Thursday, 30 May 2019

THURSDAY, 30 MAY 2019

THURSDAY, 30 MAY 2019

The Speaker took the Chair at 2 p.m.

Prayers.

Bills

Supplementary Estimates Documents

Hon GRANT ROBERTSON (Minister of Finance): I hereby present the Supplementary Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2019.

SPEAKER: That paper is published under the authority of the House.

Budget Documents

Hon GRANT ROBERTSON (Minister of Finance): I hereby present the 2019 Budget Speech, the Budget at a Glance, the Wellbeing Budget (including reports on fiscal strategy and on child poverty, and the summary of initiatives), the Budget Economic and Fiscal Update, and the Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2020.

SPEAKER: Those papers are published under the authority of the House.

Appropriation (2019/20 Estimates) Bill

First Reading

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Appropriation (2019/20 Estimates) Bill be now read a first time.

Bill read a first time.

Budget Statement

Second Reading

Hon GRANT ROBERTSON (Minister of Finance): I move, That the Appropriation (2019/20 Estimates) Bill be now read a second time.

It is my great pleasure to present the second Budget of this coalition Government and the first Wellbeing Budget for New Zealand. From the day we took office, this Government has committed to putting the wellbeing of current and future generations of New Zealanders at the heart of everything we do. Budget 2019 shows that we are delivering on that commitment. It shows a Government that is not satisfied with the status quo.

In the election that led to the formation of this Government, New Zealanders were asking a core question: if we have declared success because we have a relatively high rate of GDP growth, why are the things that we value going backwards, like child wellbeing, a warm, dry home for all, mental health services, or rivers and lakes that we can swim in? And the answer to that question was that the things New Zealanders valued were not being sufficiently valued by the Government, and because they were not being valued, they were not being measured, and because they were not being measured, they were not being done.

So today, in this first Wellbeing Budget, we are measuring and focusing on what New Zealanders value: the health of our people and our environment, the strengths of our communities, and the prosperity of our nation. Success is making New Zealand both a great place to make a living and a great place to make a life. I am proud to be part of a Government that is doing things differently, because not only has this Budget measured our success differently, we have embedded wellbeing at every stage of the creation of this Budget: from setting priorities to analysing proposals to making the inevitable trade-offs that come with the privilege of being in Government.

For me, wellbeing is when people are able to lead fulfilling lives which have purpose and meaning to them. A Government does not determine a person’s wellbeing, but we can certainly play a part. Ensuring New Zealanders have the capabilities to do this requires tackling the long-term challenges we face as a country. I want to sincerely thank all members of the Government for their support for this new way of doing things. New Zealand First and the Green Party have embraced this new approach. The coalition agreement, the confidence and supply agreement, and the Speech from the Throne remain the foundation documents of our Government and in this Budget we take further steps to deliver on them, building on the Foundations for the Future Budget of 2018.

Before moving to discuss the details of the Budget, it is important to acknowledge that it was put together in the shadow of the March 15 terror attacks. That day changed the lives of the families of the 51 who died, those who were hurt or injured, and the wider community, particularly the Muslim community. As a country, we must continue, as the Prime Minister said in the days after, to walk alongside them in their grief. In addition, we need to take the lessons from this tragedy to build a better, kinder, more inclusive country, and over the last two months, and in this Budget, we have made provision for a number of direct responses to the terror attacks. We have increased funding for mental health support services in Christchurch, put in place funding for additional financial support for families, and increased funding to support our wider ethnic communities. This Budget also sets aside $150 million for the gun buy-back scheme, based on initial advice from officials. Any additional funding that is required for the scheme will be sought as needed, and following on from the royal commission into the attacks, we will consider what funding or support is required to ensure our security and intelligence services provide New Zealanders with the information and confidence they need. In the meantime, this Budget allocates an additional $50 million to support the New Zealand intelligence community to continue its work.

This is usually the point in the Minister of Finance’s Budget speech where they discuss the economic and fiscal outlook, but in applying a wellbeing approach to this Budget we have not only examined the performance of our economy and finances but also the welfare of our people, the health of our environment, and the strength of our communities. So this Budget presents a wellbeing outlook. My ambition is that, from now on, at every Budget New Zealanders will be able to clearly see the direction their country is travelling in and how the Government of the day plans to influence that direction with the investments it makes.

Evidence from the Treasury’s living standards framework, which is made up of the four elements of wellbeing, suggests New Zealanders currently have relatively high levels of wellbeing but there are significant gaps. The state of our financial and physical capital is broadly strong. New Zealand has relatively high material living standards, and the economy is forecast to grow at 2.6 percent on average over the next five years. While this is a lower growth rate than what we have seen in recent years, it is still well ahead of forecasts for other advanced economies, including the US, the UK, and Canada. The labour market is strong, with unemployment at 4.2 percent and set to remain at around 4 percent across the forecast period. Wage growth is strong and is expected to average 3.4 percent over the next five years, ahead of inflation. The Government’s books are in good shape. Treasury forecasts the Government’s fiscal position to remain strong, with surpluses across the forecast period and net debt reducing to below 20 percent of GDP in 2021-22, consistent with our Budget responsibility rules. Analysis of our human capital suggests that, on average, New Zealanders are healthy and well educated. Life expectancy continues to gradually increase and is above the OECD median. Our adult skill level is in the top performing OECD countries, and our expected educational attainment is above the OECD median. Although the condition of our natural capital is generally worsening, the proportion of New Zealanders with suitable drinking-water has gradually improved in recent years. In comparison to other OECD countries, the quality of our air is good in most places, at most times of the year. Evidence of our social capital suggests that New Zealanders are well connected. We generally have a strong sense of belonging, and we’re in the top performing OECD countries for indicators like freedom from corruption, trust in others, and trust in Government institutions.

Despite these areas where New Zealand is relatively successful, our analysis has shone a powerful light on where the Government needs to intervene and invest to improve the overall wellbeing of New Zealand. These areas of need include: New Zealand’s poor mental health outcomes, significant numbers of children living in poverty, the country’s high levels of greenhouse gas emissions, unequal growth and low productivity, and significant disparities across indicators of wellbeing between Māori and Pacific peoples and other ethnic groups.

Budget 2019 marks New Zealand’s first ever Budget day report on child poverty. Our goal, as articulated by the Prime Minister, is for New Zealand to be the best place in the world to be a child. We have passed legislation in this House to make sure that Governments now and in the future are held to account for decisions that have impacts on children living in poverty. The Child Poverty Reduction Act will help to ensure an enduring focus on reducing child poverty, political accountability against published targets, and transparent reporting on the progress we are making. The child poverty report indicates that as at 2017-18 around 180,000 New Zealand children lived in poverty on a before-housing cost measure and around 250,000 on an after-housing cost measure. The Government has already set ambitious 10-year targets to halve child poverty and three-year targets to significantly reduce the rates. This Budget builds on the Families Package from last year that came into effect after the baseline data for this report.

The Budget also increases incomes and gives our education system the resources to help make New Zealand one of the best countries in the world in which to be a child. So the child poverty report indicates that, due to our policies, by 2020-21 we will reduce the number of children in poverty on the before-housing cost measure by between 41,000 and 66,000 children and between 50,000 and 74,000 children on the after-housing cost measure. I encourage members to read the full report in the Budget documentation.

In producing this Budget, we have drawn on the 61 indicators within Treasury’s living standards framework dashboard that cover everything from incomes and homeownership rates to subjective wellbeing and our sense of connection to our communities. We have looked at international and national evidence, including the views of the Government’s science advisers, ministries and departments, as well as other inputs such as the child wellbeing strategy. No other New Zealand Government has used this level of evidence and statistical analysis as the foundation for a Budget. The process for Budget decisions has also changed. In the past, Ministers and agencies focused almost exclusively on their own areas of responsibility when designing Budget initiatives, an approach that has not worked for addressing New Zealand’s long-term challenges. This year, Ministers worked closely together, focusing on how they could collectively tackle the Budget priorities as well as address their individual portfolios. There are many examples in this Budget where that collaboration has seen new and innovative programmes emerge.

Through the robust process for Budget 2019, we set five priorities, grounded on a solid body of evidence. I will shortly work through the detailed initiatives within each of these priorities. We are also making the significant investments necessary to meet cost pressures that have built up over the previous decade of under-investment. To do this, we have increased the operating allowances for new spending in this Budget to an average of $3.8 billion per year over the four-year forecast period, an increase from the $2.4 billion set at the last Budget. We have also increased the multi-year capital allowance by $1.7 billion to $14.8 billion.

We have kept in mind the importance of balance, and our commitment to carefully managing the country’s finances. We have maintained a sustainable surplus this year and kept debt at manageable levels. This balanced investment approach is important given the continuing risks of the trade disputes between the US and China, Brexit uncertainty, and a slowing global economy. The increased Government investment in Budget 2019 will stimulate the domestic economy in the face of this global slowdown and outweighs the costs of higher spending and debt. With interest rates at historic lows, now is the time to make the high-value investments we need to secure our future living standards.

The Public Finance Act obliges us to present a long-term fiscal strategy. This year, that takes us beyond the five-year commitment made by this Government to our current debt target in our Budget responsibility rules. We have decided that this prudent buffer should be set out as a net debt to GDP percentage range rather than nailed to a single figure after the expiry of our current debt target in 2022. That range is set to be 15 to 25 percent. A range gives Governments the capacity to take well-considered actions appropriate to the nation’s circumstances—circumstances that change over time. It establishes boundaries within which debt is kept to sensible and sustainable levels and fiscal choices are driven by impact and value. The Budget shows net core Crown debt tracking at just under 20 percent throughout the long-term projections out to 2032.

Turning now to the major priorities of the Wellbeing Budget, He Aha Oranga, the report of the inquiry into mental health and addiction, revealed that we need a whole new approach to mental health and addiction in New Zealand. As it stands, we only have mental health and addiction services for those with the highest needs. People with emerging issues or mild to moderate mental health or addiction needs have been, largely, left on their own or have had to wait too long to get help. Most New Zealanders will have themselves or have a friend or a family member who has struggled with addiction or with their mental wellbeing. Data suggests one in five New Zealanders experienced mental health and addiction challenges at any given time. This comes at a huge cost to individuals, to families, and to the economy. It’s estimated that in 2014 that the economic cost of serious mental illness alone was $12 billion or 5 percent of GDP. It is time to finally take mental health seriously. This Wellbeing Budget makes an investment of $455 million to create new front-line services for mental health. The Government’s aim is to transform our approach so that, within five years, every New Zealander who needs it has access to a range of free services that support and maintain their mental wellbeing. This new layer of services will put trained mental health workers in doctors clinics, iwi health providers, and other health services so that, when people reach out for help, there is a trained mental health worker immediately available.

If there is one issue that has brought discussion about mental health and addiction to the fore in recent years, it is New Zealand’s tragic suicide rate. One death from suicide is one death too many, and the effects of each suicide on friends and family is devastating. The Wellbeing Budget is investing $40 million into suicide prevention services to give at-risk people intensive support. This includes better recognition and support for people who have self-harmed or experienced suicidal distress. Demand for addiction treatment services has grown steadily over the last decade, and we need to do more to support people struggling with alcohol and drugs. That starts with early intervention. Investments in this Budget will make it easier for an estimated 5,000 people a year to get early support through primary care for alcohol and drug issues. Budget 2019 also provides $44 million over four years to improve existing drug addiction services, with a focus on residential care, detoxification services, and ongoing support for the more than 2,000 people who are currently receiving assistance.

We also need to upgrade current facilities and add capacity by building youth facilities. That’s why we’re investing $200 million into new and existing mental health and addiction facilities. At the same time as we develop new models of mental health and addiction treatment, we also do need to do more to support and expand existing services. As part of the overall funding boost for district health boards (DHBs), a total of $213.1 million is ring-fenced to enhance mental health and addiction services. Budget 2019 supports the mental health of our young people by extending nurses in schools to a further 5,600 students by commencing the roll-out to decile 5 secondary schools, at a cost of $19.6 million over four years. And we have also previously backed the integrated therapies programme Piki to support those aged 18 to 24.

This Budget also helps address some of the pressing causes and effects of mental health issues that lie outside of the health sector. Budget 2019 is investing $197 million into Housing First, meaning a total of 2,700 people will now have their lives turned around by helping them into permanent homes. This represents the largest Government investment ever in addressing chronic homelessness. The Government is also investing $128.3 million over four years in mental health and addiction services in our corrections system. Not only is there a clear need for better treatment in our prisons, we know that, by supporting offenders to overcome addiction, we can save taxpayers in the long run by reducing reoffending. Taken together, the investment in our mental health priority is worth $1.9 billion. I want every mother, father, brother, sister, or friend who has seen their nearest and dearest suffer to know that we have heard the call and we are answering it. Mental health is no longer on the periphery of our health system; it is front and centre in all of our wellbeing.

Our second priority is to improve child wellbeing. We know that, every year, almost 300,000 children are affected by domestic violence. Within the State care system, nine out of 10 children and young people have had a family violence incident in their lifetime, half within the last year. Addressing family and sexual violence requires working in new and different ways across Government, with communities, and with Māori. Through the Wellbeing Budget process, eight Government agencies have taken shared responsibility for this issue through a joint venture and have developed a single, whole-of-Government package of initiatives to address New Zealand’s long-term record on family and sexual violence. The $320 million package includes funding and support for sexual violence crisis, support services for children and young people, enabling victims of sexual violence to give evidence in alternative ways to reduce the risk of experiencing further trauma, dedicated funding for a kaupapa Māori response to sexual violence, and covering one million New Zealanders with integrated safety response sites. There has never before been an investment of this scale in preventing and responding to family and sexual violence, and I want to particularly acknowledge the leadership of Parliamentary Under-Secretary Jan Logie in pulling this package together.

If all New Zealand children are to do well, we must do more to break the cycle and stop our most vulnerable from falling through the cracks. The Wellbeing Budget starts to deliver a new system by targeting investments toward providing the very best care for children at serious risk and in the most need of help. And I want to thank the Minister for Children, Tracey Martin, for her strong advocacy for children in care. The new intensive intervention service will use highly skilled support workers to help families and whānau of children most at risk of entry into the State’s care to remain safely at home. This will cover around 150 families and 400 children in the first year. In addition, the Budget provides $26.7 million for the ministry’s NGO partners currently providing early intervention services. The Budget is investing $525 million into care to back the new national care standards. We’re also investing an extra capacity with 350 additional front-line staff, including social workers and more caregivers. Legislative changes mean most 17-year-olds will be included in the youth justice system from 1 July 2019. The Wellbeing Budget provides extra funding to make this transition successful and to improve the outcomes for some of the most vulnerable children in our care.

The Government is committed to ensuring the welfare system is fairer and upholds the dignity of New Zealanders that need support from it. We have already announced that we will increase abatement thresholds, for those on benefits who work, in line with increases to the minimum wage, and remove the punitive sanctions for those women who do not name the father of their children. Today, we add to that by taking the decision that the Government will index main benefits to average wage increases. In 2017, the Children’s Commissioner, Andrew Beecroft, said that the single best thing that the Government could do to combat child poverty was the indexation of benefits. Today, that is exactly what we will do. It is estimated that around 329,000 individuals and families will be better off as a result.

Evidence tells us that educational outcomes early in life are linked to child wellbeing and the potential for positive outcomes later in life. Through the Wellbeing Budget, the Government is delivering a number of significant improvements to improve New Zealand’s educational system. This includes investing in more teachers, including training an additional 2,480, employing more than 600 learning support coordinators in schools, and increased funding for operational grants to meet demand and cost pressures. This Budget will also reduce the financial pressure on families when it comes to their children’s education. The idea of a free education has been compromised by ever increasing so-called voluntary donations. So, from the start of the next school year, all decile 1 to 7 State and State-integrated schools will be eligible to receive $150 per student per year if the school agrees to stop requesting donations from parents. Nearly half a million children, at 1,700 schools, will benefit from this. Meanwhile more than 145,000 households are estimated to benefit from the removal of the $76.70 NCEA fee that families pay every year for 168,000 secondary students.

Evidence also shows how children’s nutrition and physical activity are linked to their academic achievement. I am particularly proud that this Budget provides a $47.6 million investment for an innovative joint initiative from the Ministry of Health, Ministry of Education, and Sport New Zealand to promote healthy eating and physical activity for children. All schools and early learning centres will be supported with new resources, including health promotion guidelines and staff, and school physical activity advisers. This is an excellent example of the joined-up Government approach to wellbeing, with the project a true collaborative effort from the three agencies.

Our next priority is supporting Māori and Pasifika aspirations. As a Government, we have committed to doing things differently for Māori and Pasifika. The evidence in the wellbeing outlook shows Māori and Pacific peoples score consistently lower on most areas of wellbeing relative to the general population, including in measures of income, education, and housing. This is why the Government has made targeted support for Māori and Pasifika aspirations a priority for Budget 2019. The centrepiece of this is the allocation of an additional $80 million to support whānau through Whānau Ora. We are also investing a further $50 million to reduce health inequities for Māori and Pacific peoples by providing targeted services and support and growing our Māori and Pacific health workforces. To further help Māori open up economic opportunities, the Government is investing $56 million over the next four years to unlock the potential of whenua Māori. Current research shows that 600,000 hectares, or nearly 40 percent of Māori land, is underdeveloped.

Seventy-six percent of those in high-security corrections settings identify as either Māori or Pacific, and the re-imprisonment rates of people released from high security are above 70 percent. That is why the Wellbeing Budget contains $98 million in funding for a new kaupapa-based corrections pathway, including for high-security prisoners. The initiative is co-designed by Whānau Ora, corrections, the Ministry of Social Development, and iwi, and aims to tackle the long-term challenge of Māori overrepresentation in the prison system. I want to credit Minister Kelvin Davis for his role in leading that work. The new pathway will enable people to experience a Māori and whānau-centred approach for all of their time with corrections. We are acknowledging that our system does not work for the majority of Māori. This is a system change and a culture change for our prisons.

Our languages speak to our sense of belonging, our identity, and our understanding of how we came to be here. The Government has an aspiration that basic Te Reo Māori will be spoken by a million people in Aotearoa by 2040. Nearly $10 million in this Budget will fund Te Taura Whiri, the Māori Language Commission, and support an increase in certification for Te Reo teachers. A further $14 million is being invested over the next two years to support Te Māngai Paho to fund more Te Reo Māori and Māori-focused content for broadcast across the motu.

Pacific languages in New Zealand are also an important part of our cultural wellbeing; however, without action, we risk losing a sense of culture and belonging for our Pacific people. This Budget provides $20 million to establish a new Pacific language unit with a set of language support functions to help ensure the survival of Pacific languages in New Zealand. Through this Budget, we’re investing $27.4 million to ensure Pacific students and their families have the skills, knowledge, and opportunities to pursue any education pathway, and we’re also investing $14.5 million to place up to 2,200 Pacific young people into employment, education, or training. The Budget supports Pacific businesses through an $11 million investment in the Pacific Business Trust to expand the delivery of a range of business services and support economic development activities focused on growing Pacific businesses and job opportunities.

The next priority is building a productive nation so that New Zealanders thrive in the digital age. Productivity growth is a key driver of incomes both at a household and country level, but New Zealand has struggled for decades to be productive. We’re committed to turning this around. It will require industries and businesses to innovate and adopt cutting edge technology.

It also means New Zealanders will need to acquire new skills to take advantage of the opportunities in the changing job market. Budget 2019 allocates $157 million into innovation, with initiatives to support businesses to become more productive and develop high-value, low-emissions products. Twenty-six million of this will go towards helping commercialise science and research and turn ideas into products and services. This package will support the Government’s target to invest 2 percent of New Zealand’s GDP into research and development by 2027.

There is evidence of a gap in our domestic capital markets, which may be slowing the growth of New Zealand firms. The gap is not being filled by current venture capital. In a productive economy, it is important to have well-functioning early-stage capital markets and a healthy start-up ecosystem. New start-ups are well served but the expansion after the start-up phase is not well supported. So Budget 2019 establishes a new $300 million fund to support the New Zealand Venture Investment Fund in making venture capital investments to take start-up businesses to the next level. The Guardians of the New Zealand Super Fund will support this new investment through governance and by leveraging their investment expertise.

The Government wants to make sure New Zealanders are equipped with the skills they need to adapt and thrive as their workplaces change and to ensure young people are prepared for entering the workforce. This Government has launched a vital reform of our vocational education and training system. We need more high-quality, accessible trades training and apprenticeships, but, at the same time, our polytech system is struggling. We need better coordination, with on-the-job training, and a nationwide, coordinated system that supports quality regional provision. This Budget allocates $197 million to support this.

The Wellbeing Budget boosts Mana in Mahi, the programme that subsidises employers to take on apprentices, extending the places available from 150 to almost 2,000, and progresses towards our goal of 4,000 places. An additional $26.6 million is allocated through the Provincial Growth Fund to extend He Poutama Rangatahi to assist young Māori and Pacific people who are not in employment, education, or training and are at risk of long-term unemployment. The Wellbeing Budget continues the development of the school leavers’ toolkit to better equip young people for life after leaving school. The goal of this programme is for all secondary school students to have access to programmes which provide civics knowledge and skills, financial literacy, and key workplace competencies.

The final Budget priority is transforming the economy. As an outward-facing, export nation, the risks to New Zealand from climate change cannot be underestimated. More frequent and intense weather events will affect the country’s agricultural and horticultural sectors, with flow-on implications for exports and the economy as a whole. The transition to a low-carbon economy will take time, and Budget 2019 is an important step. It provides funding to ensure the independent Climate Change Commission can provide the advice, guidance, and monitoring that New Zealand needs to reduce greenhouse gas emissions in line with our goal of limiting global warming. Budget 2019 also allocates significant investments into research and development initiatives to develop new ways of reducing emissions—$8.5 million dollars will be invested in the Global Research Alliance on agricultural greenhouse gases, together with an investment of $3.2 million for the agricultural climate change research platform. This will support world-class research here in New Zealand to help agriculture deal with the effects of climate change. So much of what New Zealand relies on for wellbeing is derived from the land. Changing the way we use our land can have significant benefits for the health of our waterways, contribute to our climate change goals, and increase productivity. The Wellbeing Budget provides more support for farmers and councils to make positive land use changes. A $229 million sustainable land use package will invest in projects to protect and restore at-risk waterways and wetlands and provide support for farmers and growers to use their land more sustainably.

The Budget provides support to address capability gaps and inconsistent practices across regions in relation to the development and implementation of freshwater rules. This includes improving consistency between councils, better compliance and enforcement, better engagement with Māori, and improving scientific knowledge to inform plan development. Forestry plays a critical role in improving water quality, reducing carbon emissions, and creating jobs. The Wellbeing Budget allocates over $49 million to help transform the forestry sector and support our one billion trees programme. Combined with existing funding, this equates to an investment of $58 million in Te Uru Rākau. Foresters and landowners will have the support they need to increase the value they receive from wood and timber resources. I want to congratulate the combined group of Ministers who worked together across portfolio and agency boundaries to bring this package forward.

Rail has huge benefits for New Zealanders’ wellbeing, unlocking regional economic growth and reducing emissions and traffic congestion, preventing deaths and injuries on our roads. The previous Government took a hands-off approach and left rail in a state of managed decline. Today, we begin to turn this around. Budget 2019 invests more than $1 billion over the next two years in modernising KiwiRail. These are the first steps in implementing our Future of Rail programme. This includes $375 million for new engines and carriages, $331 million to invest in track and other supporting infrastructure, $300 million from the Provincial Growth Fund for regional rail, and $35 million to begin the process of replacing current ferries that are nearing the end of their lives.

Alongside this investment in rail, this Budget makes significant investments in our infrastructure. One of New Zealand’s greatest long-term economic challenges has been under-investment in our crucial infrastructure. We are committed to closing this infrastructure deficit. This year, we have shifted to a rolling multi-year capital allowance. In the past, Governments have set a single-year capital allowance for the coming year. This approach has meant trade-offs were made between initiatives submitted in a single year rather than based on a medium- or long-term view of the likely capital requirements. The multi-year capital allowance allows the Government to make better investment decisions and provide greater clarity for the construction sector. We have established the New Zealand Infrastructure Commission/Te Waihanga, funded through this year’s Budget. Its job includes producing an infrastructure pipeline and developing a 30-year strategy to provide certainty about the long-term infrastructure requirements of New Zealand.

The Wellbeing Budget, for the first time, makes a multi-year commitment to building new schools and classrooms by setting aside $1.2 billion of funding for the first waves of a 10-year school property programme. Budget 2019 allocates $286.8 million in capital for the first wave of investment to build the new schools and classrooms. A traditional Budget would have stopped there, leaving uncertainty about what funding would be made available in future Budgets. The multi-year capital allowance means we can plan further ahead. An additional $913.3 million has been set aside in this Budget to allow the Ministry of Education as well as schools and communities to better plan for growth over the next 10 years. This is the largest ever investment in school property by a New Zealand Government.

Last year, DHBs reported that about 19 percent of their assets were in poor or very poor condition. The current Government inherited issues with earthquake-prone hospitals, asbestos, leaky roofs, and buildings that had, simply, come to the end of their useful lives. That is why Budget 2019 includes two years of capital funding for health—$850 million for 2019-20 and a further $850 million for 2020-21. On top of the $750 million invested last year, we are delivering on fixing our hospitals. In addition, the coalition Government has committed to the rebuild of Dunedin Hospital, and Budget 2019 sets aside the money for the rebuild, which will be allocated over the life of the project. These crucial investments in our schools and our hospitals are the central components of the Government’s infrastructure package in Budget 2019. In addition, the Budget contains a host of investments that support the provision of critical public services and provide new programmes across portfolios that I do not have time to fully outline today.

Before I finish today, I want to be clear that, as significant as it is, this Budget is just one step in a longer process of reform. For the Government to embed wellbeing into how we undertake public policy and make decisions, we need to go beyond the Budget process. We are amending the Public Finance Act to ensure that broader framing is used in the development of each Budget, as we have done with the Budget delivered today. Each year, the Government will be required to set out how its wellbeing objectives, together with its fiscal objectives, will guide its Budget and fiscal policy. In addition, Treasury will be required to report on current and future wellbeing outcomes at least every four years. The Government will also reform the public finance system and the State sector Act to reduce risk aversion, promote innovation, and support a more rapid response by the public sector to issues and challenges. This will mean changes to budgeting, planning, and accountability requirements for agencies.

The Wellbeing Budget is about a new approach to tackling New Zealand’s long-term challenges. We do not claim perfection on the first attempt, but we do believe that this Budget represents a significant step forward. Our priorities are clear: taking mental health seriously, breaking the cycle on child poverty and domestic violence, supporting Māori and Pasifika aspirations, investing in crucial national infrastructure by building new schools and hospitals, managing the books responsibly, and addressing long-term economic challenges such as building a sustainable economy and preparing for the jobs of the future.

In 1968, Robert Kennedy bemoaned the limits of GDP in a well-quoted speech. In it, he concluded, “It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything, in short, except that which makes life worthwhile.” Today, 51 years on, we begin, through this Budget, to value and measure all that makes life worthwhile in New Zealand. I commend to this House the Wellbeing Budget.

Budget Debate

Budget Debate

Hon SIMON BRIDGES (Leader of the Opposition): I move, That all the words after “That” be omitted and the following substituted: this House has no confidence in this bungling and incompetent Government because they are overseeing a slowing economy, declining job creation, a rising cost of living, and they are failing to deliver on their promises to New Zealanders.

This is a botched Budget by a bungling, incompetent Government. But it’s what this Budget isn’t that is the real tragedy for New Zealanders. It sure as heck isn’t a wellbeing Budget. It isn’t a Budget in the Prime Minister’s so-called year of delivery—delivering for New Zealanders—and, most tragically of all when you consider what we’re all trying to achieve, it has no plan to grow our economy and deliver that wellbeing for Kiwi families, for mums and dads, for middle New Zealand, who get out of bed every morning and work and make this such a great country. They are worse off under this Budget, from a slower economy, from higher taxes—and I’ll come to that—debt and more of it, and wasteful spending. But before I get to that, I want to come back to the botch, briefly, because this Government is embarrassed—

Hon Amy Adams: Which one?

Hon SIMON BRIDGES: Which one? Good point. This Government is embarrassed that, as with our economy and our health and our education systems, they’ve lost control of this Budget, and so they’re lashing out unfairly here, there, and everywhere. Well, I’m going to explain a few things to them about the so-called hack. Someone went to a website and they looked at the top right of the website, and what did they find? A search bar—that is what they found. And when they typed in things like “2019-20 defence” the money came up. There were no tricks and nothing clever; it was on the website for anyone, including my 7-year-old son—if he wanted to; I’m sure he didn’t—to find. I can hear “Old Naughty” ringing in my ears. Maybe his locus of control is a little out of kilter. Grant Robertson’s is today.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. Reluctant as I am, there should not be a case where someone can use a phrase like that, otherwise I might refer to “Young Stupid”, and you wouldn’t like that either.

SPEAKER: There’s a tradition, as far as the Budget debate is concerned, to let debates run, to have much less interjection than we have had in the last three minutes, and also not to make unnecessary points of order. I just want to say to the Deputy Prime Minister that a number of us may have taken slight offence at that interjection, but it wasn’t bad enough to interrupt the House, and he is warned not to do it again.

Hon SIMON BRIDGES: This Budget is the “botched Budget”. It’s about as safe and secure as the gun cabinet at the Palmerston North police station. Jacinda Ardern did say that the world would be watching this Budget, and they sure are—it’s just for all the wrong reasons. I was watching TV last night—we were on the BBC; we were all over the place, watching Jacinda Ardern. But as I’ve said it’s what’s not in this Budget that, sadly, matters. We have been, haven’t we, promised this new thing that is transformation, revolutionary, and spectacular—drum roll please. What is it? Wellbeing. That’s what we’ve been promised. It’s as if other Governments haven’t had this at the heart of what they’ve been doing for decades and decades, and it is a nonsense. But we were told that this Budget, for the first time, would be strategic, that there’d be no silos, and that everything would be done in accordance with evidence and according to wellbeing principles that the Government’s set out.

Well, if that’s true—[Interruption] exactly right—I’ve got just one question for the Prime Minister when she speaks: why is there money for defence and trains and not teachers’ pay and a 1 percent increase for cancer drugs that keep people alive? And that means people are going to Australia. That’s the emptiness of the wellbeing principles and the spin we’ve seen in relation to this Budget.

I’ll tell you why: because New Zealand First stole the shrinking cookie jar. And be clear: it is shrinking. Over time, with a weakening economy, that’s what we’re seeing, and Jacinda Ardern knows that is the price of this Government. Like this Government generally, this Budget is all glossy pics and spin.

But what it isn’t—don’t go looking for real wellbeing inside it. Real wellbeing doesn’t look like jobs from 10,000 a month to negative 4,000 this year. It doesn’t look like 13,000 more beneficiaries. It doesn’t look like hardship grants up $50 million a year. It doesn’t look like emergency housing tripled, when Phil Twyford promised us no one would be sleeping in cars last year and it’s worse. Those at the bottom are doing worse.

The Government talks about indexing of benefits, but the reality is that doesn’t even keep up with rent increases. That’s what we’ve got here. Kiwi families and mums and dads who go to work each day—middle New Zealand—they are going backwards.

I said I’d come back to tax: $71 million tax snuck into this Budget on GST on mobile roaming—several million bucks. Just another tax hidden in the fine print; didn’t see that in the press releases. Fifty-six million dollars in tax on a WorkSafe levy. That takes the taxes by this Government to eight and counting. All the while, for middle New Zealand the costs are going up and they are worse off. Rent is up $50 a week to $450 a week, the highest ever for the third of New Zealanders who rent in New Zealand. That’s not kind, Jacinda Ardern. Those taxes and regulations, they are not kind.

Fuel is up—the highest we’ve seen, I think, in at least six months—to $2.20. Again, it’s the tax and the regulation that is in the Government’s programme, and more to come, that are doing this. Without those taxes, it would be some $2, much more affordable. It would mean Kiwi families had more for the essentials that they need. That’s not kind, Jacinda Ardern.

Electricity is going up. Don’t ask me; ask the retailers. That is what they’re doing, and that, again, means less in essentials for Kiwi families who work hard, who pay their bills, and who actually don’t have enough to do that, thanks to this Government and their programmes. You can’t mess around with oil and gas. You can’t play around with the pricing of electricity, as this Government does, in a study and have no effect. That’s not kindness.

You know what the best example of all of that is? Actually, it sums up this Budget: it’s right on the cover of this. One of the young women in this didn’t want to be on it. Do you know what she’s done, Clayton Mitchell? She’s moved to Australia, because the costs of living under this Government have gone up more than ever before. That tells you all you need to know about this Budget. It’s glossy pics, it’s spin, but, in terms of real wellbeing for New Zealanders, it just isn’t there. That tells you all you need to know. This is many things, but it isn’t a wellbeing Budget.

In the so-called year of delivery, it’s not just wellbeing that’s not being delivered. Anything promised has been broken. Anyone want to talk about capital gains tax or fiscally responsible debt targets? [Interruption] Oh, I can hear something again. It’s that locus of control flying around the room—oh no; that’s locusts. Does anyone want to talk about immigration, welfare reform, fees-free, or KiwiBuild? All reset, which is code, we know, for no delivery—broken promises by that Government over there. Let’s go through it—they’re recalibrating; that’s right.

Housing: I don’t know if Phil Twyford’s actually read the Budget—or hacked it, as Grant Robertson calls it these days. Do you see any mention of KiwiBuild? Not a whisper. Not a single thing in Grant Robertson’s speech on KiwiBuild. It’s about as popular as Gabs Makhlouf in the Beehive these days—talked about as much, I suspect. Housing First—that’s the one thing that’s here. Here’s the problem: that’s ours, Jacinda Ardern. The only policies in this Budget that work are ours.

In transport: not a single new road anywhere. If all there is is Winston Peters’ ghost trains—containers carrying nothing and carriages carrying nothing because the customers don’t want them—that’s simply not good enough when all the roads are cancelled and there’s not a single new one being built—well, except for the roundabout at Shane Jones house; that’s true. That’s it in transport.

In law and order, the tragedy is crime—serious crime—is up some 25 percent. They use the fake news on that, but Andrew Little’s figures make it so. It’s very clear—it may in fact be more. Gun buy-back: $168 million. It’ll cost them—you heard it here first—at least half a billion dollars. They haven’t remotely covered the cost on that. Drug-driving regime: not there. If they were serious about this stuff that Nick Smith and others have championed—71 million dying a year—they’d do something about that, and they’re not. Here’s the other little thing I saw when going through this Budget. The drug and alcohol courts of New Zealand: no more funding—in a wellbeing Budget, no more funding. I say shame on that.

Then the big two, which you’d really expect to see the transformation, the revolution, in this Budget: education and health. In education: yep, there are some buildings that any Government would do. But $1.2 billion over a decade isn’t enough. It’s smoke and mirrors in relation to that. I say to Chris Hipkins: what’s the use of classrooms without teachers? What’s the use of classrooms without teachers? It’s tanks and trees not teachers that this Government, in this non - wellbeing Budget have prioritised. Some 40 broken promises in education, my colleague—40—Nikki Kaye has told me. This isn’t a wellbeing Budget; it’s a broken Budget.

In health: mental health, sure. I acknowledge what’s there is good, and I celebrate that. But there’s double-counting. There’s smoke and mirrors. They’ve put Housing First in it and double-counted that. It’s not transformative—more broken promises in this sector, as with others, in what matters so much to our families. Fewer surgeries—less new money in that than we saw the year before. A 1 percent increase in cancer drugs.

People like this are moving to Australia because they’ve seen the cost of living issues, they’ve seen the stronger economy, and they’re voting with their feet. I say to Jacinda Ardern: how can it be a wellbeing Budget when there really are only crumbs under the table for cancer drugs in this country?

Midwives: nothing. Dental care: nothing. St John Ambulance: look, it’s islands got more than ambulances in this Budget. Where, Jacinda Ardern, is the $10 dollars off the GP visits? Weeks before the election at the Ōtara markets, she was there with the Tua man behind her, and she promised it and a transformation. “Let’s do this!”, she said. I’d say it’s more like “Let’s botch this!” by Jacinda Ardern. Where are the annual free health checks that are mentioned, Rt Hon Winston Peters, in this—free health checks annually for seniors, dental, and also eye checks? Not there. In fact, nearly all the things he promised aren’t. He’s prioritised other things that he cares about. It’s broken promises. All this Budget does in health is keep the lights on, and it barely does that.

They’ve delivered one thing: the “Shane Jones political slush fund”. Actually, I’d like to call it the “Shane Jones memorial fund”, because it’s the last one he’ll ever get. It’s given a loan to a dairy company that’s been sold—Winston Peters—to foreigners. He wanted to give money to an airline that didn’t even want it—160,000 seedlings mulched, and about the only thing that looks any good is a roundabout to Shane Jones’ house.

But here’s the bit that really is the most important thing—or lack of anything—in this Budget, and that’s no plan, zero real plan, to grow New Zealand’s economy for New Zealanders, which means there will be less wellbeing for Kiwi families all around this country, less real delivery by the Government. That’s why they can’t meet their promises. And this lack of plan is why we have a weakening economy—Stuart Nash—from 4 percent growth to 2 percent growth in little under a couple of years. If we need any evidence of that and the shrinking tax take—and the capital gains tax they didn’t get and they were counting on—it’s the $17 billion more they are borrowing in the next three or four years, and it’s in the numbers there, on New Zealanders’ credit cards. But it’s the grandchildren that will pay. That’s what we’ll see there. More debt, more taxes, more wasteful spending, and the Reserve Bank cutting interest rates as well to prop up this Government and the economy.

Indeed, we’re no longer arguing—Jacinda Ardern and I—about that sharply weakening economy; we are simply arguing about who’s to blame. Jacinda Ardern, what does she say? It’s all about the global conditions, except all the evidence is contrary. And Grant Robertson, he’s like that Shaggy song on the economy—“It Wasn’t Me”. Grant Robertson: “Wasn’t me”, but the evidence is clear. We caught him red-handed, and it is him. It’s his responsibility. Growth from 4 to 2 percent: “Wasn’t me”; $17 billion more in debt and wasteful spending: “Wasn’t me”. A cut in the official cash rate to prop up the Government: “Wasn’t me”. And jobs down and benefits up all around this country: “Wasn’t me”. Well, we saw it, Grant Robertson. We caught you red-handed. It is you, and you’re responsible for this economy.

The real reason for all of that is because business confidence and certainty have taken such a hit. As Amy Adams here says to me time and time again, “That is simply New Zealanders, who get up out of bed, who go to their workplaces, and they’re making decisions about whether they hire another staff member or whether they buy that extra bit of kit or equipment.” Right now, with employment law changes, overseas investment changes, the banning of oil and gas, the talking down and the doing away with parts of the international student regime—you can’t do those things, Jacinda Ardern, and it not have an effect. That effect is 4 percent to 2 percent, it’s more taxes, it’s a slowing economy, it’s more debt, and it’s more waste.

It’s worse than that, because the New Zealand economy has gone from reasonable real growth to zero. The only thing that keeps us going, “Old Naughty,” is population increases from immigration. That’s what’s keeping this economy going at the moment. Where is the plan to grow our economy? We need one, and this botched Budget isn’t it.

The Budget’s a bit like a fairy tale I read my children: The Emperor Has No Clothes. That’s what it’s like. Underneath the gloss and the spin, it is a naked, botched, no real wellbeing, no delivery for New Zealanders, and no economic plan—“Wasn’t me” says Grant Robertson, but we caught him red-handed.

Our plan would ensure we did away with wasteful spending and failed spray and walk away policies. That would mean less debt. We would prioritise health, education, and infrastructure. And it’s Kiwi families—middle New Zealand—that have got nothing in this Budget. In fact, all they’ve got is a couple of taxes, higher rents and the like that take more money out of their pocket—we would make sure they get to keep more of what they earn.

We’d ensure business confidence and certainty. In our first 100 days, we would provide for tax relief, for business-friendly employment laws and overseas investment rules, bold Resource Management Act and planning reform, the repeal of the oil and gas ban, and public service targets that actually held officials accountable and delivered real performance for New Zealanders. We’d do Lumsden Maternity Centre—Hamish Walker—and greater maternity care for mums and dads all around New Zealand. As the hardest-working Opposition New Zealand has ever seen, we will be ready to go with wider plans as well.

Don’t worry, New Zealand. In less than 18 months, this bungling, incompetent Government will be gone, and we’ll be ready to lead.

Rt Hon JACINDA ARDERN (Prime Minister): What can I say, other than that was uplifting! I want to start with going right to the heart of this issue, because today we are debating wellbeing. I have to say, I find it somewhat galling to hear the Leader of the Opposition say, “Well, every Government does wellbeing.” I make the assumption, therefore, that that member believes that when he was in Government—indeed, when he was in Cabinet—that his Government did wellbeing.

Why is it then that we are dealing with mouldy, leaking hospitals? Why are we dealing with schools that need more classrooms, that weren’t even funded for population growth, where there was a 40 percent decrease in teachers learning to become teachers, and we are picking up the pieces of that. Why were we left then with chronic homelessness?—people sleeping in cars and on the street. Not just people, children living in cars and on the street.

I make no apology for the fact that, unlike that Government, we have not turned people away from our lists. We have not turned people away. Yes, special needs grants have gone up, because we told Work and Income to give people the help that they need, and I am proud of that.

If that was a Government who cared about wellbeing, why did we inherit 250,000 children living in poverty? Why did we inherit Oranga Tamariki facing cliff-face funding? They weren’t funded beyond their out-years. We’ve had to make sure that they can keep the doors open, plus we’ve added extra social workers. If they really cared about infrastructure, why did they let rail go into the absolute state that it is in now? If you want to talk about safety on our roads, get freight off it and get it on to rail. If they genuinely cared about the wellbeing of our environment, we wouldn’t have heard one of the most mentioned things in that member’s speech, the reversal of the oil and gas future exploration ban. That seems to be his only response to climate change, which does worry me.

It is just not credible to say that the Opposition somehow have invested in all of their time in Government, when this Budget has had to reverse the under-investment that we have experienced. It is not credible to say what they would have done and would be doing, when they were here only 18 months ago. If they cared so much about all of those issues, why did they not do it then? I’m very pleased to hear about their new-found interest in dental care, for instance.

But this Budget does something about all of those things—those areas of under-investment that we inherited. It is about genuine wellbeing. But sometimes what is not said gives a bit of an indication about what’s going on as well. The member mentioned mental health once. And he mentioned it in order to call a billion-dollar investment in mental health services “Smoke and mirrors.” I have to say, I don’t think I heard the member mention children almost once. If there’s one thing I learnt in Opposition, sometimes it is OK to agree. Sometimes it is OK to acknowledge that there is a problem, and that it’s worth facing it and it’s worth investing in it. And I would hope, when it comes to child poverty and mental health, that it might have been one area where the Leader of the Opposition might have just said “I agree.”

Finally, as for the cover image, I’d liken it to the situation somewhat similar probably to the Opposition caucus room. Regardless of the smiling faces on the front, it’s what happens on the inside that really matters.

Today we have laid down the foundation for not just one Wellbeing Budget but a different approach for Government decision-making all together, and for that I want to thank Grant Robertson. The vision for this Budget started many years ago when our finance Minister was in Opposition. He created this piece of work not because it was an interesting project, which it is, but because he heard many an economist say that GDP wasn’t enough to measure success, and he agreed and did something about it. I want to say thank you, Grant. This was a first in so many respects, and its legacy won’t just be a document, but the hundreds of thousands of lives that will be changed as a result.

I also want to thank our coalition partner New Zealand First, and especially the Deputy Prime Minister. There are elements of this Budget, including, for instance, the investment in rail, that have been a huge focus for New Zealand First, as a party. But there are other elements where your Ministers have taken on portfolios and delivered important agendas that are central to wellbeing like our Minister for Children, Tracey Martin, and for that we thank you.

To our confidence and supply partners, the Green Party—in this Budget we fulfil many of our commitments to both you but also to the environment. That includes making sure that the economic transition required to deliver emissions reductions is effective, is efficient, and is just. But more than that, today we further our shared ambition to lift the wellbeing of all New Zealanders, and particularly our tamariki.

Thank you to all the parties in this Government for your collective commitment to being a Government that is not satisfied with the status quo, and is instead tackling our long-term challenges, and we’ve demonstrated that commitment here today.

It is here, with these words of thanks, that I’m actually going to depart from a traditional Budget day speech. Now, usual practice would have me traverse over various and disparate initiatives, the many areas of need and investment, but not today. Today I want to pick up the first thing that I talked about when I took on the leadership in the Labour Party. I want to talk about mental health.

Roughly two or so years ago there was an event on the forecourt of Parliament. It was a weekend so we didn’t have the usual crowds of onlookers and gatherings of people. Instead, it contained a group of bereaved people—family and friends who had lost loved ones to suicide. They brought with them pairs of shoes to represent the number of lives that had been lost in that year alone. I knew one of those pairs of shoes and who it belonged to, just like every single member of this House will know someone. We in New Zealand have two degrees of separation to each other, but there is no separation when it comes to New Zealand’s experience of suicide. It affects all of us.

But suicide is only one part of the story. The issue of mental health and wellbeing more generally is a challenge that the World Health Organization says will be the world’s biggest health problem by 2030, and we can’t wait or afford to wait for that to happen. Today we take mental health seriously, and that means starting right at the beginning. Now, let me share with you today the end-to-end journey that this Budget will create for mental health and wellbeing in this country, and what better place to start than at the very beginning, with our mothers.

Some years ago I visited a programme in the Hawke’s Bay that had been started by a Plunket nurse called Nicky. She was a passionate believer in the power of good, strong relationships between nurses and new mums, so she started a trial. She paired up a well-qualified nurse who related well to young people with a group of young mums who were considered to be vulnerable. That nurse met them before their babies arrived, and she didn’t just see them for her contracted visits; she connected them with other services and whatever they needed. The result: higher rates of breastfeeding, immunisation, and the uptake of other support like dealing with the consequences of trauma or family violence and even budget advice. She helped these women not just survive for those first 1,000 days.

I absolutely believe in early intervention. I believe in the power of relationships and I believe that when mothers are supported and given the best chance possible their children will thrive. So in this Budget we begin the journey by putting $10 million into extending Nicky’s programme across three sites in New Zealand, which I hope is just the beginning.

But what about our next generation, children who are already in school? How do we build resilient kids in a day and age when there are so many pressures on them, and even at the youngest of ages? Thankfully, this question has already been asked and answered in small pockets around the country, with programmes that have an evidence base behind them, like one called Sparklers. Sparklers is about helping educators to improve children’s emotional and mental health at school. For instance, a teacher can go online and download an activity that helps a child to manage their stress and to relax. We know that these resources make a difference to children’s mental health, and that’s why from now on, as a result of this Budget, those resources will be available to every school and every teacher across New Zealand.

But even the most resilient kids can experience difficult times, and that’s why, as of April this year, we finished rolling out Mana Ake, a programme that puts a mental health support team in every primary school and intermediate school in Canterbury and Kaikōura. It already has helped 2,000 kids and will keep doing that this year.

For older children, who we know experience additional stress through the years of adolescence—in the last Budget we started the roll-out of nurses in schools. Evidence tells us that these health teams are often the front line for mental health issues, and that’s why in this Budget we continue the roll-out into more schools, taking the total number of young people covered by this programme to almost 83,000 young people.

Now, not every child or young person—in fact, not every person, generally—will want to reach out to someone face to face. Some would prefer the phone. Some would prefer a text service, or some can’t reach services quickly, such as those who are in rural and isolated communities. That’s why we are making an investment into tele and digital health, of $21 million this Budget. This will be a service for everyone, no matter what age you are or where you live in New Zealand.

I said before that during the election campaign I had a number of people share some really personal stories, but there was this really common theme in all of them. For all the work we do to build resilient young people and communities, there will always be a need to help people in times of distress or at the beginning of dark clouds rolling in. Yet, I constantly heard the message: “We don’t know where to go for help.” That became one of our key tests this Budget. Will someone in the very early stages of a mental health issue be able to get the help that they need? To create a network like that, where would we possibly start? With this Budget, we start in people’s neighbourhood, in the health services they use most often.

A few months ago now I visited a medical centre in South Auckland. It was your usual GP clinic, but with a twist. It didn’t just house doctors; it was also a home to mental health workers, and for a very simple reason: GPs were discovering that in their very short 15-minute appointments, patients were opening up. They’d share issues that often went just beyond their medical expertise, but they never had the time or necessarily the experience to help, so they’d do what they could. They might give a referral to another service and hope that they would go and see them.

I spoke to one of the patients at the clinic that day. She had a good job, she had good friends, she was part of a close family, but she suffered from deep and dark depression. She told me she had been one of those patients that came to see her GP in a moment of distress, when she struggled to leave the house, but when the doctor referred her on to other specialists and gave her referral letters—quote—“I knew I would never go.”, and she never did. So her doctors brought the service to her. They brought in mental health workers who were trained and could take appointments right away due to the flexibility in their working day. The doctor would hear their story, then walk them down to someone who could support them right then and there. Now, that woman who had previously ignored those appointments didn’t ignore the service. She told me how it literally changed her life. In fact, she had brought family members to that clinic for the same life-changing support. That is why today we will ensure every person in New Zealand will be able to access the support they need by rolling out a new workforce of trained mental health workers in doctors clinics, iwi health providers, and other health services across the country. It is a new service targeted specifically at the mild to moderate mental health support that so many in the middle miss out on. It is for all of us and it will be a game-changer.

Now, we also know from the mental health inquiry that we need services that meet the needs of Māori and Pasifika. Kaupapa Māori services will receive $62 million to ensure that the primary mental health service is offered in kaupapa Māori providers and we will do the same for the Pacific health workforce as well. In total, it will cost $455 million. It will take us a full five years to get the workforce we need to have the service running at full capacity. But I absolutely believe that when we do, this new layer of early care will transform mental health services in New Zealand.

But even with early intervention care, we still need more investment for those cases where intensive services are needed. That’s why the Wellbeing Budget, again, delivers a three-pronged approach. We’re increasing mental health capacity of staff already working in emergency departments (EDs). We’re putting additional staff into those departments who help people who present with mental health issues, and we are providing further follow-up services for people who are in ED in crisis, because we know that’s when many come. And for those who have lost loved ones, we know more care is needed, and a result of this Budget is it will provide a free counselling service for up to 2,500 bereaved as a result of suicide.

This Budget is not just about mental health support. Thanks to the mental health inquiry we also know about how vital and under-resourced our addiction services are. Now, I still remember hearing first hand about that, last election, and those who work with me will probably know this story—I’ve shared it a few times since. I was in Gisborne with a group of front-line workers and volunteers from the social sector. Included in the room was the mother of a young man who had experienced methamphetamine addiction. There’s a lot that stood out from her talk, but there’s one thing I remember the most, that in an area that was experiencing such huge need, there was not one residential drug treatment facility available and one bed available in Tai Rāwhiti—not one.

Well, today in this Budget, that changes. A total of $200 million has been allocated to build further facilities across the country and that will include Tai Rāwhiti. Of course, in order to tackle mental health issues we have to look at the complex and interwoven issues that contribute to them. There is no point in targeting mental health if we don’t also invest in drug and alcohol addiction, which this does, without investing in homelessness—which this Budget does—family violence, poverty, and issues that contribute to stress in life. We do all of that in this Budget.

I have to, though, focus, as the Minister for Child Poverty Reduction, on a particular area that means a huge amount to me. There is no ignoring the stress and strain that material deprivation causes our families. We’ve already made a huge dent in child poverty in this country, as this first child poverty report in the Budget shows. Through family tax credit changes, accommodation supplement changes, the Best Start programme, the winter energy changes, changes to abatement rates, and initiatives in this Budget, we are projected to lift between 50,000 and 74,000 children out of poverty, but there is more work to do.

Today, we make a systemic change. This Budget acknowledges the work of the Welfare Expert Advisory Group and those who have stood and campaigned for a long time, to make sure that we index benefits to wage increases. Now, we already Consumers Price Index adjust, but it hasn’t stopped families falling further behind. The last Government knows that. That’s why they had a one-off benefit increase when they were in Government. This Budget, whilst making a modest change this year, will make a significant long-term difference in relieving a major stress on low-income families in the future.

There is so much more to say about this Budget, but I want to repeat just this. I’ve said this before: Budgets are all about priorities. You have limited budget and limited money, but we need to make sure that you balance the economy, grow the economy, balance the books, create jobs, look after your people, and look after the environment. This Budget shows that you can do all of those things. We said we would deliver this Budget and we have. We have delivered a surplus. We are delivering low unemployment. We have delivered low debt. We’ve delivered a plan for addressing mental health challenges. That means every New Zealander will get the help they need when they need it. We’ve delivered cheaper education for families. We’ve lifted tens of thousands of children out of poverty, and we are delivering housing to the homeless. That is what a wellbeing Budget looks like. That is what we came into politics to do and we are doing it.

Rt Hon WINSTON PETERS (Deputy Prime Minister): Thank you, Mr Speaker. First of all, we had the courtesy to hear Simon Bridge’s speech, but he never had the courtesy to hear the Prime Minister’s speech. It tells you a lot about some people—

Hon Member: And took a point of order!

Rt Hon WINSTON PETERS: And can I just say, as well, I didn’t say anything that was contrary to the Standing Orders. The point’s very clear. And then, of course, on Tuesday he released this document [Holds up document]. This is fake news. I want to ask Mr Chris Bishop: is it James Ballantyne out of your office that has accessed the Treasury website? Perhaps you could tell us before this debate goes much further.

Can I also say that I’ve been here for some time, and anyone that’s been here for some time would have heard a lot of Budgets—good ones, bad ones, cruel ones. There was the “mother of all Budgets”, a “packet of cheese Budget”, a “chewing gum Budget”—Budgets which have torn the social fabric of our very society asunder, and they’ve taken generations to recover. Those members over there will recognise those Budgets because they largely were either responsible for them or they supported them even when they were in Opposition. Oh, I can remember them giving Rogernomics 9 out of 10 inside of caucus and I was wondering, “What on earth are these turkeys around me going to do if they ever get the job themselves?”! And they were—like, it was, “Oh, we agree with the theory; only we can do it better ourselves”, except that they can’t run a university tuckshop, in the main. Most of them have got no commercial experience at all—at all.

Hon David Bennett: Like you—ha, ha!

Rt Hon WINSTON PETERS: Oh, yes, I do. I make far more money in my business than you make with your five farms—with your five farms—and I never paid my staff Third World wages. Now, we’ll get over that, because I’ve got the evidence to prove that, and I don’t want to spend too much time on your loss of civic contribution.

Can I say, today, that there have been politically calculated Budgets, cynical Budgets, Budgets of neglect, but today the Labour - New Zealand First coalition has delivered the Wellbeing Budget. It is, from someone who should know, the best Budget delivered to the people of this country in 40 years. The very first conclusion anybody can make about this Budget is that it would never have been written by today’s National Party. It could never have been written by today’s National Party. Perhaps very close, with respect to Keith Holyoake and people like that, but most definitely not by this disorganised rabble over there. They would never have had the vision, they would never have had the foresight, the planning, or the will to produce such a Budget: a Budget for all the people in this country. History’s going to judge this Budget, and it will be judged as a defining moment in this country’s political history. It will be judged as a Budget of delivery. It will be judged as a Budget from a coalition Government which has sought to invest in the people and the land—all parts of it.

Hon Gerry Brownlee: What’s in it?

Rt Hon WINSTON PETERS: Now, you know, this bombast and noise can go on there, from someone whose record in business was five weeks as a director of an illegal casino in Christchurch. Five weeks, before he got outed by somebody very close to me—oh namely, yours truly, actually. Five weeks as the director of an illegal casino, and his bombast and noise and his lack of humility knows no bounds. He shouts out every day. This woodwork teacher from St Bede’s all of a sudden is an expert on the economy—unbelievable. Jeez!

I want to say that New Zealand First is in coalition with the Labour Party because we would not tolerate the patterns of the status quo, the pattern of managed decline. We wanted change, and today, we saw from Mr Robertson’s Budget that we are achieving it. We wanted change that would protect our people, invest in our neglected provinces, grow our economy, enhance our environment, and protect our national interests.

The Prime Minister and the Minister of Finance and our coalition Government Cabinet members and parties can be commended, because history will applaud today’s Budget. They can laugh over there, but history will applaud this Budget, and future Governments, dare I say it, will seek to emulate it. It’s a Budget of delivery. We seek to improve the wellbeing of New Zealanders and to tackle cycles of poverty and deprivation. We seek to invest in the infrastructure of our country, after many years of neglect, and to truly boost our economy.

Look, for example, there they were, these people on the other side. Many of them represent the provinces, and they’re laughing at a billion-dollar investment in rail—laughing at a billion-dollar investment in rail. Do you know that Vogel, in the space of nine years in the 1880s, built more rail in that one decade than the rest of us have built in the 139 years after it, and they sit there and they laugh and jeer as though they know something. Well, they don’t. When I say that for too long, rail was run down, they were even going to go for diesel over electrification—thank heavens we stopped that.

You know, rail’s in our national interest, and, as the Prime Minister said, it makes our roads safer. It gets the massive leviathans going down the roads to be less frequently on the roads. It gives us a chance to have a balanced, strategic transport policy of sea, road, and rail, and I want to make it very clear that the announcement that was made pre-Budget today has got one summation: rail is back on track.

You know, when you look at it, our colleagues have made it very clear that the Wellbeing Budget seeks to tackle—

Tim van de Molen: Somebody point out where he is up to.

Rt Hon WINSTON PETERS: —a range of areas—what’s that? What’s that? Did you say something about yourself? Does anybody know where he’s from? Does anybody know where that chap over there is from? No. He’s “Mr Anonymous”. He makes his speeches by way of interjections, but they never ever put him up. Guess why? Even with their lack of talent, they’ve got better than that. Unbelievable—unbelievable.

The fact is we are a Government prepared to deal with massive mental health concerns, and I want to say to the National Party and its financial backers that mental health can be a concern in any family. It knows no economic barriers, and there but for the grace of God can go you and I. This Government understands that. We don’t turn a blind eye to it. In fact, it’s up front and central to our future considerations.

We support Māori and Pasifika. We support, for example, having a foreign policy that is a step up. It’s a real refresh. It’s a refit for the circumstances and challenges that we face. But all we hear from these people there is the despicable comment about the need for money to be spent in our country and nothing spent abroad at all, as though we haven’t got a neighbourhood and as though people don’t look over our shoulders and say “So you’re New Zealand. Who’s with you?”

Our commitment gets the response where we are a highly respected nation internationally, growing at tremendous speed now our potential and concern and cooperation with countries like Japan and Indonesia, the biggest Islamic country in the world. That’s what smart policy does. But it begins with our neighbourhood and it begins with the place where our DNA has been there for a thousand years—just in case some of those ones who arrived later haven’t got that clearly through their minds.

Can I say also, you know, that the transformation of New Zealand’s forestry sector—

Tim van de Molen: Lost, again.

Rt Hon WINSTON PETERS: —or the one billion trees, is a magnificent—no, no, I’m just abbreviating it. I’m abbreviating it because I took some time out to deal with you.

SPEAKER: Order! Order!

Rt Hon WINSTON PETERS: I know that was a mistake, but nobody else would—nobody else would.

Hon Member: Wake up, Winston.

Rt Hon WINSTON PETERS: Oh, the other fellow—that fellow from Helensville, again. John Key’s successor—unbelievable. He’s a real beaut, that fellow. I know that he’s most likely to be the one that sheers off to form a conservative or a Christian party. I’m not so sure about the Christian side of it, because I think these guys are all in the Old Testament. They don’t know about the New Testament, and forgiveness and love. They don’t realise that that is the shape of future politics, not their Old Testament, eye for an eye behaviour, and he will be one of your classic guys who are going to do that, and perhaps the guy from Pakuranga. Those two guys are the fly-by-nighters who will shoot through.

But back to the billion trees. Not only are we ahead of our programme on a billion trees but we’ve put in a further $58 million to ensure that the case and preparation of this tree-planting goes on and that Forestry New Zealand, or Te Uru Rākau, increases its regional presence to ensure ongoing, close work with foresters and landowners.

Now, did you hear this comment on Tuesday about tanks being supported instead of teeth—tanks being supported instead of teeth? As my friend James Shaw pointed out in the question time, there aren’t any tanks in this Budget. Well, there’s—

Hon Kris Faafoi: There’s one tank over there.

