Thursday, 4 April 2019

THURSDAY, 4 APRIL 2019

THURSDAY, 4 APRIL 2019

The Speaker took the Chair at 2 p.m.

Karakia.

Business Statement

Business Statement

Hon CHRIS HIPKINS (Leader of the House): Legislation to be considered next week will include the remaining stages of the Arms (Prohibited Firearms, Magazines, and Parts) Amendment Bill and the Social Security (Winter Energy Payment) Amendment Bill, the second reading of the Taxation (Research and Development Tax Credits) Bill, and the first readings of the Land Transport (Wheel Clamping) Amendment Bill and the Credit Contracts and Consumer Finance Amendment Bill.

Hon GERRY BROWNLEE (National—Ilam): I thank the Leader of the House for that indication of next week’s work programme and I wonder if he might give us some indication of when the Government intends to adopt item No. 4 on the members’ orders of the day.

Hon CHRIS HIPKINS (Leader of the House): The Government currently doesn’t have any intention, I don’t think, to adopt that as a Government item of business.

Oral Questions

Questions to Ministers

Question No. 1—Housing and Urban Development

1. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: For which KiwiBuild developments were all dwellings already under construction at the time an underwrite was signed, and for which KiwiBuild developments were some of the dwellings already under construction at the time an underwrite was signed?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): Thank you, Mr Speaker. I’m advised that it takes approximately three to nine months between when a developer approaches KiwiBuild and when a contract is signed. To avoid delays, developers often continue their work while the ministry undertakes the appropriate due diligence when negotiations take place. I’m advised that no developments had all their homes under construction at the time the underwrite was signed. I’m also advised that when the Northlake, Dignity Street, and Mike Greer Homes underwrites were signed, there were some homes under construction.

Hon Judith Collins: Why is he not aware that 10 houses he underwrote in Whangarei’s Kotātā Heights were also under construction before he underwrote them?

SPEAKER: Underwritten, I think, but carry on.

Hon PHIL TWYFORD: I didn’t include those in the answer to my primary question because they are not part of the underwrite.

Hon Judith Collins: Why did he underwrite 10 apartments in Ōtāhuhu, when Auckland Council documents show all 10 of the apartments were under construction before the 2017 election?

Hon PHIL TWYFORD: Because those are not covered by the underwrite.

Hon Judith Collins: Is he telling the House that he has just bought them?

Hon PHIL TWYFORD: They were purchased off the plans as part of the KiwiBuild scheme.

Hon Judith Collins: How can they be purchased off the plans if they were already built?

Hon PHIL TWYFORD: Because they were included in the plans at the time that they were built. The KiwiBuild buying off the plans scheme is working with developers to build affordable housing that was never built, let alone planned or considered under the last Government. We are working with the private sector to provide affordable homes to first-home buyers, and it’s working.

Hon Judith Collins: Is he aware that six months—

SPEAKER: Order! I’ll remind members in the back corner that my hearing is better than it used to be, and I could generally hear Mr Bishop anyway.

Hon Judith Collins: Thank you, Mr Speaker. Is he aware that six months before the last election, 16 of the Ōtāhuhu apartments were already pre-sold for less than $440,000, while the cheapest KiwiBuild price in the same apartment development is now $550,000?

Hon PHIL TWYFORD: Now, that is an example of just how fast house prices were going up under the former National Government.

Hon Judith Collins: Does he have Cabinet authority to underwrite houses that are already built?

Hon PHIL TWYFORD: I have Cabinet authority to underwrite homes that produce hundreds of new affordable homes that are available to first-home buyers. The underwrite reduces the financing costs and risk. It reduces the profit margins of builders and developers, and it makes more affordable homes available to first-home buyers. The policy’s working.

SPEAKER: Order! The member will answer the question.

Hon PHIL TWYFORD: Yes, I have Cabinet authority to do what the member asked. I included that in the first answer, Mr Speaker.

SPEAKER: No, no the member didn’t, actually.

Hon Judith Collins: How can it be that he says he is adding to the housing stock, when some of these houses were built before the last election?

Hon PHIL TWYFORD: Because the totality of the deal with each developer includes a large number of affordable homes that otherwise would not have been built.

Hon Judith Collins: Does he stand by his answers to written questions where he states that of the 74 KiwiBuild homes reported as completed, more than half were already under construction before he signed an underwrite agreement in order to get construction started on them?

Hon PHIL TWYFORD: Yes, I stand by my answers.

Question No. 2—Social Development

2. Hon LOUISE UPSTON (National—Taupō) to the Minister for Social Development: Why were unauthorised payments made to 25,000 people by the Ministry of Social Development?

SPEAKER: I have been warned, and I’ll warn the House, that the answer to this question is slightly longer than generally desirable.

Hon CARMEL SEPULONI (Minister for Social Development): Thank you, Mr Speaker. All winter energy payments were made in accordance with the policy intent of the winter energy payment. The error sits with the drafting of the legislation. The policy intent was that the following two groups of people should receive the winter energy payment: people receiving Government funding for their long-term residential care or residential care services but who are not eligible for residential care subsidy or residential support subsidy, or people who travel overseas for more than four weeks during the winter period, who should receive the winter energy payment for the first four weeks of their absence. The legislation does not reflect that, hence why we have introduced the Social Security (Winter Energy Payment) Amendment Bill. It is also important to note that the 25,000 referred to in the question is 3.3 percent of the 774,200 New Zealanders who, on average, per month, receive the winter energy payment. After including those of partners, close to one million New Zealanders have benefited from the winter energy payment.

Hon Louise Upston: Does the Minister accept that this has been unlawful spending, and what actions has the Minister taken to ensure this mistake isn’t repeated under her watch?

Hon CARMEL SEPULONI: As I said earlier, the policy intent was clear but the legislation doesn’t match that. It’s not the first time in this House, in this Parliament, that there has been a drafting error and a correction has had to be made. I think it’s important to put it into context. If we look at an example that’s similar, that would be one where a change was made accidentally in 1998 with regard to stand-down periods through the Social Security Act. That mistake didn’t get picked up and changed and rectified until 2015. So I’m glad that this took 16 months, as opposed to 17 years.

Hon Louise Upston: Does the Minister take full responsibility for this unlawful spending?

Hon CARMEL SEPULONI: I’m the Minister, so, although I might not draft the legislation, I take responsibility.

Hon Louise Upston: Why will taxpayers pay the energy costs twice for those in full-time residential care?

SPEAKER: Order! I suppose it’s a rebuttable statement, but the member has got to be very careful when she’s asking questions starting with a fact which is at least debatable, if not wrong.

Hon CARMEL SEPULONI: I have recently been made aware of an issue and I have it in my notes, and now I just can’t find it—

Hon Gerry Brownlee: So not that aware?

Hon CARMEL SEPULONI: Hang on a second. With regard to those in residential care, there are about 460 patients who are in residential care where it is very difficult to determine whether or not they are getting the subsidy or they are not getting the subsidy. In fact, the cost of trying to work that out would cost more than trying to rectify that situation for those 460 people. So the ministry has decided that they will continue to allow that to happen.

Hon Louise Upston: So is the Minister saying there is still a large group of people for whom taxpayers will fund their energy costs twice, instead of fixing the problem that’s already been identified?

Hon CARMEL SEPULONI: This is an issue that has been brought to my attention, and it is something that we’re discussing. It is not a large group of people—it is 460—keeping in mind that close to one million New Zealanders have benefited from the winter energy payment.

Hon Louise Upston: Why did the Minister wait so long to bring legislation to the House, when she was alerted in June 2018, and why does she think it’s right this time, when clearly there are issues that she’s just mentioned?

Hon CARMEL SEPULONI: As I said earlier, mistakes are made in the drafting of legislation that take a long time to pick up. This is 16 months. It will be rectified before the winter energy payment is paid out in May, and that is the main thing: that we will be acting lawfully before it is paid out this year.

Question No. 3—Finance

3. TAMATI COFFEY (Labour—Waiariki) to the Minister of Finance: What recent reports has he seen on the New Zealand economy?

Hon GRANT ROBERTSON (Minister of Finance): Yesterday, ANZ released its Commodity Price Index, showing that this year’s upward trend in prices has continued through March. The ANZ world commodity price index pushed up by 1.4 percent in the month on the back of strong prices across sectors. Dairy prices gained 2.5 percent; meat and fibre prices, 1.1 percent; and forestry prices lifted 0.4 percent. The stable exchange rate meant that the New Zealand dollar index also rose by 1.4 percent. ANZ said it expects further price rises for the major export sectors in the coming months. This is indeed encouraging news for Kiwi exporters and growth in our regions.

Tamati Coffey: What reports has he seen on the impact of commodity prices on economic confidence?

Hon GRANT ROBERTSON: Yesterday, Rabobank released its Rural Confidence Survey for quarter one 2019, which showed that confidence among Kiwi farmers lifted on the back of rising commodity prices. The number of farmers expecting agricultural economic conditions to improve in the coming 12 months rose to 16 percent. The survey also found farmers’ expectations for their own farm’s performance was also up this quarter, lifting to a net plus 11 percent expecting business to improve over the next 12 months. It is important to acknowledge that for some farmers their confidence is lower than the historical average. Sheep and beef farmers, for instance, have said that this is due to factors such as Brexit and a slowing Chinese economy. The Government is working hard to ensure stability and certainty for exporters, and has signed regulatory agreements with the UK and is continuing to negotiate further free-trade agreements to diversify export opportunities.

Tamati Coffey: What other reports has he seen on New Zealand’s economic performance?

Hon GRANT ROBERTSON: According to the Business New Zealand Performance of Manufacturing Index (PMI), the manufacturing sector expanded at a faster rate in February than in January. The seasonally adjusted PMI for February was 53.7 percent; a PMI reading above 50 indicates that manufacturing is generally expanding. This was up 0.7 points from January and the second-highest expansion level for the last nine months. BNZ senior economist Doug Steel said that “The positive messages around production in the PMI gave confidence that the industry retains impetus”. It is pleasing to see yet more real data showing the solid fundamentals underpinning the New Zealand economy.

Question No. 4—Small Business

4. Hon JACQUI DEAN (National—Waitaki) to the Minister for Small Business: What is his response to the recent MYOB report showing 67 percent of the small businesses surveyed were against the Tax Working Group’s proposed capital gains tax?

Hon STUART NASH (Minister for Small Business): Mind Your Own Business (MYOB) has confirmed that the survey was finalised before the Tax Working Group report was even released. There was no information given to those who took part in the survey about the 19 recommendations in the Tax Working Group report that were there to help with small and medium sized enterprises’ (SMEs’) compliance costs. I would also note the Horizon survey that came out last week, which said that more people support a capital gains tax than oppose one, and I tend to place more credibility on this survey.

Hon Jacqui Dean: What’s the new information the Minister just noted that they should be aware of?

Hon STUART NASH: New information? The fact that the Horizon survey came out last week and said that more people supported a capital gains tax than were against one.

Hon Jacqui Dean: So what reassurances can he give to the 81 percent of small businesses who are opposed to the capital gains tax that are directly involved in agriculture, forestry, and fisheries?

Hon STUART NASH: I would say to those businesses to read the report, but I would also say that this Government is considering all options. We are listening very closely to the feedback given and no decisions, at this point, have been made.

Hon Jacqui Dean: Does he think that uncertainty around the potential costs of the implementation and compliance of a capital gains tax on small business is conducive to business confidence?

Hon STUART NASH: I will say, once again, that we are considering all options, we are listening to all voices, and at this point in time no decisions have been made.

Hon Jacqui Dean: I raise a point of order, Mr Speaker. The Minister didn’t answer the question.

SPEAKER: I think he did. I think he’s certainly addressed it and I think he probably answered it, as well.

Hon Jacqui Dean: Does he agree that, according to the MYOB Business Monitor’s latest economic data, small business operators are concerned about the direction of the economy, or are they just wrong?

Hon STUART NASH: Mr Speaker—

SPEAKER: No—the member will resume his seat—it doesn’t relate to the original question. It’s a very specific question about capital gains tax. Just because there was a survey with other questions in it doesn’t mean that the member can move off on to those. Further supplementary?

Hon Jacqui Dean: I raise a point of order, Mr Speaker. Is it an extra supplementary or can I replace it?

SPEAKER: You’ve lost your supplementary.

Hon Jacqui Dean: Thank you. How does the Government plan to reverse the dissatisfaction that nearly half of SME business operators have expressed in the MYOB survey in this Government’s year of delivery, and will he take responsibility for that?

Hon STUART NASH: It’s a question I’m delighted to answer. What I will say is: 1 April R & D tax credits. I’ll talk about the drop in ACC levies. I’ll talk about e-invoicing between New Zealand and Australia, which is expected to save both countries about $30 billion. I would also say that Minister Faafoi and I are doing a review of unfair trade practices. I would also say that the Small Business Council is looking—

SPEAKER: OK. That’s enough, thank you.

Hon Gerry Brownlee: Well, it’s not enough to change the position, but anyway.

SPEAKER: Mr Brownlee, no commentary on my rulings, please.

Hon Gerry Brownlee: Was that a ruling?

SPEAKER: Do I have to order you to, or will you anyway?

Hon Gerry Brownlee: No, no, of course not. I withdraw and apologise.

SPEAKER: Thank you.

Question No. 5—Agriculture

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

Hon ANDREW LITTLE (Minister of Justice) on behalf of the Minister of Agriculture: Yes, in the context in which they were made.

Hon Nathan Guy: What advice has he received that justifies his statement on Rural Exchange recently in reference to the Tax Working Group report, and I quote, “It probably won’t affect the vast majority of farmers.”?

Hon ANDREW LITTLE: That was a surmise on my part, but I reiterate for the benefit of the member that the Government has no new tax policy. It has commissioned an independent working group to look at matters in relation to the tax system, and decisions have yet to be made on that independent working group’s recommendations.

Hon Nathan Guy: When he said on Radio New Zealand, and I quote, “Farming for capital gains is flawed and is something that needs to be looked at.”, does he therefore support a capital gains tax?

Hon ANDREW LITTLE: On behalf of the Minister, no. I stand by the statement that was made because there’s been ample research and commentary recording that many New Zealand farmers have farmed on the basis of the rising value of their land, as opposed to necessarily running their farming business as a business. And, in fact, many and successive Governments have been working very hard with the rural communities to make sure that farming is run as a business.

Hon Nathan Guy: What advice has the Ministry for Primary Industries provided to him regarding the impact on rural communities of a capital gains tax and environmental taxes proposed in the Tax Working Group report?

Hon ANDREW LITTLE: On behalf of the Minister, none, because, as I said before, the Government has no new tax policy. It has received the report of an independent tax working group, which has made some recommendations. Those recommendations are under consideration, and when and until such time as a decision is made, nothing has changed.

Hon Nathan Guy: Is he therefore saying that he or his officials haven’t been consulted regarding an imminent Cabinet paper to do with the Tax Working Group report and recommendations?

Hon ANDREW LITTLE: On behalf of the Minister, no. I’m saying what I said before, which is that the Government has not changed its tax policy. It has received the recommendations of an independent tax working group. It is considering those recommendations, and when and until such time as a decision is made, nothing has changed.

Question No. 6—Education

6. JAN TINETTI (Labour) to the Minister of Education: What feedback has he seen on the proposals for the Reform of Vocational Education?

Hon CHRIS HIPKINS (Minister of Education): We’ve received a wide range of feedback on the proposals for the Reform of Vocational Education, including some very positive feedback from some of our institutes of technology and polytechnics. For example, the Western Institute of Technology at Taranaki, or WITT, have acknowledged that there is a consensus around a need for change and that the pitfalls of the present competitive landscape for polytechnics and the bad incentives it had created do need to be addressed. The majority—the vast majority—of New Zealand’s 16 institutes of technology and polytechnics recognise that there is a need for change, and they are positively backing the process.

Jan Tinetti: What other feedback has he seen on the opportunities that the proposals create for industry and providers?

Hon CHRIS HIPKINS: To name two from the primary sector industry, where we’ve had a lot of feedback, Horticulture New Zealand has said that the reforms link what training is required directly to industry needs and that there should be no cliff-face at the end of secondary school where students are left wondering what to do, how to train for it, and who will employ them. Dairy New Zealand have said that the current model has not been working efficiently for dairy and that off-the-job training and on-the-job training should be provided in a complementary rather than a competitive way. That is something the Government is committed to.

Jan Tinetti: What other feedback has he seen from business and employers on the proposals?

Hon CHRIS HIPKINS: I’ve received a lot of feedback from employers, including from the New Zealand Aged Care Association, who have announced their support for the Government’s approach to the reform of vocational education and training in saying that there is a clear and urgent need for the Government’s planned reforms, which are a step in the right direction. We’ve had a lot of feedback from small businesses around the country, who, in particular, have said that they would like to see more consistency and training in a much more streamlined and integrated training system. This, of course, is the last week for industry, employers, providers, and the public to get their submissions in on the proposals, and I encourage people to have their say on them so that the Government can take all of the feedback into consideration as we make further decisions.

Dr Shane Reti: What feedback has the Minister had from the Skills Active industry training organisation?

Hon CHRIS HIPKINS: I don’t believe their submission has yet been lodged with those who are conducting it. I have met with them personally. They have pointed out that there are significant aspects of the proposals that they strongly support, and they have also pointed out that there are some parts of the proposals that they do not support.

Question No. 7—Revenue

7. ANDREW BAYLY (National—Hunua) to the Minister of Revenue: Has he requested or undertaken any assessment of the business valuation and compliance costs that would result from the capital gains tax proposed by the Tax Working Group?

Hon STUART NASH (Minister of Revenue): Yes.

Andrew Bayly: What does he believe it would cost to value a business, given independent appraisal reports of the value of companies subject to takeover offers normally cost in excess of $100,000?

Hon STUART NASH: I’m not a business valuer.

Andrew Bayly: Does he think it’s reasonable that small-business owners should have to bear the cost of valuing their businesses, costing thousands of dollars each, if the Government introduces a capital gains tax?

Hon STUART NASH: A purely and highly hypothetical question.

Andrew Bayly: Why does he believe that it’s purely hypothetical, given that the Tax Working Group recommendations would require the 500,000-plus businesses in New Zealand to be valued and the consequential significant uncertainty that has already been created for the thousands of owners of those businesses?

Hon STUART NASH: It’s hypothetical because the Government has made absolutely no decisions on any of the recommendations from the Tax Working Group’s report.

Andrew Bayly: How would he ensure the integrity of the tax system, given there are three valuation methodologies commonly used to value businesses and any one of them could be used to justify a value of a business?

Hon STUART NASH: No decisions have been made whatsoever, but I take the integrity of the tax system as one of my major roles as the Minister of Revenue, and I will absolutely ensure the integrity of the tax system, but I would say, once again, no decisions have been made on any of the recommendations in the Tax Working Group’s report.

Question No. 8—Police

8. Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Police: What reports has he seen in relation to police’s response to the 15 March terror attack?

Hon STUART NASH (Minister of Police): I’m sure I speak on behalf of most of this House and our country when I say that we are extremely proud and indebted to the women and men of the New Zealand Police service, who have served our country with the utmost integrity and kindness since 15 March. I have seen many reports and letters and hundreds of social media comments that pay tribute to these brave, compassionate, and dedicated women and men of our police service. Under the firm and unwavering leadership of Commissioner Mike Bush, 1,072 additional police personnel have been employed to assist with the response. This includes, for example, 137 staff from the Wellington region and 71 from the eastern district. Police are also taking a holistic approach to reassurance activities at places of worship across New Zealand, with mosques a priority location. Police have, so far, made 953 visits to places of worship, with 19 sites having 24/7 scene guards, and we thank the police for their service.

