Thursday, 11 April 2019

THURSDAY, 11 APRIL 2019

THURSDAY, 11 APRIL 2019

The Speaker took the Chair at 2 p.m.

Prayers.

Business Statement

Business Statement

Hon CHRIS HIPKINS (Leader of the House): Today, the House adjourns until Tuesday, 30 April. Legislation that will be considered in that week will include the remaining stages of the Fire and Emergency New Zealand (Levy) Amendment Bill and the Taxation (Research and Development Tax Credits) Bill, the first reading of the Credit Contracts Legislation Amendment Bill, and the committee stage of the Local Government (Community Well-being) Amendment Bill. Wednesday, 1 May will be a members’ day.

Hon GERRY BROWNLEE (National—Ilam): Thank you, Mr Speaker, and to the Leader of the House, for giving us that indication of forward business, but I am wondering if, perhaps, the Leader of the House might have given more consideration, after more than 80 public statements, to moving the member’s order of the day No. 6—Broadcasting (Games of National Significance) Amendment Bill (No 2)—further up the Order Paper in order that New Zealanders might be assured that, absent of the 5G network, they can watch the World Cup rugby this year?

Hon CHRIS HIPKINS (Leader of the House): Can I congratulate the member on getting the number of the order of the day right this week, which he didn’t get last week. But I can assure him that the Government is not intending to adopt that as a Government item of business, but, of course, if members across the House wanted to see it progress up the members’ orders of the day, then there are options for them to explore that.

Oral Questions

Questions to Ministers

Question No. 1—Energy and Resources

1. GARETH HUGHES (Green) to the Minister of Energy and Resources: Does she stand by MBIE’s decision to extend OMV’s Great South Basin application last year, given the company is now seeking a consent to drill?

Hon DAVID PARKER (Acting Minister of Energy and Resources): On behalf of the Minister of Energy and Resources, the 2018 decision approved changes to some of the conditions of OMV’s work programme for the permit. This allowed OMV to seek more information on the underlying geology before commencing drilling. The application was made to the Ministry of Business, Innovation and Employment and assessed against the statutory criteria in the Crown Minerals Act. It met the criteria, and so the changes to the work programme were approved. This is not an extension of the length of the permit, which still expires on 11 July 2022.

Gareth Hughes: What does the Minister have to say to New Zealanders who thought the Government had banned new offshore oil and gas permits for good?

Hon DAVID PARKER: On behalf of the Minister, the Government, I think, has been clear that we are pursuing a transition away from fossil fuels towards clean, renewable, affordable energy. This has been very well publicised, and I think most New Zealanders understand the detail of it.

Gareth Hughes: Doesn’t this change to the work programme that OMV is benefitting from, and the 16 other possible extensions raised by the Minister in the industry over the next 10 years, undermine the historic oil and gas line we drew in the sand?

Hon DAVID PARKER: No, we don’t think so. We think that we are helping New Zealand transition away from fossil fuels towards renewable energy.

Gareth Hughes: Given we’ve already discovered enough fossil fuels to guarantee catastrophic climate change, why are we looking for more?

Hon DAVID PARKER: I think we have signalled a pretty clear direction. We are transitioning away from the use of and exploration for fossil fuels. We’ve been clear that existing rights are protected, but we have blocked more block offers in the offshore area.

Gareth Hughes: Does the Minister agree with climate strike organiser Greta Thunberg, who said, “I want you to act as if the house was on fire,”? And isn’t looking for more oil we can’t afford to burn like pouring petrol on that fire?

Hon DAVID PARKER: On behalf of the Minister, I do agree that New Zealand and the world need to quickly transition away from the use of fossil fuels, towards renewable energy, and that it is a pressing and urgent problem.

Question No. 2—Prime Minister

2. Hon PAULA BENNETT (Deputy Leader—National) to the Prime Minister: Does she stand by all her Government’s statements, policies, and actions? And happy 74th birthday to her deputy.

Rt Hon WINSTON PETERS (Deputy Prime Minister) on behalf of the Prime Minister: Yes.

Hon Paula Bennett: Does he support an inquiry into Pharmac?

SPEAKER: Order! We’re going to go back and we’re going to say “she” because we’re remembering who’s answering.

Hon Paula Bennett: Does she support an inquiry into Pharmac?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, that was made very clear in today’s New Zealand Herald, where she said that she’d asked health Minister David Clark to look into the issue of early access to new drugs after the pleas made to her yesterday.

Hon Paula Bennett: Does she have full support from her coalition partners for the members to vote down a select committee inquiry into Pharmac?

Rt Hon WINSTON PETERS: First of all, the select committee is independent of Cabinet, as we well know. No instructions were given to those members. They made the same decision that those members made for nine years. If it was such a pressing issue for the last nine years, why didn’t they do something about it, rather than finding a social conscience the moment they received the Opposition benches? Can I just say that the Prime Minister made it very clear that this is not the end of it; she’s concerned about these drugs, and she’s asked her Minister of Health to look into it.

Hon Paula Bennett: So does she agree with the Government members of the Health Committee voting yesterday to turn down a request for an inquiry into Pharmac?

Rt Hon WINSTON PETERS: Can I say, on behalf of the Prime Minister, that we have not had a chance to discuss that as a Cabinet, so I can’t really represent what Cabinet might think of that other than to say that this is a seriously complex issue. Of the two drugs that were present at the select committee inquiry, so to speak, yesterday, the significant thing is that there are countless other drugs of similar magnitude of equal health and we have to consider the whole lot in tandem and then all together and its potential costs. But we remember the Keytruda argument. Do you remember that? The National Party did nothing about it at all until the last moment.

Hon Chris Hipkins: I raise a point of order, Mr Speaker. Just reflecting on the question that the member asked, is it now acceptable for the Prime Minister to be questioned on the actions of members of Parliament who are not part of the executive?

SPEAKER: And the answer to that is no, and I should have stopped the question. My apologies.

Hon Paula Bennett: Based on her answer, does she believe it is fair and reasonable for New Zealanders to currently have to travel to Australia to get the care and the drugs and the access that they need?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, given that that’s what they’d been doing for the nine years that the National Party was in Government, the real issue is—[Interruption] For the nine years that the National Party was in Government, they had to do all that and more, with a substantially reduced health budget, which is not the case for this Government. Let me say that because of that—this Government having a sense of conscience and fairness—it’s going to be looking into the matter.

Hon Paula Bennett: Is she aware that in a previous Labour-led Government, New Zealanders were having to travel to Australia just to get access to the care they needed for cancer; now they have to travel to Australia to get access to the drugs?

Rt Hon WINSTON PETERS: Can I just say that this Government—as the Prime Minister has said, and I’m speaking on behalf of the Prime Minister now, she’s going to ask her Minister of Health to look into it. But I want to say this on behalf of the Prime Minister as well: there’s nothing so dreadful or turgid or despicable as to use people’s illness and sickness for political points.

Hon Paula Bennett: Does she not think that an inquiry into Pharmac through the select committee would actually mean that the issues that she is raising in her answers in this House today could be explored through that very inquiry?

Rt Hon WINSTON PETERS: Again, on behalf of the Prime Minister, if that was the case and it had merit, why, for nine long years, didn’t the National Party do something about it? It suggests that maybe an inquiry’s not the best way to go about it. Maybe something of greater immediacy within the Minister of Health’s office might be the way to go about it, and that’s what the Prime Minister has asked him to look at.

Hon Paula Bennett: Why did her Government not reinvest the $200 million of savings made by Pharmac back into new medicines in last year’s Budget?

Rt Hon WINSTON PETERS: Well, first of all—

Hon Gerry Brownlee: Whoops!

Rt Hon WINSTON PETERS: No, it’s not a whoops case; it’s a “let me remind you” case. Pharmac is independent of Government. That’s the whoops, Mr Brownlee. That member doesn’t know that, but we do. So they are budgeting internally themselves, and we’re taking that advice. It doesn’t mean, though, that we don’t keep alongside of them in terms of their future needs, and the Minister of Health, as he is, will consciously go about that in a way that never happened with his predecessors.

SPEAKER: Supplementary question, the right honourable Rev. David Clark.

Hon Dr David Clark: Is the—[Interruption]—thank you, Mr Speaker.

SPEAKER: Or maybe not right honourable; just ordinary honourable.

Hon Dr David Clark: Is the Prime Minister aware that the combined pharmaceuticals budget was a record $985 million last year and that it will not be reduced as a consequence of any savings?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, not only is she aware of it, she remembers the gruelling, grinding pathway of success of that Minister of Health in a very difficult Minister of Finance’s office environment to get that magnificent outcome.

Hon Paula Bennett: Does she believe in a democratic process that sees all parties in Parliament involved in making a decision into an inquiry about a Government agency?

Rt Hon WINSTON PETERS: Again, on behalf of the Prime Minister, if an inquiry was the best way to go, why, for nine years under the National Party, was there no inquiry? Why? Well, it may be that there’s a more immediate way to respond. [Interruption] No, shouting and screaming in Parliament doesn’t attend to this matter.

Hon Gerry Brownlee: It wasn’t a problem.

Rt Hon WINSTON PETERS: It wasn’t a problem? Well, the Pharmac funds were far less then than they are now. It was a big problem back then—no inquiry. We think the way that the Minister of Health is going about it is the best way to go in responsible Government, and that’s what we’re going to do.

Hon Paula Bennett: Does she have any concerns about the decision-making process of Pharmac?

Rt Hon WINSTON PETERS: Well, on behalf of the Prime Minister, the decision-making process of Pharmac has been there for decades now, never required to be challenged. Never was there an inquiry in the 24 years since it was established. So why, all of a sudden, in 2019, does it become of a pressing interest, other than that it is being used as a tool, and the victims of health funding are used as a tool, for nefarious, malicious political purposes?

SPEAKER: Order! Order! I just want to remind the Deputy Prime Minister, speaking for the Prime Minister, that he is speaking for the Prime Minister and to ask him to use the voice and language of the Prime Minister, and I think he’s getting a bit far away from it.

Rt Hon WINSTON PETERS: I raise a point of order, Mr Speaker. If I could do that, I’d be the Prime Minister!

SPEAKER: Yes, and some of us notice an improvement most of the time!

Hon Paula Bennett: Does she believe that the process of decision making by Pharmac at this time is a good one?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, I think we’d all admit that every organisation needs to constantly review and examine its processes to see that they have best practice in the current time, and I would believe that that’s what Pharmac is doing for themselves right now.

Hon Paula Bennett: As she has stated in the House today that she does not believe that there should be an inquiry, does she stand by her reply to media in February? When asked whether she would block an inquiry into Pharmac, she said, “Absolutely not.” and further said, “I hope they would.” And, if so, was she aware her Government members in the Health Committee were going to block an inquiry?

SPEAKER: That’s not an area she has responsibility for.

Hon Paula Bennett: Why doesn’t her Government put the money that is needed into Pharmac so these people can get the care they deserve in New Zealand?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, let me say that the Minister of Finance is dealing with a set of circumstances of an inherited economy that wasn’t performing. We are seeking to turn it around—we are seeking to turn it around. We are seeking to grow the economy so that we can better afford First World drugs, but we can’t do it all overnight. Look at the last nine years of the National Party: they couldn’t average even 1.5 percent for those nine years.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Mr Speaker, I’d ask you to have a look at the question that was asked and the ruling that you made on the one supplementary prior to the last one. The supplementary, as I heard it, certainly was asking for the Prime Minister to comment on a statement that she had made and then asked her what her opinion was on actions of her colleagues in light of her public statements. It seems odd to say she has no responsibility for her own statements and then odd to say that the leader of the Labour Party has no responsibility for her members.

SPEAKER: The member will resume his seat. The first thing to do is remind him of Speakers’ ruling 20/3 as to the timeliness of interventions. He’s too slow in this particular case; it has to be taken up immediately. The second point I’ll make to him is that the core of the question went to a select committee proceeding for which the Prime Minister has no responsibility.

Hon Gerry Brownlee: Three legs to a question.

SPEAKER: Well, if you get one wrong, you lose it.

Hon Gerry Brownlee: Oh—new rule.

SPEAKER: Does the member want to withdraw and apologise voluntarily, or—

Hon Gerry Brownlee: I withdraw and apologise.

I raise a point of order, Mr Speaker. Mr Speaker, your reference to the timeliness of taking a point of order I think is somewhat unreasonable given that it’s never something people want to do, disrupting the flow of a question. I deliberately left it to the end, and I didn’t ask for anything turned back or anything else, simply that you might have another look at it. I don’t think that was unreasonable, nor was it untimely.

SPEAKER: Well, we differ.

Question No. 3—Housing and Urban Development

3. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: Does he stand by his statement that houses purchased off the plans as part of the KiwiBuild scheme were purchased off the plans “Because they were included in the plans at the time they were built”?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): Yes, in its original context.

Hon Judith Collins: What definition of buying off the plans has Cabinet used in approving the outright purchase of private sector houses for KiwiBuild?

Hon PHIL TWYFORD: The Buying off the Plans scheme is a generic name for a scheme that involves both the use of the underwrite and buying off the plans literally, in order to incentivise developers to build more affordable houses.

Hon Judith Collins: Why did the KiwiBuild Buying off the Plans business case that was adopted by Cabinet last year define a time line on page 48 where all legal and contractual steps occur before construction begins?

Hon PHIL TWYFORD: Oh, look, I’d have to have the document in front of me and read it in order to specifically answer that question, but, look, I’ll say this: the Buying off the Plans initiative through KiwiBuild, the use of the underwrite, is part of our commitment to get the market to build more affordable homes, something it hasn’t done for a very long time, and something the previous Government never even tried to do. We’re doing it.

Hon Judith Collins: What proof does he have that Cabinet made a decision that allowed him to use his KiwiBuild budget to buy houses that are already well under construction?

Hon PHIL TWYFORD: I’m advised that the purchase of houses as part of bigger KiwiBuild deals is perfectly within the remit that Cabinet signed off. You know, the member can’t have it both ways. On one hand, she wants to quibble about the fact of saying we should do more due diligence on projects, and then on the other hand, she criticises us for actually assessing projects properly as we negotiate the KiwiBuild contracts.

Hon Dr Nick Smith: Just do what you said. Do what you promised.

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

Hon Dr Nick Smith: I withdraw and apologise.

Hon Judith Collins: Is he certain KiwiBuild is allowing developers to reduce profit margin when developers such as Mike Greer Homes have two identical attached townhouses for sale in Rolleston, one with a KiwiBuild underwrite and one for sale to the general public, and both are marketed at exactly the same price?

Hon PHIL TWYFORD: I’ve said this before, but I’ll say it again: the mistake that the member repeatedly makes on this issue is to quibble about individual homes. The Mike Greer project actually has delivered 104 affordable homes—104 affordable homes—for first-home buyers. That’s more than the affordable homes that the last Government built in nine years.

Hon Judith Collins: Do houses underwritten that have already been offered to the market prior to entering the KiwiBuild programme meet the Cabinet definition of a KiwiBuild house as one that is “offered for sale, in the first instance, to an eligible [KiwiBuild] purchaser;”?

Hon PHIL TWYFORD: Well, as I said in an earlier answer, the purchase of those homes or the underwriting of them is perfectly within the remit that Cabinet’s signed off. It would be silly and nonsensical to tell developers to stop building affordable homes while we take the time to do the due diligence properly, to take three, six, or nine months to properly negotiate a contract. I’m not going to tell developers to stop building affordable homes, because that would be silly.

Hon Judith Collins: Is he the only person who believes that buying off the plan includes buying a house that has been built and marketed unsuccessfully to the public?

Hon PHIL TWYFORD: No, because there’s a huge majority of the New Zealand public who want to see affordable homes built, who support our Government’s efforts to work with the private sector to build affordable homes for young Kiwi families. That’s the basis of our policy, and that’s what we’re doing.

Question No. 4—Housing and Urban Development

4. PAUL EAGLE (Labour—Rongotai) to the Minister of Housing and Urban Development: What progress, if any, has Housing New Zealand made providing assistance to tenants affected by previous methamphetamine contamination policies?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): Housing New Zealand advises that since September, they’ve been in contact with 900 people on this issue. Of those, 425 people have received discretionary grants averaging $7,889. A further 336 claims for assistance due to the meth contamination fiasco are being considered, and 33 claims have been approved and are awaiting payment.

Paul Eagle: What steps will the Government take to ensure that this does not happen again?

Hon PHIL TWYFORD: Well, Housing New Zealand’s previous meth contamination policy was a moral and fiscal failure, which harmed many people and, in the worst cases, left families—

SPEAKER: Order!

Hon PHIL TWYFORD: —homeless.

SPEAKER: Order! Order! What the member’s going to do is he’s going to answer the question, which was in order. His answer describing policies of a previous Government was not.

Hon PHIL TWYFORD: So, under our Government, Housing New Zealand has become a compassionate landlord that supports people to live in its homes with dignity and respect. Housing New Zealand no longer ends tenancies and makes people with addictions homeless or throws people out on the street on the basis of no decent evidence. If there are issues around addiction, Housing New Zealand now connects people with the support services they need to help them.

Paul Eagle: What else is Housing New Zealand doing to better support its tenants with issues such as addictions?

Hon PHIL TWYFORD: Well, Housing New Zealand is now a very different organisation and is well on the way to becoming a world-class public housing landlord. It’s partnering with other agencies and specialist NGOs to help those tenants with complex issues such as mental health and addiction—for example, the new Greys Avenue development in central Auckland will have 24-hour specialist social and health services on the premises.

Question No. 5—Regional Economic Development

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

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

Hon Paul Goldsmith: Which Filipino truck drivers was he referring to in his statement to Newstalk ZB last Thursday when he said that he talked to the New Zealand Transport Agency (NZTA) chief executive and “I wanted clarification as to why they have been offering immunity and amnesty for Filipino truck drivers to, arguably, spy on New Zealand - owned businesses.”?

Hon SHANE JONES: I’m glad the member has asked that question. The reported comments I made on the ZB show reflect the fact of what I am focused on—that there are foreign, migrant, Filipino workers right throughout the entire four winds of the transport industry, and the notion that they should be encouraged to begin spying against New Zealand businesses is something that bothers me immensely.

Hon Paul Goldsmith: Were the Filipino truck drivers working for Semenoff Logging?

Hon SHANE JONES: The Filipino truck drivers no doubt may be employed by businesses that do include such logging contractor. The fact, however, is that Meredith Connell—where did they get their authority from to publicly state that it is the policy of the Crown prosecutor to encourage, incentivise? What inducements were they proposing to offer these Filipino migrant workers to begin acting as pimps?

SPEAKER: Well, I don’t know that that’s quite the word. Take care going forward, I think. It does have another meaning for most people.

Hon Paul Goldsmith: From whom did he hear the allegation that Filipino truck drivers were being offered the opportunity to “spy” by the prosecutors in the Semenoff case?

Hon SHANE JONES: To the best of my knowledge, Mr Steve Haszard—by name and nature—said that on Radio New Zealand.

Hon Paul Goldsmith: So how can he stand by his statement in the House yesterday that his conversation with the NZTA CEO was not about the decisions and methods of the prosecutor in the Semenoff Logging case?

Hon SHANE JONES: I stand with a tremendous level of ease.