Rt Hon WINSTON PETERS: There are some people tanking—that’s true—but there’s not one tank with respect to this Budget. But here’s the point: every time there’s a crisis in Samoa or a tornado or cyclone in, for example, countries like Tonga or, dare I say it, all the way to Indonesia, and our support is needed and we put our planes in the air and we show what a responsible country we are and we get there hours and days before anybody else, that’s what our defence force does, as they did in the Kaikōura earthquake and everything else. So here comes the National Party, which have had their support all these years, and they’ve spent all their time dumbing down on expenditure that makes us a responsible First World country.

I’m going to make sure that every defence guy out there knows this and that every defence woman knows, as every policeman and policewoman knows, that they’re being called bullies by people like Chris Bishop. We need to have these farmers out there know what double-talk emanates from their so-called representatives in this Parliament. There will be no letting up on exposing hypocrisy.

Now, we’ve devoted over $700 million for the SuperGold card becoming a super-SuperGold card. We’re going to make sure—now, you make sure you tell grandma that, won’t you, and grandad that a new card’s coming. If they get on a plane and go down to Dunedin or go way down to Gore or some place like that, they can step off and open their card up and know exactly what service is within five metres, 500 metres, or 500 kilometres. It’s going to be a great new card where your doctor will tell you on your phone “Look, your appointment’s three weeks from now.”, and then on the day beforehand—just to make sure we don’t have wasted capital here—they’ll remind you that you’re in tomorrow, and tomorrow morning they’ll tell you, at 8 o’clock, “Be there on time.”

This is the kind of thing that’s coming. We’re going to have a super-SuperGold card because under the National Party, they did nothing about it whatsoever. [Interruption] Oh yes, well, what they did was they put a cap on the transport component. They didn’t mind about 90,000 people coming in here, getting full super after 10 years, whether they qualified or not or paid any taxes, actually no. No, they didn’t give a rat’s derrière about that, but then they attacked every old person in this country, with respect to the travel concession, and very shortly, I’m certain I’m going to be able to persuade my Finance Minister colleague of the correctness of giving a bit more help there. But first of all, we’re going to get the card right, and it should be going and operative by the end of this year.

Now, look, we had a visit from St John Ambulance. This is a service that is now the repository of the National Party’s claims that it should be fully funded. Hardly out of here, what, 18 months, and they’re shouting out that it should be fully funded. When they left them, it was only funded 71 percent. Their arrogance knows no bounds. Oh no, it’s fully funded now, and I know that St John only asked for 95 percent funding, because the charity and other componentry will be a check against fiscal certainty and fiscal responsibility. So 95 percent, we’ll get there one day. But there’s a huge change, since we put in the $21 million and also the rest that is going to be funded for the next four years that was already agreed by the previous Government. Here’s the point: we did it. They talked but New Zealand First and the Government has done it.

Can I just say that you’ll remember back on 19 October 2017, when we announced why we were going with the New Zealand Labour Party. I think the Prime Minister remembers. I remember the photographs that I’ve seen of that day. We said we were going to go with the Labour Party because capitalism needed to regain its human face. We did not want a modified status quo where the wrongness of fiscal, economic, and social policy just persisted; no, we wanted a real change which had in mind all the people of this country, which was founded on sound economics, and which was founded on turning around exports. Look at the dramatic lift in exports. It was going that way under the National Party, and we’ve only been in 18 months and there’s been a tremendous turn-around of over 10 percent. Now, guess what that means? It means if we can keep that going, then far more enterprises will be offshore, earning money to bring home for the family in New Zealand, and we’ll be able to fund our social policies. But the first thing you’ve got to do is make the money—which is a very, very key part and componentry of this Government; and New Zealand First understands with great simplicity—and that’s why exporting had to be turned around.

Now, there are rural members over there who were sitting in an administration where the dollar was bouncing around—the most volatile dollar in the whole world—and it was heading to 80 percent sometimes, and it got past 80 percent; and they never raised a murmur. Oh, no King Country—not a word. Ōāmaru, Timaru—not a word. While the country was run for their downtown big-end banking mates, and farming was in serious strife, they wouldn’t raise a finger. In comes a new Government; where’s the country now? It’s around about 65. That is a massive improvement in the wealth of farmers and every exporter. Do we hear them cheering from the rafters and saying “By heaven, why didn’t we do that when we’re in Government?”

Hon Gerry Brownlee: That is straight out impoverishment.

Rt Hon WINSTON PETERS: Then we’ve got Gerry over there—

Hon Gerry Brownlee: That is impoverishment. What a silly understanding of currency.

SPEAKER: Order!

Rt Hon WINSTON PETERS: Well, you know, he’s got some idea, Mr Speaker, that all you’ve got to do in this House is open your mouth and let the wind blow your tongue around. It requires a whole lot more effort than that—a whole lot more effort than that.

Hon Gerry Brownlee: The member should sit down.

Rt Hon WINSTON PETERS: Oh, no, no, no. Oh, I’m not sitting down—no, no. Oh, no. There are hundreds of thousands out there wanting me to stay right here and make sure he doesn’t get this job. They write to me every day. By the way, I’m sick of hearing from the National Party with letters and correspondence saying, “Winston, please come back. All is forgiven. We need a leader.” I get that from all sorts of people all of the time; walking around the streets, I can’t fight them off. It’s not easy—it’s not easy being me.

Could I say, I’m also proud of the fact that against all the advice, we increased the minimum wage again. Between 2005 and 2008, we took it from $9 to $12—in three years, in fact, which is an all-time record. We’re doing the same again. Guess what? The same naysayers came out with the same arguments and said it would cost jobs. Well, if that’s true, how come unemployment’s at 4.2 percent? They never stand up for the worker, they never stand up for fairness, and somehow they’ve got no understanding that out there in New Zealand, without this Government putting the support that we are putting in, it would be serious Struggle Street for hundreds and thousands of families. That’s what we’re trying to do in this economy, and that’s what we’re trying to do in this Budget. That’s why Grant Robertson deserves all the congratulations, because as the Prime Minister pointed out—I didn’t realise we worked on this project for so long, but it is a gear change; a serious one.

Hon Gerry Brownlee: Every social statistic will look worse this time next year.

Rt Hon WINSTON PETERS: Can I just say, here’s the evidence, Mr Brownlee, and it’s this: the IMF says that New Zealand’s going to perform far better than every country in the eurozone—indeed, they say we’re going to do far better than China, the USA, Australia, the UK; that we’re going to outperform them all. All those forecasts are very disappointing for the National Party, because, as we warned on 19 October 2017, there were a series of storm clouds gathering on the horizon. We said so that night. We said that we were going to confront difficult times, but if we went with the right Government, the right party, and the right policy, we would better protect the people of New Zealand. That’s what we’ve done today.

So in my closing seconds, I want to say to those beltway commentators and neo-liberal partisans—most of whom can’t understand what the word “philosophy” is, or they’ve got some conditions that are very difficult to pronounce—that this has been a magnificent Budget today, and in the history that we are forming for the future, it’ll be long remembered. I want to say one thing to the National Party: all these lessons are being given to you for free.

Hon JAMES SHAW (Minister for Climate Change): E Te Māngai o Te Whare, tēnā koe. Ki a koutou ōku hoa Pāremata huri noa i Te Whare, ngā mihi o Te Tau Hou ki a koutou katoa.

[Greetings, Mr Speaker. To my parliamentary colleagues throughout the House, greetings of the New Year to you all.]

Mr Peters says that it’s not easy being him, but can I just say it’s not easy being me either, because I have to follow him. One of my regrets—and there weren’t many—about the 2017 election campaign is ending up with one fewer MP than him, and therefore I have to follow him every single time. It’s not an easy act to follow. In fact, I could sell tickets to this. I could fund the next election campaign off the back of it.

For many, many years, the Green Party and our predecessor, the Values Party—and Mr Peters will remember this—have advocated for an approach to economics that delivers human prosperity within ecological limits. A growing gross domestic product does not, by itself, deliver a fair society or a healthy environment. Our economy here in New Zealand has grown, even while homelessness increased dramatically and our waterways became too polluted to swim in; but GDP growth has been treated as if it was the ultimate goal for decades. Members of this House who have been around for a while will remember my predecessor, Dr Russel Norman, talking about a smart, green economy that works for everyone. There’s a saying: “First they ignore you, then they laugh at you, then they fight you, and then you win.” We are winning. New Zealand is winning. New Zealanders are winning, because fundamentally the way the Wellbeing Budget has been put together is, at its heart, what the Greens have been talking about all this time.

What gets measured gets managed—what gets measured gets managed. This Wellbeing Budget starts to change how we think about our economy. Every single bid considered for this Budget had to pass the usual business case, but it also had to stack up against a set of environmental and social and economic indicators as outlined in the Green Party’s confidence and supply agreement. The Green approach to sustainable economics is finally starting to take shape through this Wellbeing Budget. I want to acknowledge and thank the Minister of Finance, Grant Robertson, for his leadership in bringing this thinking to this and to future Budgets. It is a sign of how things are changing and how they have changed over the years that this thinking is becoming mainstream. The Crown has a duty of care to all New Zealanders and a responsibility to tangata whenua under Te Tiriti o Waitangi to deliver on policies that deliver wellbeing and enable us all to thrive. Now, I have to say, we are still a long way off from a genuinely holistic approach that places the wellbeing of our environment, of our communities, and our culture at the heart of decision making. But this Budget, the Wellbeing Budget 2019, is a critical first step on the journey and we are delighted to be part of the Government that is delivering it.

Earlier this month, the United Nations published a report telling us that there are a million species at risk of extinction around the world as a result of human activity. Humans are the source of the single greatest mass extinction event since an asteroid wiped out three quarters of all life on Earth 66 million years ago. It’s extraordinary to be living in this time. Our growing horror at this ecocide has actually sparked its own movement—the extinction rebellion. Here in New Zealand, even here in New Zealand, there are 4,000 species threatened or at risk of extinction. Yet the Department of Conservation (DOC) has to look after a third of the country’s landmass and all our marine protected areas, off our shores, with one percent of the Government’s Budget. So, last year, we increased Vote Conservation by $180 million over four years. That was the single biggest increase in DOC funding in 16 years. This year we estimate we will be able to double that commitment with an additional $180 million dollars in conservation funding through the international visitor conservation and tourism levy—$180 million over four years in last year’s Budget and another $180 million over four years in this year’s Budget. The Green Party campaigned in Opposition for a tourism levy to help protect the natural heritage that people come here, all this way, to see and I have immense pride that now that we are in Government, we are delivering it. You add in a new marine protection area the size of Auckland on the south coast of the South Island, add in to that the biggest addition to a national park in New Zealand’s history, the 64,000 hectare Mōkihinui addition to the Kahurangi National Park and we’re starting to make some progress.

Now, there’s also been an extraordinary showing of commitment to climate action by the school strike for climate. Tens of thousands of our own teenagers have taken to the streets to protest years of dithering over climate change by the very adults who should have exercised a duty of care over those teenagers’ futures. It is time for the dithering to stop and the doing to start. By the end of this year New Zealand will have, in primary legislation, for the first time, a commitment to living within 1.5 degrees of global warming.

In today’s Budget—Budget 2019 provides $107 million to transition our economy—

Hon Gerry Brownlee: Property boom in Invercargill coming.

Hon JAMES SHAW: —towards a low-carbon future. We will have independent expert institutions to help guide Gerry Brownlee on the way there. There’s $42.7 million for the climate change commission to provide the advice, the guidance, and monitoring that New Zealand needs to reduce our emissions.

Since I got into this job 18 months ago, I have been to farms all over this country. Everywhere I have been, farmers have told me that they dearly want to help to clean up our rivers and to reduce greenhouse gas emissions, but they don’t feel that they have the information that they need and the tools that they can use to get the job done. Now, our confidence and supply agreement says that we will provide assistance to the agricultural sector to reduce biological emissions, improve water quality, and shift to more diverse and sustainable land use, including more forestry—lots more forestry. Now, over half of the $229 million sustainable land use package will fund exactly the kind of support that farmers and councils have been asking for. It includes on-the-ground advice and tools to support farmers making the change to more environmentally sustainable and higher value production. Once again, the Wellbeing Budget delivers. There’s over a third of a billion dollars, in fact, on climate change, clean water, sustainable agriculture—the Wellbeing Budget delivers.

Now, on the campaign trail in 2017 I was struck by the breadth and the depth of feeling right across the country about mental health. The phrase “mental health crisis” kept coming up over and over in a way that it hadn’t in any of the campaigns that I’d been involved in before. The Prime Minister has devoted almost the entirety of her Budget speech, in this Budget, to this today. It is the first priority of this year’s Budget. Now, our confidence and supply agreement commits us to increase funding for addiction services, to treat drug use as a health issue, to ensure that everyone has access to timely and high quality mental health services for New Zealanders, particularly 18 to 25-year-olds. I want to thank the Hon Dr David Clark for working with us to get those services, such as the mental health pilot Piki, off the ground. Thank you, David. The Greens are proud to be part of a Government that has committed, fully, $1.9 billion—$1.9 billion—of operating and capital expenditure over the next four years to turn the crisis. The road will be long; it will be. It’ll be hard, but, as of today, it gets better.

It also gets better for families who are affected by the plague of domestic and sexual violence that is so prevalent in our society that it’s frequently referred to as “New Zealand’s shame”—a plague that is closely associated with the mental health crisis. Now, on top of the $1.9 billion going into mental health services is a significant programme for ending the cycle of violence in our communities. The package to break the cycle of domestic and sexual violence highlights how the Wellbeing Budget pioneers the way that Government Ministers and agencies are supposed to collaborate together to deliver social, environmental outcomes. The domestic and sexual violence package is a $320 million investment in a joint venture of no fewer than eight different agencies and, more than that, many Ministers, led by my colleague Jan Logie. It’s a ground-breaking approach to joined-up Government where the focus is on the outcome—on the outcome—not on the individual Minister or budget appropriation line. We’re very proud that this approach was the prototype for the rest of the Wellbeing Budget.

Not long before we received the mental health report we also received the report of the welfare expert advisory group. Now, the Greens negotiated the review of the welfare system in our confidence and supply agreement. We knew that the social safety net had frayed and broken over the years, and the advisory group’s report confirmed that. It made for heartbreaking reading. A couple of weeks ago Phil O’Reilly, who was the former head of Business New Zealand, said in an interview: “If you look at the evidence on benefit payments, we are simply not paying people enough to survive”. By his own admission if there was ever an award to the person least likely to be a secret pinko socialist, it would be Phil O’Reilly. But he’s right—he’s absolutely right. We have become a nation with a group of people so disadvantaged and so excluded that not only do they have no hope of getting ahead, they also had no hope of having a roof over their heads.

The Greens are really pleased that this Budget includes over half a billion dollars for reintroducing the indexation of main benefits to the average wage, for removing deductions, and for changing abatement thresholds. These are three of the most important changes that we campaigned for in election 2017, and that $535 million dollar commitment builds on the $5.5 billion Families Package that this Government introduced in the post-election mini-Budget. But we know we have a long, long way to go. The advisory group’s report tells us that this can only be the start of a sustained campaign over the coming years and in future Budgets to ending poverty in this country. I want to thank the leadership of Carmel Sepuloni in working with us on that.

The Green Party’s confidence and supply agreement with the Labour Party is fundamentally different from most arrangements in most previous Governments. Previous agreements have ring-fenced a handful of priorities that are important to the support party and have given that support Party ministerial responsibilities and Budget support to deliver them.

Chris Bishop: That’s not different—that’s the same as before.

Hon JAMES SHAW: In return, that support party—I wouldn’t speak up too much, Chris. Remember where all your support parties ended up—signed up to the major party’s policy programme as the basis of Government. Our confidence and supply agreement goes much further. It outlines 20 priorities—and you have to remember that only a third of those 20 priorities are actually delivered by Green Party Ministers; the rest of them are delivered by Labour and New Zealand First Ministers. Our confidence and supply agreement is a programme of policy for the Government—

Hon Phil Twyford: We’re doing your work.

Hon JAMES SHAW: —not just for the Green Party. Thank you, Phil. In fact, several priorities appear not just in our confidence and supply agreement but also in the coalition agreement of New Zealand First and in the Labour Party’s manifesto.

Hon Andrew Little: We’re all of one mind.

Hon JAMES SHAW: We are all of one mind. That includes the massive investment going into rail being led by the Hon Shane Jones, a $1 billion investment in freight and commuter services all over this country. So I want to thank and acknowledge our partners in Labour and New Zealand First for working with us to deliver, yes, the Greens’ priorities and those shared priorities of our Government through this Wellbeing Budget. Our people and our planet will be better off as a result.

Now, last year, I think of our 20 policy priorities—seven were funded through that Budget. This year, 16 of our 20 priorities are funded through Budget 2019. The Budget initiatives across the Government that deliver on our confidence and supply agreement total up to $2.7 billion of operating expenditure and $2.2 billion of capital expenditure, and that is extraordinary. So if anybody had any doubts about whether the Greens would be able to make more of a difference in Government than in Opposition, well, I think this removes any doubt.

Fundamentally, the Wellbeing Budget is based on an approach to economics that delivers human prosperity within ecological limits. It has been a long time coming. There’s a long way to go, but this is an incredibly important first step. I’ve spoken today about this Budget’s investments in conservation and clean water, climate change, sustainable agriculture, mental health, tackling family and sexual violence, and poverty. But this Wellbeing Budget goes much further than that.

Members of this House who have been around a little bit longer—perhaps like yourself, Mr Speaker—may remember Jeanette Fitzsimons calling for our success to be counted not by the size of our GDP and our incomes but by the warmth of our relationships with each other and with nature, by the health of our children and our elders and our rivers and our land. We want more people to share the secret of real happiness and satisfaction in life, which comes not from having more but from being more, and from being part of a society that values all its members, that values the land, the water, and the other species with which we share them. Against those measures, this Wellbeing Budget delivers. Nō reira, tēnā koutou, tēnā koutou, tēnā tātou katoa.

Hon PHIL TWYFORD (Minister of Housing and Urban Development): I move, That this debate be now adjourned.

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

Ayes 63

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

Noes 56

New Zealand National 55; Ross.

Motion agreed to.

Urgency

Urgency

Hon IAIN LEES-GALLOWAY (Deputy Leader of the House): I move, That urgency be accorded the introduction and passing through all stages of the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill, the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill, the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill, the New Zealand Business Number Funding (Validation and Authorisation) Bill, and the District Court (District Court Judges) Amendment Bill; the introduction, first reading, and referral to a select committee of the Education (School Donations) Amendment Bill; and the first reading and referral to a select committee of the Kāinga Ora—Homes and Communities Bill and the New Zealand Public Health and Disability (Waikato DHB) Elections Bill.

The Government is asking the House to accord urgency to a package of bills that deliver the Government’s Budget priorities and address other issues that require a rapid legislative process. Six of the bills to be considered under urgency are fewer than 10 clauses long. Five bills will pass through all stages.

The Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill sets the rates of duty on vehicle fuel that will apply from 1 July this year. The immediate enactment of the bill will enable businesses and other vehicle users to plan in advance of the changes. The Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill gives effect to the income support policy changes announced through Budget 2019 that will contribute towards the Budget priority of reducing child poverty and improving child wellbeing. The Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill creates a revenue stream that will contribute to the funding of conservation and tourism infrastructure, and comes into force at the start of July. Its enactment now will enable further action to proceed. The District Court (District Court Judges) Amendment Bill allows Budget provision for additional judges to be put into practice. Passing the bill under urgency will allow those judges to be in place and deal with a backlog of cases as soon as possible. The New Zealand Business Number Funding (Validation and Authorisation) Bill corrects a drafting error in the 2016 legislation. This has to be corrected and on the statute book by 30 June.

Three bills will have their first reading under urgency so that select committee consideration, including opportunities for public submissions, can be accelerated. All three have been well sign-posted. The Education (School Donations) Amendment Bill reduces the burden on families by reducing the reliance of schools on voluntary contributions. The Kāinga Ora—Homes and Communities Bill creates a Crown entity that will make a critical contribution to housing New Zealanders in strong communities. The New Zealand Public Health and Disability (Waikato DHB) Elections Bill gives legislative force to the already announced exemption of the Waikato DHB from the elections later this year, so must be enacted as soon as possible. I commend this urgency motion to the House.

A party vote was called for on the question, That urgency be accorded.

Ayes 63

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

Noes 56

New Zealand National 55; Ross.

Motion agreed to.

Points of Order

Bills, Introduction—Availability of Tabled Bills

Hon GERRY BROWNLEE (National—Ilam): I raise a point of order, Mr Speaker. The bills don’t appear to be available.

SPEAKER: They are now.

Hon GERRY BROWNLEE: Oh, I see.

SPEAKER: That’s the normal—

Hon GERRY BROWNLEE: No, they’re normally actually put out on the Table as the motion is being read. So we are at a slight disadvantage, but only slight.

SPEAKER: I just make the point, Mr Brownlee, that the motion hasn’t been read. We’re just getting to it now.

Bills

Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill

First Reading

Hon PHIL TWYFORD (Minister of Transport): I move, That the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill be now read a first time.

This Government is committed to tackling the long-term challenges facing New Zealand, challenges both across society and the economy. To do this, we are prioritising initiatives that improve the wellbeing of New Zealanders. This bill will provide funding for transport projects that meet the needs of New Zealanders now and into the future. We are focused on delivering transport projects that provide real benefits to New Zealanders.

The previous Government’s policy prioritised travel times, often saving a few minutes on a few kilometres of road on a few hand-picked motorways. Meanwhile, deaths and serious injuries blew out, and congestion in our major cities got worse every year. Our Government is taking a balanced approach to transport policy. We’re investing in road, rail, public transport, walking and cycling, and motorways, rather than just focusing on eye-wateringly expensive motorways that carried 4 percent only of vehicle journeys.

The Government’s transport agenda is set out in the Government Policy Statement on Land Transport 2018, and under the Government policy statement released in 2018, the purpose of transport policy is to give New Zealanders access to the things that they need, like work, education and community, a safer transport system free of death and serious injury, reduced carbon emissions, and, of course, value for money. To achieve this agenda, this bill implements increases to excise duty set out in the Government Policy Statement on Land Transport. The bill increases the rate for petrol by 3.5c a litre, with effect from 1 July 2019 and again on 1 July 2020. These increases to excise duty, along with the equivalent increases in road user charges, were announced on 28 June 2018 in the Government Policy Statement on Land Transport. This bill gives effect to that announcement.

Our Government inherited a mess in the transport sector. Despite cars getting safer, the number of deaths and serious injuries increased by 55 percent between 2013 and 2018. The rail network was in a state of managed decline, but as the Deputy Prime Minister said in the debate we’ve just had, rail is back on track under this Government. Forty percent of the transport budget was being spent on a few hand-picked motorways that carried only 4 percent of vehicle journeys. Our cities were getting congested every year. Our biggest city’s transport plan had a $5.9 billion hole in it with no plan on how to fix it, and the New Zealand Transport Agency (NZTA) was not carrying out its regulatory function, which meant that cowboy operators were signing off on unsafe vehicles.

Well, our Government has already started tackling the long-term issues and fixing up that mess. We’ve rebalanced investment away from a handful of expensive motorway projects and put it towards saving lives and getting our cities moving. Last year, 377 people died on our roads. Why should we accept neglected and dangerous roads? Unlike the last Government, we’ve committed to improving thousands of kilometres of dangerous roads with interventions that are proven to prevent deaths and serious injuries, like side and median barriers and wider shoulders and intersection upgrades. I make no apology in this policy for putting safety first. New Zealanders are sick and tired of seeing their loved ones die on the roads.

We’ve recognised the benefits that investing in rail can have. Rail makes a major contribution to national and regional economic growth, reduces emissions and congestion, reduces road deaths and injuries, and connects communities. One of the first things that I did as transport Minister was allow KiwiRail to publicly release the report they had had commissioned in the last term of the former National Government, that that Government suppressed and refused to allow them to release, a report—

Hon Kris Faafoi: Who did that—who did that?

Hon PHIL TWYFORD: Oh, it was Simon Bridges, the former transport Minister, who suppressed a report that showed that the rail system in New Zealand delivers $1.5 billion of economic value to this country every single year.

Since we’ve been in Government, we’ve instigated the Future of Rail project to make sure that we are taking a long-term, joined-up approach, and today we have started making funding available for rail projects on a huge scale—$1 billion committed in the Budget today to get rail back on track—but we have also committed to bringing rail into the National Land Transport Programme. There are a number of significant rail projects—$200 million upgrading the Wellington and Wairarapa rail lines, a commitment to do the third main in Auckland, and electrification to Pukekohe—under the National Land Transport Programme and funded, as it should be, alongside road and all other transport projects.

We’ve also reopened the Napier to Wairoa line, and I want to acknowledge the leadership of Shane Jones, responsible for rail and regional economic development. We’ve made huge steps forward with New Zealand First championing the role of rail as a driver of economic development in our regions. We have futureproofed the City Rail Link in Auckland, and we’ve invested in upgrading the Wellington and Wairarapa regional commuter line.

We’re making a record investment in public transport across New Zealand over the next three years to get Kiwis out of the traffic jams and get our cities moving again. This Government understands that if you don’t invest in modern transport systems that allow people to move around our major cities to get to work, to get education, then you get a drag on productivity that drags down that city, that drags down the prosperity of the people who live in it, and drags down the rest of the country. That is why, fundamentally, we are committed to building modern transport systems in our major cities. It’s not going to happen overnight, but we are committed to unclogging our roads and making public transport quicker, cheaper, and more reliable.

Improved public transport and rapid transit are vital parts of the Let’s Get Wellington Moving indicative package that our Government released only a couple of weeks ago. I’m looking forward to the councils in the greater Wellington region signing up to that package, that will see them commit 40 percent of the funding of that programme—40 percent of the programme—because they know, they understand, that Let’s Get Wellington Moving is about investing in the economic powerhouse that is Wellington City. That’s why the mayors of this region have all committed, including Ray Wallace in the Hutt—including Ray Wallace—to supporting this project.

Together, we have worked alongside Auckland Council to close the $5.9 billion funding gap that Simon Bridges left when he was the transport Minister. We’ve committed to a 10-year $28 billion funding programme to rescue the country’s biggest city from the mire of gridlock and falling productivity that the National Government left, that we’ve inherited. We will build vital projects, including the light rail project, Penlink and Mill Road, heavy rail, bus upgrades, safety improvements, and more dedicated cycle lanes. The only way that we can do that is by Auckland Council paying their share—one third of the programme—and by increasing the fuel tax, as we are doing with this bill.

The systemic failures at NZTA have been uncovered and addressed. This Government was not prepared to allow our country’s transport agency to fall down on the job, to fail in its job as a safety regulator, like that party did for nine years. We put safety first, and that’s why we have turned around NZTA’s performance, and they are back on the road to doing their job properly as a safety regulator.

Parts 1 and 2 of this bill amend the Excise and Excise-equivalent Duties Table, made under the Customs and Excise Act. The bill makes a number of consequential amendments to regulations to increase the rate at which duties are refunded, to allow people who use the motor spirits for off-road, commercial, and other purposes. Every year, we invest around $4 billion in transport, with about two-thirds of that from the National Land Transport Fund. Because of inflation, if we don’t periodically raise the excise, we will be making real cuts to our transport spend. That would be bad for the economy and bad for the country.

Governments of both stripes have used the excise to fund our transport system since 1927. This increase will deliver $120 million extra a year and allow us to make the investments this country needs.

Hon PAUL GOLDSMITH (National): Thank you, Mr Assistant Speaker. Well, here we are: the first piece of legislation from the Budget and it’s putting up taxes—road taxes. People will be welcoming today. They’ll be scratching their heads, thinking what’s in it for them in this Budget, and we’re immediately talking about paying more at the pump. Kiwis who are struggling with the cost of living rising in this country at the moment will be not very excited to be focusing on these increases in petrol excises—more increases in petrol excises—this year, and again next year.

Where does the money go? Well, it’s supposed to go into trying to reduce congestion across our cities and our roads and to provide better roads. That’s the idea, but, of course, that’s not what this Government is focused on. Most people would assume that the purpose of transport policy and transport investment is to enable Kiwis to get around quickly, efficiently, and safely. That’s what transport policy should be about: to enable Kiwis to get around. But that’s not what the focus of this Government is through its Government policy statement on transport. Actually, they’ve removed all references to removing congestion. They’re not interested in removing congestion—they’ve taken that out of the priorities. So this extra money going into the fuel is not going to be focused on reducing congestion.

The two priorities of this Government are safety and mode shift. Now, of course, everybody agrees that we should be focused on safety, but you’ve got to have more ideas than just reducing speed limits when you’re dealing with safety. And getting people out of their cars and into public transport? Well, OK, that’s a useful goal to focus on, but if that’s your sole focus in transport policy, well, you know, when you look at nobody going anywhere in a massive traffic jam on the Southern Motorway in Auckland—hang on a moment; that achieves both of your priorities, doesn’t it? People are safe because they’re not going anywhere, and, secondly, they’re highly motivated to get out of their cars because they’re not going anywhere as well. This absolute lack of focus on congestion is how the transport policy works.

So what have they done? We pay all these extra fuel taxes that we’re discussing in this bill, and it goes into the big fund to be spent on transport, and the Government then decides how to spend it. This Government has, through the changes that it’s signalled in its Government policy statement, resulted in around a dozen major road transport projects being cancelled or delayed into the never-never land. So if you live in Tauranga today, you know that instead of getting on with a decent road going north of Tauranga up to Katikati, you’re not getting anything like that. You might get a single-lane road with a couple of sticks in the middle of the road, and everybody in Tauranga, in that whole area, is frustrated as anything. We talk about Let’s Get Wellington Moving—well, “Let’s Get Wellington Moving in about 30 years” is the correct title for it.

While they’ve talked about all the stuff they may do in the never-never, what they have said today is that they’re not doing the Melling interchange, which needs to be done, for a long, long time. So if you live in the Hutt Valley, you know that all this money that you’re paying in fuel taxes ain’t going to get you anywhere in terms of reducing congestion. Likewise, if you’re in Christchurch going to Ashburton, no help is on the way, I’m afraid. If you’re on the Southern Motorway in Auckland, there’s no help on the way. Mill Road—that was supposed to be a second route south—has been put off into the never-never land, way, way down the line. If you want to go up north through Wellsford, sorry—no help on the way. If you want to go—

Hon Shane Jones: Oh, yes, there is: catch the train.

Hon PAUL GOLDSMITH: —up through Ōtaki—oh, Shane Jones. He’s wandering around the countryside in Northland, handing out his money, trying to talk about regional development, but the single thing that everybody in Northland wants is a decent road to Whangarei. We had a process to get there, and we were making progress on it, and we committed to making progress on it. This Government’s not doing it, and instead they have this obsession with rail. So it was amazing to look at the Budget today. There is a whole section of this Budget, “Transforming the economy”—transforming the economy—and the number one project to transform the economy is to increase the subsidies for rail. Wow, that is amazing! What an amazing Government! Increased subsidies for rail is the number one policy to transform the economy.

Now, look, we all love trains—we all love trains. I love going on a train. I caught a train last week into Britomart Place. They’re wonderful things, and the previous National Government invested enormously in the electrification of the Auckland rail transport network, and we agreed to do the central rail loop, which will be transformational for people on rail in Auckland. I love going on trains, but to suggest that you should spend $1.4 billion on rail and then, at the same time, stop a whole lot of projects on the roads that would relieve congestion for frustrated motorists around this country is, I think, an unbalanced approach to transport policy.

We had the Minister of Transport standing up there and saying, “Oh, we’re focused on doing all sorts of other things to help relieve congestion, such as the light rail project.” Well, remember the first thing that Jacinda Ardern said when she became leader of the Labour Party was that we were going to have a game-changer. We were going to have light rail from west Auckland to the Auckland CBD, and then from the Auckland CBD out to the airport. Well, what’s happened? We’re 18 months on: nothing. Nothing has happened. We were asking Phil Twyford just a couple of days ago, “Have any decisions been made?” No. Have they got anywhere near putting a business case together? No. Have they even talked to Watercare and Vector and all those things to understand what’s underneath Dominion Road before they’re going to rip it up, in order to have any idea, to come up with anything like a business case? No. They’re months away from getting anywhere near even coming up with a business plan, and when they do, of course, it won’t stack up.

Only a very strange individual would think that the number one priority for transport in Auckland is a slight improvement to the public transport offering down Dominion Road, because, don’t forget, right now the people have been slicing off their verandahs down Dominion Road so that double-decker buses can go down Dominion Road. That’s very well served by public transport. This Government thinks the number one priority for this sort of money that they’re collecting in these taxes is a slight improvement on the public transport down Dominion Road, when north, south, east, and western Auckland are grinding to a halt.

Hon Maggie Barry: What about the North Shore?

Hon PAUL GOLDSMITH: Around the rest of the country—oh, North Shore? Well, don’t even think about the North Shore. No help is on the way for the congestion on the North Shore, apart from a heavily subsidised taxi scheme, I think, somewhere—but that’s an Auckland Transport thing.

This Government is bereft of ideas. So this money that’s collected is increased fuel taxes. So when petrol is going up through the roof at the moment, the Government is adding to that through the extra petrol taxes. It goes to NZTA—the New Zealand Transport Agency. Everybody knows that it is in total chaos and dysfunction, the NZTA, and that’s contributing to the fact that no new roads have been built, because nobody can find the same person to answer the phone every second time in the NZTA. If you talk to local mayors, they can’t find anybody to deal with, because it’s just a complete state of chaos. There are hundreds of people leaving all the time. The entire board has been cleaned out—they brought in a new chair and he was gone within a year.

So the agency that’s in charge of actually delivering the projects in order to make the lives of New Zealanders easier to get around is in chaos and dysfunction, and the Minister needs to take some responsibility for that. Instead, all the money that’s being collected is going to these fanciful projects that these Ministers are based on. When you think about where they come from, the priorities, the whole point of a good transport policy is to take a dispassionate view and look out over the next 30 years and ask ourselves, “Well, what are the biggest priorities and what are the things that we need to do in order to help the country move, so that we can actually get around, enjoy a good quality of life, and do the things that we want to do—pick up the people that we want to pick up, take the things that we want to take, in a quick fashion, collect the kids from netball on the way home from work, and have the flexibility to live the lives that we want to live?”

So we work out what the priorities are. We did that in Auckland for the first time ever, in conjunction with the council, and we agreed on a set of priorities of major projects. What happened? This Government came in, threw that all out and said, “No, we’re not doing the east-west thing. We don’t like it. We don’t like all these other projects, like a second route south. We’re going to delay them for 15 years and we’re going to do our pet project—light rail, a slow tram—halfway down Dominion Road.” The other focus is the basis of the horse-trading in the coalition deal between New Zealand First and Labour, and they are absolutely focused on spending on rail. Like I say, we all like our trains, but we struggle to understand why massively more subsidisation for rail should be the number one focus of transport policy and priority.

So for the motorist who’s going along to the petrol station and is going to be paying yet more tax for their petrol, I’m afraid to say that under this Government, help is not on the way. We’ll be enjoying the debate over the next few weeks and months over how this Government can defend what is indefensible in its transport policy. Thank you, Mr Assistant Speaker.

Hon KRIS FAAFOI (Minister of Broadcasting, Communications and Digital Media): It is a privilege to speak to the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill—a very catchy phrase indeed, but not such a catchy policy from the Opposition. Whenever there is an issue in transport, the only thing the National Party ever wanted to do was build a road. If there’s congestion, build a road; if there’s an issue, build a road.

Hon Ruth Dyson: Build a road.

Hon KRIS FAAFOI: That’s right—and not fund it. So I have a challenge for the Opposition, who are obviously bitterly disappointed with something we’ve been signalling for some time, to make sure that there is some action on some of the fundamental transport issues that face the country—like congestion, like safety. This measure will bring in, as the Minister said, $120 million extra to help address these issues which went unaddressed for nine years, and my challenge is: which of the projects that we’ll be able to undertake via the collection of this excise—which, as the Minister said, has been the way we’ve funded these transport projects—will you go around and campaign on next year and say you’re going to get rid of? If you fundamentally disagree with the increase in excise to fund these projects, I would like to know—from whoever’s going to stand up next—which of the projects which this Government will undertake will you go around the country and say this about: “The Government wants to increase safety or invest in more roads or invest in rail, but we don’t believe that so these are exactly the kinds of things we’re going to cut as a result.”?

I really look forward to this. I think this is a wonderful piece of legislation that deals to some of the major infrastructure issues that transport is facing and will give this Government the ability to address some of them. There are other infrastructure issues that the Government is dealing with in the Budget—1.9 on mental health, more capital investment in education—but transport is one place where we think that extra investment is needed. I do note also the concern from the other side of the House about the increase in excise. It’s been an issue for some time but something that the previous Government actually did nothing about. It tried to but it didn’t quite get there, and at least on this side of the House we have given the Commerce Commission the ability to look at some of the underlying issues around the pricing of fuel, and we’ll get to the bottom of whether or not New Zealanders are getting a fair deal.

But regardless of that, this piece of legislation will allow the right kind of investment. If we want to deal with congestion, then, again, the National Party will just build a road. We will look at investing more in public transport, because getting people out of their cars and into public transport, like light rail or buses, is actually the way to reduce congestion—newsflash for the National Party. Also, if we’re talking about safety on our roads, getting more heavy-fleet vehicles off the roads and investing in—

Brett Hudson: How’s a tram going to help the people of Porirua?

Hon KRIS FAAFOI: —wait for it—rail is also another way to make New Zealanders feel safer. So again, my challenge to whoever is the sad sack who’s going to have to stand up and defend their position is: tell us what you’re going to cut. Tell us which projects, as a result of this, will the National Party go around and campaign on next year and say, “We are not for this. We didn’t want it and we’re going to cut it.” I’d like to see how that goes down in all the areas they live in. Let’s see who’s next. Good luck.

BRETT HUDSON (National): I am the sad sack who is next, and I’m delighted to oppose this Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill, and whoever came up with that name must have been on some spirits themselves. Mr Faafoi—I can’t believe that member gave a spirited defence to increasing the cost of living on hard-working New Zealanders in the electorate of Mana. What are they going to get out of a tram set that runs from the Wellington Railway Station to Wellington Airport? Five-eighths of nothing at all, Mr Faafoi. It is remarkable—here we are with a Budget that is supposed to be a wellbeing Budget.

What does this Government think? How do they think you improve the wellbeing of New Zealanders? Well, according to Mr Twyford, you slap an extra tax on hard-working people. You raise the cost of living for New Zealand workers, and in his mind that is improving wellbeing—because that is precisely what this piece of legislation does. I just took the opportunity to take a look on Gaspy. People in Wellington are already paying, as of today, almost $2.30 a litre for their petrol—for 91 octane petrol. If they happen to require 96 octane, it’s going to cost them quite a bit more. They’re paying almost $2.30 a litre.

What does Mr Twyford think of those people who are living their lives, going to work, and taking their kids to sport? What care does he have for them? He says, “I think that’s not enough. Here’s an extra 8c a litre. Go and enjoy that.” That is the Labour Party’s and the coalition’s views on New Zealanders. The best way to make them better off, in their view, is to take more of their money away from them—more tax. This is an “increase tax Budget”. Botched as it is, it’s increasing taxes—it’s the first thing they’re doing—and in a manner of speaking, it actually is the worst of all possible taxation, and I’ll explain why.

When we think of it, it is actually taxation without representation. And the reason it is that is because the people who are being hit with this tax are the people who will get little to no benefit from it—the Government has already made that clear—and none more so than in Wellington, which I will come to. They intend to take more and more tax from motorists and spend that on projects that benefit those motorists not at all. So in the Let’s Get Wellington Moving programme—which is a very poorly named programme, because the last thing it will actually do is get Wellington moving. If the first action of this Budget is to tax people more, the first action of Let’s Get Wellington Moving is to slow people down. Remarkable!

It’s the nature of a Labour-elected official. What they do is actually the opposite of what they claim they’re going to do. But in terms of Let’s Get Wellington Moving, the Minister is prepared to fund $1.3 billion, plus about $1.1 billion of interest on top of that, to get people who currently use the bus to get from the eastern or southern suburbs into town, off the bus and on to a tram. Because that’s all light rail—and it is light rail. At $1.44 billion as raw capital, it can only be light rail, because as we know, bus rapid transit would be about a quarter of that and trackless trams would be hundreds of millions of dollars less simply because they don’t need steel rail in the ground. But Mr Twyford’s view is “I’m going to tax motorists more with 8c a litre in this piece of legislation so that people who don’t drive cars already, because they’re on buses, can get on a tram instead.”

What is he going to do for those motorists that he’s going to slam with this extra tax? Well, they get nothing—nothing at all—because while he’s prepared to spend a lot of money on trams, he’s ruled out an extra southbound lane from Ngauranga to Aotea Quay. He’s ruled out the second Terrace tunnel. He’s ruled out the undergrounding from the Terrace Tunnel to the Basin Reserve, which does nothing at all for any motorist who lives in the northern or western suburbs of Wellington City, or, indeed, in Mr Faafoi’s electorate of Mana, or in Hutt South, in Rimutaka, in Ōtaki, or the Wairarapa. It does nothing for them at all. But he’s going to take an extra 8c a litre from all of those people that travel to work each day in their vehicles—maybe because they have to; maybe because it’s better for them. He gives them nothing but takes everything they have. That is actually a form of a lack of representation. Taxation without representation—it’s a good way to describe what Mr Twyford is doing to them.

Governments fund their programmes of action, but Governments have to justify them. If it’s about getting people off buses and into trams, the Government should be justifying the overall benefit for spending that money. Well, that was attempted in a Public Transport Spine Study in Wellington, which compared options of mass transit from the railway station to the airport against each other and against alternative options. What that found was that light rail in Wellington would lose between 90c and 95c in every dollar spent on it—90c to 95c in every dollar would be lost, and that was when it was expected to cost half a billion dollars less than they expect now.

So not only is Mr Twyford proposing with this legislation to take 8c a litre off motorists all over New Zealand; he’s expecting those motorists in Timaru, in Whangarei, in Auckland, in Tauranga, but also the motorists in Wellington to have that tax forcibly removed from them and spent on projects—one of which, at least, is going to lose 90c to 95c in every dollar of theirs that he spends on it. But it’s even worse, because he is shifting so much money out of the infrastructure that people need—taking $5 billion out of State highway improvements and throwing most of it into loss-making light rail—he’s also setting up situations where those same motorists, through their local and regional councils, are getting taxed again to fund the infrastructure (1) that they need and (2), quite frankly, that they have already paid for through their existing fuel taxes, even without this increase. It’s just a tax upon a tax.

A great example is here in Wellington. Let’s Get Wellington Moving is a $2.6 billion additional tax on ratepayers. That is roughly the equivalent—roughly the equivalent—of $13,500 per household across the region. But, for the good people of Wellington City that might be listening, I’ve got bad news. There is no way that the mayors in Wairarapa, Kāpiti, or even the Hutt are going to be prepared to take a full share of this. So if a person happens to live in the Wellington City boundaries, their share is going to be a great deal more than $13,500—a great deal more.

Anyone who stands as a representative in this city and says it’s okay for our residents to get smacked with that amount of money on top of this additional tax, on top of the fuel tax they already pay, on top of their income taxes, and on top of the GST they pay—that seeks to justify that they, because of Mr Twyford playing around with the funding, should have to pay more than $13,500 just to get the transport they already pay for—then, quite frankly, that’s an abject shock and shocking thing to do.

Fundamentally, Mr Twyford and his Government, particularly his finance Minister, had the ability to deliver for New Zealanders, including their transportation needs, including that infrastructure, without raising more taxes. Instead, they have chosen to take the forecast surpluses—which, admittedly, are a bit smaller now than when they first took office, and that’s due to their decisions as well—and apply them to expenditure that is not delivering any return, such as Mr Jones’ $3 billion fund, which some call a slush fund; fees-free, which is not delivering any additional students at all; $1 billion for Mr Peters in the area of foreign affairs; $1 billion now to subsidise rail that wouldn’t exist without the subsidies it already gets—but that’s simply another transfer of taxpayers’ money into another venture that is not delivering any return for them.

The result of that is that in order for those New Zealanders to get what they deserve and need, because of the decisions the Government has made, both in terms of its general spending but its reclassification or rejigging of funding within the National Land Transport Fund, they are faced with additional tax in this form of 8c a litre on their fuel, on every litre of fuel they will purchase, but also, because of all of those things, additional taxes through other sources such as the regional transport tax that Wellingtonians will face for 30 years at least to be going nowhere at all if they happen to live on the northern parts of the city and beyond.

It is a Government that has got its priorities completely wrong. Mr Twyford, stop over-taxing New Zealanders.

Hon SHANE JONES (Associate Minister of Transport): A day of National histrionics. A day where the man’s voice is hoarse. A day where his leader, rather than talk about the critical issues, thought he would score petty political points. A demonstration of cynicism. A demonstration of an absence of trust—an absence of trust. I predict there’ll be more discussions about illegality in relation to that man’s behaviour. I have absolutely no doubt that once minds more attuned than “Mātua” are on these technical legal matters, not unlike Mr Little, sitting in front of me, there’ll be more said about that petty, cynical sensationalism. But once the partisan dust has settled, it will show the man’s on treacherous ground. He’s in a legal quagmire. Unfortunately, he has fallen. He has fallen.

However, let me talk about what Kiwis mandated this side of the House to deliver on. They delivered to us the privilege to visit wellbeing into their households, and, through transportation policy, wellbeing is coming to the provinces and to the regions. Now, it does require me to put a certain level of my own moko or moniker on those efforts. The Minister of Transport has introduced not only the need for us to improve the imposts and increase the impost but he’s laid out a transport plan, and a key part of it includes rail. The key part includes rail because it’s an asset that was deliberately neglected, run down, and ignored. But, just as we’re increasing the ability of the New Zealand Transport Agency (NZTA) to move transport more efficiently, to address the long, sad history of Auckland’s transport debacles, this—not only this tax but the broader package—today will allow this side of the House to pay for a project that they started but never ever funded.

Now, we’ve had some epithets thrown across from that side of the House for this that they were going to build a road not unlike the one in Cambridge from Pūhoi to Whangarei to Tai Tokerau. They may have had—not on Facebook but on “Fakebook”—that particular dream, but they did not fund it. They did not budget for it. They did not allocate the funding. NZTA have confirmed. Sure, there was florid language—something I’m a stranger to myself. There were all sorts of promises made in the election. Nothing was funded. So what the Minister of Transport has done is ensured, with these small increases, a sum of $45 billion for the next 10 years will be there.

Now, the obligation falls upon us to ration it. We will ration it in such a way we don’t have political monuments in the form of four-laning and tarmacking our way to climate extinction. We don’t believe in that over here—we don’t believe in that over here. We think a far more nuanced and moderate approach is needed—not only roads but rail.

Now, as I understand, my rangatira, the Rt Hon Winston Peters, is in Whangarei tomorrow. He’s going to demonstrate that the falsehood of building a four-lane highway, promising all the way to Whangarei without a penny in the purse, was a falsehood. However, he’s going to remind them that under the NZTA proposals that our side has endorsed, there is substantial amounts of dough to fix up our regional roads. One of those roads that no doubt he’ll talk about will be the need to improve the road from Whangarei to Ruakākā.

But he’s really going to talk about rail, because when you win political power, you have the opportunity to serve the public and to dedicate capital. In the dedication of that capital, you can actually fulfil people’s dreams. We’re establishing, over a two-year period, well over a billion dollars for KiwiRail, whereas, over the last 10 years, they hardly even spent $300 million or $400 million per year. No wonder the thing was run down.

So I say to Kiwis, I say to the media: “Haere ki Whangarei āpōpō.”—go up to Whangarei tomorrow. There’s a rail rally. And, conveniently, my rangatira—leaving the next generation, not unlike myself, to hold the fort here—will be up in Tai Tokerau. In fact, I will be talking to accountants tomorrow, but that will be in Auckland. I will remind them that wellbeing is beyond monetisation. It’s beyond the harsh quantification exercise, where the full kaupapa of mauri and mana and wellbeing is not captured. I will give that largely Pākehā audience—friends of the National Party—a lesson. The fact that they’re from Auckland—I will introduce them to the concept that Auckland has to do not only the barracking for its own interests, but bear in mind that its port cannot stay where it is. That is why rail is such a handsome beneficiary. Lay down the track and the infrastructure and the cargo will follow.

But I don’t want to be diverted. I want to come back to more important matters. Other than the ability for me to deliver on an overdue promise, actually, what I’ll talk about is safety. Now, my colleague from the Green Party, Julie Anne Genter, has convinced me that there is a place for the various wire ropes and other safety measures. Now, I, of course, have insisted that as we roll out those safety measures, we bear in mind the road needs of agricultural people. That’s why in Ashburton I said we won’t be indiscriminately putting those safety barriers in place until such time as the New Zealand Transport Agency (NZTA)—an unusual organisation. An unusual organisation, but soon to see greater sunlight once our senior colleague brings forward the names that will provide a more focused level of governance, because there have been people on the board of NZTA who forgot about their statutory mission. They were only there as vessels to pour out the rhetoric of the last regime. The last regime is history. The last regime is haere ki Hawaiki nui, political Hawaiki roa, and electoral Hawaiki pāmamao, which means they are a distant memory. That is a distant memory.

So once our colleague works with us—the Cabinet Ministers—there will be a new body of people dealing with governance. Then what we will see is that they will roll out safety, and the safety will be better funded by these overdue price increases. If you want a quality, global-leading infrastructure, you have to contribute, you have to buy it, and that’s what these imposts represent.

So let me finish on reminding us that the kaupapa of this Government is safety as a feature of wellbeing. Rail is a hedge against excessive reliance on roads. Rail is an opportunity for boosting tourism. Rail is an opportunity for opening up new industrial zones. Now, it doesn’t actually take a lot of money, but it needs a lot of political will. Soon I will going to Heretaunga. I will be going, as the regional champion, to watch the train go from Napier up to Wairoa. When it goes there, I will have the Rātana band—they’ll be playing the brass band when I arrive. And then we will be making statements that show we practise what we preach. We promised to reopen that line and, indeed, the opportunity might arise—with suitable lobbying from my colleague on the right, Kiritapu Allan—that the line go up to Gisborne. But that, however, is for another day. There are at least 500 more days before that decision needs to be announced. Well, actually, when I see the future, there are probably 3,000 days of this regime when we can have those decisions made.

Now, look, I don’t want to sound excessive. I don’t want to sound too extravagant, because it’s been a day of shouting and rhetoric and pettiness and cynicism from the other side of the House, where they thought they would deface the heart of wellbeing by displays of cynicism, which I predict the Leader of the Opposition is going to be held legally accountable for. There are laws to be upheld in relation to the privacy of information. My leader was right, and once legal beagles get hold of that, we may very well have not heard—as Boris Johnson is currently experiencing—the last shot in that regard.

MATT KING (National—Northland): Look, I just wanted to respond to the last speaker, Shane Jones. He’s an impressive guy. He talks a big game though—he talks a big game. He talks about election promises and us not keeping election promises. I was on the election campaign against his great leader, and man did I hear some election promises, and none of them were kept—none of them were kept. So I have the terminology: “Pot, come in kettle.”—that’s what I say. These guys talk fantasy over reality. We had Māori seats—they were going to abolish them; Mangawhai rates; they were going to move the Auckland port to Northland. Now, Northland is OK. We’re in a growth area. We’ve had growth for the last five years, but we could do with more. The offer: they came north and said that they were going to relocate the Auckland port to Northland. That was music to the ears of Northlanders, but, I tell you what, you’re not going to move the Auckland port to Northland by taxing motorists.

So what we had was we had Jacinda Ardern saying, “No more new taxes.” That was the first line. This is a tax and spend Government. How are we going to support the motorists by taxing the motorists and spending it on rail? So let’s talk about rail. Let’s talk about all the money that they’ve just promised in the Budget to pour into rail. Rail doesn’t work in Northland, and Shane Jones is going to find that out. We’ve had rail up there for decades—decades we’ve had it, and guess what? No one uses rail up there. To compete with the roads, you’ve got to have distance and you’ve got to have bulk, and up north, we don’t have either.

So some people might say—this classic argument—you’re going to get the trucks off the road. Well, you’re not going to get the trucks off the road. You’re not going to get those trucks off the road, because the reality is we’ve got forests scattered all over Northland, and they’ve got to go by road. They’ve got to be loaded on the trucks—

Hon Shane Jones: They’re being moved by Semenoffs.

MATT KING: On the Semenoff trucks. They’ve got to be loaded on the trucks in the forest, and with the distance from there to Northport—where all the logs go out—rail cannot compete with trucks. So the reality is—and I’m specifically talking Northland here—they’re going to pour millions of dollars of motorists’ money into upgrading the rail up there. It sounds really good. The punters up north, they’re thinking, “Oh, this is great. We’re going to get all this money spent on rail.”, but it’s going to be a dead duck, it’s going to be a waste of time. We all know why they’re pouring money into Northland: to buy the Northland seat—that’s a fact.

Now, in everywhere else around the world, they’re building four-lane highways. I actually happen to know that Shane Jones’ great leader has been advised by people in the know, people up high, that rail is not going to work in Northland—you’re wasting your time with rail. You know what? I have it on good advice that he was given this advice and he said, “Well, National’s got the roads tied up. We’re going with rail; it’s a vote winner.” So that’s a fact. So they’re pig-headedly pushing ahead with rail.

In Australia, they build four-lane highways, and everywhere they build four-lane highways, they get growth. In Northland, our economic action plan identified the four-lane highway in Northland as the single biggest driver of growth in Northland. These guys are going to funnel money away from the highway to put it into rail. Now, we promised in the 2017 campaign that we would start building the road from Whangarei South, which is the busiest and most heavily used road in Northland. So from Whangarei city out to Northport, we were going to build that road. Yes, that was a 2017 campaign, and, yes, it hadn’t been allowed for in the Budget, because we were going to do it in 2019, so that’s two Budgets later. The same thing was said by Winston Peters—that we weren’t building the actual highway from Pūhoi north, and it was under construction during the campaign. I said, “You can actually see drone footage of it being built.”, and he was standing up in an election campaign and saying that we weren’t building it.

The other thing is the New Zealand Transport Agency (NZTA). Now, I don’t know if they’re being politically interfered with or not, but we have requested meetings to talk about the roads—this excise tax that’s supposedly meant to be going into roads. We, our National MPs, have requested meetings with the NZTA staff all over the country, and for some reason we can’t get them. The guy that represents Northland, I’ve requested twice in writing and several times on phone calls to get meetings with them, just to understand what their plan is for Northland, and they won’t meet with us.

The biggest piece of infrastructure built with excise tax money in Northland was the Matakohe bridges, a $26 million 2.5 kilometre major piece of infrastructure for Northland, in the southern end of my electorate.

Hon Shane Jones: New Zealand First policy.

MATT KING: No, that was the second of the 10 bridges promised. We built it with our funding, our design. And you know what? There were two bridges there, and you know what they’ve done? They haven’t even had an opening ceremony. They just moved the cones aside and let the traffic go through. Yet, we’ve got blessings and openings and sod turnings for tiny little jobs in Northland that Shane Jones likes to attend, all over Northland. I’m expecting an invite to the opening of an envelope, with Shane Jones.

But this $26 million project—not a bean. There was a lady that campaigned up north for these bridges. She’s been campaigning since 2012. She was involved in an accident with her daughter on the Matakohe Bridges, so she’s been campaigning; she’s been working away. She hasn’t had the respect to be invited to an opening of this major, major project. So they just moved the cones to one side and opened the whole thing. That’s the way we get treated.

So what do the people get with this excise tax? They get a cost of living increase, on top of the regional fuel tax. In Northland, out the southern end of my electorate, they get hit with this regional fuel tax on top of this excise tax we’re getting now, and they get nothing for it. They’re getting nothing for it on the roads. They’re getting the money poured into trains in Auckland, or so-called public transport infrastructure in Auckland. But they’re paying for it—the whole southern end of my electorate are paying for it.

They cancelled the Northland road. They’ve cancelled the Warkworth to Wellsford section of the road that we were going to build. They’ve cancelled that. Well, the rest of the world, Andrew Little, is building four-lane highways. That’s the reality. Your Government is pouring money into rail and boo-hooing roads. Well, I’ll tell you what: they don’t want to go with our four-lane because they know that’s a winner. So they’ve proposed in Whangarei to build—well, they’re building a roundabout there. You know, that’s Shane Jones’ special wee roundabout. That’s well overdue. I can accept that roundabout, but that was going to be part of the four-lane highway that we were going to build. They’re just going to do the roundabout. So they’ve proposed running a double-lane row next to the existing State highway instead of running into a four-lane, and this is going to cost two-thirds of the cost of a proper four-lane highway. So it’s not going to be half the cost; it’s going to be two-thirds. They’re still pushing ahead with it.

So, northerners, we’re getting ripped off. New Zealanders are getting ripped off. And this represents politics—this represents politics of the very worst kind. It really does. So we oppose this. We oppose this excise duty. We oppose this tax and spend Government. We oppose their rail over road, rail at all costs over road. And you know what? I can tell you this: the New Zealand First Party will be pushing up daisies before that Auckland port gets moved to Northland. They will be pushing up daisies. They’re proposing this now to try and win the Northland seat, but they will never deliver on it. We know it. It’s just a pipedream like most of the other promises that come out of the mouths of those across the House.

Hon JULIE ANNE GENTER (Associate Minister of Transport): Tēnā koe, Mr Assistant Speaker. Tēnā koutou e Te Whare. I am so proud of this Government today. I’m proud to stand here and speak on behalf of the Green Party, supporting the Labour-led coalition with New Zealand First Government. We are making real progress for New Zealanders on the issues that they very much care about, because I know that most New Zealanders know that we have an infrastructure deficit. Most New Zealanders know that we have a lack of reliable, frequent public transport options for getting around our towns and cities. We had over decades—successive Governments had let the rail network fall to pieces, and that had significant consequences on the functioning of our road network as well as consequences for our economy.

It’s funny; I never thought I’d be a politician. I was a transport planner just working on positive solutions to various long-term challenges like climate change, like inequality, and transport provides an absolute opportunity that actually benefits every part of society in New Zealand. I was very naive back in 2009. I thought, well, surely the National Party will want to support a transport policy that’s fiscally responsible, that reduces congestion, that’s better for moving people and goods, because that’s good for business, that’s good for our economy. So I wrote to the then transport Minister, Steven Joyce, and let him know that, actually, all of his objectives aligned with transport investment that would also be better for people, for our towns and cities, and for the climate. So it’s one of those rare areas where it’s a win-win, because nobody in New Zealand benefits from a transport policy that is spending most of the money on a few minor but very expensive expansions to the highway network outside our major cities. Why? Because it doesn’t do anything to help people get around at peak time. It actually makes congestion worse. It does nothing to reduce the cost of moving goods around our country. It does nothing to improve road safety. So surely they wouldn’t want to keep doing this.

But listening to the debate here in the House from members of the Opposition, I see, sadly, that they don’t really understand what a transport network is, and that when we invest in rail, whether that’s for passengers or goods, that benefits the rest of our transport network—that benefits the roads. I know it’s a hard concept for those members over there for some reason, but, luckily, on this side of the House, we embrace science, we embrace evidence and reality, and the reality is that the greatest benefits to our transport network are now achieved through investing in the complements to our road network in maintaining our road network and making our road network safer, and that is exactly what we are doing.

I do remember, it must have been five or six years ago, speaking in a speech on Budget legislation under urgency that was very similar to this legislation—oh, yes, that’s right. The National Party, while they were in office, increased fuel taxes. They increased fuel taxes by about 24c a litre, during their time, and the difference—and I’m fully supportive of that, as long as the revenue is used to actually improve our transport network. Sadly, under the National Party, a few mega-projects were selected for political reasons so they could cut some ribbons, and all of the money went into that.

So you know what happened during that time? I see the members of the National Party are so gullible. They actually believe their rhetoric and their lines. They actually believe that the projects that were prioritised under that last National Government were going to somehow benefit the economy, even though there was not a single shred of economic evidence to support that position. They had to invent a whole new category of roads—called roads of national significance—because those projects never would have passed a basic cost-benefit analysis that had been prioritised under the New Zealand Transport Agency and their policy.

So what the National Party did was tax all New Zealanders in Southland, in Northland—the ones who are the most dependent on the roads. They raised their petrol taxes and they reduced their road maintenance spending. They reduced the spending on road police by over 10 percent, and that is why, of course, we started to see a dramatic increase in deaths and serious injuries on our roads. From 2013 to 2018, under the National Government, road deaths increased 55 percent—deaths and serious injuries—and that’s not acceptable.

