options. Let’s give New Zealanders some choice—

Brett Hudson: What’s there to encourage the 1.2 million to start contributing? Come on.

Hon Kris Faafoi: Well, they just had $1,000 that you took away.

Dr DUNCAN WEBB: Yeah—and, of course, the five-year lock-in period; we’ve done away with that—more flexibility.

Hon Kris Faafoi: Where’s the kick-start?

CHAIRPERSON (Hon Anne Tolley): It’s very difficult for the speaker when members on their own side are yelling as well as the Opposition.

Dr DUNCAN WEBB: But Mr Faafoi’s contribution was excellent, I must say.

CHAIRPERSON (Hon Anne Tolley): Well, he doesn’t have the floor.

Hon Carmel Sepuloni: He doesn’t need it!

Dr DUNCAN WEBB: Ha, ha! To move finally to something which I thought was important, and another one which really showed the rigour that a select committee—and, I must say, the Regulations Review Committee—can bring to these proceedings, is the care and management rules. It was proposed that the commissioner have an ability to, essentially, suspend the operation of parts of the law where there were obvious drafting errors and the purpose of the Act wasn’t achieved. Those powers were stated broadly, and the Regulations Review Committee, which I am lucky enough to sit on, pointed this out to the Finance and Expenditure Committee, which I’m also lucky enough to sit on.

So we took cognisance of that, looked at it, and suggested that further scrutiny of that was required because, of course, it’s an extraordinary power for a member of the Public Service to be able to, essentially, suspend the operation of the Tax Administration Act, which is what was happening here. Now, whilst we accept that legislation can grind relatively slowly through Parliament, we wanted real scrutiny of any legislation which conferred that kind of power not on Parliament, not on the executive, but on a member of the Public Service.

So that section of the legislation, that care and management section, was taken out of the legislation and it is coming back before the committee in another guise, in another tax Act, to have a closer look at, and I look forward to seeing that, because it’s an indication of the real scrutiny and, I think, the real quality improvements that can be achieved in this kind of legislation. But overall, this is a bill that really does help New Zealanders and it helps New Zealanders, especially those hard-working New Zealanders on lower incomes in respect of secondary tax. A fantastic addition to our tax law. Well done, Minister. I commend this bill to the House.

A party vote was called for on the question, That the Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Bill be now read a third time.

Ayes 63

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

Noes 57

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

Bill read a third time.

Bills

Local Government Regulatory Systems Amendment Bill

Second Reading

Debate resumed from 7 March.

GINNY ANDERSEN (Labour): Thank you very much, Madam Deputy Speaker. It’s a great privilege to resume my call on the Local Government Regulatory Systems Amendment Bill. We were last debating or discussing this bill on Thursday night last week, so it’s great to be able to pick up and talk about all the good things that this bill will deliver for local government and for New Zealanders. I’d like to also acknowledge the excellent contribution of my colleague Jamie Strange, who spoke to the points last Thursday and made such a strong contribution to how dog parks and various other aspects of this bill will enhance participation of New Zealanders to be able to engage with their local government.

As part of the Governance and Administration Committee, that heard this bill, we received and considered 18 submissions on the bill, and it was great to be able to hear from different interest groups. Two key local government sector groups, Local Government New Zealand and the Society of Local Government Managers, submitted in support of the bill, and it’s good to see that we’ve had that engagement so far. One of the key areas that this bill goes towards changing is, interestingly, around how public notices are notified to the public, and as we’ve seen a big change away from print media and on to online, this bill will enable public notices to be notified in a way that people will engage online as well as hard copy if they wish to. So it’s good.

As this omnibus bill tidies up a range of different areas, one of the ones that I’ll just pick up on that I particularly like that the committee made a slight change to, but has strengthened it, I believe, is that the bill seeks to really look at increasing diversity in local government, and that’s good to see. It encourages participation in a wider sense, because what we do see, sometimes, is declining rates in some areas of New Zealand of people voting in their local government elections. With some of the remuneration of those key roles, we also see people struggling to be able to actually earn a salary and pay their weekly expenses. There is an increasing number of New Zealanders who have retired who have taken up that role, because it is only those who tend to be able to afford to live on that salary. So that’s a point that we need to be looking at for local government, to make sure we encourage young people and people from a range of different ethnicities and backgrounds and experiences to be able to represent New Zealanders at that level.

The amendment to the Local Electoral Act introduces a new duty to facilitate and foster representative and substantial electoral participation. The committee has made the change that—we recommended that this duty be placed with a chief executive officer, rather than the electoral officers. The chief executives, we considered, would be well-placed facilitating and fostering electoral participation and that that would be reflected throughout their organisations and in their approach to how they’re going about planning their elections. The current low level of participation in local elections means that the membership of councils is often less diverse than the communities they serve, and it would be great to see that change over time. The committee recognised there was some overlap between matters raised in the submissions on the bill and the Justice Committee’s inquiry into the 2017 general election and the 2016 local elections.

The one other point I’ll touch on before finishing is that the bill looks at really aligning a range of terms, and it removes the ambiguity from the local government regulatory system. There are various provisions in the bill where we want to make sure that the same language is used across other pieces of legislation in order to avoid confusion, and one example of this is the standardisation of the definition of “working day” across local government legislation. This will clarify the time allowed for statutory processes and will reduce the complexity of these processes for local authorities.

While we’re talking about the working day and local government, can I commend the Hutt City Council for agreeing to pay people the living wage in terms of their working day. It’s been great to see that happen—big supporter of the living wage all around. So congratulations, Hutt City Council, for achieving that over a long period of time. Thank you very much for the opportunity to add to this, and I commend this excellent bill to the House.

Bill read a second time.

Bills

Local Electoral Matters Bill

Second Reading

Hon KRIS FAAFOI (Minister of Broadcasting, Communications and Digital Media) on behalf of the Minister of Local Government: I move, That the Local Electoral Matters Bill be now read a second time.