Dr Duncan Webb: What other reports has he seen around the support New Zealand Police has received from other agencies and first responders?

Hon STUART NASH: The aftermath of the 15 March terror attacks has seen a highly coordinated all-of-Government response to ensure police efforts are optimised and victims are supported. This includes agencies that have set up offices on the ground specifically to address victims and their families’ immediate needs, and these include ACC, Immigration New Zealand, the Office of Ethnic Communities, and others. In terms of first responders, almost 40 firefighters and personnel from Fire and Emergency New Zealand helped in the communication centre. St John deployed 50 staff to triage, treat, and transport dozens of patients whose injuries ranged from minor through to those with critical gunshot wounds. And a special mention must go to the Defence Force, who deployed 553 personnel, 13 aircraft, and armoured mobility assets to assist in the response.

Dr Duncan Webb: What reports has he seen around the international assistance police have received in response to the 15 March terror attacks?

Hon STUART NASH: New Zealand Police are extremely grateful for the offers of support they have received from their international partners. The FBI and the Australian Federal Police have been on the ground supporting police’s investigations and response. The national remembrance service in Christchurch and other national services held around New Zealand required significant New Zealand Police security support. Approximately 900 police staff were involved in the operation alongside New Zealand Defence Force personnel. In response to a request from Commissioner Bush, the Australian Federal Police also provided a significant contingent that assisted with specialist tactical support. We thank the international policing community for their support.

Question No. 9—Climate Change

9. TODD MULLER (National—Bay of Plenty) to the Minister for Climate Change: Does he stand by all his statements and actions?

Hon JAMES SHAW (Minister for Climate Change): Yes.

Todd Muller: Does he stand by his statement made on 4 March during an interview on Q+A that when it comes to the application of GE technology in New Zealand, he—and I quote—“will be led by the science on it.”?

Hon JAMES SHAW: Yes.

Todd Muller: Does he agree with the former Prime Minister’s chief scientist, Sir Peter Gluckman, who said—and I quote—“I’ll go as far as to say that I cannot see a way that agriculture in New Zealand will be sustainable over the long run in the face of environmental change and consumer preferences without using gene editing.”?

Hon JAMES SHAW: No.

Todd Muller: Does he agree with the then Prime Minister’s chief scientist, Sir Peter Gluckman, who also said at the time—and I quote—“There is no way that we will get a reduction in methane production, and I can see no way that we will see an economic advantage for farmers as we shift to more plant-based foods, without using gene editing.”?

Hon JAMES SHAW: No.

Todd Muller: When he said he would be—and I quote—“led by the science”, did he mean all science or just the science that fits his political narrative?

Hon JAMES SHAW: If the member looks at the previous supplementary questions, he’ll see that what Sir Peter Gluckman was saying is that he didn’t see any other ways than GE to achieve those outcomes. I do see other ways.

Todd Muller: What are the other ways of addressing agriculture emission reduction that he thinks the chief scientist has not captured in his assessment?

Hon JAMES SHAW: I can’t comment on what the former Chief Science Advisor included in his assessment, but if the member’s interested, I would advise him to read the report of the Biological Emissions Reference Group that the previous Government set up. It took a number of years looking at a range of options for how agricultural emissions could be reduced and found that, actually, with a high degree of confidence, agriculture would be able to reduce emissions by at least 10 percent by 2030, and found with a similarly high degree of confidence that it would be able to reduce it by at least 30 percent by 2050.

Todd Muller: A final supplementary: does he consider climate change to be a sufficiently serious global issue that all science and innovations, including GE, need to be considered, or does he just think it is a pick and choose menu?

Hon JAMES SHAW: Well, I think that policy makers always have options in front of them about what choices to make, but I certainly do believe that climate change is not just the greatest challenge of our time but, potentially, the greatest challenge of all time.

Question No. 10—Research, Science, and Innovation

10. Dr PARMJEET PARMAR (National) to the Minister of Research, Science and Innovation: What advice, if any, has she sought or received on the impact of a capital gains tax on research and development in New Zealand?

Hon CHRIS HIPKINS (Leader of the House) on behalf of the Minister of Research, Science and Innovation: I’ve not received any advice on the impact of a specific capital gains tax as a proposal on R & D in New Zealand, because the Government’s not made any decisions in response to the Tax Working Group report. However, I have received general advice provided by the Inland Revenue Department and Treasury to the Minister of Finance and the Minister of Revenue that concluded officials do not consider there is a conflict between the R & D tax incentive and expanding the capital income tax base.

Dr Parmjeet Parmar: Does she, then, agree with advice from the Inland Revenue Department in 2017 that not having a capital gains tax incentivises New Zealand businesses to undertake research and development?

Hon CHRIS HIPKINS: I think the Minister of Revenue has already answered that question by pointing out that that advice was provided long before the debate around the capital gains tax was even introduced and before the Tax Working Group had even considered the matter.

Dr Parmjeet Parmar: I raise a point of order, Mr Speaker. My question was about if the Minister agrees with that advice.

SPEAKER: And the question was addressed.

Dr Parmjeet Parmar: Does she, then, agree with advice from Treasury and the Inland Revenue Department in 2018 that a capital gains tax would allow the Government to claw back some of the benefits of the R & D tax credit?

Hon CHRIS HIPKINS: The R & D tax credit was introduced in last year’s Budget. The idea that there’s any link between the consideration around a capital gains tax and the R & D tax credit is preposterous.

Dr Parmjeet Parmar: I raise a point of order, Mr Speaker. Again, my question was if the Minister agrees to this advice that was provided.

SPEAKER: Well, he said that the member’s assertion was preposterous. I think that’s a pretty clear answer.

Dr Parmjeet Parmar: I raise a point of order, Mr Speaker. This is in the documents, in the advice, that was provided to the Tax Working Group.

SPEAKER: And the member’s had a response. The member mightn’t agree with it, but it was pretty clear.

Dr Parmjeet Parmar: Does she agree with Peter Beck, the founder of Rocket Lab, who, in relation to the impact of a capital gains tax on technology companies, said, “NZ already has big problems around creating large valuable technology companies and this will not help.”?

Hon CHRIS HIPKINS: On behalf of the Minister, I have huge respect for his work, but we respectfully disagree on this matter.

Dr Parmjeet Parmar: Does she agree with advice from the Inland Revenue Department in 2017 that not having a capital gains tax advantages start-ups?

Hon CHRIS HIPKINS: As I indicated earlier, that advice pre-dated any consideration of capital gains tax and it pre-dated the deliberations, considerations, and consultations of the Tax Working Group.

Question No. 11—Regional Economic Development

11. JENNY MARCROFT (NZ First) to the Minister for Regional Economic Development: What recent announcements have been made regarding the Provincial Growth Fund?

FLETCHER TABUTEAU (Parliamentary Under-Secretary to the Minister for Regional Economic Development) on behalf of the Minister for Regional Economic Development: The announcement from the under-secretary on Tuesday was hugely positive for our regions. Up to $200,000 a year for up to two years will be made available to the country’s regional economic development agencies. It will help bolster their capacity to progress key regional and national economic goals, such as job creation.

SPEAKER: Well, I think it’s fair to say that that was said in the voice of the Minister!

Jenny Marcroft: How will this Provincial Growth Fund (PGF) investment bolster capacity in the regions?

FLETCHER TABUTEAU: On behalf of the Minister, capacity funding is about ensuring that these independent economic development agencies are working optimally for their region in a time when regional economic development is foremost in this Government’s thoughts and actions. This funding will ensure regional organisations already at full capacity with their business as usual—having worked long and hard in this space, completely unsupported by the members opposite—are now able to accelerate key projects through the PGF that would otherwise not see the light of day, while, just as importantly, they will at the same time improve their long-term capabilities and expertise in driving regional economic growth.

Hon Grant Robertson: How would the Minister assess the performance of the under-secretary in making this announcement?

FLETCHER TABUTEAU: On behalf of the Minister, I think, at the time, he was modest and reserved.

Question No. 12—ACC

12. JO LUXTON (Labour) to the Minister for ACC: What changes were made to ACC levies on 1 April, and why were they made?

Hon IAIN LEES-GALLOWAY (Minister for ACC): The average work account levy paid by employers and self-employed people has decreased from 72c per $100 of liable earnings to 67c. The Government was able to do this because ACC has done a good job in managing its investments and claims liability, and it’s great to be able to pass these savings on to levy payers.

Jo Luxton: What does this mean for business?

Hon IAIN LEES-GALLOWAY: The reduction in work account levies will save businesses $100 million over the next two years, and I’m sure that those businesses will put that money to good productive use.

Jo Luxton: What other decisions has the Government made regarding levy rates?

Hon IAIN LEES-GALLOWAY: The earners levy remains at the current level of $1.21 per $100 of liable earnings, and the motor vehicle levy at its current level of $113.94, on average, per annum. Like all investors, ACC does face global headwinds, but I have confidence in their ability to navigate those. New Zealand can be reassured that ACC is in excellent hands.

Hon Tim Macindoe: If significant levy reductions are possible, what is the Minister’s justification for increasing ACC levies payable by a clear majority of New Zealand’s motor vehicle owners?

Hon IAIN LEES-GALLOWAY: Well, as we have traversed a number of times in this House, there is no evidence that variable levies based on vehicle risk ratings promote injury prevention or encourage the purchase of safer cars. What it did do, though, is put a disproportionate impact on low-income vehicle owners. Removing it is estimated to transfer around $4 million from high and medium income people to low-income vehicle owners, and that is about getting the right balance in the ACC system.

Hon Tim Macindoe: I raise a point of order, Mr Speaker. That was all very interesting, but I didn’t ask about the vehicle risk rating mechanism or most of the other things the Minister has just mentioned; I simply asked him to explain to New Zealanders why, for the vast majority of them—

SPEAKER: Yeah. I heard the question and I heard the Minister respond. Is there a further supplementary? No.

Bills

Social Security (Winter Energy Payment) Amendment Bill

Second Reading

Hon CARMEL SEPULONI (Minister for Social Development): I move, That the Social Security (Winter Energy Payment) Amendment Bill be now read a second time.

First of all, I would like to thank the Social Services and Community Committee for their comprehensive examination of this bill. The process was fast, but it ensured that the changes proposed to the winter energy payment legislation accurately addressed the issues identified, while making sure people do not miss out on this vital support this year. I’d also like to thank the submitters who took the time to provide their views on this bill.

The bill amends the Social Security Act 2018 to align the legislation with the original policy intent. I want to make it very clear that no new policy is being introduced as a result of the proposed amendments. The technical amendments in the bill ensure that the people who were intended to be eligible for a winter energy payment receive these payments lawfully in the future.

The winter energy payment provides extra financial assistance in the winter months to everyone who is on a main benefit, superannuation, or veterans pension. As a form of financial assistance, the winter energy payment has the largest eligible population within the benefit system. The payment is in recognition of the increasing cost of living that often leads to those on fixed and low income struggling to heat their homes in the winter.

The importance of warm, dry, healthy homes over winter cannot be overstated. As mentioned before in this House, the winter energy payment has had a positive impact on the lives of many New Zealanders. We’ve received a range of correspondence from individuals expressing their genuine gratitude for the difference this payment will make or has made. One woman wrote, “Thank you very much for the winter energy payment. My son has autism and lives at home and gets supported living payment. I really appreciate that the Government cares about the least-privileged members of our community. Families affected by autism are often struggling, so the extra help is great.”

The winter energy payment was introduced as part of the Government’s Families Package in December 2017. This package has provided additional financial support towards accommodation, heating, and the costs of raising children from low and middle income families. The amendments will ensure that people in the following two specific scenarios continue to receive the winter energy payment in a lawful way in the future: people receiving Government funding for long-term residential care or residential care services but who are not eligible for residential care subsidy or residential support subsidy and people who are absent from New Zealand for longer than four weeks at any one time during the winter period. Clauses 4 and 5 of the bill ensure people in these specific scenarios are eligible to receive winter energy payments. After their consideration of this bill at the Social Services and Community Committee, the committee recommend by majority that the bill be passed with a minor clarification to one of the sections amended by the bill.

During the select committee process it was identified that the proposed wording in clause 4 of the bill for the amended section 72(d) needed a bit more refining. This was to ensure that only people who receive residential support subsidy are not eligible for the winter energy payments under that section. The agreed policy intent regarding people receiving residential care support was that people receiving residential support subsidy and residential care subsidy would not be eligible for winter energy payments. The previous wording in this amended section unintentionally captured people who are in residential care due to a long-term chronic health condition and do not contribute to the cost of their care and people who are in residential care due to an intellectual, neurological, physical, psychiatric, or sensory disability including, without limitation, an autistic spectrum disorder or a long-term chronic health condition and redirect their own benefit under a private arrangement with the provider.

There was also another issue raised during select committee which was raised earlier in the House by Louise Upston and now’s the opportunity for me to provide a more fulsome response to that particular issue. There is a small group of people—around 460 according to the Ministry of Social Development (MSD)—who are in residential care and receive Government funding for this care: for example, if they have been the victims of crime and are also receiving a main benefit, superannuation, or veterans pension. MSD has no information about the funding they receive for their care, as MSD is not involved in undertaking financial means assessments for this group as it’s not required, and it continues to pay these people the full rate of their benefit. In order for MSD to identify the small group and change their payments, new systems would be required to share information between the Ministry of Health and MSD. MSD is determined that the most cost-effective, lawful, and practical option is to continue to pay this group the winter energy payment.

The amendments in this bill are technical and are in line with the original policy intent for the winter energy payment. The bill does not introduce any new policy. As I said before, the committee recommend by a majority that the necessary amendments are made to ensure these people are not unintentionally captured by clause 4 of the bill. I’d like to thank the committee again for their quick examination of this bill, which has ensured that the amendments accurately address the issues identified.

This select committee’s work has helped ensure we are on track to continue to provide the winter energy payment this year to everyone who is entitled to it. The winter energy payment provides financial assistance to beneficiaries, likely to be on the lowest incomes, and to older people, who are more often susceptible to ill health in winter.

We want to ensure that the winter energy payment continues to positively impact the lives of New Zealanders by helping eligible people and families to heat their homes over the winter months. This bill helps to achieve this. I know there has been some criticism of the fact that there was a drafting error and we’re back here in the House. It does happen occasionally. It’s happened under previous Governments. As the Minister, of course, I know that that’s not ideal, and I’m not particularly happy with it, but we have captured it in time, before the winter energy payment is paid out again in May. As I said, it’s good that the mistake was discovered and can be corrected within 16 months, as opposed to examples where we’ve had to wait 17 years before a mistake was discovered and corrected. I commend this bill to the House.

Hon LOUISE UPSTON (National—Taupō): Thank you, Mr Assistant Speaker. I do want to say that it was good to hear, earlier in this House, the Minister for Social Development taking responsibility for this unlawful spending, as we didn’t hear that in the first reading speech only a matter of a couple of months ago.

The Minister has just said that it was captured in time, but I want to just put on record, because it is really important that New Zealanders understand this, that the payments made to over 25,000 people were unlawful. They were not authorised by the Parliament and they were picked up—actually, there’s a bit of a time delay. The Minister was made aware of the issue months before, in June 2018, and then the Office of the Auditor-General raised it again in October as an issue of unauthorised spending, or unlawful spending. Over 25,000 people had payments that were not allowed for in the New Zealand Parliament’s law that was passed.

This is a significant issue. I know the Minister wants the House to just kind of brush over it lightly, but it is a significant issue to spend taxpayers’ money that this Parliament has not authorised. That’s what makes it unlawful. So it was great that the Minister took full responsibility for that. We didn’t actually get any assurance in this House, though, that it won’t happen again.

One of the reasons that the National Opposition members didn’t vote for this in the Social Services and Community Committee—it had a minority viewpoint in the select committee report and didn’t, of course, vote for it in the first reading, nor will we vote for it in the second reading—is because there is absolutely no guarantee that this piece of legislation, which is fixing an error in legislation that was rushed through the House—this fix piece of legislation has also been rushed. It has a shortened report back and insufficient parliamentary scrutiny.

We’ve had a Minister twice today sitting here telling us that she knows there is an issue, that there is a group of New Zealanders who taxpayers will fund their energy payments twice—doesn’t know the number. How is that acceptable? Taxpayers, I think, will be particularly concerned to know that there is a Minister who is quite happy to have rushed legislation fixing rushed legislation where the errors were originally made, and still having errors. That is just such poor practice. It’s hard to stress enough how bad this is, but this is a Minister who also dropped a 500-page Supplementary Order Paper in May, 24 hours before the Social Security Legislation Rewrite Bill, and failed to get the details right at that stage as well.

One of the issues that hasn’t been traversed—and the Minister didn’t mention it at all—is the fact that this is retrospective legislation. Now, members in this House quite rightly have been scathing in the past of retrospective legislation. So Chris Hipkins, in 2013 when it was the Plumbers, Gasfitters, and Drainlayers Amendment Bill, said, “simply imposing this by way of a legislative override, effectively, of a whole lot of organisations—the Regulations Review Committee, the Ombudsman, and various others … to ride roughshod over those organisations through a legislative process is not the right way to do it. It is manifestly unjust. It is simply not right. Retrospective legislation is not right.”

So not only is this a piece of legislation that’s been rushed through the Parliament to fix a mistake because legislation was rushed through the Parliament without sufficient scrutiny, but now we have retrospective legislation, which, according to members on that side of the House—they have said, and I’ll repeat, “retrospective legislation is not right”. Here they go again—here they go again. It’s just not sufficient to say that this is a minor technical bill. It’s not. One of the results of this bill will mean that taxpayers will pay energy costs twice for a group of people who are in full-time residential care that is paid fully by taxpayers, and that group will get the winter energy payment as well.

Again, had there been sufficient time, had the Minister allowed sufficient time for this House to do its work, instead of sitting on her hands from when the issue was first raised in June 2018—if it was so minor and such a small technical change, why wasn’t the bill brought to the House? Why wasn’t the bill brought to the House in a timely manner so the Parliament could scrutinise it so that this particular issue with the taxpayers paying twice for energy payments could have been fixed? But no—no. We have a Minister who is determined to abuse the parliamentary process, to jam legislation through this House without sufficient scrutiny. Third time lucky—third time lucky. Unlucky, actually—poor performance is more what it’s about, and, you know, quite rightly, she takes full responsibility, which is as she should.

But this is legislation fixing something done under a rushed process without scrutiny. The fix is also a rush. It’s not fixing the problem, as the Minister herself has admitted, and, to cap it all off, it is retrospective legislation, which is a retrograde move for this House.

Hon PEENI HENARE (Associate Minister for Social Development): Tēnā koe, Mr Assistant Speaker. The hypocrisy—the hypocrisy of a contribution like that, blaming this Government for bad legislation in this House. I recall, this being my fifth year in this House—in fact, yours too, Mr Assistant Speaker—the amount of times while in Opposition we sat through the process of exactly what that member’s moaning about—exactly what that member is complaining about. What we see today is a Minister and a Government that’s actually taking responsibility, making sure we have the right pathway forward, and—guess what?—at the end of the day, making sure that families far and wide in this country receive the support that they need to stay warm this winter. How hard is that to comprehend? How hard is that to comprehend, to make sure that families receive support this winter?