So our Government has made safety a top priority for the transport budget, and this very minor, modest increase to fuel tax and road user charges will benefit our roads right across the country, not just in Auckland, Tauranga, Wellington, Christchurch, and Hamilton, which are the only places where the National Party spent any money on roads—and, unfortunately, they weren’t even projects that reduced congestion, because adding additional motorway lanes in an urban area never reduces congestion, and the speed of our road network in an urban area is determined by the speed of the rapid transit. Did they have any investment in rapid transit?

Hon Members: None.

Hon JULIE ANNE GENTER: None—none. So we were able, with our very modest increases in fuel taxes, which are the same as what happened under National, to spread that money right around the country. I’ve spoken to local authorities and they tell me they are so relieved and so happy that there’s going to be more money going into road maintenance in Southland, in Otago, in Northland, because—oh, let’s see. OK, so the National Party announced seven highway projects. Most of the money was going on seven—just seven—highway projects over nine years. Two of those projects had already been funded by the last Labour Government—Victoria Park Tunnel and Waterview Connection—and two of those projects, 10 years later, had barely started construction.

So that previous speaker, Matt King, who was talking about four lanes to Whangarei—now, that was a pipe dream. That was never funded under the last Government. In fact, they had barely started construction on the Pūhoi to Warkworth—

Kiritapu Allan: But what about the 10 bridges?

Hon JULIE ANNE GENTER: The bridges? Three of them have been done, I think. I think three out of 10. So let’s be rational. I do plead with the Opposition members: we should have a bipartisan, across the House approach on transport, because this is what New Zealanders want. Eighty-seven percent of Automobile Association members say they want investment in protected cycleways in our cities, because they agree with the idea that kids should be able to walk and cycle safely to school. That is good for the kids’ health, that’s good for their learning, and it’s good for congestion. It makes life easier for mums and dads.

So the motorists in New Zealand overwhelmingly support a balanced approach to transport, which is exactly what this Government is delivering, because they know that it doesn’t matter if you drive a car or if you take a bus, you take the train, or you take your bike; everybody benefits by having more choices available to people. But I have to say, this fuel tax increase that we’re doing today is primarily going to benefit the roads that were sorely neglected under the National Government.

Hon David Bennett: No, it’s for trains—ha, ha!

Simeon Brown: It’s all going to trains.

Hon JULIE ANNE GENTER: Oh, I think Opposition members are a little bit confused. Yes, this Government made a huge commitment to rail in today’s Budget. Does that come from the National Land Transport Fund? No, it’s Crown funding and Provincial Growth Fund funding, so you actually have no—sorry, Mr Assistant Speaker. You know what you’re talking about, but those members in the National Party have no idea what they’re talking about. They can’t read a Budget statement. They actually have no idea how the National Land Transport Fund works and they certainly have no idea about what is actually going to benefit our transport network.

That is why congestion did not get better after 10 years under National. The state of our local roads has degraded to a horrific state, and that’s why it’s going to take years to make up for it. But we have increased road maintenance for local roads and State highways by over 20 percent. We’ve increased the number of road police. We’ve increased funding for regional improvements, for local road improvements, for walking and cycling improvements. We were even able to invest in rapid transit, which is going to benefit the people of Auckland and Wellington and Christchurch, Tauranga, and Hamilton, because this Government believes in a balanced transport investment that’s going to benefit our towns and cities, benefit freight, benefit the climate, and, most importantly, benefit our children and their children.

I wish that the members opposite were able to engage in an informed and rational debate. But, sadly, they’re stuck with their talking points, which are absolutely wrong. I think the former president of Local Government New Zealand would know there was significant criticism of the National Party’s transport policy.

Lawrence Yule: Not under my watch.

Hon JULIE ANNE GENTER: In fact, I think I even heard criticism from that member. But, for whatever reason, he chose team blue—going to be sitting on the Opposition benches for years and years to come, sadly. But, hopefully, we could have some constructive dialogue and debate, because those members should realise that the investment this Government is making in our transport system for New Zealand is one that is going to benefit the country at a far, far greater rate and is going to benefit generations to come.

ANDREW BAYLY (National—Hunua): Well, I just wish I was an expert in transport matters. I just wish I had that expertise and was able to draw on that wealth of experience I must have had before I came into Parliament!

That speech I’ve just listened to was very confused, unfortunately. I’ll come back to some of the stuff that was raised in that speech, but here we are: we’re talking about a wellbeing Budget. I think that the term “wellbeing” is going to be like one of those words that—you know, we all heard them in years gone by—everyone picked up on: “unique selling point”, “strategic stuff”; you know, all those words that everyone loves to use. And the Wellbeing Budget that everyone talks about—of course, no one really understands, except for this, sort of, glow of happiness that we’re all meant to have. But, unfortunately, this Budget doesn’t achieve that. It does provide some stuff that will progress certain aspects, but, unfortunately, on the balance of it, I don’t think it achieves what it should be, and what it would have been, and what it could have done, actually, given the situation where we are currently.

I think the first thing is that here we are talking about the “Excise and Excise-equivalent Duties Table (blah blah blah) Amendment Bill”. It’s the first tax to be introduced, the first piece of legislation after this Wellbeing Budget that they’re introducing—the very first thing, out of everything that was raised in that Budget. So it’s all about increasing the petrol levies, basically.

Hon David Bennett: Plus GST.

ANDREW BAYLY: That’s right—and GST, Mr Bennett. The fascinating thing is why would you be introducing a first bill which is about raising tax, when you’re trying to achieve better outcomes for New Zealanders? The first thing everyone knows about these types of petrol taxes is that they’re regressive. That means the poorer people are the worst ones off. That is Economics 101, and yet this is the first bill that that Government puts up. That I cannot understand.

But also let’s just talk about the context of tax. So this is a tax—

Hon Shane Jones: He’s a howler—wait for it, a howl’s coming.

ANDREW BAYLY: Mr Jones, this is a piece of tax—that additional tax you want to put in. So I was just running through the numbers. Interestingly, personal tax in the Budget, in your lovely Wellbeing Budget you put forward, has gone from $36 billion in 2018, and under your glowing Wellbeing Budget, New Zealanders—ordinary people in New Zealand, not people sitting in Parliament—are going to end up paying $13 billion of additional tax over the next four years. That Government over there is going to take another $12 billion of additional tax off ordinary New Zealanders in the form of personal tax. We also know that GST is going up. So, of course, that’s—

ASSISTANT SPEAKER (Adrian Rurawhe): The member needs to come to the bill.

ANDREW BAYLY: Thank you, Mr Assistant Speaker. That is going to go up, and company tax is going to go up. So what I’m saying to you is that you have a tax take that is going from $72 billion—

Hon Shane Jones: I raise a point of order, Mr Speaker. Look, I know that the term “spirit” is in the bill, but the taxation and company tax—that’s another bill. We’re talking about motor spirits. So can the member come back to it, or we’ll begin to think that it’s a different spirit that’s guiding him.

Tim van de Molen: Speaking to the point of order—

ASSISTANT SPEAKER (Adrian Rurawhe): No, I don’t need any help, thank you. Yes, it’s a serious matter to interrupt a member while they’re speaking. It’s the role of the Speaker to make those decisions around relevance. Even the unkindest person might say that a number of speeches in this debate have been vaguely relevant, but that’s my decision. We are under urgency. I did interrupt the member. I felt that he was beginning to have more of a Budget debate speech rather than speaking to the first reading of this bill. So if members could speak to Part 1 and Part 2 of the bill while they are having other conversations—or contributions, I should say—to this bill, that would be a good thing.

ANDREW BAYLY: Thank you, Mr Assistant Speaker. So the context for this is that under this Government, tax is going to go from $72 billion to $100 billion, so why do you need to now introduce another tax bill as the first bill up? That’s my point. You have already—“you”, as in the Government, Mr Assistant Speaker. The Government is already raking in heaps of money under current settings, and the very first thing that they do is introduce a bill trying to impose more tax on wellbeing and New Zealanders, unfortunately, and I just do not get that logic.

The other thing about this bill is that it still doesn’t address the issue around what it’s going to do for our horticulture growers or those people who are paying diesel tax, and how those arrangements are doing. So not only is this bad for motorists; it’s also bad for the productive sectors of our economy.

I just want to refer back to this issue around what this Government is trying to do in terms of transport. Of course, we’ve heard Julie Anne Genter, the previous speaker, talk about safety, and I know that about $800 million has been assigned to safety improvements—this move to mode changes. But, as the Hon Paul Goldsmith, my colleague, mentioned earlier, the congestion is the issue now. That’s not to say we shouldn’t be putting money into rail. That’s not to say we shouldn’t be looking at other modes of transport. But the thing about this is it’s fine to upgrade what you’ve got, but what you haven’t got, you can’t upgrade, because it hasn’t been built. That’s the issue. We’ve got a deficiency. That is the issue about how we need to make sure that New Zealand has the transport infrastructure, and that means, principally, roads, but it doesn’t mean it exclusively.

I think that with the Auckland Transport Alignment Programme, it was a big programme—28 billion bucks—that was agreed between the National Government and the Auckland Council, as an example—

SPEAKER: Order! Order! Sorry, I walked in on something earlier and I wasn’t quite sure what the acting Speaker was saying, but what I want to indicate to the member is that it’s a very narrow bill. It’s a revenue bill and it’s not a spending bill, and, therefore, the debate on it, as this stage go on, gets narrow. It gets slightly wider at the second reading. I think he’s making a speech which could well fit at the second reading, but it’s not a first reading speech, which is on this bill.

Tim van de Molen: I raise a point of order, Mr Speaker. I appreciate that ruling. What we’ve seen throughout this debate has been quite a straying from speakers on both sides of the House—I’ll admit it—in terms of the breadth with which they’ve covered this topic. So to now close that down on a very narrow focus for the last few remaining speakers presents a slightly different profile of what they’re able to enact on, and I would ask whether we can have consistency through the remaining stages of this bill.

SPEAKER: The short answer is that we will have consistent rulings going forward on this, and I would like to remind the member that when I have made a ruling, he shouldn’t then be questioning it. The rulings will be consistent for the rest of this debate and the other first readings.

ANDREW BAYLY: OK. So the relevance of this bill is directly related to the issue of the Auckland Transport Alignment Programme because it’s an element in its funding. That is why getting agreement around that Auckland Transport Alignment Programme is very, very important, and this is part of making sure that that can occur. But the issue we’ve got is how this money is funded and, as I’ve said before, it’s the regressive nature of this, and the most pernicious thing about this is how it disadvantages the poor and the people who are the most vulnerable in New Zealand.

I think the issue about this is that I heard the Minister of Transport, in his opening speech, talk about what he’s doing with the New Zealand Transport Agency (NZTA), and he talked about “We’ve sorted NZTA out.” I’ve just got to say that I totally disagree with his opening comments on this bill, because we’ve got the Southern Motorway, which is already a year behind schedule, and one of the reasons why it’s a year behind schedule is that there’s been an incredible focus on building a cycleway down the left-hand side of that motorway—

SPEAKER: Order! Second warning.

ANDREW BAYLY: So this cycleway is part of what this bill is being funded for, and the Associate Minister of Transport referred to it directly in her speech before. So if that was a big part of the funding of this excise tax, I’d have to say the purpose of this bill and the purpose of this funding is very, very susceptible to elements of the funding network for the transport to actually not deal with the issue of what the needs of people are in terms of meeting their transport needs.

The Minister also spoke in his opening speech about the electrification to Pukekohe. Again, that is an issue that has not been progressed under this Government. It is a piece of action that is missing significantly in the entire mix that the Minister referred to.

Also, Mill Road is another example that he referred to. I’d have to remind the Minister that the money that comes out of this exercise is not actually being—

Hon Phil Twyford: “Exercise tax”.

ANDREW BAYLY: It’s exercised as part of the Auckland project. It’s the start of the funding that comes out of this excise tax. The Minister suggested before in his speech that it’s being applied to Mill Road, but, actually, that is not correct. Only part of Mill Road is being built, and that is the most disappointing thing.

So if you’re going to introduce a bill to increase the price of petrol and diesel for all motorists in New Zealand, please—and I’d just say this—make sure it’s going to projects that benefit all New Zealanders. Pet projects like that are not the ones that will help reduce congestion, which is the main part of this.

I think this issue of non-delivery around these major projects, which this excise tax is meant to be directed to, is one of the most disappointing things. I just find it absolutely absurd that this is the first bill that the Government would put up after this so-called Wellbeing Budget.

SPEAKER: Before I call Aupito William Sio, I just want to warn all members speaking from now on that we will be talking to this revenue bill, not to any expenditure matters which might be better dealt with in other legislation, and there’ll be some balancing up in the second reading.

Hon PAUL GOLDSMITH (National): I raise a point of order, Mr Speaker. I’m just puzzled. Is your ruling that if you have a revenue-raising bill, we cannot talk about what the money that we are raising is to be spent on?

SPEAKER: You can have passing reference to it, and if it can be absolutely drawn to it, the answer is yes. But there is a lot of expenditure that is occurring as a result of excise duty or taxation generally, and this is a narrow bill.

Hon AUPITO WILLIAM SIO (Minister for Pacific Peoples): Mr Speaker, you are absolutely correct. It is a—

SPEAKER: Order! I don’t want the member—I do not want any members—referring to my ruling.

Hon AUPITO WILLIAM SIO: It’s a proud day today to be part of a Government that’s delivering the first wellbeing Budget. That Wellbeing Budget has five key priorities. One of those priorities is transforming this nation, giving ample opportunity to business—

Hon Simon Bridges: I raise a point of order, Mr Speaker. This is an excise bill, and the member’s talking about the Wellbeing Budget.

SPEAKER: Yes, and I was just about to interrupt him when I got involved in a discussion with the leader’s whip, who wanted to know how long this particular call was.

Hon David Bennett: How long is it?

SPEAKER: Who said that? Stand, withdraw, and apologise.

Hon David Bennett: I withdraw and apologise.

Hon AUPITO WILLIAM SIO: At a time like this, when you smell the pork, I’ll keep it short. I’ve got food in my office. There are two fundamental reasons for this bill. One is that this Government is taking the safety of the country very, very seriously. Two, when we’re talking about establishing a transportation system for the whole of the country, we’re talking about lifting economic opportunities for the regions. If that side there is wanting to oppose this bill, they are opposing community safety on our roads and they are opposing economic development in the regions. I have to ask that side there: how do you put, how do you fix—

Jonathan Young: What clause?

Hon AUPITO WILLIAM SIO: Petrol excise duty; clause 1—how do you pay for safety measures on our transportation system? How do you ensure that we have a system that will increase economic development in the regions? Somebody’s got to pay for it, and that’s the reason for this. That’s all that needs to be said about this bill. I recommend that that side move this bill. Otherwise, if you’re opposing it, then you better be ready to go out to the community and say to them that you don’t want to fix up safety on our roads—

SPEAKER: All right. That’s enough, thank you.

TIM VAN DE MOLEN (National—Waikato): Thank you, Mr Speaker. I rise to take a call on the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill—quite the mouthful. Now, this is concerning for me because we’re looking here at imposing an additional 3.5c per litre, plus GST. Whilst the intent here is to raise revenue for the National Land Transport Fund, the concern is the impact that has, and we have to consider that on our motorists and on our communities. In the Government policy statement in 2018, the Government’s key priority, after they’d reshuffled and reprioritised that Government policy statement, was on safety, we were told. So this bill, looking to raise additional excise revenue to stream through into that National Land Transport Fund, should therefore be focused around safety considerations.

What we’re seeing, and how this is actually playing out, the implementation of the National Land Transport Fund off the back of the Government policy statement 2018, is that there are allegedly a raft of safety improvements that are looking to be rolled out in numerous locations, such as in the Waikato, and yet they’re not being delivered. So the question is: if we’re looking to raise additional revenue through a bill such as this, and clause 3 is looking to amend that, specifically increasing the rate by 3.5c per litre on 1 July—only now a matter of some weeks away—then how do we have confidence that the Government is going to utilise that in the most appropriate way, which they have said is safety? Safety concerns are absolutely important on the roads, and we need to make sure that we are doing what we can in that space.

An additional 3.5c, coming in on 1 July this year, is a significant impact for Kiwis all around the country—and that’s going straight out of their back pockets. So we’re hearing in the Budget, at large, about a number of other different areas where spending has been allocated, but directly in relation to this revenue raising under the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill, this is going to have a significant and detrimental impact.

As if that weren’t enough, then we have clause 5, which amends the Excise and Excise-equivalent Duties Table to further increase the rate of excise duty and excise-equivalent duty on motor spirits by an additional 3.5c, plus GST, on 1 July next year. So not only are our motorists and our communities going to be hit by 4c a litre from 1 July this year, they’ll see the same again next year. The revenue that’s going to be raised through that, as I mentioned, is looking to try and achieve what the Government wants under their Government policy statement, which they have reiterated on numerous occasions as being safety-focused at the expense of commuter times—that’s no longer a priority, we heard from New Zealand Transport Agency. But the bulk of that funding already comes through petrol excise duty—some $1.9 billion on recent figures. So the question then is: how do we have confidence that this additional revenue raising will be utilised in that safety component? When people are looking to fill up at the pumps, they will rightly be questioning “Where is this going? How can we see direct benefits from this extra expense, this extra revenue, that we are giving to the Government to allegedly invest on our behalf in areas of concern for us?” Depending on the locations around the country—in the Waikato, there will be question marks around that because we’re not seeing significant investment. The Government has already indicated that they’re no longer carrying out projects which have significant safety benefits in our region; they’ve scrapped them altogether. There are some safety upgrades that are being planned, but they’re fiddling around the edges and not really hitting the heart of the issue.

So raising this extra 4c a litre, once we add the GST on this year, and an additional 4c per litre next year—8c per litre for motorists is a significant cost that most families—

Andrew Bayly: On top of the last year’s.

TIM VAN DE MOLEN: —will be impacted by. And, of course, for anyone, as Mr Bayly says, who’s in the Auckland region, well, they had the regional fuel tax as well. The amount of revenue this Government is now seeking to raise through the excise duty on fuel is going through the roof. They’re covering up lack of funding in other areas, shifting funding to address this—

SPEAKER: Order! The member’s time has expired.

TAMATI COFFEY (Labour—Waiariki): I want to start this conversation just by acknowledging some of the fatalities that we’ve had in the southern end of my electorate over the last month. I guess it dovetails, really, right into—[Interruption] There’s a lot of opposition coming from there at the moment, but, actually, this is a really serious topic. Seven people from the same family died in a collision south of Taupō, and you want to make fun of that—

SPEAKER: Order!

TAMATI COFFEY: Sorry, Mr Speaker. One died in a head-on smash at Ātiamuri. Five of them died from the same family in Kinleith in the last month. Three people died in a crash between a truck and a van, also in the Taupō region.

When we’re talking about fatalities on the road, as the local member of Parliament for the Waiariki I feel it when we have these fatalities. When families are involved, which we’ve seen in the last month, it sends a really strong message to me that we need to make our roads safer and that if we can do that by a petrol excise of 3.5c per litre, with the money to be reinvested into making our roads safer, into ensuring that we’ve got different modes of transport so that we, actually, don’t have such a strong reliance on our roads for the trucks, then I’m really supportive of that. This is a really serious issue, and while some members of the House can, kind of, rubbish it, actually, this is something that needs to be done.

The Government’s policy statement, when it comes to transport, really does focus on safety as a priority, and that’s exactly what we need on our roads. We need to make sure that they are safe for our people to travel on. I know that people in my electorate have been absolutely stung by the amount of road accidents that we’ve had—and for a variety of reasons. But they are telling me that they’re crying out for better solutions. So that’s exactly what this excise is going to be reinvested back into: making sure that our roads are safe, making sure that we have options as well.

In Tauranga, one of the most congested parts of my electorate, they, unfortunately—

Hon Simon Bridges: My electorate.

TAMATI COFFEY: —haven’t done very good planning at all. Their local member probably dropped the ball on it quite a while ago—

Hon Simon Bridges: Oh! The only work’s happening because of me.

TAMATI COFFEY: —and we’re having to fix that up.

SPEAKER: All right, all right. The member will resume his seat. Now, this member’s on a warning. I gave him a couple of minutes to get into the bill. He mentioned it, I think, once. He will now focus on it, or his speech will we curtailed.

TAMATI COFFEY: I commend this bill to the House.

SPEAKER: The question is that the—

Jonathan Young: No, we’ve got one more.

SPEAKER: Jonathan Young—the member has the call. There’s a tradition in this House that, if you want the call, you say something.

JONATHAN YOUNG (National—New Plymouth): I did say something, and I didn’t want to interrupt you.

SPEAKER: I know, but it was a bit late.

JONATHAN YOUNG: I didn’t want to interrupt you. I’m very pleased to speak on this bill, the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill. The question, I think, that needs to be asked is about the quantum that has been set in this bill. We have heard from other speakers on, including GST, 4c from 1 July 2019—not too far away—and then a further 4c from 1 July 2020.

I think it’s appropriate to mention that safety measures are important, and this is part of what this is about. What we are also hearing around the country is that speed limits are being reduced, and so the question is: how much does that cost? We know that doesn’t cost anything; it’s about behavioural changes in our driving. So when it comes to what is being charged to motorists at a time when petrol prices are again on the increase, here we are in the Wellbeing Budget adding in further costs. So we do challenge these steps and we do suggest that in the process of the second reading and the committee stage, we have ample opportunity to exercise our views around why we feel that this is excessive.

Can I just say in agreement with the previous speaker, Tamati Coffey, that we have been saddened by the losses of New Zealanders on our roads and we want to see that stop. We want to see not just improvements in particular centres but right through our network as well.

So as we consider these prices, we consider, also, the ability of New Zealanders to be able to have an affordable way of life, and I implore the Government to consider that in your own deliberations when you come to set these figures. With that, I will conclude my comments.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you. This is a bill which imposes a paltry 3.5c in additional excise duty, and yet here we have it from the other side saying, “Too much. What’s in it for me?” Well, I’ll tell you what: the Opposition should think, not about saving 3.5c a litre out of their own pockets, but about saving some lives, as Mr Coffey noted before.

Here we have them railing against rail. They should be thinking about saving the planet, not their leader’s ego. So the 3.5c a litre that is going to be imposed this year—which is desperately needed revenue to fill the huge gap, and that we need to have—and the safety improvements that Minister Genter was referring to are a great investment, a great use of this tax. So it is time to think not about saving 3.5c out of their own pocket. We’ve well looked after hard-working New Zealanders with our Families Package and other measures. The 3.5c here is a tiny burden, it’s a trivial burden, compared to the huge benefits for our economy—saving our economy, not eight minutes of travel time. So stop railing against progress. I commend this bill to the House.

A party vote was called for on the question, That the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill be now read a first time.

Ayes 63

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

Noes 57

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

Bill read a first time.

Second Reading

Hon PHIL TWYFORD (Minister of Transport): I move, That the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill be now read a second time.

Thank you, Mr Speaker. I want to make a contribution in this second reading of the debate and respond to some of the remarks that were made, particularly by the National Opposition members in the first reading. A lot of the comments that we heard from the Opposition benches were really an objection to any further revenue gathering for the sake of the transport system. I just want to make a few observations about that.

The party opposite, when they get up in the morning and look in the mirror they like to see a reflection of a party of fiscal prudence, but, actually, the way this debate has been conducted by those members, I think, really gives the lie to that notion that they are, in fact, the party of fiscal prudence. The members tonight are opposing this bill on the basis that it’s revenue gathering, but their record in Government over nine years—and I know the 18 months since the last election seems like a very long time for the members opposite, actually, it’s not a very long time at all. But I want to remind them, because they’ve clearly forgotten, that during their time in office they increased the take from petrol tax by 24c a litre.

Dr Duncan Webb: How much?

Hon PHIL TWYFORD: 24c a litre during their—and tonight, they come down to the House and object to the fact that we are putting it up by 3.5c a year, twice over the next two years. It’s also worth noting, I think—

Kiritapu Allan: There’s a word for that.

Hon PHIL TWYFORD: —for the benefit—I wouldn’t say that word, do you mean inconsistency?

Kiritapu Allan: That’s what I meant. Yeah, sure.

Hon PHIL TWYFORD: Yes, perhaps inconsistency is the right description. But the party of fiscal prudence, the National Party—they would like to see themselves regarded in that light—during the last election campaign, they went around the country and promised 10 new motorway projects. Ten new motorway projects that added up, would have cost $12 billion.

Kiritapu Allan: Did they set aside the funds for it?

Hon PHIL TWYFORD: No, they were completely unbudgeted. There was no decision making, there was no planning, there was no funding.

SPEAKER: Order! The member will resume his seat. As I indicated in my earlier ruling, the second reading is the widest of all the debates. The member has, however, used just about 25 percent of his speech without focusing on the bill. He will now, at least, have some passing reference to it.

Hon PHIL TWYFORD: Thank you, Mr Speaker. This revenue bill—the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill—has aroused, in the Opposition benches, very strong objections in that they don’t want to be part of gathering revenue for a transport policy that they don’t agree on. They’re against this bill increasing the petrol excise by 3.5c for the coming year and the consequent changes to the road-user charges because they don’t like what that money would be spent on. I cannot allow the moment to pass without observing what that says about the National Party’s transport policy: they are threatened by rail; they have a visceral hostility to rail. They are threatened by walking and cycling infrastructure. They are philosophically opposed to spending money on public transport.

SPEAKER: Second warning. This bill is about excise and just reading out the title of it and then going back to a speech about another party’s policy is, even with a very broad second reading approach to things—and this is a broader stage and I want to warn members that it’s going to get a lot tighter going forward. This is the second warning and it is the last warning. The Minister’s speech will be curtailed if he strays again.

Hon PHIL TWYFORD: Thank you, Mr Speaker. I want to comment on the third main objection that we heard from the Opposition benches in the earlier debate, and that was the assertion that increasing the petrol excise or the petrol excise itself is somehow a regressive tax. Now, on the face of it, a 3.5c increase in the excise for people of all different incomes and means is regressive, but what the members fail to take into account is that this is about gathering the revenue, taking into account inflation, and avoiding what would, in effect, be real cuts to transport revenue. It’s far more regressive not to invest in the kind of transport policy that we have, and that is to build in our cities a decent public transport system—that is far more regressive. People who have to get to work every day and cross the city, who are forced to own a car and spend in the region of $10,000 a year running a vehicle because there is no decent public transport system—they face the real regressive charge of decades of underinvestment in public transport.

That is the reason why we have to protect the revenue stream for the transport system. We have to protect it against inflation by periodically increasing excise as that party did—as that party did—to the tune of 24c a litre during the time it was in office. If we don’t protect the revenue flow for the transport system, and if we don’t then invest in a decent public transport system so that New Zealanders have genuine choices about how they get around, then we will be doing a terrible disservice to New Zealanders, and this Government is not prepared to let that happen.

We’ve heard the cry “tax and spend” coming from the Opposition benches repeatedly through this debate, and what I say to them is that they may not be a “tax and spend” party on that side of the House; they’re just a “spend” party, because they promise over and over and over—they promise expenditure, but they’re not willing to recognise that that requires revenue gathering. That is a fundamental inconsistency and shows, I think, a lack of integrity in relation to the transport policy. So I urge the Opposition to tell us in the rest of this debate—

SPEAKER: All right. Thank you.

Hon PAUL GOLDSMITH (National): Thank you, Mr Speaker. The previous speaker, Phil Twyford, has accused us of a lack of integrity in the way that we govern, tax, and spend, and he says we’re just a spending party, not a taxing one. Well, the previous National Government took us from massive deficits during the time of the Canterbury earthquakes and global financial crisis back to surpluses to provide the surpluses which this Government gleefully spends around the country. He says that where this party—

Greg O’Connor: You inherited surpluses.

Hon PAUL GOLDSMITH: Oh my goodness. I suggest that member look over his history and you’ll find that—

SPEAKER: Order! Both sides now. There are going to be many, many more hours of Budget debate, and that will occur, and this is the sort of debate that can happen there. I’ve just asked Mr O’Connor to stop trying to get this man to deviate from what should be appropriate.

Hon PAUL GOLDSMITH: Thank you, Mr Speaker. I will not deviate from a complete focus on this bill, which is an introduction of higher fuel taxes. What this represents is a sneaky tax grab on the motorists of New Zealand. Only a year ago, they came to the country and said, “Yes, we’re going to put up fuel taxes. We’re going to put them up 3.5c a litre every year for three years, making it 10.5c plus GST”—don’t forget: plus the GST, so that’s another 1.5c or whatever, so 12 or 13c—“and we’re going to do that over three years. It’s going to come in on 30 September each year”—woompha, woompha, woompha—“and everybody is going to pay this big tax, and it’s going to hurt, but you’re going to like it or lump it.” Now what do we find—now what do we find? A sneaky little tax grab. They don’t bring it out on 30 September; they bring it out on 1 July—so another sneaky little three months of taxes that they’re adding to the pile just to gather a bit more money. We’ll be waiting for the committee stage to have the opportunity to ask the officials exactly how many more millions of dollars they will be sneakily bringing into their coffers as a result of this tax or excise revenue.

The Minister thought he might be able to get it passed, but he didn’t. It’s a reason why New Zealanders will never trust the Labour Party on taxes, because they always say that they’ll try and be disciplined, but when it comes to reality, they aren’t. This excise duty’s expansion of motor spirits levies and taxes is affecting the petrol pump and the diesel pump that people encounter on a regular basis, and paying more for it is going to be noticed by all New Zealanders and lamented greatly.

Now, you cannot talk—you cannot talk—about an increase in excise levies without referring to where that money is going to go to. This bill is about taking money in, and we need to know what we’re spending it on. That is why we are opposed to this bill—on a number of counts. The primary count is that it’s a sneaky little tax grab, bringing it forward an extra three months, but secondly because we are not at all impressed by how the Government is choosing to spend this extra excise money.

The way that we can work out how they are planning to spend it is through the Government policy statement on transport, and that guides the workings of the National Land Transport Fund, which is dealt with by the New Zealand Transport Agency (NZTA). All these things are relevant. The chaos and dysfunction in NZTA, for example, where they’re losing staff at a great rate of knots—they lost a chairman within a year of him coming in, and the whole board has been turned over, so none of the local mayors can get anybody on the telephone in order to talk about their local projects—that is relevant to this bill because we’re raising the money for that fund to be administered by NZTA and we’re not getting much for it.

Then we’ve moved away from spending the money collected by this excise tax to reduce congestion on our roads to give relief to the frustrated motorists of this country who are wasting their lives away in congestion and are looking for solutions. This Government has decided not to spend the money on reducing congestion but rather to focus entirely on mode shift—that is, getting people out of their cars and on to scooters and walking and cycling and everything else apart from using their car, which is quite appropriate in some circumstances, but doesn’t meet the circumstances of everybody’s needs and requirements. If you’re trying to pick up your daughter from netball practice on the way home from school in the dark and the rain in Auckland, then you probably would prefer to have a car to do that. That’s one of the relatively simple things about having a good quality of life in this beautiful country that we all enjoy.

The people who are paying this excise tax at the pump, whether it’s diesel or petrol, want to know that they’re getting some progress on it, and they want to know that if they live in a city or in parts of New Zealand where there is rapid population growth, such as there has been over the last few years, because we had a successful economy and a successful country and people wanted to come and live here—not so much recently, as we’ve seen in changes to the flow, and I won’t digress on that matter. So you’ve got rapidly growing population, and we need to invest in infrastructure to keep the transport modes operating. That’s why you need to have a balanced approach to transport investment. So when we see this fund, when we pay our taxes, we want to know that there is a balanced approach, and we’re not seeing that from this Government, I’m afraid, and on that basis, we’re not very happy with it.

This was previously announced—I was just going back over the initial press statements from last year, when this Minister, Mr Twyford, announced these excise increases: 3.5c last year, another one this year, and another one next year. It was going to be on 30 September. Now he’s moved it forward to 1 July and has brought about a sneaky tax grab on the motorists of New Zealand. It amazes me that they think this is the first piece of legislation to celebrate post-Budget.

The only other question that I have—and I’d be interested during the course of the committee stage to sort of delve into this—is that a big part of this money that’s being collected from the motorists is going to be spent, according to the Minister’s wishes, on a slow tram down Dominion Road. When we asked what is the purpose of the slow tram—it’s not about going to the airport, as the Minister always talks about, because it’s never going to the airport; it’s only going to Māngere. The purpose that was explained to me by the chair of NZTA was urban regeneration—urban regeneration. So what I find intriguing is why motorists should be paying excise levies—

SPEAKER: Order! I was so enthralled that I missed the fact that the member got 10 seconds extra. It’s dinner time. The House is adjourned until 7.30. The debate will resume then.

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

Hon PAUL GOLDSMITH: Thank you, Mr Speaker. I was telling the nation that this bill here, the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill, was a sneaky tax grab on the motorists of New Zealand. A lot of people tonight will be asking, “What’s in this Budget for me?” Well, I can tell you what’s in this Budget for you: it’s more petrol taxes. We were promised that we would be paying more petrol taxes last year, starting from 30 September each year, but this Government, in this bill, have advanced that by three months on each of the two years, an extra—we’re trying to work out exactly how many more millions of excise that will represent. We think it’s about $60 million—an extra $60 million. So they’ve snuck in an extra $60 million at least, and we’ll ask the officials at the committee stage—$60 million worth of extra taxes, on top of the extra taxes that they were already bringing in, and that’s why the people of New Zealand can’t trust this Government on taxation.

I was also talking about that broad question: where does all this money that they’re taking out of the pockets of the motorists—where does it go? One of the biggest places that it goes—is supposed to be going—is into building the slow tram down Dominion Road. The primary objective of that slow tram, as has been explained to me by the chair of the New Zealand Transport Agency, was urban regeneration. So the question is, well, how on earth is urban regeneration an appropriate thing to be spending fuel taxes on? Fuel taxes are supposed to be hypothecated to building transport infrastructure—whether it’s roads or rail or public transport—in order to enable Kiwis to get around and do the things that they want to do. We’ve all got places to go and we all need to get on with it, and we don’t like being tied up in congestion. We do need to accept that the population is growing; therefore, we need to invest in expanding infrastructure, and when all the money that’s been collected in these fuel taxes is siphoned off—siphoned off—to urban regeneration plans, whatever that means, then we have less focus on reducing the congestion and building the transport infrastructure that we need in this country. That is why we oppose this bill.

Hon ANDREW LITTLE (Minister of Justice): I just want to take a short call on this, the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill. It is a very important bill. It adds, in the next financial year and the financial year after, an incremental increase in the excise collected on petrol so that we can fund the roads and the road safety that this country desperately needs.

I think the member who’s just resumed his seat, or just spoken, at least, Paul Goldsmith, neatly illustrates the tension that I think exists with members opposite, that they have great plans—and they had great plans when they were in Government for a small number of roads; very grand plans—and any more roading beyond that, they had no ability to finance at all. We know they have an allergic reaction to tax. I didn’t think, however, it was as bad as finding out earlier this week that their leader spent the night on Monday night with Grover Norquist, an anti-tax extremist from the United States. That’s the state of their thinking now. That’s why they’re opposed to increases—very small, modest, incremental increases—in excise duties on petrol.

The reality is when you’re in Government and you want to do good things for the people like safer roads, like more roads in more parts of the country, you have to have the means to do it. You’ve got to have the financial means to back it. We cannot have a repeat of what we had in the dying days of the previous administration, which was very elaborate and grandiose promises but with nothing to financially back it. This bill allows us to do that. It means that the revenue collected in other forms in other areas—general taxation—can go towards those things that are about supporting and assisting, developing and growing the rest of the economy.

We need a good excise duty on our petrol so we can have good quality roads, safe roads, and it would be better for every New Zealander in every part of the country.

BRETT HUDSON (National): Thank you, Mr Speaker. I’d like to say that it’s a better bill at this, the second reading, but it certainly isn’t. There are a couple of reasons for that, the first of which, of course, is the Government’s decision to sneak this extra tax in by shifting the date to 1 July. It wasn’t necessary, and had they chosen any other date, had they chosen to keep it at 1 October, of course, we could’ve had a select committee process for this bill, and New Zealanders could’ve had the opportunity to submit to the Government, to Parliament, and tell us what they think about their cost of living being raised by this Government on the first day of its so-called Wellbeing Budget. It’s very difficult, I think, to justify and to explain this so-called world-first wellbeing Budget if the very first action the Government takes to legislate change under it is to raise people’s cost of living, to take more money out of their pockets and, if their track record is anything to go by, to waste it.

So we could have and should have had a select committee process, even—as much as we dislike it on this side of the House, and they used to in Opposition—if that select committee process had have been a truncated one. We still could have given the opportunity to interested parties, and particularly New Zealanders themselves, to tell us—to tell the Government in particular—what they think about having additional taxes imposed on them. Instead, what we have, and are now debating in a second reading, is a sneaky attempt to grab even more.

The Government did say last year that they intended to raise fuel excise taxes not only last year, which they legislated for at the time, but this year and next year. But they signalled that those other two increases would be on 1 October of this year and next. So suddenly, people can perhaps anticipate—I wouldn’t say look forward to it, because they wouldn’t be looking forward to it, but anticipate that there are some additional costs to be imposed on them. But along comes Budget day, and, surprise, surprise, without any forewarning or signal, they discover that both the first iteration and the second are each going to be levied three months ahead of the original plan. Now, that will have a cost imposition over and above the 8c, including GST itself, of an additional, we believe, $60 million—$30 million each year—which puts the total, as the Minister has said that the 4c a litre including GST is an impost of $120 million. So there are two of those, which is $240 million, and this extra $60 million. New Zealanders arrive here on Budget day, find out what the Government wants to announce, and the first thing they learn is we’re going to take an extra $300 million off them—hard-working New Zealanders.

Although it was signalled somewhat in advance—not the exact timing, but these extra excise charges—I think it is not only possible but appropriate that as the Government goes through each of its financial years and is able to assess what has been done, what has worked and, mainly for them, what hasn’t worked, but also what the forecasts are for the years ahead, to have to not only re-look at what their plans were but to re-justify them, because, quite frankly, I would argue that there is no justification for these 4c a litre tax increases in the first place. For instance, the Government has come into the Budget giving back or re-prioritising or re-allocating about $300 million that had been set aside for the fees-free programme, because they discovered that it didn’t work. They didn’t get a single extra student. They in fact may have lost some along the way, but it didn’t work. So there’s a very solid argument to say that this tax is not an absolute requirement—not early or at all—because measures that the Government had spent other tax revenue on, particularly surplus or anticipated surplus revenue on, are not working.

I mean, of course, there’s the Provincial Growth Fund of Mr Jones. It’s been in the press almost every day of the year, mainly for the wrong reasons, and a Government, a Minister of Finance, might well look at that and go, “I could use that money to do my roading and other transport activities.”—which is what the National Land Transport Fund funds and what the excise funds. “I could choose to use other surplus money to do that, and I don’t have to add this incremental tax.”—or taxes, because there are two batches of them. The choices the Government could make—because we are firmly of the view that neither of these impositions are required.

In fact, we have had to listen tonight about allegations that we had unfunded and uncosted plans previously. Well, I can tell the House and New Zealand that we fully intended to use some of the Crown account—all those surpluses—to fund some of our transport initiatives, along with the National Land Transport Fund, at the taxation rates that existed at the time. We believed it was possible. It could be just as possible for this Government, notwithstanding the weakening economy is going to affect their forward surpluses somewhat, so it does raise the point that these taxes are by no means necessary. Clearly by that side they are desired, but they are by no means necessary.

Because the taxes themselves are very clearly—or hypothecated—set against specific uses, we can look at what it is the Government’s going to use them for. The excise can only be collected for the National Land Transport Fund, and the Government has already taken actions to show what its priorities are for under that fund. So the challenge here is that motorists—because it is motorists, in their diesel and petrol cars, in their vans and in their trucks, who are going to be paying these additional taxes and, therefore, have a lesser disposable income for the other pressures in their lives. It is these motorists who are going to pay these two batches of additional taxes, so they have every right to wonder and question what they will see from that, and the Government has pretty much set that out through the general policy statement and the National Land Transport Programme.

There is a removal from any prioritisation on reducing congestion, certainly on our roads, and a very strong objective or priority to mode shift into other, non-car or non - motor vehicle forms of transport, particularly, as we see along Dominion Road in Auckland and most recently announced in Wellington, into what appears to be light rail systems, because the amount of money they’ve budgeted would tend to indicate very strongly that they can only be light rail. So motorists can ask themselves, “Well, OK, if I’m paying an extra 8c a litre in fuel tax, how does it help me?” In Wellington at least, if you live north of the city, in the northern suburbs such as all of Ōhāriu, but also the Hutt Valley, Wainuiōmata—if you happen to drive from Wainuiōmata; some people cycle a bit, but if you happen to drive from the Hutt Valley and that area—those motorists will be paying significantly more in these taxes. They have every right to ask themselves, “What do I get for the extra tax impost?” They still have to go to work; they’ve still got lives to lead. They may have children going to sports. There are things—desirables or necessities—for them to get around in their motor vehicles, so they will pay extra tax under this bill. They have every right to say, “What do I get?”

Well, that programme that the Minister announced just a week or so ago, Let’s Get Wellington Moving—it’s not terribly aptly named, but that’s still what it’s named—means that they will no longer get an extra southbound lane from Ngauranga to Aotea Quay. They are not going to get an extra tunnel at The Terrace, and neither will that Terrace Tunnel area be undergrounded to Te Aro. Now, the Let’s Get Wellington Moving programme was initiated by the previous Government, and the clear objective of it was an integrated transport solution to unlock congestion and productivity from Ngauranga through to the airport. The programme that’s been announced simply can’t do that, but what it does do, through taxes like these—and particularly these are definitely part of it—is place an impost on motorists, who gain absolutely no benefit from it at all, because not only is the throughput not going to be there but the light rail scheme is going to remove a couple of lanes from out on the quays, so they haven’t even got a route change. They haven’t even got alternative routes that they can use to somehow lessen the congestion they’re going to face. So they’ve got every right—every right, I believe—to question the motives but certainly the actions of a Government that would simply take more money out of their pockets and give them nothing in return.

In the first reading speech, I said that in a manner of speaking—by no means a direct definition, but in a manner of speaking—this action could be likened to the most egregious form of taxation, which is taxation without representation. In this case, the people who will be paying the most are people who are required to use motor vehicles or whose lifestyles or circumstances favour it most, and an earlier contribution pointed out—and officials have agreed in the regulatory impact statement, by the way—that this is a very regressive tax. It is well understood that lower-income earners are more reliant on their motor vehicles than others, so they do pay a disproportionately higher amount. It is clear that they are getting hurt more. They will pay more of this impost—this $300 million impost—but what are they personally going to get from it? The answer at best is very little, and, quite frankly, approaches nothing. That is why I make the argument that it could be seen and could be interpreted as an equivalent of taxation without representation. It is unnecessary, it is wrong, and it is bad for New Zealanders, particularly when it’s supposed to be a wellbeing Budget. We oppose this.

Hon SHANE JONES (Associate Minister of Transport): I will deliver a methodological speech, because it’s important that members on the other side of the House understand that, in actual fact, a bill of this nature requires us to focus our remarks on to the actual bill before us. This bill is actually very simple. What it does is it changes the size of the impost for the petrol excise duty (PED), and then it changes the size of the impost for what we colloquially call the RUC charges—road-user charges. It makes a very small change in 2019, and then it makes a similar change in 2020. What it does is it funds to a greater level the resource reservoir, to enable the Government to meet its transport commitments.

Now, those commitments are articulated in the Government Policy Statement on Land Transport (GPS). Phase one of that was articulated and announced by my colleague on my right, and it’s generally known as the GPS. That’s all this bill does. In addition to that, the GPS is not a static document. The GPS is capable of being refined, and I am assured by the senior transport Minister that a process of refinement is under way. So the vast majority of the speeches that are being made, attacking this remarkably simple and bare document as an act of stealth or an act of artfulness, show that they have a pitifully low understanding as to how Parliament is meant to work on bills that are as sparsely written as this one, and they obviously have a vision to spend the entirety of the long weekend in this House.

What I would encourage the members to focus on is that it’s the GPS that contains the philosophical and policy preferences, not this simple bill. This simple bill, once we get into the committee of the whole House stage, is, basically, Part 1 and Part 2. It has absolutely nothing to do with their rants about Dominion Road, with their continual hate speech against rail, or with their ongoing displays of ignorance about climate change; it is simply Parliament using its sovereign powers to slightly increase this source of revenue so that we can allow the New Zealand Transport Agency to deliver the GPS, to the tune of $45 billion over the next 10 years.

I have now laid out what is for a bill of this nature, and I do hope the members on the other side of the House—I would point out that I was gone for three years, and, by Jove, standards have slipped on that side of the House. A bill as bare as this ought to be focused on the simple changes to the imposts associated with PED and RUC. All flights of fancy sadly seen on that side of the House should cease, and, sir, I beseech you to cause them to desist. Thank you very much.

JONATHAN YOUNG (National—New Plymouth): Thank you, sir. Thank you very much for that speech, Shane Jones, which I think was designed to curtail our criticism of this bill. Can I say that I do support my colleague’s comments about taxation and the balance that we have around taxation, because this is a fuel excise tax. This is a tax that is coming out of the pockets of motorists to the tune of approximately $300 or $350 a year, if somebody is travelling perhaps 15,000 kilometres, as they do in regional New Zealand. Can I say that taxation without representation, the full terminology around that, is tyranny, and in this case it is taxation without compensation—that is, the benefit to the motorists—because they are the ones who are paying this $300 a year for benefits—

Kiritapu Allan: How much did National put it up? Was it 26c?

JONATHAN YOUNG: We put it up 24c over nine years. You’re putting it up 24c within two years—within two years. So can I say that this is taxation without compensation, without designation of those funds to go back into those regions, which is the principle behind hypothecation of transport funds, whether they are road-user charges or excise taxes. They are designed and determined to bring expenditure back into those areas where that money was raised from in order to maintain the quality of transport networks that we have. Now, what we continue to receive are messages whereby we should feel guilty because we drive a car and don’t jump on to the nearest bus or train. Look, I just want to say that not every regional town or village or city has an adequate public transport network, and I do not think that this excise tax is going to do anything for most of New Zealand.

We understand and we feel that by the Government policy statement, there is going to be a significant concentration of investment into Auckland’s public transport, and there’s not a willingness to reduce congestion except to get people out of their cars. I think that my colleague Paul Goldsmith, who talked about picking up his daughter from a netball practice in the evening, on a dark night—perhaps, even on wet, windy winter’s night—is going to use his car instead of asking her to jump on a bus. And I think that parents all over the country would see sense in that.

There are times when I hop in my vehicle, my car, and I think, “Could I do this journey on public transport, as busy as we are as MPs?” I ask that question because there is this willingness by the general public to think of different modes of transport, and most times I come to the conclusion that I couldn’t do it. I couldn’t jump on a bus and go out to Airport Drive to pick up my dog who’s been at a kennel for socialisation for a day. I couldn’t do that. I couldn’t jump on a bus and go and visit a business somewhere—and I could never find a train—and I couldn’t jump on a bus to go and visit a school without losing many hours out of my hard working day.

I think many New Zealanders face this—they face the pressure of transportation. Everybody is time-poor. This is why personal vehicles continue to be very popular and used in our society. It’s because we live in a long country, we are sparsely populated, and we cannot afford huge amounts for public transport that comes regularly and goes door to door. None of them go door to door. Do you think a business would not use the rail network if it could go door to door and be cheaper than a truck? Of course they would, but it’s not—and those businesses need to pay their bills. They take options that work best for them in terms of being able to supply their goods to market. Until this country or KiwiRail can come up with a solution that is going to be competitive—and more competitive than other options—New Zealanders will continue to make those choices, and that’s what we face.

As somebody who owns a couple of bicycles—most of the time they are beautiful homes for a family of spiders—in the summer I get out there on our walkway and in our environs in New Plymouth and enjoy it, and there still is the incredible need and necessity for us to be able to transport ourselves and do whatever we have to do in ways that work for our lives. That is the issue, and what we are objecting to that we are paying a tax, particularly in regional New Zealand, for purposes that don’t work for our lives. They may work for Aucklanders who live down Dominion Road. They might work for other people who live in metropolitan centres, but what we want to have is the compensation for our taxation that’s going to continue to make our roads safe and easy to use and get us to where we need to get in wonderful and easy ways. I do see the first citizen of the regions in the House tonight, and I am sure that he will stick up for regional New Zealand and say that what I am saying has some truth to it.

What I would like to see from the funding that this bill engenders, from the $300 million a year extra that’s going to come in, is regional New Zealand’s transport networks continuing to be improved and upheld and that we would have safer roads. I don’t agree that safer roads is simply putting wire strip down the middle, because we know that if you’re a motorcyclist that’s the most dangerous thing you can have on that road. They call it the cheese-cutter for a very good reason, and I just think that what we need is investment in our roads, our contours, our curves, our berms, our markings, and our signage—all of these things that will make our roads continually safer. I believe very much that the gold standard of roads throughout Europe is double-laning each way. It’s four-laning, and the propensity of accidents is far lower than what we face here in New Zealand. One of the reasons, I think, after my visit to Ireland a few years ago, why they appreciate being part of the European Union is because the quality of roads they had to build in order to maintain the standard of roads that the European Union expect of their members.

This is something that I think, in terms of the network we have in New Zealand, we should continue to build. You might call them roads of national significance; they are roads that all New Zealanders can drive most safely on. Those roads of national significance, I understand, for very, very many years, had no fatalities. I think there was one recently, and it was not because of the quality of the road. So what we understand is that when you build good roads, you create safe transportation.

The reality is that there are many modes of transport on a road. A lot of people travel in buses. Well, that’s a good thing but you still need good roads. Once again, coming back to the point, as a regional MP I would like to know that when I pay my increased excise tax, I am going to get benefit in my region, and I think the people of Taranaki would feel the same. We grumble quite often about different parts. We live in a very rainy part of the country. We live in very challenging topography, like those who live in Gisborne and the East Cape area. They face challenging topography. We do not want to be ignored because a slow tram’s going to go down Dominion Road and it’s going to cost billions of dollars. We do not want to have our roads deteriorate and no longer be safe. We want our roads to have the investment that comes from our pockets, which we pay every time we go to the petrol station. I think that is what New Zealanders expect, and I believe that it’s our right to expect that as well. Thank you, Mr Speaker.

SPEAKER: Before I call the Hon Eugenie Sage, we are now halfway through this debate and what I’ve seen as the debate has gone on, not from a brilliant start, is that it’s drifted further and further away from the bill. I’ve made it very clear that the second reading is the broadest debate of any part of a bill, but I think the member managed twice to go five minutes without relating to the bill. What I’m going to be watching for very closely now is all members speaking to the bill, and if they find that there’s not 10 minutes’ worth in there, they can sit down. I call Eugenie Sage. [Interruption]

TIM VAN DE MOLEN (National—Waikato): I raise a point of order, Mr Speaker.

SPEAKER: You’re not going to reflect on my ruling, are you—because that would be disorderly, and you’ll be in big trouble.

TIM VAN DE MOLEN: Thank you, Mr Speaker. I seek your ruling, actually, on a matter—and I have been trying to find this in Speakers’ rulings—with regards to the comment Mr Jones made around hate speech in the House. I raise that because that is a particularly concerning term, and the suggestion that hate speech has been used by members on this side of the House—well, there’s two options: either it’s correct, in which case his comment was a reflection on the Chair for not restricting the use of that speech in the House, or it was incorrect, in which case I’m sure the member would want to withdraw and apologise for an incorrect statement.

SPEAKER: The member will resume his seat. It was a marginal comment, and, if members took objection to it, they have an obligation to do it at the time. They can’t spend their time flipping around looking for the right Standing Order in order to do it. But I will say to Mr Jones that he was, not unusually, pushing at the margins.

Hon EUGENIE SAGE (Minister of Conservation): Tēnā koe, Mr Speaker. Thank you. I’m very pleased to take a call on the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill. Commenting on the previous speaker, National is so stuck in the past. It fails to get the point that under its Government you had 40 percent of the transport budget being spent on a few hand-picked motorways, and they carried 4 percent of the vehicle traffic. What this increase of 3.5c a litre in the excise duty is about is signalling a major change in our transport system, which was in the Government policy statement in 2018. So Mr Young, your comment that there is a tyranny totally ignores the fact that this was signalled in the Government Policy Statement on Land Transport. Why do we need to do it? Because National left a huge hole in the funding for transport. Mr Young was talking about the need for safer roads. That’s what this Government is prioritising with a $1.4 billion programme over three years to make our roads safer.

The Associate Minister Julie Anne Genter, who’s got a particular responsibility for road safety, was in my home city of Christchurch recently. One of the projects that’s being advanced there on State Highway 74 from Burwood to Marshland is putting barriers along the side of the road so that students at Avonside Girls’ High School and Shirley Boys’ High School can go to school cycling on that cycle path, feeling much safer.

It’s the funding that goes into new signage. It’s the funding that goes into rumble strips. We are about making roads safer. That’s what this excise duty funding will help to do. It’s all about ensuring that we change the priorities away from motorways that were used by smaller numbers and into making safer roads. Mr Young, you failed to mention that under your Government, deaths and serious injuries on our roads increased by 55 percent between 2013 and 2018.

We need to have this small increase in the excise duty, which equates to about 83c a week for the average family, because we want to make our roads safer. That is the programme of investment that was set out in the Government policy statement. That is the practical improvements that are being rolled out every month on roads all over New Zealand, not just the big motorways.

So yes, this is an increase in the excise duty, but it is about saving lives, saving families the pain of losing loved ones and of having people seriously injured, because it’s those practical improvements, like the signage, like the rumble strips, and like the barriers that ensure that our roads are safer. That’s why the Green Party is strongly supporting this bill. Thank you.

ANDREW BAYLY (National—Hunua): Thank you, Mr Speaker. It’s nice to be talking on this second reading of the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill. I will talk on the bill, but I’d like to just rebut some of the comments said before.

I think no one in National is saying that we shouldn’t be building cycleways or enhancing our bus services or, in fact, expanding our ferry services, which we’re not seeing in Auckland, as an example. I think to be characterised by the Government that we’re fixated on roads—and when I say we, National—is actually an incorrect statement and actually doesn’t reflect reality.

During our time in office, we certainly did spend a lot of money on roads. Some of it was towards trying to realise the 50-year dream that we’d have a four-lane motorway that goes from Cambridge to Wellsford. I guarantee, when the final bit gets completed—which will happen in a couple of years’ time—every single Minister in that Government will be there, and, for anything to do with transport, I imagine that Mr Shane Jones, particularly, will be there to be seen, to be cutting the ribbon, to be able to be part of this wonderful vision that no doubt they would like to claim at that point.

The other point I would just like to make with relation to the last speaker Eugenie Sage’s comments is, actually, some of these roads that we were trying to do, some of these motorways that you say we shouldn’t be worrying about and decrying, actually are about safety. The most relevant example, of course, is the Katikati to Tauranga road, and the campaign, “Fix the BLOODY Road”, is all about safety. For Government Ministers—and Ministers, as the previous speaker is one—to be able to be sitting there saying this is all about fixation and not worrying about safety aspects, I think is a very poor characterisation.

But now turning to the bill. It’s interesting. I think it’s just worthwhile reflecting that last year we were in a similar situation where the Government was putting forward all these arguments why it should be putting up an Auckland fuel tax of 11.5 percent plus GST and also put forward a proposal—legislation—that we should have this form of excise tax—two lots of 3.5c. We’ve heard today, and we’ve heard countless times in this House, that, yes, Mr Jones talks about the national land transport and the Government policy statement—and we all understand that, Mr Jones; some of us read the papers. The focus has gone from safety—not only safety and mode shift, and particularly buses, which we’re all very aware of—but the other thing is there’s now this removal of this issue around congestion. We had it confirmed by the ex-chair—the one who’s just recently stepped down, alongside the recently stepped down CEO—of the New Zealand Transport Agency (NZTA) that congestion was no longer a priority for the NZTA, and a lot of that was to do with the Minister.

I thought it would be worthwhile, in that intervening time over the break, to actually go back and look at some of the documentation that was put forward by the Government at the time that excise tax was introduced. It’s interesting—this is all in relation to the excise when it was introduced. The transport Minister said there is a need to increase excise and charges to fund roads and public transport initiatives. He talked about the 3.5c a litre—two lots, of course—coming in 30 September. One of the issues in this bill, Mr Speaker, as you no doubt know, is that that change is not from 30 September but actually 1 July. So it’s interesting. The lovely little press release actually referred to a specific date.

Hon Shane Jones: Petty. Petty.

ANDREW BAYLY: Oh, it’s not petty, Mr Jones. For a person on your very excessive salary it may be petty, but for the people of my electorate and living in places like Waiuku and Kawakawa Bay, actually, it a lot of money. It’s a lot of money, and you’re arrogant to be able to suggest it’s not.

What this Minister did go on to say—

Hon Shane Jones: He’s a howler!

SPEAKER: Turn the volume down.

ANDREW BAYLY: —Aucklanders are already facing an 11.5c rise in the cost of petrol—was “Auckland[ers] alone lose $1.3 billion a year in productivity to congestion. We will tackle gridlock in Auckland by giving commuters options through major road projects and upgrades such as Mill Road and Penlink.”—the new money will be spent on roads and public transport and road safety. That’s all in relation to the excise tax bill that we’re talking about tonight.

SPEAKER: Yeah right!

ANDREW BAYLY: On the very same day I went on the Labour website. It’s called LabourVoices—June 28: “We’re reducing congestion in our cities with a number of major road projects and upgrades.” Very interesting! “As well as this, we’re completing any current ongoing expressway projects, and allowing up to $9.5 billion of future State Highway upgrades.” Well, I’ve got to suggest, that was all in relation to the proposal to bring in excise taxes last year. Somehow, in the space of 12 months, not only have we seen the Minister go back on his word about when these excise taxes would be introduced, but also, he was very, very specific about the purpose of these. I think that borders on recklessness, because I think, to make that statement—and it was in two places, and it was well-documented—is actually a very poor thing for a Minister and the Government. As I’ve said before, to be introducing this tax bill at this point is incredible.

But the other thing I would say to you is I think there’s a lack of logic in this excise tax bill that we’re discussing tonight. What this Government over there is doing is imposing more taxes on car users to help the Government to fund projects other than those which deal with traffic congestion. I think that is the travesty about this bill. That is the travesty about what you clearly said—and when I say “you”, I’m referring to the Minister—a mere 12 months ago. We’ve got Government Ministers over the other side there, including the associate transport Minister, who’s interjecting rather loudly. There is a lack of veracity around what the purpose of this money—

SPEAKER: Order! Take care.

ANDREW BAYLY: —this excise tax is going to be used for.

Now, just on the final thing—

Hon Shane Jones: GPS.

ANDREW BAYLY: I know about the GPS, Minister, but what I’d also say, for those people using motorways, such as electric cars and buses, they are also part of that network. Therefore, in terms of roading projects, it is a legitimate purpose and one that is not contemplated in this bill.

The final thing I want to do deal with is the question of regression. I talked about the regressive nature of this tax, and then I listened with somewhat horror to this absurd statement by the Minister of Transport, Mr Twyford, who, at the opening of his address of the second reading, made the comment that this tax is not regressive. Again, I find that very, very disappointing, because, in the accompanying papers, in the departmental report, in here, the regulatory impact statement—

Hon Shane Jones: It’s one page.

ANDREW BAYLY: You should have read it, Associate Minister. I suggest the Associate Minister of Transport should read the regulatory impact statement before he interjects, because he is showing a degree of ignorance that borders on—again, if you want to make the claim that you know everything, make sure you know it, Minister, and I suggest you don’t.

So specifically in here, Minister of Transport, are the words around regression, and it is absolute 101 economics that taxes of this nature are regressive. And for you to make the claim that they’re not, I’d love you to come out to places like Waiuku and Kawakawa Bay and explain why they’re not. When you live a long way out, and you have no option around public transport, and you travel much further than other parts to get to your work, because you have no other choice—to say that is not regressive is, I think, a shocking statement, and shows a total lack of economics and business sense, and I’m horrified to hear that from the Minister.

Hon MEKA WHAITIRI (Labour—Ikaroa-Rāwhiti): Tēnā koe, Mr Speaker, tēnā tātou katoa. I’m pleased to take a call on the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill. You would think that that side of the House had never brought legislation in this House or do not understand what the purpose of excise taxes are. We are bringing this through to this House today because it is part of the Government’s GPS. It is a simple bill. There’s only two parts. It’s about enacting a Government strategy that has been well consulted on. It is an enabler to ensure that 3.5 percent per litre comes into effect on 1 July. It is to lay out the safety and also the acknowledgment of this Government’s interests on all roads throughout Aotearoa New Zealand, not just a select few that we experience from that side over there.