Hon Paul Goldsmith: That’s extraordinary. Does he—

SPEAKER: Order! Order! Does the member have another supplementary?

Hon Paul Goldsmith: Yes, I do.

SPEAKER: Well, he very nearly lost it.

Hon Paul Goldsmith: Well, thank you very much, Mr Speaker. When he quoted his grandmother the day before yesterday, “Words once issued might be forgiven but are not forgotten.”, was he meaning that the Prime Minister might forgive him for talking to the CEO of NZTA about the regulatory case but the CEO would not forget his words?

Hon SHANE JONES: From time to time, I do fall back on my heritage and the culture that has made me the champion of the provinces that I am. That, from time to time, is a cautionary lesson to me that, like the Book of Isaiah says, neither the spoken word nor the baby given birth to goes back to where it came from.

Hon Paul Goldsmith: So if he agrees that the Filipino truck drivers worked for Semenoff Logging, his conversation with the NZTA CEO was about the decisions and the methods of the prosecutor in the Semenoff Logging case?

Hon SHANE JONES: The trucking industry know they have a champion in my good self, and they should suffer no doubt that when issues of regional significance occur in the industry, they are able to bring those issues to my attention. I realise that the trucking and heavy freight industry have to balance their statutory requirements for safety, but in the absence of a thriving trucking industry, regional development may be undermined.

Hon Paul Goldsmith: I raise a point of order, Mr Speaker. He did not answer that question at all.

SPEAKER: Ask the question again.

Hon Paul Goldsmith: So if he agrees that the Filipino truck drivers worked for Semenoff Logging, his conversation with the NZTA CEO was about the decisions and the methods—

SPEAKER: I’ve heard enough. He did answer the question.

Question No. 6—Health

6. Hon MICHAEL WOODHOUSE (National) to the Minister of Health: Does he stand by all of his answers to Oral Question No. 6 on Wednesday, 3 April?

Hon Dr DAVID CLARK (Minister of Health): Yes.

Hon Michael Woodhouse: Has he seen a report of comments by patient advocate Malcolm Mulholland, who said yesterday, “I again spoke with Ms Wall and asked where the inquiry was at. She then told me that the inquiry was being blocked by Dr Clark and at a ‘higher level than him.’ ”?

Hon Dr DAVID CLARK: I have seen some of those comments reported, and I would comment that I’m not responsible for the comments of Mr Mulholland.

Hon Michael Woodhouse: Has he discussed those claims with the chair of the Health Committee, and what was the nature of those discussions?

Hon Dr DAVID CLARK: No.

Hon Michael Woodhouse: Does he agree or disagree with Mr Mulholland’s version of events?

Hon Dr DAVID CLARK: I’m not responsible for the comments of Mr Mulholland, and, in so far as I’ve seen them, to the best of my knowledge they’re not correct.

Hon Michael Woodhouse: What, then, if anything, did the Minister communicate to the chair of the Health Committee that could have been perceived by Mr Mulholland as blocking the inquiry?

Hon Dr DAVID CLARK: Again, I’m not responsible for the perceptions of Mr Mulholland, but I would say that I’ve been completely consistent on this issue. I don’t believe that an inquiry is necessary. That’s been my public comment, and it’s been reported as far back as October last year in Stuff. I’ve always said that the Health Committee is free to hold any inquiry it sees fit. That’s my public comment and that’s on record from last year.

Hon Michael Woodhouse: Has he seen reports of the Health Committee chair saying, “There does need to be some form of independent review.”, and might that form of review be the one that he explicitly ruled out in a media interview on 14 March?

Hon Dr DAVID CLARK: I just want to observe that I am no more responsible for the comments of Louisa Wall MP than I am for the comments of Michael Woodhouse MP.

Question No. 7—Education

7. JAN TINETTI (Labour) to the Minister of Education: What recent feedback has he seen on the proposals for the reform of vocational education?

Hon CHRIS HIPKINS (Minister of Education): Yesterday, a statement was made by eight of the country’s 16 institutes of technology and polytechnics (ITPs), who collectively represent more than half of the students enrolled in the polytech sector, backing the reforms. They see this as a generational opportunity to design a sustainable and effective vocational education sector, with a move away from counter-productive competition. I welcome their feedback, and I welcome their constructive approach.

Jan Tinetti: What problems have the ITP Group and other stakeholders identified in the current vocational education system?

Hon CHRIS HIPKINS: In their statement yesterday, the ITP Group said that the current funding process was inflexible and it had led to institutions trading quality against cost. UCOL have said that in their meetings on the reforms, industry representatives have shared their concerns around an ongoing shortage of workers with the right skills and training. The chairman of the Central Otago Labour Market Governance Group said the horticultural industry was in a rapid growth phase and needed nearly 30,000 trained people over the next 10 years, and, for him, the proposed vocational education reform is the first opportunity in decades to address the imbalance and move to create a vocational education and training system that is fit for the growth and expansion needs of New Zealanders into the future.

Jan Tinetti: What opportunities have the ITP Group identified in the proposed reforms?

Hon CHRIS HIPKINS: The chief executive of The Open Polytechnic of New Zealand strongly supports an integrated system that puts learners at the heart of its thinking, enabling frictionless mobility between locations, modes, and types of learning. The chief executive of the Western Institute of Technology at Taranaki recognises this is an opportunity for the real value of online distance learning offered by The Open Polytechnic of New Zealand and other providers to be realised in concert with local ITPs. The chief executive of Unitec said Māori joint-ownership of the new model was also critical, because it would assist in closing the gap between the success rates of Māori and non-Māori students. There have been a number of interesting observations made by those currently in the sector. Nobody in the sector is arguing there should be no change.

Dr Shane Reti: Why is the Minister driving a wedge between high- and low-performing polytechnics by not showcasing the views of polytechnics like the Southern Institute of Technology and instead showcasing the views of eight polytechnics, in whom six reported deficits and five currently have commissioners—

SPEAKER: Order! Order! The member can start the question again, without the assertion.

Dr Shane Reti: Why is the Minister highlighting eight polytechnics today—of whom, six are reporting deficits and five currently have commissioners?

Hon CHRIS HIPKINS: Over the last week or two, I’ve been highlighting feedback—both good and bad—that’s been made by a number of different players within the sector at the moment. I think it’s important that the comments that I highlight are those that are well informed, rather than those that are based on misinformation.

Question No. 8—Statistics

8. Hon Dr NICK SMITH (National—Nelson) to the Minister of Statistics: Does he stand by his statement, “this census looks to be more successful than previous censuses, that we’re meeting all of our targets”, and when will core public sector agencies like health and education have access to reliable census population data for allocating public funding?

Hon CHRIS HIPKINS (Leader of the House) on behalf of the Minister of Statistics: In answer to the first part of the question, yes, in the context that it was made. In answer to the second part of the question, the Government Statistician has made it clear that on 29 April, she’ll publicly announce when Census 2018 data will be available.

Hon Dr Nick Smith: Why does the Minister continue to claim that Census 2018 was a success when Professor Spoonley from Massey University calls it “a failure”, when Victoria University—

SPEAKER: Order! The member’s had two legs.

Hon Dr Nick Smith: Well, there’s a series of academics—

SPEAKER: Well, if there’s a series of statements, the member can have a series of supplementaries.

Hon Dr Nick Smith: Well, perhaps I start from the beginning again, Mr Speaker?

SPEAKER: OK.

Hon Dr Nick Smith: Why does the Minister continue to claim Census 2018 was a success, when academics and researchers have described it as “a failure”, “a disaster”, “a shambles”—

SPEAKER: Order!

Hon Dr Nick Smith: —as “useless”, and “a tragedy for New Zealand”?

SPEAKER: The member can answer any bit of that he wants.

Hon CHRIS HIPKINS: As I was very clear in my first answer, the Minister stands by the comment made in the context that it was made. It was made in April last year in the context of questions in particular about online response rates and other targets.

Hon Dr Nick Smith: Does he agree with the senior staffer from within Statistics New Zealand, who has stated publicly, and I quote, “There is no accountability or responsibility being taken [within Statistics New Zealand] for what [has turned] out to be the worst census in over 50 years.”; if so, why is he telling people who are questioning Statistics New Zealand to “back off”?

Hon CHRIS HIPKINS: I disagree with the premise of the member’s question. The ultimate accountability for the census rests with the Government chief statistician.

Rt Hon Winston Peters: Which Government and what Minister was responsible for establishing this census process, and when did that happen?

Hon CHRIS HIPKINS: The parameters for the census and the budget for the census were established before this Government took office. I understand that during the course of that process, there were three different Ministers responsible for overseeing it.

Hon Dr Nick Smith: Can he confirm that from October 2017, when he became the Minister of Statistics, until March 2018, he did not have a single specific briefing with Statistics New Zealand to ensure all was well with the delivery of Census 2018, when his predecessor Maurice Williamson, in the same months prior to the successful 2013 census, had five such specific briefings?

Hon CHRIS HIPKINS: I can confirm that the Minister is a much harder worker than Maurice Williamson and has many other responsibilities.

Hon Dr Nick Smith: Does the Minister regret his decision as Minister of Statistics to be overseas for the very week of the 2018 census and not follow the example of his ministerial predecessors, who actively promoted participation, now that we know that over 700,000 New Zealanders failed to complete Census 2018?

Hon CHRIS HIPKINS: I think if the member seriously believes that Maurice Williamson urging people to fill in the census form had any material impact on the result rate for that census, the member is dreaming.

Hon Dr Nick Smith: Does the Minister regret last March and April dismissing the concerns that were expressed by census field officers, by the media, and by Opposition members of Parliament over the obvious implementation problems occurring around the country with the census implementation, when at that time they could have been addressed, and now it has been confirmed that over 700,000 New Zealanders did not complete Census 2018?

Hon CHRIS HIPKINS: I reject the premise of the question. Ultimately, the responsibility for dealing with any such concerns rests with the Government chief statistician.

Question No. 9—Corrections

9. Hon DAVID BENNETT (National—Hamilton East) to the Minister of Corrections: Does he stand by all his statements and actions?

Hon STUART NASH (Minister of Police) on behalf of the Minister of Corrections: Yes, within context.

Hon David Bennett: When he said last week that to ensure the safety of prison officers, the biggest measure the Government has introduced is to continue to safely reduce the prison population, will the number of prison officers reduce as the number of prisoners reduces?

Hon STUART NASH: What I can say is that the prison population is below 10,000, and in the last year the prison numbers have dropped by 821.

SPEAKER: No, I think the member better have another crack at answering the question.

Hon STUART NASH: As far as I’m aware, at this stage—on behalf of the Minister of Corrections—we’re not looking at dropping prison officer numbers.

Hon David Bennett: What incentives does he believe prisoners should have for good behaviour when dealing with the issue of assaults on staff?

Hon STUART NASH: Well, on behalf of the Minister of Corrections, they won’t get parole.

Hon David Bennett: Did he ask the Department of Corrections to provide a range of options that could set out incentives for good behaviour by prisoners, with the goal of positively impacting on staff assaults?

Hon STUART NASH: I don’t have the answer to that question right now, but if the member wants to put it down in writing, I’m sure the Minister will provide a response.

Hon David Bennett: I seek leave to table an email sent by the Department of Corrections on 22 March 2019, which is not publicly available, which requests incentives—

SPEAKER: All right—OK. It’s been clearly described. Is there any objection? There appears to be none.

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

Hon David Bennett: Does he believe prisoners should respect prison officers and the justice system without the need for incentives?

Hon STUART NASH: We’re not dealing with kids here; we’re dealing with some of the worst offenders in our society. To ask them to respect authority—part of the reason they’re in prison is because they have disrespected authority. We’re working very hard to ensure that we give these men and women the opportunity to become productive citizens once they leave prison.

Question No. 10—Police

10. Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Police: What reports has he seen in response to public safety and security concerns in the wake of the 15 March terror attack?

Hon STUART NASH (Minister of Police): I’ve seen numerous reports of police moving across a number of fronts to provide reassurance and guidance, and to ensure safety and security in regards to newly prohibited weapons. Today, police have announced an information and education campaign aimed at responsible gun owners to let them know how they can take part in the amnesty and buy-back. Police have also separately launched an outreach campaign and have already made over 3,400 visits to schools, mosques, and churches, and are providing security advice around significant public events.

Dr Duncan Webb: What advice has he received from police around public safety and assurance in relation to significant public events, such as Anzac Day?

Hon STUART NASH: Police are working with the RSAs and community leaders to provide advice and ensure that police resources are deployed appropriately at Anzac Day services. It is important that the public be safe and feel safe when attending Anzac Day services, and police districts are working hard to achieve this. Police Commissioner Bush informs me that the decision to provide advice to community leaders and that some services should be consolidated was not taken lightly, and it was made with the safety of everyone involved. In the current environment, it is important that members of the public attending Anzac events remain vigilant and report anything suspicious or concerning to police.

Dr Duncan Webb: What advice has he seen around the measures that police are taking against those who are threatening to undermine public safety and security?

Hon STUART NASH: Our national threat level remains high. Sadly, there are a small number of individuals who are emboldened by what occurred on 15 March and have made threats and preached racist and anti-immigrant rhetoric online and in other forums. As I said in the House last week, police are monitoring these individuals closely. Police take this conduct extremely seriously and encourage the public to remain vigilant. I’m also advised that over the last week, a number of firearm seizures have been made by the police. As Police Commissioner Mike Bush has made clear, if you see something, say something.

Darroch Ball: What recent reports has he seen around police actions regarding organised crime since 15 March to help improve public safety and security concerns?

Hon STUART NASH: As per the coalition agreement with New Zealand First, of the 1,800 new police officers, 720 have a serious focus on national security, organised crime, financial crime, and cyber-crime. This investment is paying dividends. Just today, a year-long operation into the Comanchero gang saw the execution of search warrants at seven properties across Auckland—$3.7 million in assets were seized, including luxury vehicles and two homes. The importation of drugs, the profiteering off addiction and harm to others, is abhorrent. The professionals who aided this gang will also be held to account. I thank New Zealand First for their support for our police, and I thank police for their continued efforts to keep our communities safe.

Question No. 11—Transport

11. CHRIS PENK (National—Helensville) to the Minister of Transport: Does he stand by his statements and actions in relation to light rail in Auckland?

Hon PHIL TWYFORD (Minister of Transport): Yes, in the context they were said and taken.

Chris Penk: When, if ever, will construction of light rail to Auckland’s north-west be completed?

Hon PHIL TWYFORD: Light rail is the plan for both of Auckland’s proposed light rail lines. The two—city centre to Māngere, and the line for the north-west—are designed to extend Auckland’s rapid transit network, which currently consists of the heavy rail network and the Northern Busway. A market-sounding and procurement process is now under way, and the Government will be considering options shortly.

Chris Penk: Why did the Minister say at a recent public meeting that if it’s not possible to do both, Cabinet has prioritised the city centre to Māngere over light rail to Auckland’s north-west?

Hon PHIL TWYFORD: Because that is the situation in the hypothetical scenario that there’s not enough money to fund and finance both those lines. Cabinet has, indeed, prioritised the city centre to Māngere line because that has the strongest case; it’s connecting two of the biggest concentrations of jobs in the country. But make no mistake about it; we intend to deliver rapid transit on the State Highway 16 corridor to support the north-west growth corridor. It’s a massive growth area, and the north-western motorway currently resembles a carpark in the morning and afternoon peaks.

Chris Penk: So is there enough money or not?

Hon PHIL TWYFORD: Well, there’s never enough money for transport projects. There are always more projects than can be funded at any one time. We have a procurement process under way now with business cases, so the member’s question can only be answered substantively by the completion of that process.

Chris Penk: Does the Minister not accept that he’d already answered the question by promising that within the Auckland Transport Alignment Project document—namely, the completion of the project would be within 10 years?

Hon PHIL TWYFORD: That is certainly our intention: to deliver that project within 10 years, both light rail lines. But we are well aware that west Aucklanders were let down by the short-sighted decision to spend $860 million widening the north-western motorway without any provision for rapid transit on that motorway corridor. We don’t intend to take such a short-sighted decision. We will deliver rapid transit to support the north-west.

Chris Penk: I seek leave to table a uniquely annotated page within the Auckland Transport Alignment Project document.

Hon Member: By who?

Chris Penk: Annotated in the sense I’ve crossed out the bits that the Minister’s now broken promises on.

SPEAKER: So is the unannotated thing publicly available?

Chris Penk: For what it’s worth, yes.

SPEAKER: So all we’re being offered in this particular case is a publicly available document with the member’s markings on it?

Chris Penk: I thought that might be helpful, given the circumstances.

SPEAKER: The member will resume his seat.

Question No. 12—Agriculture

12. KIERAN McANULTY (Labour) to the Minister of Agriculture: What recent reports has he seen about the importance of sustainability to farmers?

Hon DAMIEN O’CONNOR (Minister of Agriculture): The Ministry for Primary Industries survey released this week shows the growing understanding among farmers that sustainability is vital for them to get the most value for what they produce. The results show that 92 percent of farmers surveyed focused on making their farm more environmentally sustainable, up from 78 percent in the last survey in 2009. That is very, very heartening. In my travels around the country, I’ve seen some excellent work farmers are doing using riparian planting, waterway control, and improving fertiliser management. I’d just like to acknowledge the good work that they’re doing in this area.

Kieran McAnulty: Why is sustainability so important to farmers?

Hon DAMIEN O’CONNOR: I’d like to inform the National Party and the rest of the country that it’s really important that our farmers and growers know that international customers are more discerning now about the origins of the food and fibre they buy. Those customers want to know the story behind their food and that it’s been ethically and sustainably produced. I note that Rabobank’s chief executive recently said that we can’t rely on the ways of the past if we’re going to get more value from what we do now. That’s why we applaud the farmers that are taking on sustainability with enthusiasm.

Kieran McAnulty: What is the Government doing to help farmers achieve their objectives?

Hon DAMIEN O’CONNOR: We’re doing heaps to help farmers—heaps and heaps. We’ve rolled out the SFFF fund, which is the Sustainable Food & Fibre Futures fund, which has $40 million available, not for business as usual but for leading-edge initiatives across the private sector. We’re working on an integrated farm plan template to help farmers meet all their obligations. We’ll be putting in money and effort to make sure that farmers get more from what they do, not just expect them to do more.

Bills

New Zealand Infrastructure Commission/Te Waihanga Bill

First Reading

Hon SHANE JONES (Minister for Infrastructure): I move, That the New Zealand Infrastructure Commission/Te Waihanga Bill be now read a first time. I nominate the Finance and Expenditure Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 26 August 2019.

Kia ora nō tātou. This bill establishes the New Zealand Infrastructure Commission/Te Waihanga to provide independent expert advice on infrastructure. Quality infrastructure is essential to improving New Zealand’s long-term economic performance and social well-being, but a short-term project-by-project focus by successive Governments means many of our key infrastructure networks need critical investment. For example, our transport and urban infrastructure is struggling to keep up with population growth and increased demand, and parts of our water network are over 100 years old. This infrastructure deficit is manifesting in housing unaffordability, congestion, poor-quality drinking-water, and lost productivity.

We announced the new Infrastructure Commission at the Building Nations Symposium last year in Auckland. The idea of nation-building is something that New Zealand historically did well and is a cornerstone of this Government’s narrative. I think fondly to the days of the Ministry of Works, where there were options other than leaving school, lounging on the couch, joining a gang. Consequently, in the absence of quality long-term programmes, we are seeing far too many provinces today struggling with the infrastructure deficit.