The Local Electoral Matters Bill modernises two pieces of legislation to provide greater flexibility and to enable local electoral arrangements to adapt to changing circumstances, such as developing new voting methods for the future. The bill is one component of a broader effort to improve civic participation in local government. On behalf of the Minister of Local Government, I would like to thank the Justice Committee for its constructive consideration of the bill. I would also like to thank the 27 submitters on the bill, especially the nine submitters who made oral submissions to the committee. The Government was particularly pleased to see that submitters from the local government sector and those on behalf of the visually impaired were supportive of the bill.

The 27 public submissions covered all parts of the bill and provided useful perspectives on the proposals. The Justice Committee has recommended amendments to the bill in response to some of the issues raised in submissions and to help ensure the bill achieves its stated objectives. The Government supports these amendments, and a number of amendments have been made to reflect these recommendations, which I will speak to briefly. I would also like to thank the National Party for the support expressed separately in the Justice Committee’s commentary and for their constructive approach to the bill in the committee. I can assure them that the Government is very aware of the risks in trialling any new voting method, particularly in an online environment, and especially under the pressure of an imminent local election. However, the Government is also aware that some risk will always exist, and these need to be managed prudently rather than preventing any form of innovation or progress occurring in this area.

For many New Zealanders, filling out their ballot papers every three years is the only way to influence decision making in local government. Therefore, it is vital that the legislative framework for the local elections supports opportunities to ensure that voting in local elections is as easy and accessible as possible. The Local Electoral Matters Bill makes changes to better achieve this aim. Changes to the cost and regularity of postal services are creating increased challenges to deliver postal voting effectively and affordably to New Zealanders. The Local Electoral Act 2001 was enacted to provide for the only two voting methods known at the time, and that was postal voting and polling booth voting. However, the legislation still envisaged and made provision for the possibility of other voting methods in the future, including electronic or online voting. It is in this context that the changes in this bill are the first step in a wider programme to improve the operation and effectiveness of local elections.

The bill has two parts. Part 1 of the bill amends the Local Electoral Act 2001 to make the explicit provision for local authorities to conduct trials of new voting methods. In particular, the bill introduces authority for trials of new voting methods to be limited to subsets of electors in a local election. Currently, a local authority running an election is required to consult with other bodies that are party to the election before adopting a voting method. The Government supports the amendment made by the Justice Committee to ensure that these consultation requirements also apply to local authority resolutions to trial a new voting method, including a trial that would only apply to a specified subset of electors.

Significantly, the Justice Committee also recommended the creation of new contingency mechanisms to be available in the event of a serious problem with a voting system. During the consideration of the bill, officials from the Department of Internal Affairs identified two scenarios that cannot be adequately provided for under the current framework of the Local Electoral Act, either directly or under enabling regulations, for a new voting method. The two scenarios relate to identification of major problems at different stages of the election: firstly, during the voting period; and, secondly, after polling has closed. Where a significant problem occurs during the voting period, there needs to be provision for the electoral officer to make a formal decision that a component of a voting system has been compromised or has failed, and that the component and votes already cast using it must be abandoned.

The critical aspect that cannot be dealt with under existing provisions is enabling electors to vote again when their votes have been abandoned. The Act is very clear that no person can vote twice. The explicit provision inserted by the Justice Committee circumvents this restriction where the initial votes have been formally abandoned. In the event that a serious failure of the voting system is discovered after the polling has closed, the District Court should be able to direct that an election outcome be voided and the election held again. However, the Act currently provides that a District Court inquiry can only be initiated by a candidate or 10 electors, and only after the full results have been announced. Relying on this provision would require official results to be announced and outgoing members to leave the office and elected members to take office while court action is in progress.

Obviously, this mechanism is not fit for purpose for developing a new voting method, and there should be a provision for the electoral officer to initiate a court inquiry without official results taking effect. The Government supports the committee’s recommendation that the electoral officer be given the power to apply to the District Court, after the voting period is complete, seeking a judgment that the election may be voided and rerun. While the proposed mechanism would apply to all local elections, the Government considers it to be particularly relevant to trials of new voting methods.

Part 2 of the bill amends the Electoral Act 1993 to allow people analysing voter participation in local elections to use age group information for this analysis. The Justice Committee accepted the suggestion from submitters that this clause be extended to also provide access to Māori descent information. The Government agrees that there is value in providing electoral participation researchers with access to details about Māori descent information in addition to age group information. The extension to the clause may assist in identifying and removing barriers to Māori participation in local body elections. Part 2 of the bill also amends the Electoral Act to allow local authorities to be supplied with date of birth information from the database of registered electors where this is explicitly required in order to conduct an election.

Clause 12 amends section 113 of the Electoral Act 1993. The clause requires the Electoral Commission to supply an electoral official of a local authority with electors’ date of birth information for the purpose of conducting any election, by-election, or poll. The primary reason for local authorities to require date of birth information is to support voter authentication at the time of voting. Date of birth authentication avoids creating a new barrier to participation or significant extra costs, and it is information held both by the elector and the Electoral Commission that is not published on the roll or printed on voting papers. This makes it an efficient means of authenticating electors. This information may also be used for other purposes related to an election, by-election, or poll using future voting methods. An example of this might be for scrutiny of the roll during the official count.

Local government representatives expressed that having flexibility in its options to authenticate voters was important. Flexibility will also allow local authorities to work with online service providers on the best option, allow for innovation, and potentially to trial more than one approach to authentication. The bill provides for the secure use and destruction of the date of birth information. This date of birth information is defined in regulations as “specified material” and, as such, will be placed in secure containers, with the electoral officer endorsing and signing a memorandum describing the contents. The Government supports the committee’s amendments also to further clarify the circumstances in which date of birth information can be provided to local authorities and to ensure that date of birth information is not supplied in any other circumstances.

Once again, can I thank the individuals and the groups that made submissions on the bill and the Justice Committee for its improvements to the bill. The Local Electoral Matters Bill benefits New Zealanders, because it will provide an enduring framework for efficient and effective local body elections that can adapt to changing circumstances. The changes in this bill, together with a wider work programme to improve the accessibility and effective operation of local elections, will support local democracy by ensuring all electors have a reasonable and equal opportunity to vote in local body elections. I commend the bill to the House.