So I’m pleased that it is a simple bill. We are here in the second reading to pass it. It does look at—like I said—raising, per litre, 3.5 percent. This bill aligns very closely to the GPS. I haven’t heard that side talk and reference that, but that particular strategy, like I said, was well conversed and consulted on.

For the very short time I contribute to this I want to talk about the actual safe roads and roadside constructions that are currently happening in my electorate. My electorate goes from the top of Te Araroa on the East Coast, right down here to Wainuiōmata. I want to acknowledge the work that’s going on State Highway 2 of Wairoa to Bay View in Napier. I want to talk about the Paki Paki to Waipukurau on State Highway 2. You see, I share State Highway 35 into State Highway 2. Those particular roads not only unlock the potential economically in the regions I represent, but they create the safety commitment that this Government has built in the GPS. So it is important that we usher in this piece of legislation. It’s a simple bill, and I look forward to its progression in the third reading. I commend this bill to the House.

MATT KING (National—Northland): Thank you, Mr Speaker. It’s a pleasure to speak for a second time on the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill. Now, the Government have a Government policy statement, and it’s radically different from the one that we had, and it’s focused a lot on Auckland, and it’s focused a lot on trains, but the excise tax is taken off motorists. So I heard Julie Anne Genter talking before about “car fascists”, but she wants to tax the very “car fascists” that pay the excise tax. The people that are driving these vehicles on our roads, they’re happy to pay tax. And yes, over nine years we put our tax up about 24c. You guys, at this current rate, it’ll be something like 50c or 60c over nine years, but we know you won’t make nine years, so we’re not too worried.

This excise tax is meant to be—or the motorists believe—it’s to be spent on the roads. In the 1980s, I drove up State Highway 1 to Northland, and it used to take me over five hours in my family’s HQ Holden, and that road is paid for by the excise tax. Over the—

SPEAKER: Not by this change it wasn’t.

MATT KING: Over time, using the excise tax and other means, we’ve improved the road. The road is now not fit for purpose, and we need to be spending that excise tax on upping the road. So we’re building—

Hon Shane Jones: Nine years; National neglect.

MATT KING: —and we’ve started. Shane Jones is going “Nine long years.” So we talked about the four-laning of that road—back in 2012 we floated the idea. We were opposed by the Opposition at the time about spending excise tax on a four-lane highway. But four-laning is the way of the future. If we build a four-lane highway in Northland, we’re future proofing it for 40 years. This Government is proposing to use this increased excise tax on a tram to Auckland.

So the thing about the four-lane highway—they’re talking about the spending on safety all over the country, right. Well, the four-lane highway that we’re building is the safest, most resilient road in the country—they’re the safest roads. We’ve had no deaths on those roads.

SPEAKER: Order! Order! I’ve been listening carefully to the member, and other than one sort of time that I waved the bill at him, he hasn’t actually referred to the bill and what the bill does. What a Government policy statement doesn’t do is actually not part of this bill.

MATT KING: OK. Well, I’ll shorten it up a bit. This excise tax increase is a direct attack on the low-income people of this country. In Northland, we pay this excise tax and we pay a regional fuel tax, and we’re going to see no benefit from them. That four-lane highway has been cancelled in Northland. The excise tax goes on the lower part of my electorate; the regional tax is paid on the lower part of my electorate. The motorists in my electorate are not going to get the benefit of it, because this Government has cancelled the four-laning. So this excise tax you’re drawing on is going to be used predominantly for projects in Auckland—

Matt Doocey: Trams.

MATT KING: —public transport, trams—a tram down the Dominion Road that’s not even going to be going to the airport, although it’s been promised; it’s not going to go to the airport.

So this sort of excise tax—all it does is load up and increase the costs for low-income people. Shane Jones, he can afford to pay this tax, but there’s a lot of people in my electorate that are going to find these increases—and all the taxes across the board that this Government is doing—really tough.

So of course we are opposing this tax. We support a more graduated, slower—over nine years—increase in excise tax over time, but we’re not going to support this one because this Government has whacked the taxes up across the board—

Matt Doocey: That’s right—raising cost of living.

MATT KING: Yeah, cost of living. So we oppose it.

Dr DEBORAH RUSSELL (Labour—New Lynn): I rise to bring comfort and good cheer, especially to Mr Jonathan Young, who is distressed by this increased excise. I wish to refer Mr Young to the general policy statement at the start of this bill, where it says that the increase in this excise is “to provide additional funding to the national land transport fund”, additional funding that will help with our roading services.

Mr Young stood up and he said, “It’s taxation without compensation.” It does reveal a rather distressingly transactional approach to taxation. I guess that’s a problem for Mr Young. But Mr Young’s real problem was: what would this excise be used for? Would it benefit his region? This is where I bring comfort to you, Mr Young. Mr Young, among the projects that will be assisted by this increase in the excise is the Mount Messenger bypass. Mr Young, among the projects that will be assisted by this excise is the Awakino Gorge tunnel bypass. Mr Young, as a Taranaki woman myself, born and bred in that beautiful part of the country, these projects will benefit your region, brought about in part by this increase in the excise.

Mr Young, sleep easy tonight. This increase in the excise will benefit your region. I commend this bill to the House.

TIM VAN DE MOLEN (National—Waikato): Thank you for the opportunity to take a call in the second reading of the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill. I wanted to elaborate a bit on what I’d touched on in the first reading, which was primarily in regards to the manner in which the excise duty that is proposed to be raised under this bill will be utilised in rolling out the objectives of the Government policy statement (GPS) in relation to the funds under the National Land Transport Fund, and, in particular, to some of the projects in my electorate of the Waikato.

As I’ve mentioned in the first reading, the Government redrafted the Government policy statement, released that in 2018, and the No. 1 priority, as ascertained under that statement, was on safety as opposed to reducing congestion, which we’ve heard a bit about already. So in terms of raising additional revenue to help fund national land transport projects, this safety focus should be the priority, based on the Government policy statement.

When we consider the Waikato Expressway—and in particular the additional projects that were notified under the former Government for extension near Cambridge where it currently ends in my electorate, which is a beautiful part of the electorate, of course, but no significant intersection, as to why that would be a termination point as such for the expressway project in its entirety. Whereas just a further dash down the road, State Highways 1 and 29, the intersection there is a significant juncture with significant safety concerns—the cost, obviously, of extending that four-lane expressway down there is reasonable. We didn’t have a firm figure on that, but it was a few hundred million dollars. But the safety improvements that would have been achieved by continuing that expressway were significant, and that is the main aspect here. When we’re talking about raising additional revenue, primarily for safety reasons, then projects such as that should have continued to be a priority, and yet it was scrapped. The new Government came in and got rid of it.

That is a very busy piece of road, not only that intersection of State Highways 1 and 29 but, actually, the intersection of Karapiro Road as well. There’s a school there, and in addition to that there is significant traffic that diverts up to Hobbiton—one of the main tourist attractions in New Zealand, actually, and a great part of the Waikato. The schools had to shift their entrance, because it’s no longer safe to exit on to State Highway 1 there. So they’ve had to go out to a side road at some additional cost.

So when we’re looking at the expressway as it was previously planned—and the route had been identified—the significant safety improvements that would have been achieved from the investment of funds raised under an excise tax such as this would have made absolute sense. Indeed, the business case supported that.

So it is concerning to see, now that we are having an additional 3.5c plus GST—so just over 4c—a litre on fuel proposed to come in in a matter of only a few weeks now, to add to the revenue stream available to the Government under the National Land Transport Fund, to then try and achieve the objectives of the Government policy statement.

Now, we’d already, of course, seen an increase last year, and yet we’ve seen some of these projects be reprioritised away from safety. We heard previously from the New Zealand Transport Agency (NZTA) that congestion is no longer a priority, in terms of reducing congestion. So whilst I don’t agree with that, I accept that that’s their stance on it. When we look at a number of projects up in the Auckland area, where a lot of these funds that will be raised under this particular Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill will be funnelled or channelled into that area, it suggests that, actually, where are the significant safety improvements if we’ve heard that congestion is not the issue? Safety is the No. 1 priority and the key focus under the GPS, and we’re raising additional excise duties under this bill, of an additional 4c now, earlier than what we’d expected. Then why are we not seeing that diverted to projects that the Government has identified as being a significant safety risk?

So that is a key question that I would like to see addressed by the Minister during the committee stage. There may well be some Supplementary Order Papers coming, to look at adjusting how much and the timing of this excise tax, so that we can have more confidence that it is being utilised in a manner consistent with what the Government has expressed their intent is, under the Government policy statement 2018, as opposed to what we are seeing play out in an ad hoc sort of way, in terms of the debate we get from NZTA through the annual review process. What we hear when we tried to visit projects, which has been somewhat challenging, in terms of getting access, in terms of then how this utilisation of the excise funds will play out in a practical sense—and so another element, and we’ve heard around how rail is becoming a significant part of that Dominion Road project.

We’re talking about raising an additional 4c a litre this year and, when we move forward to 2020, 1 July next year, an additional 4c. And yet that project down Dominion Road, as I understand, is not able to be completed until after the America’s Cup.

Hon Paul Goldsmith: Not allowed to be started.

TIM VAN DE MOLEN: Can’t even be started, sorry. Thank you, Mr Goldsmith. It can’t even be started until that point. So here we are increasing the excise tax revenue take for the Government this year, an additional increase again next year, and yet they’re not able to utilise any of that additional revenue for this project until even further down the track. So why do we need to bring this in now if those funds are not yet going to be utilised? So that’s where we may well see an SOP coming from this side of the House as well, around those particular dates that these clauses would come into effect, rather than 1 July 2019, and subsequently under clause 3 and then under clause 5, 1 July 2020—perhaps pushing those out further to a more appropriate time line that would then coincide with what the Government has indicated under the Government policy statement for the National Land Transport Fund. It would be a more appropriate time for utilisation of that.

So those are the key aspects that I’d like to signal we will be expecting more debate and discussion on in the committee stage.

SPEAKER: I don’t think so.

TIM VAN DE MOLEN: I beg your pardon?

SPEAKER: I’m just saying that the scope of the bill is very narrow in committee.

TIM VAN DE MOLEN: Right, OK.

SPEAKER: Very narrow.

TIM VAN DE MOLEN: Sure, excellent. So the other aspect of that rail, in terms of the commuter rail—sorry, what we’ve talked about—down Dominion Road, is actually the other project in my electorate, and what we were hearing from the Government is a commuter rail project from Hamilton to Auckland. Whilst we hear that reducing congestion is not the focus for the utilisation of these funds, that project is solely focused around, well, additional modes of transport, additional options, with a view to reducing congestion. Although, of course, with only 200 passengers on a slightly overloaded train each day—compared to the thousands of commuters that head north into Auckland—there would indeed be very little actual change to the commuter space there. At a journey time of about 2½ hours each way, I suggest it’s unlikely that we’ll see significant uptake of a slow train journey from Hamilton up to Auckland—as scenic and beautiful as that may be from a commuter’s perspective.

So hearing again that that is another significant project that may be utilising funds from this additional revenue raised under the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill, both this year, 4c, and an additional 4c next year, the question is how does that then play out if we are focused on safety? We’re not making much impact through a project such as that commuter rail system from Hamilton to Auckland, which actually consequently is now being extended again. So originally, the list member Mr Strange confirmed it would be up and running by now, in 2019. The subsequent date by the Minister, who I think pulled him aside and said, “Actually, this is what we’re doing.”, was early 2020. Now we’ve seen that extended again. So already they’re failing to meet some of those deadlines.

That just brings me to the last point I wanted to touch on around NZTA’s ability to meet deadlines and whether there’s additional revenue available or not. It’s quite clear at the moment in my electorate that they are unable to meet time frames, and I’ve written to the Minister about this with my concerns. A number of projects that are specifically safety-oriented—which the Government has said is their number one priority under the Government policy statement—are not being delivered in a timely manner. NZTA are exceeding their time frames that they’ve given to achieve that and putting the safety of motorists and residents in the Waikato region behind the priority that it should be there. It’s simply not good enough to see them not prioritised in that regard. So I look forward to seeing this continue and there will be much more debate from this side of the House.

PAUL EAGLE (Labour—Rongotai): Thank you, Mr Speaker. It’s a privilege to be the final speaker in the second reading of the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill.

Hon Shane Jones: Ah, ka pai.

PAUL EAGLE: Absolutely, ka pai. In fact, when I walked in I thought I was listening to the abdication speech from the member for Northland, Matt King, handing the seat to Shane Jones for his fantastic advocacy for rail, but that wasn’t the case. What a pity.

But let’s just say this. This second reading is really about saving lives on our roads. It’s as simple as that. We’ve heard a lot of fluff, just a lot of—I don’t know—whatever you call it, but they’ve missed the point of it, and that is the fact that every dollar gained will be reinvested back into transport—a transformational programme that the Minister for Transport, the Hon Phil Twyford, and the Associate Ministers are implementing. What a programme that is. Some are disappointed; on this side of the House we’re not. We’re all ready to go and do the bizzo. I commend this bill to the House.

A party vote was called for on the question, That the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill be now read a second time.

Ayes 63

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

Noes 57

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

Bill read a second time.

In Committee

Part 1 Amendments to take effect on 1 July 2019

Hon DAVID BENNETT (National—Hamilton East): It gives me great pleasure to take a first call on this bill. When we look at it, we’re getting a taxation regime as the first thing on our Wellbeing Budget day, which is something that many speakers have raised here already. It just seems very ironic that a Government that is focused on wellbeing really wants to put taxes on the most hard-working and dedicated members of the New Zealand community. The hard-working people of our regions and our cities will be paying more for petrol from this Wellbeing Budget.

It’s not a small increase that they’re putting on. They’re putting on an 8c increase over two years. The first part, Part 1, talks about the first effect, which will be the 3.5c that comes into effect—plus GST gives you the 4c that will come into effect. And it’s great that we’ve got the Minister here, because I note that when the Minister brought in the last set of charges on excise tax, he came to the figures that—basically, the figures that you’d be looking at here, under Part 1, would, effectively, be $260 per car, per year; 260 bucks. So all those people that are thinking that this is a Budget that will actually help them, well, you’re 260 bucks down this year now, under this Budget, and that’s the reality of it.

Then we’ve got the intricacies of where that money is actually going, because there are no roading projects post-2020. They’ve all been cancelled. Well, the Waikato Expressway, Hamilton bypass, is still going—

CHAIRPERSON (Poto Williams): Order! I hope we can start this debate the way I hope it will continue, in that it is a very narrow debate and the member was very useful in referring to the clause on which he was speaking, but we are talking about the collection of the excise rather than the use of the excise, OK? Thank you.

Hon DAVID BENNETT: Yeah, and so the collection of the excise is very important, and the reason the Minister gave for that collection of the excise is rail, and that was one of the things they talked about in the Budget today. It was a very high priority in the Budget, was rail. When we look at that, the 3.5c—going to 4c with GST—goes into the pot of funding. It doesn’t go to one particular form. It just goes into the general fund that they use, and that’s the hypothecation.

That general funding is going to be disproportionately used on rail, under the Minister’s change in priorities that you’ve seen in recent years, and that’s been seen, effectively, in the removal of a lot of roading projects in the regions. My region, for example, is one of those that’s had that effect. So 4c each Waikato motorist will be paying, under clauses 3 and 4, to take effect on 1 July—they will be paying that extra 4c and they will get no benefit for it, because there are no rail projects of significance that will be funded from that.

The Minister’s looking at me, and I know he wants to explain the train option that he’s looking at, from Hamilton to Auckland, but that’s only for 150 people. That’s the maximum number of people that can go on it. So there’s going to be 300,000 people in the Waikato paying 4c from 1 July, under clauses 3 and 4, and there are 150 people that will get some benefit from it. So that is demonstrably unfair to the residents of the Waikato. You’re going to see that across the other regions, and I’m sure other members will stand up and give their own stories. Some of them won’t even have any payment in relation to that, but in the Waikato, we have had one option, but it isn’t a very effective option.

CHAIRPERSON (Poto Williams): As I said to the member before, this is about the collection of excise, not about expenditure.

Hon DAVID BENNETT: Yeah, and because the Minister looked over and was obviously wanting to make comment around that, I was clarifying it for him so that he wouldn’t make an inappropriate comment and would do it with the full facts.

CHAIRPERSON (Poto Williams): It’s very helpful of the member—

Hon Shane Jones: But irrelevant.

CHAIRPERSON (Poto Williams): —but perhaps not needed.

Hon DAVID BENNETT: Well, the relevance of it, Mr Jones, is that 4c is a lot of money, and when you add it up to 8c over the two clauses, that affects New Zealand families. This is a time when people are finding the cost of living very difficult. We’re putting more costs on to New Zealand families and on New Zealand motorists, and that affects the productivity of the country, it affects the economic growth of the country, and it affects the spending power of families because they can’t get out of this cost. It’s not something that you have a choice around. Every time you fill up at the gas tank, you’re going to be paying 4c extra now.

Hon PAUL GOLDSMITH (National): Thank you, Madam Chair. Now, the question that I have for Minister Phil Twyford and for the officials that are with him is just how much extra tax revenue—we’re dealing with Part 1 here; excise revenue—will he be gathering in the three months from 1 July to 1 October, when most people were expecting the second round of tax that we’re talking about in Part 1 to come in, because motorists will remember with horror that the extra fuel taxes came in on 1 October last year, and it was the first of three years’ successive increases of fuel taxes that this Government was bringing in in totality, amounting to 13c or 14c extra, after GST, per litre for petrol and the equivalent for road-user charges.

So they came in on 1 October, and most people were budgeting fearfully for the next round to come in this year and for another one to come in next year. They were thinking it was 1 October, because that was what it was like last year, and we will have this rude awakening when we see in this legislation that it’s 1 July. They’ve brought it forward an extra three months. So I’d be very keen to get from the Minister and from his officials how much extra revenue you’re crimping or sneaking out of New Zealanders with bringing this in an extra three months earlier, and then we can have a sense of just how much in totality is being collected by these taxes. I think the Minister once mentioned that it might be an extra $120 million a year, but I’d be very keen just to get a sense of exactly how much he expects to be gathered from this revenue, because, frankly, looking at the regulatory impact statement, it’s very hard to work out exactly what we’re getting.

I note the Chair’s comments that this is a bill about revenue, but you cannot talk in this House about revenue without the flip side of what the revenue is going to. That’s the yin and the yang of the equation, and if we can’t understand what the money is being spent on, then we don’t have any sort of sound basis on which to have a discussion. So that’s why it’s perfectly legitimate for us to ask the question of where the money is going.

But, anyway, in the first instance, there was the—

CHAIRPERSON (Poto Williams): You may think that, but it’s actually up to the Chair to decide whether that is the case, and I have already spoken to a previous member to say that this is about the collection of excise. You perhaps can touch on it, but I’m not expecting wide-ranging debate on that particular point.

Hon PAUL GOLDSMITH: So am I understanding you to say that here, in this House, when we debate a taxation bill—effectively, a taxation bill—we would only have a debate about the nature of how the tax is collected, and we’re not allowed to talk about what it’s going to be spent on?

CHAIRPERSON (Poto Williams): We are in the committee stage of the bill. The committee stage is—

Hon PAUL GOLDSMITH: Yes.

CHAIRPERSON (Poto Williams): —in general, about a clause by clause debate. So we are debating the clauses of the bill.

Hon PAUL GOLDSMITH: Yes, and the clause of the bill is increasing the taxes collected from the motorists, and the motorists have a reasonable understanding to know what the tax is to be spent on. If we can’t in the committee stage of this House discuss that, then I think we’re unfairly scrimping the nature of the discussion that we’re having.

CHAIRPERSON (Poto Williams): We are talking about committee stage, not first, second, or third reading. So I don’t need to give you any further clarification, but continue with your call.

Hon PAUL GOLDSMITH: So I’m looking across to the officials and I’m very interested to know what the extra three months’ revenue gathered from the collection of this excise duty of 3.5c per litre, plus GST, imposed from 1 July 2019—only nine months after the previous increase, on 1 October 2018—will be. What I think the motorists of New Zealand will be surprised and shocked to discover is that even though they may have budgeted to expect an increase in the petrol price on 1 October, they will find, in a rude awakening, that it arrives on 1 July. So that is my question.

BRETT HUDSON (National): Thank you, Madam Chair. It’s quite remarkable, isn’t it, that here we are on Budget night, and the first piece of legislation we are debating under what is supposedly the world’s first wellbeing Budget is making New Zealanders worse off. In Part 1, they’re worse off because most people are not in the position to claim back GST—most motorists. It’s not 3.5c a litre they are worse off by, but it’s actually 4c, or 4.025c, because most New Zealanders who will get caught by this legislative change will not be able to claim back the GST they will have to pay in an inclusive amount.

The real challenge I have with this is that there’s no question that the clause, as it’s written, is going to take that money off New Zealanders. No one’s going to debate that it won’t work—it will work. In fact, it will work too well, because too many New Zealanders are caught up in this. The Government is looking to impose a charge on New Zealanders that most of them cannot get away from. They can’t get away from it if they are driving their own motor vehicles. They can’t get away from it if they are taking the bus. They are challenged to try to avoid this tax. Any good piece of taxation should offer not only incentives to consider doing something else but should be considerate of the prospect of people having choice, and they don’t, in many cases, or at least not choices that will allow them to legally avoid paying this imposition.

So I’ve come to help the Minister. My amendment will help him, and he doesn’t need to thank me, but I’ve got some great news for him: we’ll stop this. We’ll can this particular increase in Part 1 because, Minister—great news—your fees-free policy didn’t work and the Minister of Finance has $198 million spare. The Minister has previously responded to written questions as to what this charge of 4c a litre, including GST, would raise over the course of a year, and his answer was, roughly speaking, $120 million. So, Minister, it’s great news: you want $120 million out of Part 1 each year, and Mr Robertson has got a spare $197 million in cool cash just lying around because no extra students came into tertiary study.

But there’s even better news. There’s even better news because—to be clear, Madam Chair—while the excise charge must go into the National Land Transport Fund, and the National Land Transport Fund must be used to fund land transport, the other really good bit of news for the Minister is that land transport projects can also be funded from other sources such as general taxation surpluses. So the great news, Minister, is that this tax is not required, because the Government has some other sources from which they can bring about the same amount of revenue to apply. The really great news is that if you’re not going to have extra students in the first year of the fees-free policy, you’re not going to get any more in the future years. In fact, if you’ve only got students that were going to go anyway—

CHAIRPERSON (Poto Williams): Ahem.

BRETT HUDSON: —you could can the whole—I’m getting to the point, Madam Chair—funding of the whole thing, because it’s a multi-year thing. I’m not just trying to say to the Minister it’s one year. I appreciate that this excise would otherwise last until otherwise stopped. So if they got rid of the complete fees-free policy, he could fund it year in and year out as well. So I offer this piece of assistance to the Minister: scrap this first year of excise, go to Mr Robertson, and get some other cash.

There’s another bonus—a real added bonus—because, of course, we know that the Labour Party came from the workers and that they represent workers’ rights, and we know from looking at the regulatory impact statement that officials hold that this excise tax is regressive. So this excise tax, should it go ahead, will harm lower-income New Zealanders more than the well-off. It will harm the very people that the Labour members have always purported to represent but whom they are trying to sting with $120 million a year extra in excise tax. A difficult one to square that circle, but none the less, I’m here to help—I’m here to help, Minister.

We can can this excise, and all of those lower-income New Zealanders are going to think that’s a great thing—you’d actually help their wellbeing in this Wellbeing Budget because you won’t have imposed this additional tax on them, you won’t have stripped $120 million out of their pockets. It’ll be theirs to use in whatever pressures and circumstances they have in their lives. It’s my gift to you, Minister. You don’t need to thank me, Minister—the Minister doesn’t need to thank me. But I offer you this; it’s an opportunity to do what’s good for New Zealanders. It would be good for the Government. I’d encourage you to take it up, Minister.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Chair, it’s a wise decision on your part, if I might say so. I’ve been sitting up in my office, watching the first and second reading debates for this bill, and I saw that we were getting to the committee stage. I was compelled to come down to the Chamber because I’ve got a series of questions that I’d like to ask the Minister that relate to Part 1, particularly that relate to clause 3 of Part 1, and specifically around the words “motor spirits”.

Now, just by way of a background: just before Christmas, I had the good fortune to purchase a new car and—

Hon David Bennett: I thought you were going to get pulled over for drink-driving.

Hon SCOTT SIMPSON: No, no, no, no, nothing like that, no. I travel the vast, extensive roading network around the beautiful Coromandel electorate extensively. So it gets to be that, every few years, a new car is required. So this time, I made the momentous decision to, in fact, buy an electric vehicle, Minister. So in the months since before Christmas through to last week, I have clocked up something like 16,000 kilometres in my electric vehicle, 100 percent charged and no motor spirits have been used; not a single drop—not a single drop of motor spirits of the sort that are referred to in clause 3 of Part 1 of this bill have been used. So I’ve been using roads, I’ve been travelling along roads, and like thousands of other drivers of electric vehicles, I haven’t been contributing anything in terms of excise tax to the roading infrastructure of the country. Now, there are some of my colleagues who think that’s a terrible thing—it’s a terrible, terrible thing.

Now, my question to the Minister is that this is a Government that purports to be one that has an eye on environmental matters; but actually the walk doesn’t match the talk. This bill, particularly clause 3 of Part 1, is a classic example of that. So due to some foresight as a way of trying to encourage greater use of electric vehicles, currently they are exempt from road-user charges and, of course, paying motor spirit excise duties and taxes, because they don’t use any motor spirits; and yet they’re using the roads. So my question to the Minister is: what provision will he make, at some point, to review those matters? I understand that a review is due in 2021—and I think this is a question.

Now, perversely, one of the odd things that have happened since this Government came to power is the uptake of electric vehicles has actually slowed down. Part of the reason that people are actually buying electric vehicles and not paying motor spirit excise currently is that they’ve been waiting—waiting—for this Government to promote some kind of incentives for the purchasing and use of electric vehicles; 100 percent emissions-free vehicles of the sort that the Green Party want the entire country to be driving, and we saw how well that kind of policy—

CHAIRPERSON (Poto Williams): Order! Order! I apologise to the member, if I’m going to be consistent with where I’ve gone before. I have allowed you to stray a little. So I’d like you to come back. I know you’re referring to words within the amendment bill, but—

Hon SCOTT SIMPSON: Yes, I am. I’m referring to the “motor spirits” words in clause 3 of Part 1, and how they don’t apply to a significantly increasing number of vehicles on our roads that don’t pay, that are excluded—that are specifically excluded. I think that this is something that maybe the officials may not have considered in the drafting of this bill. Is the Government going to—and the Minister in the chair, I’m sure, can probably answer this question—review the position of electric vehicles and their current exemptions from the motor spirits—well, because they don’t use motor spirits—the fees, the portion that they should fairly pay for using the country’s roads, particularly if they’re driving around the beautiful Coromandel electorate? Is that a matter that he has considered; is it a matter that the officials have considered; and is it something that should rightly and correctly and properly be addressed in clause 3 of Part 1 of this bill?

As I say, currently there are some 15,000 or 16,000 electric vehicles not paying any contribution at the moment. That’s due, I understand, to be reviewed in 2021. There’s no mention of electric vehicles in this bill, and yet the impost of 4c a litre is going to be put on everybody else using vehicles that consume motor spirits.

LAWRENCE YULE (National—Tukituki): Thank you, Madam Chair. I’m going to do the best that I can to keep specifically to the parts of the bill. It’s interesting today, though, that in this Wellbeing Budget, it’s my view that the Government has given and tonight we’re taking away. If you look at the press release that was put out by the Hon Phil Twyford when the Government policy statement came in, and he talked about the excise tax, he actually included some tables in that press release, which talked about what the increase in excise would be and what the increase in road-user charges would be in those years, and it breaks it down by deciles. That’s important, because today the Government has announced, on school donations, a reduction in donations—

Hon Member: Only for certain schools.

LAWRENCE YULE: Only for certain schools. So I’ve got it broken down in deciles on the excise tax. What it says here—and this is from Mr Twyford himself—is that for a decile 1 family in Auckland, it’ll be another $3.64 a week; decile 2, $2.54; decile 3, $4. I can keep going through that; I won’t but I can. The reason I say that is when you add that up—when you add that up—that is more than the relief they’ve given to parents in the very same Budget today. So today they’ve given relief to school donations, and here we are, the first bill up, in the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill is a tax to take more than that money away from those very same families. When I look at this bill and the Wellbeing Budget, they are giving and they are taking away.

There’s one other part of this bill, which I wish to raise with you and the Minister. In Part 1, clause 4, it talks about the rates of refund of excise duty and the excise-equivalent duty and how they’re amended. I’ll remind the Minister that, when the changes were made to the Auckland fuel tax and proposals were made to change the excise tax after the Government policy statement, there was an issue raised about the use of agricultural vehicles in horticulture and farming from going from one farm to the other, and that was going to be addressed through regulations as part of that bill. When we look at this clause tonight and they’re talking about tables of refunds, I see no mention of any specific clause that deals with that issue. I’d like to remind the Minister that, at the time, he suggested he would bring to us a way that that was going to be dealt with. To the best of my knowledge, as we sit here tonight over a year on, that hasn’t.

So, as I talk in front of this committee and as I talk to this bill on the excise tax itself, there were issues raised previously, there were issues raised about the refund mechanisms which are talked about in here, in Part 1, clause 4, and even for next year; and they’re not mentioned. To the best of my knowledge, no significant work has been made to deal with that issue. If you go to areas like I’m particularly connected with, in Hawke’s Bay and Pukekohe, where there is a lot of inter-farm, inter-property movement, then those people are paying excise and regional fuel tax and, to the best of my knowledge, it’s not mentioned. I would have thought, as part of the Wellbeing Budget, not only would we have understood these tables that Mr Twyford produced in 2018 which show the decile preferences but we would also have had some relief given in these regulations to the very things that were asked for at the time.

So I’m disappointed tonight, as we come before this Parliament in a legislative way under urgency to address a whole lot of issues, that that small issue could not be addressed as part of these regulations. So, in closing, my view is this Government is giving and taking away, and it is a significant burden if you look at the numbers—the average is $2.50 a week, according to Mr Twyford, and in Auckland it’s $5.77 a week if you include the regional fuel tax. Those are significant impositions on the very families this Government is supposing to help.

Hon PAUL GOLDSMITH (National): Thank you, Madam Chair. When we come to talk about legislation—

Hon Member: Give someone else a turn.

CHAIRPERSON (Poto Williams): The member has a Supplementary Order Paper (SOP); so he takes some precedence over the—thank you. Just to quieten down the grumbles.

Hon PAUL GOLDSMITH: Thank you, colleagues.

CHAIRPERSON (Poto Williams): And it would be helpful if the member spoke to his SOP.

Hon PAUL GOLDSMITH: Thank you, I will come to my SOP in just a moment because, when we talk about legislation that brings in new taxes or excises, one of the fundamental questions that we have to grapple with is: upon whom does the burden of this new tax fall? You might think it’s obvious—it’s the motorist who goes up to the petrol station and pays to put the petrol or the diesel into their car. But, indeed, it is much broader than that, because everything that New Zealanders buy, whether it’s a cup of coffee, a banana, a bunch of grapes, a new phone, everything that they purchase has to be transported, and if it’s transported, it relies on the petrol and diesel that is included. So what we’re talking about here is a 5 percent increase this year in the road user charges and the petrol prices. It’s year on year for three years, so all up it’s an over 15 percent increase. We all know, everybody knows, that the price of petrol and diesel fluctuates enormously because of international prices, but one thing that doesn’t fluctuate is the tax—the tax stays the same, and it keeps on rising.

So all Kiwis, in all walks of life—the ones that don’t drive around a great deal still pay for it in every tub of ice cream that they buy, and everything that they get from the supermarket; every time they want to buy a pair of jeans. It’s all added into the overall cost of living. This excise tax that we’re talking about today is another reason why Kiwis are finding it hard to get ahead, and that’s another reason why the young woman on the front cover of the Wellbeing Budget happens to no longer be in New Zealand, because of the cost of living. This Minister needs to take stock of that and recognise that even though it might just, on the surface of it, be at the petrol pump where people feel this pain, you do need to recognise that it filters through to the rest of society.

A second question that I have for the Minister is in relation to this. Of course, the increased excise tax on motorists is designed to—they pay that tax because they want to have good transport infrastructure. But the question that has arisen is under the Minister’s Government policy statement. His signal is that the biggest project that will be bought with this money is the slow tram down Dominion Road. That has been described and justified as an urban regeneration project.

Chris Bishop: Sorry, say that again?

Hon PAUL GOLDSMITH: An urban regeneration project. So what I want an answer from the Minister on is: is urban regeneration a legal and appropriate thing to spend road taxes on—taxes that have gone into the National Land Transport Fund? I want to know from the Minister whether it is legal to spend that money on an urban regeneration project. If the slow tram is one part transport and nine parts urban regeneration, is that legal? Or, if it’s two parts transport and eight parts urban regeneration, is that legal? I want to have a clear and concise answer from him on that point.

Finally, my SOP was a simple one, which is to say that, in Part 1, this tax should not come in on 1 July; it should come in on 1 October, like it did last year, when everybody was expecting it to come in, before this Government brought in a sneaky change to bring it in on 1 July and crib an extra three months’ tax out of New Zealanders, who weren’t expecting it. I’d like to know, and so that SOP suggests that, and I would be grateful if the committee could consider that SOP carefully and give it due thought. Thank you, Madam Chair.

Hon PHIL TWYFORD (Minister of Transport): Thank you, Madam Chair. I will endeavour to address the issues and the questions raised by members on the Opposition benches that are within scope. David Bennett made the comment that he believed—and I’m not sure where he sourced this information from—that the cost of the excise increases in this bill would amount to the equivalent of $260 a year, per car. I want to say to Mr Bennett that the analysis provided by the Ministry of Transport would tell us that the effect of one of these increases would be 83c a week for the average family. For lower income families it would amount to 40c a week. All three increases together would amount to $2.50 a week for the average household, and for lower income households it would amount to $1.24 a week.

I think it might have been, possibly, perhaps, Mr Goldsmith who asked how much extra revenue will be gathered between 1 July and 30 September, and the best estimate we have is around $30 million. Paul Goldsmith, in his Supplementary Order Paper (SOP) that wants to replace the 1 July starting date with 1 October, for both parts of the bill—two SOPs—the effect of this would be a very significant loss of revenue and, of course, it would just simply contradict the Government’s desire to synchronise the period with the financial year.

The only other question that I think was in scope was Mr Goldsmith’s question about whether or not the excise is regressive and the answer, of course, is that it’s no more regressive than the totally inadequate public transport systems.

Hon Paul Goldsmith: I didn’t ask that.

Hon PHIL TWYFORD: Well, I think the member asked about the burden of the tax falling on the people who can afford it least. OK, well, it was another indistinguishable colleague.

Hon Paul Goldsmith: What about the urban regeneration?

Hon PHIL TWYFORD: Well, I don’t believe that that question is in scope.

CHRIS PENK (National—Helensville): Thank you, Madam Chair. Speaking to Part 1 of the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill, I’ve found some good news: there has been a raising of the spirits by this Budget, but the bad news is the spirits are motor spirits and the raising is an increase in a tax. So we look at clause 3(1) and what we’ve got is a dollar figure in a column in a table in a section in a schedule of an Act. It’s what Winston Churchill would have described as a riddle wrapped inside a mystery inside an enigma. That’s about how easy it is to understand. The point of this exercise is the kick-off of the Wellbeing Budget, because there is very little, if any, wellbeing to be obtained by it.

Looking at the particular wording in clause 1, I can’t help but notice that the dollar figures are expressed to three decimal places. We’re talking about cents, and a cent is a 100th of a dollar, so why we’ve got an extra little bit there, I suppose, might be the Minister trying to squeeze out every last fraction of a cent from the taxpayer—

Chris Bishop: Squeeze ’em till the pips go.

CHRIS PENK: —indeed, Mr Bishop—and that’s an unfortunate thing indeed. So my question to the Minister is whether he might round off those figures. Maybe round down rather than round up—I’d hate to be the cause of suggesting that he increases his increase still further, but if he can give us some advice on that, that would be very helpful indeed. I hear a colleague, Scott Simpson, musing on the subject of Swedish rounding. I’m not sure, but perhaps if the Government’s acting in the manner of the Swedish Chef, then that would be an appropriate exercise to undertake.

I note that we’ve got a couple of figures there, and one of them is “plus 8c per g of Pb”. I’m just wondering whether there might be something to do with the GST that’s also applied, or perhaps that’s a separate thing. In any case, I’m sure the Minister will be able to answer that. If I’m incorrect in that assumption, and I fear I may be, then perhaps he can put me right on that front.

Brett Hudson: I think you’ll find it’s grams of lead.

CHRIS PENK: I probably don’t need to take the remainder of my time, really, except just to point out that—

Matt King: He was unsure what you were meaning.

CHRIS PENK: Oh, I beg your pardon. I sense that the Minister’s unclear about what I was unclear about, so as I’m roughly half—

Tim van de Molen: Now we’re all unclear.

CHRIS PENK: Tim van de Molen is unclear. And now I’ve forgotten the question. But now, being halfway through my contribution, roughly, I think if I start again, that’s the safest way. So it’s a pleasure to move on and to clarify that my two questions to the Minister were in relation to the expression of the numbers at clause 3(2), which is, for example, 66.524—whether that could be rounded down to 66.52, reflecting that cents in the dollar are hundredths of a dollar. My other question was in relation to GST as distinct from the “plus 8c per g of Pb” as expressed in the wording of Part 1. So I look forward to the Minister’s answers on those points, please.

Hon TIM MACINDOE (National—Hamilton West): Thank you, Madam Chair. I’m very grateful for the call.

Hon Member: He’s front row.

Hon TIM MACINDOE: Well, I thought it was time I brought some gravitas to this particular debate. I want to begin with a compliment to the Minister, and that is for the fact—

Hon David Bennett: The silver fox.

Hon TIM MACINDOE: No.

CHAIRPERSON (Poto Williams): Order, Mr Bennett. I heard that comment.

Hon TIM MACINDOE: I’m tempted, but I shan’t write Mr Bennett’s compliment to the Minister into the Hansard record. The reason I wanted to pay the Minister a compliment was that he did at least take a call a few minutes ago, because quite often in debates of this nature we find that Ministers sit in the chair and refuse to answer the questions. But having thought, “Oh, well, I’ll acknowledge that.”, I have to say how disappointed I was by the quality and the brevity of those answers. I want to put quite a number of extra questions to the Minister. Yes, Mr Twyford, you can look as quizzical as you like, but your answers were both brief and inadequate. For that reason, I have every intention of putting considerably more to you.

The first question relates to the very significant point that was made by my fine colleague the member for Tukituki when he drew the committee’s attention to the fact that there is concern that the impact of these particular excise increases will more than outweigh any benefit that parents of school-age children in New Zealand might enjoy from today’s announcement of the cessation of donations to schools from decile 7 and below. So I would like the Minister, who was doing some calculations a few moments ago, to tell us if Mr Yule is correct and, if so, what the differential would be for the average motorist, particularly in rural areas or provincial areas such as Mr Yule’s electorate, where parents quite often have to drive long distances. The same is true of Mr Falloon’s electorate and those of many of my colleagues around me.

The second thing that I want to ask the Minister is why he is ramming this particular measure through under urgency here in this post-Budget debate when he must be aware of the fact that motorists have experienced huge pain at the pump repeatedly during the period of his Government. The prices per litre, especially here in the Wellington region, and also in the South Island, have risen dramatically under this Government. I’m pleased to say that, as a member for the Waikato, they haven’t been quite as dramatic—in fact, we enjoy some of the lower petrol prices in the country—but I do feel for my colleagues and everybody who resides down in the South Island, who don’t have that particular opportunity to pay slightly lower prices. Why are they being denied the opportunity to put their concerns through a select committee process? Is it really so important that this bill needs to be rushed through under urgency? If the Government was really willing to be upfront about their intent to the New Zealand public, surely they would be prepared to defend their policy at the select committee and to give, perhaps, the opportunity—I think it’s Mr Goldsmith who has an amendment to defer the introduction of this particular measure. If his amendment could be adopted and the measure could be deferred, then we could have a select committee process when the Government would have an opportunity to hear from New Zealanders and to outline their thinking on it.

I also want to ask him what his answer is to the member for Coromandel, Scott Simpson, who I thought made an excellent point when he pointed out that, as the driver of an electric car, he and others who are in that category, many of whom are upper income earners, are not being asked to share the pain that the purpose of this tax is going to impose on the vast majority of motorists. The whole point of the excise, as we read in the explanatory note to the bill, is to provide additional funding to the National Land Transport Fund established under the Land Transport Management Act 2003. So there’s nothing in there about saying that only a certain category of motorists should have to bear the burden. Surely the Minister could explain why he is singling out those who are still driving petrol and diesel-driven cars, fossil-fuelled cars—why are they being singled out under this particular measure? If it was a climate change measure or something, it might be understandable, but it’s not. It is simply another tax grab from a Government that makes a specialty of tax grabs.

I’ll take another call if I can later on, but I also want to ask him whether he will support the amendment in the name of the Hon Paul Goldsmith, because I do believe it would give us far more time to consider this measure appropriately.

KIERAN McANULTY (Junior Whip—Labour): I move, That the question be now put.

IAN McKELVIE (National—Rangitīkei): Thank you, Madam Chair. Very thoughtful of you, Madam Chair—thank you. Just as a reminder to the committee, the Cricket World Cup starts in about 10 minutes, so I’ll be out of here. I’m going to take a brief call on Part 1 of the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill, and I’m going to spend my time talking about the insatiable appetite that Governments have to nick money off recreational users. The tragedy of this sort of stuff is, of course, that if you go out and mow your lawns on a Saturday morning, it’s going to cost you more. I think we tend to forget that. In the drive to drive more cars and more trucks and things on the road, we forget the recreational users. Not only people mowing their lawns but those people that go fishing on the weekend are subject to this tax as well. One of the questions I would be really interested in the Minister perhaps addressing is whether, in fact, there’s room for those fishermen to get that money back at some stage, because, when you think about it, whilst they drive their car on the road to tow the boat, they’re paying tax on the car, they’re also paying that same tax on the petrol that’s in the boat, and they have also registered the trailer, of course.

The other issue that was raised a little earlier is a much more serious issue than perhaps either of those, although I’m sure the issues with respect to recreational fisher people is very important to them, and the fact that every time we put these rates up, they get affected pretty badly by it. But I really wanted to go back to the issue that was raised earlier by one of my colleagues, and that’s the road-user charges. Again, we look at these bills and we think excise tax on road fuel, effectively, affects passenger transport. The biggest impact it has, of course, is on goods and services transport, and it’s massive. So this country relies heavily on road transport to get its exports to port and also to get its food and supplies around the country. Those road-user charges are a significant cost on our community. They’re a significant cost on the rural and provincial communities as well, because, of course, those people have to drive a lot further. So these taxes have a much bigger impact on people who live further from the city than perhaps they do on people who live in cities. So the cost to people in rural and provincial New Zealand of the increases in these taxes, and particularly the tax listed in clause 3 of Part 1 of this bill, is significant to those communities. It’s also significant to the farming community because farmers spend a lot of money on transporting stock around the country, particularly at this time of the year, of course, with the dairy cows on the move. But it is a cost on all of our community, and I think that the challenge that we have with the provision of services of this kind will always relate to the way we fund them.

I was around in the days of the debate on the hypothecated funding of land transport, and I think that was probably in the term of the last Labour Government, actually, when that was brought in. Of course, in those days, that was hypothecated, basically, to fix roads. That’s changed dramatically now, and we have a Government that’s using these taxes for all sorts of other reasons and, effectively, taxing a sector of the community to prop up—well, not to prop up but to provide—public transport in some areas of New Zealand. Many of us live in parts of New Zealand that have no access to public transport and, consequently, have no opportunity to use or get the benefits of the tax that we pay in the form of these excise taxes. So it’s quite a significant inequality, I think, in the way we apply these taxes, and as my colleague Mr Simpson talked about, driving those strange electric things, they are subsidised by all of us, and I think that’s grossly unfair as well.

So there’s some interesting anomalies creeping into the way we’ve historically taxed or put excise tax on fuel to, effectively, fund these issues, and there’s going to have to be other ways found to fund these things in the future. I guess if they all turn into Scott Simpsons and all drive those very expensive electric cars, then we’re going to have to probably, I guess—short of us having to use the fuel to power the power stations to power the cars, we’re going to be in trouble.

I don’t want to take any more time in this debate, but I think we do need to consider—and I feel sorry for—those recreational users who either mow their lawns on a Saturday or go fishing or whatever. They are the ones that suffer the most as a result of this type of tax. So it certainly has an impact. Thank you, Madam Chair, for letting me take a call on that bill.

Hon PHIL TWYFORD (Minister of Transport): Thank you, Madam Chair. Again, I’ll try to address the questions that I think are in scope. Christopher Penk had a couple of points to make, and one of them was about whether or not the amount being charged in clause 3(2), and in a similar situation in Part 2, where it’s, basically, to three decimal points—[Interruption]

CHAIRPERSON (Poto Williams): Order! [Interruption] Order! Order! I apologise to the Minister. Members have asked the Minister questions; I think they should actually listen to the answers.

Hon PHIL TWYFORD: So I want to reassure Christopher Penk that the fact that the number is expressed to three decimal points is not a problem, because these amounts are charged to fuel companies that are processing millions of litres. So it’s not like Joe Bloggs is going to rock up at the service station and be charged 63.024c per litre on his credit card.

The other question that Christopher Penk had, I think, was about where it says “plus 8c per g of Pb”. That’s not a form of GST; that’s actually a longstanding provision in the fuel excise which is designed to be a disincentive for the insertion of lead into petrol, but it’s there as an artefact of history.

Brett Hudson’s got an amendment that would delete clause 5. We will not be adopting that, because, obviously, it would contradict the entire intent of the bill and lead to a substantial loss of revenue. Thank you, Madam Chair.

DENISE LEE (National—Maungakiekie): Thank you very much. It’s a real pleasure to talk alongside this copious amount of male charm beside me. Thank you very much for choosing a female option here tonight, Madam Chair. I will of course be speaking to, in Part 1, clause 3(2), which is the mechanism for adding—they quite liked that, didn’t they? Still getting a bit of feedback.

I would like to refer to some of the statements in the impact summary by the Ministry of Transport, which, of course, we traversed last year in June when it was given to us alongside the impact statement for the regional fuel tax for Auckland. Now, I realise that we’re on this particular excise duty tonight, but back then it was very clearly stated that for this particular—and it was signalling what we’re doing here tonight, that the objectives of this mechanism would be that additional cost should be reasonable for users, and that’s a direct quote from the impact statement: “additional cost should be reasonable for users.” So, if we keep that in mind, I’ve got some questions for the Minister, questions which definitely, for me, raise red flags—red being the optimum colour there.

It’s around the section of the impact statement where it was referring to constraints on the scope for decision making. It reads there that “The existence of the [regional fuel tax] in Auckland”—and I’m going to get to tonight’s topic, don’t worry—“constrains the ability of the Government to increase [the petrol excise duty] and [the road user charge] rates as further rate increases across the country will place an additional burden on businesses and individuals [and in this case] in the Auckland region.” So there we are. There it is from the Ministry of Transport, and that’s the impact statement which relates to tonight’s bill. So how does the Minister reconcile this—that’s my question—when, clearly, the constraint for the decision making which has led to tonight’s bill is there in black and white for all to see?

Furthermore—and it’s referring to the Government policy statement in 2018 but it applies to tonight—“Cabinet agreed that the Minister of Transport would report back to the Cabinet Economic Development Committee on increases to [the petrol excise duty] of between 3-4 cents per litre per year for the next three years”—and, of course, that’s, again, what we’re doing tonight—and “This constrains the magnitude of increases that can be realistically considered.” So there it is again: the very fact that they are having to review it and look at this charge should be a constraint for increases. How has the Minister taken that into account?

Another question for the Minister would be that, when looking at alternative funding mechanisms, back in the impact statement, scaling back expenditure was one of them. Did the Minister take that into consideration when coming up with this particular bill?

Now, my last comment around that impact statement would be one more statement where it was said that the provision of greater transport choices would benefit low-income households. Now, you might take that at face value, but I’ve got a question for the Minister: where are the greater transport choices that were mentioned and heralded? Where is the light rail option? Where is the East-West Link option? Where is the City Rail Link, on time and on budget? Where are the greater transport options, Mr Minister? We’d like to know. Because I’ve talked about the impact on income of businesses and residents, there’s also very much a repetitive strand, and that’s with regards to the impact on low-income households.

I would like to finish—and I will be taking a further call if I don’t get to finish—with this particular quote that I want to read. They were submitters, the Auckland Action Against Poverty group. So I want to read just two short quotes from them. One is “Auckland Action Against Poverty … calling on the Labour led Government to find alternatives to its proposed petrol tax in order to fund its transport projects.”—this is a quote that I’m reading. Madam Chair, can I take a further call, please? [Time expired]

ANDREW FALLOON (National—Rangitata): Thank you very much, Madam Chair, for the opportunity to take my first call on Budget legislation tonight—

Chris Bishop: First of many.

ANDREW FALLOON: —first of many; exactly right, Mr Bishop—and specifically the committee stage of the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill, which is obviously quite a mouthful, but it’s here tonight in the name of Minister Phil Twyford. If anyone at home is confused a little bit about why we’re still debating this several hours after the Budget, it’s because we’re passing through all stages tonight. The reason that’s important is because we’re now looking at the committee stage, and because we’ve been denied the opportunity to have a select committee, this is a very important stage in the process where all members can contribute, test the Minister, and put questions to him—which I’ll be doing in just a moment.

My first question to the Minister—just coming to Part 1, which talks about an increase in the excise from 63.024c to 66.524c; for the mathematicians in the room, obviously that’s a 3.5c increase—is: where is that money exactly going to go? It’s difficult for us on this side of the House to determine whether or not we’re going to support or oppose this measure if we don’t know where the money is going to go, because, for me at least, if I knew that money was going to be going fairly to regional New Zealand—if that 3.5c was going to be spent in the regions that it’s needed—then it might be something that we might look at supporting.

The answer, for me, has got to be roads. It’s got to be roads, and when you look at what the Government’s done with the National Land Transport Fund, they’ve taken $5 billion out of the State highway network and put it into Auckland rail and cycle projects. So if this 3.5c increase in the excise is simply going to go into more of those projects, clearly that’s not something that we’re going to support.

Now, Deborah Russell, in the previous stage, the second reading, said—she thundered, in fact—“Your region will not be worse off.” Well, actually, Deborah Russell, my region is worse off, because that’s a Government that has, as part of that $5 billion, cancelled four lanes between Ashburton and Christchurch.

CHAIRPERSON (Poto Williams): Order! We’re straying a little past the bill. Thank you.

ANDREW FALLOON: Thank you, Madam Chair. I was just coming to my second question to the Minister, actually. It’s been raised previously in the debate that this is a regressive tax—3.5c on the poorest people, who live often on the outskirts of town. So it’s regressive on lower-income New Zealanders, but I would also argue that it’s regressive on people in regional and rural areas. The reason for that is that if this money is going to be going to fund public transport in places like Auckland, Wellington, Christchurch, and, of course, in David Bennett’s area of Hamilton, that’s—

Hon Tim Macindoe: Excuse me?

ANDREW FALLOON: —fine for them—and Mr Macindoe’s, of course. That’s fine for them, actually, but it’s going to be people in places like Ashburton and Timaru who will pay for that.

In his earlier contribution, Mr Twyford said that, no, it’s not regressive, because we have a poor public transport system and so we need to put more money into that. Well, my question to the Minister on that is: what viable public transport link does he think is viable in a place like Ashburton? Does he think it’s from Allenton shops into town, or from Tinwald across the river into Ashburton? If he wants to put this 3.5c excise into more public transport, what does that mean for a place like Ashburton?

I do want to come to the departmental disclosure statement, because this actually referred a little bit to this regressive nature. It talks about the fact that petrol excise duty and RUC—road-user charges—are the major contributors of revenue to the National Land Transport Fund, which funds the delivery of the Government Policy Statement on Land Transport. So that points out, actually, that the vast bulk of the money comes from road-user charges and from petrol taxes. So it’s money that’s coming from motorists, from road-users, and going into public transport when they’ve taken $5 billion out of the State highway network.

My final point and my final question to the Minister is in relation to aviation—and this is a point that hasn’t been raised yet. I know Mr Eagle, on the other side, is very proud of the fact that his electorate has got two airports in it. Well, mine has three. The smallest of those is at Rangitata Island, and that’s a real favourite of aviation enthusiasts. The owner of that airport has asked me several times, and I’ve put it to the Minister as well, about a carve-out or an exemption for recreational aviation enthusiasts who go and purchase petrol to fill up their planes and then fly around. Clearly they’re not using the roads. So my question to the Minister—when he replied to me last time, he was talking about the fact that there’s a review under way—is: what is the stage of that review, and if it’s not coming out soon, will he consider a carve-out?

Hon DAVID BENNETT (National—Hamilton East): I raise a point of order, Madam Chairperson. We have a difficult position in the committee at this stage of the evening now, and I wanted to do the point of order before we got too further on, because I need the Minister’s full attention at this moment in time for something that’s happened in the Chamber in the last half an hour with his explanations.

We had put up a number for the cost of the fuel tax, and it would be $260 for the cost over the year. Now, the Minister refuted that in his comments and used a different figure. I’m referring to the figure here—and I quote—that the 3.5c tax, 4c with GST, according to figures would be $2.50 a week, and $2.50 a week gives $130 a year for the first part of the tax, and if you double that, you get $260.

CHAIRPERSON (Poto Williams): So are you suggesting that the Minister is needing to correct something?

Hon DAVID BENNETT: The Minister needs to—

CHAIRPERSON (Poto Williams): I just want to get to the point of the point of order.

Hon DAVID BENNETT: Well, the Minister needs to come back and reply with the figures that are correct, because I am quoting from the Minister on 1 October on his last increase in taxes, and if you look at this article—“Transport Minister reveals the impact of new fuel taxes”, and that comes to $260. And now, today—

CHAIRPERSON (Poto Williams): Thank you. I thank the member.

Hon DAVID BENNETT: —he’s coming at a much lower figure.

CHAIRPERSON (Poto Williams): I think we’ve got the gist of where we’re going.

Hon DAVID BENNETT: So the Minister needs to clarify—

CHAIRPERSON (Poto Williams): Yeah, I think we’ve got the gist of where we’re going with it. Thank you.

Hon DAVID BENNETT: —and I want to give him a chance to do that before he leaves the Chamber tonight.

CHAIRPERSON (Poto Williams): I thank the member. Right, I think we’ve got the gist of where you’re going with this point of order. Now, I think we need to actually check what was said in the Hansard, and I don’t know if the Minister himself recalls what was exactly said, but I’m sure the Minister will return to the House and make the correction if it is so needed.

Hon DAVID BENNETT: I raise a point of order, Madam Chairperson. The Minister clearly wrote down the numbers when he replied to me, and so he will have them there in front of him now.

CHAIRPERSON (Poto Williams): Thank you—thank you. I thank the member. I will leave that in the hands of the Minister to make any correction that is required.

Dr DEBORAH RUSSELL (Labour—New Lynn): I move, That the question be now put.

CHAIRPERSON (Poto Williams): I think there’s sufficient interest in the debate continuing.

SIMEON BROWN (National—Pakuranga): Thank you very much, Madam Chair, for the opportunity—and for looking right through my colleague Tim van de Molen—to take a call on the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Sports) Amendment Bill. I’d like to just start by reflecting a comment—

Hon Member: Not “Motor Sports”—“Motor Spirits”.

SIMEON BROWN: —which many—spirits? Well, we’ve talked about motor spirits and motor sports, and we’ve talked about aviation sports, and they’re all getting pretty much a fail out of this piece of legislation that we’re putting through. It’s an interesting time here in this Parliament, when we’ve just seen the first wellbeing Budget, to be spending our first bill talking about tax—increased taxes, and increased taxes on motorists.

I’d like to ask the Minister a number of questions in relation to some of the comments that he’s made tonight, and also then some questions in relation to how this will impact on my electorate of Pakuranga. Firstly, the Minister stood up and said in relation to a question, which was, “Why is this being brought back from 1 October to 1 July and how much is that going to raise additionally?” that it would raise an additional $30 million and that the purpose of that was to synchronise the budgets. Now, I’d like to ask the Minister what that synchronisation actually means, because, on this side of the Chamber, what we see is a $30 million increase in taxes on hard-working New Zealanders and another $30 million next year, and we do not understand what this synchronisation actually means.

I’ve heard all the members on this side of the Chamber talking about different projects, and I’m not going to get into different projects, but what other projects is this synchronising for? We have a right to know what this money is actually going towards. Thirty million dollars is a substantial amount of money that taxpayers will be having for fork out for this Government’s so-called synchronisation. Or is this something like a reset, which the Minister has also recently announced in another portfolio?

The second question I’d like to ask relates to my electorate of Pakuranga, and that is in relation to where this money will be going to, and not in relation to any particular project, but the fact is that in my electorate we have been asked by this Government, and forced by this Government, to continue to pay more and more and more excise tax. In Auckland, we’re paying the regional fuel tax of 11.5c per litre. Last year, we had to pay a 4c increase in our tax on petrol levies, and now we’re paying another 4c. The question I’d like to ask is: how many more times will this Minister be coming down to the House and forcing people in my electorate to continue to have to pay more petrol tax and still have uncertainty over the projects and what it’s going to be delivering in Auckland?

This is not an unsubstantial amount of money. This is something that will cost the people of my electorate, who work hard, pay their taxes, and go around Auckland in their cars. The majority of them—90 percent of people in my electorate—have to use their cars to go to work. That’s a fact. The Minister can talk about all the things that the Government’s trying to do around public transport etc., etc., but 90 percent of the people in my electorate have no other option but to use their cars to go to work. That means they have no other choice but to continue to pay this petrol tax and petrol levy.

The Minister might talk about all the different things that are happening in Auckland but the reality in Auckland is that the people in my electorate don’t all just go into the city. They travel all across Auckland to go to their place of employment. The CBD is one of the places they go to for their place of employment but there are many other places where we do not have the public transport options or other options; so the only option that people in my electorate have is to pay this additional petrol tax. The question I ask is: how many more times are we going to have to continue to pay additional excise levies when we fill up our cars in order for this Minister to continue to try and fulfil the promises? If we’re going to see more synchronisations and more resets and all of the rest, how many more petrol taxes is this Minister and this Government going to force on motorists in Auckland?

Hon PHIL TWYFORD (Minister of Transport): I want to just respond briefly to some questions that Denise Lee posed in her contributions. The first was whether or not we’ve taken into account something that was set out in the impact summary about the existence of the regional fuel tax of Auckland constraining the ability of the Government to increase petrol excise duty across the rest of the country, and the answer is of course we did consider those things. The question of the burden on people paying the excise was carefully considered and weighed up against the gains that would be generated through additional revenue being brought on stream for the country’s transport system. So the answer is yes to that.

Denise Lee asked, further to that, whether we considered reducing expenditure, which was one of the options that was set out in the impact summary. The answer to that is, no, we didn’t consider reducing expenditure, simply because the country has a substantial infrastructure deficit and we desperately need to invest in a modern transport system for New Zealand.

Ms Lee also asked: where are the greater choices that were referenced in that document that are necessary in order to provide people with alternatives to driving and to paying this tax? The answer in Auckland, which is the case that was cited, is that the City Rail Link, which is on the way to completion over the next four years or so, will double the carrying capacity of the entire rail network in Auckland, and that will mean that there will be trains running as frequently as every few minutes in dozens of town centres across the city.

The extra revenue generated by the changes in this bill will contribute to the National Land Transport Programme, which has already seen more than a 50 percent increase in spending on public transport right across New Zealand, an extra billion dollars on public transport systems in this three-year period, and also more than a 50 percent increase in walking and cycling infrastructure all over New Zealand, responding to huge demand in our communities for genuine alternatives to single-occupant vehicles. I believe those were the only questions that are in scope.

TIM VAN DE MOLEN (National—Waikato): Magnificent choice, Madam Chair. It’s wonderful to be able to join the thoroughly robust questioning that has been happening from this side of the House in relation to the committee stage of this bill. Now, we’d heard from Mr Goldsmith, around the timing, his amendment looking to bring that timing earlier, because it was a bit of a sneaky move to impose a “weasel tax”, as it were.

I think a “weasel tax” is an appropriate term. I see Mr McAnulty looking quizzically at that term. Perhaps he’s confused about what a weasel is. Well, I can assure him the weasel is “weasonably” small whereas the stoat is “stoatally” different. But, if he prefers, I can refer to it by the family name of mustelids if that helps him at any point in this debate.