Now, this is something many of us take for granted in New Zealand—i.e., basic infrastructure—but I can assure you that one of the loudest complaints articulated to me when I visit the regions is roads, bridges, buildings, water infrastructure, and telecommunication. So what’s wrong? Quite simply, New Zealand lacks a long-term infrastructure plan. There are some small bright lights, but in terms of a comprehensive statement, it eludes us. We have an 80-page, glossy document from 2015: lots of pictures of ports and cranes, but no way of quantifying the extent of our deficit. I do not make that statement in any way wanting to cast a negative reflection on the people who have joined over the recent period of time and sat upon the infrastructure committee, but a fact is a fact.

During the development of the policy related to this bill, extensive engagement with the sector was undertaken and a number of problems were highlighted: a lack of integrated investment decisions within and across central and local government, and a lack of visibility, pipeline, and scale. Our overriding focus is on building new assets, rather than the outcomes we’re trying to achieve and our ability to deliver on them. Central government and local government procurement capability is often lacking. The industry has been saying this for a considerable period of time, and I wager a guess that virtually every MP in this House that has within his or her mission matters of economic importance will have encountered people from that sector making these points. We require a step change.

Ministers have listened, and I think I should make the point that I’m sure Ministers under the last regime heard similar entreaties. So, this bill seeks to deliver what the sector has been asking for: an entity with autonomy to provide robust impartial advice, vision, and strategy. The authority to commit public funding, to actually invest on behalf of the Crown, will continue to remain with the elected politicians enjoying the privilege of holding a warrant to be Cabinet Ministers. However, a commission is important in terms of coordination and planning, ensuring that we make the most of the infrastructure we have planned long term.

So the two main areas that require our focus: the first is strategy and planning. Good infrastructure outcomes require us to think about the full infrastructure lifecycle, from planning to delivery. There will always be political debate, and indeed I am embroiled mildly in such a debate at the moment in terms of the future of the Ports of Auckland, but I’ll be the first person to say that the creation of a reservoir of talent and expertise is overdue. Even if, from time to time, elected politicians like my good self may not thoroughly or exhaustively agree with the responses, that does not mean that that quality of advice should not be served up to us.

The second group of functions for the commission is to provide new expert transactional capability to support the delivery of projects across central and local government. I need look no further than what I colloquially call the railway loop in downtown Auckland. I’m sure there are a host of lessons for Ministers, MPs, and all stakeholders to learn from that large infrastructure project and what transactional improvements we might take on board in further urban development transport infrastructure developments. So the establishment of the commission—Te Waihanga, which, in Māori, remains “to construct, to conceive, to design”—is a concrete step that this Government and, God willing, future Governments will use and will improve the level of accountability in terms of how we plan, coordinate, and deliver.

I have briefed the Opposition spokesperson on the bill and the vision behind it to ensure that we try and find some common ground. They have had nine years also of looking at the lessons, looking at areas for improvement. To deliver this vision, I asked all of my colleagues in the House to support the bill in this regard. I commend the New Zealand Infrastructure Commission/Te Waihanga Bill to the House.

Hon JUDITH COLLINS (National—Papakura): Thank you, Mr Speaker. The National Party will be supporting this bill to select committee, and we would like to hope that the spirit of cooperation that the Minister has shown towards us in this matter will continue so that we can, in fact, have good input into it not only in select committee but further on.

I think most people who have had any ministerial roles around infrastructure, whether it’s myself in energy and resources or whether it’s the Minister and many others, those of transport and others, will understand how infrastructure is something that this country needs, and it needs a lot of it. National’s 2017 election policy was to create a new national infrastructure commission to lead more public-private partnership projects and to utilise National’s infrastructure investment. The commission would also have ensured that New Zealanders get faster access to new schools, hospitals, and roading.

I have been astonished at the amount of infrastructure that we have in New Zealand today that was actually built in the 1960s and the 1970s. A lot of it has been referred to in a negative way as Think Big but, actually, if we look at our hydro dams that supply the vast majority, about 63 percent, of our renewable energy, or energy in our electricity supply, most of those are part of Think Big projects. I well remember as a child—obviously, merely a tot at the time; not really, but let’s just keep the fiction going!

SPEAKER: The member is far too young to remember that.

Hon JUDITH COLLINS: Far too young. Thank so much, Mr Speaker.

Hon Ruth Dyson: Your grandmother told you about it.

Hon JUDITH COLLINS: Yes, well, if she had been alive, she would have. There was the “Damn the Dam” song—there was all of that—and, actually, those projects, some of them have turned out to have been the greatest thing that any Government could have done in terms of securing our renewable energy supply. There were also projects like the Marsden Point Oil Refinery. There were the gas projects of Methanex. All these projects were big infrastructure spends that a Government was required to come into to do, because we are a big country physically—greater in size than the whole United Kingdom and smaller in population than Melbourne—but we do not have enough people who can invest in some of these big projects without having to have a Government to help.

We also believe, on this side of the House, that we should look more to public-private partnerships. We certainly used that in the big infrastructure spend on the prison at Wiri, in South Auckland, and that has so far, in my opinion, been a successful project. We see that there is this need to look ahead and to plan. We think it is a good idea to have people who are independent from the Government and from Parliament to look at these issues and to give us views that we may be challenged by. I think it’s a good thing to have people to challenge us on our views and to give us views that we may not have even heard of, and I think that’s something that this commission will want to do.

I welcome the fact that the Minister has involved us quite early on in the process too, and also to discuss appointments to the commission, which I think is a smart thing to do. We believe that this is a commission that would need to have experts but also people who are good at looking to the whole of New Zealand and to what is needed rather than to individual projects that may only help a very few people. I would have thought that if we had had this sort of commission put in place by the Government, if we had got it in place ourselves, it would have, possibly, prevented some of the rather foolish campaigning on things like stopping the East-West Link, in Auckland, which is a major thoroughfare with the largest number of trucks and lorries travelling down that. That project also included cycleways—entire refurbishment, essentially, of the waterfront—and one of the things that we have seen is nothing happening on that.

These are the sorts of things that a commission that is free of interference from politics should be able to deal with. I think, also, we need to have a commission that can look without the—somewhat occasionally—slightly jaundiced view of us in politics around what is best for New Zealanders, rather than pushing a particular bandwagon. I am sure that many people would suggest that, today, if we didn’t have the motorway system, we would be a much less productive country than we are now, and I believe fully that if we had a better motorway system—more thorough—we would have a far more productive country.

When I think about some of the big infrastructure projects that we have been involved in around the Waterview Tunnel—and I know that the previous Labour Government also had input into that—these are projects that are game-changers for our cities, and, therefore, for New Zealand. I think also too of an infrastructure project that people often just take for granted now, and that is the infrastructure project of the ultra-fast broadband roll-out, very successfully—very successfully—done in New Zealand, still continuing today, but it’s all within plan and it’s within budget. That’s something that many other countries have not been able to do. So it was a very well-thought-out project, properly planned, and actually had a lot of expert advice in there, which was listened to. That’s the sort of infrastructure project that I’m sure a commission will want to look at what else is needed.

I’m heartened by the views of the Minister for Infrastructure that infrastructure also includes things like water, the fact that we have a country with a lot of water on one side of it—on the western side; not so much on the eastern side. I understand that we have so much water, but the problem is not all of it is to the standard that we would like it to be. I think it is important that we look at these issues, and that’s why we believe that this is something that we should support, and certainly to the select committee. We would like to hope that the select committee process and the bill do not end up giving any dictate to how funding is to be arranged for infrastructure projects. Although we now know a lot more about public-private partnerships, and we’ve certainly used those very successfully, there will be other forms of funding that we have not yet thought about or used.

I think it is also very important to understand that we should be available and open to looking to every other form of funding that might help New Zealand, and making sure it’s in the best interests of New Zealanders. New Zealand doesn’t have enough capital for what we need to do. As well, we do not have enough people skilled in these areas—of construction—that we need. So the best way to start getting that going is to have a plan, and the best way to end up with a plan—a national plan that can follow through from Government to Government, and is not just at the whim of a Minister or a Prime Minister—is to have this sort of commission. We hope that this commission will be exactly what the Minister has said he believes it will be. We hope it will not become so completely taken over by whoever is the Minister at any stage in the future, and that the commission will be one which can give robust advice to a Minister and, sometimes—actually, often—advice the Minister doesn’t want to hear. That is the role of a commission that really wants to add value, and to be independent from a Government, and on that basis we will support this bill to select committee.

Hon PHIL TWYFORD (Minister of Housing and Urban Development): Thank you, Mr Speaker. It’s a pleasure to stand here and support this bill, and acknowledge the leadership of the Hon Shane Jones in developing this piece of work to establish a New Zealand Infrastructure Commission.

Through to 2022, New Zealand will be spending net capital of $42 billion on infrastructure, and that figure alone I think should be enough to focus our minds on the need to improve the quality of the spending, to build the right infrastructure projects at the right time and the right place, and to lift the procurement performance of central government across the board. Not to put too fine a point on it, this bill is a response to what I think has been a less than optimal performance for some time in the issue of the procurement of infrastructure. Government itself has not even been properly coordinating its procurement of major infrastructure projects across the public sector. It certainly hasn’t been operating strategically within the Australasian infrastructure market as it should be doing, and it hasn’t adequately built a multi-year pipeline of large infrastructure projects, which would allow the industry the certainty and the ability to plan its workforce and its ability to engage with those projects.

Some Government agencies are very good at large projects; others not so. It was only a few months ago that we discovered that Government agencies, by and large, were not even following the Ministry of Business, Innovation and Employment’s own procurement guidelines for construction contracts—guidelines that had been issued by the Government’s lead procurement agency. So Minister Parker put paid to that, and Government agencies and departments were directed to follow those guidelines, but the fact that it hadn’t been happening I think illustrates the lack of a cohesive policy in this area.

The commission that’s proposed under this bill will have two main roles: strategy and planning first, and, secondly, procurement and delivery support. So the first: the importance of developing a policy framework for procurement—a set of principles upon which Government agencies would undertake their procurement, designed to lift the quality and the standard of procurement, and to develop that multi-year pipeline. Second one: delivery support. When there’s an agency or a ministry that has a big project on its books but doesn’t necessarily have the capability in-house and the history of doing these large projects, the commission would be able to step up and assist it and take over that procurement role.

One of the really important opportunities here is for the central government to coordinate its procurement work with local government. If you take the construction industry, central government’s about 20 percent of all the work that happens in New Zealand in a given year, but, actually, local government, while less than 10 percent of the market, still is a very, very significant customer. Now, if central government and local government were to get together and coordinate their procurement, that could make a major positive difference to the market.

The commission is intended to be a one-stop shop for investors and the big construction companies who work in this space—a place for them to come and talk, to understand the plans and the needs of the New Zealand Government and the wider New Zealand market, and to provide expert advice in planning and strategy for all bits of the public sector.

Much of the thinking that has supported the development of this bill has drawn on work that’s been going on in Canada, right across the United Kingdom, and Australia over the last decade or so, where a number of Governments have been trying to lift their game to achieve much greater efficiency and better outcomes for big infrastructure projects. We’ve seen in a number of those countries arm’s-length commissions established that have taken the infrastructure role out of a ministry, out of Treasury, out of central government, and established an arm’s-length, independent commission with the idea of addressing two main things. The first is that—and we see this in New Zealand currently—central government’s capability on infrastructure is spread over, I think, three different units across Treasury and the Ministry of Business, Innovation and Employment. So you just don’t get the concentration of capability that would allow you to achieve that kind of centre of excellence that you would want.

The second is to make it arm’s length from Government, and to take some of the politics out of it to try to build a cross-party consensus and to engage better with the private sector. Ms Collins, in her speech before me—unwittingly, I think—illustrated one of the very problems that this bill is trying to address. She articulated such a narrow, ideological, and highly partisan attitude towards infrastructure projects. That is the very thing that this commission, by lifting the general standard of procurement practice, building consensus across Government and across the political spectrum and, indeed, with the private market—those are the challenges that this bill is setting out to address.

I want to acknowledge a couple of influencers in the work that led up to this bill being drafted. One is a number of the Australian infrastructure agencies: the federal agency Infrastructure Australia, Infrastructure NSW, and a number of what they call i-bodies. These arm’s-length infrastructure commissions have been extremely helpful, and Minister Jones and I and Minister Robertson have had extensive conversations with a number of the Australian bodies. We’ve been over there, they’ve been over here, and they’ve been extremely helpful in teasing out the model and the different options that we could look to in setting up this new body.

I also want to acknowledge Infrastructure New Zealand, the industry body that represents a lot of the infrastructure companies, who have been a prolific generator of ideas and proposals right across infrastructure, including in my areas of responsibility around housing and transport and urban development. Infrastructure New Zealand has been advocating for making policy proposals for the establishment of an arm’s-length infrastructure commission, as we see here in this bill today, and they deserve, I think, significant credit for that.

I want to finish by just briefly commenting on a companion piece to this bill, and that is the work that I’ve been leading with Treasury on establishing new ways of funding and financing the infrastructure that’s needed for urban growth. That work, I think, sits alongside the work that Minister Jones has been doing on the new Infrastructure Commission. It’s designed to provide new options to fund and finance the roads, the three waters, broadband, electricity, and all infrastructure that’s needed to allow our towns and cities to grow. We will, I hope, shortly bring a bill to the House to legislate the framework for this new way of financing infrastructure that will allow private financing, bond finance, to be invested in the infrastructure for new urban growth, paid back over the lifetime of the asset up to 50 years, with an infrastructure levy on the properties in that development. It would, effectively, bypass the council balance sheets and allow us to tap into a limitless supply of investment capital to build the infrastructure that our cities need.

This kind of innovation is the kind of thing that the Infrastructure Commission wants to foster and, I think, with these two initiatives side by side, New Zealand can truly lift its game in the procurement of big infrastructure projects. We’re talking about built infrastructure, engineering projects, everything from energy, water, roads, electricity—all of the things that we need to build an efficient and prosperous New Zealand. Thank you.

ALASTAIR SCOTT (National—Wairarapa): Thank you very much, Mr Temporary Speaker. Mr Temporary Speaker, it’s a pleasure to rise on this occasion with you in the Chair. I’d like to pick up on a couple of things the Hon Phil Twyford, the previous speaker, said. There is absolutely a need for this initiative, so it’s a very good initiative, in my opinion. Mr Twyford talked about a number of other projects and reviews going on. He mentioned Three Waters, for example, and I imagine the thinking in that review will feed into the commission’s work, because there is a lot of work to be done in the provinces. I note that the sponsoring Minister, the self-proclaimed prince of the provinces, is leading this bill.

There is an issue in the provinces. There is a demand on local government to raise their standard, raise the bar. The bar set by the community continues to rise; the funding available in those smaller communities does not rise with it. The regional towns tend to have lower per capita incomes, and, of course, they’ve got the infrastructure that they’re obliged to maintain and keep up, or maintain the upkeep of. So I was very pleased to listen to Minister Jones.

Minister Twyford’s comments around public-private partnerships (PPP), and the idea that an investor can bring in an investment in a bond—I was interested to hear the words when he said “bypassing the local government balance sheet”. That was an interesting concept that he dropped into the conversation. That’s a very worthwhile thing to investigate. There are a lot of people who have cash who are willing and able to invest in these big projects and small projects, whether it’s local council, regional council, small-town infrastructure, or big roads infrastructure. So that was a good comment from Minister Twyford.

I wonder if the Government will extend the pro-PPP argument to things like prisons—because I know that the Government took that off the table at one point—and whether that would be considered a piece of infrastructure that could be funded by a PPP, or indeed schools or hospitals, or whatever else you want to include in the conversation. So we’ll see where that goes, because that is all going to be interesting stuff.

There are issues. Even this week, in the South Wairarapa District, there is an E. coli warning. The water has to be boiled again in the town of Martinborough. This is unacceptable in the 21st century, and I wonder whether, other than the funding and procurement that the Ministers have mentioned, the commission will look into the governance of local government or the structure of local government—not just the funding or the balance sheet but who is running the infrastructure. Who is in control and who is managing the three waters in these towns? I know Minister Mahuta’s Three Waters Review is looking into that, and I know there are some models that are being proposed, but there is an issue. There is definitely an issue that needs to be addressed, and so I commend the Government for bringing this commission, and at this point we will be supporting it for all those reasons that I have outlined. So it’s an interesting discussion.

Roading versus rail—you know, again, it’s another example of where funding really is not 21st century. We still fund the roads separately from the rail, whereas in reality, all we’re doing is getting a 20-foot container from A to B. The infrastructure of both roads and rail should be considered together, and probably shipping as well.

So I think that if the commission can bring all that thinking together—and I also commend Infrastructure New Zealand on their huge amount of ideas and contributions that they make to the discussion—and if the Government and this side can bring it all together, I think, without politicising it, and ensuring that these guys remain independent, we could have some very good results if we let those three to seven people do the job. Thank you, Mr Temporary Speaker.

Hon AUPITO WILLIAM SIO (Minister for Pacific Peoples): “Mr Speaker”, I notice that your voice and authority are the same, but you look different—you look younger! Mr Temporary Speaker, thank you for this opportunity.

I’d like to spend a bit of time talking about what’s in the bill and why the bill is necessary, but also talking a little bit about what the future of this work is about. Before doing so, I note that Alastair Scott, the previous speaker, made reference to the Hon Shane Jones as the self-proclaimed champion of the regions. I do want to say that, yes, whenever Matua Shane makes reference to himself in that way, there are looks on the other side of the House, but I want to say that it works. I like it. I hold it up. Our communities like it because they see somebody in this House that’s specifically focused on championing the needs of the regions. Now, you’ve missed the opportunity, that side of the House, of identifying somebody on your side to be the champion of the regions.

So, now, it is a real pleasure to acknowledge that the Hon Shane Jones is, in fact, the first citizen of the region, the champion of the regions, and the founder of the Provincial Growth Fund. But I also want to acknowledge this work here that he’s introducing to this House, the New Zealand Infrastructure Commission/Te Waihanga Bill. This is something that I think is a challenge to all of us here in this House to look to the future.

If you look to the words “te waihanga”, in Māori, I’m advised it means “a cornerstone, or to make, create, develop, build, construct, generate.” A cornerstone, as some of us will understand, is a key part of building solid foundations for the future. We all know that we need good roads. Roads are necessary to enable the delivery backwards and forwards of goods and services. We all know we need good water infrastructure. It’s about lifting the well-being of our community, and sometimes when you get out to the regions, you can’t help but ask yourself why it is that we have good drinking-water in some parts of New Zealand and in other parts, not, or in other parts they are relying on underground water or relying on rainwater. That’s why, sometimes, we have the kinds of issues that we’ve had to deal with in some of the regions. But—

Hon Jacqui Dean: Oh, that’s such a Wellington comment. Rainwater’s good!

Hon AUPITO WILLIAM SIO: No, don’t hush me on this one, madam. I’m saying to this House that this is a critical bill if you’re sincere about laying strong foundations for this country.