Hon Dr NICK SMITH (National—Nelson): I would be overstating this bill if I called it “small beer”. I would describe it as micro-brewing. So insignificant are the provisions in this bill that for the Acting Minister of Local Government, Kris Faafoi, to just have spoken and described this as a linchpin of the Government’s reforms for local government really does show just how feeble a programme this Government has in the important area of local government.

Let me begin by taking the House through exactly what the bill does. The law currently allows for the trial of novel voting methods. All this bill does is that you can try novel voting methods in the subset of a council. That is, if you wanted to trial internet voting in a local board area in Auckland, this bill would allow you to do it. Now, how many members of the House really believe that introducing that provision to the law is going to solve all the challenges that apply to local government? But there’s more—there’s more.

This bill is going to allow councils to be able to collect age-related data on voter participation. That’s not a bad thing—members on this side of the House support it. Councils should be able to know that there is a such and such participation rate of 20-year-olds and a high level of participation rate for older people. That’s information that might help councils. But when members opposite pretend that somehow this is the great breakthrough for improving the decline in local government participation that’s occurred over the last 20 years, I say to the Government to go back to the drawing board. You are micro-managing in the extreme.

Now, when the Minister of Local Government introduced this bill she said it was going to be the flagship for introducing internet voting into local government. National has said in its minority view that we have a real caution in that regard. These members opposite were very gung ho about conducting the census all on the internet, and we all know how that went. It was a flop, and the Minister of Statistics still has questions to answer in that regard. Actually, running our voting system is far more important. In the National minority view on this bill we draw attention to the National Academies of Sciences, Engineering, and Medicine in the US that has produced a very comprehensive report on the very real risks of introducing internet voting. National is not saying we’re opposed; what we say in this bill is it needs to be done with substantive care.

The Justice Committee introduced quite extensive amendments to the Government’s original bill because of this caution, and these amendments were driven by National members wanting to be absolutely sure that we maintain the integrity of the vote. Nothing is more important in our democracy than making sure that people are not able to hack into the counting systems for votes, and that people are not able to pretend they’re voting for someone else. And that becomes very difficult to administer when people may be sitting at home on their computer casting a vote and you never know for sure who it is that is actually on that computer voting.

The last set of amendments in this bill provide for researchers being able to get some extra information out of our electoral system for them to be able to do research. Again, National members support that. But I say again to the Government: anybody who pretends that these very minor changes to the Local Electoral Act and to the Electoral Act 1993 are really kidding themselves if they think this is going to make any substantive difference to the major issues that face our councils.

I reflect back on those big, bold promises that were made by Minister Nanaia Mahuta when she first became Minister. There was 18 months of work and we end up with this micro-brewing bill that will make diddly squat of difference to anywhere in New Zealand. The reason that I will not take the first call is it’s not worth the time of the House. The way the bill has been tidied up makes a reasonable job on some reasonably minor amendments. I challenge the Government to bring some decent local government reform to this House. It is an area where we need improvement, and this bill makes such minor differences that it barely cuts the mustard.

GINNY ANDERSEN (Labour): Thank you very much for the opportunity to speak on the Local Electoral Matters Bill. It is another excellent piece of legislation, making local government work even better than it already does in New Zealand. I like this bill that came to the Justice Committee, and I enjoyed hearing the submissions on it, and I very much enjoyed engaging with the members opposite on the select committee about how we refine and improve this bill. So it does come as some surprise to hear such complaints that this bill is “micro-brewing”, I understand was the term that was used.

What I see is an incredibly bold move to take a step towards a different way of voting. So we know the current provisions within the Local Electoral Act will provide postal voting and a polling booth. But what this bill does is it looks at being able to enable a trial of online voting, whether that be to a specific group. It might be those people in an area that have disability issues. It might be somewhere where there are people over 65. It might be younger people. So it enables a local body to make that determination as to how they would like to work with online voting. And it was interesting to note that Nick Smith, the member opposite, had such concerns that this bill wasn’t making any fundamental changes. But from that side, I also heard great hesitation in making that transition to online voting—great scare that technology would not be able to adapt to democracy and be able to provide that security.

We very much heard those concerns during the committee from those members, even though we heard so many submissions that really wanted to be able to embrace online voting, because of the benefit it provides for participation and because of the benefit it provides for increasing the current low levels of local government engagement that we see right across the country—down to 22 percent in some areas, which is really disconcerting. So I think this is a bold bill, because it goes to try and take the first step to enable local government to work by making online voting work in a secure way, in a way that they feel in control of, and in a way that they can determine how to roll that out gradually in order not to move too quickly or too fast. So I think that this does an excellent work.

When I think about some of those barriers to local government participation, I think of myself. I think of what I did in the last local election. I filled out my form. I read up on all the councillors and who I would like. I ticked my boxes, and I put it in the envelope, and I put it on the front seat of my car, and I drove around with it for over a week, because I couldn’t find a mailbox. The National Party got rid of them all, and we can only get the post three days a week. So the fact that we don’t have so many post boxes or such regular mail is a great barrier. So we do need to be moving towards online voting, because it will enable more people to be able to go about their daily business, in their work, and still engage in local government. We shouldn’t make it harder for people to vote. We should make it easier for people to vote, and that’s exactly what this bill does. It gives us a reality check.

So, specifically, it provides a mechanism to limit the risks of trialling a new voting method. Having that data is also a great asset to have for local government. Having better-quality data on voters will give better insight into voter turnout—why people did or did not turn out. Given the last bill that we’ve just been talking about, it will also enable local government to own that area and decide how they’re going to design those elections to maximise the turnout particular to their own unique circumstances.

It will enable better engagement, so I’m proud to see that. An area where we have some of the lowest turnout groups for local government participation are Māori, Pasifika, and youth, and we need to really up that. We totally need to up that, and we need to make sure that we just don’t continually have the same people representing a wider body that is not reflective of those people. So we want to move away from “pale, male, and stale”. We want to be able to have a far more diverse, informed, and operating local government that reflects the needs of the community and that builds facilities and things in their area that respond to those needs, and I think this bill makes an excellent step of moving in that direction.