Now, the first question I had for the Minister of Transport this evening was in relation to an answer he gave earlier in regards to Mr Penk’s question about the additional terms under Part 1, clause 3(2), the plus 8c per gram of lead—or plumbum, the Latin term it’s derived from. I think the atomic number’s 82 for lead, off the top of my head. The question there is whether or not that term is relevant, and he suggested it was perhaps a somewhat outdated term given—

Hon Paul Goldsmith: Historic artefact.

TIM VAN DE MOLEN: A historic artefact. Thank you, Mr Goldsmith. And perhaps that’s how the Minister might like to be remembered in time. But I wonder why, and the question for the Minister is: why haven’t we taken this opportunity, whilst we’re bringing this change in, to actually tidy that up and to remove that term if it’s no longer necessary—in particular because, given under the next clause, Part 1, clause 4(2), it talks about the refund rates and those being a single figure in terms of cents? So why, on the one hand, are we talking about a figure with three decimal places plus 8c per gram of lead but, in the refund option, we have no mention about minus X number of cents per gram of lead; we simply talk about a straight cent figure. So is there a reason why that differentiation exists and why it wasn’t able to be tidied up in this consideration of the changes we’re making to these excise duties at this point in time? I would have thought that would be an appropriate time to tidy that up.

A couple of other aspects I just wanted to touch on were around the timing again and the impact that has around the additional revenue. I’d touched earlier, in the second reading, on my intent to mention this during the committee stage around the regions missing out. We’ve heard a little bit about that on some of the South Island and other North Island regions as well. In the Waikato in particular, we had the Waikato Expressway projects planned. They were in the pipeline ready to go—previous Government continuing a safety focus there. This Government withdrew that as a result of changes to the Government policy statement. We heard then that the focus was around safety rather than expressways. Well, of course, that was a contradiction, because expressways are very safe. That particular project in the Waikato going from near Cambridge down to Piarere was bypassing two very dangerous intersections with high crash rates.

So my question in relation to that was: are we going to see additional benefit in that region for those sorts of projects, given his increased safety focus as expressed in the Government policy statement? Specifically, in relation to the timing that Mr Goldsmith’s amendment addressed, the Minister ruled it would not be supported by the Government, because of the significant revenue that would be lost with that three-month change. Well, my question then is: if we are pulling it forward three months and we’re gaining an additional $30 million of revenue under this in the first year and, indeed, another $30 million in the second year—that’s $60 million of additional revenue—would he now reconsider that Cambridge to Piarere expressway, given that $60 million would be a significant part of the total build project for that particular project? So I’d like to hear from the Minister whether he will now reconsider carrying out that project, given the significant safety benefits it brings to the region as well, given his additional revenue he is sourcing under this “weasel tax”, as it were.

The other aspect I wanted to know was with the safety focus again. Now, I wrote to the Minister recently about my concerns on safety and the New Zealand Transport Agency’s (NZTA’s) inability to deliver on time frames with committed projects in the Waikato region. So my question here is: does he expect that, with a significant additional tax grab, NZTA will be able to meet all future obligations that they have committed to in regards to safety projects under his watch as Minister? Those are the key questions that I have for the Minister, and I would appreciate his response to those.

MARK PATTERSON (NZ First): I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

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.

Motion agreed to.

The question was put that the following amendment in the name of the Hon Paul Goldsmith to Part 1 be agreed to:

in clause 2(1) replace “1 July 2019” with “1 October 2019”

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

Ayes 56

New Zealand National 55; Ross.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Brett Hudson to clause 3 be agreed to:

delete clause 3

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

Ayes 56

New Zealand National 55; Ross.

Noes 63

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

Amendment not agreed to.

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

Ayes 63

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

Noes 57

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

Part 1 agreed to.

Hon TIM MACINDOE (National—Hamilton West): I raise a point of order, Madam Chairperson. I accept absolutely that it is entirely at your discretion as to when a closure motion is accepted. However, I point out to you that while the member Mark Patterson was moving his closure motion, my colleague Tim van de Molen sought to raise a point of order with you. He did that before you had indicated that you were accepting the closure motion. I was actually going to raise a point of order as well. It may well have been for the same reason, but Mr van de Molen beat me to it. So my point of order is to ask you why a point of order would not be accepted before you came to a point of ruling on a closure motion which was being moved at the time that Mr van de Molen sought to take his point of order.

CHAIRPERSON (Poto Williams): I thank the member for the point of order. All I can say is that it was a matter of timing. I didn’t hear Mr van de Molen’s point of order until after I had actually accepted the closure motion. It may be that he was—because, within the fullness of the seeking of calls, members stand up and seek the call when closures are given, and I didn’t actually hear the point of order, and I accepted the closure motion.

TIM VAN DE MOLEN (National—Waikato): I raise a point of order, Madam Chairperson. The question then for me became a matter of timing, because, as per the Speaker’s Rulings, any call can be taken before the completion of the words are used to put the question, and I thought the eye contact of your acknowledgment was after you had started putting the question but had not actually completed putting the question. Therefore, my call still should have been able to be sought during that point.

CHAIRPERSON (Poto Williams): Actually, I was putting the question. I was putting the question. So, in my view, I have accepted the closure motion. I am putting the question.

TIM VAN DE MOLEN (National—Waikato): Madam Chair, can you confirm, then, that you’re making a new Speaker’s ruling that overrules the previous one that says a call can be taken before the final word of putting the question is made?

KIERAN McANULTY (Junior Whip—Labour): Speaking to the point of order?

CHAIRPERSON (Poto Williams): OK, I’ll accept that.

KIERAN McANULTY: Madam Chair, this issue to me seems very clear: Mr Macindoe’s point of order started with “I accept that it is entirely your discretion”—that’s where the matter should have finished, in my view.

Hon TIM MACINDOE (National—Hamilton West): I raise a point of order, Madam Chairperson.

CHAIRPERSON (Poto Williams): Well, we will take one more and then that will be it; I will rule.

Hon TIM MACINDOE: I think Mr McAnulty is being disingenuous with that. Had we had the opportunity—or, at least, had I had the opportunity—to raise the point of order that I was going to put, it was going to be that Mr Patterson had not used the correct wording for a closure motion. So, while I absolutely accept that you have made your ruling, and I don’t wish to ask you to go back on it—that would be totally inappropriate—nevertheless, I do point out to the committee that the closure motion was not moved in the correct terminology and, therefore, had you had an opportunity to rule on the point of order, you might well have reached a different conclusion.

CHAIRPERSON (Poto Williams): I thank the member. And just for clarity’s sake, for the benefit of the committee, we keep very detailed notes of who is taking calls, the relevance of those calls when questions are being asked, in terms of being in a position to accept a closure. So I’m fully satisfied that I’ve taken sufficient debate on Part 1 of this bill. I am now seeking calls on Part 2.

Hon TIM MACINDOE (National—Hamilton West): I raise a point of order, Madam Chairperson. I have been in this Chamber on a previous occasion when a member was asked to leave the Chamber by the Speaker for failing to meet the expected dress standard of the House. I would suggest to you that Mr Patterson’s dress tonight is of the same poor standard and should not have been permitted for the considerable period of time he’s been in the Chamber.

CHAIRPERSON (Poto Williams): I’m sorry; I can’t see Mr Patterson.

KIERAN McANULTY (Junior Whip—Labour): I raise a point of order, Madam Chairperson. The rules are very clear, Madam Chair, that members in this House are expected to wear business attire. It would seem to me that, in the spirit of filibustering, we are seeing some pretty poor choices—

CHAIRPERSON (Poto Williams): OK, thank you. No, that’s it—that’s it. We’re not taking any more. We are either going to move on to the debate on Part 2—it is starting to move into areas of disorder—or we are not going to. We are going to continue with Part 2? Is that what the members wish?

Part 2 Amendments to take effect on 1 July 2019

TODD MULLER (National—Bay of Plenty): Thank you, Madam Chair. I would like to raise a couple of comments on Part 2, as we conclude quite an extraordinary day.

Hon Aupito William Sio: Give it some heart, Todd.

TODD MULLER: No, sometimes it’s worth deep reflection. And this is a day that I am sure will be reflected on by many for years to come, and “botched” sums it up perfectly.

I would like to raise two questions, specifically to the Minister of Transport, with respect to Part 2, to remind people we’re talking here about clause 5 and the rate of excise duty and excise-equivalent duty on motor spirits amended. We’re talking now about lifting from 66c—remember this has gone from 62c to 66c, and now 70c, with the changes that are explicitly outlined here in this clause. So, specifically, my question to the Minister relates to the modelling that he has done, or his officials have done, around demand elasticity and the point at which you load so many taxes on a particular part of society that your demand assumptions are proven false.

I think there is every chance that the revenue assumptions that have been built into this increased tax that we’re debating here tonight will be proven flawed because (a) of the regressive nature of it, and (b) the assumptions both in terms of amount of petrol consumed, if you like, by the national fleet may well actually not meet the expectations because the cost impost has become so great that it is starting to affect New Zealanders’ ability to be able to access fuel for their transport. So I would certainly like some comment from the Minister around that analysis.

Debate interrupted.

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

thursday, 30 MAY 2019

(continued on Friday, 31 May 2019)

Bills

Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill

In Committee

Debate resumed.

Part 2 Amendments to take effect on 1 July 2019 (continued)

TODD MULLER (National—Bay of Plenty): As I was saying earlier today when we were discussing this part, there are two key points that I wanted to raise. Just to conclude the first point, I really want to understand from the Minister of Transport what the modelling suggests around demand elasticity, with respect to how much more does he think he can continue to load up excise duty before there is a commensurate reduction in demand. There must be modelling around that. It’s very important, I think, for us to see that, because this is not an inconsequential jump. We’ve moved from 63c, of course, in Part 2; it is going up to 70c plus GST.

The other area that I would be very interested for the Minister to explore for us is the interplay between this excise duty and the signal it sends, and the revenue it makes through that process, and the emissions trading scheme (ETS) framework, and, in particular, the fact that our carbon price drives a signal of around 6c to 7c in terms of impost on our community, but this excise duty is now 10 times more than that. I just want to get a sense from the Minister, again, in terms of his assessment of how this may change into the future. Climate change is, as is signalled, such a material issue for this Government, yet you have a price signal baked in through the carbon price of 7c a litre, yet you have, as planned here in Part 2, an excise duty of 70c. There is quite a contrast in terms of where this Government puts their priority. I actually think there is quite a dissonance between this prioritising of using this as a tax grab for the Government, as opposed to the language they use around the importance of ensuring that the ETS and the carbon price and signal is effectively sheeted through the economy.

So I want a real understanding of how he sees those interplaying as we go through. Look, I’ve got many more points I’d like to make on this debate; I appreciate there are others here who’d like to make a contribution, so I look forward to making a comment later.

Hon GERRY BROWNLEE (National—Ilam): This part of the bill deals with the actual amounts that are being—

Hon Chris Hipkins: I’ve got high expectations; this will be good.

Hon GERRY BROWNLEE: Sorry, there’s the Leader of the House over there. I did not know—there’s been an overnight reshuffle, and there he is sitting in his new seat on the second row, bounced off the front bench. The Hon Chris Hipkins, one of the best performing Ministers—no, that’s not true; one of better—

CHAIRPERSON (Poto Williams): Order! Let’s come back to the matter at hand, thank you.

Hon GERRY BROWNLEE: Well, I was simply responding to the cruel interjection that came on my contribution.

This is the part of the bill that deals with the actual numbers of cents increased on a litre of motor fuel. I think the general public—the motoring public, certainly—accepted, through a number of years of increases in excise, that there was a big roading programme in place for New Zealand. I don’t know if anybody who is a regular motorist, who regularly uses roads, would now say that that very big programme, funded largely through motor vehicle excise, was a bad thing. Most people look at those extensions of motorways, those improvements to roads, and they see it as a positive thing. So they don’t mind paying excise at a reasonable level. But here we have a Budget item for an increase in excise when the Budget itself shows no new roads being built in New Zealand, and no particular expenditure over and above normal going on roading. So what we have is the motorists of New Zealand paying an extra 7c a litre over the next two years so that the Government can advance its programme for rail, and for light rail, and for all sorts of other bits and pieces around the place.

They have not been upfront enough—well, the Minister of Transport hasn’t—to say, actually, this is to discourage people from using motor vehicles. This is designed to get people on to bicycles, and on to their feet, and into public transport—and to put up with the sort of reliability issues that we’ve seen here in Wellington, and that we see in all sorts of other parts of the country—because the use of the motor vehicle is going to become so expensive. That’s unreasonable. So I intend, shortly, to put a Supplementary Order Paper (SOP) on the Table of the House to ensure that the public do know how much is being collected in excise and other Government charges on every litre of motor fuel. That SOP is going to ask that the IRD supply to all sales outlets for motor fuels an A3-sized, fully framed, easily installed statement of just how much excise is being taken by the Government, so it can be seen, for example, that today’s 3.5c for 1 July this year, and the 3.5c for next year, same date, and turning up to 7c, is just the start, because there’s a little bit of GST on top of that as well.

I think people need to understand and get a little bit more demanding of the current Government about the quality of roads that are available in New Zealand and some of the improvements that are needed, as well as some of the big extensions of motorways that are required around the country.

There is a suggestion that “Well, people will be, actually, quite pleased that we’re going to get people out of motor vehicles and get them into public transport and on their bicycles, and even the e-scooters for that matter.”, although, of course, watch out there; I suspect regulation is coming—we’ll just see how the Government responds to a proposal that’s currently before them at the moment.

The SOP is not intended to be an encumbrance upon those who are retailers of, or wholesalers of, motor spirits. It is intended to be information so that the public will know that when they are paying their $2.50 for a litre of motor fuel—in this case, petrol—about half of that belongs to the fuel supplier but a big huge chunk of it belongs to the Government, and a smaller chunk, actually, is in the distribution and sales of the motor fuel itself. I can’t see why that would be a bad thing. I think in the spirit of openness and transparency, making sure that people can see what the Government’s up to—this would be a perfectly reasonable thing for the House to accept. I look forward to it being well supported by the Minister when it’s on the Table shortly.

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put.

Hon PAUL GOLDSMITH (National): Well, thank you, Madam Chair. I did want to delve a little bit deeper into the nature of the Supplementary Order Paper (SOP) that is going to be forthcoming from Gerry Brownlee, and in relation—

CHAIRPERSON (Poto Williams): Order! We will debate that further once the SOP is tabled. The member tabling it can refer to it, but, however, we cannot debate it until we actually see the SOP so that we can see the content of it.

Hon PAUL GOLDSMITH: And that’s an excellent point, Madam Chair, so we’ll wait for the arrival of that SOP. But in the meantime, Part 2, that we’re discussing here today, is in relation to the amendment taking effect on 1 July 2020 for what will be the third—the third—of the successive increases in the motor fuel spirits levy. So that will bring the total to 10.5c extra a litre that motorists would be paying under this Government—

Brett Hudson: Plus GST.

Hon PAUL GOLDSMITH: —plus the GST, which takes it nearly to, well, about 12.5c a litre extra that Kiwis are paying—and so, you know, that’s not insignificant when the price of petrol, of course, as we all know, fluctuates enormously in terms of the crude price of petrol. Everybody understands that, but what they also understand is that the one thing that doesn’t fluctuate—it only ever goes in one direction—is the extra amount of tax that’s collected. We’ve had quite a number of speeches talking about elements of the fairness and wisdom of continuing to collect more and more fuel taxes and yet not delivering anything more in terms of roading infrastructure to growing cities and growing parts of the country, and increased congestion on the roads. Indeed, that fuel tax, as Gerry Brownlee said, under the Government policy statement is dedicated to encourage people to get out of their cars. So people are paying more tax at the petrol pump to go into their cars to encourage them to get out of their cars. Most people would probably find that a little bit strange and confusing.

The other element is, of course, further discussion about where exactly the burden of this taxation falls. The point I was making yesterday—and it’s equally relevant to Part 2 of this bill—is that, while the person at the petrol pump feels the pain and pays the extra taxes and wonders where that is going, it’s the impact of that cumulative 12.5c a litre of petrol on everything that moves that adds to the cost of living. It’s not just filling up your car that costs more; it’s actually buying a litre of ice cream, getting your bread and milk from the supermarket, buying a new shirt, buying a new TV, buying your new fridge—anything that is transported anywhere. Probably the only thing that’s not affected by it is your Netflix subscription or services that are delivered electronically. Yes, you’ll be free from this, probably, but for anything that is moved around the city and transported—ultimately, the costs of that transport flow through to every part of the economy. That’s why any Government that does this over time has to be absolutely strong in their clear arguments that the revenue that is being raised is actually going to be used to improve the lives of the people paying that tax.

Anybody in Auckland can see the incredible improvement that the Waterview tunnel, for example, made to the movement of traffic in Auckland City. Anybody in the Waikato can see the incredible improvement that will come from the Waikato Expressway. What we’re struggling with today is that the increases have increased in tempo. The previous Government referred to petrol tax increases in the previous Government over nine years. They were over a very extended period of time, and very much focused on funding very clear projects, and it’s been replaced by a substantial quickening of that increase under this Government—12.5c in three years, including GST—and, at the same time, an abandonment of any obvious and clear roading transport projects in order to make a difference to the lives of New Zealanders. That, I think, is where they’re going to come unstuck over the next few years.

Hon PHIL TWYFORD (Minister of Transport): Todd Muller raised the question of demand modelling, and I want to direct him to page 11 of the regulatory impact statement, which cites Kennedy and Wallace 2007, “Impacts of fuel price changes on New Zealand transport”, and it notes that demand for petrol is relatively inelastic. Their modelling says a 10 percent rise in the price of petrol—which, obviously, is way in excess of what we’re talking about here—would affect petrol consumption: consumption would decrease by 1.5 percent in the first year, and 2 percent after two years. So that is the modelling information that we have, which indicates there is a level of inelasticity in demand for petrol. He also raised questions about the carbon price, but this is not a debate about other transport policies like the carbon price. Similarly, Mr Goldsmith raises questions about the flow-on impact of excise to the wider economy, and I don’t believe that’s part of this committee stage debate.

ANDREW BAYLY (National—Hunua): Thank you, Madam Chair. There are a couple of things I’d like to talk to on this. The first is this issue I’ve raised, on three occasions, around the regressive nature of this duty. It is noted in the regulatory impact statement (RIS), actually, the impact of this duty on lower-income and vulnerable people and families. It’s interesting, the calculations that the Minister of Transport uses, and, in fact, the report refers to the cost of it. Normally, transport costs for low-income families are anywhere between 6 to 8 percent of their total budget. So here we are, we’ve got a Government imposing yet another high level of duty—another 3.5c plus GST—on top of the already proposed changes in their earlier years and, of course, for the year coming to fruition. That, together with the Auckland regional tax, is, as we know, very, very substantial.

I just wanted to know—and this is a good opportunity for the Minister to talk about it—the financial implications of that. I know he talks about it being only a few cents, but actually in some of the modelling in some of the estimates we received when we were looking at this issue in the committee, it was quite significant—in fact, some were up to a thousand dollars that would be the impact around some of the increased charges that road users are going to incur over the course of all these different arrangements that this Government has brought in, even though it campaigned on the fact it wasn’t going to bring in new taxes.

CHAIRPERSON (Poto Williams): Order! We are starting to stray a little bit.

ANDREW BAYLY: The other thing I wanted to talk about is that I think this raises a whole wider issue around this excise tax, because the issue is that I think the Government needs to be clear about what its future intentions are. It’s fine to bring in an Auckland regional fuel tax and these three excise duties of 3.5c, but I think it’s absolutely imperative that people should know what the future intention of this Government is around introducing further excise taxes, because, as we all know—in fact, in the RIS, again, it refers to the issue around the alternative funding mechanisms that the New Zealand Transport Agency and the Government have in terms of trying to bring in different money to meet its Government policy statement targets, but I think there’s a requirement that says, “Does the Government intend, if it is lucky enough to win the next election, to bring in further increases in the excise tax?” In fact, there are road-user charges (RUC) questions. So I think it’s fine just doing this in a piecemeal fashion but, actually, the public of New Zealand have a right to hear from the Government actually what it is in terms of future funding and the future increase in this petrol excise duty.

The other thing is that the Ministry of Transport obviously uses a cost allocation model to work through some of the charges, and it notes that the RUC is always overcharged. There’s an over-receipt or collection of taxes from road-user charges, and that’s a perennial problem. It’s noted in the RIS again. As it says quite clearly here, “The actual RUC rates set in regulations are generally higher than the base rates because a level of over-recovery from the system”—they talk about the need to fund additional investments. What I’d like to hear from the Minister is that some of the submitters during this process on the excise tax suggested alternative options to increasing the petrol excise duties and the RUC, such as congestion pricing and tolling. And, again, I think this needs to be in the context of where you’ve got a Government who’s imposed, roughly, another 20c in a short order within 19 months of coming into office. Effectively, the public of New Zealand, and particularly in Auckland, will be subject to an over 20c per litre charge that has been introduced by this rapacious, tax-gathering Government since the time they’ve come into play. I think it’s time now for the Minister to be absolutely clear about his future intentions regarding these two forms of further tax that he wishes to impose on the New Zealand public.

CHAIRPERSON (Poto Williams): Before I call the next member—if members would just resume their seats—I just want to remind members that this is a very narrow debate. We are on Part 2 of it, which, actually, the amendments that take effect from 1 July 2020—it’s very, very narrow. I’ve allowed 20 minutes of quite wide-ranging debate; we need to come back to these two clauses, 5 and 6. We had quite a significant amount of debate yesterday on the broader issues. I do not want to be sitting members down due to repetition, repeated arguments, so let’s try and concentrate on these two clauses, which, really, are just about the date and the amendments that take effect from 1 July 2020.

Hon PHIL TWYFORD (Minister of Transport): Just in response to Mr Brownlee’s Supplementary Order Paper, which would require—

CHAIRPERSON (Poto Williams): No, no, not yet. We’re not—not yet.

Hon Phil Twyford: Oh, really? Oh, OK.

ALASTAIR SCOTT (National—Wairarapa): Thank you very much, Madam—

Hon Gerry Brownlee: I raise a point of order, Madam Chairperson. I have given the amendment to the Clerk. At what point does it become tabled?

CHAIRPERSON (Poto Williams): It’s actually not part of Part 2 debate.

Hon Gerry Brownlee: Not what, sorry?

CHAIRPERSON (Poto Williams): It’s not part of the Part 2 debate—it is not part of the Part 2 debate. We may come to that, but not just at this point.

Hon Gerry Brownlee: Can I take it back and make it Part 3?

CHAIRPERSON (Poto Williams): Ha! Not just yet. We are just working on how this will impact on the debate going forward, so—

Hon Gerry Brownlee: No, no—sorry, I’m seeking genuine guidance. I think what I’ve said is a relevant point. It’s simply—you have a bill that sets out all this stuff. I’m saying why can’t that be displayed by the outlets? So do I need to write another part to the bill to be able to get that idea considered by the House?

CHAIRPERSON (Poto Williams): I’m yet to determine whether this is within the scope of the bill.

Hon Gerry Brownlee: Well, it would be good to know that before the committee stage finishes—

CHAIRPERSON (Poto Williams): Yes, and you will.

Hon Gerry Brownlee: —so that a new part can be entered. I’d only need to write “new Part 3” on the piece of paper, I believe.

CHAIRPERSON (Poto Williams): I thank the member. You will know shortly. Thank you.

ALASTAIR SCOTT: Thank you, Madam Chair. I’d like to talk briefly about the effects of the increase in excise on petrol, but particularly relating to rural New Zealand. Rural New Zealand is where people have to, by the nature of where they live, travel further than a commuter who might live in Wellington. Although the Prime Minister has ruled out increases in regional fuel taxes on her watch, it’s disappointing that this increase across the entire country has been initiated in this Budget. If the Prime Minister was true to her word to say there was going to be no regional fuel tax increases, then why is this here? Why are we even talking about it here today? This is a regional fuel tax across all regions in New Zealand.

Getting back to rural New Zealand, this affects those people in rural communities who are generally on lower incomes. We know that the high-income electorates, if you want to call them that, for example—for the sake of argument—are in the cities and the poorer electorates are in the rural communities. I say that because the poorer people drive less efficient cars, older cars. They burn more fuel per kilometre than someone who’s in a new car. As the Minister of Transport quite rightly says, the demand for fuel is inelastic, so, in a way, no matter what the price does, people will continue to consume the same amount of fuel. There is no choice of public transport in rural New Zealand. People have to get into their cars to go from A to B, and because of the inelasticity in demand for fuel, it is, essentially, a universal tax. Everyone will pay the same amount per litre per person, and so it hits the lower-income people, as described by Mr Bayly earlier—it hits them harder. It has a greater effect on them—more than those who have higher incomes.

This Government says they are all about supporting those who are less well-off. Well, this is a regressive tax. This tax hits rural New Zealanders harder, hits lower-income people harder, hits those who are on lower incomes harder, and hits those people who have to travel to rugby practice. People in my electorate, they travel for 40 minutes to go to rugby practice, to netball practice, and back. We’ve just had a boarding house closed in Wairarapa College. The Wairarapa College boarding house has just closed, and what is that going to mean? It’s going to mean people will have to travel more to go in and out, from home to Masterton, to get their kids to school, because the boarding school has closed. So people in rural New Zealand will be affected to a greater extent than any other city electorate because of the distances and the requirement to use petrol.

People in Wellington have an option. They can jump on a bus; they can walk or cycle, but I tell you what: you don’t want to be cycling on some of the bumpy roads around—and that’s the other thing: we collect this money from those people who drive more than the city folk, and where does the money go? It goes to Auckland. It doesn’t go to rural New Zealand. The Te Marua to Masterton review continues. There’s an incredible number of upgrades that should be for the safety—and that’s what the Government talks about—of our commuters—

CHAIRPERSON (Poto Williams): Can we come back to the bill at hand. I have cautioned members on repetition. Thank you.

ALASTAIR SCOTT: The point, Madam Chair, is—yes, I take your point. My point there is that this increase in excise is going to affect the rural people much more than the city folk, and that’s why it is a very poor show from the Prime Minister when she says no more regional fuel taxes, and here today we are talking about a regional fuel tax.

BRETT HUDSON (National): Thank you, Madam Chair. It’s quite remarkable—I will be talking to my amendment here in Part 2—that it’s still day one, actually, of the Budget. We’re still on Thursday, and the very first legislative action of this Government in the world’s first wellbeing Budget was to make people worse off in 2019. That was Part 1, a 4c a litre impost on people to make them worse off—first action.

Well, that wasn’t enough for this Government. It wasn’t enough to make people worse off this year; they are determined under Part 2 to make sure that New Zealanders are going to be worse off next year as well. They’re going to slap them with another 4c a litre just to make sure that they can’t get ahead, because, clearly, under this Government, people getting ahead is not what they are about, and, quite frankly, that is just terrible. Of course, it harms most those people which the members of the Government, their party, have always purported to represent. It harms lower-income New Zealanders more. It’s a regressive tax. It is the nature of the tax.

I’ll just make the point that I recognise the advisers who are in the Chamber for this debate. They have appeared before the Governance and Administration Committee. They are very good, hard-working, and diligent people. To hear the Minister of Transport somehow undermine or dismiss the comments they have provided in free and frank advice about the regressive nature of this tax I think is unreasonable, and the Minister should have a bit more respect for the work officials do. Certainly, we do in select committees, and they deserve it in this committee of the whole House as well, particularly because, of course, this legislation never saw the light of a select committee day.

Just before I move on to my actual amendment and what it will do, during the course of this debate on this bill, the wide-ranging debate on this bill, I’ve heard members across the other side of the Chamber talk as if they think—

CHAIRPERSON (Poto Williams): Actually, I hope it’s not a wide-ranging debate, and will you come back to the matter at hand. Thank you. OK—thank you.

BRETT HUDSON: No, no, I’m talking about the debate that has been up until this point. I’ve heard members on the other side of the Chamber talk about excise tax as if it’s a diminishing tax that just goes away over time, when the reality is, once the excise increase is set, it remains there in perpetuity unless amended in legislation, such as we’re doing in Part 1 and now in Part 2 here. So all the tax that has been added on since excise was first introduced is still being collected. Those moneys are still being collected every year and on every litre of fuel that is sold, certainly for vehicles on the road.

The real question that we are looking at here in Part 2, as well as earlier in Part 1, is: do we need an incremental charge? Do we need even more tax? The tax we’ve been levying is still being collected. The answer we’ve held is no, particularly when there are other sources of revenue, such as are noted in the regulatory impact statement, such as Crown accounts using surplus funds in a much better way than the Government has been to date.

I’ve been reflecting also, and whether it’s the Minister’s leader talking about kindness and the rest of that, it is supposed to be a wellbeing Budget. I’ve reflected and thought I would like to help with some wellbeing with this amendment. The Government is determined that the wellbeing of New Zealanders is going to decrease through these taxes. Well, I’m thinking of the wellbeing of the Minister. I’m offering the Minister an opportunity here to negate—to cancel—the 2020 scheduled excise increase, and I will now tell the Minister why I believe it is a very good idea for his wellbeing.

He has a view—and it’s been articulated a number of times in this committee today but also outside in the past—that he would like to see a mode shift with more New Zealanders taking transport options other than driving their own cars, particularly if they’re single-occupancy vehicles. He also believes, as he has stated on more than one occasion, in incentives and how pricing can help to drive behaviours. So there is a clear correlation here. He’s got a view that putting more excise on people’s fuel consumption will lead them, will give them a natural incentive, to look at other options that might be available to them.

He’s also stated, both through the Government policy statement and in his speeches, that he has an intention to put more funding into these other options. So he’s going to create the choices, he believes, for people to use. But here’s the problem—here’s the hole that he’s digging himself, and which, ordinarily, I might be pleased to help him step into. It is quite a deep hole and will cause him quite a bit of damage. The Minister has built a model—it’s a house of cards model. His model requires fuel excise moneys to pay for transportation options that don’t naturally have a fuel excise attached to them, such as horrendously loss-making light rail options from Wellington Railway Station to Wellington Airport—$1.44 billion worth. He needs people in their cars, driving and paying tax, to help him fund that, and yet he’s putting in increases which his own logic says means fewer people will drive fewer kilometres, therefore leaving him an enormous funding hole.

Steven Joyce talked about an $11 billion hole in the Crown accounts. Well, Mr Twyford is busy digging one of a similar size in his transport budget. Minister, I’m here to help you. I’m here to help you. I am concerned about your wellbeing. I don’t want you next year to be like Phil Goff and David Cunliffe some years ago when they recommended using smoking taxes to fund taking GST off fruit and vegetables, which is, quite frankly, ridiculous. So, Minister, I call on you to scrap the second round of tax excises—do yourself a bit of good.

CHAIRPERSON (Poto Williams): Just before I call members, I just want to advise the committee that the Hon Gerry Brownlee’s tabled amendment to insert new Part 3 is out of order as not being in the correct form of legislation.

Hon GERRY BROWNLEE (National—Ilam): I raise a point of order, Madam Chairperson. Can you elucidate for the committee the reason for the amendment being out of order?

CHAIRPERSON (Poto Williams): If you would so desire, I shall.

Hon GERRY BROWNLEE: I would like it, because I put it in under Part 2, “Amendments to take effect on 1 July 2020”, and I thought that it would be in the interests of transparency and motorists’ wellbeing to know how they were being taken in this particular measure.

CHAIRPERSON (Poto Williams): Thank you. I thank the member, and I thank you for asking for clarification. If the member would refer to Speaker’s ruling 113/3, the amendment is out of order because it is not in a form of words that may be embedded in law. It is actually technically inoperable.

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put.

Hon GERRY BROWNLEE (National—Ilam): I raise a point of order, Madam Chairperson. It was my understanding that one person can only once in any part debate move a closure motion. The Hon Ruth Dyson moved a closure motion earlier in this part.

CHAIRPERSON (Poto Williams): She did, and she’s quite able to move again. I think in this case we are getting close to the limit. I think I will take one more call.

SIMEON BROWN (National—Pakuranga): Thank you, Madam Chair. I would like to continue to talk about—

CHAIRPERSON (Poto Williams): I hope this is a relevant call without repetition.

SIMEON BROWN: Absolutely, Madam Chair, and I’ve got a number of relevant calls to make about the topic here which we’re discussing, which is “Amendments to take effect on 1 July 2020”. I think it’s important to reflect that this bill is about increasing taxes not once but twice on motorists—once this year, on 1 July, and another time next year, on 1 July 2020—by increasing excise tax by another 3.5c plus GST.

I would like to ask the Minister of Transport how he feels with his sun feelings and moon feelings as he puts in place a second tax, or is that just about trying to improve the Government’s locus of control by being able to force another two taxes on motorists over the next two years? That does not reflect well on what is a so-called wellbeing Budget.

I would like to ask a number of questions, which come from the “Impact Summary: Increases to Petrol Excise Duty and Road User Charges”. The first question I would like to ask the Minister is around the costs and benefits. It says here that “It is not possible to complete a detailed cost benefit analysis at this time,” and I would like to ask the Minister why a detailed cost-benefit analysis has not been completed on these increased taxes, and to also outline to the committee what, in his view, the cost-benefit analysis will be.

Further down in that part of this document, it says that “For the purposes of this analysis, the Ministry of Transport is assuming that the overall [National Land Transport Plan] programme will have a BCR of greater than one, so there will be a net-benefit from a higher level of investment.” I would like to ask the Minister whether he can give his assurances to the committee that this increased tax will have a positive cost-benefit analysis, because there are huge assumptions being made here in regard to the programme of works that this tax is going towards paying. That is a question which I’m sure motorists up and down this country would like to have an answer to if they are going to be required to pay this additional excise on 1 July 2020, because when we are asked to pay additional taxes, motorists and taxpayers are willing to pay that additional money if they understand where that money is going to and that it will actually have a positive benefit on their lives.

I would like to know from the Minister whether the ministry has conducted a cost-benefit analysis on all of the different projects which are in the Government policy statement, and whether they all do have—the ones which are funded—an actual cost-benefit analysis which is above one, because I think that’s an important piece of information. Motorists, who will be paying this petrol tax, have a right to know that the money that they are paying is actually going to go towards projects which are actually going to provide more benefit than the cost to what they will be paying.

I would also like to just make the point again that this increased tax will be regressive, and I know that the Minister has tried to refute that by saying this is only a small increase—only a small increase. This 3.5c increase might sound like a small increase, but that’s 3.5c on top of the 3.5c we’re going to get this year on 1 July 2019, and now we’re talking about an additional 3.5c next year.

Kanwaljit Singh Bakshi: And GST.

SIMEON BROWN: Plus GST—that’s quite correct, Mr Bakshi. That is an additional 15 percent on top of these two taxes, and in Auckland and in my electorate of Pakuranga, it’s not only these two taxes; it’s last year’s 3.5c increase and the 10c increase in the regional fuel tax, plus GST.

This is not a small increase. What we are looking at for people in my electorate is an over 20c per litre increase in their taxes. That is not insubstantial. And how about the people in Ōtara? How about the people that Mr Bakshi represents in south Auckland and the real impact that it has on people, particularly those on fixed or low incomes? This is a regressive tax, this is an increased, substantial tax, and the Minister should take responsibility for what this tax actually is.

CHAIRPERSON (Poto Williams): I will take the Hon David Bennett, but I have to say my patience is being tested in terms of repetition and I will sit the member down if I find repetition.

Hon DAVID BENNETT (National—Hamilton East): Yes. Madam Chair, I intend to bring up a couple of points that haven’t been canvassed so far. The first point is in regard to how once we look at Part 2 and we look at clause 5 and 6 added together, we get to that 8c figure, which is, effectively, $260 per car that a household will have to pay. Now, most households are two-car families, and there will be over $500 that every family in New Zealand is basically going to have to pay out from this tax grab. In practical terms, that’s $10 a week that the Government has taken off every family in New Zealand today—$10 a week. That is a huge amount of money. We are talking about a tax bill here, and we haven’t talked about what the actual financial implication will be per family, and $10 a week per family is what they will be paying now.

Many of my colleagues have talked about how people aren’t able to access public transport options as an alternative in many parts of the country. But I want to raise a new point, and that is that the timing of this doesn’t make sense, because all the public transport options the Minister has been talking about don’t even start being built until about 2022.

The City Rail Link in Auckland that they’re looking at building from the city to the airport starts in about 2022, and then they’re raising money now. They’re raising money before they actually have to pay it on those things. So New Zealanders are paying ahead. They’re paying three or four years ahead of when that money is required. That is completely unacceptable and nobody has pointed that out in this committee. We haven’t discussed how New Zealanders are now being charged for something they’re not actually getting. They’re having to pay for something that may happen in the future; it may or may not happen. If we look at some other prospects of Government policy, they don’t happen.

That is $10 a week for the average New Zealand family, and most of them don’t get any benefit off it at all, because as we’ve heard before, most New Zealanders don’t live in a place where they can access these two rail options that are really where this money’s going. It’s going to fund the central rail link and it’s going to fund the rail link between Auckland and the airport. That’s where this money’s going—let’s not beat around the bush; that’s what the Minister needs the money for and that’s what he’s going to do with it. One of the projects hasn’t even started, so why are people paying for it? And both of them are only accessible to a very small proportion of the New Zealand population.

Then comes the third point that I want to raise, which is a new point in this debate as well, and that is the inequity between transport funding throughout New Zealand. For too long, some regions have had a limited amount of capital funding coming out of the transport budget. Now, some members of the Opposition will say that doesn’t matter; you’re still getting maintenance funding and all that. But when you’re looking at capital funding for new projects, the Wellington region has done the best out of any region over many, many years. As a proportion of the population, it’s probably only about 7 or 8 percent of the population, and yet the Wellington region gets 10 percent—OK? Well, it gets over 13 or 14 percent of funding. It does. [Interruption] Well, if the Minister in the chair doesn’t agree with that, then show me the figures, because if he looks at the capital funding that goes into Wellington, it is certainly higher than the proportion of population. Isn’t that true, Minister Twyford? You shook your head before, but it’s true, isn’t it? Yes, it is.

So we’ve just had an admission from the Minister, who was before saying no, but now when you ask him directly, he refuses to answer. So Wellington gets a higher proportion of funding than its population. So how about somewhere like Southland, Minister? Does it get a higher proportion of funding and of capital funding from transport budgets than its population? Does it, Minister? He’s gone silent. He doesn’t want to explain to the members of Southland. Well, I’ll give him a really easy one. Has Auckland, over the years, got a higher proportion of funding than its population? The answer is no. Auckland has been underfunded for many years. Auckland has been subsidising Wellington for many, many years, and Auckland is finally getting some money out of this. But at the same time, they’re making all Aucklanders pay for it, not just the ones that can access the service. I think if—[Time expired]

CHAIRPERSON (Poto Williams): Just a moment—before I call members, I just want to refer to the new tabled amendment in the name of the Hon Gerry Brownlee. Unfortunately, this is ruled out of order, and the same ruling applies as previous. It’s difficult to determine who this actually applies to with the wording in which this tabled amendment is written, so it is ruled out of order.

Hon GERRY BROWNLEE (National—Ilam): I raise a point of order, Madam Chairperson. Madam Chair, I’d obviously want to seek the guidance of the Clerk’s Office in getting the language right, because I do think it’s important that people know how much the excise is. So when it says that it must be displayed at fuel stations, what’s unclear about that?

CHAIRPERSON (Poto Williams): What is unclear is who is actually obliged to be covered by this particular amendment.

Hon GERRY BROWNLEE: That’s right, but the next section of the amendment makes it clear that there can be no delivery of motor fuels to a fuel station if the motor fuel station is not displaying the excise amounts. Now, that would mean that they can’t operate their business. So it’s pretty clear, I think, who is responsible. It’s as clear, for example, as some of the parts in this bill about who is actually paying. So I’m really deeply disappointed that the Clerk’s Office has decided to advise you in such a fine and narrow way, although I would note that it is a growing trend from the Clerk’s Office.

CHAIRPERSON (Poto Williams): OK. I thank the member for his contribution in that regard, but we are ruling it out of order.

GREG O’CONNOR (Labour—Ōhāriu): I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

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.

Motion agreed to.

The question was put that the following amendment in the name of the Hon Paul Goldsmith to Part 2 be agreed to:

in the heading to Part 2, replace “1 July 2020” with “1 October 2020”

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

Ayes 56

New Zealand National 55; Ross.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Brett Hudson to Part 2 be agreed to:

delete clause 5.

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

Ayes 56

New Zealand National 55; Ross.

Noes 63

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

Amendment not agreed to.

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

Ayes 63

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

Noes 57

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

Part 2 agreed to.

Clauses 1 and 2

Hon PAUL GOLDSMITH (National): I’ve just got a specific question to the Minister and the officials. So we’re saying that this legislation comes into force on 1 July 2019, in order to bring an extra 3.5c a litre excise in. Now, looking at the impact summary, it did refer to the Road User Charges Act 2012 requiring 42 days between the gazetting of the new road-user charges rates and when the new rates go into effect.

So I’m just wanting some clarity around how this works, because this flows through to, as I understand it, the road-user charges. We’re well less than 42 days before it comes into effect, and so presumably it should have been gazetted back on 19 or 20 May, and presumably that won’t have happened if the law hasn’t been passed. So I’m very keen just to get some clarity around the timing of how that works in relation to this bill, because, obviously, if you’re signalling to motorists—the diesel users, particularly—that there’s going to be an increase, ultimately, in the road-user charges—a 5 or 6 percent increase—and the Road User Charges Act requires 42 days for the gazetting, has that gazetting happened already, and if so, isn’t the usual practice to pass legislation, have the legislation go through Order in Council, and then the gazetting takes place? So that’s a simple and basic question that I’d like to get an answer to.

Hon TIM MACINDOE (National—Hamilton West): I used to think that Sir Humphrey of Yes Minister fame was a fictional character, but I realise that he is clearly alive and well and he’s been working away in the Beehive. I want to talk in this title and commencement debate about the fact that this is a really Orwellian and totally unjustified measure. The title of the bill is absolute gobbledygook—Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill—deliberately designed to confuse the public into not noticing what’s going on. And it’s worked.

Hon Gerry Brownlee: Oh, they won’t be confused at the pump.

Hon TIM MACINDOE: They probably won’t be confused at the pump, and I am so disappointed that the Hon Gerry Brownlee’s amendment wasn’t accepted, because that would have given the public the information that they are entitled to have to know exactly what is happening.

I want to follow the “keep it simple” principle and suggest a new title for this bill, and that is, simply, “Excise (Further Unjustified Increase to Petrol Tax) Bill”. That’s exactly what it is, and we should call it out for what it is. Motorists are already paying a huge amount in excise tax on fuel, and the really sneaky part about this is that in all their pre-Budget hype, as they were telling us over and over again that this was going to be about wellbeing, they never mentioned this. They never told the motorists, “The first thing we’ll do in a wellbeing Budget is put your petrol tax up.” So let’s give it that name.

But if the Government won’t accept that, let’s try “Excise (Tell the Motorists How Another Petrol Tax Increase Helps Their Wellbeing Bill”. If this is a wellbeing Budget, it’s incumbent upon every member of the parties opposite—Labour, New Zealand First, and the Greens—to tell the motorists of New Zealand how this measure helps their wellbeing, when, as speakers noted in the debates last night, this will more than cancel out any benefits that some of them are going to see from other measures in the bill. The member for Tukituki made a very good point in that regard last night.

Giving the bill a title that is absolute gobbledygook to 99 percent of the population doesn’t make it more palatable; it simply reflects the Government’s sneaky aim to fool the electorate and fool the media into not noticing that this tax increase is happening. Well, this is dishonest. It’s heartless. It’s the direct opposite of a wellbeing measure. So the bill’s title should reflect that.

But if they won’t go with that one, let’s have another one: the “Excise (We’ll Charge You More But Give You Nothing in Return) Tax Grab Bill”. In my region, the mighty Waikato, there is widespread dismay at this Government’s abandonment of our important Waikato roading projects. I see the member for Waikato-Tainui over there. I know that she’ll agree with me that under the John Key - led administration, one of the greatest things that we were able to do—probably the single most important thing for our region—was to promise the Waikato Expressway, which was a 10-stage project to be delivered in 10 years. It was a $2.1 billion project, so a huge investment, and while we were in Government, it was on track. We were delivering it on time and under budget.

The sections that have already been completed are making a huge difference to the hundreds of thousands of motorists that travel not only within our region but through our region, because, after all, the main trunk line from Auckland and further north right down through the central North Island is hugely busy. Thanks to the sections that are now under way, journeys are safer, they are quicker, and for that reason, they are also more fuel efficient. So, in other words, it’s also very good for the environment.

There are huge benefits, and yet there is nothing. The Hon David Bennett made a very good speech before, pointing out how much our region misses out and, in particular, the dishonesty of the fact that the projects that are supposedly going to benefit—and it’s really just the City Rail Link; so some Aucklanders will benefit—from this measure don’t even come into effect for a long time. So that’s why I’m suggesting this new title.

What we’ve got here is a shambolic, tax-grabbing Government. We’ve got a major section no longer progressing on target in the Waikato Expressway. That is hugely disappointing. Why is it? It’s because there is so much uncertainty in the construction sector now that the construction workers who are building the roads are leaving the country again, and so the companies can’t find the workforce to continue to build the road. The National Government proposed to extend the expressway from Karapiro to Piarere. That’s a very dangerous and extremely busy section, and it’s off the table with this Government. We were also going to extend the project down to Tīrau—again, hugely popular. Lots of people voted for it, and this Government has taken it off the table. This is a fundamentally dishonest measure.

CHAIRPERSON (Poto Williams): Members, Paul Goldsmith’s tabled amendment to clause 2(1) is out of order as being consequential on an amendment that has been negatived. Paul Goldsmith’s tabled amendment to clause 2(2) is out of order as being consequential on an amendment that has been negatived.

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

Ayes 63

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

Noes 57

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

Clause 1 agreed to.

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

Ayes 63

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

Noes 57

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

Clause 2 agreed to.

House resumed.

Bill reported without amendment.

Report adopted.

Third Reading

Hon PHIL TWYFORD (Minister of Transport): I move, That the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill be now read a third time.

The purpose of our transport policy and the outcomes that this excise bill makes possible are a transport system that we aim to make free of deaths and serious injury. We want a transport system that allows New Zealanders easy access to get to the things that they need on a daily basis: work, education, community. We want to reduce carbon emissions, and, of course, run a transport system on which we spend, on behalf of the citizens of New Zealand, around $4.5 billion a year to grow and maintain. We want to deliver value for money.

We know, in our largest cities, that they are performing poorly economically. One of the reasons for that is that for years this country has not properly invested in modern transport systems that deliver the mobility and the access that allow us to take advantage of the productivity gains that we should be reaping in large cities. Cities are, from one perspective, essentially labour markets. They give large numbers of our citizens access to jobs. They give firms access to the workers that they need to be productive. When you don’t have efficient transport systems that deliver mobility and access, then it’s a drag on labour market productivity.

So this bill is designed to inflation-proof the revenue streams for our transport system now and into the future. If we don’t make the increases in revenue that this bill enables, over the next 10 years—if we were not to pass this now—we would be taking around $2 billion out of the transport revenue system. If we did that, we would simply not be able to make the investment that we’re doing now. For example, on more than 3,000 kilometres of roads around the country, at a cost of $1.4 billion in this three-year period, it is estimated to save more than 150 lives annually by making a serious programme of improvements to the roading network to prevent deaths and serious injuries.

This bill increases the rates of excise duty on petrol by 3.5c per litre on 1 July 2019 and, again, on 1 July 2020. Our Government is not shying away from the hard decisions. We’re tackling the long-term issues to give people and businesses predictability and certainty, and we flagged the increases that we are legislating through this bill when we announced the Government Policy Statement on Land Transport a year ago.

For too long, New Zealanders have paid the price for the previous Government’s unbalanced transport policy that spent 40 percent of the transport budget on a handful of projects that carried only 4 percent of vehicle journeys. We have to turn that around. This excise increase is absolutely necessary to overcome the infrastructure deficit that we inherited as a result of that unbalanced transport policy.

We’ve heard in this debate, as the bill has progressed through the stages, time and again the Opposition’s resistance to these excise increases, but their position lacks credibility and integrity. The Opposition party, during nine years in Government, raised the excise tax—just as we are doing today in the House—six times. They added 24c a litre to the excise tax, and now they oppose this regular, incremental increase in the excise. Political parties of all stripes have funded the transport system through fuel excise since 1927. There hasn’t been a Government in New Zealand’s history that hasn’t raised the excise tax to inflation-proof the revenue sources for our transport system.

What makes it even worse, the gall and the shamefaced audacity of the Opposition to oppose this revenue increase is exposed by the fact that in the last election campaign, they made unfunded promises of $12 billion for 10 new motorway projects, and transport officials advised Simon Bridges, who was then the transport Minister, that those promises would require an excise increase of more than 8c a litre. He never signed off that advice. In the dying months of that Government, the transport officials advised an 8c increase—8c a litre in one go—just to fund their election promises.

So they’re happy to go around the country like a drunken sailor, promising new motorways, but they will not admit that they require extra revenue to fund it. That is worse than being a tax and spend Government; that is a spend Government—completely irresponsible and lacking in integrity. We know that the productivity and growth of the country’s economy has been held back by the gridlock in our cities and under-investment in regional roads, local roads, and all of the other modes of transport that make up our transport system.

We are committed to building a modern, efficient, and sustainable transport system. To do that requires revenue. To do that means that we have to inflation-proof the revenue streams for the National Land Transport Programme. We have to get New Zealanders out of the gridlock in our cities. We have to stop the epidemic of deaths and serious injuries that have happened in recent years on our roads, and we must get on with building an efficient and sustainable way to move freight around this country. This bill will provide for the increase in transport funding that will allow us to meet those objectives. I commend this bill to the House.

SPEAKER: Before I call the Hon Paul Goldsmith, a number of members have drawn to my attention the fact that we are having a problem with one of our lights up there, which is causing some annoyance to members—quite rightly. What I’ve asked is for an attempt to isolate it, and it might mean that we work even more in the dark than we do generally for a period of time, because it’s frankly not acceptable the way that it is.

Hon PAUL GOLDSMITH (National): Thank you, Mr Speaker. The flicking light is a metaphor for this Government falling apart—a botched Budget and a botched Government. Now they can’t even get the lights to stay on properly.

We’ve had a short and truncated debate about this increase in taxes on the car. So, ultimately, what we’re talking about here in this legislation is about $360 million extra over the next two years for motorists to be paying at the pump, and that flows through to the rest of the economy. So it’s a pretty ironic thing that the first piece of legislation passed following the so-called Wellbeing Budget is a significant increase on the taxes of hard-working New Zealanders as they go about their lives, and that’s what it is. This Government gives with one hand, so a little bit of extra saving on school fees—$150 million over four years. Well that’s swamped by the significant increase that all those families will be paying in their fuel taxes.

Now, the Minister says it’s inflation. It’s much more than inflation, sorry, Minister. It’s more than inflation; it’s actually increasing the pool. People would understand that if they were getting something for it, but they’re not getting anything for it. What they’ve seen from this Government so far is the cancellation of 12 major transport projects or more: so the East-West Link gone; the road north of Tauranga to Katikati gone; the Waikato Expressway slowed down and little pieces lopped off so that you stop in the middle of just out of Cambridge, and then you’re back into a dangerous road; if you want to go down to Ashburton, no future for you there; and the Melling Link intersection in Wellington gone, delayed into the never-never land. So you’re paying more but you’re getting less for it. Well, that’s a really great deal, isn’t it? The people of New Zealand will be delighted at that—they get to pay more taxes on their roads and in their cars to get less for it. That sums up things perfectly.

Instead, the extra funds are going to go to two areas: firstly, is the focus on safety. Everybody understands that we should absolutely be focused on road safety. You’ll get no debate from this House on the importance of trying to reduce the road toll. What we find frustrating, however, is that at the same time that they’re keen to increase taxes to focus on road safety, they have a complete blind spot when it comes to doing anything about drug-driving, for example, because the Greens, of course, want us all to be smoking more drugs, so they have a blind spot on that area. Secondly, the Budget’s got nothing more on road safety.

SPEAKER: Order!

Hon PAUL GOLDSMITH: Sorry, I was just trying to get some context to the story, Mr Speaker.

SPEAKER: No, the member’s had too much on the second reading; we’re on the third reading now.

Hon PAUL GOLDSMITH: Right. This is our last chance to make some comments on this bill before it is hastened through in the short time that we have here in this urgent debate. So the point I’m making is that we’re going to get to spend all this extra money, not on reducing congestion, but on road safety and mode shift. Mode shift, for the uninitiated, is getting people out of their cars on to some other form of transport. So, ultimately, you’re being asked to pay more tax at the petrol pump for your car in order to get you out of your car to do something that, presumably, you don’t want to do, given the fact that you might be trying to pick up something in your car, pick up a child in your car on the way home from work, or do something that—if you live in most parts of provincial New Zealand, you don’t have the opportunity to necessarily cycle long distances in the rain and the dark, or catch a bus that doesn’t exist, along with picking up 10 bags of groceries from the supermarket, and so forth.

So it’s a very, very ideological approach to transport that we’re dealing with under this Government. The previous Government, of course, yes indeed did increase road-user charges at a much slower rate over the nine years of Government. We did that in order to fund things that would make the lives of New Zealanders easier in getting around. You can think of the Waterview Tunnel and the Waikato Expressway—things that have made a dramatic impact on the quality of life and the speed and efficiency and safety of all Kiwi motorists. People can understand paying something to get something. What they struggle with is paying more at a much-increased tempo of increases in road taxes that we’ve seen from this Government—$360 million extra over two years. What they struggle with is paying all that extra fund and getting less for it, and that’s what we’re seeing in the Government, because you can’t talk about an excise bill without seeing the results for it.

Now, we asked some other questions during the second reading debate and didn’t get any answers to them, unfortunately. One was: how is it right that this extra $360 million that is being collected through these duties and is supposed to be hypothecated—that’s what the regulatory impact statement says, and we’re looking at the regulatory impact statement. It talks about this money being hypothecated for the National Land Transport Fund and it has to be spent on particular things. Here we go, a footnote in the regulatory impact statement: “The revenue is ‘hypothecated’ in the sense that there are legislative constraints (in the Land Transport Management Act 2003) that govern how this revenue can be used.” Well, hang on. That’s fine, but I never got an answer as to how an urban regeneration project, which is the basis for the light rail, slow tram down Dominion Road that’s been proposed to be built with some of this money, relates to land transport management—an urban regeneration project. I never got an answer to that. I’d be interested to hear from somebody somewhere in the Government to explain why they’re going to motorists saying “We want more money from you for your motor spirits levy in order to fund the roads and transport directly.”, and how they’ve extended that into an urban regeneration project. We haven’t got an answer, and we won’t get an answer because there is no answer.

The other question that I raised was I thought there were supposed to be 42 days between the gazetting of the new rates and when they come into effect. We’re less than 30 days from that happening now. I never got an answer to that basic question either. I’d be very interested to hear at some point from somebody in the Government to explain those basic details.

So we’ve had, as I’ve said, the first piece of legislation from this Government following the much-heralded Wellbeing Budget, with the glossy photos and the picture of the—

SPEAKER: Order!

Hon PAUL GOLDSMITH: —lady that’s now in Australia—

SPEAKER: Order!

Hon PAUL GOLDSMITH: —and the first piece of legislation that we’re debating under urgency after that Budget is a $360 million tax increase on New Zealanders. When we talk about these duties and excise duties, we have to think about who pays them. The point I wanted to make—with the indulgence of the Speaker—is a simple one: who pays this levy? It’s not just the person that drives into the petrol station and has to pay an extra 7c plus GST for the two years that we’re talking about, but we have to remember these are the second and third years of a three-year increase. So, in total, they’re paying an extra 12c a litre. Everybody knows that the fuel prices fluctuate given international prices, but the one thing that doesn’t fluctuate is the tax that you have to pay, which is the same and it continues to grow. So at the fuel pump they have to pay an extra 12c after GST—12.5c—and they don’t like it. Why should they like it?

But what we sometimes forget is that that increase in diesel and fuel prices flows through to every part of the economy—flows through to every part of the economy. It represents about a 5 percent increase in each year—so, collectively, over a 10 percent or 11 percent increase—in the road-user charges. So every time everybody’s wanting to buy something, whether it’s ice cream, milk, bread, clothes, fridges—you name it—anything that is transported will cost more because of this increase in taxes.

We can understand that, we could put up with that, if we could see that there was a clear focus on reducing congestion so that people could get their goods more efficiently and the whole system might be more efficient. We can understand that. But there is no evidence whatsoever that this Government has any interest in that. They are solely focused on other things. Their ideological pursuit of mode shift—in a couple of decades’ time when most people are driving around in electric vehicles, which don’t have an impact on the environment, people will be looking back and saying, “What on earth were they trying to do? Why were they trying to get people out of cars when cars don’t necessarily have a negative environmental impact?” They did it because they just loved bossing people around—that’s the fundamental. Thank you, Mr Speaker.

FLETCHER TABUTEAU (Deputy Leader—NZ First): Thank you very much for this opportunity to speak. What I’d like to do is thank the previous speaker, Mr Goldsmith, and just summarise his stuttered and confused 10-minute contribution to the House and take out some of the key points he made. The first point he made was that National, when they were in Government, increased the excise themselves at least six times, from my own recollection, on petrol—when they were in Government. He acknowledged they did it themselves.

He then also acknowledged that road safety is incredibly important—in fact, for the National Party, road safety is incredibly important. So here I am right now on this side of the House thanking him for that contribution from the member, and I say I agree with him. I thank him for his support. I’m upset about the way they’re going to vote, but I agree with him.

I also recommend it to the House, and with that I commend it to the House. Thank you, sir.

BRETT HUDSON (National): Thank you, Mr Speaker. I stand in opposition to this bill in its third reading. I have a few comments to make about, particularly, the Minister’s contribution, before getting on to the more substance that I wanted to talk about.

The Minister, when he introduced this bill in its third reading, claimed before this House—with all the rules that go around that—that the purpose of this bill is to inflation-proof funding for our land transport system, which is quite remarkable really, because despite every effort by this Government to drive up the cost of living, which they are actually being successful at, inflation is still, if you take general reports, around 1.6 percent and occasionally going up to about 2 percent, but then international fuel price assistance is helping that a bit. So inflation, we’ll say, is 1.6 to 2 percent, but the impact of this bill in year 1 is an increase of 5.6 percent, and in year 2 it’s an increase of 4.8 percent.

Now, either the Minister has told the House one thing which the facts do not substantiate—and he may wish to have another contribution at some point during this debate—or we’ve actually seen, after the inadvertent openness and transparency earlier this week around the Budget itself, and we may just have witnessed in this House the Government being its most open and most transparent of all, and Mr Twyford is sending a signal to New Zealanders that they can expect over the next year and a bit for inflation to leap up to in excess of 5 percent. Quite frankly, having seen all the other stuff in their Budget, I wouldn’t be at all surprised if New Zealanders at least feel that sort of pain over the course of the next 18 months.

But it is remarkable—absolutely remarkable—that here we are, the first piece of legislation in Budget 2019, the Budget that was lauded by the deliverer of it and the Prime Minister as being a global first, the first ever wellbeing Budget.

SPEAKER: Order!

BRETT HUDSON: The very first action of it—the very first legislative action of that Budget—is to make New Zealanders worse off in 2019 by imposing an additional 4c, including GST, of tax on the consumption of motor fuels in their work and in their lives. It’s even worse than that though—that’s just 2019. The same legislation that is so hell-bent on making New Zealanders worse off this year is equally—equally—determined to make sure that they are worse off next year as well, because it puts a further imposition in legislative concrete: a further 4c, including GST, per litre of motor fuels at the beginning of July next year. How can that possibly be described as helping people’s wellbeing? It certainly cannot.

I just want to tidy up another misconception, which I guess members weren’t really hearing in the committee stage. But throughout the process of this bill today, including at its introduction, I’ve heard members on the other side talk as if they believe that fuel excise taxes have a short half-life—that they just disappear into the ether after a period of time. Because it is true that Governments of either stripe have increased fuel excises over the years, whether it was in 2012 or 2002, or any other date, there have been instances where fuel excises have been increased. Those increases remain in perpetuity unless, such as with this bill, they are changed by Parliament. They do not naturally come down. Some of the real value of them is inflated away over time, but the dollars are still collected, and yet members over there talk as if you don’t constantly add fuel taxes—and I’ll just reiterate that this is far greater than the current rate of inflation. If Parliament doesn’t through Government continually add to fuel excises, somehow it all goes away—it doesn’t go away. Those earlier excise changes are still being collected today.