We don’t have a population policy. We have never considered that, yet our population grows on a regular basis—2 percent, generally—and that’s not taking into consideration those people who come in and out of our country and end up residing in Aotearoa New Zealand. It’s not just the roads and it’s not just water; there’s a host of other infrastructures that are necessary to ensuring that at the end of the day, the laws that we pass here and the work that’s been delivered by our public sector actually delivers for the people and actually lifts the well-being of people.

So it is a visionary work, and I note that the problems in the past, and that’s largely because of our democratic system—the three-year term means that often parties in this House are short-sighted in the things that they pick up and run with. We all know that it takes nine years for one party in Government to set things up and then sometimes they get things wrong, and then it takes another term for the next Government to come along to try and fix what they’ve inherited. We might end up playing, continually, the political game in here, but at the end of the day, the people who suffer are the people that we are supposedly here representing. Again, I’m emphasising why this bill is important and the need to look long term, the need to look to the future.

Look, the advice I’ve received is that we’ve got an infrastructure deficit. It says successive Governments—I’m not necessarily pointing the finger at that lot for the last nine years; it says “successive Governments”—have failed to plan for a long-term agenda. So I suspect every MP in this House will have examples of the specific infrastructure that their communities might need. Long-term infrastructure, particularly the kind of infrastructure that benefits present and future generations, requires significant investment. It also requires us to debate issues about who pays for that and how much we end up paying for that infrastructure. Mr Jones was able to secure $42 billion out of last year’s Budget to start and begin this work over a four-year period. Now, I would say that that’s a small amount of money because in actual fact, when you set up the commission—when you set up the commission—

Hon Member: I thought it was only $3 billion.

Hon Alfred Ngaro: $42 billion!

Hon AUPITO WILLIAM SIO: Maybe I got it wrong.

Hon Shane Jones: No, no, he’s right: $42 billion over 10 years.

Hon AUPITO WILLIAM SIO: Over 10 years—$42 billion over 10 years.

The reality is we’re talking about infrastructure that at the end of the day delivers services that will ensure the people that we represent are served appropriately and receive the kinds of services that modern economies should be able to receive. Now, I’ve only talked about roading and water, but there are other infrastructures that require significant investment. For example, some in this House believe that everybody has access to the internet, but I know there are a number of communities, including out in the regions, that still do not have easy access to the internet. In this day and age, you would think everybody in New Zealand has access to internet. So this is an important work. That’s all I’m emphasising.

It’s an important work that does require a united position by this House, because if it isn’t united, then once we’re out of office in 18 years, that lot will come in and try to change it in 18 years.

Hon Member: Don’t be so modest.

Hon Kris Faafoi: OK, 21.

Hon AUPITO WILLIAM SIO: OK, 21, then.

I note that this commission needs to be independent. Yes, it needs to be independent because it needs to have a long-term focus, and our democratic system only allows us to look at three years ahead. But this is visionary stuff, and I would have to say with modesty that this is again a demonstration of the leadership, the vision of this Government because—

Jonathan Young: Come on!

Hon AUPITO WILLIAM SIO: Absolutely, absolutely. It requires vision to come up with these kinds of ideas, OK? So I have no hesitation to commend this bill to the House and invite the general public to make sure they have an opportunity to submit to this bill at the select committee stage.

JONATHAN YOUNG (National—New Plymouth): Thank you, Mr Temporary Speaker. Can I just acknowledge the previous speaker, the Hon Aupito William Sio, and I think it’s a matter of history, of which I think the Minister is fully aware, that this idea around an infrastructure commission has stretched over not just the thinking of this Government but also the thinking of the prior Government. In fact, you know, Policy 2017 talks about this infrastructure commission being needed because of the long-term significant investment that probably not one region can ever afford, not one particular sector can afford, but it needs to be a “New Zealand Inc.” concept and work programme, and we certainly need to have the people who understand the issues, the challenges, the supply chains, the procurement very much involved in bringing recommendations and advice to the Government of the day.

Can I just encourage the previous speaker not to be so harsh on the former Labour Government for nine years. When he referred to nine years of mismanagement and the next Government coming in to have to fix it up, he should not have been so harsh on Helen Clark. In fact, he did refer to the Minister securing $42 billion worth of infrastructure funding, and the Minister said, “Yes, over 10 years.”, whereas the previous policy of Bill English, the infrastructure Minister at that point in time, was $32 billion over four years. So there was not, in a sense, a deficit in his term, his framework, because there was significant investment planned by the previous National Government—in fact, a 40 percent increase on the prior four years.

So, look, we understand that in a modern society, a modern economy, infrastructure is the backbone of how everything works, whether that’s ports, roads, airports—the big, big items—or whether it’s hospitals or all the things that people who live in a successful country and economy can rightfully expect. But it’s incredibly important when we make this long-term planning that we do it in order to streamline processes and procurement; that we ensure that we have the human capital, the skilled people, the construction entities that can continue to support infrastructure replenishment and rebuild, and new projects for the betterment of New Zealand’s community and our society.

You know, some of these projects are literally billions of dollars—certainly hundreds of millions of dollars and many of them tens of millions of dollars—but what we need to ensure is that we don’t have a workforce that’s here today and gone tomorrow. We need to connect them sequentially so we can not only do it sequentially in order to manage workforce but also the economics around this. You know, our spokesperson for infrastructure, the Hon Judith Collins, referred to projects in the past which were termed Think Big. Back in the day, you know, there was a lot of enthusiasm and people probably thought that it would drive the country broke, but they have been very important projects, very important projects in time—decadal projects that have had life and input and economic value for decades and decades to come and certainly cost hundreds of millions of dollars.

This is the complexity that this commission will address. And, you know, we don’t need novices. We need people who are well-experienced, who are connected also in the Australasian, even global, context as well, so that we get the best value for taxpayer money when the money comes from taxpayers. We certainly believe that there is an opportunity for public-private partnerships around some of these infrastructure projects, and let’s hope the commission get an opportunity to look at that as well.

I’m very pleased to support this bill, as we are, at the first reading, and we trust that the select committee will do a thorough job on this, because this is for the benefit and the growth and the development of New Zealand and all that we need. Thank you very much.

GARETH HUGHES (Green): Kia ora, Mr Speaker. Ngā mihi nui ki a koutou. Kia ora. I rise to support the New Zealand Infrastructure Commission/Te Waihanga Bill. That was an incredibly curious contribution from the last member, Jonathan Young, because, essentially, if I understood it correctly, he was sort of saying, “Well, we had the idea in our previous nine years of Government.” If that’s the case, why on earth wasn’t it actually implemented or actioned during the nine years of the previous Government? Look, I think the voters are going to give the Opposition very short shrift to say, “We had the idea. Give us some support as well.”

Look, what Kiwis are going to be questioning and evaluating the contribution of various Governments on is the actual action and difference they bring to New Zealand. That’s why I’m proud to be supporting this bill—because infrastructure is such a critical component of delivering a richer New Zealand for New Zealanders. What I mean by that is “richer” in an economic sense and a household finance sense but also in a cultural and environmental sense, because I believe infrastructure can deliver better quality of life outcomes, nicer communities, healthier cities. So we’re supporting this because we believe it’s a step towards a richer New Zealand.

As the Government’s about to spend $42 billion on infrastructure spend over the next three years—an estimated amount—it’s important that we get it right, and that’s why having an infrastructure commission created to help with planning, strategy, procurement, and delivery is critically important. An area that the Green Party was particularly focused on in the development of this legislation was making sure that when we’re talking about infrastructure, we talk about the whole gamut of it. When we talk about infrastructure, I think everyone knows we’re talking about roads and bridges and buildings, but what this legislation also contains is water infrastructure, telecommunications. Now, when you look at the previous Government, they say they had this idea of a commission but didn’t implement it in Government. I think the challenge was that if they had one idea in Government over the nine years when it came to infrastructure, it was roads, roads, roads. That was the single plan they had.

What we also need to do is make sure that when we talk about infrastructure, we’re also talking about rail, electricity and power infrastructure, but I would also add—and I think this is a unique Green contribution to this debate on infrastructure—that it’s not just hard infrastructure. It’s not just power poles or rail lines—I would put it that it’s the water infrastructure; it’s our natural infrastructure; it’s the lakes, the mountains, and the waterways. This is actually how our country and our economy operate: built on the natural environment. You couldn’t farm in New Zealand without the natural infrastructure. You couldn’t have such a vibrant and valuable tourism industry if we didn’t have such spectacular natural infrastructure that people literally fly from around the world to come visit, because it’s so special.

When you look at the idea of—often in this House, I’ve heard it portrayed as a trade-off between the environment and the economy. We somehow have to sacrifice our environment if we want to grow jobs. I absolutely reject that argument. We only have an economy because of our natural world. Kate Raworth, a UK-based academic, described it as the “doughnut economy”. Instead of portraying the environment and the economy as in conflict or needing to be balanced, you actually need to envision our economy and our society much like a doughnut. The outer limit of that doughnut, of the circle, is the natural world, and if we go outside of that, everything within it—which is our economy and our society—can’t actually operate. So we’re pushing very hard for a more expansive set of infrastructure definitions. I’m going to be very interested to hear the select committee submissions on this, because I think many New Zealanders who love and treasure their environment will want to see that our forests, our wetlands, and our beaches are considered as part of the conversation on infrastructure.

An area where you can see the Green Party’s influence and touch on the legislation is in clause 11, where climate change is explicitly mentioned as both a thing to be cognisant of in terms of mitigation, but also in terms of adaptation. Now, that $42 billion estimated spend over the next three years on infrastructure in New Zealand—we can choose to do that smartly, to make sure we’re saving taxpayers down the line from the risks of climate change.

We’re seeing the impacts of climate change already in New Zealand in terms of infrastructure. I think of my home region of Wellington where almost 50 percent of Greater Wellington Regional Council’s expenditure in recent years is on flood wall protections. Now, this is directly as a result of rising sea levels and the impacts we’re seeing in terms of the water space. It’s happening in other regions, such as the Kapiti Coast. It’s happening in Otago, where sea walls are being eaten into. When we’re spending literally tens of billions of dollars of taxpayers’ money on infrastructure, we need to make sure we’re spending it wisely and protecting that investment into the future as seas rise and as weather patterns change.

As we hear from the New Zealand Climate Change Adaptation Technical Working Group head, she says, “Typically, we hold the line, we build back a bit response, and that won’t pass muster anymore.” We will be forced to fund the transition, the way we make decisions, how we do business, and where to locate ourselves, so it’s critically important that these are the big issues that will be considered by the commission in their planning and strategy. We’re seeing the impacts of climate change today, and it’s only going to worsen as time progresses. So we need to spend our money wisely to make sure that if we are investing in infrastructure for a richer New Zealand, we’re doing it for future generations in this land that we treasure and love. Kia ora koutou.

Hon JACQUI DEAN (National—Waitaki): Thank you, Mr Speaker. There’s much in this New Zealand Infrastructure Commission/Te Waihanga Bill that National does support. I think that the framework that the commission is proposing is something whose time has come. Previous members around the House have been pointing the finger at who did what and who didn’t and what damage they might have done. Well, that’s all fine, but I think that this infrastructure commission is really a reflection of the thinking of successive Governments around the provision of infrastructure for New Zealand.

I think what I can support and what we can support in this proposed shape of the infrastructure commission—and it’s not spoken of in the bill or the commentary, but I’m sure that the select committee will explore this—is the ability that this provides, potentially, to get ahead of the issues. The previous speaker, Gareth Hughes, did mention climate change mitigation, and that is very important and increasingly emerging as an issue that the Government and the Parliament need to consider in infrastructure going ahead 30, 50, 100 years and beyond.

Now is the time where this Government and Parliament appreciates and understands that we need to evaluate all of those challenges, whether it’s climate change, whether it is methods of investment. We favoured, in our proposal, public-private partnerships. That is not a philosophy that is necessarily shared by this particular Government, but I believe our input into the select committee process on that will be interesting in exploring what that might look like in terms of getting ahead of that challenge—getting ahead of the wave—so that we are not always building and contemplating infrastructure in a reactive sense, because when it is reactive, which it is now, with that comes priorities and funding challenges.

We have got an opportunity—and we, the biggest Opposition party and the biggest party in this Parliament, will proactively work with the Government on this bill. We won’t agree on everything, and those issues will be teased out in select committee. But in this reading we do support this bill.

Hon MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): E Te Māngai o Te Whare, tēnā koe. E ngā mema o Te Whare nei, tēnā tātou katoa. I’m pleased to rise in support of the New Zealand Infrastructure Commission/Te Waihanga Bill. Can I say from the outset that this is a bill after my own heart. It’s a bill that’s not only strategic but smart. It’s got a way of unifying the political divide, from what I’ve heard in the House today, because no one’s going to argue that long-term investment into infrastructural development in the infrastructural market of New Zealand that expands out to 30 years to help guide Government to where we put the $42 billion in the next three or four years—I believe is the right thing to do.

So we’ve had this bill presented by the honourable Minister Shane Jones—the prince, the champion of the provinces—and I can attest that in places like the Tai Rāwhiti, like Wairoa, like Hawke’s Bay, he walks on water. He walks on water. Of all of the things that could bring productivity in places like Tai Rāwhiti, it is the work of the honourable Minister that local government and iwi and other service providers talk about.

But back to the bill, because it’s important that we talk about the attempt or the aims of the bill. It’s been traversed by previous speakers, but clearly, having an arm’s-length commission that advises the Government both in the areas of strategy and planning functions but also in the support functions as well is something that needs to be commended.

Like other previous speakers, I come from small communities and towns on the East Coast where water, roading, housing—but also, on the positive side, they are trying to grow the local economy, trying to maximise getting our produce to markets through roads that don’t close down every winter because they get washed out; to explore other transport systems because once the roads close down, we can’t get our produce to market. So a commission like that that can influence and help provide advice to the Government is something that we need to support and commend, and, like I say, I’m excited about that.

The Minister, in his press release, talked about the infrastructural commission obviously working with the second-largest asset holder, which is local government. I want to put a plug in there for the Māori economy. I want to put a plug in there that as the Māori economy grows to about $50 billion, as we morph into post-settlement entities—and this isn’t just about settled iwis; these are land incorporations, large whānau trusts that are operating as we speak, small businesses, for example. As they develop and evolve over a certain time, what you will start seeing, in my analysis, is a purchase into local utilities—whether it’s ports or whether it’s the provision of electricity power, for example. So if there was a potential area that we could expand who this commission will be working alongside, I’d just like to put a holding pattern in there for our iwi authorities around the motu. I mean, it would be silly that if we are working down in the South Island, we aren’t, obviously, considering Ngāi Tahu, similarly with Tainui in the middle of the North Island, but also factoring in other iwi organisations like Ngāti Whātua, etc.

It is a commitment that we want to invest in our local communities. We see the benefits that it derives not just from an iwi perspective but for everybody that comes from those particular communities—that we do have safe roads, that we are exploring wider transport systems that can allow both the transport of people and goods to market, but also ensuring that we’ve got the housing infrastructure to meet the growing demands and the growing population in those communities. It’s also ensuring that we’ve got good, safe drinking-water.

It is a really good bill. I’m excited that it’s been brought to the House. I want to commend the Minister for bringing it to the House, and the work of Cabinet and other Ministers that have had a hand in bringing this bill to the House. It’s important that people get the opportunity to submit on it when it goes to the select committee. I commend this bill to the House.

Hon PAUL GOLDSMITH (National): This bill, the New Zealand Infrastructure Commission/Te Waihanga Bill, the National Party does support in terms of setting up an independent infrastructure committee. One of the key issues around the provision of infrastructure, everybody in New Zealand recognises, is that as a growing country and economy, we need to continue to invest in all sorts of basic infrastructure in order to maintain a growing economy. One of the issues that we have is that it costs a lot in New Zealand, per kilometre, to build tunnels or roads or any element of the infrastructure. It’s very expensive in New Zealand.

So one of the useful things that any Government can do is to try and develop a pipeline of work going out 20, 30 years so that international deliverers of this kind of infrastructure work—contractors—can come to New Zealand and compete, so that we can have a wide range of world-class producers of good quality infrastructure here in New Zealand, competing over an extended period. Otherwise, if we sort of go one and then turn off for five years and do another and turn off for five years, we struggle to attract that real international competition, and things are much more expensive.

So that was the thinking behind the Auckland Transport Alignment Project, which the previous Government put together for the first time, getting agreement between the Auckland Council and the Government about what the priority projects were in transport so that you had a pipeline and so that international contractors could come in. The problem was, of course, that no sooner had we got that all together than there was a change of Government. Phil Twyford comes along and changes all the priorities—throws out the East-West Link, turns off a whole bunch of things, and turns on a light rail. So that makes us a little bit nervous about this, because they haven’t demonstrated goodwill in terms of maintaining that integrity of a pipeline of work over an extended period of time which people can have comfort about.

Our hope is that this independent commission can bring a little bit more sensibleness to the discussion so that we can look far out into the future and have general agreement about a number of things that need to be done over an extended period, so that we have that pipeline, and so that we can get more efficiency into the provision of infrastructure in New Zealand. We can only spend each dollar once, and if we can get much more out of every dollar that we spend by having a good competitive environment, that would make a difference.

So we’re very much up for the discussion. We support the proposal. We’re looking forward to having a robust debate through the course of the select committee so that we can come up with a system that works well, but, ultimately, its success depends on the discipline of future Governments. If decisions around infrastructure are made on a highly ideological basis, then it becomes difficult to have that unity across the House. So that’s where my plea would be to this Government: to be focused on robust economic analysis of the outcomes of the investment that we’re seeing in infrastructure. Thank you, Mr Speaker.

PAUL EAGLE (Labour—Rongotai): Thank you, Mr Speaker. It’s my pleasure to talk on the first reading of the New Zealand Infrastructure Commission/Te Waihanga Bill. It’s exciting. When I first saw this, I thought “about time.” So I want to congratulate Minister Shane Jones, the first citizen of the provinces, for finally getting it on the road, literally. This is a really important bill in terms of getting an entity under way to provide independent and expert advice on infrastructure.

In his speech, he talked about what was wrong, and it was quite simple: there is no long-term plan. There are lots and lots of ideas and lots and lots of little plans, but no one cohesive plan for Aotearoa New Zealand in terms of the infrastructure that a whole range of entities are building. That’s short-sighted, that’s costing millions, but more importantly that’s costing lives. I believe this bill will address that.

He also mentioned four problem areas, and some of those I just want to talk about further in a tad of detail, and that is the fact that we’ll see some integrated investment decisions—that’s really important. Every speaker has talked about a pipeline. My colleague Meka Whaitiri talked about integrating that local and central government procurement capability. I think that’s important. That word “capability” is important because I know many in local government, whilst big on ideas, lack the capability to deliver.

This bill sets out the functions of the commission in two main areas, the first being strategy and planning—that’s important. What I foresee is that they will bring together all those entities who are beavering away with their plans, looking at individual plans for different types of infrastructure, bring it together, and get an agreed vision for the future. It will form a road map, then we get the pipeline, and things will get under way pretty quick.

The second thing, which hasn’t really been talked about, is sort of a one-stop shop of experts. That’s really important, and I mention those in local government, those smaller government entities that don’t have the capability. They will now have the independent expert advice there in this commission to be able to deliver those projects, and that’s really important because the ideas are big but the delivery is left wanting. This is the commission that’s going to bring those bits together.