One of the interesting ones, too, is it will largely benefit the next generation. The changes that we are putting through now will really be seen in the next group of young people coming up, who are so eager to be able to be represented. The communities that are being shaped at local government level in terms of what cycleways or what roads or what parks—if those young people will be benefiting from those, it’s so important that they have a say in that design and that they have a say in how that community takes shape in order for them to feel part of where they live and for them to grow up in a community that reflects what they want to be.

It’s really important that we acknowledge the good work that’s gone on from officials that enabled us to be able to make necessary changes, and—in conclusion—I would also like to acknowledge that we recommended some new contingency mechanisms. There were ongoing concerns raised by members of the National Party in relation to a serious problem occurring in the voting system, and so there have been amendments to the bill to enable an extra process in that level, should there be a problem.

We do see problems sometimes in our local government elections. Here in Wellington, I understand, there was a rogue postie who pinched a couple of thousand voting forms right during the voting time, and that caused a real upheaval. People had to get their envelopes again. So I’m just pointing that out to say that it’s not just online voting and not just the internet that has its challenges with meeting the needs of democracy. All forms of voting have those concerns, as well.

It’s up to us, as good members of Parliament, to be able to make sure that the system is as robust as possible, that people participate as much as they can, and that we have our local government and central government that work well in unison to give people the best possible services that they need. So, without further ado, I commend this most excellent local government bill to the House.

Hon JACQUI DEAN (National—Waitaki): Thank you, Mr Assistant Speaker. It’s a bit of a worry when a couple of minor clauses—a couple of minor changes to the Local Electoral Act and the Electoral Act—deserve such fulsome praise from Government backbenchers.

It is a bit of a worry when you consider that those two minor changes to clauses, one of which—so the existing law does allow online voting, and all this one does is to allow online voting to be trialled in a ward rather than in a local authority area. Then the other part of the bill is to make age-related data available to be provided in a statistical format by age band to a local authority—oh, my goodness me! It deserves its own bill, and it deserves fulsome praise and exposition by Government backbenchers, because, quite frankly, they need to show that this Government is doing something when, in fact, this Government isn’t doing anything.

Or—or—my other theory here is that the Three Waters Review reforms being cooked up by the Minister of Local Government, Nanaia Mahuta, are going to be so unpopular that they are just trying to lull the local government sector into believing that “Oh, yes, we’ve got a Government that’s supporting us. We’ve got a Government that’s doing things for us.”—that’s what they’re saying. No, just wait—just wait until Nanaia Mahuta brings her proposals for compulsory aggregation of water services to this Parliament, and then watch the fallout. But, anyway, in the meantime, we’re dealing with this most worthy bill, which makes the two most minor changes to clauses known to mankind.

Back in the day, back when the last, most excellent National Government was in, these two minor clauses fell across my desk, as I was the Associate Minister of Local Government. I had a couple of options, but my preferred options—well, let’s go through them. So they could have gone into a regulatory systems bill, just about. They just about would have fitted into a regulatory systems bill. There is one. The Labour Government have brought one into the House. It’s sitting on the Order Paper. It could have gone into a statutes amendment bill. It could have fitted there very well, but no, it needed its own bill. Well, how exciting for them and how underwhelming for the rest of us.

GREG O’CONNOR (Labour—Ōhāriu): Thank you, Mr Assistant Speaker. Just replying to some of the previous speakers like the Hon Nick Smith, who might be pleased to know that when we look at what the issues are around local bodies and the poor turnout, actually, his own electorate of Nelson, at 52 percent, had the highest turnout at the last election. So perhaps Mr Nick Smith’s passion in this House has outraged—perhaps the outrage at the Nelson market on a Saturday morning might just be having some effect. So, there you go—he’s very pleased.

The next one down was Dunedin, at 45 percent, and the numbers go down thenceforth, so that’s where we actually look at the need to have this bill to increase participation. In fact, it’s gone down from 2010, when there was a 49 percent turnout nationally, to 41 percent in 2013. It did consolidate in 2016, at 42 percent—up 0.2 percent. But therein lies the problem. We come to this House and we talk about democracy, and I think there’s no one in this House who would profess to be anything other than a great believer in democracy—that very system that has us all standing, or sitting, here tonight. But, like any democratic process, it’s participation that we really must ensure that we increase, because without participation, we end up with something of a pseudo-democratic system.

So it behoves us to look at ways that we can engage, particularly, our younger members of the public. It’s quite interesting that when you look at the demographic, of course, in the South Island, where the average age of people is higher, it’s a greater turnout, and if you go to Auckland, it’s very low. It behoves us to look at ways that we can get our younger population voting in local body elections and, indeed, what better way to do it. We are not a great example in this House. One only has to look around here at any one time to see how many heads are down, looking at our devices, but we probably are fogies compared to many of our younger contemporaries, who spend their whole lives on these devices. So it does make sense that in any attempt we make to increase their participation, we obviously have to look at modern methods, and, of course, electronic voting is the most logical way to go.

Look, at the Justice Committee, we did examine this. Obviously, we only have to look around the world to see examples of where other countries have used electronic methods to interfere with others and to influence others. So it is important that we do actually have protections in place, and that’s why with this bill—despite the criticisms of those opposite—whatever we do, we’ve got to make sure that it does stand the test of time. So what better way to test it than to give our local bodies the ability to use electronic voting, and that’s essentially what this bill does. It gives our local bodies the opportunity to decide—particularly locally—what will suit them.

Nowhere in this bill is it a substitute for our mail voting. In fact, when we talk about fraud and the possibility of fraud, one of the things at the moment is, of course, that virtually all local bodies use some form of postal voting. The old days of having voting sites are pretty much gone in local body elections. Of course, there is also how many forms turn up at different houses, and, truth be known, we will never know how many of those voting forms are filled out by one person in those houses.