So the question comes to: what is the need for additional tax burden to be placed upon New Zealanders at the fuel pump? Well, we know that the tax itself, the excise itself, is hypothecated to the National Land Transport Fund. That’s the only purpose for which the tax can be used. We know from comments, both in the Chamber during the course of the passage of this bill but also by Ministers related and by Government Ministers outside at various times, that the decision has been made, set very firmly, that the funding that is taken from fuel excises, including these increases, is to be set against other land transport projects than might have been the case in more recent years. For instance, $5 billion has been taken out of the State highway improvement category and redirected mainly to mass transit, which is not particularly good code for loss-making light rail in Auckland along Dominion Road but also, as we discovered recently, in Wellington, from the railway station to the airport.

All motorists are looking now, if this bill passes—and it’s only a short way away, one fears—at facing a further tax burden over the course of two years of another 8c a litre on their fuel, including GST, and it will be funding things other than what they are using. The mere fact, the obvious fact, is that in order to be paying this tax increase, someone has to be in their motor vehicle, because if they’re not using their motor vehicle, quite obviously, they’re not consuming fuel and, therefore, they’re not paying it. So the people that are paying this impost have every right to want to know what it is being spent on and how it is helping them.

Well, we know that it’s going, very largely, to mass transit, to light rail projects. We know through the Public Transport Spine Study in Wellington that they can be enormous loss-making vehicles. In Wellington, it was estimated that the light rail from the railway station to the airport would lose 90c to 95c in every $1 spent on it—90c to 95c loss in every $1 spent on it. That, by the way, was when that project was estimated to cost half a billion dollars less than it is currently estimated. So the math doesn’t look at all good on that. So if one is a motorist being impacted by this legislation, they have every right—because they know that the extra tax they’re paying is going into the National Land Transport Fund—to want to know what it’s being spent on, but, importantly, to know that there is genuine value that will come from it.

Now, in this region in particular, most of the people that will pay most of this tax are people that live on the northern edge of the harbour or beyond—people in the electorate of Ōhāriu, people in Mana and Remutaka and Kāpiti and Wairarapa and Hutt South, and people who might travel from Wainuiōmata every day, sometimes by cycle, sometimes by car. They will be asking themselves, as they are seeking to make their way into work or perhaps weekend sport in Wellington, what is happening to the additional tax that is being levied upon them. They are not going to benefit from a light rail system from the railway station to the airport, but every day that they hear about that project, they will be reminded that there will be no additional southbound lane from Ngauranga to Aotea Quay, there will be no additional Terrace Tunnel, and there’ll be no undergrounding from the Terrace Tunnel to the Basin Reserve, and yet they will be paying, by the time this is fully effected, 8c a litre more, including GST.

But wait, it’s even worse for them, and particularly for people in the Hutt Valley. So not only are they being taxed more and getting less out of the “Let’s Get Wellington Not Actually Moving” programme, but they’ve also had a major roading project deferred in their area: the Melling interchange. It’s off the table now for at least 10 years—10 years before it even gets redesigned, let alone re-implemented, although, I could suggest to them there is a way that they could possibly bring that forward if they changed the Government. But none the less, the outlook they have right now is it’s being pushed out by at least 10 years, and they might well ask themselves “If that’s gone out that long because of these other decisions the Government’s making about spending my additional fuel tax, then what’s going to happen to the cross-valley link?”, because I dare say that’s not going to be rushing ahead and a priority of this Government any time soon.

Also, particularly for people in Ōhāriu, because they too live further away from town, will travel more in their vehicles, and, therefore, will pay more of this fuel tax, the Government has dipped out on the Pētone to Grenada link road, a link road that was estimated to take well over 20,000 vehicle movements a day off State Highway 1—off the Wellington motorway. Every one of those vehicle movements would have helped to reduce congestion for what was probably about 80 percent of the—

SPEAKER: Order! Order! Order! We’ll get back to the bill now, I think. There’s some appeal to what the member is saying, but I think he’d better get back to the bill.

BRETT HUDSON: So they’re missing out, but they’re paying extra tax—that is the point. They are paying the extra 8c a litre, but they get nothing for it.

This is supposed to be a wellbeing Budget. It was supposed to make Kiwis better off, but its very, very first legislative action is to take money out of the pockets of hard-working Kiwis this year and next year and to make sure they get nothing in return for it.

Dr DEBORAH RUSSELL (Labour—New Lynn): This bill provides choice for people: choice and options about how they move about their cities, choice and options about how they get from point A to point B. It provides safety for people: safety on our roads, which desperately need safety improvements. I commend the far-sighted Minister of Transport for bringing this bill to the House—the Minister who has the courage to say that if we want choice, if we want options, and if we want safety, then we need to find a way to pay for it. This is an excellent bill and I commend it to the House.

SPEAKER: Jonathan Young—a five-minute call.

JONATHAN YOUNG (National—New Plymouth): A five-minute call—thank you, sir. I think that Brett Hudson, the previous National Party speaker, has identified the issue that this is a city-centric move by this Government to build optionality in cities but that the regions miss out massively.

You know, the money that we pay in regional New Zealand is going to go for rail options in Auckland and in Wellington. We look at just even the recent announcement to get Wellington moving: $6.4 billion, with 60 percent paid for by people out there who are paying more tax for petrol in the excise fuel tax in regional New Zealand, in Hawke’s Bay, in Taranaki, in Gisborne, and in Southland. These are the people who are paying for these rail options that are in cities that, as the previous speaker mentioned, are going to be huge loss-leaders for transportation in the cities themselves.

We have this mode shift mentality that wants to, basically, punish motorists, and get people out of their cars, get them on to bikes, and get them into trains, and yet it’s the motorists who pay for it and the motorists receive no benefit. So we have a taxation without compensation. We have a taxation that is affecting people in regions of New Zealand where we see that there are projects being cancelled that would bring benefit to them and would bring faster travel times and safer travel times, as well. We do not support what this Government is doing in this regard.

When you think about the increases on top of an increase that already came in last year, on 30 September, of 4c, including GST, there is another 4c on 1 July and another 4c on 1 July next year, and then, on top of that, of course, Aucklanders are paying 12c, plus GST, as well, it all adds up to an incredible amount of money that, as the different speakers have said, has a purpose around urban refurbishment and urban renewal. So, once again, we would make the criticism that, actually, this is using funds that motorists in cars are paying in an excise tax that is being redirected for purposes that it should not be.

So can I just raise the point and reiterate what the Hon Paul Goldsmith raised, and that is the fact that the cost of living increases for New Zealanders are mounting. We just need to be aware that with excise increases year after year after year—

Hon Ruth Dyson: Ahem.

JONATHAN YOUNG: —I’m referring to excise increases—year after year after year—

SPEAKER: Just two years in this bill.

JONATHAN YOUNG: I beg your pardon, sir?

SPEAKER: Just two years in this bill.

JONATHAN YOUNG: Yeah. Year after year—right. Year after year—

SPEAKER: Very good.

JONATHAN YOUNG: So I’ll say it twice—ha! But I think the point needs to be made that regional New Zealand is missing out on this analysis.

I thank the member last night in the committee stage who said, “Don’t worry, the Labour Government is coming to the rescue of the people of Taranaki. We’re doing Mount Messenger.”, and, in fact, you might recall that last week, Simon Bridges asked the Minister “Can you name one genuinely new road this Government is building, particularly in regional New Zealand?” and he said, “We’re starting Mount Messenger.” Well, that’s where we expect excise tax money to be spent. But, already, Gerry Brownlee had put aside $30 million and Simon Bridges had put $100 million aside, so for this Minister to claim—

SPEAKER: Order! Order!

JONATHAN YOUNG: —that he’s starting that road—

SPEAKER: Order! Order! Let’s get back to the bill.

JONATHAN YOUNG: Well, the bill, sir, is that the people—

SPEAKER: No, no, it’s nothing to do with what Mr Brownlee and Mr Bridges did years ago.

JONATHAN YOUNG: The final context of this bill is that it is a city-centric focus in terms of the excise tax increases that I believe that regional New Zealand is upset at.

Sir, just in my final, closing comments, I thank you for the opportunity to speak on this. I would suggest that the mode shift that the Minister wishes to initiate and lead through is going to be a misstep for this Government in terms of what the purpose of this excise tax is all about.

ALASTAIR SCOTT (National—Wairarapa): Thank you, sir. I’d like to comment, firstly, on what Deborah Russell mentioned about this bill vis-à-vis choice—giving people choice. She couldn’t even spend a minute to describe the choice that was given to consumers of petrol, but I’ll tell you what, this bill gives no choice to the people in Wairarapa specifically and to the regions more generally. They have to spend this extra tax on their petrol to get from A to B. There is no other choice. There is no option to get on your pedal bike and cycle to your rugby practice, or to walk or even get public transport. We’ve got to get in cars, and cars use petrol.

In the provinces, you will find that incomes are below average—below those incomes in the cities. This bill affects those people, those lower-income people, more aggressively than those with higher incomes, and we find those people in the provinces. We find in the provinces those people who drive older cars, less efficient cars—cars that use more petrol per kilometre.

We have people who are unable to turn up to work some days because their petrol tank is empty. They’ve put the 20 bucks in on a Monday, and that’s gone by Thursday night. They don’t turn up to work on Friday, and now they are at risk of not turning up to work on Thursday because there’s still only 20 bucks and the petrol price continues to rise and rise. And where does the money go? It goes straight to Auckland.

This is a regressive tax. This is also, by the way, a regional fuel tax, and the Prime Minister said earlier that there were going to be no more regional fuel taxes on her watch. When the uproar and the protests at the Auckland regional fuel tax hit her right between the eyes, she said—

SPEAKER: Order! Order! Back to the bill.

ALASTAIR SCOTT: —“No more regional fuel taxes.” This affects the regions of the Wairarapa, Wellington, and all provinces.

This is a national road tax across the whole place, and it affects the provinces. It’s so ironic. We’ve got a prince of the provinces over there—a prince of the provinces. It will be interesting to see him stand up—

Brett Hudson: He supports it.

ALASTAIR SCOTT: He supports it. How can he possibly support it when this hits the provinces harder than those who have choice in the cities?

This is a terrible bill. This is a bill that taxes the poor harder than those who sit in this House, who can afford an extra two bucks, five bucks, or 10 bucks. There is no concern for those people who are at the bottom of the ladder. There is no concern for people who have limited resources and who do have further to travel, who do live in the provinces, and who do have to spend half an hour going in and out to rugby practice, to netball, and to schools every day. There is no option. There is no choice of public transport. There is no choice of walking. There is no choice of cycling—

Dr Duncan Webb: No choice of walking? Do they not walk in the Wairarapa?

ALASTAIR SCOTT: How long would it take you, Mr Webb, to walk from Tīnui to Masterton—how long would it take you? You wouldn’t have a clue—you wouldn’t have a clue. Mr Speaker would be able to cycle at least, but you wouldn’t even be able to cycle.

It’s a disastrous bill. It is a regressive tax. It’s not just petrol that it affects, obviously. It affects your beer and your bread. Everything—everything—that’s on the supermarket shelves is affected by this bill. It affects the—

Dr Duncan Webb: Does it affect your chardonnay?

ALASTAIR SCOTT: —transport costs of everything that, Mr Webb, you use in your household. It’s inflationary. It gives no more money to wage and salary earners to compensate for that inflationary effect. It is a terrible, terrible bill, and I’m very pleased to be speaking against it.

SPEAKER: Now, before I call Jan Logie, I’m going to ask Dr Jian Yang to remove his advertisement. Thank you.

JAN LOGIE (Green): Thank you, Mr Speaker. It’s with pleasure that I rise on behalf of the Green Party to add our support to this piece of legislation. Really, I am sometimes just struck by how much the Opposition seems to be stuck in the 1950s. At times it really is this dinosaur attitude towards getting around and mobility, and it does—

Matt King: It’s called reality.

JAN LOGIE: Well, if your province is stuck in the 1950s, then I think that’s on the previous Government, so I’d be a bit careful about characterising your communities in that way. I suspect they might not wish to be characterised in that way.

At the heart of this, this is about ensuring that the Government has the money to be able to ensure that our roads are safe for people. That benefits every single person in this country. When I hear the concept of mode shift spoken about in a kind of sneering tone, really, that’s the bit for me that strikes like the 1950s—not recognising the value to us of that mode shift collectively and that, actually, we have to invest to enable that. The fact that people, at the moment, don’t have a choice in some areas is because we have not collectively invested to give them the options to be able to cycle and to be able to take public transport, and that is what this is about doing.

I do think there’s this sense that it’s being said that “Well, electric cars are going to solve all this, so, you know, actually, we’re going to look back on this and be like ‘Argh, what were we thinking, trying to support people to have options to get out of their car?’.” This is directly related to the debate and related to what we’re investing in, which is enabling that mode shift as well as safety.

I do need to say that part of the value of the mode shift is in reducing our carbon emissions—that is for sure—but it’s also in the co-benefits of public transport and walking and cycling, which are to our health, for us individually but also collectively, which shows up as reduced impact on our health system. It’s also about connecting people to their communities. We need to have the infrastructure for cycling—

SPEAKER: Order! Order! Order! I am going to interrupt the member. She’s making a contribution to the debate which could well have been marginally inside the requirements of the second reading, but she’s gone sort of about three steps away from the increases in the excise duty. One step’s OK, but not three.

JAN LOGIE: Thank you, Mr Speaker. I’ll go back to some of the other arguments that I’ve heard from the Opposition around the cost of this being too onerous. The advice that I have in front of me is that this will result in a rise in the cost for the average family of 83c a week, which is $43.16 a year. For low-income families, this will be $20.80 a year. We don’t take that lightly. This Government, I think, is very committed to reducing costs and ensuring that people have more money in their pockets to be able to pay for these. I heard somebody saying that the school donations announcement in the Budget was going to be overwhelmed by this, but that equates to $150 per family, and this is $20.80 a family, so, actually, it’s the other way round. This Government is very aware of that.

But I also need to say that by enabling people to have those options for public transport—and you will have seen the announcement around the work enabling people on low incomes to be able to access public transport for free in the future—this is the start of us staging that transition for people to be able to get around freely and without that cost.

Alastair Scott: In rural New Zealand? How many buses in rural New Zealand?

JAN LOGIE: It’s also about delivering safety for those people in rural New Zealand, who deserve to be safe on their roads and who have not been, under the previous Government’s strategy of massive, massive infrastructure in small areas that didn’t benefit most New Zealanders. So this cost actually pays off in safety and wellbeing and is being offset by other initiatives from this Government to make sure that people have more money in their pockets to make those choices. We are all going to be much better off when these policies are realised by stronger communities and more mobility options. Thank you.

SPEAKER: I’ve lost his name—Matt King.

MATT KING (National—Northland): You’re killing me—you’re killing me!

SPEAKER: It’s a mental block.

MATT KING: I know you know me—I know you know me, Mr Speaker.

Look, I’ve got to reply. I feel so strongly that I’ve got to reply to Jan Logie about this excise tax. She earnestly believes in what she’s saying. If she could come to rural New Zealand and tell them that they’re going to spend this increased excise tax on trains and trams in Auckland or on public transport, she would get booed out of every regional hall in the country. It’s just simply not practical.

They talk about this excise tax and this increase in excise tax, and they’re going on about road safety. Well, when we were in Government, we invested in road safety—every Government does. The Labour Government did before us. They invest in road safety. The only road safety investment I’ve seen in Northland that this excise tax is going on is plastic sticks and rumble strips. Plastic sticks up the middle of the road and rumble strips—that’s the only thing I’ve seen in Northland.

If you’re an apartment dweller in Wellington or any of the major cities and they’re talking about public transport—yeah, that’s fine. You know, money’s going to that—that’s great—but what about the rest of the country? The fact is that this excise tax is funnelled. It’s taken off, it’s extracted from the motorists, and the motorists expect that this money should be spent on roads.

I mean, they talk about this multimodal transport. In Northland, we don’t have buses, except for school buses. For the distances that we’re talking about, we’re not going to be biking and we’re not going to be walking. We need to take the vehicles, so we need this excise tax money spent on roads.

We’ve got four-lane roads. We started the programme of four-laning, and this Government seems to have taken the excise tax out of that spend. They’ve cancelled 12 projects—our four-lane highways, which are winners—and they’re going to funnel that into, I guess, trams in Auckland and rail and so forth. It’s just not going to work.

In the UK and the USA, they’ve got extensive train tracks—especially the UK. They’ve got a massive population, and all their trains are used for passengers. The freight goes on the four-lane highways. It’s the same in the US—their freight goes on the four-lane highways. So in Northland, you’re going to take this excise tax, taken together with the regional fuel tax out of the southern end of my electorate—the Wellsford, Port Albert area is in the Auckland region, so there’s a regional fuel tax. If you put this excise tax on top of that, they’re paying a massive percentage of tax. Under this Government, none of that money is going to be spent for them.

There’s people in Port Albert who would go to Auckland maybe once a year, and their excise tax, their fuel tax every time they fill their car up—and in my electorate, there’s a large number of rural people on low incomes. They’ve got a large number of rural people on low incomes, and they’re paying this excise tax, this increase, to pay for spend in Auckland. They’re not going to get any benefit out of it.

I know that Phil Twyford has talked about our gold-plated four-lanes, but he doesn’t refer to his gold-plated tram that they’re going to spend this increased fuel tax on. Well, these four-lane highways, it’s just what the rest of the world are doing. This is the way of the future. We’re going to be ending up going on electric vehicles. The Greens will love that, and I’m all for it. Everyone knows that we’re all for that. We’ve got our own MP here with an electric car. He’s very proud of it; he shows it off all the time. So we’re all about the future. We’re all about lowering our emissions—I mean, you’re a fool if you’re not—but in the here and now, we’ve got to improve our infrastructure, and the four-laning is future-proofing.

I’ve got to talk about Northland. In Northland, the four-laning is—

SPEAKER: Just keep relating it back.

MATT KING: I see the Speaker’s holding up the bill. I’ve mentioned the excise tax increase just about every sentence, I have. I’m talking about it. Phil Twyford talked about what they’re going to spend this excise tax on, and I’m demonstrating that it’s actually not going to be going on the roads, because they’ve cancelled 12 of these projects. It’s actually going to be going on trams, so I think it’s relevant to be talking about what the excise tax is going to be spent on.

They always harp on about safety, so they’re going to spend this excise tax on road safety. Well, piecemeal repairs on old dangerous roads, in my book, are not going to cut it. In Northland, spending on the State highway—yeah, that’s great. There are a few stretches of road that are especially dangerous, and Dome Valley’s one of them. I’m all for spending this increase on that, and I go along with that. That’s a good spend. Dome Valley is called the killing fields up North. It’s a particular stretch of road, and they’re going to widen it, and they’re going to put some safety wires up the middle, and some rumble strips, and all that. You know, quite frankly, that’s great. I appreciate that. I think it’s a $30 million spend, and we would have done that in our term as well, but the actual answer for Northland is a four-lane highway going right through to Whangarei. That’s the answer.

So they’ve cancelled the leg from Whangarei south. They’ve cancelled that. They’re taking money off Northlanders for this excise tax and they’re going to can that. That’s the busiest road in Northland, and I think the cost-benefit ratio for that section of road is three or four. So it’s, hands down, better than just about all the projects in the country, but they’ve canned that. They’re building a roundabout there. They’re going to spend the excise tax on the roundabout, but they’re not going to do that road.

The New Zealand Transport Agency have told us they might put another State highway next to the one that they’ve already got instead of doing a four-lane highway. They’ve told us that the costs for that are going to be two-thirds of the cost of just doing a four-lane highway, which we all accept we’re going to have to do in the future with the excise tax. We’re going to have to build a four-lane highway, and it’s going to have to wait until the National Government comes in to do that.

So instead of accepting that “Hey, this four-lane project that we’ve got going throughout the country is actually a winner.”, they’d do anything but. They’d pour money into piecemeal repairs down the State highway—in some areas, it’s great; in some areas, it’s just wasting money—and they’re even going to talk about putting in just another State highway next to the existing one. But the fact of the matter is that if you want to spend the excise tax efficiently, you build a four-lane highway with the gradient and the camber that can carry heavy freight. They’re pouring money into rail in Northland, and it’s just going to be a waste of money. It’s going to be a big white elephant—it’s a total waste of money—but the four-lane highway is going to open up Northland to economic growth and it’s going to future-proof us for 40 years.

So this Government isn’t very visionary, in my view. They talk about us being in the 1950s—the previous speaker, Jan Logie, talked about National being in the 1950s—and yet they’re going to invest in last century’s technology: trains and trams. That’s last century’s technology. We are planning and we are visionary. We are visionary because we’re planning four-lane highways, which will carry electric vehicles, electric trucks, in the future. You boohoo it—you boohoo it—but, deep down, you know it to be true. You know it to be true.

SPEAKER: Order!

MATT KING: The four-laning of the highway is a good spend of this excise tax, and, rest assured, when we’re back in, we will start building that four-lane highway—we will start building it.

You talk about safety. OK, we want to make the existing roads safer, which is what you’re going to spend this excise tax on—

SPEAKER: Order! I’m “you”.

MATT KING: Sorry, Mr Speaker. Sorry, it’s—[Interruption] OK. Are you me? Oh, OK.

SPEAKER: Well, that’s close to the most embarrassing thing I’ve said in here.

MATT KING: I know you’d like to be me—no, sorry. Now I’ve lost my train of thought.

Building a four-lane highway. So us, in National, we’re going to spend that excise tax on—you plan for the future, so you’re visionary. You build four-lane highways—that’s what you do. The rest of the world is, so we’re just doing what the rest of the world’s doing. You plan for the future, but you also have to live for the here and now as well. We have to build for the here and now as well, and as National MPs, we recognise that not everyone can catch a bus—you know, that’s great. In my electorate, unless you’re going to school, you can’t catch the bus. Cycling everywhere? Well, the Speaker might be able to cover the miles—

Dr Duncan Webb: On yer bike!

MATT KING: —on yer bike, yeah—but the rest of us mere mortals, we’re not going to get on our bike. We’re not going to ride, so it’s not practical. So yep, OK, funnel all that money from the excise tax into Auckland—that’s fine—but what about the rest of the country? Ninety-eight percent of the rest of the country is rural, and this is not going to work. We oppose this bill on principle, and that’s it.

Dr DUNCAN WEBB (Labour—Christchurch Central): Mr Speaker, thank you. “That’s it”—if that’s a King-hit, God help us. Poor Northland, hung out to dry by the leader of the National Party. What happened to Bridges’ 10 bridges? Still there, one-way—“One-way Bridges”—and Judith Collins is coming the other way.

This bill, this 3.5c excise tax, is nothing more than a “no free ride tax”. All of this money is hypothecated to go back into the roading network—simply, a pay as you go. This Government is tired of decent, hard-working New Zealanders subsidising a roading network. What we need is a framework where the money that is gathered on taxes goes straight back into those roads and is self-sufficient. That’s what this fantastic Minister of Transport is aiming for, that’s what this bill does, and I commend it to the House.

TIM VAN DE MOLEN (National—Waikato): Thank you, Mr Speaker. What a contribution from Duncan Webb. It demonstrates just how disconnected this Government is. I’ll refer to a comment he made earlier in this debate, actually, when he laughed at the suggestion that people might not be able to walk everywhere. Well, I think even his constituents in Christchurch would be embarrassed by the naivety of that comment when you consider the regions around New Zealand. Clearly, that Government is not considering the regions around New Zealand when it comes to the excise tax increases that we’re seeing under this bill—4c extra this year, 4c extra next year. What’s the benefit of that to regional New Zealand? We’ve heard from the Government that their focus is on trams in Auckland—trams and trains. We’re not seeing any new roading projects as a result of this additional $360 million - odd of tax revenue that they will gain through these increases.

During the committee stage I asked the Minister of Transport a question which went unanswered—a couple actually, but one in particular that I’ll come back to now—which was in relation to the timing of this being implemented. We’d heard previously there was going to be $300 million - odd of tax which they’ve signalled through these 4c increases each year, but they’ve pulled it forward three months, so now it’s 1 July. The Minister refused to change that via an amendment from Mr Goldsmith, because he said it would be $30 million a year of lost revenue. So, conversely, that’s $60 million of additional revenue the Government will now have through bringing this forward that they had not expected to have previously, which was not in the Budget when they originally planned their projects.

So the question I had during the committee stage, which I’ll reiterate now and hope to get an answer from the Government on, is: will the Minister now reconsider the Waikato Expressway from near Cambridge down to Piarere, through my electorate, a very dangerous section of road? That $60 million would cover a significant portion of that road. Will he consider putting that back on the cards now, given that the New Zealand Transport Agency has said it has a very strong case—a very good cost-benefit ratio—and has a significant safety focus? We’ve heard from numerous members on that side saying, “Oh, if only the Opposition would think about safety.” This is all about safety, Minister.

I want to touch on Jan Logie’s comments earlier as well. I admire her focus on safety there, because, actually, we all want to see increased safety in the transportation space. This won’t achieve it. The Government’s projects here will not achieve that for rural New Zealand. There are a number of roads around the country that do have quite dangerous intersections. Of course, people need to be mindful of that when they approach them, but, actually, we can be doing more as a Parliament to reduce that risk, and we should be. Two of those intersections—State Highways 1 and 29, Karapiro Road and State Highway 1—would have been bypassed by that expressway, and so I’d urge the Minister to reconsider that. Those intersections have been absolutely dangerous. There have been lives lost, sadly, and we would have bypassed those with the expressway.

So we hear about how this is all about safety, but, really, it’s not. It’s about trams and trains, which will have very little impact on safety and, actually, very little impact on reducing congestion as well, which has also been identified by the Government as no longer the priority that it was, although they have mentioned it a few times throughout the course of this debate. As I’ve sat here through the entirety of each reading and each stage of this bill, I have not heard any clear reasoning why the Government is unprepared to look at projects in the regions. All of these projects are centralised to Auckland, to the cities, and whilst I absolutely accept there is a need in some of those places, it’s not going to benefit all the residents in those areas, and it’s certainly not helping the regions. The regions are losing out.

We heard a bit from Scott Simpson during the committee stage as well, around his electric vehicle. There are a number of members on this side of the House who do drive electric vehicles. I have a lovely one myself, which I drive around the mighty Waikato, and, of course, we won’t be paying any of this excise tax with those electric vehicle capabilities. Is that fair for all of New Zealand, given that we use the roads just as much? It’s not. The regions are missing out, the Government doesn’t care, and, quite frankly, it’s not good enough.

PRIYANCA RADHAKRISHNAN (Labour): It’s about time we had a modern, efficient, and safe transport system in New Zealand, and this bill will go a long way to ensuring that we get there. Can I commend this coalition Government for its vision for a transport system that offers choice. I’d also like to thank the Minister of Transport, the Hon Phil Twyford, for his leadership to get us to a place where we implement that vision. I commend this bill to the House.

ANDREW BAYLY (National—Hunua): Well, we haven’t had any contributions from the Government on this bill, and I think that’s really disappointing. They say this is the most important piece of legislation they’ve got to do following a wellbeing Budget, and yet very few of them can even stand up and give a 10-minute speech on the merits of why this is so important. I think, for democracy, all those people who are watching should be ashamed of the Government in not standing up for what they are meant to be doing.

The first thing is I heard a Labour member describe tax as a beautiful thing, recently—tax is a beautiful thing. I’ve got to say it’s like I’m hearing all the Government members there saying, “Yes, taxes are a beautiful thing and that’s why we’re going to increase them.” Of course, this excise bill increases tax for ordinary New Zealanders. That’s what it does, and in the context of where we’ve come from since this Government has come to power, not only have they brought about the increase through the Auckland regional fuel tax—10c, plus GST—but this bill is also about increasing excise taxes over a similar period. We had the first bit last year, we’ve got this lot this year, and we’ve got another lot the following year. I’ve asked the Minister to be clear about what happens after that if they are lucky to be in power. He’s a bit silent on that—silent on that issue about what the future tax might be.

Before I talk just a little bit more about the tax aspect, I want to say again that National supports a lot of new modes of transport. In fact, we did actually invest a lot in alternative modes of transport, and the Minister even acknowledged it himself. He said that 40 percent of the Budget was going towards motorways, and, yes, that’s right. We were trying to bring together and finalise a 50- to 60-year vision for motorways around New Zealand that actually should have been done by successive Governments over that period. That concept of having this seamless, four-lane highway from Cambridge right through to Wellsford is a good concept, and as I said earlier in another debate on this, I have no doubt we are going to see the Minister of Transport and the Associate Minister and anyone else from the Government at the opening of those final stages that were introduced and implemented under a National Government.

I think it’s wrong to characterise the National Party as being one that is against multimodal transport. That’s not right: we invested lots in it. We were the ones who went out and bought the $660 million worth of new trains for Auckland. We did a lot for trains and a lot for KiwiRail but also for the biking initiative came from National, so I’d just remind the Government members of that.

But the thing about this excise tax is that it is actually quite a perverse tax, in my view. What it’s doing is ripping money out of the pockets of motorists, but, as the Minister has said, the priority is on other modes of transport. So we’re going to take all that money from people who use cars, and use that to fund bikeways, buses, walking ways—all those types of alternative modes of transport. I do not think that’s an appropriate thing. I do not think it is appropriate that you take money from one class of user and apply it to another class of user.

I think that that is the first inconsistency, and, I think, the most disturbing thing about the use of the excise tax, which no doubt this Government is going to set about doing, but also what this excise tax does is it continues to create this divide between urban and rural areas. Many of the people who will pay this tax live in small provincial rural towns, and they are going to be paying for large projects. We know what the priorities are: $6 billion going into light rail projects in Auckland at the expense of $6 billion of significant roading projects around New Zealand. We know it’s going into those large projects—those large rail projects—and yet many of those people who live in those rural communities do not have the opportunity even to experience the benefit of what this money will be spent on. I think that is a really bad thing and yet another inconsistency.

Even in my electorate of Hunua, which is still part of the Auckland Council region, I have people in places like Waiuku and Kawakawa Bay who have no or limited access to public transport, and yet they are reliant on their cars and will have to pay this amount of money to go into those projects in places like central Auckland. I think that’s wrong. I think that really is wrong, and, unfortunately, those are the same people, in many cases, in those smaller rural towns who are the most vulnerable. They are the most vulnerable to changes and increases in fuel tax because they have no other choice. As we’ve heard earlier today, the cost of petrol for these people is proportionately much higher, and that’s why it’s always described—this type of tax, an excise tax—as a regressive tax, because it hits the poorest and the more vulnerable members of our community the most.

Even in my electorate, we’ve got the Southern Motorway that’s a year behind schedule. There’s been a Minister of Transport missing in action in terms of how that project is so far behind schedule, even though as local MPs we’ve been pushing for that, and it is still delayed and causing mayhem. The thing about transport and these roading projects that this Government is sitting on is they’re no longer just regarded as being infrastructure projects; they’ve actually become social issues because of the level of congestion. The Government can say what it likes—it can say what it likes—but the voting public of New Zealand know what the issue is every morning when they get in their car—and the vast majority do—and try and commute on our major roads, and yet we know that the Government has ripped six billion bucks’ worth and put it into what they believe are far higher priorities.

The other thing is we’ve got the Pukekohe electrification—the Minister talks about it. Well, actually, it’s now going through, I think, the third redesign, and it’s probably two to three years away. At some point, I’d really like to hear the Minister be clear about it, because we’re going to have to tell the commuters of the Pukekohe and Franklin area what’s going on. But there is absolute silence on it. It continuously gets delayed. We talk a good shop about rail and how we’re going to extend the network, but all I’ve seen is delay and delay and delay on that project.

Then they’ve got another issue—and I’m just using these examples because these are all projects that this excise tax could have been used for. We’ve got the issue of a brand new roundabout required to unleash and unlock Wesley development, the highest and largest special housing area in all of New Zealand—4,500 homes—and that has been stuck. That will not be able to continue to build new houses that that Government so desperately needs but, more importantly, the people of New Zealand so desperately need, because this Government—your Government—will not spend the money on upgrading a roundabout to make it happen, which is a consent condition. So you talk a great shop, but the reality is that it’s not, and I think that again just shows you the deception—if I can use that word—between what has been said and what is actually occurring on the ground.

The other thing I’d like to raise is the issue of my farmers in Franklin, at the heart of the horticulture industry of New Zealand. I of course recognise there are other industries in parts of New Zealand, but Franklin is the only place where you can grow horticultural crops 365 days a year. The cost and the imposition of the road-user charge arrangements, which are part of this bill, and the administrative arrangements of that are onerous and have not been dealt with.

This is a Government that does not recognise the value of productive areas of our economy, and this is all part of this excise tax that this Government is imposing. They do not listen to people, they do not listen to the travelling public of New Zealand, and they certainly do not listen to the business community of New Zealand.

PAUL EAGLE (Labour—Rongotai): Thank you, Mr Assistant Speaker. I’m speaker No. 12 of 12. This is it, and I’m the only speech standing in between transformation and—that’s it.

It’s my pleasure to thank the Minister of Transport for this transformational plan. It will save lives, and I’m really looking forward to it. I commend this bill to the House.

A party vote was called for on the question, That the Excise and Excise-equivalent Duties Table (Budget Measures—Motor Spirits) Amendment Bill be now read a third time.

Ayes 63

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

Noes 57

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

Bill read a third time.

Bills

Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill

First Reading

Hon CARMEL SEPULONI (Minister for Social Development): I move, That the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill be now read a first time.

This bill gives effect to the income support policy changes, “Incomes for people receiving benefits—indexing main benefits, removing deductions, and changing abatement thresholds.”, announced through Budget 2019. This Government believes in a welfare system that ensures people have an adequate income and standard of living, are treated with respect and can live in dignity, and can participate meaningfully in and contribute to their communities. The Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill is part of this Government’s continued commitment to that vision.

Today, we will pass a bill to help implement Budget 2019 income support changes. These changes will increase abatement thresholds for main benefits to keep up with increases in the minimum wage, repeal section 192 of the Social Security Act 2018, and ensure that the rates of main benefits are indexed to wage growth. Increasing abatement thresholds will benefit around 73,000 low-income individuals and families who might otherwise see the value of their hard work diminished as the minimum wage increases. Repealing section 192 will help around 12,000 sole parent beneficiaries, who will see an average gain of $34 a week from April 2020. It is estimated that indexing benefits by wage growth will lift the incomes of around 329,000 individuals and families. Most main benefit rates will increase by between an estimated $26 and $46 per week by 1 April 2023. As a package, these changes mean 339,000 individuals and families will be better off. This year’s changes build on the progress made through the Families Package implemented in 2018. With these packages combined, it is projected we will lift between 50,000 and 74,000 children out of poverty on the after-cost measure and are on track to meet our target of halving child poverty in the country by 2028.

This bill is an important part of our ongoing overhaul of the welfare system to help those New Zealanders who access the welfare system for support to live in dignity. The changes that are proposed through this bill are enduring and effective changes that signal the transformation that this Government is committed to in our welfare system. This Government wants to support people in the welfare system to have adequate incomes, and part of this is having a welfare system that encourages people to work when they are able to. The Government’s abatement threshold changes will match expected increases to the minimum wage over the next four years. This means that, as the minimum wage increases, the number of hours people can work at the minimum wage before their benefit reduces will stay the same.

While most of the abatement changes will happen through Order in Council, this bill makes sure veterans pension abatement thresholds can be increased along with increasing the abatement thresholds for other benefits. I acknowledge the collaboration with my colleague the Minister for Veterans, Minister Ron Mark, in making these changes to the Veterans’ Support Act 2014.

The repealing of section 192 of the Social Security Act 2018 will ensure the removal of a discriminatory sanction that has been allowed to exist in legislation for far too long. Section 192 of the Social Security Act 2018—formerly section 70A—reduces the benefits of sole parents if they do not name the other parent of their child and apply for child support. This sanction does not apply to any other parents receiving other benefits who might choose not to apply for child support, such as those receiving benefits who have found new partners. In 2016, the National Government was advised that there was insufficient evidence to support that the then section 70A sanction was fulfilling its purpose of collecting child support from unnamed parents. That briefing also said that section 70A sanctions were associated with poverty and long-term benefit dependence. The sanction is discriminatory and creates undue hardship for children. This Government wants to ensure New Zealand is the best place to be a child and the best place to raise a child. This means reducing child poverty, and it also means improving the wellbeing of New Zealand families. By repealing section 192 of the Social Security Act 2018, we are also removing the stigma and judgment on the women and children who have had this sanction imposed on them.

The indexation of main benefits to wages is an historic move for New Zealand. It makes sure the rates of main benefits do not continue to go backwards against wage and salary earners. As I’ve mentioned on numerous occasions, the changes we make as part of our welfare overhaul must be enduring and effective. The indexation of main benefits to wages enshrined in legislation reflects that principle. In 1991, the National Government significantly cut benefits, including scrapping the universal family benefit, and, since then, main benefit levels have largely been adjusted using the Consumers Price Index instead of wages, but New Zealand’s average weekly wage increases faster than inflation. This is one reason the gap between the living standards of New Zealanders on benefits and other New Zealanders has grown significantly over time.

In each of the last 10 years, increases to the net average wage have been larger than the Consumers Price Index rate used to adjust benefit rates, bar one. The slow erosion of the value of main benefits relative to average wages has contributed to increased poverty in New Zealand society. This legislation makes sure that the main benefits will increase in line with average weekly wages so that New Zealanders who rely on the welfare system can keep up relative to wage and salary earners. This is an important step toward making sure people in our communities aren’t simply left to fall further and further behind.

As previously mentioned, this bill supports us in our ongoing overhaul of the welfare system. It makes significant improvements to some fundamental benefit settings and will improve the lives of many thousands of New Zealanders who need support from the Government. After years of under-investment, we are left with a system that is inadequate and burdened with complexity, a system that has sometimes seemed set up to punish people in need rather than help them realise their potential. Our Government does have a vision for a fairer and more accessible welfare system that treats New Zealanders with respect and dignity. The change in this bill represents some fundamental steps toward that vision, but I acknowledge that there is more work to do.

The bill plays a necessary role in complementing the Ministry of Social Development’s ongoing work to develop a stronger culture that improves the experiences of people that come to the welfare system for support. Notably, it also delivers on some of the recommendations outlined in the recently released Welfare Expert Advisory Group report, Whakamana Tāngata—Restoring Dignity to Social Security in New Zealand. The report will be pivotal to informing the development of our three- to five-year work programme to overhaul the welfare system in a planned and systematic way.

I want to take the opportunity now to acknowledge Professor Cindy Kiro and her leadership in chairing the Welfare Expert Advisory Group. This is a group of 11 members, representing a diverse range of backgrounds, expertise, and views. I want to commend their commitment to delivering a report of high quality and building consensus across their final 42 recommendations. As previously mentioned, this bill also builds on the gains achieved through the Families Package and will assist us with continuing to lift children out of poverty.

This bill changes income support policy in ways that will matter for people’s lives. It is part of the Government’s promise to overhaul the welfare system in a meaningful way so that people have an adequate income and standard of living, are treated with respect, can live in dignity, and can participate meaningfully and contribute to their communities.

This bill today signals an historic turning point for the welfare system here in New Zealand. It is with great pleasure that I introduce the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill. I now commend the bill to the House.

Hon LOUISE UPSTON (National—Taupō): I’m going to start where the Minister for Social Development ended, with the Welfare Expert Advisory Group, and say: is that it? Is that it? There were 42 recommendations—three recommendations accepted—to a welfare system that Labour have said for years was broken. All of their comments in Opposition were that it was urgent and that changes needed to happen desperately. Guess what—is that it?

Of the three changes today that we are sitting here considering in urgency, post-Budget, in the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill in this first reading, two of the three urgent things that the Government has introduced were their campaign promises, but they’ve waited this long to do it. The other one, actually, quite frankly makes sense. But of the months and months and months of work with the Welfare Expert Advisory Group, the Government accepted three of the recommendations—only three. So I say, Minister, again: is that it?

If this is a silver bullet to solving child poverty, guess what: it ain’t going to happen any time soon. And I’ll say this—

Hon Andrew Little: You can’t do it with a google search. What’s the plan?

Hon LOUISE UPSTON: Oh, a bit sensitive—a bit sensitive. Yeah, great question, Minister Little—what is the plan? What is the plan for the Government’s promise to lift 80,000 children out of poverty in 10 years? This side did it—85,000 in five years. So if you want to have a conversation about results, if you want to have a conversation about lifting children out of child poverty, actually, this side of the House have done it. But this—three changes. I want to talk about the three changes, and I want to focus my time in this debate on one of the issues.

The first is indexing. Indexing isn’t new. Indexing main benefits has been around since the 1990s, so it’s not new. The change that’s proposed by this piece of legislation—and this is where the rubber hits the road in terms of reality. This change in the indexing by 2023, on average, will increase what a beneficiary household gets by $11—$11 in four years’ time. I say to the Minister: is this it? If that is your answer to child poverty—because we know that the large number of children who live in benefit-dependent homes live in some of the most challenged circumstances. In four years’ time, $11 a week—is this it?

In terms of abatement rates, National agrees with the ability of every household to keep more of what they earn. It’s no different for those on benefits. So, as a principle, we do support lifting abatement rates, but we’ll have more of a discussion on that. What I do want to spend most of my time on, though, is the lifting of obligations and consequences on the naming of parents, because at the end of the day—and New Zealand First will be very interested in this—this, in reality, is a tax cut for deadbeat dads. This is a tax cut for deadbeat dads, who aren’t going to be held financially responsible for their children. That’s, at the end of the day, $115 million. That’s the price tag: $115 million. The deadbeat dads are let off the hook. They are let off the hook.

A lot of those listening to this debate won’t understand the history of this particular obligation, so I did want to go back through it and explain the kind of size of what the problem has been in the past. I actually want to refer not to one of my own colleagues but to a former Labour Minister who, in Budget 2004, also made changes around this particular obligation, but what he did at the time was increase the sanction. So the obligation was there, but the Labour Government were very concerned about—guess what—parents not being held financially and emotionally responsible for their kids and not contributing child support.

So I’m fascinated that the Government actually now believes that dads shouldn’t be responsible for their kids—they shouldn’t be financially responsible for their own children. Just because somebody is on a benefit, why is it that the Government thinks that the children in that household don’t have a right for their parents—and it is usually the dad—to be responsible for them? I ask the Government, why is it that you think, just because somebody is on a benefit, that the father of those children shouldn’t be responsible—shouldn’t be responsible? Because, you know, for the sparky in west Auckland who pays child support for his three kids, he’s responsible. He’s accountable. So if their marriage breaks up, if the mother of his children then goes on the sole parent benefit, why all of a sudden shouldn’t he be responsible for his children? It’s a very simple question. It’s a very simple question. Obligations and consequences: if you don’t fulfil the obligations—guess what—there’s a consequence.

As I say, in Budget 2004 Steve Maharey was very concerned. He said, “I think parents should contribute emotionally and financially to their children throughout their lives.” He called it a financial incentive—a financial incentive.

Priyanca Radhakrishnan: Live in the past.

Hon LOUISE UPSTON: Oh, it suits the Government when they want to talk about things in the past. So let’s never talk about the nine years that National was in office, if you don’t want to talk about the past. That’s fine.

So let’s have a look at some of the numbers, because here’s what’s happened. Here’s what happens when there’s not a consequence, when there’s not a sanction, or, in Steve Maharey’s words, “a financial incentive”: the number of parents that were not named or who applied for child support increased by over 40 percent in seven years. So I asked the Government: how many more parents are you expecting not to be responsible for their children? A 40 percent increase—40 percent increase in seven years, and this was referring to those on benefits.

Now, I was a solo mum. I was on the DPB. It was some of the hardest times of my life. So this is not about beneficiary bashing; this is about saying our side believes, fundamentally, that dads and parents should be responsible financially and emotionally for their children.

Fletcher Tabuteau: So do we. This doesn’t do it.

Hon LOUISE UPSTON: Great, New Zealand First agrees—excellent. Because this is a tax cut for a deadbeat dad who gets to not pay for his own children. This side of the House thinks that’s outrageous—outrageous. So this is major opposition from this side of the House because of the obligation that exists currently and should exist.

What I do want to do, because I know it’s been raised in this House before, is just talk about the fact that there are clear exemptions. In the current law, we used to refer to it as section 70A; it is now section 192. I just want to put on record the exemptions that are already in place for not naming the liable parent: if there’s insufficient evidence to establish who the parent is, if the person receiving the benefit is taking active steps to identify them, if the parent would be at risk of violence, if the child was conceived as a result of incest or sexual violation, and if there is other evidence that says there’s no real likelihood of child support being collected. You know, those are very practical, sensible exemptions that are applied on a regular basis for those receiving the benefit who aren’t able to, for a variety of reasons, including their own safety, name the parent.

But guess what: this is about a tax cut for deadbeat dads who the Government don’t believe should be responsible for their own children. This side, the National Party, will oppose this bill because it is an absolute outrage not to hold or to have obligations on parents supporting their own children.

PRIYANCA RADHAKRISHNAN (Labour): Thank you, Mr Assistant Speaker. I want to begin by challenging some of the comments that the previous speaker who resumed her seat, Louise Upston, made, because they completely missed the point. Firstly, in terms of repealing section 192, the member claims that members on this side of the House don’t want to hold “deadbeat dads”—she says—accountable for their children. That is absolutely untrue. Why? The reason we’re repealing section 192 is, firstly, because we choose not to penalise women who choose not to name the fathers of their children.

Secondly, we don’t see the point in continuing a policy that does not work. Move to the future, the Hon Louise Upston. Thirdly, the member asks, “Is this it?” It is not. Although this is a significant bill, this is not it, because there are at least 20 recommendations from the Welfare Expert Advisory Group report where work is under way. So I say, the Hon Louise Upston, this bill is significant because it contributes to improving child wellbeing, to reducing child poverty, and to ensuring that everyone, regardless of their circumstance, can live with dignity and participate in their communities in a meaningful way. Thank you, Mr Assistant Speaker.

Hon ALFRED NGARO (National): Oh, that was a briefer contribution than I thought we would have. I stand to speak on the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill.

I want do something a little bit different, because, in actual fact, it was Minister Carmel Sepuloni who set the tone here. The Minister decided to go on the attack and actually began to talk about the things of the past, rather than talk about celebrating the things of the present and what they’re doing. In fact, I noted there were about four points. So, in actual fact, she stirred the pot to make the pointers at this point.

But I’m going to do something a bit different. I’m actually going to start off by being a bit more positive. So I do want to commend her, because when we on the other side look at the factors and the things that this bill will contain, what do we support? Well, the abatement thresholds—we would support that. We think that’s important. What we would say, though, is a caution, because when you think about it, the fact is that the amount of the abatement threshold that we are talking about is going from $80 to $150, I think, so that’s an increase of $70. Most people have talked about that. The Welfare Expert Advisory Group actually wanted it to be $100. They felt that that was what the threshold should have been.

So it’s $30 less, but it is an improvement. On this side, we’d say that that’s actually a good thing, so I want to commend the Minister and the Government for doing that because I think that’s really important as well.

Let’s talk about the indexing of benefits, each year, to the average wage growth. That’s a good thing, and we should commend them and say that that’s something that we think is important. We can talk about Consumers Price Index indexing, which we actually did when we were in Government, but this is indexing—right? OK, that’s a good thing. You’ve made the effort to do that.

However, it is maybe not as good as what the Minister and the Government may have thought. Let’s think about the amounts that we are talking about here, because, in actual fact, though the Minister gave an amount which actually was for 2023, we are talking about 2019, and when this comes into force, what are the actual amounts that beneficiaries will receive? It is actually $11—that’s what it is. It’s actually $11.

So there was the talk about “This is amazing. This is the first time—this is history.”, and, on the other side, the Hon Andrew Little said, “Well, what are you guys going to do? What will you do?” Well, in actual fact, he may have forgotten Budget 2015—in fact, he won’t have forgotten it, because he was there. In Budget 2015, under a National-led Government, core welfare rates were increased for the first time—since 1972, by the way.

Hon Andrew Little: Seven years into the Government—seven years into your Government.

Hon ALFRED NGARO: But hang on, hang on. Since 1972, right—42 years. By the way, in the previous Labour Government of nine years: nothing. In the previous Labour Government: nothing. So talk is cheap, but in actual fact, when you had the chance, you never did it.

Hon Andrew Little: National cut it in 1991.

Hon ALFRED NGARO: Hang on, let’s talk about this bill right here. You’ve introduced an indexing that will give $11, so let’s think about what we did in 2015. What we did was we increased the base benefit rate so that after tax it was $25—$25. Let’s think about that: $11 versus $25.

Well, we had an independent report by Radio New Zealand. They went out and asked “What could we buy with $25?”, and I’ve got a list of things that they could buy with $25: 2 litres of milk, a bag of chicken drumsticks, cornflakes, bananas, Wattie’s tomato sauce, two tins of baked beans, two tins of spaghetti, two tins of peaches—

Fletcher Tabuteau: Don’t read your shopping list in the House.

Hon ALFRED NGARO: —12 eggs, pasta, margarine, a loaf of bread, and for those who are out there who may be gluten-free, like Mr Fletcher Tabuteau, you could get gluten-free biscuits—that’s right—for $25. They’re only getting $11. That’s right—the indexing will only give them $11. So I’m not so sure if you want to crow so loud to say that this is amazing and this is wonderful, because, in actual fact, when we did it, it was $25 and that’s what you got. Here’s the shopping list, which was independent, and that’s what you got for that.

Let’s talk about the area of concern that actually we have: sections 192 and 194. Now, what I’d like to say, hand on heart, is that I’m pretty sure that I would be the only one on this side that has actually worked with the Hon Steve Maharey. When I worked with him—like with the Welfare Expert Advisory Group—because of the work that I was actually committed to in the community around community development, I was asked to come on to form what they called the Blueprint committee. This was after the baseline review, where Judge Mick Brown was commissioned by Mr Maharey to look at the whole of the welfare sector. With that, we spent three to four years putting together a framework to look at how we could get greater connectivity, less duplication, and greater efficiency into the whole of the welfare sector.

So I can talk about when the Hon Steve Maharey was here. When he talked about these sanctions, I heard him say directly—and this is what he said—“It is a rort, and I have said time and time again in this Parliament that fathers must front up to their obligations, and we will make sure they do. It is not unreasonable to expect that single parents bringing up children on their own identify who in law is the other parent, or to expect that they seek financial support for the child from the other parent. It is not unreasonable to penalise financially those who do not.” Now, the others have talked about it, and we know that the numbers have been slightly dwindling, but the fact is that there are those out there that need to be held to account.

The speeches on the other side have talked about National members being the ones who have been using the stick. Well, isn’t it interesting? The stick actually came from the Labour Government of the day. They made the stick a bigger stick. They increased the penalties—from a Labour-led Government of the day. So it’s a bit interesting for them to turn around and say that it was a National Government that put this in place when, in actual fact, what you are reversing here, from sections 192 and 194 of the Social Security Act, was actually implemented and increased by a Labour-led Government with its ideology. That’s interesting—

Darroch Ball: What year was that?

Hon ALFRED NGARO: —2004—but we would agree. We on this side would actually—

Darroch Ball: Didn’t you have any common sense in there?

Hon ALFRED NGARO: Yeah—well, you were probably still at school. You were probably in primary school, over there. But we would agree with this. Why? Because it’s only fair.

In my maiden speech, I talked about fathers taking up their responsibility. I’ve worked in communities to ensure that where it’s possible, a father should take up his responsibility, not just in the financial contribution but in being a father, where he needs to be. We know that in this country there are women that are having to struggle, day in and day out. It is not unfair to put on them a burden of responsibility—whether it be financial or even emotional—that fathers should be held to account on. So we do not resile from the fact that we uphold what was actually put in place by a Labour-led Government, reinforced by a Labour Minister for Social Development and Employment. We would say that this is appropriate and this is right. You cannot turn around and say that this is a wonderful thing and that this is freeing for all of those people, because it’s not about the women we are talking about that we want to put the burden on—that the burden is actually on. The burden of responsibility is purely on the fathers who do not take up their responsibilities, and we think that’s critically important.

The Minister then talked about the importance that the contribution of all of these things—there’s actually only a few of them—was really important because, in the end, it was about contributing to child poverty. So what I did—as we all did—was pull out the report that was submitted. In the report, this talks about the Wellbeing Budget. I studiously looked through this report to look at what was actually in here. We’ve got the before-housing costs and the after-housing costs and all the things that you would measure, though some of them we do challenge.

But as I went along, I found a little disclaimer. I found a little disclaimer in here, in the words of the Prime Minister herself—right? So while they’re saying they’re doing all these wonderful things and they’re increasing benefit rates, indexing, removing the sanctions, and so forth, here’s the little disclaimer. It’s on page 6—and I quote—“Are we on track to reach our targets? While it’s too early to say with certainty if all the changes we’ve made will enable us to reach our targets,”—that’s actually here, in print, from them. Right? It’s the little disclaimer, because what you’re trying to say is “We’re going to try, but we may not get there.” It’s a bit like KiwiBuild, and a bit like all these things. I don’t want to go out of scope, but, you see, it’s the little disclaimer that says, “Look, but we did say that if we don’t quite get there, we may not make it.”

We would say on this side that there are things that we would support in this bill. There are two things that we would support in this bill, so we want to be positive. We’re not a negative group over here, but we do have to say that we take exception to the areas around sanctioning, but not because of the burden upon the mothers that are out there, who are the single mothers up and down our country and in our communities in whom we have great pride for the effort that they put in to raise those children. But what we do want to challenge are the fathers who are out there who do not take up their responsibilities. On that principle, and that principle alone, we will oppose this bill. We will continue to oppose it. Why? Because that’s the right thing to do to make them responsible, so that their children will know who their fathers are—taking up their responsibilities for this. We cannot support this bill, because of that principle.

DARROCH BALL (NZ First): Thank you, Mr Assistant Speaker. It’s a pleasure to rise on behalf of New Zealand First to speak—

Hon Dr Nick Smith: Why does this member support this? Why do you support deadbeat dads?

DARROCH BALL: —just listen up, Mr Smith, and you’ll find out—in support of the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill. First of all, I’d just like to congratulate the Minister and the current Government, the coalition Government with support from the Greens, on bringing this legislation to the House. As has already been mentioned by some of the speakers on this side, this is just the start of a well-overdue overhaul of the entire process.

I think what this bill does, in its essence—and I’ll get into a couple of details, and, obviously, one of the specific details has been topic de jure at the moment, and we’ll get into that—is it actually brings in a good balance between ensuring that we’ve got a robust and effective safety net for those in this country that need it but also ensuring that there is a focus on getting those who are on main benefits into work.

I’ll start with probably the most controversial issue that has been voiced so far, which is section 192 and the repealing of the sanctions. I think that there needs to be a little bit of common sense brought to this argument, and that’s why we’re here, but what it shows is that the National Party continue on their modus operandi, which is a cursory glance at any of the statistics, a one-dimensional view on the surface of the problem, and then basing their entire premise of their argument on flimsy evidence, if any, and very little logic, if any.

I’d just like to say first that there’s a couple of questions that came out of the Hon Louise Upston’s speech, which didn’t make sense, and I’ll be asking her a couple of questions. Then there’s a question that I want to ask every member of the National Party that wants to stand up. First of all, the Hon Louise Upston said that we shouldn’t be taking away the sanctions, because the sanctions work. But, if they worked, then how come there are around 24,000 children significantly being affected by the sanctions? She also said that it had increased by 40 percent in the time period she gave. If it was successful, how come there has been an increase of 40 percent? If the sanctions were working, to ensure that the father in this process was paying a fair share, then, if the father started paying, the sanctions wouldn’t be applied. So if that was the case, then it would be working and we wouldn’t have seen a 40 percent increase, would we? It makes no logical, common sense whatsoever.

I think there’s one important difference in wording that the Hon Alfred Ngaro hasn’t picked up on: there’s a difference between “consequence” and “responsibility”. So one of the last things that he said was that the National Party are proud of the work that the mothers do in raising their kids in poverty and on benefits, but the problem with section 192 is that the consequence is not worn by the father. So how can a sanction that is designed, in theory, to hold the father to account—which is what New Zealand First agrees with, and we were agreeing when the National Party speakers were standing up and saying, “We believe that all fathers should be held to account and pay their fair share.”

We agree 100 percent, absolutely. But in no way, shape, or form is this sanction actually achieving that, because where is the consequence when you fulfil the sanction? If you implement the sanction, who wears the consequence? Who wears the consequence? The solo mother on a benefit. You’re taking money away from the solo mother on a benefit, and who does that ultimately affect? The children. Riddle me in any way, shape, or form how the father is wearing any of those consequences and being held accountable. Where is it? How is it?

So, you see, we’ve got a situation—if you take a step back—where the father in the first place is not responsible, because they’re not paying the child support. They’re not paying the child support. So the father is irresponsible.

Melissa Lee: Not responsible for the children that they create?

DARROCH BALL: No, Melissa Lee—listen up. I’m saying that the father is being irresponsible—the father is being irresponsible in the first place. So now you’re going to take money away from—who? The father? No. Are you going to have some consequences for the father? No. You’re going to take money away from the families, and the children, and the mothers who need it the most in this country—the solo parents that are on a benefit. Riddle me that logic.

Now, New Zealand First, like I said, supports the concept that the fathers who aren’t paying child support need to pay child support, need to take responsibility, and there needs to be a way of doing that. This section is not the way. That’s as plain and simple as it is.

Hon Alfred Ngaro: Name the way.

DARROCH BALL: This section is not the way. Not only is it not the way, Mr Ngaro, it is affecting the wrong people. That is why New Zealand First is in support of the removal of this section.

I’d just, lastly, like to say that with the indexing of main benefits, I think there’s a short memory in this House for some of the people on the opposite side. Prior to 1991, one of the benefits that we’re talking about is the sole parent benefit, or the DPB as it was known back then. That was the equivalent of around 70 to 75 percent of the average wage—prior to 1991. In 1991 it dropped and kept dropping until, last year, it was under 50 percent of the average wage—it was 47 percent, or thereabouts. Now, consider the cost of living—one of the essential aspects of a robust safety net. Now, we can start talking about—we’re going to hear from the other side; and we’ve heard—how there need to be incentives to get off the benefit and sanctions to get off the benefit, and that’s a separate argument. What we’re talking about is the absolute, essential, genuine nature of needing that safety net. There’s no way that there could be any sort of argument from that side of the House for that lower benefit—it was once 75 percent—which is so low that a beneficiary who has children and needs it the most can’t survive. That’s as simple as it gets.

New Zealand First supports this bill because it goes a long way—like I stated right at the start—towards the balance between ensuring that we’ve got the robust safety net that this country needs and ensuring that we encourage people to get into work. Thank you, Mr Assistant Speaker.

MAUREEN PUGH (National): Thank you very much, Mr Assistant Speaker. I stand to oppose the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill this morning in its first reading. We’ve heard a lot of very impassioned pleas from the Government benches about why this is such a good idea, but, actually, none of them have been particularly convincing. In fact, when I think back over time to the 2000s, when these sanctions were actually introduced by the Helen Clark - led Government, they were introduced for very good reason. Unfortunately, we haven’t heard a very good reason for undoing that particular part of the legislation.

We know that this is an omnibus bill, and it does affect the Social Security Act. National has very supportive views about the impact on the Veterans’ Support Act 2014. It makes common sense to include that in some of the indexing that we’re going to be talking about further in this bill, I’m sure. But I would like to pick up on some of the things that have been mentioned by the Government—in particular, the Minister who introduced the bill, the Hon Carmel Sepuloni, who said that people on benefits deserve to live with respect and dignity. I don’t think there’s a person in this House that would argue with that point of view, but I guess where our views differ is how we actually reach that as an outcome.

Living with respect and dignity, in my very humble opinion, also means living independently, but with a safety net provided by the State in situations where we do need that safety net. It is not intended to be a lifestyle choice, and that is the very real risk we run when we start playing with some of the indexing and we start playing with some of the sanctions that ensure that people comply with the intent of these benefits, which is to be that safety net, not a lifestyle choice.

Now, we are going to be talking in some detail in the committee of the whole House stage, and I’ve prepared a Supplementary Order Paper too to attend to some of the detail in this removal of the sanctions out of this bill. As my colleague the Hon Louise Upston shared with us before, having been on the DPB herself—I too have been in that situation with my two young children. I’m not sure if I was a freak of nature or whether I was just extremely frugal, but I never had a problem living on the DPB with my two children. It provided adequately for me and my family for a couple of years—

Darroch Ball: When was that?