I want to talk about a case study, because one of the things that excited me was when Minister Jones talked about the Ministry of Works. For those of you who know—and I know our chief whip Ruth Dyson knows this—when you go to the Chatham Islands, there’s Highet Place there. I’m not going to talk about Allan Highet, who was responsible for pushing the button on Think Big. The one thing that that road sign tells me is that there are a whole lot of former houses there, built by the ministry, for Government workers. It’s a symbol, to me, of, really, what went wrong when the Ministry of Works leased somewhere like the Chatham Islands.

If you’ll bear with me, we were proud to open the $56 million wharf down there. I was recently reading a contractors’ magazine and it sort of summed up why we need this commission. It said, for example, we had to establish the quarry, which required excavating up to six metres of over-burden, build a road from the quarry to the port, set up a concrete batching plant, and construct a yard to produce 3,000 concrete blocks for the breakwater. Ladies and gentlemen, can I tell you that that’s a huge, huge project, but because of the way that we currently do our procurement, that’s all gone. There’s no quarry, there’s no more road, and there’s no more concrete batching plant, because they’re doing it project by project.

Meanwhile on the island, there’s a huge list of infrastructure projects that need doing. Let’s start: the airport extension. That too needs concrete—that’ll need a quarry. Let’s continue: communication. There’s no cellular network. Where in New Zealand, apart from some of those small rural outposts, is there now no cellular network? The broadband is a bit shonky at that, too. Basic infrastructure for telecom is left wanting, costing the economy millions and billions of dollars. For those of you who do get down there, you will see two windmills on their sides, literally. I mean, it’s a sight unseen unless you’ve been there. Again, it’s energy infrastructure that could run that island purely by wind, but instead there’s not been the foresight or the funding put there to get those windmills back up.

I don’t even need to mention housing. I don’t even need to mention schools, let alone a small wee wharf up there in Kāingaroa for the fisher people—those who catch fish. How about that? But what there is is a case study right here, just off the mainland—800 kilometres out there in the water, between Wellington and Christchurch—that is an example of why this commission is needed. What you have is a community suffering because we do everything project by project, entity by entity—there’s no vision, there’s no road map, and there’s no pipeline. That’s why I bring it back to Highet Place, because that was named after the then Minister of Works. Those houses were built for Government workers to deliver Government infrastructure.

In 2019, we face a frightening reality of a whole bunch of projects that need to go through individual assessments, conflicts of interest, probity—you name it. It’s just more unnecessary work. I believe that if you have one commission, a one-stop shop—and I like using that term—that gives, I guess, a refuge for those seeking not only a listening ear, a sympathetic one at that, but also the capability, because that council on the Chatham Islands is small. It’s tiny. It has an enterprise trust, but it doesn’t have capability. So having this commission, I believe, would get the 600-plus people into mainland reality, but not only that; it would leverage that economic benefit, which is in the billions. I know that the Minister is keen to get down there and keen to assess those Provincial Growth Fund applications. My concern is that that process will happen, they will get the nod—my nervousness remains in the capability of service delivery, and that’s why this commission will be up and running and providing them with that capability that they desperately seek.

I’m glad the Opposition is on board. The first citizen of Epsom is very keen to be part of this.

Hon Ruth Dyson: Prince of the provinces.

PAUL EAGLE: Oh, sorry. I was referring to the first citizen of Epsom, who wants to be the first citizen of the provinces.

Hon Paul Goldsmith: I raise a point of order, Mr Speaker. I think there is a basic rule that members are supposed to refer to other members by their names and not epithets such as that.

ASSISTANT SPEAKER (Adrian Rurawhe): Yes, the member is absolutely correct. Actually, a general encouragement to all members: there has been, over the last few days, quite a bit of nicknames and not full names. The member should use the correct name and with the honorific.

PAUL EAGLE: Sorry, Mr Assistant Speaker. I withdraw and apologise to the member for Epsom. How about that? There we are. Oh, sorry, the list—look, I forget. The good member from somewhere in Auckland! Thank you, Mr Assistant Speaker. Does that work? We’re getting there.

ASSISTANT SPEAKER (Adrian Rurawhe): Haere tonu.

PAUL EAGLE: I don’t want to say anything more, because we’re coming up to dinner time, and I know that that’s important for some of the members in this House, particularly on my right-hand side. I commend this bill to the House.

TIM VAN DE MOLEN (National—Waikato): Thank you, Mr Assistant Speaker. Look, it’s an absolute privilege to make a contribution after that fantastic performance from Mr Eagle. Now, look, just on this establishment of an infrastructure commission, broadly I think this is a great concept. We’ve seen a lot of change over the last couple of years in terms of the direction of some of the infrastructure projects with the change of Government. What we need more broadly is greater consistency and greater certainty to allow and facilitate that investment in our infrastructure projects. Ones of particular importance and priority for me are around roads, around broadband, and around schools.

In the Waikato, we’ve been very fortunate recipients of investment in infrastructure over a period of time now, through the last Government—in particular, roads of national significance and the Waikato Expressway, a very important project linking Auckland down into the greater Waikato region. That in part came about because of the foresight of local MPs along with local territorial authorities some years ago, getting in behind and having a bit of a strategy, a talk-through of development, and some vision around what progress in infrastructure might look like in that region.

Now, that’s the sort of longer-term view we need to be taking with a number of these particular projects, because the risk is, obviously, with a change in Government you can see fantastic projects such as roads of national significance turfed out for some other projects. Whilst those priorities can be debated, of course, the reality is that it creates uncertainty, and what we really need to be delivering in infrastructure is longer-term certainty in those areas. Again, in the Waikato, we have significant growth happening at the northern end, near the Bombays, and that’s an area where we really need to see some concerted effort around crystallising a longer-term plan for investment in infrastructure.

Broadband is another key one that we’ve benefited from in the Waikato, but also we’ve seen some massive progress around the country in that space for a number of years now. It has really benefited our potential, our capacity, and our economic growth as well when businesses can be located in a fantastic region like the Waikato, and not necessarily in Auckland, but still have the ability to connect into their customer networks through good roading access but also good internet connectivity. These are really important aspects that need to be considered at a longer-term view.

With that in mind, those are just a few of the aspects of pertinence in my area. We’ve already heard a number of other considerations canvassed around attracting overseas investment, or the potential to do that through this commission. So I commend it to the House. Thank you.

GINNY ANDERSEN (Labour): Tēnā koe e Te Māngai. Thank you very much for the opportunity to speak on the New Zealand Infrastructure Commission/Te Waihanga Bill. It strikes me what a good, common-sense bill this is to bring together so many aspects that are so important to New Zealanders’ well-being under one area, and that’s been needed for quite some time in this country.

This bill really looks at the ability to look at what good infrastructure is and how that’s connected to each other, but before I go on any further, I would like to acknowledge the Hon Shane Jones and the excellent work that he has done for the regions of New Zealand in not only being able to deliver to areas that have been long neglected in their own economic development but also having the foresight to consider how these areas are interconnected. It is a holistic approach that ensures that we have all of these elements of infrastructure working effectively at the same time. That will really empower those people out in the regions. So I would like to just acknowledge the good work that has gone on in that space.

I would also like to acknowledge those on the other side of the House for the fact that they have the foresight and vision to support such an excellent piece of legislation. I think it goes to show that this is indeed a visionary piece of legislation that will do New Zealanders good stead in the many years to come.

I think it’s important to look at what the problem has been in terms of infrastructure development. To talk about what good infrastructure is, we almost need to have a think about what bad infrastructure is. My mind reverts straight away to examples of parts of the Pacific, or even in Africa, where you have colonisation that builds a road straight from the resource to the port, without considering the ongoing development and the communities and the people that reside in between those two points. So what we’re wanting to see is an ability for communities to be connected and supported and to be able to flourish and have the best possible well-being that they can, to not just do the basics of getting resources from A to B but take into account all the other aspects of health and well-being. Having this ability to connect and have oversight over those things is really what the commission that this bill sets up to establish will be able to do for New Zealand.

The commission will ensure that future Governments are supported to deliver quality infrastructure to New Zealanders and that they are held to account for how infrastructure is planned, coordinated, and delivered. Let me just pause to say how important that “coordinated” is, because in many areas—and I’m sure there are MPs in the House today who, in their own areas, have seen one project that has been kicked off without consideration to how it interlinks with another project that may be on a different time frame or that may be under the management of another agency or local government, and there’s an inability for those voices to be united around the table. So having a commission that can have oversight in these areas provides a very real way to look at how we can deal with those ongoing issues.

Some of the key problems that have been experienced in the past have included a lack of integrated investment decisions with and across central government and local government, and we have seen that time and time again. There’s also been a lack of ability to see the visibility, the pipeline, and the scale to make sure the timing of such big projects are interlinked well together. Our overriding focus has just been on building new assets, rather than on the outcomes we’re trying to achieve and our ability to deliver on them. Central government and local government procurement has often been lacking and has not been coordinated enough, so this bill enables that by dealing with these issues, we put in our capability to ensure the well-being of New Zealanders is not at risk.

So I’m incredibly proud to see this work coming together. It’s an ability to have a holistic oversight of how development can empower communities, and to make sure we’re maximizing the benefits of what investment Government is putting into key infrastructure projects. It’s important to note too that this commission is not going to be overpowering. It still enables Ministers or departments that invest in and maintain infrastructure will see no change to their existing decision-making powers or accountability. This new commission will be enabled to just be a strong coordinator and facilitator to make sure that there is an oversight of different projects that will be happening simultaneously, potentially, and even in different areas. So its focus is adding an overarching strategic perspective that does not currently exist, and its impact will derive from its ability to gain credibility across all infrastructure owners—whether that be the market—and also to have influence with those decision makers that are so important.

In saying that, there are so many stakeholders in some of these large-scale infrastructure development projects, and it can be incredibly difficult to ensure that the range of stakeholders and their interests and their competing views are all taken into account. These are, quite simply, some of the reasons why those large-scale projects can go over time or over budget, because there is not an oversight in that area.

So, just to summarise, the commission’s main functions will be to coordinate, to develop, and to promote an approach to infrastructure that encourages infrastructure and the services that result. That will, in the long term, really enable the well-being of New Zealanders to be maximised, and that is a good thing.

The establishment of the New Zealand Infrastructure Commission/Te Waihanga is quite, quite clearly a concrete step to hold this Government and future Governments to account for how we plan, how we coordinate, and how we deliver infrastructure. I’m proud to see such foresight, such vision, and I’m pleased to see strong support from both sides of the House. I commend this bill to the House.

Bill read a first time.

Bill referred to the Finance and Expenditure Committee.

Hon KRIS FAAFOI (Minister of Broadcasting, Communications and Digital Media) on behalf of the Minister for Infrastructure: I move, That the New Zealand Infrastructure Commission/Te Waihanga Bill be reported to the House by 26 August 2019.

Motion agreed to.

Bills

Taxation (Research and Development Tax Credits) Bill

Second Reading

Debate resumed from 10 April.

Hon PAUL GOLDSMITH (National): Mr Assistant Speaker, thank you very much for this opportunity. Look, the National Party is not supportive of this bill that’s come to the House, the Taxation (Research and Development Tax Credits) Bill. Obviously, most parties across the Parliament are supportive of some measure of support for research and development in the New Zealand economy. We have a massive contribution, in terms of public science through universities and Crown Research institutes and many other areas. Previously, the National Government made a very significant contribution to business research and development through the Callaghan Innovation grants system.

There’s a long and searing debate that can be had on the merits of tax credits versus a grants system. The primary advantage of a grants system is that a country can know how much it’s going to spend, and budget for it, and then, in an open and transparent way, figure out how that is going to be spent. With an R & D tax credit, it’s much harder to figure out how much it’s going to cost over time. It’s great for accountants but it’s not good for start-up companies. In particular, if you’re not making profits for 10 years and you’re needing cash now in order to grow your business, then you’re going to much prefer a grant system more than you are a tax rebate system, if you’re nowhere near profit.

So that has been the very strong feedback from most of the businesses in the start-up sphere; they’re concerned about this proposal. Now, there’s loose talk about some kind of way of dealing with that problem for start-up companies, but we haven’t seen anything substantial yet from Government. What we have seen is talk of introducing a capital gains tax that would be even more difficult for that important group of innovators in this economy. So on that basis, we are not convinced this is a sensible piece of legislation, and I think that sort of summarises our thoughts quite clearly. Thank you very much.

MICHAEL WOOD (Labour—Mt Roskill): I’m very happy to rise to give a brief contribution in support of the further passage of the Taxation (Research and Development Tax Credits) Bill. This is a really important bill. One of the challenges that New Zealand has faced over the last 40 years has been the challenge of declining relative productivity. That is, for each hour that our citizens work when they give their labour, or every dollar of capital that we invest, we get relatively less back than many other countries do. That is a productivity gap that has opened up over the last 40 years. Ultimately, it is productivity that drives our ability to generate the national wealth that we need to ensure the well-being of New Zealanders.

So if you want to look at the long-run economic challenges that New Zealand faces, this is one of the biggest ones, because what we’ve been doing in this country is taking the low road in terms of growth, quite often—low wage economy, relying on immigration and population growth, shifting towards a service-based economy, and not actually putting the investment into plant machinery, R & D, and all those things that the most successful economies over the last 40, 50 years have put the investment into.

This bill addresses one of those gaping holes, which is R & D. New Zealand, as it stands, has one of the lowest private sector rates of research and development in the OECD. In terms of public sector investment, we’re kind of roughly mid-range, bottom of mid-range. In terms of private sector investment, we are one of the lowest. One of the ways that we can seek to address this is by directly saying to businesses that “Within your operations, we will recognise your investment in research and development”. This, I think, goes to one of the critical points that the previous speaker, the Hon Paul Goldsmith, raised, one of the critical points of debate in respect of the bill—it’s how do you go about doing that? Mr Goldsmith has put up the argument for a grants system. He’s right in one respect: I guess if you say we’re going to give out $50 million in grants this year—or whatever the figure is—then you know what the figure is.

Well, that’s not really an argument for a system that will enhance research and development in the country; that’s an argument for knowing how much you’re going to spend on it. What the research and development tax credit does, and this happens in many, many other jurisdictions, is it actually says, “We’ll recognise the R & D that you do. You don’t have to jump through hoops. You don’t have to go through a process. You’re not reliant on the particular political mood of the day in terms of what’s a good thing to be funding and supporting.” Actually, in terms of a market mechanism to recognise the research and development contribution of companies to our economy, a research and development tax credit is where it is at, and it is somewhat surprising in that respect that our Opposition, on that side of the House, who consistently tell this side of the House that we don’t understand how markets work, want to intervene and pick winners through a grants-based process.

I would argue that this system is not only more equitable, which means that any company that is carrying out R & D and that qualifies gets it, rather than a grants system whereby someone gets it only if they apply and if they happen to be the one that is granted it out of that limited pool. So I think this is a far more effective way of ensuring that we incentivise R & D. And, as I say, that’s going to be a long-run driver of productivity and the generation of wealth and good jobs for people in New Zealand.

The select committee had a full process for this bill. We heard, I think, about 32 submitters and had a lot of dialogue with officials. I want to thank and acknowledge officials for their support on this bill. As a result of that dialogue on the select committee, there are a number of changes to the bill which, I think, has taken a bill that had a good concept sitting in behind it and has made sure that it will be as effective as possible.

One of the areas that we have made a change in is recognising that sometimes, particularly with start-up companies, there are changes in what are called controlling rights. That’s how start-up companies often get the capital that they need to push themselves along. Yet in its original form, the bill would have meant that if there was a change in controlling rights of more than 49 percent, you would have potentially lost the access to the tax credit. We’ve rectified that issue here, so that’s going to be a real boon to those small start-up companies going through changes in ownership who might still benefit from this.

We’ve made a change in respect of what’s called the contractor’s margin. In the bill as it originally came to the committee, if the R & D was done by an outside contractor, then only 80 percent of the value of the tax credit would have been applied. That was, effectively, saying, “Well, there’s a profit margin and we don’t want to be providing the tax credit to that.” The point that was well made in submissions is that actually there are some companies for whom the only viable option is to get R & D support externally, and we shouldn’t be playing favourites there. So we’ve got rid of that provision in the tax credit—100 percent will apply in either of those situations.

This is a good bill. It’ll enhance New Zealand’s productivity, it will enhance our national wealth, it will deliver good jobs for our people, and I commend it to the House. Thank you.

JONATHAN YOUNG (National—New Plymouth): Thank you for the opportunity to speak about this bill. Now, we did support this bill at the first reading because, obviously, we want to be open to ideas that are going to enhance New Zealand’s productivity, especially in the space of R & D. But we have come to the conclusion that our support will not go ahead for this bill because we do see some flaws in it.

I know the previous speaker, Michael Wood, referred to trying to work out different ratios of support to different types of companies, but particularly for those who are in pre-profit situations that are still investing quite heavily in their R & D—and I’m talking about millions of dollars—that don’t have a strong profitable income that they can claim a tax credit for. Such a company exists in New Plymouth, and I’ve met a number of them who have literally spent millions of dollars in developing their technology and, in fact, have received overseas support from the United States Department of Energy. But that support is going to be matched dollar for dollar. So a tax credit doesn’t really work for them because they do need substantial grant funding. Now, they could go to market, they could sell equity, but then they would lose their intellectual property. They would lose the opportunity for the workforce and the technologists and the engineers in my electorate to be able to take benefit from this.

Another aspect, I think, that we feel is perhaps being lost in the debate is, in fact, that R & D investment was, and has been, increasing in New Zealand for some time. Now, I know the Government’s intention and aim is to get up to 2 percent of GDP within the next 10 years from a current level of around about 1.25 percent. I was interested to read Business New Zealand’s submission, where they stated that in order to get to that point of 2 percent of GDP in 10 years’ time, the increase of investment in R & D needs to be around about 8.3 percent per annum. What they noted was that between the years 2016 and 2018—that year between, obviously, 2017—the increase in investment at that particular point in time was around about 17 percent. So what they alluded to was the fact that the grants system was working. It was bringing a positive input into investment in R & D.

And, yes, the Government would believe that an R & D tax credit will, as they state, open up opportunity for a lot more businesses—and there’s no denying that or decrying that. But what we asked when the Minister came to our committee was: is this new money or is it going to be replacing the grants system that Callahan Innovation have led for the last four to five years? And it appeared that through discussion and questioning, in time the grants system from Callahan Innovation will disappear and it will be purely an R & D tax credit.

Look, I would see that as disappointing, because I do know there are companies where the grants system particularly works and is really needed. We do want to support people right across the business industries and industry, and some of the proposals that this bill talks about don’t work for everybody. So I would implore the Government to be open-minded and to look at different ways in which they can meet the R & D needs of these companies and industry in our country. Thank you, sir. I just finish with that point.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Mr Assistant Speaker. Look, it’s a pleasure to rise in support of this Taxation (Research and Development Tax Credits) Bill. It is really important to recognise what these tax credits will do, because a grant, of course, is all very nice and no one’s ever going to turn down an offer of money, but a tax credit system really does demand from the business real accountability, because it’s real money that’s being spent, and a tax credit’s only ever any good if it’s, ultimately, claimed by a profitable business. That’s part of the model.