Again, it’s something that, while electronic voting will not overcome that—it will be the same problem, but electronic footprints, in many ways, or electronic fingerprints, left behind in the case of any inquiries into such behaviour are more likely to be able to be tracked down than even doing so on a paper-based voting system. So I think this is something that its time has come. There’ll be those that are surprised we haven’t gone further, but I think, with electronic voting, you know, we do, and rightfully, need to be very careful to protect our democracy to ensure that as we build it slowly and learn from our experiences—and, in fact, if you have a look at this bill, there are safeguards within the bill to ensure that where there are unsatisfactory results, where it is believed that an election has gone awry for any reason, then there is the opportunity to ensure that there is a remedy put in place. That is, again, well covered in this bill. So I commend this bill to the House as a piece of legislation whose time has arrived, and I have no doubt that it will form the basis, the building blocks, of a much better voting system and, hopefully, will increase voter participation. Thank you, Mr Assistant Speaker.

Hon MARK MITCHELL (National—Rodney): I’ve got to be honest: I’m not even really too sure what the last speaker, Greg O’Connor, said, other than the fact that I got “building blocks” out of it. The reason for it is—he put up a gallant effort, I’ll give him that, but this is a lightweight bill. This is a lightweight bill. We saw the new Government come in, and they made big promises about online voting, but what did we get? We got this bill instead. We had poor old the Hon Kris Faafoi come down and, again, put up a sterling effort to make it look like there was some heavy lifting being done by the Government, but there’s not much; they’re low-level flyers at the moment, because, really, all this bill does is put up some trials. But you know what? I was reflecting on it, and I was thinking that’s probably a good thing, because we trusted the Government with our census, and that didn’t go too well. We’re still trying to get that fixed.

Hon Tracey Martin: Who signed off on it?

Hon MARK MITCHELL: What was that? We’ve got the Hon Tracey Martin in here. Boy, that’s surprising. New Zealand First—I thought they’d be off sorting out all their problems and trying to get their probity, integrity, and all those sorts of issues sorted out. But as they start to find their voice here—we’ll have to sort that one out.

This is a lightweight bill. They are trying to make some changes on the fringes, so we’ll give them that, but, actually, it doesn’t go anywhere near close to the promises that were made at the last election, and that was, quite simply, this: that there’d be an online voting system delivered.

So we do commend the bill to the House—we will support the bill—but we feel like there could have been a lot more substance to it. Thank you, Mr Assistant Speaker.

GOLRIZ GHAHRAMAN (Green): Thank you, Mr Assistant Speaker. It’s a pleasure to rise in support of this bill. It is a bill that comes as part of a suite of measures that will be rolled out in time to modernise and make our local body electoral system more effective, and futureproof them—futureproof them for New Zealanders who know that, actually, democracy has to work at every level, not just in here but out there in the regions and in the super-city where I’m from, where we’re looking forward to the election and we’re still, I think, most Aucklanders, getting their heads around that system. So it is timely to say that this engagement has happened, and I do thank and commend the Justice Committee for the work that they did. I was heartened to see that they heard submissions from members of the public, members of the local government sector, and members of the disabilities community, who all came to have their voices heard in terms of what might help their communities in accessing their local democracy.

So this bill allows local body electoral systems to trial different types of voting systems. One such trial may—and everyone, I think, who has spoken so far has focused on online voting. That is one kind of trial that we foresee this bill will allow, and it is important, given we know the accessibility issues that different types of communities have, actually. We’ve talked about youth—they are a very underrepresented group in terms of engagement in every level of our democracy. So that may make our democracy more accessible to those who will benefit from it for the longest period of time ahead in their lives, but it may also help people who are in geographically remote areas, those with different types of disability, as submitters pointed out; it may help those in the aged community, actually, who may have different types of accessibility issues as well.

We’ve also heard that local body engagement is as low as 22 percent in some areas of New Zealand, and that’s frightening, given so much that comes from engagement at the local level, whether that’s civic planning, whether that’s public transport, our parks, the types of events that we can hold in our communities—which will in turn feed more and more democratic engagement. So it is really, really important that we allow for democratisation and modernisation of that system, and that has been a long time coming.

We also know that demographics that are least engaged in local democracy also include tangata whenua, the Pacific community, other migrant communities—again, a huge concern in Auckland, where I’m from: our most diverse civic centre, where we have so many local boards working on so many different issues in all the different areas, with so many different concerns for their communities, and all feeding up to local council, which deals with different issues again, and the mayoralty race, which will be watched this year with great interest. All of these will be able to have processes specially designed and trialled as time goes on by those most affected by them so that they might better engage their communities, who will, in turn, then benefit from the work of the local boards and the councillors, and kind of, in fact, shape their communities and their democracy as we go along.

The fact that there is so much rigidity in the way that local government and local electoral bodies are able to engage with their communities and to diversify the way that they allow both voting and engagement has probably fed the lack of engagement so far and has actually crippled our democracy. So we do need to remember that where the Electoral Commission makes recommendations, where our submitters ask for a different approach, we do need to listen. I’m currently trying to address that in a bill that will, hopefully, be picked up either by the Government or through the ballot to modernise this system, based on the same principle. We need to take politics out of the way we do electoral reform, and this bill, I’m happy to see, has that support from across the House, and the approach of the Justice Committee was really heartening to that. So let’s see more of that when it comes to electoral reform for New Zealand. Thank you.

Hon MAGGIE BARRY (National—North Shore): Thank you, Mr Assistant Speaker. I rise to speak at the second reading of the Local Electoral Matters Bill, a bill that promised much and delivered little—much like the Government, really. Minor changes well short of the mark—an online voting bill, I suppose, and while we on this side of the House think it’s a good idea to explore it, this bill really didn’t deliver a whole lot. Having sat on the Justice Committee, which considered the submissions and was involved in the consultation with the local government and other bodies that came through to speak about this, I think we do have to remember that the final decision on proceeding with an internet voting trial this year, following the passage of this bill—and it will pass, and we do support it—does rest with councils and local government.