MAUREEN PUGH: Mr Ball asks when that was. Mr Ball, I was 16 when my first baby was born, I was 17 when my second child was born, and I was 19 when I needed the State to support me to escape the situation I was in. I was able then to buy my own place—a very humble place, but it set me up in my independence, where I also went on to do extra study. So Mr Ball, there are ways that people reach their independence with respect and dignity.

But I’d also like to pick up on something that that member mentioned about National relying on flimsy evidence. Well, this piece of flimsy evidence will tell you that during National’s watch, teenage pregnancies actually fell by 60 percent. That means that we have less people reliant on the State. But the purpose of my comment around the sanctions is that when a parent—in particular, the mother—refuses to name the father for the purpose of supporting her while she is receiving the safety net from the State, it is because we have failed to think about the people who are providing that safety net. We hide behind the fact that it may be the Government, but, in actual fact, it’s the taxpayers of New Zealand that provide that safety net.

Now, if the mother refuses to name the father so that the father can then subsidise the taxpayer, so he can pay his fair share of what is required for him to support his child, then that is entirely reasonable. If the mother knows the father of that child and refuses to name him, then I would suggest, if he is then providing some casual support financially—under the table, we call it—then she is actually complicit in a fraud against the taxpayers, because this is the taxpayers’ money we are talking about.

I’d like to talk a little bit about the indexing, too. I know it’s been raised by my colleagues in their contributions. Indexing to the Consumers Price Index (CPI), as it was, has ensured that benefits have kept up with inflation. Now we are going to be—if this bill is successful—indexing to the average wage; we are not going to be indexing to minimum wage. Much has been made of this over the course of announcing this Budget, about how generous this Government is with taxpayers’ money. But, in actual fact, this does not come into effect, it doesn’t start, until next year, and then, over the next 3 years, the difference between the CPI indexing that we have now and indexing it to average wage by 2023, which is the goal of this particular bill, is $11—$11. How generous are they!

I think, perhaps, they have oversold this policy, because, as we all know, the very first point of attention that this Wellbeing Budget got yesterday was a new tax—a new tax on fuel. A wellbeing Budget tells me that that was more important: to penalise hard-working Kiwis who pay the taxes now. And here we are making such a song and dance about $11 by 2023, when already they have found a way of taking more than $11 off these same people by increasing fuel taxes—the same people who struggle to make ends meet as it is.

I thought it was ironic. We were talking last week about the appropriations bill. I had prepared a quote from the former Minister, a Labour Party Minister. I thought that was quite an irony then, but I find it even more of an irony now. I quote the Minister for Social Development and Employment at the time, the Hon Steve Maharey. He said, “Removing sanctions on women who don’t name the father of their child is a complete reversal of position for Labour. It is a rort, and I have said time and time again in this Parliament that fathers must front up to their obligations, and we will make sure they do.” That’s straight from the Hansard.

What we do, and we know this—I know that Darroch Ball talked about flimsy evidence and using flimsy stats, but I can tell you that the stats are very, very clear that children who grow up in safe, secure families have much better outcomes in their lives. That is what this side of the House is more concerned with, ensuring that where parents are involved in their children, where they do not abdicate from their responsibilities, they are doing more for their children and their outcomes. The purpose of having the safety net of a benefit is well understood, but in terms of letting—as they’ve been called—the deadbeat fathers off the hook and keeping them out of their children’s lives, we actually end up disadvantaging the children who the safety net is designed to protect. I think it’s a sad day when we make it easy for people to abdicate from their responsibilities. Let’s face it: a woman does not accidentally get pregnant. There is a father, and he should be named.

MARAMA DAVIDSON (Co-Leader—Green): The Greens are very pleased and relieved to support this, the first step of overhauling the welfare system, and want to congratulate Minister Carmel Sepuloni on pulling together the expert advisory panel, with the diverse background and range of backgrounds that the experts on that panel came from. She pulled together an incredible blueprint for all of us in this House to be able to work on together, so that we might actually assist people to live their lives with dignity when they are requiring support. Thank you to the Minister for her leadership on this. It is a Greens confidence and supply agreement that we will make sure we see through.

I cannot go past acknowledging the Welfare Expert Advisory Group chair, Dr Cindy Kiro, and her incredible commitment, her wairua, to the cause of making sure she could pull together not just the voices of the panel but the voices of the country, bringing her incredible governance and leadership and insight experience as a human to this incredible blueprint that we have, and all of the panel.

I want to uphold the work of advocacy groups who, for probably at least three decades, have been on the front line of seeing firsthand what happens when we have a social security system that rather than helps people, punishes people and entrenches poverty and entrenches intergenerational struggle when we create a narrative that accepts that some people should be dehumanised so that we can afford to give them less.

I want to absolutely acknowledge the people themselves who have had to suffer under generations and decades of, I will say, successive Government policy which has not understood the importance of having a strong and robust social security support system, especially in the context of a housing market, even just the housing market alone, which has blown affordability through the roof for people trying to make ends meet.

This can only be a start to an overhaul. This can only be a start to transforming what our country has taken pride in, in setting up and understanding in a social contract that at all times there will be some people who need some help—that we understand that, mostly, people want to be in paid work if they are able to be, and that they want to be able to contribute. We can one day be proud again of what has been a foundation and a social contract understanding in this country.

I will start with welcoming the move to finally index benefit income growth to the growth of average wages. That is the least we could possibly do, especially considering that benefit income levels have been so below par of livable that it has been a shame on our nation that we have allowed people, for no good reason, to struggle with the basics of living.

We have heard in this room today that several of us in this House, several former MPs before us, and more to come, have experienced being single parents ourselves, and I certainly am one of those people. We know that for the most part people try and do their best. So the fact that we have not allowed benefit income growth to at least move at the same rate of average wages should be a stain on us. But here we are today. We’re going to fix that at the very least.

I also, in this, want to remind the House that only 21 percent of our people who receive a benefit are physically and mentally able to uphold paid work. So I want to call to account some of the rhetoric from the Opposition, which shouldn’t surprise anybody, which has continued to bash beneficiaries. I want to call that—

Hon Louise Upston: Rubbish. We weren’t talking about them.

MARAMA DAVIDSON: Absolutely has. We heard it from the start. We saw last night the Opposition leader put up a meme on the internet for the National Party’s narrative. They set up beneficiaries against workers. What is that if not bashing beneficiaries? They set that meme up in the House last night.

I want to remind people that we have people in paid employment who are struggling, and you want to set them up against people who receive the benefit. I want to remind people that today’s beneficiary is tomorrow’s low-paid, exploited worker—that today’s low-paid, exploited worker is also tomorrow’s beneficiary. That Opposition—the leader goes out with a meme to set them up against each other. That’s all they’ve got. That’s all the constituency they have left—is to continue setting up people decently trying to make their way in this daily life. They want to set them up.

One of the previous Opposition speakers tried to say that they agree with people living lives with dignity. You are not allowing people to live with dignity if you continue to stigmatise them. If you continue to shame people who receive an income by setting them up against workers, that is not allowing them to live with dignity. So I will call that out, and I have an absolute responsibility to call them out—not to mention that we have people who receive an income for paid work who have been exploited themselves, who are oppressed by the very same oxygen that keeps people living in entrenched poverty. They are struggling with the same issues. You want to divide people—that’s your constituency—

ASSISTANT SPEAKER (Poto Williams): Order! [Points at self]

MARAMA DAVIDSON: Sorry, Madam Assistant Speaker.

ASSISTANT SPEAKER (Poto Williams): Thank you.

MARAMA DAVIDSON: They want to divide people. That’s their tactic. This Government is here to bring people together. This Government is here to understand that there is a common ground that we have to find so that all people do not feel shamed when trying to access support.

This Government understands that there are people with disabilities, with mental or physical illnesses, and people who cannot work because they are providing care who do make a contribution to the community, who absolutely are a core backbone of our communities. Just because they are not in paid employment, we cannot in this House—surely, surely there’s a social contract we can agree to in this House that means we stop devaluing their contribution to who we are as Aotearoa New Zealand.

So I’m just going to pull that up for a second. Ending sanctions—OK. So the international and local evidence has been very clear that those sanctions, those punitive sanctions, do not work. It has been very clear. The experts on the panel, who we should be listening to, were very clear that not only have those sanctions not worked, not encouraged other parents to pay, but they penalised the custodian parents and their children for no good reason and they further entrench poverty.

Now, the Opposition wanted to crow about the conservative, considerate benefit increases that they made of the odd, what, $20 a week? I don’t know. It was so minimal I barely remember. But in the meantime, they kept that sanction that took it off anyway. So how dare they—the shame of them trying to crow about that minimal, minimal benefit increase while they kept that punitive sanction on the books and took it off them anyway. So I’ll just call that out as well.

What we are here to do in our jobs as representatives of the people is set up a vision for a social security system that works and that treats people with respect and mana. The very name of the welfare report, Whakamana Tāngata, is the welfare system that will benefit our communities, our people, our children, our economy, and our environment. When people can live without having to struggle and stress about the basics of everyday lives, that is our work here.

I’m proud to support this starting step. The Greens want to make sure that the transformational recommendations in this report—that we have a plan to put it in place so that we can really say, with hands on our hearts, that we are overhauling welfare. Thank you.

AGNES LOHENI (National): Madam Assistant Speaker, talofa lava.

ASSISTANT SPEAKER (Poto Williams): Talofa.

AGNES LOHENI: Thank you. I take this call on the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill. So the key parts of this bill are indexing of main benefits, removing deductions, and changing abatement thresholds, which require amendments to the Social Security Act 2018 and the Child Support Act 1991 and Veterans’ Support Act 2014.

Just touching on abatement rates, which some of my colleagues have already mentioned, in that generally we are supportive of abatement rates, ultimately, finding meaningful work is the main ambition of many New Zealanders who are currently on the jobseeker support. So there is a fine line between where we have those settings to ensure that there are still incentives to move into full-time paid work, which is, ultimately, better outcomes for those people for their families.

I’d just like to touch on a comment that the member Marama Davidson spoke to about divisiveness in terms of the repeal of section 192, which was the one to remove the benefit deductions on sole parents who do not identify the other parent of their child. Ultimately, I think this part of the bill—actually, this bill—is divisive to families. We on this side of the House have always been pro-families and supportive to families. The underlying ideology in this bill is actually to be divisive. It’s actually putting a barrier up between children and one of their parents.

Marama Davidson: It’s not what the sanction does.

AGNES LOHENI: The sanctions actually did work. So let’s have a look at what this says. It’s a really shallow attempt, actually. This bill is a very shallow attempt to address child poverty. In terms of a stigma, this isn’t about removing stigma; this bill is actually about parental responsibility. It’s about personal responsibility. It’s about the fact that taxpayers are paying for this. This is not the Government; this is about other hard-working New Zealanders who are contributing to this, who are paying for this. They’ve got their own children to pay for, and at the moment, now, these other hard-working New Zealanders have also got increased costs of living under this Government. So this is another burden on taxpayers.

So I recall that Minister Sepuloni had been quoted as saying that this bill was about catching up with the times. So catching up with the times, let’s see—

ASSISTANT SPEAKER (Poto Williams): Order! [Interruption] Order! All members—I think we need to all come to order. This is starting to get a little out of hand, as with the previous contribution. We shall not heckle each other in this Chamber. Is that clear? I can refer members to Standing Orders if you would prefer, but let’s just have a little decorum in this particular debate.

AGNES LOHENI: As I said, Minister Sepuloni had been quoted as saying that this is about catching up with the times. So what are the times that she is referring to? Is it the time to throw away personal responsibility? Is it the time to withhold kids from knowing who their dads are? Is it the time to disregard dads and their roles and their responsibilities?

True dignity actually comes from being independent of the State. Of course we are there to help and to support people who need it when those times come. It should be a safety net. We don’t want it to be a permanent state of existence. That is actually not wellbeing for those children. It is not wellbeing for those families.

This bill gives the message that we want to make it easier for you to remain on welfare.

Kieran McAnulty: Rubbish. What a load of rubbish.

AGNES LOHENI: This bill gives the message that we don’t value personal responsibility. No, it’s not rubbish. That is actually the message that comes through in this bill. This bill gives the message to the children that “Your dads don’t matter. In fact, your dads don’t exist.”

Marja Lubeck: That’s terrible.

AGNES LOHENI: It is terrible—it is absolutely terrible. If you actually want to talk about children and then you want to give visibility to the children—

ASSISTANT SPEAKER (Poto Williams): Order! Order! Do not bring the Speaker into the debate.

Hon Member: Shameful.

AGNES LOHENI: This is not shameful; this is actually the message that this bill gives.

Where is the incentive to move off the benefit and on to a pathway to work and to better outcomes for your families? Where is that incentive? The best pathway out of poverty is through work, through jobs. Let’s not forget—it’s been mentioned, and I’m going to mention it again—the former Minister for Social Development and Employment Steve Maharey, who supported sole parents being required to name the other parent. As he stated in this House, “It is a rort, and I’ve said time and time again in the Parliament that fathers must front up to the obligations, and we will make sure they do.”—as much as we can.

Hon Andrew Little: And if they don’t, you punish the kids—very clever. Very clever—punish the kids.

AGNES LOHENI: Well, no, this bill is actually about punishing the children. The National Party actually reduced the sanctions for sole parents who failed to meet the requirements of the Act but left it in place because it’s incumbent on absentee fathers to at least provide for their children. But this Labour coalition Government doesn’t care what it costs the taxpayers—hard-working low and middle income New Zealanders, who, right now, are finding it very challenging, since this Government came into force, with the increased cost of living, more taxes, rents on the rise, and job creation on the decline. Is there any consideration at all for these hard-working families?

So let’s have a look at the numbers in terms of does this work. The numbers who incur a section 70A penalty did actually fall. In 2004, there were 19,443, and, in 2016, that number had fallen to 13,616. That’s a decrease of 30 percent, so who was saying that it doesn’t work? It does actually work.

The other reason that has been cited for removing the sanction is that it was often family violence - related, but, actually, those exemptions were already in place. The exemptions include cases where there was insufficient evidence, where the child or sole parent could be at risk of violence, where the child was conceived as a result of incest or sexual violation, where the sole parent was actively trying to identify the other parent, or where there were other compelling circumstances. Right, there are exceptions to the rules for cases of violence, so that blows that argument out of the water. So here we have a classic case of the State putting a wedge between children and their fathers and of the State saying it knows best for families.

The repeal of this sanction weakens these children’s opportunity to know and have a relationship with both parents. I refer to the United Nations Convention on the Rights of the Child, which says that it is a child’s right to be registered immediately after birth, to have a name and nationality, and, as far as possible, to be known and to be cared for by their parents. That is a convention which New Zealand has signed up to. It also protects a child’s right to preserve their identity, including their nationality, name, and family relations, without unlawful interference.

We should be supporting and encouraging dads to take responsibility for their children, not putting up barriers. It comes down to values. If we truly value families, if we want to support families to be strong and resilient, and if we want our children to know both their parents, who are a big part of knowing their identity, then we would not be supporting this bill. There are real, long-term effects for fathers being left out. This affects children.

The long-term wellbeing of children is not keeping them in benefit-dependent households. Welfare is not the same as wellbeing. We absolutely need to ensure that all New Zealanders, no matter where they come from or where they live, have a warm, dry home, food in their lunch boxes, a secure home, and equal access to opportunities, but not at the expense of having the State putting barriers up to children knowing who their dads are.

We need to look more comprehensively at how we can improve people’s financial wellbeing and at reducing the number of children who are living in benefit-dependent households. On that note, I oppose this bill.

ASSISTANT SPEAKER (Poto Williams): I understand this is a split call. Kieran McAnulty, you have five minutes.

KIERAN McANULTY (Labour): If there was ever a reason why the New Zealand public needed to know why I could never ever support the National Party, they only need to listen to their speeches today. They are trying their hardest to paint themselves as a compassionate party, talking about stories of people pulling themselves up—and good on them for doing it—and then, in the same breath, complaining that any increases in benefits and linking it to the average wage is a waste of taxpayers’ money.

They crow that they were the Government that increased benefits, and yet they’ve got an opportunity to support a mechanism which will help people out of poverty and they are choosing not to because they’d rather grandstand and talk about hard-working New Zealanders, while neglecting the fact that at any point “There but for the grace of God go I”. So I say shame on the National Party.

It is an absolute privilege, and I stand here with pride, to lend my support to this bill, which will go and help 339,000 families in this country. This is long overdue, and I’m proud to be a part of it.

JO HAYES (National): Talofa lava, Madam Assistant Speaker. What a load of rubbish that member Kieran McAnulty just said then. Honestly, what would he know? What would he know? I can tell you that now.

Well, I’m pleased to stand up to actually vote against this bill—this bill that will actually support more people to stay on benefits—to support those that have had generations and generations of beneficiary families. It will say to them that “It’s OK. If you’re not ready to work right now, it’s OK, and you can stay where you are on the benefit.” This is not wellbeing—it is not wellbeing. Just as my colleague before me, Agnes Loheni, said, there is a big difference between welfare and wellbeing, and this is bill is not it. It is not a wellbeing bill, I can tell you that now.

I too have been a sole parent. There are a few of us in this House that have been sole parents and that have been on the domestic purposes benefit, and, yes, when it came to naming the father, I named the father, because the father of my child needed to take responsibility and needed to pay the State. That was his role, and he said that he would do that. I didn’t want him in our lives, but he said he would do that.

There is no reason why dads cannot pay something towards their children, unless there are those exemptions that my colleagues have already talked about. Why would somebody want to have a relationship with a woman that results in a child and then just walk away? Why would you want to do that? What about those young people that are in our jails today that are children of sole parents? These kids have ended up in the system because they have not had a father figure helping them, guiding them, through their lives.

Why on earth can’t the dad pay? If he wants to play, he’s got to pay. Every other parent—that is, couples in this country, married or not—that take that responsibility do that without a blink of an eyelid, and yet we have a small group that sit back and say, “No, you don’t have to pay. That’s OK, we understand.”—everyone except those that come in under those exemptions that my colleagues have already alluded to in this House.

When we start to look at the abatement rates, well, yes—as my colleagues before me have said—we do support abatement rates and the increase of abatement rates, but how by much? What about those hard-working Kiwis that are working out there? They’re paying their taxes, and then we see that those people that are on a benefit get a large abatement and get a little bit more than those who have been working all their lives on a lower income. What about them? Where’s the fairness there?

I know that we want to see more and more of those people on benefits going into work. We have to support them. Is this the way? I don’t think it’s the way. There are other ways to get people off benefits and into employment opportunities. Perhaps the money that is being spent in this particular area could have actually gone more on employment. There was a little bit there for employment, but it could have gone a lot more and much deeper. There are other ways, rather than allowing people to say, “It’s OK, you can stay on a benefit. You’re not really ready to work yet. That’s OK.”

No, all that does is just breed more and more beneficiaries, and we will see a lift in the rates of those young women—and it will be young women—that will end up being on that benefit, and for what reason? For what reason? Because the dad—the father of those kids—won’t cough up. He won’t cough up, and it is a shame. It is an indictment on our society that we let this happen. We are supposed to be a society that looks after everyone. We all look after each other. We actually help people to get into work. But, no, what this particular area in the bill is doing—repealing section 192 of the Social Security Act—is allowing women to not name those dads.

Well, for some women, yep, as my colleagues have said, there are reasons why, and I totally agree with that. Why put themselves at risk? But for the majority of them, they can name the dads. I could almost say, confidently, that there will be sole parents sitting out there that are actually cohabiting with the father of their children, and he will pay nothing. I can say that confidently because I know the areas where it happens. Some of those, I know them, and it’s wrong, and they should be naming that dad.

So, again, I stand here—I’m very, very upset that this Government thinks this is a great bill, because it is not, and that is why I’m not supporting this bill. That is why this side of the House is not supporting the bill. This Government needed to go away and do much more work, and they didn’t, and, if this is all they’ve come up with, well, shame on them—shame on them.

Hon CLARE CURRAN (Labour—Dunedin South): Thank you, Madam Assistant Speaker. I’m going to resist the urge to respond, because 18 months ago, this Government—the coalition Government, led by Jacinda Ardern—promised New Zealand a new kind of leadership, a leadership as responsible stewards of the economy but advocating for a new kind of values that have been missing in this country: compassion, dignity, fairness, and kindness. We faced huge issues—huge issues—and we know we’ve had to ask people to be patient, and that’s been difficult for them. But we needed a new kind of leadership that demonstrated deep change, and wellbeing—the Wellbeing Budget—is at the very heart of that deep change, and this bill is a real indication of that. I want to commend the Minister Carmel Sepuloni for a real demonstration of deep change in the culture of change that’s happening in Work and Income.

What is contained in this bill—the indexing to the average wage, the raising of abatement, and the no-naming part of the bill—is a real indication of deep change in our country, where we treat people with dignity no matter what their circumstances. We are not a punitive Government; we are a responsible Government, and I commend this bill to the House.

SIMON O’CONNOR (National—Tāmaki): I think that speech was rather symbolic—short and indicative of how much time they want fathers to spend with their children, which is, basically, very little.

Hon Members: Oh!

SIMON O’CONNOR: I just thought I’d start with that little hand grenade. I’m really pleased to take a call to actually oppose this bill.

I thought I’d start, though, around the word “stigma”—that’s becoming en vogue now. What I thought was ironic a bit earlier was a speaker—I’m not sure if it was Greens or Labour; it’s blending in a little bit—who was talking about stigmatising as being a bad thing and then turning it on to this side of the House and, effectively, trying to make us feel ashamed for having a different opinion. I think that explains progressivism, which is, basically, if you don’t agree with them, then they’re going to come after you. You know, shame is good for some but not for others.

Marama Davidson: Oh—pot, black!

SIMON O’CONNOR: I think I hear the shaming happening now, and it’s just hurting my feelings. All right.

Let’s start with a couple of things—the positive sides. A lot of the positive sides—well, actually, we can’t talk about the positive until we put this in the context of what has been the welfare reforms. A group was put together over 18 months ago to look into welfare reforms—and to acknowledge, on the positive side, the Minister for Social Development has come to the House with some changes through this bill. That welfare advisory group, or expert group, came up with 42 recommendations. This is manifest in only two of three which have been taken up. In other words, there are at least 39 other recommendations which are not part of this Budget 2019 welfare package. In fact, I think it’s rather generous to call three of 42, or two of 42, part of a package; it’s like going into a pick n’ mix store and walking out with only two lollies but, strangely enough, and symbolically, paying a lot of money for it.

So I do challenge the Minister—I’m sure we’ll come to it in later readings and in the committee of the whole House stage—to explain to us why this piece of legislation is not more comprehensive. The reason for that is, fundamentally, we were told this was urgent 18 months ago. In fact, during our time in Government we were told that reform was urgent, and yet, 18 months in, we only have, effectively, what are two aspects in this bill. So the first part that I think is, overall, good is the abatements. National’s been supportive of that in the past. I think there’s, in a sense, been a relative form of cooperative thought on that. I am a little concerned of where the balance point comes around abatements, where actually it’s supporting them—in this case, a beneficiary—to keep the money that they earn to rightfully help them support their families. I think we’re probably in the right space with this bill. I’ll be interested to tease that out at the committee stage.

But there is a tipping point in the complexity that is the ever-growing New Zealand welfare system, with its tax credits and Working for Families and abatements and how much work you can and can’t do. All of a sudden, you tip between encouraging people towards work, which I would argue is what leads people towards dignity—but, equally, if abatements are too generous, on top of generous benefits and tax credits and where Working for Families potentially kicks in, we may tip ourselves into a point where remaining on a benefit is seen as better than actually seeking work. To put it in very crude terms, why work 40 hours a week to earn, say, $50 more—and I’m making up the figures; it’s a crude analogy—where, in fact, staying on a benefit, with an overly generous abatement, means, actually, by not working those hours I can remain on a benefit? So it’s a debate point, but, as I say, I think we’ve landed this—oh, sorry, not “we”; that’s highly presumptuous. I think with the abatements, we’ve landed in a good area. We’ll tease it out in committee if this passes first reading, and second, of course. I think it’s around $150, which is, in effect, about eight hours a week. In fact, there’s possibly argument or discussion to be had as to whether that needs to be more generous.

Look, the other area which has certainly excited the passions of this House has been around the non-naming of a parent in order to receive the sole benefit—or, rather, to effect a sanction that’s been in place for the other sole parent. The example being—and it’s usually the mother, but not always exclusively, who has been asked to name the father so that he can take some financial responsibility for the child. I think that’s important to stress: we are only talking here about the financial responsibility; it would take many hours of discussion to draw out the wider obligations that, actually, a mum and dad have to their child, in fact, from the moment of conception right through to when they’re born and until they leave home at 18, and beyond.

What’s happening here today in this proposed legislation, in a sense—if I could be somewhat paradoxical—is not actually removing the obligations on fathers. It’s actually not removing the obligations on fathers; what it’s doing is increasing the obligations on all fathers, myself included, to pay up for the children of other people. All the other fathers in New Zealand, and mothers, now need to work just that little bit harder and contribute a little bit more money to, in a sense, make up for the gap of those fathers who aren’t prepared to take responsibility. I’m very fortunate—granted, only to be a stepfather—to be the stepfather of five amazing kids, and I try to work as hard as I can to be responsible to them and their mother. But I do take a bit of umbrage that I’m now, through this legislation, required just to work that little bit harder, a little bit further, to pay for someone else’s child, where, actually, that should be—

Tamati Coffey: You’re quite well paid.

SIMON O’CONNOR: Actually, someone says I’m quite well paid. I absolutely am well paid, and I’m pleased that member puts that up, because, you know, I think of some of the people in my electorate who work on minimum wage jolly hard. I’m thinking of a particular family who have nine kids already—my God, they work hard—who are now being required not only to look after their nine children and work that little bit harder to look after another child of another family simply because the mother and the father in that relationship are not prepared to acknowledge that relationship.

We had it a bit earlier, the discussion of the social contract. I think, again, it came from the Greens. The Greens, I would suggest, have absolutely no conception—all puns intended—of what the social contract means. The social contract is not about one person doing whatever they want and everyone else paying for it—that’s the Green Party thinking. The social contract is actually based on the primacy of the family. It is based on the primacy of the family as a building block, and that the State should never interfere in that, and that the State should only step in when it is absolutely needed and there has been a breakdown.

The thing about today is we are not talking about the breakdown in the relationship between a mum and a dad. The law currently covers that very, very adequately. What we are talking about here is when that relationship between a mother and a father and their obligations to the Crown are ignored. Fundamentally—and my colleague Louise Upston started this point in her speech—we are, effectively, here talking about a tax cut for fathers—particularly fathers—who will not take responsibility and a small tax increase for everybody else.

Fundamentally, a child has a right not only to know their mother and father but to be supported by them. It is what we as a society expect, that particularly a dad—and I do feel a bit bad that I’m just leaning on dads, but I do acknowledge the statistics; it’s primarily the fathers—does have an obligation. Maybe I could put it this way, because one of the other words of late which is very big is choice. Well, fundamentally, there is no obligation in any social contract theory for me or anyone else to fund another person’s choices. There is no obligation whatsoever—whatsoever.

I return to something else which I think my colleagues touched on earlier, and that is the UN Convention on the Rights of the Child. I’m pretty sure that those on the left are very big fans of the UN, but they are not so keen when they read through the UN Rights of the Child, which stresses the importance of whakapapa. I thought I could say “genealogy” but let’s use “whakapapa.” A child has that right, and I think it’s going to be really important as we move through these stages to understand how the left, how the Government, respects the rights of a child to have whakapapa, to have a knowledge of who they are. As Agnes Loheni pointed out, this bill not so subtly discourages that behaviour, arguably for some of our most vulnerable.

We don’t want to misuse children and shouldn’t—as I would suggest the other side is doing—politicise the children. What we want to do is make sure, first and foremost, that the child does have a mother and a father and that that father and mother support the child well beyond simply money. There’s a whole lot more to it than that, and, fundamentally, this is just one more undermining of that relationship. It’s one more undermining, actually, of the rights of every taxpayer to, first and foremost, look after their children and expect others to do the same. Fundamentally, too, it’s just another cost that’s being placed on hard-working Kiwis because we will not allow other people to take their rightful responsibilities.

GREG O’CONNOR (Labour—Ōhāriu): It may reflect the sadness of my life, but I’ve read every Budget document for the last 21 years, and, with most of those Budget documents, you go to the profit and loss and you look at where the money’s being spent, where it’s going to go—where, shall we say, the paper clips are going to be bought. This year, I got it. As I sat in the lock-up and read the document, I saw that, actually, it went beyond that. It actually told us why we’re spending the money. It told us what we’re trying to achieve, and I actually got what a wellbeing Budget was about. It’s actually more than measuring the paper clips. It is about working out what we want to achieve.

I’ve sat here this morning and listened to speeches from across the House, as I have in the past. People have talked about solo motherhood. People have talked about growing up in State houses. Actually, do you know what I heard? I heard, “Pull up the ladder. We did all right. Now, to hell with everyone else.” I go back to the document—this is what I’m seeing: we now know what we want to achieve. We are not going to pull up the ladder. We’re going to make sure the ladder remains in place so that those who haven’t had the advantages—some of them have talked about that this morning—won’t suffer from the stigma of being solo mothers and won’t suffer from the stigma of living in State houses and will have the same opportunities that some have spoken about here. I commend this bill.

A party vote was called for on the question, That the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill be now read a first time.

Ayes 63

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

Noes 57

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

Bill read a first time.

Second Reading

Hon CARMEL SEPULONI (Minister for Social Development): I move, That the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill be now read a second time.

This bill gives effect to the Budget 2019 income support changes, which will make a real difference to the lives of New Zealanders. The Budget 2019 income support changes will improve the lives of 339,000 individuals and families. The income support changes build on the 2018 Families Package, which took an important step towards addressing income adequacy. Together, these changes will lift up to 74,000 children out of poverty in the next two years.

This bill repeals section 192 of the Social Security Act 2018. This will remove a sanction that reduces the benefits of sole parents if they do not name the other parent of their child and apply for child support. Repealing section 192 will make a real difference to around 12,000 sole parent beneficiaries, who will see an average gain of $34 a week. More than this, it is another step towards a system that is not based on punitive measures and stigmatisation of some of the most vulnerable members of New Zealand society.

Surely common sense has to prevail. If we continue to put the boot into people who are already struggling and down, then how can we expect them to be able to get back up? The evidence that I have received with regards to this sanction is the same evidence that was given to the former Minister for Social Development Minister Tolley back in 2016. That evidence said very clearly that there was no proof that the sanction was actually encouraging the other parent to pay child support. In fact, there was no evidence that it was achieving the intention that had been set out when it was first implemented.

With regards to that evidence—which I received and the former Government received as well—it also stated very carefully that it had the adverse effect of throwing women and their children, who were already living in hardship, into further poverty. So can I just say that when National, on that side of the House, says that that sanction did work, they are being disingenuous, because they received the same advice that I received.

When we get told from that side of the House that our objective with the welfare system of catching up with the times has no merit, I need to remind that side of the House that it is 2019. I need to remind that side of the House that, actually, on this side of the House we do know the evidence behind what happens when people are experiencing hardship and how incredibly difficult it is for them to be able to take up opportunities like employment when they’re struggling to put food on the table or they don’t have a roof over their head.

We want the welfare system to work for those who come into it, and that is in the best interests of all New Zealand, actually. Can I just state that the objective on this side of the House is not to see people in welfare if they don’t need it; it is to support people into employment where they are able. But we don’t think that we need to do that by treating people badly.

Hon Gerry Brownlee: Put a full stop after “don’t think”.

ASSISTANT SPEAKER (Poto Williams): Order! That’s not very nice.

Hon CARMEL SEPULONI: The Budget 2019 income support changes do put more money in the pockets of some of the most vulnerable members of our society, and it also improves some fundamental benefit settings. The Budget 2019 income support changes will mean that increases in main benefits are indexed to average weekly wages rather than the Consumers Price Index. The value of main benefits will keep up with wages and salaries over time. New Zealanders who need to access the welfare system will no longer see the value of their income eroded when compared to the average wage.

Let’s keep in mind that we know, on this side of the House—but the other side seem to not know—that, actually, most people who access the support of the welfare system will come in and then go out. It is not about supporting people to maintain a lifestyle, unless, of course, they have no other choice but to rely on the welfare system.

With that in mind, it is important to state—and this follows on from something that Marama Davidson said earlier—that something like 53 percent of those who are in our welfare system actually have a health condition or disability, and we want to support them where they are able to get into employment. But we understand the challenges that they face, as well, and that perhaps they might need a little bit more assistance from the State than some others—[Interruption]—particularly those others that are sitting on that side of the House.

ASSISTANT SPEAKER (Poto Williams): Order! Order! This is starting to become heckling again. Can we just settle down a little bit, members.

Hon Gerry Brownlee: Absolutely. We’re being—it’s provocative.

ASSISTANT SPEAKER (Poto Williams): I will take that as compliance. Thank you, Mr Brownlee.

Hon CARMEL SEPULONI: The Budget 2019 income support changes also mean that beneficiaries can work the same number of hours before their benefits reduce as the minimum wage rises. These changes mean that New Zealanders who are on benefits won’t see themselves left further behind as other New Zealanders prosper.

What we’ve seen in the House today is very typical of what we’ve seen over decades in New Zealand, but I’m very proud of the fact that, actually, currently, the public discourse does not align with that side of the House. We are not seeing the discriminatory comments about beneficiaries coming from the public that continue to get thrown at us by that side of the House. It seems that New Zealand has moved ahead, but they are still left behind.

This Government is committed to a welfare system that ensures people have an adequate income and standard of living, are treated with respect and can live in dignity, and can participate meaningfully in and contribute to their communities. The Budget 2019 income support changes build on the 2018 Families Package towards that vision. To realise this vision, though, we need much more. For that reason, the Government is developing the three- to five-year plan to overhaul the welfare system that we will be talking about more as a Government before the end of this year.

I am privileged to be part of changes to the welfare system that will make a meaningful difference to the lives of New Zealanders; that will lift New Zealand children out of poverty and allow New Zealand families to live in dignity. That is why I commend this bill to the House.

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Assistant Speaker. There have been a lot of mistruths spoken in this House, so it’s, I think, important to put a few things on record. National absolutely believes in supporting people in times of need and working with them to improve their lives. We do believe that those who can work should work. We do believe that people should keep more of what they earn and we do believe that supporting people is to give them a hand up so that they can lead independent lives where they have more choices and more opportunities for them and their children.

What we don’t believe is that this is a welfare system that is broken. We don’t believe this is a welfare system that needs an overhaul. Actually, I don’t think the other side believe that it’s an overhaul that is urgent, because, otherwise, why are they planning a five-year plan to overhaul if it’s urgent? If it’s urgent, why is it that in four years’ time, in 2023, the indexing will result in a mere $11 a week, while earlier this morning the same Government that was willing to increase tax on petrol, has passed legislation that’s affected rents by $50 a week, and we see that the cost of living continues to increase? So we don’t believe it’s urgent and we don’t believe that taxpayers should pay when others avoid their own responsibilities, and that is constrained when we refer to the removal of obligations, consequences, and sanctions when a father isn’t named and, therefore, is not responsible for his own children.

But I wanted to put some more facts and figures on the table, because I think when hard-working New Zealanders are either watching this debate live or listening on the radio or who might tune in to some of what’s being discussed here under urgency for Budget 2019, there’s an element of wellbeing that they won’t be aware of yet that is very pertinent to the debate on this legislation—which, for those who have just tuned in, is the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill. There are two areas of statistics that I think are worth introducing to this debate. The first I’m going to start with is around job seekers, and this is because of two of the elements of the package: one is indexing and one is abatement rates. What we’ve seen in March 2014, the number of job seekers, and I’m referring to the March 2019 quarter in the benefit fact sheets—rounding it up, there are 122,000 New Zealanders on the jobseeker benefit; in March 2019, 132,000 New Zealanders. So, as a percentage of the working-age population, it is increasing year to year that this Government has been in office.

Not just that—not just has the number of job seekers increased; what the Budget document Vote Social Development states is that the Government is anticipating an additional 15,600 people to come on to the jobseeker benefit—

Hon Member: How many?

Hon LOUISE UPSTON: 15,600. So I’m kind of puzzled in this welfare assistance package, because I think the Government see it’s a measure of success if there are more people on benefit. If there are more people on benefit, that’s seen to be “Oh, that’s kind.” Well, can I say, it is not kind. It is not kind. At the same time, this Government is cutting funding for compulsory programmes about getting people into work. It is kind to have 15,600 more people on jobseeker benefit, and do you know what that costs? The cost is borne by taxpayers, and I’m talking about the additional amount; I’m not talking about those that are on benefit today, just for job seekers: $122 million—$122 million. I wonder how many new cancer drugs Pharmac could fund with $122 million. When we’re talking about stats, how many new jobs were promised to be created in Budget 2019? How many new jobs? I looked in the documents—

ASSISTANT SPEAKER (Poto Williams): Order! We are straying a little bit from the bill.

Hon LOUISE UPSTON: Ah, this is about benefits. This is about welfare assistance. I referred to statistics in Budget documents: 15,600 new people on jobseeker benefits.

We’ve also had quite a lot of discussion about sole parents. The majority of them absolutely fulfil their responsibilities, and we’ve heard some personal examples on this side of the House. I must say, I was quite appalled at the Government members scorning members on this side who chose to talk about their personal examples. So when you talk about stigma, look in the mirror. Look in the mirror at how rude and obnoxious that side of the House is—the Government members that are supposedly so kind, all of a sudden. When members on this side talked from personal experience about their times on the DPB—

Hon Andrew Little: Pull up the ladder—pull it up behind you. They don’t care about people in hardship.

Hon LOUISE UPSTON: So the Minister in the front seat of the Government is saying that this side of the House don’t care. Well, if we didn’t care, why did we increase benefits by $25 a week in 2015, when that Government has the opportunity right now, and you wait for four years? If you’re on a benefit, four years’ wait for $11; in 2015, $25 a week, because this side knows money talks, and that helps.

I want to go back to the area of sole parents, because, again, sole parent statistics have been declining significantly for many years, from 75,000 to 76,000 in March 2014 to 58,000 to 59,000 in March 2018. Guess what? It’s no longer declining; it’s now static. So, again, this Government, whose responsibility and whose vision is about wellbeing, is overseeing numbers on benefit increase. How is that kind? How is that kind when, actually, opportunities come from work and independence?

Hon Gerry Brownlee: That’s cutting the ladder off from the bottom.

Hon LOUISE UPSTON: That’s right. They want them to go on benefit and stay there, which is an absolute disgrace. Not only is the number not declining, what Vote Social Development in this year’s Budget also says is that there’s a prediction of an extra 1,600 people on sole—

ASSISTANT SPEAKER (Poto Williams): I apologise to the honourable member. The time has come for me to leave the Chair for the lunch break.

Sitting suspended from 1 p.m. to 2 p.m.

SPEAKER: Before the lunch break, the House was considering the second reading of the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill. The Hon Louise Upston was speaking, and she has two minutes and 23 seconds left.

Hon LOUISE UPSTON: Thank you, Mr Speaker. I’m pleased to continue my contribution on the second reading of this Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill. What I was highlighting before the lunch break, for those who have just tuned in, was what we’ve seen in terms of increasing numbers on jobseeker benefits—a significant increase—plus a prediction of 15,600 more on jobseeker benefit, which is $122 million, and a 1,600 increase on the sole parent support benefit, which is a cost of $195 million.

On this side of the House we do believe that it’s important for people to be able to keep more of what they earn, so we do support the abatement rates and we do think that’s an important element for people being able to work with the Government to assist themselves in stepping off benefits. But we don’t support a blatant increase in benefit numbers, including jobseeker benefit numbers, when supposedly we have an economy that’s in good shape and growing.

We do support indexing—the National Government introduced it. What we don’t support is fake kindness and this ridiculous suggestion that benefits will increase tomorrow, when in fact it will be $11 a week in four years’ time. We do support the financial incentives—I use those words “financial incentives”, and I’m quoting the Hon Steve Maharey in using those. We do support obligations, we do support reciprocal obligations and the social contract, and we do support sanctions when obligations aren’t fulfilled. What we don’t support is deadbeat dads getting off their financial responsibility and, instead, that responsibility landing at the feet of hard-working taxpayers.

Admittedly, this is a small number. We’re not saying it’s a large number. But we believe that dads should support their children and for someone who is claiming a benefit to name the father, when there are clear exemptions for all reasons that we accept. We don’t accept that deadbeat dads should get off paying their fair share.

Hon PEENI HENARE (Associate Minister for Social Development): Tēnā koe, Mr Speaker. Thank you very much for this opportunity. Outside of the Wellington bubble, there are thousands and thousands of families out there who are applauding this Government for this particular bill. I want to commend it to the House.

Hon ALFRED NGARO (National): I’m taken by surprise—that was a short speech from the honourable member, Peeni Henare, who actually is a very good orator. I’m very surprised. I was actually looking forward to his waxing lyrical about all the things that are good and great about this bill, and then he caught me by surprise.

I stand to take a call in the second reading of this bill. In particular, I want to just address a couple of points that were made in the first reading. The first point is one that was made by Marama Davidson. She was talking about ensuring that this welfare system, which is broken, is fixed, and so forth. I just want to remind the member that, actually, last year she voted in support of the Social Security Act, when there was the rewrite of the Act. If she was to look into the Act it says this in section 3(e): “to impose, on the following specified people or young people, the following specified requirements or obligations:” and it begins to list these obligations. The member talked a lot about how we don’t need sanctions and we don’t need obligations and that it is hard-headed, but it was that very member and her party that voted for those. Why? It’s because obligations are necessary—in the right place, at the right time, for the right cause, they are necessary. So I just wanted to remind the member of that as well.

We are talking about this bill in particular, the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill. There was reference by the Minister in regards to Whakamana Tāngata, which was the report by the Welfare Expert Advisory Group—here’s the full report here. I’ve read through the report. There are 42 recommendations. There are a number there that we would support. I commend the committee that put this together.

What is a concern is that it actually talked about the importance of indexing and about the abatement rates, but only two of the 42 recommendations are being put forward here. So when this current Government is talking about actually taking a hold and taking the recommendations seriously—which, by the way, it cost us around about $5.4 million to put this together; a good report—you would have thought, “If that was the case, why wasn’t there more put to it?”

When we think about this issue here, the most critical issue is around the removal of sanctions in sections 192 to 194 in the Social Security Act. I know the member across the House, Darroch Ball, was talking about whether this actually worked—is this right? Is the imposition that this has, especially on children and on families, the right thing to do? So I take it that the member may not have read the full part of the whole Act.

I’d like to refer him to section 70A of the Social Security Act 1964, so that he can actually see that there is a discretionary clause so that where there is just cause, this sanction or this obligation is not imposed. By the way, this sanction, or obligation, is written in the Act, and, by the way, again, New Zealand First and the members across there voted for this rewrite. It says in here section 70A(3) that the sanction “shall not apply if the chief executive is satisfied that—(a) there is insufficient evidence available to establish who is in law the other parent; or (b) the beneficiary is taking active steps to identify who is in law the other parent; or (ba) the beneficiary or any of the beneficiary’s children would be at risk of violence if the beneficiary carried out or took steps to carry out any of the actions referred to in subparagraphs (i) to (iii) of subsection (1)(c); or (bb) there is a compelling circumstance, other than a circumstance mentioned elsewhere in this subsection, for the beneficiary’s failure or refusal to carry out any of the actions set out in subparagraphs (i) to (iii)”. I’d like to say that these, again, were voted for. They are discretions that are available to the chief executive, and, actually, these clauses give just cause why there shouldn’t be a sanction applied. So I’d like to remind the member that these are the reasons why that’s critically important.

What we are talking about here is not unjust. What we’re talking about is not unfair. What we’re talking about is, actually, in this case, the importance of having a sanction where there is need to put obligation and responsibility on to the father, and in a moment, I will refer to some of the demographics of who is actually receiving sole parent support. It may surprise some of the members across the House. In fact, I’ll refer to them now.

I’ve actually looked up the stats and so forth and had a look at who’s receiving sole parent support, and we’ve tracked this back as far as March 2014, where there were 78,844 receiving that amount. But if we look at the numbers, and if we go by gender, there are actually 5,048 males that are receiving the sole parent benefit. There are 53,776 females. If we look at the ethnic groups, there are approximately 1,745 New Zealand European, there are 27,966 of Māori descent, Pacific peoples make up 6,339, and for all other ethnicities the figure is 6,015. So that makes, by the time we get down to the figure of 19 March of this year, around about 58,824. So that’s the demographic profile. It’s predominantly female, but there are some males. It is predominately Māori in terms of ethnic demographic, and those are predominantly between the ages of 25 and 39 as well, and the majority have been on a continuous duration of more than one year as well.

But what was surprising to me as I was looking through the statistics was looking at how, over that period of time, the trends have changed. In fact, in March 2014, it was 78,844. Currently, in March 2019, it’s 58,000. So we can see that, on average, over that period of time from 2014, there’s been a reduction of 3,400. But what interested me are the statistics between March 2018 to March 2019—this year. So it’s 58,830 as of March 2018, and as of March 2019 it’s 58,824. In one year of a coalition Labour - New Zealand First Government, there’s only been a decrease of six.

Maureen Pugh: How many?

Hon ALFRED NGARO: Of six. So in the period of time of a National-led Government, with the work that it was undertaking, there was, on average, 3,402 that we were reducing on the sole parent support. In just one year of the Labour - New Zealand First Government the only reduction, decrease, has been six. So that has to show something: that the amount of work that was put through under a National-led Government was quite significant.

In the time that I have, I want to point out a couple of things that are particularly important about this bill, and that is the issue around sanctions. We’ve talked in the first reading about thresholds, the abatement rates, and the indexing, which we on this side of the House have some support for, but in the sanctioning there was quite an opposition from the other side. Here are the reasons why we have the sanctions: obligations are critically important; they are in the Act, which was voted for and supported by the other side.

There’s been a report released that talked about the obligations, and it states this: “Obligations are a reality in the workplace, in schools and in our relationships. Why wouldn’t they be part of the benefit system? Far from being unfair to beneficiaries they ensure integrity and a level playing field for all who have dealings with Work and Income. Beneficiary advocates should support, rather than oppose, obligations because they build public confidence in the benefit system, [they] lift empathy and regard for those who rely on it”. It’s very clear that the sanctions that are appropriate and imposed in the right way are actually important to this welfare system as well.

So in my last moments here, I note that the real concern for us on this side is this: the speeches from the other side have been talking about how wonderful this system is, how groundbreaking this system is, and how they are truly making a difference, but why is it under urgency that we are here today for all stages of this bill when the implications of it, and the application of the indexing, will not happen till 2023? That is four years—four years—and yet we have those from the Child Poverty Action Group and the Children’s Commissioner saying that the indexing should happen now. Why? Because the benefits would happen now. When it does happen, what will they receive? A measly $11. So on the other side they are telling us, “This is a good thing, this is a great thing.”, but guess what? You’re going to have to wait till 2023, and when it does come it’s going to be great because it’s going to be $11! Yet, we on this side, in 2015, increased the benefit level immediately by $25. That’s right—that’s the difference.

So I’d like to hear from the other side the speeches that will justify why we are in urgency, why it’s in four years, and why it’s only $11. That will truly make a difference! Why is it that when you talk about the sanctions, there is already a discretion here in the Act that allows for that to happen, so there is no just cause why a father cannot be named?

DARROCH BALL (NZ First): Thank you, Mr Speaker. I think that Alfred Ngaro has made it quite clear that he’s very confused about what he’s talking about in regards to the removal of the sanction under section 192 of the Social Security Act 2018. I think, most importantly, if people go and have a look back at a few of the speeches in the first reading debate—and, I assume, the future speeches from the National Party in the further readings of this bill—they will see that, actually, National’s arguments against the removal of that sanction are quite inconsistent within themselves. I’ll point out why I say that.

I’ll start with something that Alfred Ngaro said, and I’ll end with it as well. He said that sanctions are good in so far as the right time, the right place, and the right cause. But there is a lack of logic in the National Party’s argument. So we’ve got some members who stand up and say, and Alfred Ngaro—their main message is that they want to hold deadbeat dads to account. They want to hold deadbeat dads to account.

Now, what they’re saying is that there are irresponsible fathers out there who aren’t paying for their children—the responsibility for their children—and, therefore, it comes back on the taxpayer. That’s what their argument is—they want to hold those fathers to account. But then you’ve got the likes of Maureen Pugh who stand up and say that these mothers take money under the table from the fathers and are committing fraud. That’s what she said: they’re committing fraud. So which one is it? Do you have fathers that aren’t paying anything, that aren’t taking responsibility for their children, or are the fathers paying under the table and the mothers are committing fraud? Which one is it? Which one is it? There is inconsistency in their arguments. You see, like I said in my first speech, they’re taking a very one-dimensional view on what the problem is and what the statistics show, and they’re basing all of their ideological arguments on that. What falls out of that are the inconsistencies in their arguments.

I also asked a question in the first reading and no one has yet answered it—no one has yet answered it. I’m going to ask it again, and I’m going to ask them to answer this question in the few speeches they’ve got left in this second reading. If the sanction that currently exists is, from what they’re saying, to hold the deadbeat father to account, then why does that sanction punish the mother—

Hon Member: And the children.

DARROCH BALL: —and, in turn, the children? How can one hold the father to account with a sanction when there is no result or consequence for the father? The consequence is directed solely at the mother and, therefore, the children. This is where I’m going to go back to what Alfred Ngaro said right at the start: sanctions are good at the right time, the right place, the right cause, and this is not one of them.

MAUREEN PUGH (National): Thank you, Mr Speaker. I stand this afternoon to speak to the second reading of the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill. As we’ve heard this morning, there have been some very passionate contributions to this bill, and to one part of it in particular. But I’ll take us back to the beginning and explain that this is an omnibus bill, so it is including other aspects to it, and it is going to be making changes to the Social Security Act 2018 and the Veterans’ Support Act 2014. We’ve heard that it does repeal sections 192 to 194 in the Social Security Act 2018 and will be removing sanctions that, I suppose, we will hear a lot more about as this debate progresses. But it will also be allowing for the manual adjustments of the rates of a main benefit. It will be adjusting them in line with the average wage in New Zealand, as opposed to the current situation where they are linked to the Consumers Price Index (CPI).

The changes to the Veterans’ Support Act are also to bring it in line with other benefits for the purpose of making abatement rates, or abatement thresholds, for those pensions. National’s not opposing those proposed changes to the abatement rates for veterans, and we actually honour the part that they have played in New Zealand and the role that they have undertaken on our behalf as a country. If they so wish and want to earn extra money while they are on their veterans’ pension, then we support their right to keep more of their own money. Although a few I know in my own backyard are probably busier now that they’ve retired and most of that time is taken up in voluntary roles, for those that do find themselves employed, we certainly support them in keeping that.

However, we do have some concerns with the changes to the Social Security Act 2018 and I’ll explain those as I work my way through. I thought it might also be helpful to explain to those people who may be watching—and I know it’s a particularly unusually wet day on the West Coast; so there may be some people tuned into Parliament TV—what those abatement rates and the indexing actually does mean. The abatement rates refer to the amount of money that someone on a benefit can earn while they are employed before it affects their main benefit. So, for instance, earning between $100 and $200 will make a 30c reduction in the dollar to their main benefit. If they earn over $200, that increases to 70c in the dollar. The indexing is about tying benefits to the percentage increase in the net average wage rather than the CPI, as it currently is.

The other aspect to this omnibus bill is what I would consider a retrograde step, where the sanctions are to be removed in situations where, in most cases, mothers refuse to name the father of their baby, meaning that that father is now no longer liable for contributions towards their own child’s financial support. I call that “Spray and Walk Away”. This is, unfortunately, also a reversal of Labour’s own policy.

SPEAKER: I think the member should watch her taste, really.

MAUREEN PUGH: It was brought in by the Clark Government, so it’s a bit ironic that we find ourselves actually supporting the Labour Party’s own original policy.

What I have heard this week was a very heartfelt contribution from our newest MP, Paulo Garcia. I thought he summed it up extremely well in his maiden speech on Wednesday, and I’d like to quote the part that really resonated with me and, I believe, relates to this debate we’re having today: “We live in a day when we have put our own interests ahead of our children, and this modern society will continue to do so to its own detriment. Men are particularly to blame. Women are often left abandoned, uncertain, and pressured to get rid of unexpected children or to raise them on their own. I salute in absolute praise all single mothers. I can honestly say that if either my wife or I had had to raise our daughters alone, we would have struggled severely as well. Despite the due importance we all attach to this task in our hands—that of governing this country—parenting is the most important job we really have. As mothers and fathers and, collectively, as a Parliament and as a nation, we need to support our parents, we need to support our families, and we need to support our children, but I highlight that the men of this country need to do more. We as men need to stand strong in our relationships. We must be reliable providers and protectors. We must show tamariki the way to respect and honour women.” I think that is really relevant to today’s contribution to this bill.

After 18 months of work by the Welfare Expert Advisory Group which cost this country around $112 million, this is one of the recommendations that is coming out of this. So my question is around the need to actually change policy, and I’d like to know what evidence the Government is using that shows that the sanctions were not working, that shows that their own policy was not working. I know that the former Minister for Social Development Anne Tolley has told us that, actually, to impose a sanction was particularly hard. It was not an easy task, and so if there was good reason that there should not be a sanction and that there should not be the naming of the other parent, particularly around safety for the other parent and child, those sanctions were not imposed. There was careful consideration of the situation that everyone was in, and so I simply have to ask: what is the hurry in having this particular part of the bill that we’re discussing today in this House? It could have been sent to a select committee so that we could have explored the evidence and we could have heard from the experts about what parts of this regime of sanctions were not working, and then we could have looked at the solution to that problem.

I know that the Hon Anne Tolley did a huge amount of work in this space around benefit dependency and encouraging people back into the workforce. I also know that one of the great indicators of a successful society is the number of people that are currently and actively employed not only in work but also in society. What we are seeing is a reversal of the trend, and we know that all of the indicators were heading in the right direction. In fact, it was even stated by the Children’s Commissioner and in the Salvation Army’s State of the Nation report that the indicators were heading all in the right direction—in fact, even the indicator around child poverty. It was stated that it appeared that the trend of increasing child poverty had ceased and that the trend was heading in a positive direction. So, again, the indicators were saying that the policies in place were actually working.

We do know that children that grow up in welfare-dependent homes do not just suffer because of a lack of financial support, but it is the other social impacts that also make a difference to their life. It was very well articulated by Bill English when he said, “We already have a whole lot of measurements of child poverty but it looks like they’re just going to focus just on incomes and of course that’s only half the story with any kind of poverty, including child poverty, because the other side of the story is social dysfunction”. We don’t fix social dysfunction by keeping people dependent on the State, and that’s where we’re heading with this Government because alongside removing these sanctions, they have also removed compulsory training and upskilling that will actively get people back into the workforce. Thank you.

MARAMA DAVIDSON (Co-Leader—Green): I covered my main positions and visions in my first reading speech. I’ll take a short call on this, the second reading debate of the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill. I wanted to pick up in a little bit more detail—already, since my first reading speech, I’ve had some feedback from members of the public wanting to make sure that when we uphold that the majority of people want to be supported into paid employment, we are making sure that we value the contributions of people who, for different reasons, are unable to be in paid employment, and that simply wanting to be in paid employment should not be upheld as the most virtuous quality. We should understand that we also value the contribution of all types of voluntary work. Simply just being able to—say, for example, if you have a disability or a mental disability—live without a struggle is in itself a contribution to our communities. I did mention that, but I thought I would dig down, given some of the feedback from members of the public.

Other than that, I did want to pick up that this would normally be a second reading speech for a bill that had gone through a select committee. I want to use, again, the expert panel report, mentioning that the Greens are very clear that we also need to ensure not just indexing increases in benefits to increases in average wages but that the income levels for the core base levels have been so exceedingly low and difficult and inhumane. Those need to be increased—this is what we heard from the Welfare Expert Advisory Group. They outlined, for example, that an adequate income for a sole parent with one child would be $802. The shortfall is currently at $112. What on earth would you do if you had to look for an extra $112 every week? This is how poverty becomes incredibly expensive over the long term, making it very clear here, in the second reading debate, that we’d like to signal our support for that part of the expert advice. Thank you, Mr Speaker.

AGNES LOHENI (National): Thank you, Mr Speaker. I’d like to start my contribution to the second reading of the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill. First of all, I’d just like to acknowledge my colleagues on this side of the House who’ve already spoken around the parts of the bill that we are in support of. But in my contribution, I want to focus particularly on the repeal of sections 192 to 194 of the Social Security Act 2018. I’ve stated that I feel that the removal of the benefit deductions for sole parents who do not identify the other parent of the child is a change that I do not support. I’ve been listening to the very short contributions from the other side of the House, who can offer, what I feel, are very shallow arguments as to why this part should be repealed. To me, this is really about an ideological lens which is, essentially, against families. Why is this Government so anti-families, because this is what I see as the premise of this bill, and particularly this part. Words like “stigma” and “punitive” have been bandied around on constant rotation, and, actually, that’s not an argument to withhold the fathers from their children, to withhold the names, just for that child to know the name of their father. That is not an argument.

If I look back at the intent of this bill, which includes “to support a sustained reduction in child poverty.”—well, this bill won’t do that. It’s a shallow attempt to address child poverty. The best thing that we can do for these children is to support their parents into paid employment. The sad fact is that parents in our society are not supported in the fulfilment of their parental responsibilities. My concern is that this bill, specifically the removal of sanctions around naming fathers, devalues the importance of parents—of mothers, fathers—in their children’s lives, and parental involvement is critical to children’s wellbeing as well. In most cases we know that children benefit socially, economically, and emotionally from having access to both parents. So why is this Government putting up barriers to that access? Knowing both your parents is key to them knowing their identity.

So dads do matter. Studies have shown that children of involved fathers are less likely to drop out of school, engage in risky sexual behaviours, and break the law, and they are more likely to do well in school and pursue healthy relationships. This is a terrible bill, when I think of the children and how it will potentially affect them long term. There is a level of deceit here. This bill seeks to deceive the children, who will not know who their fathers are. Dads can get out of being responsible for their children.

If the Government really wanted to lift children out of poverty, then how about tackling the rising costs of living? These families are currently facing rising costs in petrol, rent, and food. Where is the aspiration? Where is the ambition for these families?

The Minister for Social Development wants to repeal the sanction because it’s punitive to the sole parent mother. Well, how about the fact that this bill actually punishes children with regards to putting up those barriers—those barriers that we might not think will affect them today but will affect them long term as adults? Is this the message that we want to give to our younger generations—that dads aren’t important, that we don’t value them, that we don’t think their role is important, and that we don’t think they should be responsible for their children?

On this side of the House, we value strong families and personal responsibility, parental responsibility. This bill goes against those values. As I said before in my first reading speech, welfare is not wellbeing, and I’ll tell you why: when I grew up in a three-bedroom State house with 15—

Kiritapu Allan: Pull up that ladder.

AGNES LOHENI: Oh, no, it’s not about pulling up a ladder. When I grew up in a State house with my family, who migrated to this country from Samoa, they didn’t come here all this way to be on welfare. No, they didn’t, because they knew that jobs were the pathway to opportunities. They did not travel across the ocean to stay on benefits. I don’t recall any of them being on benefits. Most of them, my uncles and aunties—they hadn’t even finished their secondary schooling, but they came here and they took those factory jobs and they pulled together because they knew that that was the pathway for opportunities for them. They wanted work because it gave them skills, and they pulled together to make ends meet. All of us children were well-fed, but, more importantly, we were nourished by the strength of family. That’s actually where wellbeing comes from. It’s not a handout; it’s supporting families. It’s supporting families, supporting mums, supporting dads to support their children, to take responsibility for their children, and you know it—you actually know it.

SPEAKER: Order!

AGNES LOHENI: Wellbeing for children comes from supporting families in this country. It comes from taking responsibility. We’ve got to stop giving excuses for dads to abdicate their responsibilities to their children. As we said, it’s not a big group of dads, but it’s the underlying message that this bill gives. It’s the underlying message around values—values of family, strength of family, and resilience.

The sanctions are appropriate and they are just, because, ultimately, this is also about other people in this country, other hard-working people with their families, who are also having to pay out for these families. Is there any consideration at all, when this Government comes up with these bills, to think of the taxpayers who are paying for this as well? Clearly not—clearly not in this one. This is sending a wrong message, and I absolutely oppose the removal of that sanction. Finding meaningful work is absolutely the main ambition for New Zealanders in this country, and that’s what we should want for them as well, because, ultimately, that is what will be better for these children.