But we do know that research and development is going to be absolutely important in improving New Zealand’s productivity as we go forward. As Mr Young mentioned, 1.37 percent is our current GDP spend and we need that to go up. I did go to a very good session, which was chaired by Mr Young, on the kind of research and development that’s going on in New Zealand, particularly in the software space. It was a great event in a science forum on autonomous animation and human-machine collaboration, and what was very clear there is that you can’t always pick winners, that as research is undertaken sometimes you get a breakthrough and sometimes you don’t. One of the problems with a grants scheme is that the Government and Government bureaucrats set out to pick winners, and you simply can’t do it.

What an R & D scheme does is it rewards and encourages businesses who are embarking on research of their own. One of the things that was changed in the Finance and Expenditure Committee in respect of this legislation was a much greater acceptance of software as a really useful and appropriate innovation. So, in fact, there was a cap of $3 million of expenditure in the original bill. That has been increased to $25 million of expenditure. When we think of the tax credits that can be claimed there, that goes to show you the very significant investment that is being put into this tax credit.

Now, software does raise particular challenges because, as we know, particularly large businesses may well be developing software of their own. Large institutions, whether they be corporate institutions or educational institutions, they can spend very easily $20 million on their own internal software. So it was made very clear at select committee that those kinds of business-as-usual software applications that are developed in-house aren’t appropriate and they won’t be included in any tax credit regime.

But there is a real sense that we need to meet the market, so to speak; that a tax credit regime needs to wake up to the realities of how research happens. So there was a revisiting of the changes in identity of the parties claiming tax credits and, in particular, a recognition that joint ventures are a very important part of any tax credit regime. We need to accept that joint ventures from overseas can be participants with New Zealand parties in a regime of this nature.

So what we have here, then, is a very effective way—and I must say that a 15 percent credit is a very significant credit when we think of the corporate tax rate. It was, in fact, taken into account and increased from some early suggestions of a slightly lower rate. So that really is going to reduce the tax burden of a lot of these businesses. It’s going to be a significant reduction in the potential tax take of this Government, and, in light of that—in that sense—it really shows that this Government is committed to encouraging and entering into a partnership with businesses who are interested in embarking upon this.

So I’m very happy with this bill. It went through the select committee in what was mainly a cooperative way; worked through and really improved as a piece of relatively technical tax legislation. This is another step forward in making our economy ready for the modern world, productive, and good for all New Zealanders. Thank you, Mr Assistant Speaker.

MELISSA LEE (National): Thank you, Mr Assistant Speaker. I rise as the final speaker on this side of the House in this particular debate. I have to declare that I have not been part of the select committee process and I may not be as well versed on this particular bill as my colleagues, but I have to say that, as earlier speakers right throughout this House have actually said, most of us like the idea of incentivising businesses to invest in research and development, whether it’s to promote their business or a product, to advance the growth of New Zealand’s economy.

Having said that, I was rather disturbed to hear during the interrupted debate last night about how the select committee process did not take place. Having actually been in this House for the last three terms—this is my fourth term—and having actually chaired different select committees, I have never, ever been in a position where, as chair, I have prevented an Opposition minority view being included in a select committee report to the House. I have to declare that I’m appalled by this Government’s behaviour on that.

Because the minority view was not attached to the main report, the National Party’s view on this bill was not attached to the select committee report back to the house. That means the public are actually not well versed on why we are opposing this bill.

So I shall read some of the comments—from the minority view—that were made by my colleagues who were part of the Finance and Expenditure Committee: “The National Party supported the bill in the first reading as we see merit in exploring the potential for taxation to incentivise greater investment into R & D, and to have the opportunity to explore [whether] the framework proposed by the Government would be the best way to do that [going forward].” It is actually clear, members have said, that this will not work for many companies and businesses, because this bill gives no real visibility of what additional R & D spending will occur as a result of significant items of expenditure.

One of the items in that National Party report that I am particularly appalled about is the fact that it says it is essential that businesses have certainty over the details. The minority view said: “The Government is determined to roll this policy out in 2019, and those that are pre-profit for now will be covered by temporary arrangements subject to review down the track, because as [the] … officials [actually advised], the issues were too complex to resolve now.” So it is far too complex for them to actually sort of say whether it’s actually right or not.

It seems really, really strange, and as, I think, Tamati Coffey said yesterday, the select committee refused the report of our spokesperson, Dr Parmjeet Parmar, because of one word—because they didn’t like a particular word. I think it’s time that this Parliament actually looked at the way select committees actually report back, and I think it’s essential that minority views are attached to the report-backs to this Parliament. I think it is appalling that the Government has behaved in this manner. I oppose this bill.

Dr DEBORAH RUSSELL (Labour—New Lynn): Unlike the previous speaker, Melissa Lee, I was in that select committee meeting, so I know exactly what happened in respect to the National Party minority view. With respect, the Government side of the House was entirely prepared to accept the minority view. Why would we not? It is important for minority views to be heard. In fact, in the last few days, I know there has been a discussion amongst members of this House as to how a minority view should be treated, and some agreements have been reached.

But there was an issue with the minority view that was prepared. There was a factual mistake in it that was attributed to officials. That was the sticking point. We asked for that particular sentence—one sentence—to be modified. In fact, one person had written that sentence and even that person’s own colleagues were urging that a change be made. The intransigence was not on this side of the House.

I think it highlighted a very, very important point, in respect to this particular bill. It is a research and development bill, but, in particular, it is a research and development tax credit bill. What that pointed out was the need for those who engaged in real debate on it to be familiar with the tax system as well as with the ideas behind science and research and development. There are critical interactions with the tax system engaged in this particular R & D measure. So in terms of understanding how it is intended to work and understanding what the real facts of the matter are, having that background knowledge of tax makes a difference.

So I want to talk about some of those particular issues. We have heard on the other side of the House some of the members there complaining that a tax credit won’t work for companies who are not in profit and how that’s going to be a problem for start-ups. But, as anyone who is familiar with tax would know, there is a provision in the bill—in the very bill itself—that enables a cash-out of credits for start-up companies who are in a loss position, provided they meet certain criteria. I direct members on the opposite side of the House to new section LA 5(4B), inserted into the Income Tax Act 2007 by clause 9 in this bill—which some members obviously need some familiarity with—and that provides for a cash-out of some of the credits to help exactly those companies who are engaged in R & D and need to get a bit of a hand on their way right from the start. It helps to know what you’re talking about sometimes.

Carrying on, I want to talk about some of the technical tax matters that are in this bill that help someone. As a select committee, we have worked hard on the issues in this bill, and amongst others things, in clause 10 we have inserted new subparts LY 8, LY 5, and LY 6 into the Income Tax Act, where it allows our R & D tax credits to be carried forward in cases where some shareholder continuity rules may or may not be met. Now, the shareholder continuity rules for carrying forward losses are quite complicated, but what we’re doing here is trying to ensure that the tax credits fit within those rules so that it maximises the amount of R & D tax credits that can be carried forward.

We also worked on other tax issues—again, which helps when you’ve got tax knowledge. So, for example, we looked at the interaction of this new research and development tax credit with the Callaghan growth grant recipients and how that would fit together, and some anomalies were pointed out. One in particular was to do with people with firms that happened to have a late balance date. Now, again, if you’re familiar with tax—as you need to be to engage with this properly—you’ll know that balance dates vary and they’re defined as early or late balance dates in relation to 31 March, actually, which is the standard balance date. Now, if you’ve got that familiarity, you know how the rules interact together, and that means that you understand why we need this particular little change in the bill to ensure that Callaghan growth grant recipients who have a late balance date can get as much from this tax credit as Callaghan growth grant recipients who have an early balance date. It’s about consistency and about getting it right within the structure of our tax system.

So I think the question for the Opposition is—and it’s a question they might care to examine in depth in the committee stage of this bill and a question they might like to have a look at in the third reading of this bill—do they support research and development or not? Do they support it or not? The Callaghan growth grants are a fine thing, but we still need to lift our R & D spend in this country further, and we need to broaden it beyond a grace and favour system.

Having had a look at the Callaghan system, it is complex, it takes a lot of effort to comply with, people go through long and extended processes in order to apply for a grant, and even then they may be refused. That’s the way that grant systems operate, and indeed it’s the way they ought to operate; there should be strict criteria. The useful thing about a research and development tax credit is that it is available to all taxpayers who meet the criteria, not just to those who fit within a certain envelope—all taxpayers who fit the criteria. It means that anyone who is doing significant research and development may apply for and get this tax credit, instead of a handful or a selected few. That’s the beauty of it, and that is why this particular research and development tax credit will, in fact, work to enhance research and develop innovation in our country. I support this bill.

The question was put that the amendments recommended by the Finance and Expenditure 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 Taxation (Research and Development Tax Credits) 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

Canterbury Earthquakes Insurance Tribunal Bill

Second Reading

Hon DAVID PARKER (Acting Minister for Courts): I move, That the Canterbury Earthquakes Insurance Tribunal Bill be now read a second time.

On behalf of the Minister of Justice and Minister for Courts, the Hon Andrew Little, I’d like firstly to thank the Governance and Administration Committee for its work in examining this bill during the select committee stage. I’d also like to thank everyone who submitted on the bill for their valuable comments and insights. Hearing and considering the views of the public is, of course, essential to developing effective legislation, and that feedback has helped guide the further development of the bill. I’m pleased that, in general, submitters were supportive of the bill’s objective.

The bill will establish the Canterbury Earthquakes Insurance Tribunal. This tribunal will be a specialist judicial body that provides policyholders affected by the 2010 and 2011 Canterbury earthquakes with a way to resolve their longstanding residential insurance claims with the Earthquake Commission (EQC) and their insurers, including Southern Response.

I’d like to give some of the background to the introduction of the bill and then outline the key changes that have been recommended by the select committee in the reported-back bill. It’s now been more than eight years since the Canterbury earthquakes of 2010 and 2011, and yet thousands of insurance claims arising from these events remain unresolved. That delay has left Cantabrians feeling weary and frustrated. The tribunal has been designed to address that by providing a fair, speedy, flexible, and cost-effective service, including a funded mediation service to the people in the region with outstanding claims, so that they can achieve some closure and move on with their lives. To ensure that policyholders feel empowered and in control of their situation, access to the tribunal will be homeowner-initiated. This means the decision to access the tribunal will be in their hands rather than driven by the insurers or by EQC.

The tribunal has been designed so that’s easy for policyholders to access. There will be no application fee to access the tribunal, and policyholders may choose to be represented by someone who’s not a lawyer, or they may choose to represent themselves. Detailed guidance will also be available to help people feel prepared and informed about what to expect at the tribunal. The tribunal isn’t intended to replace the courts or any other dispute resolution process; rather, it’s been developed as an alternative specific to the earthquakes in Canterbury, emphasising speed, flexibility, and cost-effectiveness. If parties have already filed claims in court but they haven’t been concluded, policyholders may apply to transfer the case to the tribunal. If the parties are using the Greater Christchurch Claims Resolution Service, they will be supported in applying to the tribunal should they choose this option.

Flexibility is a key element of the process. We know that the remaining insurance claims are often complex and that a one-size-fits-all approach would be unhelpful. For this reason, the bill allows the resolution process to be tailored to the needs of each claim. The tribunal will take a proactive approach to case management and will work closely with the parties to find the most appropriate way to resolution. The tribunal can set time frames for each stage of the process so that claims continue to progress without unnecessary delays. The tribunal has a number of powers to help it consider claims—for example, it will be able to appoint independent experts. These experts will play a key role in helping the tribunal to understand complex information and provide an independent view where there is competing expert opinion.

The tribunal process will include an independent and fully funded mediation service, as I mentioned. Mediation empowers parties to settle disputes themselves and can be a useful tool to narrow down the issues in dispute and provide a confidential environment for parties to speak freely. However, it’s also important to acknowledge that after eight years, parties may already have tried to settle their claims through other dispute resolution processes, and therefore the bill gives the tribunal the flexibility to decide on a case by case basis when mediation will be helpful and when it won’t.

To make sure the tribunal can deliver speedy resolution, the tribunal will not consider claims relating to onsold properties. Some legal issues emerging from these claims are novel and they may have no clear precedent, so the Minister considers that they’re more appropriately considered by the courts.

I will now highlight some of the changes to the bill that the Governance and Administration Committee has recommended. I consider that these will improve the bill’s effectiveness in helping policyholders resolve their longstanding claims. The committee has recommended that the purpose statement of the bill should include the word “fair” to reflect the policy objective of the tribunal to provide fair services and to comply with natural justice rules, while also being speedy, flexible, and cost-effective.

Based on submissions, the amended bill extends the date range to include Canterbury earthquakes from 31 July 2011 to 31 December 2011, so that those people who suffered damage in the 23 December 2011 earthquake may also apply to the tribunal. The tribunal will also be able to consider liability for damage from aftershocks and earthquakes that occurred after 2011 where some damage in a claim occurred before 31 December 2011. This will remove the need for parties to go through a separate process to resolve damage from earthquakes after 2011. The amended bill also allows for parties to comment on transfers between the courts and the tribunal, and vice versa, and to comment on the referral of questions of law to the High Court. In addition, the bill originally allowed the referral of questions of law only at the hearing stage, but the bill as amended now allows them to be referred at any stage in the process.

The committee also recommended some amendments to the parts of the bill relating to experts and evidence. One recommendation is that a new clause be inserted allowing the tribunal to bring separate claims together to hear technical evidence on similar subject matter at a special hearing with all affected parties present, provided all the parties to the claim agree. This means that a number of claims with similar technical issues can, if the parties agree, be resolved more efficiently. A further recommended change to the introduced version is that parties be allowed to use experts, except where the tribunal deems it unnecessary. This upholds the principle of fairness for policyholders, while ensuring that the tribunal retains the power to prevent the unnecessary use of experts.

On the matter of cross-examination, in accordance with the principles of natural justice, the committee has recommended removing the reference to the tribunal’s “absolute discretion”—as it was in the original bill—to permit cross-examination, as it’s not the intent of the bill for the tribunal to have absolute discretion over allowing cross-examination. The intent of the bill is to allow the tribunal to permit cross-examination where appropriate. However, the tribunal is not required to permit the cross-examination of any and every party, and it must not permit any unnecessary cross-examination.

Lastly, the committee has recommended changes to the status of settlements reached before the claim goes to a hearing. The reported-back bill now proposes that all settlements reached at mediation will automatically be recorded as a decision of the tribunal and will therefore be enforceable thereafter in the District Court. In addition, the bill now clarifies that policyholders may ask the tribunal to record a settlement agreement reached other than through mediation without needing the agreement of all the parties. This means that policyholders can choose whether or not to have their settlement enforceable by the District Court, and this again aligns the bill with the overarching objective to be homeowner-oriented.

The Minister intends to table a Supplementary Order Paper (SOP) that will clarify a few minor and technical amendments required for the tribunal to operate in line with its purpose. For example, the SOP will align the tribunal with the upcoming Courts Security Regulations and also clarify that parties may bring a support person, with the tribunal’s permission.

We want the tribunal to work for those people who are still waiting for their longstanding claims to be resolved. This was an explicit election promise of all parties who make up the Government to explore ways to find speedier, more flexible, and tailored means of resolution for Cantabrians, and we’re confident that with this bill and this tribunal, we’ve found a means for those Cantabrians still waiting for a resolution to achieve this in a speedy and efficacious way. I’m pleased that the bill was widely supported in its first reading, and we hope that this continues at this stage. So I commend this bill to the House.

STUART SMITH (National—Kaikōura): Thank you, Madam Assistant Speaker. Well, it is a pleasure to stand and speak on the Canterbury Earthquakes Insurance Tribunal Bill, and I do agree with the Minister that we all want this to work. I can assure you that the National Party will be voting in support of this bill at second reading, but that may change if amendments that I introduce are not supported. We all want a fair outcome, and the sooner these things are sorted, the better. The thing is we don’t want to cause another wrong in the attempt to fix one that has gone on for eight years.

First, I want to talk about clause 5, which is defining which earthquakes will be covered. It was quite clear in the Governance and Administration Committee when we looked at that issue that that would cut a whole lot of people out with the date of 31 July 2011, given that there’d been a significant aftershock on 23 December of that year. So it was decided to extend it right out to 31 December 2011, and earthquake damage that occurred after that will also be part of what the tribunal can consider, as long as there’s been earthquake damage caused in that original period up to the end of December.

We had a lot of really good submissions, and it made the select committee’s job a lot easier. However, there are some issues, and I’d like now to talk about clause 10, “Bringing claim to tribunal”. At the moment, it is only the insured that can bring a claim to the tribunal, and I have very grave concerns about that as it is, effectively, one-way access to justice. So I’ll be introducing an amendment that will allow insurers also to lodge claims with the tribunal. Effectively, having one party to lodge a claim sets up a predetermined identification of victim and perpetrator, and I don’t think that that is what was intended with this bill, and my amendment will deal with that. We have to remember that insurers have actually paid billions of dollars in Canterbury. While they sometimes might be difficult to deal with, it would be pretty difficult without them.

I now want to talk about clause 11, and subclause (3) in particular, which is a bit confusing. It won’t allow proceedings to remain in the tribunal if the dispute has been settled between the insured and the insurer, or if there is some doubt in that. The drafters have attempted to clear that up. It doesn’t appear to me to be at all clear, and I’ll be putting in an amendment that’ll make it very clear that the issue arises when third parties are joined to the claim. That could be, for example, a builder who undertook repairs of a house that has been damaged, and that may be the person who undertook shoddy repairs, for example. But once the claim is settled between the insurer and the insured, it is not clear that the tribunal then has to continue judging that case to the point where everybody is dealt with and it’s discharged. It could easily be discharged, and the insurer or the Earthquake Commission would then have to pursue the third party in the courts. I think if you’re going to put a tribunal in to fix a problem, at least do it properly.

Clause 37(4)—this is one where I have significant issues—which is “Managing adjudication of claims and natural justice”. I’ll come on to cross-examination a bit later, but this bill was, effectively, the Weathertight Homes Resolution Services Act that was lifted and copied and pasted, effectively, into the earthquakes tribunal bill. That’s where the problems began, because what happened with the weathertight homes was a tort, and this is contract law. So those were some quite significant issues, which we’ll touch on a wee bit later as well.

But also, on the matter of having experts coming into the tribunal, in the case of the weathertight homes, the defendants were, in fact, the experts. This is not the case when we’re talking about earthquakes. Insurers and claimants rely on experts to put together their claims, and, effectively, not making it clear that experts can be used in the tribunal is actually, I think, also a natural justice issue. I’ll be introducing an amendment that will in fact help by limiting the number of expert witnesses in a particular discipline that could be used in the tribunal, and I think that will go a long way to dealing with that issue. But insurance companies themselves are not builders and structural engineers or geotechnical engineers and neither are the claimants, and it would be really foolish to have a tribunal where you only had an insurance company lawyer, a claimant, and a tribunal. Who knows what the damage is and how it’s caused?