The Minister gave examples of families that in the past winter, actually, were so grateful for the support that they received from this Government to make sure that their house was warm, that their house was safe, so that their families didn’t spend more time in A & E, more time at the doctors, and more time trying to care for the sick. What is wrong with that side of the House—

Hon Ruth Dyson: Quite a lot.

Hon PEENI HENARE: —when they can’t see what we are doing here? There is a lot wrong—there is. I am proud that in this reading of the bill, the bill will amend the Social Security Act 2018 to ensure clients in two specific scenarios are able to be paid the winter energy payment as the policy intended. The Minister explained it very clearly. In fact, I’m reminded of question time today. It takes a little while to sink in on the other side that, actually, the line of questioning and their approach to these kinds of debate are just simply wrong. The explanation given by the Minister in her contribution today clearly sets the record straight, and I look forward to visiting my constituents in Tāmaki Makaurau when they pat us on the back for making sure that them—

Matt Doocey: For overspending.

Hon PEENI HENARE: —and their families are warm this winter. The member interjecting from that side of the House should understand that the name of his electorate is “cold water”. I look forward to his constituents saying that this Government is doing a good job to warm their homes.

Hon ALFRED NGARO (National): I’ve got a lot of respect for the previous speaker, the Hon Peeni Henare, because he’s full of passion when he speaks. But for all the passion in the world, this can’t hide the truth. So let’s talk about the truth, about why we are here today. We are here today not just because of the passion that’s been shared on the other side, but because of a mistake that has been made. Let’s talk about that mistake. It was the Social Security Legislation Rewrite Bill of last year, for which, by the way, all the work had already been done by a National Government, so all they had to do was pass that piece of legislation through.

First truth, first fact: a 500-page Supplementary Order Paper, not a problem, technical in its matter, but, actually, it was turning around to change some of those issues in the bill. But here’s the point and the reasons why we’re here: they declared that it was policy-neutral; it wasn’t. What are the reasons why it wasn’t policy-neutral? It was because in all of the Social Security Legislation Rewrite Bill—there you go, it’s a bit of a mouthful—there was one little chestnut that they decided to put there; that was called the winter energy payment. That means it was not policy-neutral. Why? It was introduced by this Government as a little chestnut they could turn around there—yeah, you could burn that little chestnut somehow. It was to warm the cockles of the hearts of the people out there in voter land—to turn around and say to them, “Look, we care for you—we care for you—because we’ve got this little chestnut; it’s called the winter energy payment.”

So here’s the problem and the reason why we’re here: it’s called the “R, S, and B”—in the trade we call it the “rip, shite, and bust”. In other words, when you rush something without doing the work, what happens? You make a mistake. So here’s the mistake that they made: they hadn’t done the detail, and the reasons why we’re here today is because of that mistake. Make no excuses about it. The Minister has said a mistake has been made—a mistake has been made. Why? It was because you put the little chestnut in, you didn’t do your work, you didn’t do your homework, otherwise we wouldn’t be here today. That’s the reason why we’re here.

Let’s talk about this little chestnut. Let’s see if this is really a chestnut that’s going to truly warm the cockles of the hearts in voter land, of the people out there. That’s a little bit of truth that’s out here. So this little chestnut that’s out there, what they haven’t told you is this: it’s a payment that will erode over time. How will it erode over time? In other words, it won’t last over the longevity of the people that you want to care for. Why? You haven’t indexed that piece of payment. What does that mean to the people on the other side, who may not understand what it is? That means that, as time goes on with inflation, if you haven’t indexed it, the amount will erode over time. In other words, that little chestnut will disappear—that little chestnut will disappear.

What would have been the difference under our family tax package? We would have made a difference to the beneficiaries that are out there, the so-called people that we care for, those elderly people that are out there, those seniors, and those superannuitants. Why? We indexed it so that there was longevity of payments over a longer period of time. So this little chestnut, this hopeful little piece that you put out there, isn’t quite as good as you’re making it out to be. You can turn around and say that there’s cold water on this side, but let me tell you the truth. To the people out there, the truth is that with all the passion that you can talk about, this will not make a difference.

We don’t support this, not because we don’t think it’s important but because it isn’t clearly the change that will make a difference in the lives of the people that we’re caring about. We don’t believe it’s going to truly address the issue of those that are in sight. Here’s the thing: people are now seeing that the Minister—and not only is it a problem, but, you see, the problem that they’ve found on top of the problem is that there’s over 600 people that are going to be paid twice; 600 people that are going to be paid twice. That’s right. So not only did we not fix the first problem in select committee, because it was rushed, we’ve now got another problem that they still haven’t fixed. Another 600 people out there—which, by the way, they’ve said, “Right, don’t worry; they’re only a small number out of the one million that are out there.” But that’s not the point, is it? The point is we’ve had one problem and now we’ve found another one. This little chestnut is not what it’s made out to be.

We don’t support this. We don’t support this, because the intent that the Government has turned around and said—it won’t make a difference. It won’t truly warm the cockles of the hearts of the people that we’re talking about, the superannuitants. The winter energy payments will be paid twice to people who should have been paid only once, and here we have the so-called gift that they give to the elderly. We know this—and they haven’t thought about this detail. You’ll be scrambling around and your advisers will say, “Oh, is that true? Is that correct?” It is true, it is correct. It isn’t indexed, so guess what: it won’t last the distance of time to make the difference. But don’t worry; you’ll come back to the House and you’ll have another amendment bill on the amendment that you’ve already made.

We don’t support this bill. It isn’t what it was called to be: to make a difference in the lives of people. But, on this side, we know that we can. If you just learnt a lesson to hold on to the things that are important, we wouldn’t be back here in the House again. Thank you, Mr Assistant Speaker.

JENNY MARCROFT (NZ First): Tēnā koe, Mr Assistant Speaker. It’s a pleasure to stand and take a call on this amendment bill. I’d just like to begin my contribution by acknowledging the passion from the Hon Alfred Ngaro, the member who has just spoken. Unfortunately, that is misplaced passion. It’s passion about technicalities as opposed to passion about the people, and that is what this bill and the winter energy payment are all about. It is about warming our people—so we are passionate about people on this side of the House. The Government has made a fantastic move in terms of looking after the people of New Zealand who need to have our help and assistance.

The winter energy payment is really great for families, particularly those who have children, to warm up their homes. It is fantastic for those seniors in our community who need to ensure that during the winter months, they stay warm. It will help to ensure that those 1,600 people per year who have died living in cold houses—it will reduce that significantly. This is particularly targeted social assistance, and that is what we are passionate about: to warm up our people, because it’s all about governing with heart.

Now, the Social Security (Winter Energy Payment) Amendment Bill amends the Social Security Act to ensure that all the clients are able to be lawfully paid the winter energy payment as the policy intended. Now, although nobody actually missed out on their payments during winter last year, there was that technical error in the bill, which meant a few intended recipients received their payments despite the legislation technically saying that they shouldn’t have. This amendment bill makes sure that these people, who were always intended to receive the payment, are fully covered by the legislation.

The key scenario, in which the drafting errors were relevant, related to residential care and residential support subsidies. The winter energy payment is not paid to those who receive these subsidies, as their heating’s already subsidised. The drafting error, however, meant that some people who were not eligible for these subsidies but who did receive some other limited funding for residential care were technically outside the winter energy payment legislation. So these people still received the winter energy payment as planned, but the legislation did not technically cover them, and thus they were paid unlawfully, but this technicality, through this amendment, will be fixed. It was a very small group of people: fewer than 4 percent of those who received the payment.

I’d just like to acknowledge the Social Services and Community Committee for the further refinements that they’ve provided through the select committee process—good work there—and also note too the Minister and her speech this afternoon. The original draft of this amendment bill was a little unclear. In clause 4, the clause which inserts the new section 72(2)(d), and in the bill’s original form, a very limited number of people were unintentionally excluded from the winter energy payment due to those rare scenarios that have been outlined already.

The winter energy payment is having a positive impact on New Zealanders. It did last year; it will this year as well, and into the future. This is a very small technical fix, and it should progress quickly now through the House. On that, I commend this to the House.

MAUREEN PUGH (National): Thank you very much, Mr Assistant Speaker. We’ve heard some very passionate contributions from this side of the House, and it’s no surprise to me that people have got their dander up over here about the constant mess that this Government seems to find itself in when producing legislation and pushing it through this House.

I’d like to start my contribution to the Social Security (Winter Energy Payment) Amendment Bill today, in its second reading, by saying that simply imposing this by way of a legislative override—effectively, a whole lot of organisations: the Regulations Review Committee, the Ombudsman, and various others—and to ride roughshod over those organisations through a legislative process is not the right way to do it. “It is manifestly unjust. It is simply not right. Retrospective legislation is not right.”—that’s a direct quote from Chris Hipkins on 2 July 2013.

The irony of this bill is that it is being rushed through to legitimise unlawful payments made last year to 25,000 people; that’s $3.4 million worth of unauthorised payments. Rushing through this legislation process to fix mistakes made by rushing through legislation is a recipe for disaster, and it’s a recipe for even further errors. We’ve already heard that this process is still going to leave gaps in the legislation. I am, of course, referring to the 500-page Supplementary Order Paper that was dumped on the House only 24 hours out from the reading of the Social Security Legislation Rewrite Bill. No scrutiny by the select committee, no public process, so no submissions, and here were are; this is what happens when you bypass the system, think you know best, and make mistakes.

We already know that we have got people now who are not captured by this quick fix, and they are people in residential care, who are now double-dipping on this winter energy payment. So how is the Government going to fix that? Or are you simply going to turn your back on the fact that 600 people are going to get this?

I’m going to make mention of Peeni Henare’s comments before, when he defended this winter energy payment and asked the question of this side of the House: he wanted to know what was wrong with us over here. Well, I want to say that he thought we should be happy that those who need it were getting the winter energy payment. Well, the reason we’re not happy is that the $450 that a single person is going to get from this payment, or the $700 that couples with dependents are going to get from this payment, still falls short of the $1,000 tax relief that they would have got before they reversed the legislation that would have brought that in last year. That’s why we’re not happy; because, actually, the people of New Zealand are being short-changed.

The one thing that they have forgotten, too, is that they have created this as a universal payment; there is no means testing. So it doesn’t mean that the people who need it are necessarily getting it; everybody is getting it. And there comes my point, and I’m sure Greg O’Connor would be disappointed if I didn’t mention that it is called a “winter energy payment” when, in fact, it has nothing to do with energy; people can spend this money on anything they choose. This is a “winter payment”. It short-changes the people of New Zealand because they don’t get to keep more of the money that they earn, and they don’t have the choices they would have had, had they had $1,000 more in their pocket.

We are not supporting this bill on this side of the House, and I would urge the Government to take more respect when they are writing legislation and use the well-established process that we have through our select committees. I do not support this bill.

JAN LOGIE (Green): Thank you, Mr Assistant Speaker. I rise to take a call in the second reading of the Social Security (Winter Energy Payment) Amendment Bill, which is, as already stated by the Minister and previous speakers, a minor, technical fixing of a drafting error, as this legislation went through under urgency, from memory, to make sure that the thousands of New Zealanders who were struggling to heat their houses because they were living on inadequate fixed incomes were able to put the heater on last winter.

When we hear from the other side that this was an abuse of process, that it went through quickly, and the Government is now fixing its mistakes, I’ve got to say that my priority is those people being able to put on their heater. I remember, during the election campaign, talking to a particular woman on supported living who was in my street, who spoke to me about having $25 a week left after paying her rent. She was struggling to manage her health, wanting to get better, and was not able to put decent food on the table or turn on the heater. She was living in cold, damp conditions. We all pay for that reality, where thousands of New Zealanders have been stuck in poor health and in their homes unable to participate because of the decisions of previous Governments to keep them stuck with inadequate incomes.

That was the urgency behind this bill: to give them the money to turn that heater on, to have a chance to be well, and to start turning around the 1,600 excess deaths that happen every year in this country because of the inability of many New Zealanders to heat their houses—10 percent, I think it is, of the country who are living in energy poverty because of our policies. That was the urgency behind this legislation.

I, also, just do have to comment on some of the debates that I’ve heard from the other side of the House this afternoon. It really does feel to me as if some people must have had their memories wiped, because it is not uncommon; I have sat in this House multiple times to fix drafting errors. It’s just a human reality that mistakes happen in legislation, and that Government, certainly, was not immune to that human reality. It’s weird to me—and I may have participated in the past—it is very strange to sit and listen to the political rhetoric that ignores that reality, and to try and put it down to factors other than just that human reality and that sometimes mistakes are being made. I understand that we may be in this House considering legislation that’s fixing up errors that were made by that previous Government. So I really hope that when they’re considering any legislation like that, that the members on that side of the House rail against their previous Government in the same way that they are railing against this one, because that would provide some consistency.

I also want to point out that the concerns in the quoting of the Hon Chris Hipkins and making a point against the misuse of retrospective legislation are not appropriate in this case, because in this case the retrospectivity was to ensure that people had something extra. It wasn’t taking away people’s rights but actually ensuring that people had some more money. That’s actually not something where the concern around retrospectivity applies. We usually have a concern when it’s changing the law and holding people accountable to a law that wasn’t in place, and that we shouldn’t hold them to a measure that wasn’t clear. That doesn’t apply when we’re giving people extra money to turn on their heaters.

I also just want to point out, again, the points that have been made about the fact that this isn’t indexed. I don’t think anyone on this side of the House is saying that the winter energy payment is the solution to poverty in this country. It’s very clear from the recent statistics around the still heartbreaking rates of child poverty in this country that we have much more work to do. This sat alongside other initiatives in the Families Package, and we still have more work to do if we want everyone in this country to have the chance of reaching their potential in life, rather than being trapped in poverty.

But I do want to point out the inconsistency, particularly when up against the fact we heard that, under the last Government, when they increased a payment for sole parents of up to $25 a week, they very rarely acknowledged that it was “up to” $25 a week. Very few people actually got that full amount and that was not indexed. So it does seem very strange to me that this Opposition is holding this Government to a standard that they did not hold themselves to.

I really think that we just need to go back to the core purpose of this bill, which is about fixing a drafting error to ensure that two groups of people who managed to get the winter energy payment but, because of the drafting lack of clarity the legislation didn’t support them getting it, are able to get it, which was the intent of the policy. So with that said, it warms the cockles of my heart and I do think—we heard there was a criticism that, you know, this Government was doing this to warm the cockles of people’s hearts.

Hon Ruth Dyson: And their feet.

JAN LOGIE: Well, shame on us—and their feet. I know, shame on us that we would want to bring a bit of joy and warmth into people’s lives! It’s something, personally, I’m quite happy to stand alongside.

AGNES LOHENI (National): I’m happy to take this call on the Social Security (Winter Energy Payment) Amendment Bill. It’s been so interesting listening to the debate in the House today. Clearly, the Government is feeling quite embarrassed about what’s occurred, given the lovely words that have been fired across to us: we’re heartless over here, cold-hearted—we don’t care on this side of the House. Well, actually, we do care. We care about hard-working New Zealanders, hard-working taxpayers, in this country. We care about process and scrutiny on laws that affect all New Zealanders, and so we need to take the time that’s needed to get those laws right the first time.

So the intent of the bill is to recognise the cost of heating homes during winter. On the face of it, I don’t have a problem with it, if it was targeted to those who need it. There was no means testing applied to this payment and, not only that, but people who shouldn’t have received it got it, to the tune of $3.45 million. The devil is in the detail, and the devil is dancing gleefully over this $3.45 million.

So in the Government’s haste to remedy this $3.45 million mistake, we are now faced with amendments to fix the $3.45 million mistake, and, as a member of the Social Services and Community Committee, it’s fair to say that I have not been reassured that those issues of fairness and equity have been addressed, because the time taken to scrutinise was very insufficient. The bill is still not right, as those who are fully funded by the Government—those in full-time residential care, essentially—are having their power paid for twice. So I’m concerned that the changes further perpetuate the inequity and risk legal challenge from those who are excluded.

As I said, we didn’t get a chance to scrutinise, and there was a very shortened submission time. But I would just like to note a comment from one of the submitters, Josiah Tualamali’i, who wrote—and I just quote from his submission—“submissions have been open for 5 days of feedback which fell over a weekend … Seeing that hearings will be held the day following the closing of submissions also concerns me. These choices undermine the fantastic work being done to restore trust and increase engagement with Parliament. … One of the things I care deeply about is people trusting decision making institutions and [I’m] feeling like they can be genuinely heard—this undermines that work.”

I agree with Mr Josiah on that note absolutely. On that note, I do not support this bill.

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

ANAHILA KANONGATA’A-SUISUIKI (Labour): It is an absolute privilege to contribute to the Social Security (Winter Energy Payment) Amendment Bill second reading. I was at Māngere, where lots of people gave me their feedback on the winter energy payment, and one of them said, “Tell the Prime Minister: my dad said ‘Thank you. We can now turn the heater on.’”

I just want to remind the House that two types of New Zealanders benefit from this, as quoted by the Minister: people receiving Government funding, long-term residential care or residential care services but who are not eligible for the residential care subsidy or residential support subsidy; New Zealanders who are absent from New Zealand for longer than four weeks at any one time during the winter period.

It warms my heart that the winter energy payment touches almost one million New Zealanders—one million New Zealanders. And I want to acknowledge the—I don’t know what you call it—contribution on the other side when they talked about a short duration. But, actually, I want to thank the nine submitters, who in the past week wrote to us and voiced their opinions. So I want to thank Oliver Krollmann, Gary Wills, David Mannion, Simione Faagutu, Josiah Tualamali’i, Wendy Burgess, Rob Dowler, David Mannion, and George Sabonadiere. Thank you for taking the time to give us your opinion.

There is no need for us to continue. Winter is knocking at our door. We must pass this bill as swiftly as we can. Now, I want to end my contribution today by saying that I commend this bill to the House. Malo.

ASSISTANT SPEAKER (Adrian Rurawhe): I call Nuk Korako—five minutes.

NUK KORAKO (National): E mihi atu ki a koe e Te Mana Whakawā, huri noa i te Whare nei, ā, tēnā tātou.

[I greet you, Mr Assistant Speaker, and all in this House; greetings to all.]

I’m sort of sitting here and listening, and thank you to that last speaker who was very, very passionate. There’s been a lot of passion on both sides of the House—

Angie Warren-Clark: Say her name.

NUK KORAKO: —as we know. That outburst there actually reflects in some ways what’s coming from that side of the House—using the BS word and all that sort of thing—but what we have to understand here is that we actually have our job to do in the Opposition.

So just to highlight the reasons why we can’t support this bill, it is quite clear in the fact that, first of all, it’s not indexed. So what that does is it doesn’t give it the longevity that is needed for this particular bill. I think the other part of it is that there are parts of the community that it does not actually reach. As the spokesperson for Māori development, there has been a lot of feedback about this bill, particularly saying that the bill does not serve our kaumātua who live in extended whānau situations or circumstances with their adult children. So our kaumātua are, in effect, penalised for relying on whānau and being grandparents in the home of their mokopuna. So that is something that I think needs to be highlighted, and that’s what I’m doing here. The other part of it is that, sure, we can get through the poor drafting—you know, the fact that there’s no means testing. That is a very, very difficult one as well, because it actually allows some to receive it who don’t really qualify for it. And so we’ve got this situation of a $4.5 million mistake. So just to highlight, sort of, that part of it as well.