There’s a lot to learn from what not to do with online voting. We’ve been very cautious about it in the past. I recall, as the Minister of Conservation, looking very carefully at how people who were on the conservation islands in remote locations would be able to have that opportunity to use the internet to contribute their vote in a democratic way. But sending voting papers from overseas, as with outlying islands; fishing vessels, as well, fall into that category—we still believe that there needs to be a paper ballot to be generated, and we remain cautious about using the internet to vote, generally, until the security issues, which many people spoke to the committee about, have been fully resolved, and they are not showing any signs of that occurring at this time.

But we do support the bill. We agree it provides some very useful additional tools for improving participation in local elections and, of course, participating in democracy is what we want people to be able to do, but we don’t believe it’s the magic bullet. We don’t believe it’s the only answer. I think there has been a lot of hype, a lot of expectations raised that this bill will deliver the solution to really, I suppose, the inertia and the antipathy—really, is what it comes down to on some occasions: people that are just not engaged and don’t want to bother voting. There are a lot of underlying major issues that we need to think about in regards to this.

Recasting the vote with an online sort of voting system: I think electors need, and we need as legislators, some form of a contingency mechanism in case there are problems because, there are problems—and other speakers have alluded to them—and they occur within postal voting as well. But when there are issues, you need to be able to put it right, as L V Martin once memorably said. What a character he was. But in the sense of something as important as your democratic vote being either lost or somehow misrepresented, there does need to be, in our view on this side of the House, a trial, but we need to be really careful, and we need to make sure that there are contingency reports and contingency measures, I should say.

So the Justice Committee did recommend that the bill be passed with amendments, which is why, on the side of the House, we’re not spending a whole lot of time on it. We have spoken about it at some length and it’s gone through the due process. As I said at the outset, this bill delivered not very much but promised a lot. I think that the less said about it the better. Let’s move through the progress of other important legislation in this House. With that I commend the bill to the House but with reservations.

ASSISTANT SPEAKER (Adrian Rurawhe): Members, this is a split call, five minutes. I call Dr Duncan Webb.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Mr Assistant Speaker. I’m a bit confused because, on the one hand, the National Party is saying “Don’t leap into electronic voting boots and all.”, and on the other they’re saying it’s a missed opportunity. So I’m really not quite sure. Perhaps they should talk to each other and organise themselves.

But you know what? The other thing that strikes me is there they are talking about the need for paper voting. I don’t know where they’ve been for the last 20 years, because what we have here is a step forward. They might think that a postal system is going to be the future of voting but, you know what, I don’t. I can’t see all of the future, but I can tell you what, posting letters is something that most people under 30 have never done and never intend to do. So we need to catch up and move in to electronic voting, and that’s what this does. It does it in a very measured and a very careful way.

First of all, it gives the ability for a trial to be conducted, but what it also does—and this was the improvement that the select committee brought to the bill—is it puts significant safeguards in place because we recognise that when anything is under trial, there may be errors. And if there are errors, we need to be able to intervene. So the electoral officer is given considerable powers—and this was at the behest of the select committee—to intervene and say “Hang on. That’s not working. For the purposes of this trial, the people who have cast their vote electronically need to go and cast it again in the traditional manner. Now, that’s a really useful safeguard and, in fact, if the trial’s a significant one, the electoral officer has the power to apply to void the election—a very serious step; a step that wouldn’t be taken lightly, of course, and subject to judicial oversight.

But what we have here is a step forward, because we need to start engaging in making voting accessible, understandable, and easy. Whilst the majority of the National Party may have grown up with carrier pigeons, what we have here is a bill that uses modern, accessible technology, which is understandable by the majority of New Zealanders, by people who have grown up using emails, who have grown up using secure systems to buy things, to communicate with others, and all sorts of things. The suggestion that there is some fatal flaw; that electronic voting is not sustainable—there’s simply not the evidence to back it up. Electronic voting is used in important elections across New Zealand already. We only have to look at shareholder voting to see that. Those kinds of votes are important votes—absolutely secure; no suggestion of fraud. Notwithstanding that there are many millions of dollars at stake and, if it was susceptible, no doubt someone would have had a go.

So what we have here is a step forward. It gives the ability to local authorities to make these decisions, but it’s a great step in the right direction whilst, as Ms Ghahraman said, we are looking to further democratise New Zealand, to make our democracy—what goes on in local Government and elsewhere—more accessible to all New Zealanders. That’s absolutely a good thing. I commend this bill to the House.

CHRIS PENK (National—Helensville): Thank you very much, Mr Assistant Speaker, for the opportunity to speak to the Local Electoral Matters Bill at this, the second reading. It’s been noted, I think, on both sides of the House that in terms of voter participation, this won’t be a silver bullet. Indeed, it won’t be a silver ballot, I suppose you could say and, in fact, pretty modest change is even attempted here. It’s transformational in the sense that the Government itself is transformational, which is to say “Not achieving very much indeed.” And if we’re talking about the trials of the new methods of voting, let us hope that it’s a trial and the sense of a pilot, and not in the sense of tribulation, as we’ve seen with other debacles or shemozzles as we might otherwise describe, for example, the recent census.

Other members on this side of the House have noted the New Zealand National Party view, as expressed in the select committee report, and we noted in that a report by the National Academies of Sciences, Engineering, and Medicine—I think not perhaps a submission before the select committee. Although I have to say it wasn’t part of that process, but it emphasized the need for human readable ballots to be able to maintain and guarantee the security and verifiability of the vote. So a couple of different aspects there: electoral integrity—to use that phrase in a more pure way than has often been used in the last 18 months—must be not only done but also be seen to be done. So it’s the ability to understand that we have a system with integrity—to be able to verify that that’s the case as well as, in fact, for that to be the case.

I’m not one to speak longer than is necessary on any bill, so therefore I conclude with the comment, as with others, that we support the bill with some reservations as noted and we look forward to seeing what further, if any, the Government might come up with in this regard, as they have indeed promised.