Also, cross-examination. Now, cross-examination is a major thing in our legal system that’s a right, but in this case it is somewhat limited. Despite what the Minister said, in clause 37(4) it says, “However, subsection (3) does not require the tribunal to—(a) permit the cross-examination of a party or person”. Now, that is absolutely against the major tenet of our New Zealand Bill of Rights Act, and I’ll quote from our New Zealand Bill of Rights Act: “Every person has the right to the observance of the principles of natural justice by any tribunal or other public authority which has the power to make a determination in respect of that person’s rights, obligations, or interests protected or recognised by law.”, and yet this doesn’t allow it. It is quite clear in here that it doesn’t have to allow it. In fact, the onus would be the other way around—it almost certainly won’t allow it. I think that that is very dangerous, and I will be putting an amendment in to allow that. I’d be very surprised if the Government didn’t support that.

Clause 44(3), the tribunal’s decisions, was an area which, again, shows the foolishness of just cutting and pasting legislation, because, as I said, in the Weathertight Homes Tribunal, that was a tort, and torts allow for damages for mental distress, for example—general damages. That is not allowed in contract law. Fortunately, in the select committee, we worked on that and we actually got that chucked out of the bill. So that’s a very positive step forward.

If I can talk about, now, clause 55, “Appointment of members of tribunal”, it is a change that we made to have the chairperson have to have a practising certificate as a barrister or as a barrister and solicitor of the High Court for at least seven years. That’s great to have that person as the chair of the tribunal. However, the tribunal members, I believe, also need criteria, and I’ll be putting an amendment forward for that so that all tribunal members should at least hold a law degree and a minimum number of years’ practice experience, including litigation, or be another suitably qualified professional with arbitration experience and not have a history of advocacy on earthquake claims.

That’s really important, that last point, because there are instances in Christchurch where claims have been thwarted against the best interests of the claimant because of an agreement from their advocate on a success basis if the offer isn’t going to be high enough for them to achieve their fee. That has gone against the interests of the homeowners in Christchurch in some cases that I’m aware of, and I think we have to really ensure that the people sitting on the tribunal are suitably qualified to, hopefully, spot that sort of activity going on and ensure that the best interests of those claimants are in fact served by the tribunal.

So, as I said, we support this bill through this reading, but with caveats. I think the amendments are very reasonable, and I’m looking forward to the Government helping support those in the committee of the whole House. So thank you.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Assistant Speaker. It is with real pleasure that I see this Canterbury Earthquakes Insurance Tribunal Bill proceed through to its second reading. I must say that this is a real opportunity, and it’s an opportunity not to do as the previous speaker, Stuart Smith, would suggest and duplicate other tribunals, but to create something new, because the challenge in modern dispute resolution is to rebalance the huge inequalities between disputants, whether that be insurance companies and homeowners, banks and customers, or whatever it might be.

Mr Smith, the MP for Kaikōura, talked about natural justice, and I just want to say that natural justice is not simply all about procedure. It’s about enabling a correct, a fair, and a just outcome, and having a procedure which can effect that. In some cases—and we know this from the criminal courts already—cross-examination doesn’t get us there. In fact, it’s wasteful and it’s an inaccurate way to try and get to the truth.

So what we have here is a new kind of tribunal. It’s not a rehash, it’s not one out of the same mould; it’s one where experts can be used carefully but also kept in control so that the expense doesn’t drive away litigants who need assistance. I see also that the tribunal will have the power itself to inspect damaged properties and the like, and that’s a great innovation because there’s nothing quite like the tribunal receiving the evidence itself. So what we really are aiming towards is a tribunal that is tailored—tailored towards these specific circumstances.

It’s with some sadness that I note that there are still many hundreds or indeed, thousands of unresolved claims in Christchurch still with various insurers and the Earthquake Commission, but this is a significant step forward, and I note that homeowners will be able to transfer cases out of the High Court or other courts into this tribunal. I hope they will seriously consider doing that, because the tools available to this tribunal are quite different. They take into account the needs of the parties, and the managed mediation service, which is fully funded, taking away another barrier to homeowners who might not have the means to pay for mediation services—that’s another example of a situation where it can bring the parties together and work towards a resolution.

That’s not to say that there’s not still hard questions of law and hard technical questions which will face this tribunal. Any decision-making process imposed on the parties will leave some people disappointed. So this isn’t going to be some kind of panacea for everyone, but it does give us a new, a better, an alternative process—one that uses new tools—and I’m very hopeful that when this is in place, it can be seen as a new template, particularly for consumer disputes where there are massive imbalances of power, of wealth, and of knowledge in these disputes.

Can I commend the Governance and Administration Committee for its work. I think the bill’s in great shape. It looks like it’s a very workable piece of legislation, and I doubt that there’s much more work to be done on it at all. I commend this bill to the House.

BRETT HUDSON (National): Thank you, Madam Assistant Speaker. I rise in support of the Canterbury Earthquakes Insurance Tribunal Bill, and I support comments made by my colleague Stuart Smith just a little while ago. Firstly, I’d actually like to acknowledge not only the work of the Governance and Administration Committee members in deconstructing and reconstructing this bill but particularly the work of officials. We supported this bill in first reading, but our spokesperson in this area, Mr Stuart Smith, had a number of reservations and number of points that he wanted to raise with officials.

The reason I would particularly acknowledge them is they clearly demonstrated that they were prepared to listen to submitters and prepared to listen to the arguments from members around the table, and particularly from Mr Smith. We’ve seen a number of amendments recommended and incorporated through our report, including one that Mr Smith mentioned which was a source of major concern for us, which was the ability for the tribunal to award general damages, which could have permitted, for instance, compensation for mental distress. As Mr Smith has articulated, that would be bringing in elements of the law of tort into contract law, and that’s just not the way things are done, in New Zealand at least. There is an amendment recommended by officials and accepted by the committee that the tribunal can only award such damages as would be normally awarded by a court under general New Zealand law. So that addresses that particular issue, which, if not necessarily the greatest concern we had, was certainly a serious concern that we had with the bill.

As we worked through it, though, we noticed too in the regulatory impact statement, we were mindful—and we do support this. But we are mindful that while the tribunal will be instituted with the intention of speeding claims—and, actually, before I move further on this, I would make the point that the recommendation from officials to amend the definition for in-scope earthquakes to move that from 31 July 2011 to 31 December will in itself bring into the scope of the tribunal, potentially, up to I think around 47,000 additional claims. So that is a good idea. It also gives the tribunal some power to look at quake damage beyond that point if at least part of the damage had occurred in those eligible Christchurch earthquakes, which, again, supports the idea of the tribunal being there as an intent to help speed the process of claims, a number of which, of course—as you would well know, Madam Assistant Speaker—have been around for a very long time.

So that is all well and good. But, as the officials themselves noted in the regulatory impact statement, in terms of both available lawyers and also, particularly, experts, many of those individuals are already involved in court actions over quake claims and repairs and perhaps remediation claims as well. There are two elements there. One is potentially that there could be trouble managing a conflict of interest, or a potential perceived conflict of interest, if an expert or lawyer who has already been involved in a certain court action was to then potentially be involved in a tribunal case. But more fundamental than even those potential conflicts is simply the volume of people and the demands on their time. The officials themselves raised the very real risk that they saw that rather than speeding the process of claims, the tribunal, in the sense that it could at least create a larger funnel to accepting them, could actually end up slowing the process and causing these claims to potentially take longer than they might do, and that’s simply through the availability of sufficient numbers of experts to be able to work through those tribunal hearings in a timely fashion.

So we do bear that in mind, but on balance—well, not even on balance, actually—we supported this bill into select committee. As I’ve said, I acknowledge the work officials have done to support the committee to make recommendations. Mr Stuart Smith has a number of areas that he would like to strengthen further. He has signalled to the House today that he intends to issue a number of amendments in the committee of the whole House, and we will certainly support the bill getting through to that stage. So I’ll take this opportunity to commend the bill to the House.

Hon RON MARK (Minister of Defence): Thank you, Madam Assistant Speaker. I rise on behalf of New Zealand First to support this legislation, to indicate our support, and, if I could, to thank the Governance and Administration Committee for the work that it has done, particularly Brett Hudson, who’s just spoken and who is the chair, and Ginny Andersen, Kanwaljit Singh Bakshi, the Hon Jacqui Dean—it’s always good to see the Hon Jacqui Dean’s name there when it comes to discussing matters such as this, because she brings her wealth of the local government whānau to the table in that respect—Paul Eagle, the Hon Peeni Henare, Jamie Strange, Dr Jian Yang, and Stuart Smith, who spoke right at the outset.

I’ve got to say, as one who’s got a large number of family in the Canterbury area who went through the earthquakes and some of whom struggled with the insurance issues that arose after that series of earthquakes, it is very pleasing to see this legislation here. New Zealand First supported the concept of this bill right from the outset. I have to say that listening to some of the heartache and the heartbreak that we’ve heard over the years, you could say it’s a bit disappointing that such an initiative wasn’t taken under the previous term of Government. But we are here, and so I guess we rejoice at this.

It’s taken eight years since the Canterbury earthquakes of 2010 and 2011, and thousands of insurance claims remain unresolved. This delay has left Cantabrians feeling weary and frustrated, and, sadly, we’ve heard of cases where people’s mental health has been greatly affected and their incomes and their ability to move on and get on with life have been hugely affected, and that is not something that sits easily on the minds of many, I know. The fact that this bill establishes a specialist tribunal and a fully funded mediation service to help the people of Canterbury resolve longstanding residential insurance claims is something that should be applauded.

The tribunal has been developed to be homeowner-initiated, to ensure the policyholders feel empowered and in control of their situation. The bill puts the choice to access the tribunal in the hands of policyholders by allowing them to apply to the tribunal, rather than insurers of the Earthquake Commission.

I’ve got to say that going through the select committee’s report, it is very clear to me—and I could look at a number of areas, and I’ve also had a look at the summary because, obviously, I’m not on the committee. There were 26 written submissions from individuals and organisations. Ten submitters presented orally to the committee. Sixteen supported the intent of the bill—the establishment of a tribunal—with most of those submitters suggesting changes to clarify proposals to ensure that they were workable. Eight submitters did not expressly support or oppose the bill. One submitter expressly opposed the bill because he believed the tribunal will not work and that it will be biased against policyholders—I’ll be looking forward to that submitter’s comments in a few years from now, after the tribunal has set about doing its work.

It’s very clear that the select committee has given this bill its full attention. As I go through the report, I’m looking at a range of matters discussed by the committee where recommendations have been made as to changes, and I’m anticipating that those recommendations are going to be picked up in the Supplementary Order Paper that the Minister said would be tabled come the committee stage. I think, looking at clause 5 and then going down to look at the application of the Act in clause 8, there are recommended changes there by the select committee as to eligibility criteria. The select committee, again, has recommended changes. The form of response, in clause 15—changes, again. Transferring proceedings from the court to the tribunal, in clause 16—the committee has recommended a number of changes in there.

All I would say, again, looking through the select committee’s report, is that I note that it would appear to have been unanimously supported, although there may be some reservations and some discussion yet to happen. I just want to congratulate the committee and thank them very much, and I thank the Minister for bringing the bill to the House.

Hon JACQUI DEAN (National—Waitaki): Thank you, Madam Assistant Speaker. With regard to the Canterbury Earthquakes Insurance Tribunal Bill, National supports the bill through this stage, but we did flag a number of issues that will potentially be raised in the committee of the whole House stage. But the chair of the Governance and Administration Committee, Brett Hudson, has canvassed those, so I’m not going to go over them.

I do want to make a few comments, however, about the homeowners whom this bill addresses the concerns of and to note that it has now been a number of years since the Canterbury earthquakes and those families—and I’m seeing Christchurch-based MPs across the House who are very aware of the anxiety and sheer toll that being caught up in a tribunal process to do with your home creates. It creates a lot of stress and anxiety on those families, and the committee was always mindful, across the committee, of those stresses.

But I do want to talk about the consultation on this bill, and how it has been expressed to us that the limits placed on consultation may not have provided the breadth of views and experience that could have been really useful as this piece of legislation went through. So, for example, the Ministry of Justice consulted with Treasury, but not the Earthquake Commission themselves or any affected homeowners, or, indeed, insurance industry specialists. While we did hear from the insurance industry specialists in particular—whose views were very useful—it does seem that the breadth of consultation could have been broader and wider. However, in the committee of the whole House stage, we will make some comment about that.

I also just note that the regulatory impact statement stressed throughout the statement—and it did so several times—that the lack of consultation is thanks to the tight time frames. Well, is the House going to do this properly—is the Government going to do this properly—or are we going to have to come back again and make amendments to a piece of legislation that isn’t quite fit for purpose? I’ll quote from the regulatory impact statement where it says, “The lack of consultation has compounded the lack of data, which means Cabinet faces some significant unknowns,”—not ideal. While we do support this legislation, I’m mindful of the colleague sitting next to me, Jian Yang, whose comments around statistics and the New Zealand Census really highlight the fact that we should be able to rely on good quality data. It would seem, as is highlighted both in the census, which has got wide-ranging implications—

ASSISTANT SPEAKER (Poto Williams): Ahem.

Hon JACQUI DEAN: —returning to the bill—

ASSISTANT SPEAKER (Poto Williams): Thank you.

Hon JACQUI DEAN: —but also to this piece of legislation in getting what is the subject of this bill, the earthquakes insurance tribunal, right. Thank you.

Hon EUGENIE SAGE (Minister of Conservation): Tēnā koe. Thank you. I’m very pleased to speak on the Canterbury Earthquakes Insurance Tribunal Bill. It’s a very good bill. There are over 2,000 claims from the Canterbury earthquakes still awaiting resolution. This is an initiative that was in the Labour Party’s election manifesto and I think it will go quite a considerable distance in helping resolve those claims, because, of course, the tribunals that we have in New Zealand are different from the courts.

A tribunal is an independent judicial body set up to deal with particular issues—in this case the earthquake insurance claims—and they tend to take a more informal approach in examining the available information, talking to the parties directly, and sometimes seeking more evidence to get the right outcome. So it’s not as adversarial an approach as you often get in the courts, partly because of the way the tribunal is constituted and partly because of the procedures that it will operate under. It is this focus on ensuring—and the amendment that the select committee made to insert “fair” in the purpose—that it is cost-effective and that it is speedy and that it is fair that may see, we hope, those very complex technical claims that have yet to be resolved being able to be progressed through the tribunal and brought to a conclusion.

Now, it was interesting listening to Stuart Smith and his concern about the fact that cross-examination won’t be a major feature of the tribunal’s proceedings. But that is one of the advantages of having a tribunal over the court—that more inquisitorial approach by members of the tribunal, the ability to have experts present, the ability for parties to either have people advocating on their own account or have them advocate for themselves. So it’s a genuine inquiry into what the facts are, what the potential ways of resolving those are, and moving on to make a decision, rather than the parties being engaged in quite an adversarial position where people get lawyered up and it’s often the weight of expertise and the procedures themselves that can weigh on the outcome. So here the focus is on getting to a good outcome and using good processes to do that.

One of the strengths, I think, of the tribunal will be the ability to access mediation. Where mediation is used in some of the other court systems like the Environment Court, where the parties actually try to think outside the box and where experts can be brought in to share their expertise, that can help progress to a resolution more quickly. So the mediation powers in this bill, I think, are quite significant. So is the fact that it is a process where the parties bear the costs themselves. There aren’t any fees to actually access the tribunal, so that means that it won’t be a barrier, as the court process can sometimes be, because parties don’t have the funds to resource lawyers to advocate on their behalf. So it is with this flexibility and less formal process than a court system, but a very fair process, that we should aim to get to the bottom of the backlog of 2,500-odd cases.

I think Mr Stuart Smith raised issues too about the fact that it can only be the policyholders and homeowners who can access the tribunal rather than insurance companies. There are other opportunities through the court process. That is, of course, still open to the insurance companies to take claims there. It has been a huge amount of stress on homeowners who haven’t been able to resolve their claims that has meant that the earthquakes have had a major legacy in terms of impacts on social well-being as well as the fact that people haven’t been able to move on with their lives, and that’s what this tribunal will help people to do.

I think that the quite extensive work that the Governance and Administration Committee has done in inquiring into the detail of how the tribunal process will operate and the amendments that have been suggested to the bill through the select committee process really strengthen the way the tribunal will operate. They seem very well-founded and sensible amendments, and this ability to bring in experts and for parties to call on experts themselves and not just rely on the tribunal to do that—some quite practical changes that are being recommended through the select committee process. The ability to refer questions of law to the High Court to ensure that the parties can comment on that before the tribunal does that, the need to have at least the chair who has a legal background—and I know the Opposition is saying that all members of the tribunal should have a legal background. But if you compare this tribunal with the Environment Court, for example, laypeople with significant expertise contribute a lot to that court, and laypeople with technical expertise, I think, will be able to contribute a lot to the tribunal.

The fact that mediation is going to be fully funded again removes that cost barrier, and it’s a fairer process all round. It’s providing another option to the one that already exists through the court system, and we really need to see these claims resolved. This bill, with the establishment of this tribunal, is a major way of doing that. So the Green Party commends the bill to the House.

Dr JIAN YANG (National): The purpose of the Canterbury Earthquakes Insurance Tribunal Bill is to provide speedy, flexible, and cost-effective services for resolving disputes about insurance claims due to the Canterbury earthquakes. In principle, National supports the alternative measures to resolving outstanding claims. I understand there are about 2,233 outstanding claims. In principle, we support that. The concern is that this bill may not be able to achieve what it intends to do. It may not be able to achieve that speedy, flexible, and cost-effective process.

The reasons are, firstly, that for the tribunal to function well, we need experts and lawyers. But these experts and lawyers can be too busy to be available. Secondly, even if some of them are available, there is a possibility that they are already involved in some court process and, therefore, may not be able to serve in a tribunal because of the conflict of interest. Thirdly, the tribunal can always pass complex cases back to the court system. But we understand that many of these outstanding claims are complex, so in that sense, this may actually slow the whole process.

Finally, all the decisions made by the tribunal can be appealed. That means that there will be a double-up in terms of the process, because once the tribunal has made a decision and then it’s appealed and goes back to the court, it means a further delay. So it’s a long process. In that sense, we are concerned that this whole bill might not be able to achieve what it intends to do. Hopefully, during the committee stage, we will be able to improve this bill. Thank you.

Hon RUTH DYSON (Labour—Port Hills): It gives me great pleasure to speak in the second reading of the Canterbury Earthquakes Insurance Tribunal Bill. I want to begin by thanking and acknowledging the Minister of Justice, the Hon Andrew Little, for driving this manifesto commitment into legislation. It is long overdue and has been warmly welcomed in Canterbury. It’s 8½ years since the series of earthquakes started, and, finally, we’re giving Cantabrians an opportunity to have their outstanding earthquake issues resolved.

I want to commend the Governance and Administration Committee for the work that they’ve done. They’ve made a number of really sensible suggestions—probably prompted by submissions or discussion that they had amongst themselves—and I want to commend them for that. They added the word “fair” to the purpose. So the member who’s just resumed his seat, Jian Yang, talked about a “speedy, flexible, and cost-effective” resolution process, but the select committee added the word “fair”, and I think that’s an excellent addition. They extended the date range so that the 23 February 2011 quake could be included, they added the ability for parties to comment on transfers at more stages than the original legislation allowed, and they’ve expanded the opportunity for expert and technical advice.

With all the recommendations made by that committee—chaired by Brett Hudson, list MP from National—I think they’ve done a really good job. They’ve obviously thought about it and listened carefully to the submissions, which were almost unanimously in support of the legislation. I think the recommendations they made have improved it. I want this bill to make progress fast, so I’m going to limit my comments to those that I’ve already made, and I commend its progress to the House.