But I think the other part is that we did have, when we were in Government, the policy, particularly around our tax relief package, which would have provided a better financial return to our superannuitants, to our kaumātua particularly. So, hopefully, that little short rendition of why we don’t support this bill will go some way to actually trying to bring back some sort of decorum around this particular debate. Nō reira, e mihi atu ki a koutou katoa. Kia ora.

GREG O’CONNOR (Labour—Ōhāriu): It was very serendipitous that this morning, when I woke and my feet hit the floorboards, it was quite a chilly morning. I think, again, it is very serendipitous that we are discussing this very important bill and piece of legislation—

Hon Louise Upston: How old are you? Are you 65?

ASSISTANT SPEAKER (Adrian Rurawhe): My age doesn’t matter.

GREG O’CONNOR: —on this very day, because, as I say—actually, not everyone can rely on the constant scolding from the member from Taupō to keep themselves warm. Many is the time I’ve felt I’ve been scolded here—hold my hands up. It reminds me of being at the Westpac Stadium when those great big burners go off and we get a nice flash of heat. But, of course, back on to the bill. Not everyone can rely on that constant scolding to stay warm.

There are those who actually need it. Quite seriously, 1,600 people die each year from living in cold houses—1,600 people. So this is actually quite a serious issue. And the fact is that all the speeches we’ve heard from opposite have been very nit-picky little pieces about what we’ve got wrong. Actually, look at the big picture. Look at the fact that each of you—I mean, let’s just have some sums on this. There are 71 electorates in New Zealand. That means that 22.5 people will die in each of our electorates this year.

Putting some numbers on this, that’s actually quite serious, and so anything we can do to alleviate that is extremely important. Arthur Grimes, who I think is well known—I think he’s the ex-chairman of the Reserve Bank. I’m just quoting a Listener article he was quoted in here. He was, as I say, the senior chairman. Admittedly, he was talking about insulation, but he makes some very good points talking about subsidies, particularly insulation subsidies, especially for homeowners aged 60 or older, who are at the greatest risk of developing circulatory problems. He said, “This is where you get the biggest bang for your buck when it comes to insulation. They might not have heart disease now, but they may get it later, and I would say that as a group they should be targeted.” That just puts some perspective around the difference that having some money to pay your bills can make.

I know one of the previous speakers talked about money from this going into their wine cellars. Well, not everybody has one of those wine cellars. There are people who will actually need this and it will make a serious difference to their lives. For those who are listening at home, this debate, really—there’s been some accusations that, somehow, some people that weren’t entitled to this were getting something. No, that’s not what the debate is about. The people that were always intended to get this payment did get it last year, and now all this bill is doing is ensuring that those people are getting that payment again this year, which they obviously need, and it will hopefully prevent some of those 1,600 deaths that will occur, or perhaps would have occurred but for this payment. So I very much commend this bill to the House.

SIMON O’CONNOR (National—Tāmaki): It’s always good luck, I think, to have one O’Connor follow another. I can’t support this bill, even as we reach the second reading. It’s fundamentally for two reasons: one is process, and one is principle. Look, the process around this bill has been appalling. At the end of the day, if you look at it, millions of dollars have been incorrectly spent, and it’s good to see the Office of the Auditor-General identify that. This bill is rectifying that mistake, and, I suppose, at one level you could argue that that is positive. However, this side of the House has been consistent, right from the start, in insisting that the Government do proper process around the winter energy payment and any changes, actually, to do with social services.

I’ve waxed lyrical on this a few times, but, fundamentally, we see in the social services space the Government is bringing in legislative—be it this around winter energy payments, or the Social Security Legislation Rewrite Bill, and, of a couple of days ago, one around Oranga Tamariki—changes which have been rushed through the Parliament, with the inevitable problems. Those of us on the Social Services and Community Committee did question officials if they were 100 percent sure that no more mistakes would be found. They’ve told us that; we take them at their word, but I have a sneaking suspicion we’ll be returning to this House at some point in this Parliament to fix up another part of the Social Security Legislation Rewrite Bill.

The other reason I can’t support this is not because I don’t want our older citizens to be warm, but—and I’ve used the phrase before, and it’s not to be taken literally—you don’t bribe people with their own money. The winter energy payment is fundamentally about taking a whole lot of money off those elderly people through a tax system, packaging it up in something called the energy payment, and handing it back to them. It’s a highly inefficient way of dealing with things, in fact, if you view it as an analogy of heat, it’s a way that you actually lose an enormous amount of heat through the kinetic process. So I can’t support the bill in process or in principle, and so I do not commend it to the House.

PRIYANCA RADHAKRISHNAN (Labour): Thank you, Mr Assistant Speaker. I rise to make a short contribution on the Social Security (Winter Energy Payment) Amendment Bill. Despite the fact that members opposite have worked incredibly hard this afternoon to dramatise and sensationalise this piece of legislation, it’s actually a really simple, straightforward bill which amends the Social Security Act 2018 to align with the policy intent in two specific scenarios. Those are, firstly, those who are receiving funding for long-term residential care or residential care services who are not eligible for the residential care or support subsidies. The second group of people who will continue to receive the winter energy payment as a result of this amendment bill passing are those who travel overseas for over four weeks during the winter period, and this will allow them to receive the winter energy payment for the first 28 days of their absence. That’s, basically, what this bill does.

It amends drafting errors to ensure that those who are eligible to receive the winter energy payment and who received it last year will continue to receive it this year. That’s what it does. So the Opposition, who have given us a whole series of pretty mean-spirited speeches today—by not voting for this amendment bill, in effect, what they are saying is that they don’t think that people who fall into these two categories should continue to receive the winter energy payment this year.

At the Social Services and Community Committee, we received submissions, and my colleague Anahila Kanongata’a-Suisuiki has mentioned the names of those who submitted to the select committee. Many of them wrote to us saying that they found the winter energy payment incredibly useful. It has helped them to keep warm in their rental homes, and that’s also the message that all of us on this side of the House have received time and again from people.

Members opposite—specifically, the member Agnes Loheni—said “We do care”, and then she went on to say, “We care about proper process.” What that says to me, on this side of the House, is that members opposite care about process over the well-being and the welfare of people, and that they would, out of spite, block a piece of legislation that keeps people warm. That, coupled with the fact that the Leader of the Opposition just earlier this week refused to rule out cutting the minimum wage, tells me that saying “We care.” is just words. I commend this bill to the House.

The question was put that the amendments recommended by the Social Services and Community Committee by majority be agreed to.

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

Ayes 63

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

Noes 56

New Zealand National 55; Ross.

Amendments agreed to.

A party vote was called for on the question, That the Social Security (Winter Energy Payment) Amendment Bill be now read a second 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 second time.

Bills

Fire and Emergency New Zealand (Levy) Amendment Bill

Second Reading

Hon TRACEY MARTIN (Minister of Internal Affairs): I move, That the Fire and Emergency New Zealand (Levy) Amendment Bill be now read a second time.

I would first like to take this opportunity to commend all those involved in battling the Tasman fires and ensuring our community’s safety and well-being. The response to these fires also showed the benefit that Fire and Emergency New Zealand—a modern, unified fire and emergency service—can deliver. Fire and emergency services have become our first defence against the effects of a changing climate, responding to flooding, landslips, and bigger and more intense wildfires.

The bill amends the Fire and Emergency New Zealand Act 2017, which I will refer to as the FENZ Act. The FENZ Act reformed the law relating to fire and emergency services, bringing together rural and urban fire services to form a single organisation: Fire and Emergency New Zealand, or FENZ. The bill’s amendments all relate to the levy-based system to fund FENZ.

The bill amends the commencement date for sections 80 to 140 of the FENZ Act. These sections provided for a new levy-based system. They are due to come into force by 1 July 2019, while a transactional regime currently applies. The levy system is implemented by insurers and brokers. Insurers and brokers would need to make considerable changes to their systems before sections 80 to 140 come into force. It has become apparent that these changes will not be able to be made before 1 July 2019. This bill therefore changes the backstop commencement date for sections 80 to 140 to 1 July 2021, with the ability for this to be brought forward by Order in Council.

Further to this, I intend to table a Supplementary Order Paper at the committee of the whole House stage which amends the commencement date to 1 July 2024. The 1 July 2024 date will allow time for a first-principles review of the funding model for FENZ. Funding FENZ through a levy on property insurance is largely a carry-over from the previous fire services regime. This model of funding has some weaknesses, such as: property owners who choose not to insure are able to free ride as they do not pay a levy but still benefit from FENZ services, charging a levy on insurance can increase insurance costs and can reduce the incentive for people to properly insure their properties, and levy collection is complex to administer for insurers and FENZ levy income may become uncertain as the commercial insurance market evolves. Shifting the date out to 1 July 2024 will prevent the need for further amendment to the FENZ Act if a new funding model is to be implemented for FENZ. It also ensures that FENZ will remain funded for the duration of the review.

I would like to thank the Governance and Administration Committee for its constructive consideration of this bill. I would also like to thank the 10 submitters on the bill, particularly those who made time to make oral submissions to the committee. The committee has recommended amendments to the bill in response to some of the issues raised in submissions. The Government supports these recommendations, and amendments have been made to reflect them.

Under current policy settings, public museums and galleries pay a levy on insurance for their collections. This bill will exempt the collections of cultural heritage bodies like public museums, art galleries, whare taonga, and archival institutions from 1 July 2019. This exemption applies to items or collections that these cultural heritage bodies exhibit or conserve to enable public education, public enjoyment, or the preservation of the items. The exemption doesn’t extend to their buildings, and the institutions must be non - profit-making and open to the public. This measure will ensure that institutions which are guardians of items of significant cultural value, many of which are irreplaceable, aren’t charged a levy out of proportion with their likely need for FENZ services.

The committee recommended amending clause 8 to insert a definition of “cultural heritage bodies” for the purposes of the levy exemption. The definition of cultural heritage bodies requires museums, whare taonga, archives, and art galleries to meet a list of relevant criteria. The committee also recommended that archives and cultural heritage items be defined to provide greater clarity around what institutions to which the exemption will apply. The exemption was set to come into force when the new levy regime was implemented. Now that the implementation date of the new levy regime has been deferred, exempting collections held by cultural heritage bodies from 1 July 2019 will achieve the Government’s policy intent straight away, despite the delay in implementation.

My Supplementary Order Paper will also exempt the New Zealand Defence Force from a levy. This exemption recognises the significant contribution the New Zealand Defence Force makes to fire services in the community. The committee recommended amending clause 5 to insert a new subsection (4A) into section 141 of the Act, which empowers the making of levy regulations. This subsection provides for a minimum four-month lead time from when levy rates are set to the date on which they come into force. This will give insurers certainty around when they will need to implement changes to levy rates.

I am pleased that this bill is continuing to progress through the House. It will allow us to make sure that our fire services are appropriately funded for the very important work they do to keep our communities safe. Again, I would like to thank the select committee for their efforts and commend the bill to the House.

KANWALJIT SINGH BAKSHI (National): Thank you, Mr Assistant Speaker. First of all, I would also like to acknowledge all the firefighters, women and men, who have been contributing to this country, particularly in the recent incidents in Nelson with the fire, floods, and different incidents which they respond to. I want to thank all women and men, paid and volunteers, for their contribution and the services they provide to us.

We will be supporting the second reading of this bill, but definitely, as the Minister of Internal Affairs has just mentioned that she will be introducing a Supplementary Order Paper (SOP) in the committee stage, we will go through that SOP and see what the Minister is proposing with those changes.

When we were in the select committee process, we did ask the officials: is there any other proposal which is being considered or not? The answer was: “We don’t know if there is any other proposal; we are working on this.” That’s a little bit disappointing, because if that process was in place, we should have been informed about it. We could have gone through the select committee process, which was very comprehensive and thoroughly discussed this bill. As you can see, the submitters were very few but the quality of the submissions was quite high. Five oral submissions were heard under the leadership of the chair, Brett Hudson, and other members also provided a lot of input in this consideration. I think that was very important, that if there was something coming up, the select committee should have been informed about it, but it was not informed, and now, suddenly, we hear from the Minister that there will be an SOP to change this regime. This is a bit of a disappointment.

In the Governance and Administration Committee, there were a few recommendations made by the committee to report back, and I would like to touch upon them. The exemption to the public collection was made because we know that people have interest in artefacts and things which are in archives, and, proportionately, they would have to pay a lot of levy for this service to ensure that the insurance for these archives and artefacts is not affected. That’s why this exemption was given.

Clauses 40 to 140 in the Act, which were supposed to come into force from 1 July 2019, provided the new levy regime. Insurers and brokers will implement the regime, but they will first need to make considerable changes to their systems. That is why the committee decided that the implementation of these clauses may be changed to 1 July 2021. It was also proposed that if they are to be commenced before 1 July 2021, the Order in Council can change that date.

As I was mentioning, the public collections are exempted from this, and the Minister just mentioned that in the SOP she will be proposing, the Defence Force will be also exempted from this levy. I think that is a welcome step, and we know that the Defence Force are also always available to help the people of this country.

There was another discussion that once the levy is finalised and approved by Cabinet, how much time should be given to the insurers to implement that? Originally, it was proposed that it should be three months from the finalisation of such levies, but the committee discussed that and it was proposed that it should be a minimum of four months instead of three months. That is a reasonable time for the insurers to implement their upgrading of their software and the policies.

The committee also recommended amending clause 5 to insert a new subsection (4A) into section 141 of the Act which empowers the making of levy regulations, and that is because the levy can be changed every two to three years, as is appropriate for the Minister to consider. It is very important that we have to give them the lead-in time so that they can implement it.

I think, overall, this bill is a good bill, but now we have got a new situation where a Supplementary Order Paper will be introduced by the Minister. But meanwhile, in the second reading, we will be supporting this bill. Thank you, Mr Assistant Speaker.

Hon STUART NASH (Minister of Police): Thank you very much, Mr Assistant Speaker. I stand to support this bill, but what I would like to say is what a pragmatic Minister. You know, there was an issue identified. It was going to take insurance companies and insurance brokers longer to actually get their systems sorted to allow them to implement this in a way they could do without causing a whole lot of grief, and so what she did was she came back to Parliament and said, “We like the structure of what we’re doing, but we just need a little bit more time. We need to make sure that Fire and Emergency New Zealand is well funded”—it just makes sense; pragmatic—“but give us a bit more time so we get these systems right.”

You know, it’s an absolute pleasure, working with the Hon Tracey Martin. She does things well and she drives through change that really matters. Of that, there is no doubt whatsoever, and, of course, it is important that the Fire Service—well, it’s not the Fire Service any more, is it?—that Fire and Emergency New Zealand are well funded.

Hon Ruth Dyson: Fire and Emergency New Zealand—but they still provide a service.

Hon STUART NASH: That’s a very good point that the Hon Ruth Dyson mentions. You know, we tend to think of the fire service as men and women who fight fires, but they do a hell of a lot more, and as an MP with quite a rural rump, I know the fantastic work that men and women—mainly volunteers, as Mr McAnulty was—do. Mainly volunteers spend a spend a lot of their time—time they could be spending with their families—actually out there, helping the community. In fact, they are integral to the health and well-being of our communities, and I salute them.

I suppose the importance of Fire and Emergency New Zealand was clearly highlighted and probably no more so than during the 15 March terrorist attacks, when 40 firefighters and personnel helped in the comms centre. Their service and help was invaluable in ensuring that everything possible was done to help victims and their families, and I thank them for their service.

I do commend this bill to the House. It’s a pragmatic solution to an issue that arose, and, once again, good on the Hon Tracey Martin for making change that matters and getting us under way and just making it happen. Good on her.

BRETT HUDSON (National): I rise in support of the Fire and Emergency New Zealand (Levy) Amendment Bill as it has been reported back from the select committee—

Hon Ruth Dyson: Which select committee?

BRETT HUDSON: —which is the best select committee in Parliament, Ms Dyson—the Governance and Administration Committee. It’s the hardest-working, with the best results, but, you know, I want to be bit modest at least.

To echo the comments others have made about the services that our Fire and Emergency New Zealand (FENZ) people provide the length of New Zealand, it’s just outstanding, not only in the recent Nelson-Tasman fires, of course, and the horrific incident in Christchurch on 15 March but, actually, every day. Every day of the year, we have FENZ personnel, whether they are paid or volunteers, responding to structural fires, rural fires, and other incidents such as accidents on the road and many other first responses. They perform an enormous service for New Zealanders.

They deserve to be recognised for that, and they deserve to be properly funded for that. That’s why we had no problem supporting this amendment bill as it was introduced and worked on through the select committee. It would have been great if the industry and officials had been able to settle on the new levy rates in time for the original go-live date, if you will, of 1 July 2019. But, cognisant that they were unable to do that, we were happy to support an idea that would allow a two-year extension for them to work through the intricacies, because it is a matter of intricacies and nuances and scenario modelling to understand how a setting in one area may have some flow-on impacts in areas. We were seeking to make the funding through insurance as equitable as it can be through that model.

I’d like to acknowledge and thank officials for their work on this bill in select committee. They listened to submissions. They listened to committee members, who quite forcefully—quite forcefully—articulated some of the views.

We re-articulated some of the views that submitters had made, and they came back with a revised lead-in time for rate changes. They also came back—our drafters. The Parliamentary Counsel Office don’t get a lot of mention in this House, but they came back with an exceptionally good way of drafting the exemption for whare taonga and museums—what they call the cultural heritage bodies. It was so much better, because the easy way to do it would have been to just list a series of institutions and businesses and museums as being exempted, which would have required Parliament to make changes anytime there was an addition or deletion to that list. Instead, they put the effort in to come up with I think a very pragmatic and a very good definition that allows the intent and for change over time to be realised in a way that wouldn’t require Parliament to be passing further amendment bills.

But I just want to finish by touching on the paper that was tabled at the end of our consideration which was from the Minister, noting an attempt to extend and delay further the new levy’s—whatever that levy might be—go-live date so that she could review the funding models from a first-principles basis, because that was already done. It was done by the Government and the officials before the original bill was introduced.

We took the opportunity to ask officials what had changed, and there was no principle-based change to require another look at this. In fact, they hadn’t changed their views on how the funding should be done at all. They entered this amendment bill’s select committee stage believing that a levy-based model was the best model, and right up to the point until the Minister issued this letter to the select committee, they still believed that that was the best and most appropriate funding model. Instead, New Zealand insurance payers and also the insurance industry are going to be left with up to two further years of delay while the Government gazes at its navel a bit and tries to redo the work that’s already been done—trying to somehow create gold out of a base metal—when the work of the trade-off of understanding what the equities and inequities of each option might be, the distortions that one option might introduce over another, and why the Government and officials in the previous term settled on the levy-based model as being the best of the options that were available.

So we’re almost certainly going to arrive back at the same point, but meanwhile levy payers will have up to an additional two years of paying what appears to be—according to the annual review that was recently tabled in this House—an overcharge, because through the fire levy, the accounts for FENZ have grown a great deal quicker than anticipated and expenses haven’t risen in line with those. So the very simple deduction is that people are paying too much today on their levies, and—here you go—this could actually go on not just for one or two more years but for up to four years. I think that’s an absolute travesty for hard-working Kiwis who are looking to make ends meet while they fly in the face of rising grocery bills, a higher cost of living through higher petrol taxes, and, of course, also potential capital gains taxes and any other tax the Government might be thinking of imposing.