Hon RON MARK (Minister of Defence): Thank you, Mr Assistant Speaker. It gives me pleasure to rise and take a short call on behalf of New Zealand First and the Government on the Local Electoral Matters Bill. I just want to note the report back from the select committee. I will acknowledge that the select committee put a great deal of thought into the consideration of the bill. I notice the National Party minority view is in there as stated.

I also note with some interest that there has been a little bit of criticism of the Government when it has come to the matters of electronic or digital voting—one of the options, one of the matters that is covered in this bill, and a lot of reference, I understand, to the census that’s just recently been conducted, as though people are drawing parallels with the two options. It does strike me as a little bizarre that we should hear those criticisms at this point, at this reading of this bill, because the fact of the matter is this Government—when it came to the census and all of the provisions that have been put in place and all the decisions that have been made, they had been made by the previous Cabinet. We simply carried on with the work within the very short—

Hon Mark Mitchell: You guys had to run it. You couldn’t run it.

Hon RON MARK: There goes Mr Mitchell over there “yappering” away—the most ineffective Minister of Defence this country’s ever seen other than Mark Burton. So he can chip in, and if he wants to bring it on, I’ll say it to Mr Mitchell, “If you want to bring it on, Mr Mitchell, I have a lot of information for you, to share with the country.” and we might just do that.

ASSISTANT SPEAKER (Adrian Rurawhe): And now back to the bill.

Hon RON MARK: So, Mr Mitchell, let’s be clear.

ASSISTANT SPEAKER (Adrian Rurawhe): Order! Now back to the bill.

Hon RON MARK: Thank you. We are coming back to the bill and to their questions on digital voting. Mr Mitchell, the previous Cabinet made decisions. Within the short window of time that was left, this Government just continued with that work.

Now a lot of reservations have been have been raised around the whole question of digitalisation and it’s pleasing to see that all parties discuss those matters. I mean those of us who do live in the provinces know that out at Pongaroa, Porangahau it’s very hard actually to do anything digital because the last Government’s rural broadband roll-out was so pathetically inept—[Interruption]—and if that member, Mr Bishop, doesn’t believe me, come with me up to Gladstone, which is some 11 minutes from the main street of Carterton and try and use your cellphone. So digital voting for the good folk—the good country folk—of Gladstone is going to be a hell of a challenge, as we found out it was for people to complete their census online thanks to the ineptitude of the last Government when it came to rolling out rural broadband.

So I’ve just got to say that this bill quite ably gives the option to those councils. We know where Mr Bishop lives. Everything’s connected. He lives downtown, in amongst suburbia where the high speed broadband has been rolled out by John Key and his Cabinet Ministers for him. So digital voting might well suit Lower Hutt City, it might well suit Wellington City, but it is over to Carterton District, which has voters who live at Flat Point, out at Tora—OK—to choose themselves as to whether digital voting is appropriate, workable, worthwhile.

So it is good to see that the learned people on the select committee discussed these matters and, clearly, a majority agreed that if local government is going to go down a path of utilising digital voting, then that’s for them to decide and the legislation gives them that flexibility to do so.

I myself am not convinced. I think one of the biggest issues one faces in voting in local government elections is the big thick booklet that deals with everything—not just about the mayor, not just about the councillors, not just about the community boards, but also about the district health boards, the trusts, and gosh, we all know there’s a plethora.

Chris Bishop: Are you voting for it or against it?

Hon RON MARK: I think the thing, Mr Bishop, is giving people the choice: giving them the choice, empowering them to apply a local solution, and recognising that localism has its place as opposed to autocratic decree, which is what that member’s party more often talks about, although it touts itself to be liberal. It touts itself as being liberal, but in actual fact it’s all about autocratic decree and we see that in the way in which they whip the young ones into line over that side of the House and get the ones like Mr Bidois to parrot away to support the young Mr Bishop—the young misguided Mr Bishop. We’ve seen that in such things as the way in which they’ve championed other pieces of legislation.

Access to information about Māori descent—I do note that’s obviously a clause, an area where Mr Bridges is going to have a lot of interest. He’s just recently discovered that he’s of Māori descent, although his comments on Radio New Zealand the other morning did not go down well, so I wonder if he’s still going to be of Māori descent come tomorrow or next week because that language really was unbecoming him, but there’s access for information there for Mr Bridges, being of Māori descent, and he’ll be able to take the benefit of that whether or not yesterday he was a Māori and today he’s not—I’m not quite sure.

It’s a very short bill, befitting of shorter speeches. It probably does reflect—although there is a minority report from the National Party expressing some concerns in there—the majority view of the House. I think I’m happy that it does give local government the ability to themselves make decisions around electronic voting and on that basis I’m happy to support the bill. Thank you very much—Mr Bishop.

CHRIS BISHOP (National—Hutt South): Well, that was a classic example of a New Zealand First speech at 9.45 p.m. at night, because it’s pretty clear that Ron Mark has not read this bill. This bill’s got nothing to do with localism. It’s got nothing to do with empowering local governments to come up with their own solutions—some grandiose phrase. This bill makes very small amendments to the Local Electoral Act and the Electoral Act 1993 to allow a specific ward within a local body to trial internet voting, right? A specific ward, because you can already do online voting, and local government can already do online voting. It was not clear from Mr Mark’s contribution—and I hesitate to use the word contribution because it was more of a sort of stumble through his prepared notes—if he actually supports the bill. The bulk of the speech was about the problems of internet access 11 minutes away from Carterton, where he lives, and about Pongaroa, where he says the rural broadband’s crummy. So—

Hon Ron Mark: You don’t even know where it is.

CHRIS BISHOP: I know exactly where Pongaroa is because the local—

Hon Ron Mark: Well, I’ll see you out there.

CHRIS BISHOP: I know exactly where it is, Ron Mark, because the local cop’s been removed from Pongaroa and not replaced despite the 1,800 extra police and rural cop—

Hon Ron Mark: We had that under your time.