ANDREW FALLOON (National—Rangitata): Thank you, Madam Assistant Speaker. I’ve been in this Parliament for about 18 months now, but this is my first opportunity in that time to take a call on a Canterbury earthquake recovery bill, despite being from Canterbury myself. So I’m looking forward to taking a very brief call tonight.

The Christchurch earthquakes, or the Canterbury earthquakes as they’re probably better described in this legislation, had a very profound impact on Canterbury, right across the region. As has been talked about this afternoon by my colleague Jacqui Dean, there have been increased levels of anxiety, and, unfortunately, we continue to see mental health issues across particularly Christchurch but also Canterbury.

Although not on the same scale of the catastrophic damage that we saw in Christchurch, there was, of course, other damage in other parts of Canterbury, in places like Kaiapoi and even some damage further south in my electorate—particularly around Ashburton. In fact, there was some damage to my parents’ house, and that resulted in an Earthquake Commission claim as well—joining many thousands of other Cantabrians.

So we join the Government in wanting to see a flexible and fast and—more than anything—fair approach in relation to claims. We do support the intent of this bill. As has been laid out earlier by Brett Hudson, we will be putting forward some changes at the appropriate time, but at this point we do support the bill. Thank you.

GINNY ANDERSEN (Labour): E Te Māngai, thank you for the opportunity to speak on the Canterbury Earthquakes Insurance Tribunal Bill. As a member of the Governance and Administration Committee, it’s great to see it at this point at second reading and to have such strong support across the House. Primarily, I’m pleased for the people of Christchurch that have waited a long time to have ongoing claims resolved.

While I may reside in the Hutt Valley now, I’m proud to say I was a child of Christchurch—in Cashel Street, I waited. That was really a long time for a lot of people waiting to have their justice served. So I’m so pleased to see, after eight years, Cantabrians are no longer having to feel so weary and frustrated and are having this option in front, and it’s good to see that it’s not such a combative process as what going through the court system can be. Through having mediation and having people able to go through and get a sense of closure so people can get on with their lives, mediation is a far more flexible tool to be able to suit the needs of each and every one of those individual claims that come forward.

So it’s good to see the tribunal’s been designed so it can be easily accessed by policyholders and that there’s no application fee—so no obstacles for people to get access to that. It’s not intended to replace the courts at all, but it provides another option for people to go forward when they’re not seeing it.

I will not speak too long on this bill. I want to acknowledge the fact that we heard some really good submissions from people, and we were able to have further scrutiny to make some subsequent changes to this bill. It allows a resolution process for those people in Christchurch to go forward, and, hopefully, enables there to be a higher rate of resolution than what we’ve seen in the past.

So, without further ado, I would like to thank all the officials that did great work on that, to commend Andrew Little for championing this through, and to acknowledge all of those Christchurch MPs for the hard work that they’ve done to champion this and make sure that we see some delivery in terms of an election promise made by this Government. Without further ado, I commend this bill to the House.

KANWALJIT SINGH BAKSHI (National): Thank you, Madam Assistant Speaker, for the opportunity to contribute in the second reading of the Canterbury Earthquakes Insurance Tribunal Bill. As other members from this side have already mentioned, we will be supporting the second reading of this bill, and there will be some amendments coming through during the committee of the whole House.

I agree with all the speakers who have talked about the intent of the bill, and that is what should be happening. But there are issues that have come through because of some lack of consultation on the provisions which have been put into the bill, which are going to be problematic in the future. First of all, I would like to highlight that there was a lack of consultation, other than with the Ministry of Justice, which was consulted. Even the Earthquake Commission was not consulted when this bill was being formulated. Even in the regulatory impact statement, it says that lack of consultation has compounded to the lack of data, which means Cabinet faces some significant unknowns. So even though Cabinet is under dark clouds, how can we expect that this bill will be providing the fairness which was recommended by the select committee?

Another point I would like to touch upon is the system in which the lawyers and the technical people are being put on this tribunal. They are already involved in court cases and there could be a chance that there will be a conflict of interest. Those things could be addressed in this good-intentioned bill if we want to get this work through all of the systems. With these words, I commend the second reading of this bill.

GREG O’CONNOR (Labour—Ōhāriu): I also am a previous resident of Christchurch. I also was—I look back now—privileged to spend three weeks, basically, in the red zone, in a sort of roaming troubleshooting role, basically, in the three weeks following the second earthquake. I know that I was privileged to understand just what effect this had on Christchurch. It was such a tragedy. The rest of New Zealand and the rest of the world sat and watched and put their hands in their pockets and had nothing but sympathy and sorrow for people from Canterbury, but then life went on. Like with all these tragedies, the low-hanging fruit was picked, the easy claims were dealt with, and slowly Christchurch came back to some sort of order.

That great word “munted” that has entered our lexicon now—it is no longer mentioned probably every day as being munted, but for those residents who haven’t yet been able to resolve their issues, it still remains munted, because they haven’t been able to move on. This bill is about allowing that to happen. The system that currently exists, which has the potential for these claims to go on and on for years, meaning that those people will remain in that state that I, basically, and many others moved and found Christchurch in in those days following the earthquake—but they’re still there. So this piece of legislation is really a piece of moving-on legislation, if you like. It will just allow a new system to ensure that those whose lives are pretty much stuck as they were at the time of the quake can actually get on and be part of, really, the recovery of a great city.

Those that are going and visiting Christchurch now will see that it has moved on for many. It is, once again, becoming the pleasant place to visit and to live in that it once was, and I’m sure it will be better in the future. Let’s just make sure that everyone gets an opportunity to be part of that recovery. So I have no hesitation in commending this bill to the House.

Amendments recommended by the Governance and Administration Committee by majority agreed to.

Bill read a second time.

Bills

Insolvency Practitioners Bill

Report of the Economic Development, Science and Innovation Committee

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): I move, That the amendments recommended unanimously by the Economic Development, Science and Innovation Committee be adopted on this Insolvency Practitioners Bill.

Madam Assistant Speaker, I’d like to thank you for giving me the opportunity, but not to speak to the second reading of this bill, because it already has had a second reading. We are speaking to the consideration of a report of the Economic Development, Science and Innovation Committee, and I want to thank members of that committee for their work and consideration of this bill for a second time and for their report to the House in December last year. As I said, for those who are watching, this is a bit of a rare occurrence—a consideration of a report; not a second reading—because this piece of legislation has had a somewhat lengthy and chequered history. If it’s OK, Madam Assistant Speaker, I would like to go into some of that detail.

The first version of this bill was introduced into the House in April 2010, and that bill featured a negative licensing system for insolvency practitioners, which empowered the Registrar of Companies to prohibit certain individuals from providing insolvency services when a business went into liquidation or insolvency. Then, in May of 2011, the Commerce Committee of the time reported back on the bill, and it concluded that the negative licensing system within the bill at that time would not adequately address the problems that were associated with insolvency practitioners who were dishonest or who lacked independence. The committee instead recommended a different path. It recommended that the bill as it stood then be amended so that insolvency practitioners would be required to be registered in order to undertake insolvency duties, and it recommended that the bill as it stood then include offences and penalties for practitioners who failed to comply with the conditions of the licensing regime that they were recommending.

Then, in 2016, the previous Government identified two problems with the registration system. First of all, the system as it stood would not have adequately addressed the competency and integrity issues that we were trying to address, because the disqualification criteria at the time were minimal and there were no skill or experience or good character requirements to obtain registration. Then, secondly, the registration may have misled some users of insolvency services who might have assumed that if a practitioner was registered, they had the requirements and were fit and had sufficient skills to be an insolvency practitioner.

In order to address those problems, the Government decided that the registration system in the bill should be replaced with a co-regulatory licensing regime. In June last year, I asked that a Supplementary Order Paper (SOP) be tabled and for the bill to be considered again, and we are here debating the consideration of the Economic Development, Science and Innovation Committee on, essentially, the second consideration of this bill.

So, now that I have explained the weird and wonderful parliamentary procedure that this bill has traversed, I’d like to talk about the purpose of the bill as it stands now. The purpose of the bill, as is set out in the departmental disclosure statement, is “to promote better outcomes under the corporate insolvency system by strengthening the regulation of insolvency practitioners.” Corporate insolvency takes place when a company is unable to pay its debts as they fall due or when its liabilities exceed its assets. The objective of a system is to ensure that any remaining assets of a company are allocated for their most efficient use, with the least delay and expense possible. The bill as it stands today supports those outcomes by introducing a new regime for the licensing of practitioners, providing effective ways for holding them to account, and requiring such things as continuing professional development to raise the standards of practitioners’ behaviours over time. These changes are necessary to ensure that all insolvency practitioners meet the basic standards of honesty, competency, and skills which the public will be expecting of them.

Unfortunately, a small number of practitioners continue to fall well short of the standards and they engage in conduct such as charging excessive fees for their services, carrying out unnecessary work to inflate their fees, and acting in the interests of those who appoint them and at the expense of the creditors whom money is owed to. Finally, they have been taking appointments without necessary skills, knowledge, or experience.

At the third reading of the bill, it will be divided into three bills: a new Insolvency Practitioners Regulation Act, featuring the new co-regulatory regime; a Companies Amendment Act; and a Receiverships Amendment Act. The proposed new licensing regime in this bill is modelled on the one in the Auditor Regulation Act of 2011, and under the system, the Registrar of Companies will be required to set minimum standards of licensing for insolvency practitioners and to accredit professional bodies. These bodies will be responsible for the front-line licensing and application of the regulation of individual practitioners, which will include regulating their entry and ongoing competence, investigating complaints against practitioners, and reporting on the adequacy and the effectiveness of their regulatory systems and processes.

The bill as amended by SOP 45, which has been considered by the select committee, also makes amendments to the Companies Act and the Receiverships Act, and these amendments reflect new requirements for the licensing of insolvency practitioners, increase the transparency of practitioner appointments, improve practitioner reporting requirements, and, finally, make other changes designed to raise the standards of practitioners over time, such as requiring them to undergo regular professional development.

In its report to the House, the Economic Development, Science and Innovation Committee has given its support to the bill and has recommended some minor changes, all of which the Government will be adopting.

In conclusion, I want to reiterate my view that the bill will ensure insolvency practitioners have the integrity and skills needed to carry out their duties, and, in so doing, it will enhance the integrity of the corporate insolvency system. I commend this bill to the House.

BRETT HUDSON (National): Thank you, Madam Assistant Speaker. I rise in support of the Insolvency Practitioners Bill in this consideration of a select committee report. As the Minister of Commerce and Consumer Affairs has pointed out, we find ourselves in a not unique but rather remarkably rare situation in Parliament where we are debating, simply, a select committee report, because we are debating a bill that has, in fact, already received a second reading some years ago.

The bill has had a long gestation period in the House, which I’m sure has allowed for some very deep contemplation. I would like to take this opportunity to thank all of those specialists in the House who are so proficient at deep contemplation. I’m sure they have added something to what we are talking about today. Specifically, what we’ll be talking about is the current Minister’s Supplementary Order Paper (SOP) 45, and, in particular, the commentary and the scrutiny it received by the Economic Development, Science and Innovation Committee.

In simple terms, the SOP, as it amends the bill as it has existed for some time, creates a co-regulatory licensing regime for insolvency practitioners. The bill in its very first form had a negative licensing regime, which was a very low-touch but arguably effective regime where anyone could be an insolvency practitioner, but there were expectations and rules applied to that, and if they were contravened or not complied with, those practitioners could be, effectively, struck off—to use that term. It then went through a process of looking at a potentially very positive licensing regime where they are listed, and if you’re not on the list, you can’t be an insolvency practitioner. Now we’re looking at a co-licensing regime where we have a Government entity as a regulatory body, but also with some industry bodies having a very strong role to play in both the effective registration but also management of practitioners in our commercial market space.

What I would like to talk about in this contribution—at least, on the report—are just a couple of points that were discussed and amended in looking at the SOP. The first is a duty to report serious problems. New Part 5 of the bill would impose duties and restrictions on licensed insolvency practitioners, and they were to report things that were out of order or potentially unlawful, or items, perhaps, of oversight or negligence. We looked at the duties that were placed on practitioners and felt it was very reasonable that if in the course of discharging their duties, either directly or through information they received indirectly, practitioners should be required to bring that to light. But we were a little bit cautious that we had to be clear that it was what they discovered, not what it might be assumed that they might have learnt. So there was an amendment proposed in the report just to clarify that, to make sure that it was things that the practitioner learns about or discovers either directly in the work they’re doing or indirectly through information provided to them in the course of that work. But it does certainly place that duty on them to report those serious problems.

The other area was on solvent liquidations and particularly directors’ declarations. Previously, the situation has been that under a solvent liquidation, directors could declare a liquidation was solvent and, therefore, appoint a liquidator that was not licensed, and they would have to provide no proof and they would face no consequences if they actually did not reasonably consider that the company could pay its debts. There’s a pretty obvious potential loophole there, so in the report we recommended strengthening those existing requirements by requiring that the company’s board of directors declare that the company is able to meet all of its obligations to creditors within 12 months and by adding an offence provision, and that just tightens things up.

It does mean that if you are, fundamentally, looking at a solvent liquidation, which is the expectation that all creditors can be paid—certainly, all secured creditors—then there is no need to have, or there should not necessarily be a need to have, that licensed practitioner. There is a very different approach taken to it because it is considered that the company will have the means to pay its debts. But we do need to make sure that where such a situation is permitted, it can’t be misused, perhaps even fraudulently so. So the recommendations the committee have made just help to strengthen that and make sure that there is both a compliance requirement but also a suitable penalty if that compliance requirement is not met. That pretty much, I would argue, reflects the committee’s consideration of the SOP in general.

We supported the bill, of course. It was originally our bill. We supported the SOP and we continue to do so, but the committee went through some extensive consideration of that SOP and offered some very sound recommendations for improvement. It’s those recommendations that we are discussing tonight, and which the Minister has clearly signalled that the Government are going to adopt in full. So on that basis, we have no problem in continuing to support this bill as it progresses, and I commend it to the House.

Dr DEBORAH RUSSELL (Labour—New Lynn): I rise to take a very short call on this bill. The previous speaker has spoken of some of the requirements around who may practise—insolvency practitioners, and the like. I’m interested in the minimum standards to become licensed to become an insolvency practitioner. They’re contained in clause 35 of this bill—sorry, it’ll be subclause (2), and it’ll end up in a particular part of the legislation. It prescribes minimum standards for people who may be insolvency practitioners: you need a degree, a diploma, or a certificate, you might have to pass a specified exam, and you might have to demonstrate a certain level of competence. These are not just mere ticks in a box. What they are saying is that in order that someone holds themselves out as an insolvency practitioner, they must have the skills required to do the job.

We’ve had a few too many cowboys operating in this space—a few too many people who might have wanted to have practised well, but seem to have been unable to; a few too many people where things have gone wrong in insolvency practice—and, of course, by the nature of insolvency you’re already dealing with a business where something has gone wrong. We require a high standard of skill from our insolvency practitioners. From the work of the select committee and the work of successive Parliaments, we have now reached a stage where we are able to say who should be able to practise as an insolvency practitioner and to set standards for them, and that is part of what this bill does. I commend this bill to the House.

ANDREW FALLOON (National—Rangitata): Thank you, Madam Assistant Speaker, for the opportunity to speak on the Insolvency Practitioners Bill—the consideration of the select committee report—this evening. The first thing that stands out for this bill is its age. It was first introduced in 2010 and, in fact, is just approaching its ninth birthday now, which doesn’t quite make it as old as Simeon Brown and doesn’t quite rival, I think it was, the Conservation (Protection of Trout as a Non-commercial Species) Amendment Bill, which, from memory, sat on the Order Paper for about 20 years and saw about six different Prime Ministers. So it’s not quite as old as that bill, but, I’m sure, it is much more worthy.

I would like to commend Minister Kris Faafoi for progressing this bill. He’s given a very good explanation this afternoon of what the bill does but also given a good explanation of why we’ve got to this position of having to debate a consideration of a select committee report, which is quite rare in this Parliament.

I, of course, sit on the Economic Development, Science Innovation Committee, which was previously called the Commerce Committee, which has now looked this bill twice and has recommended it both times with some amendments. I would like to commend it to the House. We will be voting for it this evening. Thank you.

Dr DUNCAN WEBB (Labour—Christchurch Central): This is a much-needed bill, and for a number of reasons. First of all, there is the danger of captive liquidators, who, essentially, do the bidding of the former owners and directors of firms. What this bill does is twofold. Not only does it have a licensing regime which means that liquidators will now have to pass a fit and proper person test and have the appropriate qualifications for the task, but it also requires as a matter of law for liquidators and insolvency practitioners to report director wrongdoing.

So in those kinds of situations where the liquidator sees something going wrong—looks back and sees that perhaps a director has failed to account for company funds or has operated in a position where the company was clearly insolvent or any of the other things set out in clause 71 of the bill here—then there will be an obligation to report that, and what will then happen is action will be able to be taken. This is really important because this is not about protecting the insolvent company or its owners; it’s actually about protecting creditors, and those creditors are ordinary folks, plasterers, painters, building contractors, and anyone else who the company has run up a debt with.

So what we have here is an integrity requirement that a liquidator brings to any liquidation a proper and reasonable and fair approach, so that where there are claims that can be made, because it has to be said that some liquidators are a little too focused at times on their liquidator’s fees and seeing that they get the best return on the hours they put in, whereas in many cases there is hard work to be done—hard investigative work and sometimes hard litigation management work. But that’s work that really should be done, because the creditors do not each and of themselves have the resources to do that.

Certainly, in my own practice, I’ve come across situations where liquidators have been appointed by a company director who’s put his or her own company into liquidation, and they’re more or less mates. The liquidator is in the pocket of the shareholder, and in that kind of situation it is a wrong in and of itself, but it’s a wrong that’s very hard to chase down. So one of the things with professional bodies and accredited bodies being able to accredit liquidators is it’ll make sure that people who are either poorly qualified but also not sufficiently independent, who don’t have an appropriate professional background, and who don’t understand the very significant task before them won’t be appointed as liquidators.

The other thing that this bill also does—which is very important—is it brings liquidators very clearly within the purview of the courts. Now, whilst an application can be made in courts under the existing framework, this makes the manner in which that can be done a lot clearer, it makes the powers of the courts a lot clearer, and it makes the obligations of liquidators and other insolvency practitioners a lot clearer as well. That is a very important step because with anything that’s done outside judicial scrutiny, things can go wrong. Of course, the other thing that must go on here is that there must be an appropriate report given by the liquidator at the end of any liquidation. So for that reason, I commend this bill to the House.

JONATHAN YOUNG (National—New Plymouth): Just very briefly—

ASSISTANT SPEAKER (Poto Williams): I call Jonathan Young.

JONATHAN YOUNG (National—New Plymouth): Yes, I have called—thank you, Madam Assistant Speaker. Thank you very much for the work that the Minister has done on this bill. He’s certainly backed up the work that the Economic Development, Science and Innovation Committee have done. It’s a very technical bill, and it’s timely that we come to a closure, hopefully, on this debate now and send it to the vote. Thank you.

Motion agreed to.

The House adjourned at 6 p.m.