So, actually, this is not a trivial matter. It’s not a trivial matter to simply say, “We’ll take an extra two or three years to have another look at potential funding models.”

I’ll leave just one salutary message for the insurance industry, who I believe had something to do with bringing about this relook at the funding model, and that is to be careful what you wish for, because you might not get what you like. I draw their attention to the New Zealand First speeches on the first FENZ bill, where they all said that they felt that the levy model was wrong and that, instead, it should be funded through compulsory third-party insurance. I can tell members this and I tell New Zealand this: the insurance industry—the Insurance Council and their members—are not going to support the idea of compulsory insurance, where they are legally forced to provide insurance to people who don’t meet any risk profile that they would normally accept.

So I leave them with this message. They may appear on the face of it to have got a wee pause that they would have liked, but they’d better be a bit careful about what they end up with.

None the less, we will support the bill as it has emerged from select committee. We reserve our position on the bill in the committee of the whole House stage.

PAUL EAGLE (Labour—Rongotai): Thank you, Mr Assistant Speaker. Look, I was in a really positive mood until about three minutes ago. There’s just so much here to discuss, but, first of all, can I thank the Governance and Administration Committee—remember, the kūmara doesn’t talk about its own sweetness, but, as I’m a member of the committee, I’ll have to just talk a little bit about it. Well done to Governance and Administration, but can I just reiterate the words of Minister Nash, who spoke about the hard work that Minister Martin did in shepherding this piece of work through Cabinet.

Hon Kris Faafoi: Hard-working Minister.

PAUL EAGLE: Hard-working Minister. Look, it’s short and sharp, and I think he’s summed it up really well.

I didn’t know much about the restructure until the self-appointed fire officer for the Wairarapa, none other than the “Commander McAnulty”, took me through some of the ins and outs of the outstanding piece of work here. It’s so outstanding because it’s so simple, and that’s what’s being spoken about in the House this afternoon. For an organisation that has been serving Kiwis for 150 years, and intends to do that for another 150-plus, this is the right structure to move it forward.

I was fortunate enough that when this came through it was the international volunteer firefighters’ day not long after, and I managed to visit the two fire stations within the electorate and two on the border, and what I saw there was a whole lot of men and women who were absolutely, literally pumping to serve and to educate—more than fight fires these days, I found out. It’s a little different to the role that some of them may have come into in the service or in Fire and Emergency New Zealand when they first started, but now a big education component forms part of their role.

The one aspect I’d like to talk about more is the exemption around those public museums, art galleries, and whare taonga, because that’s quite crucial. The example that Minister Nash used previously was around Te Papa, and that lit my ears up to say, “So what would the impact be?” For them, it would have seen their levy go from $3 million to $4.5 million—that’s a 50 percent increase. I’m really proud that with our creative capital arts hat on, we were able to say, “Look, these are the sorts of things that will be exempt. These are the sorts of services that are important.” But, more than that, these entities can’t afford it, and in the compromise there had obviously been some work undertaken to ensure that those entities were going to be exempted.

I heard what the submitters said. They were certainly proud of the work that had been done. Can I just reinforce the previous speaker, Brett Hudson, before he got a little negative—but that’s understandable on a Thursday afternoon. He was confused in what bill he was talking on.

Kieran McAnulty: That’s why he fell off his bike.

PAUL EAGLE: He fell off the truck—the fire truck—maybe. Look, they did come back with some slight amendments and some feedback on what had been proposed, and that’s made this all the better. Can I say, this is really one of those bills that really shouldn’t be here, because it’s just fixing something up, but it is, and it’s going to do a great job. I commend this to the House. Kia ora.

HAMISH WALKER (National—Clutha-Southland): I just want to start by acknowledging the hard-working—extremely hard-working—Governance and Administration Committee. I’d like to acknowledge the chair, Brett Hudson. I think this is the third bill this week from the—

Kieran McAnulty: Name dropper.

HAMISH WALKER: And the deputy chair. I think this is the third bill this week I’ve spoken on that’s come back from the hard-working select committee.

I’d also like to pay tribute to the hard-working and excellent work that our fire and emergency services do across our communities and across the country. In the role as the MP for Clutha-Southland, I’m fortunate enough to visit many of these organisations. They’re wonderful people, and they actually do a lot more than just attend fires: they assist police, they help ambulance services, search and rescue, attend car crashes, and, quite often, they’re actually the centrepiece of many rural communities—they’re the glue that holds them together—and it also gives rural people an opportunity for social interaction.

They have changed a lot over the last 50 years. It’s not a matter for turning up to fires now. They have to have weekly training nights. When they attend fires, they then have to go the next day to clean down the gear. So there’s a lot more that they do compared to back in the day. They’re often the ones that go rushing towards dangerous scenes when everyone else is flying the other way. I’ll never forget, last December I called the fire service. There was an out-of-control bushfire down the road, and I can still feel the sense of relief when I saw them coming towards me.

In New Zealand, we have a proud history of our Fire Service. This legislation that we’re discussing today dates back to the 1970s. As I’ve mentioned, the firefighter’s role has changed a lot since then. We need a fire and emergency service fit for the 21st century and that recognises all of those services that I spoke about briefly before. We need structure in the law to reflect that. In 2017, Parliament passed the legislation—the Fire and Emergency New Zealand Act—to enable us to better support them and their services. For those reasons, I commend this bill to the House.

Hon EUGENIE SAGE (Minister of Conservation): E Te Māngai o Te Whare, tēnā koe. The Green Party is very pleased to support the Fire and Emergency New Zealand (Levy) Bill. We also recognise that, with her proposal to table a Supplementary Order Paper to extend the commencement date in order to enable a review of the funding mechanisms for Fire and Emergency New Zealand (FENZ), Minister Martin is, again, highlighting this Government’s commitment to ensuring that our critical fire and emergency services—which we saw, obviously, in action in the Tasman fire, mobilising very quickly. There was an extensive effort to get those fires under control and to protect the communities.

The fire and emergency services need to have a very secure funding basis. And, of course, the levy, which this bill deals with, has been the traditional way of doing that—that levy that falls on people when they’re paying their insurance. But that does have a number of shortcomings. It does allow for free riders, in terms of benefiting from fire and emergency services without contributing to the cost of those services. So it’s not necessarily equitable. It has led to some quite significant increases in costs for some of our cultural institutions, like Te Papa. So allowing time for a proper review of how we fund this critical part of ensuring that communities stay safe, to me, is really, really sensible, because the Government wants to ensure that we move to a funding model that is stable, that is universal, that is equitable, that is predictable, but that also has some flexibility in it. Of course, no one option will meet all of those criteria, but we can potentially do better than the insurance-based model that we’ve had to date.

So I’m sure that that review will look at just what the options are here: how do we really improve the funding model? This bill—by changing the commencement date—is giving more leeway for that to happen. But I think the response—in terms of the Tasman fires—was a tribute to the benefits of combining fire and emergency services in one organisation. There’s been a huge amount of effort that’s been put into creating a single organisational culture, ensuring that everyone works well together, and I, and so many other New Zealanders, are very grateful for the work of FENZ. So I commend this bill to the House. I’m very pleased to support it.

Dr JIAN YANG (National): Fire and Emergency New Zealand, or FENZ, was established on 1 July 2017. The purpose of that was to better meet the needs of New Zealanders. So, basically, we have evolving or changing needs for emergency services. Now, the new, unified entity is based on forty organisations with 14,000 people—so a very large workforce. And we can see the benefits now, as we have seen in FENZ’s response to the Nelson-Tasman fire.

Now, under the Fire and Emergency New Zealand Act, a new levy system is supposed to take place on 1 July 2019—this year. It has become clear that this date will not work and therefore we need to somehow postpone or delay the commencement of that particular new regime. So that’s the purpose of this particular bill. So this bill—all the amendments—are related to the new levy-based regime, the system.

Now, we understand the Government is planning to introduce a Supplementary Order Paper (SOP) at the committee stage extending the date of commencement of the new levy-based system until 1 July 2024, so we’ll see what’s going to happen there. But at this stage we support this postponement or delay because we believe that is more practical. Of course, the Governance and Administration Committee received about 10 submissions; six of the submissions made comments about this particular amendment relating to the postponement of the commencement date. All of them supported this particular amendment. The committee, of course, unanimously supported this amendment. Now the question is: what will happen after this? So at this stage, we will support this bill, and at committee stage we’ll see what’s going to happen for that SOP. Thanks.

ASSISTANT SPEAKER (Adrian Rurawhe): This is a split call. Five minutes—Greg O’Connor.

GREG O’CONNOR (Labour—Ōhāriu): Thank you, Mr Assistant Speaker. Again, as many of the previous speakers have discussed, fire is a big part of our lives and certainly the fire services now known as Fire and Emergency New Zealand are something that will touch us all at some stage. I know in my own electorate, I have three volunteer fire brigades and some professionals there, and I did get some idea of how some of the costs are incurred. The Newlands Volunteer Fire Brigade—of which there are several members who work around this building; fine men and women that they are—when the call went up to go to Nelson earlier this year, they were there. They were on the ferry, they were down there with their very nice machine, and when they came back they were persuaded to leave it down there. Much to their chagrin, when it arrived back it had been slightly bastardised—I think that’s a parliamentary word—and they were required to replace several bits while the machine was there without them. But replace them they did and they are now back, the fine group of young men and women they are, ready to protect their community of Newlands.

That just gives some idea—in fact, just sitting right next to me is a former member of the Wairarapa or Masterton volunteer fire brigade. Again, it just shows the calibre of the people that are out there protecting us day and night and prepared to come to our assistance. That same pragmatism that those young men and women, and some older men and women, do display is being displayed with this legislation, because here we have before us—and, again, the Hon Tracey Martin is to be congratulated.

There was an issue. Clearly, when you get a major change—and, again, some of the speakers before me have spoken about the new Fire and Emergency, the merging of rural fire services, and that has not been a situation that has happened without some angst, some considerable need for reorganisation. Those of us who have been involved in mergers and reorganisation will know that there are always a few unforeseen consequences of that—costs, etc. And that’s left the insurers just a little—of course, with the whole levy change having to rearrange the way they collect their levies, and this is what this legislation is about: to ensure that they get the time to do what it is they need to do.

Of course, again, being a pragmatic Minister, it was also while doing that it’s been apt—the bill was always intended to exempt museums, public art galleries, and whare taonga, and rather than keep them in the current system until the law changes either next year or by 2021, it was really rather pointless continuing the levy on those three types of buildings. So again, in a magnificently pragmatic manner, the levies on those three buildings are now going to be lifted. They are places, again—as we talked about fire being part of our lives, as are museums, art galleries, and, for a certain part of the community, whare taonga. So again, a pragmatic piece of legislation that will benefit a pragmatic group of young men and women—and older men and women—who look after us, and so I have no hesitation in commending this to the House.

ASSISTANT SPEAKER (Adrian Rurawhe): Lawrence Yule—five minutes.

LAWRENCE YULE (National—Tukituki): It’s my pleasure to take a short call on this bill at this stage, and in doing so I also reiterate what other members have said. I have the utmost respect for our men and women in New Zealand, young and old, that are firefighters, whether they’re volunteers or in the professional brigade.

Many of you may not know about the transition to get to where we got to in 2017. It did involve some significant amalgamations of local authority forces, who principally supplied rural fire services, with a professional service. I was quite heavily involved in my former role in getting to that point, and it is not surprising to me that we are asking for some more time for the insurance industry to adapt, because what has fundamentally happened is we have changed the way fire and emergency services are funded and we have, at the same stage, put a new onus on the insurance industry to look at what is funded and what is not.

But in this very short call I wish to make, I do want to acknowledge one point, and the Hon Ron Mark will probably be aware of it. When you look at how you fund fire and emergency services, there are really only three ways. The first is through an insurance-based product, the second is to a direct levy somehow on to the household, or the third is through local authority rates. And all those options have been looked at. They were all looked at in 2017 and before. While we’re happy to support what’s being proposed at this stage, I think there’s going to be a very serious conversation around the committee of the whole House to look at why those options were looked at in 2017 and we’ve arrived at this option.

It is a surprise to me to hear from the Minister the Hon Tracey Martin that she’s seeking to extend things out to 2024. All these issues were looked at before. None of them are perfect. But despite the lack of perfection, the insurance-based model was chosen as being the best, and I’d very much doubt that in the next stage of the committee of the whole House we’re going to see another model. I think we need to be careful, as a previous colleague of mine has just said. We need to be careful what we ask for, because I know that if you ask local authorities in New Zealand as to whether they want to be responsible for the funding or new rating of fire and emergency services on top of their rates, when they are not accountable for the service themselves, you’re going to get into a very interesting conversation. Thank you, Mr Assistant Speaker.

KIERAN McANULTY (Labour): For over 150 years, fire service organisations have protected our communities from fire. Now, they’ve taken many different forms, but they’ve evolved as the requirements upon them from their communities have also evolved and thus today we’ve heard many references to the fact that the New Zealand Fire Service is now Fire and Emergency New Zealand. Now, when this merger of the urban and rural fire services was first mooted, I was a little sceptical because I was fully aware of the longstanding tradition of both services and I was concerned about how they would merge together to continue their provision of service. I certainly wasn’t concerned about the professionalism of the service and the people that volunteer their time and their commitment and also those that are career firefighters. That was never in question, but the structural changes were a concern.

I don’t necessarily hold those concerns now, but what is clear—and the reason why we’ve had to bring this bill in—is that it is a complex change that we’ve seen. It is one that reflects the changing requirements of Fire and Emergency New Zealand, for we know that firefighters do not just deal with fires; in fact, structural fires are a small percentage of many brigades’ call-outs. It could be fires on a farm or in a forest. It could, and I regret to say, be a car accident or dealing, particularly in small communities, with death, including suicides.

So as the requirements on Fire and Emergency New Zealand continue to evolve, so does the need to ensure that the funding mechanism that we have in place for that service is up to date and fit for purpose, and so good on the Minister for bringing this particular bill forward.

I do not share the concerns that have been raised on the other side of the House, because I know that any concerns will be ironed out as the parliamentary process continues.

Brett Hudson: Overconfidence.

KIERAN McANULTY: I note that Brett Hudson from the other side of the House—who dragged on a fair bit in his speech, I’ve got to say. It could be, perhaps, that he knows his time in this House is limited, so every time he gets up to speak he may as well make the most of it. I imagine that is the case.

I do not share his concern that there is a chance that the levies are taking too much money from people, because I know through my time at the fire brigade that when we—it was urban brigade then; I never served under Fire and Emergency New Zealand, not when it was fully implemented, anyway. We’d go to a forest fire and we’d join up with our rural brigades right around Wairarapa, and these rural brigades wouldn’t have the adequate gear. Some didn’t have enough boots. Some had a truck that was possibly older than the member sitting to my right, Greg O’Connor—and if you can’t pick it up at home on the cameras, that’s quite old, ladies and gentlemen. The point is that if we are going to—oh, no, actually, I withdraw that comment, because the members on the other side are just as old as you. I apologise.

The point is that we have brigades—predominantly volunteer brigades—in our rural areas who are committing themselves 24 hours a day, seven days a week, in quite possibly some of the most deadly and dangerous situations, and they do not have adequate provision of gear. Now, I know there’s been a lot of effort going into that, but I do not share the concerns raised by the previous members around the levy being too high at this stage. I think this is a marvellous bill. It needs to happen. It’s pragmatic. I’m pleased that so far all the parties in this House have indicated support, but I think that as we move through this process, any concerns will be addressed quite easily.

Hon JACQUI DEAN (National—Waitaki): Touching—touching—from Kieran McAnulty. A touching faith—touching faith—in the Government. This side of the House, not so much—not so much. I think the fears that were expressed by Lawrence Yule over a funding mechanism yet to be determined, and his fears on the impact on local community, are well founded. I also share and endorse the comments of Lawrence Yule, who should know a thing or two about local government and the impact of Government policies in terms of added costs to ratepayers. We—I can guarantee this to the House—will be keeping a very close eye on what Minister Martin brings through in terms of a funding model towards 2024. We will have a very, very close interest, unlike the touching—touching, touching—trust of the list MP based in Wairarapa. Thank you.

Hon PEENI HENARE (Minister for the Community and Voluntary Sector): Tēnā koe, Madam Assistant Speaker. Look, I don’t wish to labour the point, but I want to thank many of the members across the House for their contributions. If I can add something, it’s an admiration of how brave the Minister Tracey Martin is. As she mentioned in her speech in this, the second reading of this bill, she will be introducing a Supplementary Order Paper, which no doubt will cause some robust debate in this House.

Everyone in this House knows that when you undertake—when one undertakes; sorry, Madam Assistant Speaker—a first-principles review, you’re looking at something very significant here. You want to be able to give it the time where, I’m sure, members of the public and other people relative to the Fire and Emergency New Zealand sector will be able to make a contribution to bring their voice to the debate. She’s already set out the deadline, or the time line, in front of us for that piece of work, and I admire how brave the Minister is to take on such a challenge.

A first-principles review of legislation is something one doesn’t take on lightly, and I hope that isn’t missed on members right across this House. So I want to acknowledge her and, of course, share the acknowledgments of the House in praising the fire and emergency services across this country. I look forward to seeing this bill continue on into the House. As one member has already previously mentioned, it’s taken some time to come this far already. I remember in the last term of Parliament, we debated a significant change in Fire and Emergency New Zealand, and it’s important that we continue to do the good work. I look forward to being part of a good Parliament that will make sure that this bill goes through the test that it deserves.

Bill read a second time.

Bills

Financial Services Legislation Amendment Bill

Third Reading

Debate resumed from 2 April.

BRETT HUDSON (National): Thank you, Madam Assistant Speaker. I won’t take long. I would like to just take this opportunity to thank Minister Faafoi for finishing his contribution approximately one minute before the House rose that day. I was just talking at the time, when it was interrupted, about the information asymmetry that exists in financial services from the perspective of the consumer. You could call them the investor, but I think “consumer” probably fits better in most circumstances. Those selling the services tend to know a great deal more about those services—the intricacies of them, the pitfalls, the advantages—than the purchasers, the consumers. So for the bill to place the obligation, a very clear obligation, on those providers to put the interests of their customers first I think speaks to the very heart not only of the intention of the bill but, in fact, of what the bill does.

Just before I close, I would note that the rather large Supplementary Order Paper 195 that the Minister did introduce in the committee of the whole House, which allows for staged disclosure over the course of a piece of advice and a transaction, is actually a really good idea, I believe. The idea is the investors, the consumers, should know all that is relevant about the person providing the advice, but rather than give them a great tome right up front, disclosing relevant advice at relevant points should actually make it better and easier for the consumer, which fits to the point about putting the consumers at the heart of the services and, certainly, of the legislation. We commend this bill to the House.

JO LUXTON (Labour): Thanks, Madam Assistant Speaker, for the opportunity to speak on this, the Financial Services Legislation Amendment Bill. Whilst I came into the Economic Development, Science and Innovation Committee part-way through the consideration of this bill, I’ve appreciated seeing firsthand how well Minister Faafoi has done with introducing and bringing this piece of legislation—

Hon Jacqui Dean: Just say “Thank you.”