CHRIS BISHOP: No, no, Mr Mark. It’s happened in the last 12 months. The locals of Pongaroa are very upset and have asked me to go to their town and run a public meeting about the removal of their local policeman. So I know exactly where Pongaroa is, Ron Mark. You should acquaint yourself with the electorate that you’re trying so inadequately to win.

ASSISTANT SPEAKER (Adrian Rurawhe): Order! Don’t bring me into the debate.

CHRIS BISHOP: Sorry, Mr Assistant Speaker. I was just responding to an interjection from a loud noise over the other side of the Chamber.

It’s not clear that New Zealand First actually supports this bill. Most of the speech was about the problems of doing things online. What does this bill allow? For people to do online voting. But they’re going to vote for it because they’ve become quiescent creatures of the Government. Whatever the Labour Party says they want to do, they will do, like they’re doing with police, like they’re doing with firearms, like they’re doing with everything else.

We just note the threats made to our former Minister of Defence Mark Mitchell. We note that the actually not so veiled threats from Ron Mark in that contribution to the House. We just note them, and they’ve been filed away. You know at some point, Mr Ron Mark, is going to get his comeuppance.

But for now the House is going to pass this bill. It’s a sensible piece of legislation. We remain sceptical about online voting like Ron Mark is. We remain sceptical about online voting. But it’s a sensible piece of legislation and we support it.

RAYMOND HUO (Labour): Thank you, Mr Assistant Speaker. I rise to take a short call to support the Local Electoral Matters Bill. The Justice Committee received and considered 27 submissions from interested groups and individuals. We heard oral evidence from 10 submitters. I’d like to take this opportunity to thank our officials, advisers, and more importantly the submitters, especially Blind Citizens of New Zealand, Blind Foundation, and Local Government New Zealand.

There are 17 recommended changes, notably clause 5 “…Voting method for elections and polls…”, clause 11 “…Supply of information on age and Maori descent …”, clause 12 to supply an update of birth information, and recommendations 13 and 14 are a contingency mechanism with regard to recasting the vote, voiding, and rerunning all or part of any election.

I very much look forward to the committee of the whole House debate. I commend the bill to the House.

Bill read a second time.

Bills

Accident Compensation Amendment Bill

In Committee

Hon RUTH DYSON (Senior Whip—Labour): I seek leave for the committee to take this bill as a single question for the purpose of the debate, and for the provisions to be voted part by part.

CHAIRPERSON (Hon Anne Tolley): Leave has been sought. Is there any objection? So be it.

Parts 1 and 2, Schedules 1 and 2, and clauses 1 to 3

Hon TIM MACINDOE (National—Hamilton West): It’s deeply rewarding to stand and take what will probably be the only call on this combined debate in the committee stage on the Accident Compensation Amendment Bill, as I presume that you will be reporting progress in five minutes. Just as the debate on the previous bill was uncontroversial—and members who were speaking commented that its provisions were not exactly earth-shattering—I have to say that a similar description really does apply to this Accident Compensation Amendment Bill. However, its great redeeming feature is that this is a bill that originated under the last National Government and so it, again, of course, reflects very sensible and timely amendments.

It’s good to have the Associate Minister for ACC in the chair and I’m hoping that he will be in a position—obviously, not this evening because of the limited time remaining—to take note of some questions that I would like to put to the committee. While I don’t anticipate that we’ll need to spend a long period of time in this committee stage, nevertheless there are some issues that probably would require some elucidation.

Perhaps, just for the benefit of those who are listening, it should be pointed out that, as I mentioned, we believe that these are sensible changes, so the National Party will continue to support this bill. They had been identified under the tenure of the previous Government and, in fact, the bill was initially drafted at that time. The main changes that are outlined in the bill are to ensure fairness for those who are injured near retirement age, and also to streamline the complaints process to remove some confusion, so the Associate Minister may wish to draw attention to some of those. But because of the very limited scope of the bill, one of the things I would just like to reiterate—it has been mentioned in the previous readings but I think it’s valid to mention it again—is that when members of the public came to make submissions on this bill in the select committee, a fairly common response was for them to be told that while their submissions were worthy, covered issues that were certainly valid, and reflected the concerns of many New Zealanders, nevertheless this was not the bill to address those particular concerns because it is a bill that, essentially, is dealing with technical adjustments.

So one of the first questions that I’d be grateful if the Associate Minister, or perhaps the Minister when he is here, could answer, really, on behalf of the many New Zealanders who have raised this issue is—it is our understanding that the Minister is working on a more comprehensive package of reforms and a bill that, I understand, he plans to bring to the House to deal with many of the things that submitters wanted to raise but were told they couldn’t. So could I ask the Minister if he could just indicate if that is indeed the case and, if so, if he’s got an idea of the timeframe that that might occur within, and also the scope of the changes that any such reform might bring to the House.

Essentially, the submissions that were—I don’t think “rejected” is the right word, but the submissions that, we were told, were out of scope were to do with policy, and, as I say, this particular bill is very much dealing with technical adjustments. I’d like, therefore, as I say, for the Minister to indicate if I’m correct in making that observation and if it’s still the Government’s intention.

Further, since the Government has had a very light legislative programme throughout 2018 and frequently resorted to filibustering during debates on uncontroversial common-sense legislation that was carried over from the previous Parliament and that had been the work of the last National-led Government, I’d also like just to ask when a more substantial update of ACC legislation will be introduced to the House, if that is the case, because, after all, the Labour Party and, I believe, at least one of their Government support parties, did campaign in the 2017 election on this. Their election manifesto for ACC indicated that they believed that there were many areas for improvement; now would be the time for the Government to tell us what those are. It would, obviously, be helpful to know if that’s something that the Minister and his officials are currently advancing in that particular direction.

I’m very mindful, Madam Chair, that any moment, I think, you’re probably going to stand up and tell me to take a seat. So I’m reluctant to get into another substantial topic in this call, although I hope that I will be in a position to do so next time the committee is under way.

House resumed.

The Chairperson reported progress on the Accident Compensation Amendment Bill, and no progress on the Commerce (Criminalisation of Cartels) Amendment Bill.

Report adopted.

The House adjourned at 9.56 p.m.