JO LUXTON: —to the select committee. Yes, thank you, Minister Faafoi. I’m really pleased because it shows that he is forward-thinking and he is looking after New Zealanders and he has a desire to make sure the regulation of financial markets is fit for purpose.

What this piece of legislation does is it reforms the regulations of financial advice. It repeals the Financial Advisers Act 2008. It’s really important that people today have access to extremely high-quality financial advice. Whether it be someone looking to take out their first-home mortgage or just a mortgage in general, this is a really big decision that one makes in life. There is a lot of money involved, and potentially some risk also, so it’s really important that you have good-quality, sound advice when making these decisions.

One of the things that this piece of legislation does that I think is really good is it takes away the incentive for the advisers to sell or promote—I guess “sell” might not be the right word—a particular product because they may get commission from that and have their own interests at heart. But what this piece of legislation does is ensures that financial advisers have to put the clients’ interests first, and that is really important because we do need to prioritise their interests, and that they only can give advice where they are confident to do so.

This is also really important, I think, for people who are looking to start a business, because it’s a big risk when you start a business, and there’s a lot of money involved. It’s really important that you do get extremely sound, high-quality financial advice. So without further ado, I wish to commend this bill to the House.

Hon JACQUI DEAN (National—Waitaki): What an excellent bill this is—an excellent bill, and—

Hon Kris Faafoi: If only you’d introduced it.

Hon JACQUI DEAN: Yes, it is a shame, but I want to congratulate Minister Kris Faafoi for really picking up this piece of work and bringing it to fruition. It happens all the time, you know—one Minister initiates the work, maybe another one takes it the way through, and then some lucky guy gets to bring it to the House and bask in the glory. I’m not hurt—ha ha! It is good. Look, it’s a good piece of work, and when we do talk to members of the financial advice industries—I did just last evening—there is a good understanding of the regime, and there is a good understanding and acceptance and enthusiasm for the new compliance requirements, new standards of financial advice, and also for putting the needs of the client right at the very forefront of financial advice provision in New Zealand.

The parts of this bill have been well gone over. The part I’m particularly interested in is an emerging part of financial advice, which is robo-advice, and to me that is an exciting enabler in this piece of legislation. Having said that, actually, the Financial Markets Authority (FMA) did authorise—or was it the Commerce Commission? No, it was the FMA—the provision of robo-advice ahead of this legislation. I can’t remember. Maybe the Minister can remind me—FMA? I think it was, yeah.

So already there is an emerging market of robo-advice. Well, what does it mean for me when I want to make an adjustment to my KiwiSaver, for example? I can do that, perhaps, online. I might not need to use a person to do it. It might be quicker and easier and more convenient for me, and it may be anonymous if I want that, to be able to get some advice which I need, at the level which I want, quickly, easily, sitting in front of my keyboard.

It also opens the door for innovation, and I will be very interested in the future to see just what form that takes. I know there was a lot of interest in the insurance industry, financial advice industry, obviously, and banking about what the potential is for providing that robo-advice, because any advice is good advice.

So I do commend the bill. I commend the Minister for his good sense in picking it up and running with it, and I commend the bill to the House.

FLETCHER TABUTEAU (Deputy Leader—NZ First): Thank you, Madam Assistant Speaker, for this opportunity to speak to the Financial Services Legislation Amendment Bill. I just wanted to start by acknowledging the members opposite, because this was a piece of legislation where the Ministry of Business, Innovation and Employment (MBIE) was required to do a review, which they undertook in around 2015-16, and, to be frank, they found a few problems with the existing regime for financial advice, and so that was brought to Parliament under the previous regime. I suppose what the public can take assurance in and see, I don’t know, a positive pathway for legislation is that it was started under the National Party Government and it’s continued, and it’s continued with a great sense of positivity in terms of the select committee process and the way that the two sides of the House have worked together—so a great example of collegial work in Parliament.

What MBIE did was they consulted extensively with the industry, with consumers, obviously. They put out several consultation documents and, actually, they put out an exposure draft bill for consultation. So what happened then, I suppose, is the fruits of what we’re seeing now—the fruits of those efforts is what we’re seeing now. I would kind of summarise the Government’s position by saying good financial advice is core to, I don’t know, good household operation—

Kieran McAnulty: That’s right. Dead right.

FLETCHER TABUTEAU: —yep, thank you—and people having confidence with their moneys and particularly the likes of KiwiSaver, where financial advice in that area is so core. Actually, the Government’s undertaking further pieces of work, which I won’t go into here in the third reading, just to drill down and make sure that people with KiwiSaver, which is more and more of the New Zealand workers and population, can have more and more confidence. This is one of those processes where they will go and seek advice and they can be sure, for example, that the people they are seeking advice from are working from a comprehensive code of conduct. So we want New Zealanders to have those tools to make wise decisions with their money.

A sad statistic in my notes here is that 68 percent of New Zealanders do not have confidence with their money. So in that, it speaks to the strong necessity of not only the provision of financial advice but, as the review from MBIE found, sound advice that people can trust. I think it was the previous speaker on this side who spoke about the confidence for people to engage in savings and having a sense of confidence that the people giving them advice are actually working to their best interests, which is a large part of what this legislation is about.

So to that, I think I will take the time in this reading just to outline the three main parts of the legislation. So it overhauls the regulation of financial advice, which is mainly what I have been talking to up to this point. These changes, as I said, are intended to improve the quality of and access to financial advice. They also aim to remove undue compliance costs and, actually, barriers to innovation, which is to be applauded.

The second part amends the Financial Service Providers (Registration and Dispute Resolution) Act. The bill makes changes to the Financial Service Providers (Registration and Dispute Resolution) Act 2008 to address the misuse of the Financial Service Providers Register. Actually, it does bring to mind—when I was in the previous Parliament in Opposition, I undertook quite a lot of work with financial advisers in the sector just to understand, because the evolution of the legislation of financial advice had had its ups and downs and there were quite a few elements of complication that made it hard to deliver advice comprehensively. So, actually, as much as I acknowledge those who came to the Economic Development, Science and Innovation Committee to give MPs advice and engage with our officials, this is an opportune time to thank those businesses and people that I had worked with in the past who came forward with good advice and timely advice in this area.

The third part was minor amendments to the Financial Markets Conduct Act, which makes minor changes to address technical issues of the Financial Markets Conduct Act.

So, with that, I think we can take surety on the vote in the House that this legislation will receive this early evening in that it is well supported. It is a piece of legislation that has been worked on—started under the previous Government, but engaged fully and supported fully by all of these members in the House today, and so I applaud everyone for that. With those short words, I do commend this legislation to the House. Thank you very much.

MELISSA LEE (National): It’s a pleasure to rise in the third reading of the Financial Services Legislation Amendment Bill, and I’d like to commend all of the members who’ve actually stood up and cordially congratulated all of the Ministers who were involved. In particular, I’d like to, obviously, congratulate Minister Kris Faafoi, but, obviously, our former Minister of Commerce, the Hon Jacqui Dean, did an amazing amount of work. She did jokingly, actually, suggest that somebody else was taking the glory after she’s done all the work, so I just want to acknowledge the amount of work that she’s actually done.

This bill is an omnibus bill that makes amendments, as other members have said—changes in the way that businesses change their conduct when they’re dealing with their customers. As earlier speakers have actually said, for members of the public—you know, ma and pa investors, or anyone who is making a financial decision—it is a major risk that they actually face, and having good advice from professionals who should have the nous to advise their clients without thinking about their own pocket should be the way to go, but it hasn’t been always the case.

This particular bill changes that, and puts the client care obligation at the forefront of the work that people in this industry actually do. Other members have said many things, but one of the things that this bill does, that I am particularly proud of, is the issue in relation to offshore providers with tenuous links to New Zealand who were, in fact, able to register as New Zealand financial service providers in the registry, and one of the things that we do in this particular bill is remove them—so, for example, some odd outfit who is trying to utilise the good name of New Zealand. They don’t even exist in New Zealand and yet they were able to register their company to make their clients believe that they were a New Zealand company, because they were able to register here as a financial service provider, but they don’t even have an office in New Zealand. So we are preventing these shysters from being able to register here without providing those services in New Zealand.

It would also remove the place of business test. One of the interesting debates that we had in select committee, which I found very interesting, is that there are some legitimate New Zealand businesses who were, in fact, providing financial services to offshore clients. We continued to actually look at those businesses and make sure that legitimate business could still register, but that the shysters, who were using the good name of New Zealand, could not actually do so.

This bill is a good one, and I am very proud to have actually worked on the select committee, and I commend the bill to the House.

JAN LOGIE (Green): Thank you, Madam Assistant Speaker. So it’s with pleasure I rise to take a call for the Green Party on the third reading of the Financial Services Legislation Amendment Bill. It’s nice to mark these moments in the House, where we seem to have unanimity. I too would like to acknowledge both Ministers who have been involved in this—the Hon Jacqui Dean and the Hon Kris Faafoi—for getting this bill through the House to this day.

The bill, as has been stated by others, is making amendments to the financial services legislation, which has, really, only been in place for about eight years, so it’s relatively new legislation, but in, I think, an encouraging way, the ministry, through monitoring, picked up that there were issues with the legislation, and some gaps; and this bill is addressing those.

At a high level, it brings financial adviser regulation into the Financial Markets Conduct Act 2013, and it creates new types of financial advisers, allowing also for the provision of robo and digital advice, and the intent of that—for some of us who may just associate anything that says “robo” with robocalling and the desire to disconnect from landlines altogether—is about setting out that not all financial advice should come in the same medium; that we need it also to be appropriate for the decisions that people are making, and not everyone needs a full prospectus; and that actually sometimes robo or digital advice will be the best way to get information across to people. We should be ensuring that our legislation enables that.

It also requires providers of financial advice to be licensed at a firm level, and puts in place, in effect, a new code of conduct that will apply to everyone providing that advice, and it addresses the historic offshore abuse of the Financial Service Providers Register by requiring providers to have a stronger connection to New Zealand. As Melissa Lee, the previous speaker, mentioned, I think it’s encouraging that it’s been picked up that there have been some offshore providers who have, in effect, been misrepresenting themselves as more closely grounded in New Zealand than they have, in fact, been. When people are making decisions in a New Zealand context, I think it’s reasonable that they have the ability to discern how close to the market in New Zealand the people they’re getting advice from are, so this tidies that up.

Also, I just note that through the select committee they added in subcontractors, which the Greens were really pleased to see, which I really think strengthens the legislation to stop people using that as a backdoor in terms of avoidance, which would have undermined the intent of the legislation, which is really to provide an even playing field around our expectations of good-quality financial advice. I also note that the Supplementary Order Paper that came in at the committee stage provided for a staged disclosure regime that also seems to have support from everyone in the House.

So it’s good to see that we’re all on the same page—it would be hard to think why we wouldn’t be—in making sure that New Zealanders can have confidence in the financial advice that they’re getting.

ANDREW FALLOON (National—Rangitata): Thank you, Madam Assistant Speaker. I rise to take a very brief call this afternoon on the Financial Services Legislation Amendment Bill’s third reading. I won’t add too much more to what’s already been provided by the House this afternoon; there have been some excellent contributions laying out what the changes are in this bill, which really provide a clear duty for anyone giving advice to ensure a customer outcome is the priority.

I did sit on the select committee that considered this bill, and we received 71 submissions and heard about half of those in oral submissions. They recommend a number of changes, several of which we took up, particularly in relation to the definitions of financial advice.

The most significant change, I think, in this bill, was mentioned previously by the Green member Jan Logie, which is in relation to removing the requirement that only applies to an actual person and that it does now also cover the provision of robo-advice, which, of course, is something that’s growing and will continue to grow. So, in a lot of ways, this legislation will futureproof future arrangements.

I would like to congratulate my colleagues on the committee. We all worked in a very collegial manner, as we often do on the Economic Development, Science and Innovation Committee. I would also like to acknowledge Minister Kris Faafoi for shepherding it through the House, and acknowledge former Minister Jacqui Dean. Thank you.

ASSISTANT SPEAKER (Poto Williams): I understand this is a split call. Greg O’Connor, you have five minutes.

GREG O’CONNOR (Labour—Ōhāriu): Thank you, Madam Assistant Speaker. How timely a piece of legislation is this? We’ve got a generation who are growing older, who are ones who have trusted. I know from personal experience that some of a generation ahead of me—unfortunately, there is only one generation between—

Hon David Bennett: There is no generation ahead of you.

GREG O’CONNOR: —myself and the graveyard. There still remains one, unlike for some of those people screaming from across the other side. But they were a generation that trusted the professionals. They trusted their accountant. They trusted those who, basically, looked after their financial matters, and, unfortunately, there were some investments that just didn’t really turn out to be what they thought. That’s a generation that are the first ones that lost a lot of money through finance companies, and then there was the crash. In Wellington, there was David Ross, of Ross Asset Management, which, unfortunately, again left a trail of financial victims around Wellington, in particular—building companies, Blue Chip investments.

So it’s a world where people previously really had a lot of trust in their banks. We’ve seen what’s happened in Australia with a banking inquiry, but who can you trust? It really now behoves us as lawmakers in this House to ensure that we can get some sort of confidence back in there so that people who have nest eggs—people are living longer. Those nest eggs that they had hoped would see them out and that would maybe leave a little bit for the grandchildren—they hope that they can actually do that. They need the confidence to do that, and that’s why legislation like this is so important.

Just looking at one aspect of this, around the international companies who’ve been setting up here using the New Zealand name, I had a personal experience of that. I was in New York at a fund-raiser, where I was a guest, and someone mentioned that I was from New Zealand. Someone from South Carolina who was doing a big property investment came up to me and mentioned the name of a New Zealand company that was financing this particular development that he was doing, and it was a very large development. So I had some inquiries made about this company, and they were one Canadian and two Americans who had never been to New Zealand, but who had this company doing exactly what one of the previous speakers on the other side has talked about. They were just having the New Zealand name to give it the credibility.

The money was channelled through New Zealand, which was, at one stage, why the New Zealand dollar, I believe, was the 10th most traded currency in the world—through those sorts of transactions. I might say that on that particular occasion, everything, as far as I understand, did work well, but it did show the ease of using the New Zealand name for very little. In fact, I looked into that. There was very little for New Zealand in that. I think there were about 200 other companies renting the same office space, and so there was very little accrued to New Zealand from that.

That was a type of financial system where bills like this become absolutely necessary. So I commend whoever has been involved, and it’s one of these cases where success has a thousand fathers and failure is an orphan—everyone is taking credit for it—but I’ll give that credit to Minister Kris Faafoi on this occasion. This is something that I just hope, for those of us who reach our dotage—that’s a long way away for some of us—we can actually have faith that those hard-earned dollars we have will be secure and that the State is doing what it can to be sure to protect us from some very scurrilous individuals that exist out there. I commend this bill to the House.

NICOLA WILLIS (National): It gives National great pleasure to support this bill because, as the previous speaker has said, ensuring adequate protections and rights for New Zealanders seeking financial services is a very important principle. I do want to pick up on that example of David Ross that the member for Ōhāriu, Greg O’Connor, just raised, because I have known individuals who were impacted by the terrible financial advice that he gave. The impact for them was incredibly detrimental, because the impact of very bad financial advice is not just financial and material; it’s emotional, it breaks families, it creates depression, it can really ruin lives. So this, while a dry bill on the surface of it, is actually dealing with issues that have substantive relevance for the lives of many New Zealanders.

Of course, issues like this are technical. So this is a technical and complex bill; it is establishing a new regulatory regime. So I want to take just a moment to commend the process that National followed, having introduced this bill in August 2017. That had actually followed a three-year process, and it was incredibly comprehensive. There were issues papers, there were options papers, there was an exposure draft of the legislation, and I commend that process because what we know with technical financial issues of this sort is that if there are inappropriate loopholes or technicalities are left unaddressed, then there can be ways that people can work around the system. None of us in this House want that; so by allowing all of that exposure, allowing all of that submission, allowing all of that debate, we iron out any wrinkles as we go so that we then come to this House with a piece of legislation that both sides can support.

The bill, of course, does a number of things that have already been canvassed by previous speakers, and before I sit down, I just want to highlight the modern aspect, which is removing the requirement that only a natural person can give financial advice. That, of course, allows for the provision of online advice in the future, or robo-advice. I know, not having sat on the select committee but having spoken to colleagues who did, that this has been an issue of debate and contention, but I think it’s important that we think about the regulatory principles first and then allow those to be adapted towards the technology so that people can get affordable advice that is effective and that can be relied on. I commend this bill to the House.

Hon CLARE CURRAN (Labour—Dunedin South): Thank you, Madam Assistant Speaker—just a short contribution on this third reading of the Financial Services Legislation Amendment Bill. I know it has been described as technical but it’s actually another really important step forward in the modernisation of our financial services regime. It’s also got some underpinning principles, which are pretty important and that I just want to mention—that is the intent to lift the financial capability of all New Zealanders. That’s pretty important because there’s research that says, I think, 68 percent of New Zealanders have money worries. I would hazard a guess that it could even be higher than that.

Financial literacy is a seriously big issue in this country. Our financial environment is becoming ever more complex; so this is one way of putting in place some measures to address some of those issues—another is the fact that this Government is looking at our school system, around providing a toolkit for young people to become more financially literate and to help set them up for adulthood, which is incredibly important as well. So this piece of legislation sits within a framework of intent, which is about raising the financial literacy and capability of all New Zealanders, as I said.

Having the tools to make wise decisions is pretty important. Obviously, that also then requires a strong regulatory environment around the quality of the advice that’s being given to people, and that’s why this piece of legislation feels like the next stage of quite a long—and the previous speaker, Nicola Willis, and the speaker before her, Greg O’Connor, touched on that quite long history, over more than a decade now, since that financial crisis and the collapse of financial companies and the terrible practices that were unearthed as a result, and the need for very strong financial regulation.

Two things I just want to add are with regard to making the bill fit for the modern world, and introducing the flexible and technology-neutral approach by enabling the robo-advice, which is logical and important. It’s important that it’s entered into under a regulatory environment so that it can be more closely monitored. I just want to sound a note of caution around the ability of the algorithmic approach to providing information to consumers and ensuring that that doesn’t move beyond the bounds of what’s acceptable, and I hope that there is a regime being put in place that will keep a close eye on that. We call it “algorithmic transparency”, and some work has been undertaken across the public sector on ensuring that that’s the case, but it’s just equally as important that that work is happening in the private sector and in the financial services as well.

Then, finally, just on the code of conduct—I’m sure the Minister will have touched on this—the code working group has provided the Minister with a draft code of conduct. This hasn’t yet been made public, but there are provisions in this bill to ensure that that happens in a timely way, and I’m sure that the sector is eagerly awaiting what that will look like, and it seems as if really good work has been done. I congratulate the select committee, the various Ministers involved, and all the officials, because often they don’t get the plaudits that they deserve. So, with that, I commend the bill to the House.

LAWRENCE YULE (National—Tukituki): It’s a real privilege to be able to take a short call on this third reading of the Financial Services Legislation Amendment Bill. It’s easy to forget the genesis of where this came from and the misery that was caused at the time: the high-profile case here in Wellington, two high-profile cases I’m aware of in Hawke’s Bay, and the genesis of people being ripped off by, in my view, advisers that were more interested in their own personal circumstances in the end than the clients they were servicing.

So this bill provides a clear duty for anyone giving advice to ensure a good customer outcome as a priority. I do acknowledge various Ministers along the way. I acknowledge what National did: the detailed process of engagement with the community, the draft legislation, and the way it was consulted. I also acknowledge the Hon Kris Faafoi and the way he has brought it back to the House.

In this new regime, financial providers carrying on a business of giving financial advice will be required to be licensed with the Financial Markets Authority to give advice to retail clients. Any person giving financial advice on behalf of a financial provider will need to either be engaged—employed or otherwise—by a financial provider or be registered themselves. Having sat on the Economic Development, Science and Innovation Committee, these types of details were important, because it became obvious that if somebody gave you a piece of financial advice and then moved to another provider—where was the liability if that advice was substandard or not correct? There is also a fundamental requirement in this bill that implements conduct and competence requirements to all those giving advice, both the firms and the individuals.

I do want to acknowledge, in closing, that anybody that is giving financial advice, particularly as our population gets older, has an immensely important role as people plan for their retirement, particularly. There is an absolute duty of care on those people, and that’s being enshrined in this legislation.

In closing, I would just like to personally acknowledge the Hon Kris Faafoi, because I have had providers of services in my own electorate who have seen some holes, in their view, where the legislation could be amended. Minister Faafoi has met with them and they have been addressed in the Supplementary Order Paper. So I think this is a very good example of how legislation that is very complex can be drafted, how it can be worked through a process where select committee all work together, and the Minister was open to making changes from both the select committee and members of the public. I commend this bill to the House and I think it’s a very exciting day.

KIERAN McANULTY (Labour): It’s not the first time I find myself agreeing with Lawrence Yule; I hope it’s the last. The point is that he’s absolutely right, as are many other people that have spoken on this bill, because this bill has a very clear objective, and that is the desire to lift the financial capability of New Zealanders. I don’t see the need to go on about it for too long; I agree with what’s already been said.

The fact is that not everyone is born with a great array of skills. I can only speak for myself; I was born with very little. But one of those skills that not many people hold is financial capability. So like previous speakers Lawrence Yule and my friend here, Greg O’Connor, have said, as people reach a certain age, they start to want to ensure that the money that they’ve saved away for their retirement is in good hands. I think that just makes absolute sense. So you’re looking to ensure and give people the confidence that the financial advisers that are assisting them to make decisions about their money are doing so under a regime that instils them with confidence. So on that note, I’m very pleased to speak in favour of this bill and I look forward to it passing into law.

Bill read a third time.

Bills

Commerce (Criminalisation of Cartels) Amendment Bill

Third Reading

Hon ANDREW LITTLE (Minister of Justice) on behalf of the Minister of Commerce and Consumer Affairs: I move, That the Commerce (Criminalisation of Cartels) Amendment Bill be now read a third time.

This bill is an important element of the Government’s reform programme to strengthen New Zealand’s competition law, in line with some of our major trading partners. The criminalising of cartel behaviour is the second legislative step that this Government has taken since coming into office, the first being the introduction of the market studies power. The third will be the misuse of market power and an amendment to section 36 of the Commerce Act.

This Government supports honest business. We are committed to growing an economy that works for all New Zealanders. This bill delivers on that by introducing a new criminal offence for serious cartel conduct that harms New Zealand business, consumers, and the productivity of the economy. Cartel conduct involves agreements being made between competitors to fix prices, restrict output, and allocate markets. Such conduct can cause significant harm to ordinary New Zealanders and businesses operating honestly. Cartel conduct is currently subject to a civil penalty regime under the Commerce Act. The civil regime has worked well, and I consider it will continue to do so. However, we need an extra level of sanction to ensure that the most serious cartel conduct is deterred and detected effectively. The civil regime will remain the primary option for prosecuting breaches of New Zealand’s cartel prohibition.

I’ve heard concerns about the chilling effect this bill will have. I want to address this concern again. Firstly, nothing in this bill extends what is currently unlawful. All this bill does is add a different sanction on top of the civil regime, for serious cases. The exemptions to the Commerce Act that protect pro-competitive conduct will also apply to the criminal offence. This provides for businesses engaged in collaborative activities, joint buying arrangements, and vertical supply contracts. To complement this, a new defence will apply to those who have made a reasonable mistake of fact in relation to the application of the exceptions. There is a two-year transitional period before the criminal offence will come into effect. This will allow businesses to assess their conduct to ensure that their conduct isn’t caught by the criminal offence provisions. If they are acting lawfully now, they have no need to worry about the criminal regime.

This period of time will also allow the Commerce Commission and Crown Law to make preparations for the detection and prosecution of the offences. I also expect that the Commerce Commission will issue guidance on how it will approach the selection of cases for criminal prosecution. Businesses that wish to ensure that their collaborative activities are lawful can apply to the Commerce Commission for clearance. This will allow those who have self-assessed and found their conduct to be on the line to come in for formal assessment of their conduct if they wish. I believe that most businesses will be able to self-assess and assure themselves that their conduct is lawful.

The commission has published extensive guidance in this area and this should be the first port of call for businesses that are self-assessing. Honest business should not be concerned. I am confident the introduction of criminalising cartels has sufficient provisions to ensure legitimate business practices won’t be penalised while at the same time sending strong disincentives for cartel conduct.

I said at the start of the speech that this was the second legislative step taken by this Government. The first was the Commerce Amendment Act that was passed late last year, empowering the Commerce Commission to undertake market studies. The Commerce Commission is hard at work at its first market study into retail fuel, and I look forward to receiving their final report by the end of the year. The third step in our reform programme is amending section 36 of the Commerce Act, dealing with the misuse of substantial market power. The Ministry of Business, Innovation and Employment is consulting on these reforms. I’ve made it clear in the past that I do not consider that section 36 is working effectively to protect competition. The consultation is currently open and I encourage all interested parties to make their views known.

This trifecta of legislative reforms to New Zealand’s competition law will ensure our markets are operating efficiently, business confidence is high, and regulatory settings are well managed. As the Minister of Commerce and Consumer Affairs’ colleague, I am pleased to be part of a Government who is bringing back the criminal offence for cartel behaviour. The previous Government did a U-turn on it at the last minute and removed it.

I know that deep down the members opposite support this bill, as they’ve said so previously, before their last commerce Minister reversed their own policy. In fact, I quote the Hon Craig Foss, then the Minister of Commerce, “Effective competition enables and drives innovation and productivity. In contrast, anti-competitive conduct, including hard-core cartel conduct, lifts prices above competitive levels to the detriment of consumers.” Oh how this House misses the Hon Craig Foss.

I’m aware also that Simon O’Connor, the honourable member, said this at one point: “This [criminalisation of cartels] is ultimately a bill at the heart of what the National Party believes is a way forward for our economy.” And the honourable member Brett Hudson also said, “I am delighted with this bill. It is clearly taking on the evils, the worries, and the concerns around hard-core cartel behaviour,”.

The bill we are here for today—[Interruption] I’m trying to truncate the speech process by speaking for members opposite, but the bill we are here for today will enhance the effectiveness of New Zealand’s competition law and will ensure that cartel conduct that is intentional and harms competition is subject to criminal sanctions. I believe that this will act as a strong deterrent against cartel conduct while providing certainty for businesses so that they can conduct lawful business with ease. As I said at the beginning, this Government supports honest business. I commend this bill to the House.

BRETT HUDSON (National): Thank you, Madam Assistant Speaker. I rise in Opposition to this Commerce (Criminalisation of Cartels) Amendment Bill in its third reading. As the Minister’s colleague, Andrew Little, has just spoken, I would like to thank him, actually, for drawing upon quotes from previous National Ministers and National members of the Government caucus. Those quotes show quite clearly that we oppose the sort of cartel behaviour that places absolutely unnecessary burdens, horrible burdens, on consumers, raises prices, and actually creates a very, very unfair environment for those consumers and other businesses to exist in. The difference between us in Government and the current Government is that we showed we were prepared to listen—to listen to people, listen to submitters, listen to businesses, listen to officials, and determine and decide that the criminalisation provisions were wrong and should be removed. So we did so, but we enacted legislation that absolutely introduced harsh civil penalties for cartel behaviour. That is the law today, and it is sufficient to deter that sort of behaviour.

This Government instead has gone ahead with provisions that are not only unnecessary from a deterrent perspective but will add uncertainty and issues around the management of commerce in that area. They know this, and we know this, because their officials told them so. Treasury told them, “We’re not in favour of criminalisation”—told them that. Their own officials overseeing the bill came to realise this, through the process of this bill moving through its stages in the House, and came to the Minister with Supplementary Order Paper (SOP) 194, introduced in the committee of the whole House. The SOP acknowledged that the criminalisation provisions could, and very possibly would, lead to situations where activities that did not possess criminal intent would be captured by the criminalisation provisions and we’d have, therefore, fundamentally innocent business people being criminalised just because of the Government’s desire, their unceasing desire—they, basically, don’t like business, over there, despite what they say. They see them as bad people with evil intent, and they just want to take any option and opportunity to crush them. Their own officials told them that their bill would create very poor consequences and wouldn’t deliver to the intent that they had expressed it should. So they had to introduce this SOP. So for the Minister now to tell us that it’ll all be fine and people that shouldn’t be captured by this won’t be—I think he doesn’t understand the kludge that was put together in the SOP in the committee of the whole House, because, in the detail of that SOP, the officials acknowledged that none of the options they put forward were particularly elegant or wholly effective, but basically their advice was, “Of these bad options, this is the least worst. So please do this one.”, which the Minister responsible for the bill elected to do, clearly with that advice.

We’ve got a bill going through its third reading which even officials acknowledge is sub-optimal, but we’d argue more than that, that the bill itself isn’t required at all. The civil penalties that exist today for cartel behaviour are a sufficient deterrent to ensure that consumers and otherwise at-risk businesses in our commercial market have sufficient protection that the sort of cartel behaviour is less likely to happen than it was before the last National Government. This bill is just an illustration that this Government dislikes business and wants to beat them with a large hammer. We oppose the bill.

JO LUXTON (Labour): Thanks, Madam Assistant Speaker, for the opportunity to stand and take a call. I’m actually very pleased to take a call in extreme support of this—

Hon Members: Extreme support!

JO LUXTON: —of absolute support of this piece of legislation. I find it quite interesting that the member who has just taken his seat—

Kieran McAnulty: What’s his name?

JO LUXTON: I can’t recall. I’m so sorry. I’m not sure if it’s that much of a big deal, but anyway, he’s just taken his seat. He said that he was pleased that the Minister had quoted previous Government members and that it showed that they opposed the ideal of cartels, but they did not make it a criminal offence. Actually, I’d just like to go on and just quote a little bit more from Mr Brett Hudson when he said, “it does address the negatives of cartel behaviour, and it is important that it does so, because if we did not, we could end up with a terrible situation where the tiny minority—the nameless and the faceless—are controlling outcomes, delivering things that many do not want.” This just goes to reiterate what the Minister said: that this Government supports honest business. We know that cartels cause harm—absolute harm—and it’s very hard to detect cartels, because they often conduct in secret so it’s very hard to detect them. Making it a criminal offence is certainly going to deter this type of behaviour, and we actually owe it to our consumers as well as our honest businesses, because cartel behaviour is unfair to consumers also.

Hon Jacqui Dean: Really?

JO LUXTON: Yes, yes, really, Mrs Dean—really, really, absolutely. So when people engage in cartel behaviour, they increase their own profits, but it is the consumer that misses out. So we are committed to implementing this reform. There is absolutely no place in New Zealand for cartel behaviour and, on that note, I absolutely commend this bill to the House.

Hon Jacqui Dean: Madam Chair?

ASSISTANT SPEAKER (Poto Williams): I call the Hon Jacqui Dean.

Hon JACQUI DEAN (National—Waitaki): Thank you, Madam Assistant Speaker, I should say—apologies. I’m at a slight loss for words after that last speech.

Hon David Bennett: It wasn’t a speech—it wasn’t a speech.

Hon JACQUI DEAN: Well, yeah. We are very clear, and we were very clear when we were in Government. Ministers of consumer affairs and of commerce had the opportunity to listen to feedback around the criminalisation of cartel behaviour, and after a fairly robust and lengthy period of reflection, it was determined, while I was in that position, that the civil regime of penalties against cartel behaviour was in fact working well. Under the civil regime, there can be penalties of some millions of dollars. In fact, there are penalties that have been awarded against cartel behaviour against New Zealand companies, and I think I would be fairly safe in saying that a penalty of some millions of dollars has just got to hurt. As a distinct disincentive and as a strong signal against cartel behaviour, anti-competitive behaviour, it is our belief and our position that the civil regime, in fact, has been, and is, very effective.

Treasury gave a view that was not in favour of criminalisation; it concluded, in fact, that the civil cartel regime appeared to be working well. So where’s the problem? Where is the problem that this Government felt they needed to fix? Can I be so bold as to say: was it that in the commerce and consumer affairs space, which was left in such good shape, they felt they had to do something, so they cast around in some old papers and went, “I know. I know what we’ll do. We’ll reintroduce criminalisation for cartel behaviour.”? Not a good policy position, in my contention, because it does not address a problem which does not exist. That is our position—

Brett Hudson: It’s not broken, so they’re going to fix it.

Hon JACQUI DEAN: Exactly. As the chair of the Economic Development, Science and Innovation Committee, Brett Hudson, quite rightly points out, there is no problem that needed fixing, except for the fact that the new Labour-led coalition Government needed to come up with some more work to bring to the House. This was an easy picking. The anti-business position that this Government currently holds is now expressed again. Quite frequently, we discuss other anti-business measures that this Government has brought in. They do see business as the enemy, and this is just the latest version of that philosophy and ideology—[Interruption]

ASSISTANT SPEAKER (Poto Williams): Order! Order! Members, please do not have a conversation across the chamber. I apologise to you, the Hon Jacqui Dean.

Hon JACQUI DEAN: I wasn’t listening to the conversation, because it’s not worth listening to; neither is their position around criminalisation.

I want to just give one example of cartel behaviour which was not of criminal intent, and it is a case study that I’m aware of, and it is around an online tyre dealership arrangement where there was a young guy who had an online tyre dealership business, and there was a mate in another city who also had an online tyre dealership business. They had a conversation between them and said, you know, in fact, they indulged in cartel behaviour. They fixed the price of their product. The former I was talking about sort of woke up in the middle of the night, perhaps, and thought, “What have I done? What have I done? What have I done?” and went to his lawyer. His lawyer contacted the Commerce Commission, and this man turned himself over to the Commerce Commission, who, literally, came down on him like a ton of bricks.

It was a very unpleasant—very unpleasant—experience for both of these business people. They were the subject, I believe, of penalty, and certainly the subject of a lot of deserved unwelcome attention, because it was cartel behaviour; it was. It was done more out of ignorance, which is no excuse, but one would be hard put to convince the court, or the Commerce Commission, that there was criminal intent; there wasn’t. The intent there was stupid, the intent was unwise, the intent was unlawful, and all of those adjectives, but it wasn’t criminal. So to bring in criminality into cartel behaviour where there was a lack of criminal intent is one thing, but my main point is that the civil regime is working. Thank you, Madam Assistant Speaker.

FLETCHER TABUTEAU (Deputy Leader—NZ First): Thank you, Madam Assistant Speaker, for the opportunity to speak to this refined and excellent piece of legislation. Mr Hudson spoke to the House about officials recommending against it, and what he failed to mention is that the Treasury report spoke about Treasury weighing up the cost-benefit analysis of prosecution around the issue and the nature—the very problem with cartels is the secretive nature of them and finding them. So Treasury asked, “Well, you know, what’s the benefit there if we can’t find them?” Well, actually, when we find them, and when we know someone intended to collude and act to take from the consumer in a way that increases their profits in collusion with other businesses, then, yes, we must act.

For the previous speaker, Jacqui Dean, who spoke about the civil regime currently working, I put it to her that she read the legislation and note that the civil regime will continue in parallel to the criminal process that is being reintroduced to this legislation. What we are trying to do here, what National was trying to do in their time, was work towards and acknowledge the fact that, unfortunately, New Zealand is an economy of a size and a scale where competition doesn’t exist in the volume that we would like because we know, with simple economics, that good competition means good prices for the consumers.

What we have to be really careful of here in New Zealand, and pay great attention to—and kudos to the Commerce Commission over time and now—is that we do exactly that. What has been introduced here is the ability for this Government, through this legislation, to drill down and ask the question of individuals, not just business: was there intent? Was there an intent to, essentially, steal from New Zealand consumers through the means of collusion with those who should be determined as actual competition? What we also did in this legislation was make it clear that businesses cooperating and working together is actually to be encouraged, because—and when they can prove that it is to the benefit of the end consumer—there are examples of businesses working together where you might instinctively think, “Well, hold on. We don’t want them to do that. We’ve just been told about cartels.” But, actually, there are many instances where good businesses seek to work together to create efficiencies in costs, for example—production costs, delivery costs, end costs to the consumer, and, in so doing, the price to the consumer is actually decreased and the value for money is so much better.

Now, this legislation outlines that—makes it clear that where two companies or more can prove that that is what they intend to do, and that is their undertaking, by all means do so, and do not fear confusion of behaviour and cartel behaviour. In fact, please do more of it when we know it is benefitting New Zealand consumers. So it not only reintroduced the criminalisation aspect but because we acknowledged the concerns around adding that component to this legislation, we sought to make it clearer when that provision came into effect.

So it is actually with a great deal of pride that I stand and support this bill. I would also add, and it hasn’t been spoken about by those opposite, that in the international area of cartel behaviour, in the enforcement of it, by introducing this legislation, New Zealand will come into equivalence with most of our trading partners around the world who use the criminalisation aspect to enforce legislation in their own economic precincts. So what we are doing is coming into line with best practice around the world. We are making it clear to good businesses: please continue to be good businesses and work together, but if there are individuals out there within businesses who know that what they’re doing is wrong, in colluding with what should be the competition and creating that cartel environment, then they will be prosecuted, and they will be held personally liable. I think, from memory, the penalties are $500,000 or seven years’ imprisonment, or both.

Now, if you know that going in, when you’re making some hard decisions about how you’re going to operate your business, you’re getting pretty clear signals from this Government about what we absolutely do not expect or want from New Zealand businesses, because, in the end, this is a Government that wants to ensure good competition, healthy competition, that looks after the New Zealand consumer in all parts of their lives. So this is a very good piece of legislation, and I wholeheartedly recommend it to the House. Thank you.

MELISSA LEE (National): Thank you, Madam Assistant Speaker. I stand in opposition to this bill. One of the things that the member who just took his seat, Fletcher Tabuteau, actually talked about was in terms of promoting competition. Well, that is the question. You know, we have to actually understand: does the cartel regime promote competition in the long-term interests of consumers? Does it in fact do that, promote competition? Because competition is a good thing, but the thing is that this cartel criminalisation regime will actually have a chilling effect on competition. For example, joint bids for contract could be deemed a cartel behaviour. It could be anti-competitive or pro-competitive depending on the perspective of the person who actually looks at it.

Brett Hudson: Anti-business.

MELISSA LEE: It is very anti-business, thank you, Mr Hudson. I totally agree with Mr Hudson that this bill is actually anti-business. The earlier example that the Hon Jacqui Dean gave was a mistake by a business who was trying to promote his business online to sell a particular product, but he was deemed a cartel.

When you actually think about the word “cartel”, often you think about things like a drug cartel, you think about some sort of a criminal conglomerate, but the thing is that, with this statutory definition that we currently have, cartels are currently regulated. The kind of behaviour we’re talking about is price fixing, and often price fixing happens in a business that is trying to do a sale, for example. McDonald’s up and down the country will be fixing a particular price for a particular event, for example—that could be considered price fixing. Restricting outputs and allocating markets—these are currently regulated. Cartel conduct is a civil offence.

Recently, there was an award made by the Commerce Commission of $7.5 million against a body corporate that was found to have acted in a sort of cartel behaviour, and an individual was fined $100,000 and not allowed to be in a management position for five years. That is a civil regime that is working, I would have thought—$7.5 million that a body corporate has to pay I would have thought was a huge deterrent for any body corporate to act in a cartel-like behaviour. These civil deterrents—the way that the National Government has put in place the civil regime—are actually working. This cartel criminalisation is actually—I’ve just learnt this terminology—a sledgehammer cracking open a walnut. This will not work.

JAN LOGIE (Green): Thank you, Madam Assistant Speaker. The Greens are happy to join the other parties on this side of the House to in fact celebrate this piece of legislation that’s been a really, really long time coming. I understand that the legislation first came into the House to criminalise cartel behaviour in business in this country in 2011, introduced by the then National Party Minister the Hon Craig Foss, and that was in recognition that cartels are economically damaging and that criminalisation of that behaviour would lead to a higher duty of care by company directors and protection for the interests of consumers in New Zealand.

Now, for people who may not be, like, incredibly over the language of this and these kinds of ideas, a cartel conduct is agreements between rivals to lessen competition between them, and it includes agreements to fix prices or restrict output or allocate markets. So I think, in terms of just linking back to the previous speaker, Melissa Lee, the point that’s significant is “between rivals” to make agreements around fixing prices, not internal pricing decisions of companies. So that is one point.

I would also say that the idea that this will have a chilling effect on competition also seems strange when this criminalisation of cartel behaviour is recommended by the OECD and is in place in many countries around the world. We’re actually quite far behind other countries like Australia, the US, Canada, the UK, Japan, Ireland, and Korea. They’ve all already criminalised cartel behaviour. So, finally, now we are in 2019, after the first attempt to do this by the National Government started in 2011, and I’m sure many more countries have actually caught up with what the OECD’s been recommending.

So it’s good, good, good that New Zealand is finally getting to the point of doing this, because we know that New Zealanders lose out when we don’t have a strong prevention regime in this area. I do acknowledge that the previous Government did manage to strengthen the penalty regime, because what they had back then was a pretty low fines structure, and even, I think, the first case of using the legislation resulted in a $5 fine for the businesses who were found guilty of price fixing.

But we know that, actually, there needs to be a disincentive and that the best practice is to criminalise the behaviour. I think it really is an issue of a form of white-collar crime, because it is looking to maximise the profit for businesses at the expense of New Zealanders. I think it’s fair that this House criminalise that behaviour, as is best practice internationally, and so the Greens are very happy to support this.

ANDREW FALLOON (National—Rangitata): Thank you, Madam Assistant Speaker. I sat on the Economic Development, Science and Innovation Committee that considered this bill, and I went into it with quite an open mind, but two particular issues really stood out for me during the process that we went through when meeting with officials and also discussing it with submitters. The first one is the chilling effect that this bill would have on well-intentioned individuals and well-intentioned businesses, and the second point that really came out was just in relation to the very substantial regime that’s already in place for civil proceedings.

I listened with interest to the previous member, Jan Logie, and she mentioned some of the low fines that have been handed out. Well, I’ll just read for that member some of the evidence that was presented to the select committee, which is that “As at 2011, only 16 alleged price fixing cartels had been the subject of civil decisions by the New Zealand courts during the preceding 25 years, and the maximum civil penalties have never been imposed.”—they have never been imposed, the maximum penalties.

So I ask the Government what is the problem that they are trying to fix? If their concern is that there aren’t substantial penalties, well, you just have to look to the courts and see that the maximum fines have never been handed out to anyone. So that’s where the problem lies, not with the legislation. It’s never been handed out; so we don’t believe that this bill is necessary, and we won’t be supporting it on that basis.

ASSISTANT SPEAKER (Poto Williams): I understand that this is a split call. Kieran McAnulty—five minutes.

KIERAN McANULTY (Labour): Oh, do I only get five minutes, Madam Assistant Speaker? That is bitterly disappointing. Oh, I probably won’t use them, because it’s a great bill and there’s no point in going on and on about that on a Thursday afternoon.

This is a marvellous bill, and another example of this Government doing what needs to be done and doing what the previous Government didn’t have the courage to do, because, of course, they had the opportunity. The previous Government brought to the House criminalisation provisions in their own bill, and they chickened out. They chickened out, for whatever reason. They’ve had the opportunity to explain it, and I don’t think they’ve done so adequately. They had the opportunity to bring in these provisions, and they pulled them out.

I believe it was the Hon Paul Goldsmith. He became the Minister of Commerce, and I believe he took over from the Hon Craig Foss. Now, that was a top bloke. The old Craig Foss—bring back “Fossie”. So Paul Goldsmith came in and he took them out through a Supplementary Order Paper, and it seems they failed to recognise that Australia, Canada, the United States, and the UK—our main trading partners—had criminalised cartel behaviour because cartel behaviour is quite outrageous, really, when you think about it. You’ve got price fixing. That’s the sort of behaviour that not only consumers but also businesses do not want to see in a market, and it’s about time that we had a progressive Government that came in and actually took a stand on these sorts of things.

I note, but I won’t go through, the long, long list of quotes that I have written down here from the Hon Craig Foss, from Simon O’Connor, from Brett Hudson, and from the former Minister of Commerce the Hon Jacqui Dean, all of whom at various times, when discussing the criminalisation of cartels, were in favour of doing so. Now, when they’re in Opposition and it’s this Government that’s bringing it forward, they don’t like it. I think it’s another example of when it’s their idea, they like it, but when it’s our idea, they don’t. What a shame. I’ve got no hesitation in commending this bill to the House.

HAMISH WALKER (National—Clutha-Southland): I just want to acknowledge Kieran McAnulty, that last speaker on the other side there—that was very passionate. Unfortunately, the claims, the evidence, and the facts just don’t stack up, but I can tell that member one thing: there will be a criminal cartel between the Labour Party and the National Party this weekend at the parliamentary rugby game, as that member and I are both playing.

If you look at the facts and if you look at the submissions, we had 20 people submit, including Business New Zealand, the Franchise Association of New Zealand, Horticulture New Zealand, and the Institute of Directors. Not all of them opposed this bill. Eleven were opposed and nine were in support, but most of those nine in support did support criminalisation only in some circumstances. Just a couple of them: submitters who opposed the bill said there was no evidence of a problem here with the current regime, and Andrew Falloon, the MP for Rangitata, made some very good points. They were concerned that criminalisation would have a chilling effect on competition and business, and for that fact, National does not support the bill.

JAN TINETTI (Labour): I’m delighted to stand here this afternoon and speak in favour of this bill. I am delighted to have followed so many good speakers on this side of the House and on our Government benches, who have been an absolute positive strength to this bill. I think it is a great bill.

It is not one, as I’ve stood here and said before, that I’ve actually sat on the select committee of, but I remember sitting in the committee of the whole House being absolutely fascinated at the arguments that were being put forward. I reiterate that this bill is an important element in this Government’s reform programme, and it strengthens New Zealand’s competition law, in line with some of our major trading partners.

I’m not sure why the Opposition don’t understand that. Internationally, most of our trading partners have criminalised cartel conduct. Let me read some of those out: Australia, Canada, the United States, and the UK—all very, very important trading partners. The fact that we are bringing this regime in now is something, as my colleague, Mr McAnulty has previously said, that the previous Government just didn’t have the confidence, I guess, to do. I’m not sure, they had said—they chickened out.

Greg O’Connor: Your own mates were going to jail.

ASSISTANT SPEAKER (Poto Williams): Order! Order! Mr O’Connor, not appropriate.

JAN TINETTI: Bringing this particular piece of legislation in means that we will see greater collaboration with other jurisdictions. We know that cartels can cross borders; we understand that. This means that aligning our laws with those in other jurisdictions will allow the Commerce Commission to participate more fully in international cartel investigations. It’s not hard to understand that. On that case, I have no hesitation in supporting this bill and commending it to the House.

LAWRENCE YULE (National—Tukituki): It’s getting late in the day, but I think the real issue we’re dealing with here is whether, in fact, adding a criminal element to the existing legislation will make any difference whatsoever. We can hear about other countries—we can hear about that—but I’m yet to hear in a speech or through any of the select committee material of an example in New Zealand where criminalisation would have made a difference or where it couldn’t be dealt with under the civil proceedings.

So what this is going to do, yet again—and this new Government is very good at doing this. When you go to do something, you have another tick-box exercise and you ask another lawyer, another accountant, or another business analyst “Can you check out this? Can you check out this before I go and buy that company or expand into another region, because how this might work could come back to bite me?” I think we, as New Zealanders, don’t always have to follow what other countries are doing, particularly if our culture is different and particularly if there is no discernible risk, and I haven’t seen any of that explained throughout this whole process. So we have a civil proceedings arrangement. It has substantial fines, as Mr Falloon, my colleague, said previously, that have never been fully used.

Then I listened to the Hon Andrew Little, who talked about the consumers being ripped off by cartels. You name those organisations where, by sending somebody to jail, it would have made any difference and where that can’t be dealt with under the civil proceedings regime.

So we don’t support the bill. On this side of the House, we actually don’t like cartels, but, fundamentally, we see no value whatsoever in criminalising the behaviour, nor, throughout this whole process, have we been shown any examples of where putting somebody in jail in a criminal way would have made any difference to that behaviour. So we can’t support this bill on that basis.

GREG O’CONNOR (Labour—Ōhāriu): This is a bill that really stands New Zealand apart as a very fair country. I think those of us who’ve watched different regimes around the world—we start, I suppose, with communism—I think we all agree there was no competition. The State ran everything; it was pretty much a failure. But look at the other side, where perhaps most of our ancestors came from. Many of our ancestors came from Victorian England—the place was one big cartel. Look at the United States: the necessity for the anti-trust bills—the Sherman Antitrust Act of 1890. That was what happened when you actually had cartels. In fact, the biggest losers were farmers. The biggest people who pushed that legislation in the United States were actually farmers, because the result of those massive cartels over there brought about the antitrust.

New Zealand’s a very fair country; we’re a very balanced country, and I think, as we’re seeing, the world is looking at New Zealand as a country that generally gets it right. So this is about making sure that we do have that fair environment; that we get the balance right between what is competitive behaviour and what is too much State interference, and I think this is actually getting it about right.

One of the questions asked by the previous speaker, Lawrence Yule, was: where does this make a difference? Many of them, presumably, have sat on boards, and as we all know—and we’ve seen many of the criminal cases; many of the cases where organisations have gone broke, for want of a better word—when they’ve been dissected, often it’s one individual. Often it’s the CEO; it may be the chairman of the board. Those decisions are made and many of the directors have probably been relatively unfairly treated. They have been dragged into this. When it’s actually been dissected, it’s often been one individual or two individuals who have actually dragged the organisation into the position they’ve found themselves in.

This is where the criminality comes in. Those people go; they can be sacked. The company and shareholders of the company will have to pay the fines. But this way it ensures that those who are sitting around that board table, those who are advising the board, those who are sitting around making these decisions will just look over their shoulder and think, “Actually, it’s not only a sacking in this, it’s not only a bit of reputational damage; I may end up in Rimutaka Prison.” I suspect that’s probably why, after all those magnificent speeches by those opposite, when the criminal provisions were being considered and agreed with, it was pulled at the last minute. I suspect there were those who were afraid that it would be—those who would go to jail, those that would end up sitting in Rimutaka, where they belonged, were afraid that that would actually happen.

So that is why having a criminal element to this is actually essential. It means there are some things you simply cannot walk away from. I commend this bill.

A party vote was called for on the question, That Commerce (Criminalisation of Cartels) Amendment Bill be now read a third time.

Ayes 63

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

Noes 55

New Zealand National 53; ACT New Zealand 1; Ross.

Bill read a third time.

Bills

Accident Compensation Amendment Bill

Third Reading

Hon IAIN LEES-GALLOWAY (Minister for ACC): I move, That the Accident Compensation Amendment Bill be now read a third time.

New Zealand’s no-fault accident compensation scheme has been a source of national pride and this Government is committed to ensuring that the accident compensation scheme remains fair, transparent, and accessible for all claimants. Overwhelmingly, people who are injured receive an excellent service from ACC in terms of their treatment and their rehabilitation. This bill makes a series of changes to boundaries rather than the core of the scheme in order to maintain and enhance the effectiveness and efficiency of regulatory systems into the future. There are four main components of the bill, which I will now cover.

The bill amends the interface between weekly compensation and superannuation in several areas to improve fairness. The first of these provides for fairer transitions for those who are injured close to retirement age. These changes mean that people will be able to receive up to two years of weekly compensation and superannuation before transitioning on to superannuation. This will provide a fairer, more consistent relationship between weekly compensation and superannuation to provide for fairer transitions for those people who are injured near the end of their working life.

A further amendment will mean that a client’s entitlement to weekly compensation as a surviving spouse or partner will no longer be affected by whether they are also receiving weekly compensation. Most surviving spouses or partners, including those of superannuation qualification age or older, will be entitled to a maximum of five years of weekly compensation based on their deceased spouses’ or partners’ earnings at the time of the fatal injury. I am pleased to be introducing this important amendment, which ensures consistency and fairness between the entitlements received by surviving spouses regardless of age.

The second component that this bill addresses is a gap in ACC coverage for families of employees who are posted overseas in the course of their employment. I believe there is a vital change to make as we do not want to stop people from representing New Zealand’s interests abroad because of concern about the medical coverage of their families.

Thirdly, the bill disestablishes the historic Accident Compensation Appeal Authority, which dealt with appeals under the repealed 1972 and 1982 Acts. Given the low number of appeals to the authority, it is no longer cost effective to maintain it. All new appeals under the repealed Acts will be heard by the District Court, which will ensure that claimants’ rights are maintained. The bill also contains some minor and technical amendments that will increase ACC’s operational efficiency and improve processes for the biennial levy rounds.

I thank members of the Education and Workforce Committee and its chair, Parmjeet Parmar, for their work and consideration of the bill. This also extends to those who made submissions on the bill and those who helped to facilitate its progress. I’d also like to note the work of the Hon Michael Woodhouse, as the previous Minister for ACC. Many of the policy proposals in this bill were developed and worked on during his time as Minister. They provided a clear focus and direction in which to move forward with these important regulatory maintenance changes. It is vital that we take this opportunity to work together in order to maintain and improve the ACC system.

In closing, this Government is proud to work towards creating more equitable outcomes within the accident compensation scheme framework. It is a vital component in our social contract and we look forward to improving outcomes for New Zealanders into the future. I commend this bill to the House.

Hon TIM MACINDOE (National—Hamilton West): Kia orana, Madam Assistant Speaker. During the committee stage of the debate on this Accident Compensation Amendment Bill, I asked the Minister for ACC several questions about it, which he chose to ignore, and, as he customarily does, he chose instead to abuse me and to ignore the questions. He has just outlined the main provisions of the bill, so I acknowledge that, but, unfortunately, those questions went unanswered and there won’t be any opportunity for them to gain answers now.

He has, of course, today been celebrating the fact that some levy reductions for ACC earners and payers are possible. That, of course, is thanks to the responsible stewardship of the previous National Government, and I was pleased that he has just acknowledged that much of the work on this particular bill was brought about by the Hon Michael Woodhouse. He didn’t, however, of course, today acknowledge that about two-thirds of New Zealand motor vehicle owners now face an increase in their levy—in the ACC levy.

Hon Iain Lees-Galloway: I raise a point of order, Madam Speaker. This is the third reading of a bill. The point of the third reading is to summarise the policy contained within the bill, and I encourage the member to actually address the bill that is before the House currently.

ASSISTANT SPEAKER (Poto Williams): You are correct. I was looking through the bill and I was struggling to find the section on the levies within it, so if we could come back to the third reading of this particular legislation, that would be great.

Hon TIM MACINDOE: Of course. It is a very minor, technical bill. It originated under the National Government. As I’ve just acknowledged, the Minister has outlined what its main provisions are, but I am very disappointed that he failed to answer any of the questions, and now he’s trying to interrupt my contribution.

So I’ll just make some very brief points. The first is that because it is a bill that originated under the National Government, of course we will continue to support it. The fact that it is such a minor technical adjustment means that most New Zealanders won’t even notice that it’s passing this afternoon. More importantly, this Minister has indicated in the past that he intends to make more substantial changes to the legislation. I have been hoping, through this particular process, that he would tell us what those are, because those who came along to submit to the Education and Workforce Committee asked those sorts of questions and they’re still waiting to hear the answers. Well, clearly they’re not going to get them today, but there’s no reason to delay the passage of this particular bill, so I too commend it to the House.

Hon CLARE CURRAN (Labour—Dunedin South): Thank you, Madam Assistant Speaker. I’d describe that as a rather grudging and snippy contribution from the member on the other side of the House, Tim Macindoe, who couldn’t quite work out whether it was a minor and technical bill or whether it was a great contribution from the former Government.

I have a couple of comments to make on the third reading of this, the Accident Compensation Amendment Bill. It’s great to actually have it at third reading. I’m sure the Minister for Workplace Relations and Safety is very pleased about that. He described it as being about the boundaries rather than the core, and that’s a good description, but I don’t want to diminish the importance of it. While the changes being proposed here are about the boundaries, they will make a substantive impact particularly on the surviving spouses or partners who have been forced to choose between New Zealand’s superannuation and the ACC survivor’s payments, which was discriminatory on the basis of age.

This bill really does respond to that, which was a declaration by the Human Rights Review Tribunal, and I think that is a really significant and substantive change that is being made in this bill. While it might not have impacted on massive numbers of people, it is a matter of principle, as is addressing cover for spouses, partners, and dependants of the New Zealand workers posted overseas, because that is an important fix to ensure that the people with dependants aren’t disadvantaged when they work overseas, or their companies, by maintaining long cover arrangements. We understand from agencies with staff overseas, such as Immigration New Zealand and the Ministry of Foreign Affairs and Trade, that this is a pressing problem.

Ultimately, these changes—and there are some other minor changes that the Minister mentioned—make our world-famous, important accident compensation scheme kinder to several groups who miss out on entitlements. That is a really big deal. In every opportunity we get, everybody in this House should say that the ACC—our accident compensation scheme—is something that New Zealanders should be immensely proud of. Nearly one in three Kiwis made an ACC claim in 2016-17, and most received excellent treatment and rehabilitation. This is an important scheme. This is a bill which is about the boundaries rather than the core, but it doesn’t diminish the important principles behind it, so I commend the bill to the House.

Dr PARMJEET PARMAR (National): I’m taking this call to support this bill, which we have already heard about. It’s actually making small changes but changes that are really important and will actually positively impact a number of families. So the number of families that will be impacted through this may be just in the hundreds, but it’s about making the ACC scheme fair. It’s about meeting people’s expectations. It’s important that we make sure that the ACC scheme extends to those who accompany individuals that go overseas on employment, as long as their remuneration is considered to be derived from New Zealand for New Zealand’s income tax purposes.

Debate interrupted.

The House adjourned at 6 p.m.