When I think about the figure that’s been tagged here, it’s also misrepresentative to say the headline figure of—what is it?—a $46 a week increase by 2023, and then to say afterwards, in small print, that it’s $11 a week by 2023. When you look at the extra increase that we’ve got at the moment in the rising living costs, that goes well beyond the extra $11 a week. It’s not really a gain. It’s not really a gain for a sanction that is so destructive to families, putting that barrier up to families. Actually, we should be supporting families, and removing that ability for these children to just know their father’s name—

Darroch Ball: For goodness’ sake! Do you know how out of touch that is?

AGNES LOHENI: No, that’s not out of touch, actually. It’s not out of touch. It’s actually really important. It’s disgraceful that you want to remove it. That is actually what’s really disgraceful.

If it’s so important, why didn’t the Government take up the recommendations that were estimated on the fiscal cost of improving the adequacy and design of income support? What about the report? How many of those recommendations did this Government make? It is interesting that they’re preparing for an increase in sole parent support when it’s actually been declining over the last few years.

This is a step in the wrong direction, and it’s a step back for these children. I oppose this bill.

ANAHILA KANONGATA’A-SUISUIKI (Labour): Talofa e Te Mana Whakawā. What we’ve heard from the other side about section 192, about removing sanctions, is worthy of a window being opened in this House—full of hot air. Research tells us that there is no proof that those sanctions actually encourage liable parents to pay the liable parent contribution. We have heard the Hon Louise Upston calling people deadbeat dads. Actually, they are called DNA fathers. I commend this bill to the House.

JO HAYES (National): Thank you. I’m pleased to take a call on the second reading of the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill. I’m really disappointed that we haven’t had a full select committee process so we could hear what the public would say about this bill. However, it is what it is. To me, it’s going to be a bit of a mistake, at the end of the day, when this Government, in a couple of years’ time, in 2023, looks back, and see they’ll have a whole lot of beneficiaries sitting there going “What on earth is $11 per week going to do in my benefit when we knew that back in 2019, rents went up, food went up, and, of course, the fuel prices were going through the roof?” They cannot afford to actually even live here now, and what is the indexation of this bill going to actually do for them? Nothing.

This is a bill that’s actually not going to make a difference. This Government is looking at adding another 1,600 sole parents on to the benefit. That is actually a travesty, if that’s what a Government is going to sit there and plan for—an additional 1,600 people as sole parents—when, at the end of the day, as a Parliament, we should be encouraging people to get a job and to go and do the training. But vocational training is now going to be out of the reach of many people, as we know, with the proposed changes that the Minister of Education is looking at on tertiary education. That’s going to make it even harder for those people who are on a sole benefit.

When we start to look at the indexing of benefits, this side of the House was always in favour of an indexation to the Consumers Price Index (CPI), because that’s the way that everyone else’s salaries and increases actually work—with CPI. But now what this Government is looking at is something a little bit more than that. To be honest, I don’t know—even when they go out and they say “It’s another $43 per week.”, when we start to look at it, it’s actually much less than that. The media have actually said that this is a very poor piece of legislation. They said—here’s what they actually said. As One News said on the night of the Budget, “This Government is falling well short of the recommendations from its own Welfare Expert Advisory Group.”—well short of it. This is all around the country—well short of it. What they went on to say is: why didn’t the Government take all of those recommendations? It was a total of $5.2 billion a year. Why didn’t they pick it up and start to put it in? Remember, the Welfare Expert Advisory Group was the group for the Government; that’s who it worked for—no other group but the group for this Government, the Welfare Expert Advisory Group.

So this Government has ignored—ignored—those recommendations and has taken this paltry amount and this paltry piece of legislation with three main areas and thinks it’s a great bill. Well, it’s not—it’s not. There’s no ambition in this bill at all. There is no incentive. It’s letting dads get away with not taking their responsibilities as dad, as I said in my first reading speech. Fathers need to step up. It might only be a small number, but I tell you what, you add another 1,600 sole parents on there and there are a few more dads that will be able to get away with not paying a thing. In other words, they will be able to play but won’t pay, and that is the crux of my argument—

SPEAKER: Order! I did indicate to Ms Pugh that I think we were losing—

Hon Member: A bit of taste.

SPEAKER: It was in bad taste, and I think we’ll just wind back, thank you.

JO HAYES: Well, I mean, at the end of the day, it is what it is. It is an indictment on our society here in New Zealand, to do the things that this Government is trying to do through this bill. It is an indictment, and I think that they need to go back and do their work all over again, because at the end of the day, the dads—

Kiritapu Allan: An indictment on the Opposition is pulling out the rug from underneath those that need it the most.

JO HAYES: —that are going to get away with it will continue to get away with it, and it is wrong. In the East Coast, there are high numbers of fathers that do not pay, and that’s—

SPEAKER: Order! Order! There’s an opportunity to take a speech soon.

JO HAYES: That’s right. Exactly—there is time to take a speech when you want to, Ms Kiritapu Allan. At the end of the day, we need to also look at the East Coast as well, as I said on the radio this morning. It is not all roses and chocolates on the East Coast. This isn’t roses, it isn’t chocolates, and, at the end of the day, if that member wants to take a speech and actually have something to say—which I don’t think she will—then she needs to get up and do it. Thank you.

Dr LIZ CRAIG (Labour): Thank you, Mr Speaker. Well, in contrast to the previous speaker, Jo Hayes, I actually think that this bill is historically significant because one of the most enduring things it’s going to do is it’s going to index benefits to the average wage.

In my previous role monitoring child health, we used to see thousands of kids coming into hospital for poverty-related conditions, and what surprised me the most, actually, when I look back, is just how many of our children were reliant on benefits in terms of the sole source of their family income. But the second thing that actually surprised me the most is just how far behind the incomes of those families on benefits have fallen over the last couple of decades compared to the average wage, so a little bit each year—gradual, gradual—but when you add that up over 25 years, it’s a massive, massive gap between the two, and it’s a massive gap in the living standards of those children.

So what this bill does is it stops people falling further and further behind, and what it will do when you take it across the other measures that are coming in under this Budget is it will start to reduce child poverty in a significant way. I, therefore, commit this bill to the House.

SIMON O’CONNOR (National—Tāmaki): We’re obviously addressing the second reading of the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill. The other side have been talking at length—usually through heckling rather than taking a call—about being against sanctions, but one of the great paradoxes of the second reading is that they’ve sanctioned their own speeches to be at least 30 seconds when they had a full 10 minutes. They are sanctioning themselves, which is rather ironic.

Look, obviously, we’re at second reading. I’d love to thank all the public who came into the select committee to talk. I’d like to thank the officials. They did an amazing job advising us in the select committee—no, wait a minute; there wasn’t one. Now, obviously we’re in Budget urgency—and I seem to be getting a rough, Boris Johnson voice for a moment.

SPEAKER: Is that a leadership bid?

SIMON O’CONNOR: Yes, I do apologise, but thank you. That’s the second time in almost as many days I’ve semi - put my foot in it, of a sort, around the leadership. Let’s not make it three.

It is understandable, being a piece of Budget legislation that is going through all stages, that by definition we don’t do a select committee stage, but I think it’s a pity that we haven’t had that opportunity, for two reasons. One, I don’t think there is the urgency, when one looks at the bill as currently proposed, around commencement dates and when the benefits as put forward by the Government manifest themselves. There isn’t the rush that’s needed. The other is that I feel a number of people would have liked to have spoken.

There’s been a lot of talk in the House, particularly from the other side—not through speeches, I might add—about the young people. I think it absolutely behoves us as a House to hear the voices of young people on this issue. Again, there’s a paradox of a sort that, you know, we’ve had a climate change protest or something recently, and it was lauded that the young people were having a voice, and yet here, on something relatively important—that of parental rights and the support of parents to their children—they haven’t had that chance. I suspect, too, that mums and dads would have liked to have had that opportunity. So I suppose in my second reading contribution, I just need to think through or try to articulate what I would imagine would have been some of the thoughts coming through.

Starting at the back of the bill, of course, is around veterans’ affairs. Look, it won’t surprise the House, I think—quite supportive of that. I think aligning the abatement system of the veterans pension to the wider scheme is prudent, and I acknowledge, actually, that that’s starting on some wider work that’s being done around veterans’ affairs in its entirety. Without belabouring it too far, because it’s not as significant a part of the bill, the work that our veterans have done in serving the Realm needs to always be recognised on par or beyond—or beyond—the rest of us. So I suppose as we get into the committee stage, we might draw that out a little bit further to make sure that the abatement rate for veterans is not only appropriate and aligned but, if you will, that it might even conform to an argument that they deserve more. I’m not completely convinced of that yet, but it’s something for us to explore in the committee of the whole House if this bill passes its second reading.

There’s obviously been a lot of discussion about the abatements themselves. As I mentioned in my first reading speech—and, again, I could imagine this would have taken up a lot of time in select committee from the public—it is something that National has supported in principle. I think the way it’s been expressed in this bill is good, linking it, as it’s doing, effectively, to the average ordinary-time weekly earnings. I think we’re going to have to tease it out a little bit in the committee stage as to exactly what that means. I see it is linked to Statistics New Zealand. We’re going to have some confidence in their data coming through, but I think linking the abatement to that is prudent. There are potentially other options. I don’t think they’ll be necessarily the right ones, but I think that’s prudent.

The other is the abatement total, which is, I think, now at $150, or that has been suggested. Is that prudent? As I mentioned in the first reading debate, I think it’s probably in about the right space, but there is always a balance when we are dealing with abatements to make sure that we are always encouraging people to seek work, first and foremost, and to seek any work that’s prudent. I’d better stress that by saying “any work”, I’m not saying that someone should take up something illegal or completely demeaning, but, you know, within the general notion of what it means to work—to take that up.

It wouldn’t surprise you that from this side of the House, we do believe that if you are doing a day’s work, you get to keep as much of that money as possible. So that’s a positive, and I acknowledge the intention that this bill is bringing in that regard, but we always want to make sure that the balance is right to encourage a person on to more hours of work. I personally don’t want to see a situation or a regime—and this bill might be playing into that. Again, we’ll have to tease it out further in the committee of the whole House to make sure that through the benefit itself, which is a generous abatement, we are not accidentally—and I hope it’s accidentally—allowing that person to say “You know what? It’s actually financially and socially beneficial for me to remain on a benefit.” We want that encouragement to remain to move into full-time work.

I think others with a smarter mind than me—particularly around taxes and tax relief—will want to understand how the abatement plays into the likes of Working for Families and tax work credits and so forth. Again, we don’t want to end up with a funny or a perverse situation where a generous abatement—for the right intentions, I’m sure—leads to a person actually remaining on a benefit. There is a real importance of dignity in work, and I would hope that all members of the House would acknowledge that. Fundamentally, from this side of the House, we do believe in the goodness of work. We believe that it actually is beneficial not only to the worker but to their family and to their children. It creates aspiration.

I was explaining to some Americans who were here recently on a State department trip that New Zealand is a genuinely socialistic country. We—all parties—believe in having a social State. It’s a place where we do want to provide support, but I suppose it becomes an argument of balance. That’s why in the last section around sole parents not declaring the father’s name, which a number of colleagues have traversed quite well, we think that line is crossed just a little bit too much—just a bit too much. We can understand there are situations where people don’t. I understand there were about 12,000 people last year who did not declare who the father was. There are rightful exemptions, and these remain, actually, in the current legislation, such as where someone feels threatened, where there are acts of violence, or where there is an incestuous nature of relationships and where the father is not, should not, and never should be declared.

But there is a feeling, I’d say, by a good portion of New Zealanders, who work very hard and support their own families, that there is a responsibility on behalf of the parent seeking that benefit—primarily women, but not exclusively. I think it’s easy—me included—to fall into the trap to make this just a single gender issue. It is not. But, ultimately, there is a responsibility. In fact, it’s probably more of a moral position, but, actually, one should rightfully and knowingly share the information that they have. So in the framing of a benefit dynamic, I would hope everyone in the House would feel that benefits are good, right, and proper. We want to help people and we want benefits to be as generous as they can be, but there is an expectation on those who are seeking—[Bell rung] Thank you, Mr Speaker—oh, sorry, we’re in the second reading, not committee stage, aren’t we?

SPEAKER: The member is not obligated to use all the time.

SIMON O’CONNOR: Oh no, I feel I have to put my foot in it for a third time at some point today. There’s an element too, with the benefit system, that we expect a degree of honesty. So perhaps, if I could phrase where my opposition to removals of sanctions are coming from, even if I was to step it away from my earlier comment, which I stand by, which is that people should not be paying taxes for other people where they should be—in other words, where, particularly, a father is not paying their due money to support their child. But for someone to knowingly not share information is, for me, a problem.

I think it’s probably important to keep it in Hansard and for anyone watching that we’re not arguing here about a person who is unable to declare who the father particularly is; it’s knowingly holding back that information. In more legal, moral, and ethical terms, we’re talking about a wilful ignorance. That, for me, is a bit of a problem, because, effectively, a welfare system—[Speaker shifts in his seat]—you have put me on edge now, Mr Speaker—is based, fundamentally, on integrity. It’s the integrity of the wider taxpayers who say, “We are prepared to work hard to, obviously, generate money to pay our taxes to help those in need, but there’s a reciprocal contact”—a social contract that we talked about in the first reading—“that means we expect an honesty and an integrity in completeness from those seeking a benefit.”

Fundamentally, where I’ll end it is that we expect a parent who does know who the other parent is to be honest and open and provide that information. Thank you, Mr Speaker.

MARJA LUBECK (Labour): Tēnā koe e Te Māngai o Te Whare and talofa lava, Mr Speaker. The Opposition has stated several times, “Is this bill sending the wrong message?” They asked us, “Is this the message that we should be giving?” Of course, they would too, because the leader of their party has one message, which is going out in memes all over the place, and that is: “What’s in it for me?” That is so different to the values that this Government holds dear: manaakitanga, the greater good.

This is a bill that will support New Zealanders who have to access the welfare system—very different from the examples we’ve heard across the House. For example, Simon O’Connor, the member who just sat down, told us that he has a little bit of concern that he may have to work a little bit harder so that other families can feed their children—beyond me. In sharp contrast, this Government is committed to lifting children out of poverty and improving child wellbeing. I’d like to congratulate the Minister, the Hon Carmel Sepuloni, for bringing such wonderful legislation to the House. Thank you, Mr Speaker.

A party vote was called for on the question, That the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill be now read a second time.

Ayes 63

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

Noes 57

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

Bill read a second time.

SPEAKER: Just before I put the House into committee, I want to remind especially the Government whip that when we’re having a vote and I’ve declared a result, she only calls out if she disagrees with the way that I’ve called it. It’s not a volume competition; it’s an indication from one side or the other that they have a difference of opinion from me. So while I generally appreciate her support, not in those circumstances.

In Committee

Part 1 Amendments to Social Security Act 2018

Hon LOUISE UPSTON (National—Taupō): Thank you, Mr Chair. I was waiting to see if the Minister was going to stand—which is what normally happens when a piece of legislation is being debated under urgency—to explain some of the detail around it and, in particular, why the bill is being debated and pushed through all stages under urgency. I’m sure I will feel like a bit of a stuck record when I say that I’m always against legislation that is debated without public scrutiny. One of the members opposite chipped in to say this was urgent, but, actually, nothing comes in effect until next year, and, actually, one of the provisions, which I will get to in detail, will result in $11 a week by 2023. So that’s not urgent—clearly not urgent. In fact, when this first came to the House’s attention, it was meant to be, I thought, in the Families Package, but for some reason the Minister decided it wasn’t urgent then either.

What we are talking about in Part 1 of the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill is one of the provisions that will come at a cost of $115 million of taxpayer money. So it does require a good amount of debate and questioning in this House in the committee stage.

Some of the questions I’ve got for the Minister are around the advice she’s received in terms of the number of sole parents currently that have exemptions, the number of sole parents full stop, and the number of which the obligation isn’t being met and therefore a sanction is applied, and, actually, how those three areas will change as a result of this legislation.

I have noted and put on the record earlier that there is an expectation that sole parents will rise by 1,600. I’d like information from the Minister on how that figure is derived, because, obviously, this is a change to the obligations that occur on sole parents, so if there’s an increase in 1,600 over the period of time, you know, we’d want reassurance about how the $115 million will increase and how that’s being factored, and what other mechanisms the Minister is putting in place to ensure that that burden doesn’t increase and that, actually, the burden decreases so that taxpayers aren’t picking up that tab.

As we’ve said in the earlier stages, the $115 million pretty much comes from dads that won’t be paying their child support that they would have otherwise, and with an increase predicted by the Government in the Vote Social Development document—and, if the Minister needs to know what page that was on, because she tended to look a bit puzzled before, I’m happy to assist her in finding where those forecasts are—that’s also $195 million increased spending, which, of course, any time the Government spends anything, hard-working New Zealanders have to earn it in the first place.

So I’ve got several questions around numbers, which I’m hoping the Minister will answer, around how many are currently affected, how many will be affected after this, and what steps the Minister will take to reduce that liability on taxpayers. We’ve got a number of Supplementary Order Papers—I don’t think my one is on the Table yet—but we are just looking, in the first instance, around questions around Part 1, so I’ve got specific questions that I want the Minister to address in terms of the repeal of section 192, which we used to refer to as section 70A in the old social assistance legislation.

Some of the other questions are around indexing, for example, and why, if it is so critical to reducing the number of children in poverty, the indexing hasn’t been structured in a way that would mean that beneficiaries actually have more money in their pockets sooner. As I said before, the indexing isn’t new, so it’s not transformational to have indexing. All that is proposed is that the indexing will change in terms of the method, from being adjusted to the Consumer Price Index to being—[Time expired]

Hon CARMEL SEPULONI (Minister for Social Development): Given the discussion points that were raised during the first and second reading and the fact that the member Louise Upston has also continued on that same theme, I thought I’d take an early call just to respond to the concerns that have been raised about the repeal of section 192.

The question that was put to me specifically was with regards to the evidence that I have been presented with and the numbers. Fortunately, what I have in front of me is a briefing from the Ministry of Social Development that was done in collaboration with Oranga Tamariki in February 2019 that, in the executive summary of, refers to the advice that was actually given to the previous Minister for Social Development in mid-2017—who would have, at that time, been the Minister Anne Tolley—referring to section 70A, which is now section 192, that says the information was requested by that Minister for Social Development then and that the policy advice that was given to the Minister of the time—which reflects the same policy advice that I have been given—is that there was insufficient evidence to assess the policy’s effectiveness in achieving its intent or how it affects clients and their children and whether it was in the best interests of children.

So that is the advice, in summary, with regards to why we are repealing section 192 here today. As I’ve said on at least two occasions today in the House, this is an evidenced-based decision—evidence that not only I received but the former Minister under the National Government received in writing, that we have a copy of. I’m more than happy to share it with the National Opposition if they don’t have a copy of that information. It does also go on to say that it throws children into further poverty and hardship—children who are more likely than any other child in this country to be experiencing the poverty and hardship.

I know there’s been lots of debate in the House and concerns raised by the National Government that by doing this we won’t be able to hold the absent father to account and force his hand with regards to paying child support, but, clearly, there’s no evidence to suggest that this punitive sanction—

Hon Louise Upston: I raise a point of order, Mr Chairperson. The Minister’s referring to an official document, and, given that it’s being debated in the committee, it would be good if she could table it.

CHAIRPERSON (Adrian Rurawhe): The member could have waited until the Minister had finished her call. Every member has a right to be heard, but that could have been done at the end.

Hon CARMEL SEPULONI: Thank you, Mr Chair. I’m more than happy to table this document. I’m actually really concerned that the National Party have come to the House so ill-equipped, without the information that they need to be debating what is a very important issue. So if they don’t have this information, then I’m more than happy to give that information to them, because it is available online.

Document laid on the Table of the House.

Hon CARMEL SEPULONI: Can I also state on the record that the member Louise Upston asked about figures, and this report, which was fairly recent—because it was February 2019—said that at the end of June 2018, 25,500 children—

Hon Louise Upston: So not the previous Government.

Hon CARMEL SEPULONI: —were in families affected by section—I will state this one more time, just for the record for Louise Upston, who doesn’t seem to be listening. This report is a February 2019 report. In the executive summary, it refers to the policy advice that the Minister for Social Development was given previously, which is what I said in the House earlier. I really wish that member would listen.

Now, going on to what she asked, with regards to the numbers of children, at the end of June 2018, 25,500 children were in families affected by section 70A reductions—so that’s section 192 now. Of these children, 9,500—one-third—were not themselves the subject of a deduction, but, of course, they’re living in a household where that deduction is made, and so they are impacted by that deduction. The 25,500 children who were in families affected at this date made up an estimated 2.3 percent of all children in New Zealand. The proportion of New Zealand children who were ever in families affected is much larger. Among children born in 2010 to 2011, an estimated 11 percent of all children ever present in New Zealand by age six were in a family affected by section 70A benefit reductions at some time.

I think it’s really important to take this seriously because, as a Government, we have committed to child poverty reduction targets. Now, where there is a measure in place, through our legislation, that disproportionately impacts children and actually throws them into further poverty, then we actually should have consensus, given that we had consensus—bar ACT—on the fact that we will reduce child poverty in this country. This is only one measure. It’s not the answer to all, but it does take us a step further to being able to respond to that commitment that we have made in this House.

I know—well, I anticipate—that the Opposition is going to continue to traverse this issue, but I wanted to put out there right from the beginning that I have the evidence in front of me now to support why the sanction doesn’t work—the same evidence that was presented to the previous Government. So I really don’t want to spend hours on end debating the moral assertions that are being made by the other side of the House on these women or the absent parent or the decision not to name the other parent. At the end of the day, our concern is for the children that live in those homes, and we are not going to continue with policies that have no evidence base, that are punitive, and that only serve to punish children and throw them further into poverty. Thank you very much.

Hon LOUISE UPSTON (National—Taupō): Thank you, Mr Chair. I was quite specific in the questions that I asked about the numbers, and I do expect an answer from the Minister on the questions about the numbers that I specifically asked. I asked about the number on the sole parent benefits. I asked—

Hon Carmel Sepuloni: That’s not relevant to this.

Hon LOUISE UPSTON: Oh, well, does she want to take another call because, actually, you accused me before of not listening to you, so, actually, this is the one opportunity for the scrutiny of your legislation. You want it under urgency, we’re going to debate it—we’re going to debate it at length—

CHAIRPERSON (Adrian Rurawhe): Order! Order!

Hon LOUISE UPSTON: I hope you’re going to call her to account.

CHAIRPERSON (Adrian Rurawhe): I’m going to make a ruling. The Minister in the chair does not interject from the chair, OK? So please do not do that again.

Hon LOUISE UPSTON: Thank you, Mr Chair. Now, I know debates in this House do get a bit emotive at times, and I accept that comes from both sides, but the reality is that this is a piece of legislation—again, the majority of which we have had from this Minister that’s debated with either no public scrutiny or a very reduced public scrutiny. So we will be taking our time. We do expect this House to allow the courtesy and the dignity and the accountability of scrutiny, which is why I’ve asked some very straight questions around the numbers of sole parents on benefit currently that have exemptions in place. The exemptions are important, they’re for very valid reasons, and it is important—I put those five exemptions on the record of the House in the first reading.

Then I also want to know the reason behind the increase of 1,600 sole parents that is forecast in the Budget documents—and this is a Budget debate on the welfare package. How has that figure been derived? What will be the fiscal impact of this policy? The current prediction is $115 million. My question was: how much more will that increase? Another question was: what steps will the Minister be taking to ensure that parents who are liable will pay their fair share? So the Minister said she doesn’t want to apply a sanction—this is detailed in this piece of legislation in Part 1. My question is—on behalf of taxpayers up and down New Zealand—how will she ensure fathers pay for the children they are financially responsible for?

In terms of reducing child poverty—and, under National’s time, we lifted 85,000 children out of poverty. So we absolutely support the work of this Government in continuing to reduce the number of children in poverty. Very closely related to that, though, is the number of children in benefit-dependent homes, which is why this question around obligations and consequences and sanctions for those on the sole parent benefit is important. I do expect the Minister to take it seriously. I do expect the Minister to answer straight questions that are asked in this committee. The Minister herself has said that this piece of legislation is about reducing child poverty. Well, I would then expect—if she takes that seriously—that she will answer every question that the Opposition raises in this committee to ensure that this piece of legislation is thoroughly debated and thoroughly scrutinised, in order to deliver the intended policy outcomes that the Government has stated.

We will have other questions. I am looking forward to that. In terms of the sole parent obligation, I’m interested to know if there are other obligations that the Minister is expecting to lift—they’re not in this particular piece of legislation. This is specifically around section 192—as I said before—which was formerly section 70A. When there is an obligation, most New Zealanders would view that there is an obligation for dads to pay for their children. One of those obligations is to provide their details so that the mother and the support for those children through—in this instance, the benefit system—can be fully delivered. The Government talks about entitlements. I agree that those children should be supported, and it is a dad’s responsibility and a mum’s responsibility to ensure that those children get the support that they need and are entitled to. So I am asking the Minister to provide detailed answers to my very straight questions.

Hon TRACEY MARTIN (Minister for Children): Kia ora, Mr Chair. Thank you very much. I’ll just take a short call on the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill, just to support the intent of what the Minister for Social Development is doing here. It shouldn’t be a surprise to anybody that I have the job of being the Minister for Children. I want to acknowledge Louise Upston, the previous speaker, and the articulation of both sides of the House that we want to make sure that children are given the best opportunity that they can, that they are well-supported by us as a country, and that parents are held to account, I suppose, on the welfare of their children.

However, I believe it’s been articulated across this House on numerous occasions that when we create policy, we must create policy based on a level of fact: is the policy that we are creating, or a policy that somebody else has created—can it be proven that it is the solution to the problem? I think what we’ve identified, and, again, the previous speaker talked about it, is that one of the problems that we’ve got—and it’s not a new problem—is that fathers have abandoned children for centuries and mothers have had to step up and do it on their own for centuries. So it’s not a new problem; it’s about finding the solution to that problem. What the evidence shows is that if this was the solution, it hasn’t worked. What it has done, however, is it has made it harder for those women. It has made it more difficult for the lives of those children.

So, certainly, I know that the member who has just resumed her seat, Louise Upston, asked what the solution would be, and, then, how we make men who abandon their children take responsibility, and I would love to sit down and work through a solution that actually works with that member. I think that would be a great thing to do. Let’s find one that doesn’t penalise children. Let’s find one that doesn’t take money out of the hands of single parents so that they have less money to put food on the table and less money to actually provide school supplies for their children and less money for shoes and socks and clothes and all those other sorts of things that that money is needed for. So let’s do that—let’s not penalise children.

What we know from the evidence is that there are children living inside these houses, and we know who their dads are. We know who their dads are. For whatever reason, there’s been a difference between who the dad is of one set of children and then, possibly, there’s another child. Now, that’s not new, either. This is not a modern development—that one woman might have children to a couple of different dads. You might be widowed after a war, for example, and go and marry again, or have a child to somebody else. This has not been created just in the last decade, so we need a solution to the issue where men abandon their children. That’s the solution we need, but part of that answer should not be to penalise children merely because they don’t know who their father is, or it should not penalise children who happen to live inside the house of a child for whom we don’t know who the father is—and we have evidence about that.

The Opposition have said—quite rightly so, and I have listened to them—that when you create policy, it must be based upon evidence. This did not work. This hurt children. We believe it is time to acknowledge that the evidence says it doesn’t work. We believe it is time to find another way, and I absolutely welcome the opportunity to sit down and talk with the Opposition about “How else can we can make men accountable?”, or “How can we make them want to be accountable, rather than actually take off?”, because that would be better for the children as well—to have reasonable, responsible males in their lives, in a constructive way. That’s what I believe we are all trying to achieve.

We support the intent. We support the bill. For too long, these children have been penalised for situations that adults have created.

Hon ALFRED NGARO (National): I thank the Minister for Children, the Hon Tracey Martin, for her comments. We agree that it should be evidence-based and we should be looking for proactive solutions to this.

Here’s the question that I would like to pose to the Minister in the chair, the Hon Carmel Sepuloni. For all those that it hasn’t worked for, what about those for whom it has worked? What are the numbers there? Here’s the thing: if we’re talking about it being evidence-based, what has been the costing on those who have disclosed and who’ve actually contributed?

So what you’re doing now is this: you are setting a precedent. In actual fact, those who have done the right thing—we’ve heard stories about that—and who have actually disclosed who the other parent is, which has made them accountable, have now contributed. You’ve only costed from where, as we understand—and I’m happy to be proved wrong. You might have the evidence there of the costing of what it would be, then, for the whole amount of those on a sole parent benefit—right—in regards to those who have disclosed where there’s been payment. Now, the State is going to have to bear the cost of that whole costing for those children. That’s what we’re talking about. So to the Minister in the chair, if she could provide that information, that would be helpful as well.

The Minister also talked about the issues around solutions, and, in fact, the Hon Tracey Martin talked about that. There are discretions already here. So when we’ve gone down to discretions, it’s not a safety issue, and it’s not an issue of if you can’t find out, if you’re not sure, or if you don’t know. It could have been an indiscriminate sort of relationship for a period of time, and they’ve gone. There is nothing there, when you go through the discretions, that would bar somebody on an issue of safety or on an issue of not being able to find out who the lawful parent is—nothing. So what are we left with? We’re left with an adult who has the opportunity to disclose the person—to disclose the person. That’s what we are talking about.

So if you’re talking about making adults responsible, then you’ve just removed that. You’ve just removed the ability to make those adults responsible.

You’ve made a good point, and I would say to the Minister in the chair, then, what other alternatives did she seek? They were talking about opportunities for it being evidence-based. Well, the Minister talked about reducing the number of children in poverty, but what we know from the trends from 2014 through to 2018 is that the reduction in the number of those on sole parent support was, on average, 3,400—on average, 3,400. But from March 2018 to March 2019, the only decrease was six—six.

So is this Government is now saying that, in actual fact, they want to reduce child poverty? Are they now counting—the fact is that a parent with children in a benefit-dependent home is classed as reducing children in poverty, because according to the stats, according to the figures, it’s clearly showing that under this Government, what we’re actually doing is increasing the number of people on benefits. They’re not decreasing it; they are increasing it. That’s what they’re doing. You’re increasing the number who are on benefits. So to the Minister in the chair, I would like to put a couple of those questions to her.

The other question that I would like to put to the Minister as well is in regard to discretions. When she talked about it being evidence-based, what other evidence did she show for other opportunities? If we talk about evidence, I want to refer to this report. This is called the Heckman report for 2010, and it says this: “The key to a successful welfare state lies in devising proper incentives to encourage actors at all levels of the economic system to respond to the new opportunities. In principle, a welfare state can provide the proper incentives for productivity and at the same time accord a measure of security and dignity for all citizens.” I would like the Minister to respond to that. What evidence did she supply?

It’s one thing to have a report, but did she delve into the evidence around the decisions that were made? The recommendations that were presented to her—I’d like the Minister to present that evidence and the reports that she refers to around these recommendations, because we haven’t seen that. As my good friend and colleague the Hon Louise Upston has been saying here, she made an Official Information Act (OIA) request for those reports and did not receive them. So much for a transparent and open Government! Here we are in urgency, in this committee stage—and, by the way, the indexing will take another four years, with only $11—and yet still we are just now being presented with the potential of the answer to that OIA request.

I have these questions. I have other questions I’d like to pose to the Minister. I look forward to her response as soon as possible.

Hon Dr NICK SMITH (National—Nelson): Thank you, Mr Chairman. I want to support my colleagues Louise Upston and Alfred Ngaro in raising real concerns about the repeal of the responsibilities of parents. I think, when I’ve listened to the Minister and the Minister of Children, there’s a real naivety about the real world in New Zealand, because before this law existed, there was a real racket that went on in New Zealand, and it went like this: if the mother doesn’t name the father, they don’t have to pay their child support. So what the father does is he says to the mother “Don’t name me and I’ll give you a hundred bucks a week, cash under the table.”

That certainly suits the financial interests of the mum, it certainly suits the financial interests of the father, but it is grossly unfair to the honest, law-abiding mums and dads who meet their responsibilities in New Zealand. My great fear, in the naivety of this bill, is that that is what is going to occur again, and I want the Minister to say why that would not occur. What would be the incentive, out in the real New Zealand world, for people to be able to avoid their child support responsibilities? Or am I to take from the look on the Minister’s face that, actually, she doesn’t care? She doesn’t care about that fairness.

The second question I have is actually for the Minister of Children. Members on this side of the House actually believe it’s the right of the child to know who their dad is. I think that is a fundamental right if you believe in the wellbeing of children, and this is the Wellbeing Budget. So why do we want to remove the incentive for children to know who their mum and dad are? I’ll have a bet with the Minister in the chair, the Minister for Social Development: if this bill is passed, the number of birth certificates, with the Department of Internal Affairs, of which there is no father will radically increase.

Why do I know that? It’s because before this became the law, the opposite was true. Actually, when this did become the law, we saw a substantive increase in the number of children who know who their fathers are. So I say to the members opposite: what’s good about a society in which kids don’t know who their dad is? There is a deafening silence. Why is it that members opposite do not understand the importance of the role that fathers play in children’s lives and why we want a legal framework where people do know who their dad is? There is nothing that is going to be positively achieved for the wellbeing of New Zealand society and children by providing this crude financial incentive for dads to no longer be named on the birth certificate.

The further point I would want to make is actually about how reasonable sections 192 to 194 in the current Act—the Social Security Act 2018—are. When I listened to the member and I listened to members opposite, you would think that this is a harsh provision with no discretion. As my colleagues have pointed out, there’s actually very good, practical law in what is being repealed. If there are issues of domestic violence, if there are issues of incest, if there are other reasonable reasons as to why the mother would not want to name the child, there is absolute provision in section 193 of the existing law that we are now proposing to repeal. Those provisions are being removed, which actually disproves the claims that are being made by the members opposite.

So I would just love a member opposite to show me the examples of where mums are being asked to name the father of the child in unreasonable circumstances, because I’ve not seen one, and I’ve dealt with hundreds of constituency cases in this area. The tragedy of this law is that it is going to disconnect children from their fathers, and fathers have an absolute pivotal—both financial and other—role to play in children’s lives. This is a provision that will actually make the wellbeing of New Zealand families and New Zealand children worse, and that’s why the Opposition opposes it so strongly.

JAN LOGIE (Green) Thank you, Mr Chair. I rise to take a call on behalf of the Green Party, and I guess I will primarily stick with some of this conversation around ending the section 192 deductions. The previous member, Hon Nick Smith, was saying “Give us an example.” Well, actually, we had I’m not sure how many submissions, but submissions from a huge number of community organisations on the rewrite of the Social Security Act in 2016, exactly on that point of people telling us of the sanctions being applied on mothers for not naming the father, and they didn’t even know that that sanction was in place, let alone know what the conditions were for them being able to appeal it. We had a lawyer sitting in front of us, in tears—and the member Alfred Ngaro, I’m sure, remembers this—recounting her experience of having to hear those stories of women detailing the abuse they’ve experienced and the incest in their childhood that had resulted in their pregnancy and their child, and the humiliation that she felt personally participating in that system to enable those women to access the exemptions on this sanction.

This is what we’re here to change—to actually trust those women that the decisions that they make are in the best interests of them and their families. On this side of the House, we trust women to make the right decisions for themselves and their families. That is absolutely backed up by the evidence that we know from the conversation about how, actually, men have a role to play in their families, and we need to incentivise that. Really, I think the Minister Hon Tracey Martin put it really well about how, of course, we’re all interested in healthy, thriving families. We want policies that will work to support that.

I would call out—what word shall I use that’s parliamentary?—an inconsistency, though, from the National side of the House, when I remember, in this House, participating in changes to child support laws that reduced penalties for non-paying parents. So those non-custodial parents who were not contributing to their families—that previous Government actually reduced the incentives, as they would argue, for those parents to contribute.

Yet here they are: when it’s an incentive, supposedly, that punishes women and children, they’re opposed to removing it. So they’re not willing to punish the dads for not contributing, but they are insistent on punishing the women and children who may not want to name the father—because they just don’t trust women. It’s the only thing I can take from that.

I really want to reference a point that the Child Poverty Action Group made in their submission on this in the original legislation. They were saying that they believe non-custodial parents should make positive contributions to the lives of their children. However, they were concerned that the emphasis on monetary support simply reduces children to the status of financial obligations. That’s from their perspective on what this debate is about. They want us to look at what positive families look like and how we ensure that all of our families have enough to be able to nurture their children for their children to thrive. When there’s a sanction in place that removes vital money from families below the poverty line already, we know that we’re going in the wrong direction.

So the Green Party is very pleased—backed up by all of the research around how you support families to thrive—to fully support this particular aspect of the legislation.

SIMON O’CONNOR (National—Tāmaki): We’ll see how many calls we’re able to get, but I would just like to indicate to Jan Logie, the member who’s just resumed her seat, who was talking about trust and particularly trust of women, and just remind her that she’s a member of Parliament, as I am. Why I mention that is this Parliament is based on making laws precisely because we don’t trust people. We make laws to protect the most vulnerable. We make laws to actually create structures around them.

Just to illustrate the point that she might be right—we might need to trust women around these sanctions—I ask that member why she does not trust women with driving speeds and why she does not trust women with seatbelts. She’s part of a process here in this Parliament where rules are made where we do not trust people. I just say that because the member was very quick to use the word “consistency”, and the funny thing is there was a terrible, terrible lack of it. So just a reminder to that member, next time she talks about trust, that she’s part of a parliamentary process where we actually—[Interruption]

CHAIRPERSON (Adrian Rurawhe): Order! Order! Matt Doocey, you know the rules. You do not interject while walking around the Chamber, OK? You go back to your chair.

SIMON O’CONNOR: Thank you, Mr Chair. So I think that just puts paid to the trust argument, because if the member’s going to be consistent, then apply it to pretty much every law in this House, which applies to every man, woman, and children—and child; sorry, I’ll get my declensions right.

Part 1, clause 8, is talking about the rates of benefit to be set down by Order in Council. New section 452A(1)(a) talks about the “average ordinary time weekly” as expressed on a quarterly basis, which makes sense, and to be published in March each year. I would like the Minister, if she’s prepared to take a call, to explain to me and the committee why that was chosen. I suspect the average ordinary time of weekly earnings is the appropriate measure, but I am not an expert. I know that she has officials here. I would welcome it if she would do so to provide us an explanation of why that was chosen. With what has happened around Statistics New Zealand—I know it was to do with the census—I would just like the Minister in the chair to express confidence in Statistics New Zealand to be able to provide those details both accurately and on a timely basis.

The other question I’d ask in relation to what is going to be a change through new section 452A is why it’s “every year”. I think that, I don’t know, by tradition makes sense, but I’m also very aware that, from Statistics New Zealand and then through to other Government departments like the Ministry of Social Development (MSD) and the like, we are getting this on a quarterly basis. In the spirit of generosity not only to the Minister but, of course, to the people who are going to be supported, why not enable a review to be done every quarter rather than every year? If I’m suggesting in this committee that every quarter is a step too far and far too generous for this centre-right politician, can I suggest we come to an amicable agreement to make it every six months? The great thing about Orders in Council is that you’re actually able to do those quite frequently, as the Minister knows, so I can’t see a process problem there.

So those are a couple of very basic questions that I think are fairly important to me and, I suspect, to this side of the committee to understand fundamentally why the average ordinary time of weekly earnings was chosen over, say, the Consumers Price Index, for example, or even linking it to changes in the minimum wage. I suspect I will know the answer to why it’s there, because that’s been the protocols, and perhaps it’s linked to the Budget, which is timely, of course, seeing as we are 25½ hours after the last one. But why not by quarters? I think, in some ways, that would enable—particularly if we are into the argument of supporting particularly vulnerable women and their children—why we are not able to, in a sense, keep up with the play. And, in a modern environment, as we are now, of big data, computers, and the like, we should be able to do this. Having used some of the welfare systems, I’m sure even the Social Welfare Information for Tomorrow Today system and UCV2—if the Minister and those people are still using those systems—might be able to keep up with it.

Look, I also have a couple of Supplementary Order Papers (SOPs) in my name, which I might address if I am allowed the time. The first is SOP 241. This is a suggestion to insert a new clause 6A. In effect, it’s seeking to create a review process. Obviously, after two sets of votes, which this side have lost, I have accepted, somewhat emotionally, that we probably won’t be able to stop the overall intent of this legislation; so, in the order of attempting to be constructive, I thought it would be important to review it. A member who’s recently taken the chair talked about wanting to be evidence-based. I’m looking forward to her support for this SOP, because this is about collecting evidence. This is about a review, effectively, around the number of non-declared parents. What it’s going to seek to do in new clause 6A is, in effect, ask the Ministry of Social Development to now explicitly record and track the number of people who are, first and foremost, applying for the sole parent benefit. That will be relatively easy because they are already doing that, but in the course of preparing for this discussion today, it’s not actually been readily available how many people have, up to now, been sanctioned, nor how many people have not declared the other parent. I was able to track down some information courtesy of written parliamentary questions, but it’s not a matter of course for the Ministry of Social Development to indicate the number.

I’d better be clear: we’re not asking for a “name and shame”, by any means—this is, obviously, anonymised data—but what we’d love to see, as per the suggested addition of new section 194A(1)(b), is to note those who “fail to identify who is in law…”. I am happy if members opposite want to amend that; I am conscious that the word “fail” is relatively negative. That perhaps reflects my general views here, but I think it would be incredibly helpful.

I’ve gone on, in this SOP, to also suggest a trigger warning to those of trigger points. The trigger point is 500 parents in a single quarter, or 1,500 parents in a calendar year. I’m the first to admit that’s incredibly low. I noted in my second reading speech that about 12,000 people—from what I was able to see—have not declared the other parent; so this is deliberately low, and I’m happy for that to be discussed and debated, but I’ve kept it deliberately low because, while I want this triggered, I think it’s important, again, to use the words, particularly from the Green Party, who want this to be “evidence-based”.

Then, the further clauses that carry through are just to make sure that the review is done in a timely and a speedy fashion. So, in this new clause 6A, which is making an amendment to the principal Act by inserting a new section 194A, the review must begin immediately when those trigger points in subsection (2) occur. That’s for two reasons. Firstly, it’s to make sure that MSD is recording the data and that the moment per quarter, effectively, that this happens, they get on to it. I’ve given them 60 days in this SOP—or I am suggesting it, of course; this is not an Act yet—but, again, I’m very much looking forward to the other side’s supporting it, because they are evidence-based. They’ve got 60 days—I’m always a little bit sceptical. Look, I used to work in a Government department, and I’m sceptical of myself then achieving things in a timely manner.

Importantly, as in subclause (3)—I’m afraid I don’t always get the legal nomenclature—the review must be tabled in Parliament within one month of the completion of the review. Now, obviously, my motive, if you will, is to make sure that the Minister—and it’s actually not a reflection on the particular Minister; this would apply if it was someone from my own side—ensures that this is in the House swiftly so that we, as a Parliament, can look into it. I would be very happy for the Minister in the chair, through her experience, I suppose, to explain to me if that’s too short. If it’s more prudent that it should be two months, for example, we’d be happy to look at that.

Probably the final point on this SOP, if I might—and I haven’t put it in yet, and I don’t know if I require another SOP—is to indicate which select committee the bill should go to. I suspect it’s best handled in the Social Services and Community Committee, but there is a small argument to be made that it could also be in the Finance and Expenditure Committee because, ultimately, this is having a financial impact. My instincts suggest it should be in the Social Services and Community Committee because, fundamentally, this is about the children, as has been said. So that Supplementary Order Paper, ultimately accepting somewhat—and I hope my colleagues don’t resile from me for it—that this legislation will be progressing, is an attempt to be constructive. It is an attempt to bring out the evidence so that we do have that information. MSD is, I would have to say, particularly good at bringing information forward, but the number of people who have not declared the father, in particular, is not readily accessible in its quarterly reporting, or not that I’ve been able to find. So I think that would be helpful.

I am more than happy for the Minister in the chair, or anyone else who wishes to take a call today, to push back, if required, on the numbers where this is triggered, the time it’s requiring MSD to process the review, and, in particular, the time for the Minister to report back. If that’s inappropriate, I would be the first to, and happy to, change that.

DENISE LEE (National—Maungakiekie): Thank you very much, Mr Chair.

Hon Member: Oh, good choice.

DENISE LEE: Yes, it is a good choice, and thank you very much. I appreciate the time to speak here in the committee stage. TV ONE, on One News, said on the night of the Budget—which was, obviously, just this week; the days are quite long—that the Government is falling well short of the recommendations of its own Welfare Expert Advisory Group. That is a fact. They’ve picked it up, we’ve picked it up, and I’m going to link that fact in with a Supplementary Order Paper (SOP), an amendment that I have in my name.

So the first question, which leads into the content that I have in my SOP 246, is, quite simply, why didn’t the Government take up more than three out of 42 of those recommendations? They’ve received quite wide scorn for focusing on just three. Something that they commissioned had 42 recommendations—just three. So here we are now, debating something that has come from—well, actually, it hasn’t come from that report, because, as I just said, only three of the 42 were picked up.

The fiscal cost estimated of improving adequacy and design of the income support out of that working group report was $5.2 billion a year. Perhaps that’s why we’re only left with three out of the 42 recommendations. There’s just no ambition in what the Government is presenting us with—a partial nod to beneficiaries, while Winston gets the planes, trains, and definitely not the automobiles.

CHAIRPERSON (Adrian Rurawhe): The Rt Hon Winston Peters.

DENISE LEE: The Rt Hon Winston Peters—I guess I need to insert that. My Supplementary Order Paper inserts a new clause 6A. It inserts a new section 194A that inserts that the Ministry of Social Development (MSD) must report on key outcomes for children in benefit-dependent households. So it reads that the Ministry of Social Development “must publish yearly as part of its Annual Report or Statement of Intent, or as a standalone report,”—so there are three options—“information on key outcomes for the number of children in benefit-dependent” households. Now, where did this come from? That report, the same report that only had three out of 42 recommendations picked up—well, this is one of them that wasn’t. So this is not something that we’ve come up with on this side of the House; it has been discussed, debated, and rejected by the Government. We’re asking them to take another look at it here this afternoon.

Now, why would you report? Why would you want to know what’s going on for children in benefit-dependent households—

Simon O’Connor: Evidence.

DENISE LEE: It’s because we need to be evidence-based. Thank you, that’s exactly what I was going to say; thank you, member O’Connor. We need to be honest with ourselves, honest with the public, and honest with those who are receiving benefits. We need to be accountable. This is our message to the Government: if you back your idea, then back your ability to look at outcomes a year later—simple as that.

So this Supplementary Order Paper introduces recommendation 5 of the Welfare Expert Advisory Group report. It’s there and it’s plain for all to see: recommendation 5. It provides for clear reporting on a number of outcomes related to Vote Social Development. This specific clause that I want to insert, a new clause 6A, requires MSD to report on the lives of children in benefit-dependent homes and how these changes in this bill affect them. We couldn’t ask for anything more basic and more intrinsic for impact on young New Zealanders’ lives.

So the purpose of the bill, as we understand it, and as we’re debating here this afternoon, is to improve and increase the incomes for low-income individuals and families. This amendment, my SOP, creates measures and yearly reporting on the improved outcomes for benefit recipients. I’ll just say one more time: why would we do that? It’s because we want evidence-based, we want honesty, and we want accountability. Our message to the Government is: if you back your idea, then back your ability to pick up one more recommendation—because you didn’t pick up many in the first place—from that Welfare Expert Advisory Group report.

Hon MAGGIE BARRY (National—North Shore): Thank you, Mr Chair. I rise to speak, for the first time, on this omnibus bill.

Hon Member: First of many.

Hon MAGGIE BARRY: First of many, absolutely, I’m digging in for the long haul. This is a bill that gives a lot of scope for comment. The Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill—I thought I better give it its full title before I put the boot into it—is an omnibus bill that, I think, does highlight the fundamental philosophical differences that exist between the political parties in this House.

I heard Jan Logie from the Greens talking about trusting women to make the right choice. I think naivety and hoping is not quite enough when you are legislators. We need to make sure that there is fairness and protection for the vulnerable. We also need to make sure, as lawmakers, that we do what is for the greatest good for the greatest number. This bill doesn’t stack up on any account, in that regard.

In fact, the Hon Dr Nick Smith made a valuable point in relation to the philosophical difference, and it is this: where in this bill is there any incentive at all for men to really step up and take responsibility for parenting a child? While the other side of the House may be quite happy to let men get away with the kind of rorts that Dr Nick Smith described, that used to exist before we put in the requirement to name the parent, do we really, as a country, want to go back to the bad old days where there were backhand deals done, men got away without paying very much, and the State ended up paying for everything? I don’t believe that for—

Brett Hudson: It’s not the State; it’s the taxpayer.

Hon MAGGIE BARRY: The taxpayer. Well, I tend to think that, as taxpayers, we need to, in terms of how the State protects taxpayers’ interests as well, ensure that we are having a fair spend of that hard-earned taxpayers’ dollar. This, I believe, will result in some epic squandering and the wrong signals—it’s just the wrong signals. If a man is to father a child, he needs to actually step up and support that child. We need to be there, as the State, with the taxpayers’ money, ensuring that the children are not badly affected.

Again, I come back to something that Jan Logie said: that there would somehow be this punitive measure on the child and that it was really not fair in any way that there would be hardship. For the member’s elucidation, the exemptions in the existing law do provide for parents who are in fear of their safety if they name the other parent or if the child is a result of a sexual assault. So there has always been compassionate and understanding flexibility around family situations which, really, are very sad. I think that as a Government, when we calibrated the existing law, we did it properly. This is a measure that’s going to send altogether the wrong signals.

So as it’s gone through so far—and I’m now looking at the Supplementary Order Paper (SOP) factor—some Supplementary Order Papers, particularly around clause 6A, I think, are worth highlighting. My colleague Dr Alfred Ngaro has moved an amendment to ensure that there is a proper reporting basis to all of this. So he has suggested a report on what he calls “key outcomes” on the repeal of sections 192 to 194, which means that the Ministry of Social Development would be required to report on these outcomes. “(a) Full and correct entitlements from across the ministry; … (b) take-up rates of payments;”—which I think makes a great deal of sense and would give us an idea of the landscape, really, and who would be using this amendment. The “(c) employment outcomes for people receiving a benefit;”, that is very valid as well, because to create a safe environment for a child and to give mana to people, they need to be in work and they need to not be dependent on the State. So there needs to be encouragement and incentives for people to get off benefits; this bill sends altogether different and contradictory signals. The impact of employment supports and services on those receiving a benefit is also contained within that SOP 243.

I think it is very good to have clear reporting, because you cannot manage what you can’t measure, and we need to be able to measure, if this bill goes through—and unfortunately the numbers are stacked against a sensible outcome and it does appear that it will go through. If we look at repealing sections 192 to 194, I think putting in the measurement devices that were contained in the Simon O’Connor SOP 241—

Simon O’Connor: A very good SOP.

Hon MAGGIE BARRY: —to put in clause 6A—yes, I can hear the member behind me talking up his SOP, and I agree with him. I think that in the same way that Alfred Ngaro’s amendment suggestion means that you can have measurable reporting, my colleague Simon O’Connor’s goes another step further. And when you have around 10,000—[Time expired]

MAUREEN PUGH (National): Thank you very much, Mr Chair. Again, this bill has generated quite a bit of passionate discussion this afternoon. I’d like to turn our attention to a part of the bill, Part 1 and clauses 8 and 9, which talks about adjustments of the rates of the main benefits and the inclusion of new sections 452A and 453. We’ve heard a bit of debate around those mandatory adjustments and the impact that that’s actually going to have on beneficiaries as the time comes closer to 2023.

I wonder if the Minister for Social Development could answer whether any other options were considered in terms of assisting people on main benefits. The reason I’m asking that is because there are other ways that, perhaps, we could assist people who are in the most desperate times—and I’m thinking about our superannuation beneficiaries and those on single-parent benefits. One of the options that I have for the Minister to consider is to increase the Rates Rebate Scheme, and I wonder whether that was ever contemplated as part of the assessment for beneficiaries. I do know that as local government rates increase—and for some of them, we’re now getting into double figures every year—that has a significant impact on them. If it’s not directly through their local government authority, it is actually via their rent, which their landlords, of course, are responsible for paying. So whatever way it is imposed, it is still those people that are covering the cost of that.

We know that the impact of this adjustment of their benefits is going to have a pretty insignificant impact by the time we get to 2023. I feel that there could have been something done in a lot more urgency, with a lot more immediate impact, which would have had quite a tangible effect. So I want to just really get some reassurance from the Minister that all options have been investigated in terms of this.

We know that those people that are on those single-parent incomes are responsible for a very precious part of our society, and that is the children. I do give credit to Minister Tracey Martin for continuing the very important work that was initiated around the social investment approach. We know, from all of the research that was done and that was used in making that decision, that children who are brought up in benefit-dependent households have certain indicators that do not bode well for them. If we can make life a little bit easier in some of the outgoings that those households are responsible for, such as rates and rent, then perhaps we will make better headway with their lives.

We know that children in benefit households are more likely to leave school without NCEA level 2. We know that they are more likely to have contact with Child, Youth and Family and with the Department of Corrections before they are 18. So anything that can be done to lighten the load on those families will be greatly appreciated, and especially for our superannuitants. By the time most of our superannuitants have reached retirement age, they are in their own home. I know what a huge relief it was when the Rates Rebate Scheme came in, and the relief it brought them in simply applying for a little bit of rebate on those rates, because they are starting to get away. So those are my contribution questions. Thank you.

Hon LOUISE UPSTON (National—Taupō): I raise a point of order, Madam Chairperson. Thank you. About an hour ago, I requested that the two official documents that the Minister was referring to, be tabled—and, according to Standing Order 377, documents tabled by leave must be done within a reasonable period. Madam Chair, given that we are in urgency, this is the only time for scrutiny of this legislation. I want to know if—

CHAIRPERSON (Poto Williams): Thank you. I have been advised that they have been tabled. They’re just being copied; they’re on their way into—

Hon LOUISE UPSTON: They’re just not available for members. This is urgency—

CHAIRPERSON (Poto Williams): They will be here very shortly—they will be here shortly. I can’t make it happen any faster than that; they’re just about here.

Hon Louise Upston: So—Madam Chair—

CHAIRPERSON (Poto Williams): I have ruled on that point of order. They are being copied—

Hon Louise Upston: So the Opposition doesn’t have the chance to look at two documents the Minister has offered—

CHAIRPERSON (Poto Williams): I have told the member that they have been tabled, they have been copied, and they are on their way into the Chamber. She will just wait for a few moments and they will be here for her scrutiny—

Hon Louise Upston: So we will have a longer period of time to discuss this, under urgency?

CHAIRPERSON (Poto Williams): You’re answering me back; I’m making a ruling. I’m saying they’ll be here shortly. You’ve asked a question; I have answered it. I call the Hon Carmel Sepuloni.

Hon CARMEL SEPULONI (Minister for Social Development): I look forward to the other side of the House receiving the report that I tabled some while ago in this House. Can I just say that I tabled that report despite the fact that it is publicly available online, but out of courtesy to that member, and concern that she may not know how to use the internet, I thought it worthwhile tabling it. Anyway, thank you.

Brett Hudson: Well, National knows how to use the internet, Minister.

Hon CARMEL SEPULONI: Thank you very much. It’s been tabled.

I’m so glad that there’s such enthusiasm in the House today for welfare legislation that is going through, and, in fact, I have to say publicly to the New Zealand public who can watch this that we have nearly a full house of National Opposition MPs in here—unfortunately, not in support of this legislation, necessarily—because they always turn out in numbers when welfare is up for discussion. So it’s wonderful there’s enthusiasm, and I’m really enjoying going through the Supplementary Order Papers (SOPs) that have been tabled in the House from the diligent members of the Opposition. I will go through some of the questions that have been asked, as well as respond to some of SOPs that have been tabled. I was asked earlier about the fiscal implications for repealing section 192. As stated in the Budget document, it is $113 million over four years. That’s also online now.

Can I say that with regards to whether or not repealing section 192 will have an impact on our forecasted benefit numbers, I have been told by the Ministry of Social Development (MSD) that it has no impact on our forecasted benefit numbers. We had the Hon Nick Smith in the House making assertions that the analysis that has been done states that the repealing of section 192 does not have any impact on forecasted benefit numbers. So section 192 is not anticipated to result in increases in sole parent beneficiaries.

We had questions asked about the Child Support Act. The Child Support Act stands. The difference is, now, that MSD is no longer responsible for monitoring the Child Support Act. That actually is the responsibility of the Inland Revenue Department, and I think that that’s quite appropriate, actually.

With regards to incentivising the other parent to pay, there are recommendations in the Welfare Expert Advisory Group’s report, and I think we should give those due consideration over time. As I’ve said, actually—and I think my colleague Priyanca Radhakrishnan said this earlier—there are actually about 20 of the 42 recommendations that currently have work going on under them. I think the Opposition needs to read them very carefully, because the 42 recommendations are not really a tick-box kind of exercise, which I know members opposite would prefer. They’re actually much more complex, and a lot of them require ongoing work, and so some of that work has already started. I’m quite glad about the fact that there’s work under way now in about 20 of those areas.

There are other questions that have been raised in this House. Let me go through these amendments. We’ve got two SOPs here that are kind of a little bit contradictory, but I’ll speak to them anyway. One is actually asking that we push out the time of implementation, and that is with respect to the section 192 repeal. So it’s asking us that instead of doing it in 2020, we hold off implementing it until 2021—they’re wanting us to take our time with looking at the impact of that, and so pushing it out a year. But then there’s another SOP that we’ve been presented with that actually asks us to bring an element of this package forward, and that is the indexation. So it is asking us to bring that forward to July 2019. So I think it’s very interesting that the Opposition wants to divide up this package, and on the one hand asks us to bring something right forward, and then on the other hand asks us to push something right out. We would like to take a much more commonsensical approach to how we deliver legislation in this House, and so I think that the approach that we’ve taken actually makes sense and we won’t be doing what has been asked of us by the Opposition.

We’ve had requests by the Opposition to report annually on outcomes for children in benefit-dependent households. I actually think that that’s a valid recommendation, and it’s something that is in the Welfare Expert Advisory Group’s report. It’s something that we will be considering as the Government, and I look forward to exploring further as part of phase two of the work that we are doing to implement the recommendations in the report. It’s parked for now, because it requires a lot of work with respect to how we would do that and how we would do that sensibly. I’m sure that when we do get around to doing that, the general public will want us to do that in a considered way.

I do want to reflect on the fact that now, because of this Government and with the support of the National Opposition, actually, we are at least reporting on child poverty targets annually, and, of course, given that 60 percent of children living in poverty are actually in beneficiary households, that is a consideration in that annual report as we report on our targets and make sure that we’re doing all that we can do to achieve some real progress in that space. I know that there are lots of other questions, and so I might take a seat now, and then I’ll take many more contributions, I am sure, from the Opposition and I look forward to responding.

Hon AMY ADAMS (National—Selwyn): I wanted to come down and take a call on the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill because it seems to me that this goes right to the very heart of some of the differences between this side of the House and the coalition Government that now occupies the Treasury benches. Just while we’re talking on Part 1, of course, about the removal of sanctions and starting to eat away at that obligation part of welfare, I think we need to talk about what’s really driving this.

We know that the Government is made up, within its ranks, and particularly out of the Green Party, of people who fundamentally believe you should get paid the same whether you work or not, and that there should be no incentive on people to actually go out and get ahead—no reward for effort, and everybody should get the same whether they work or not. They want to see the removal of sanctions, and it starts here in Part 1 of this bill. We know that, because that’s what Marama Davidson has said. We know that they seem to believe that money grows on trees in some mythical, magical pixie-land ATM at the bottom of the garden that prints out money and we can all just stay home and get paid regardless, and there should be no obligations on welfare. Well, this side of the House doesn’t accept that.

This side of the House believes in supporting those in need. We believe in supporting those in need, but we believe that that support comes with obligations to the taxpayers who go to work and pay for it. Those obligations are set out in the Social Security Act, which, by the way, Labour voted for just a year ago. Those obligations say that “Yes, of course, taxpayers are prepared to support you in your time of need but we do expect some things in return.” One of the things that taxpayers expect is that we are holding both parents accountable and responsible for the raising of their child and the costs of doing that.

We already have, of course—and it’s important to make this point, because there’s a lot of nonsense being spread—provisions that make it clear that if the mother is in a situation where she cannot, or it would be inappropriate to, name the father, that is manageable. But when the mother knows who the father is, it is not acceptable to simply choose not to have that father financially liable for paying for the cost of that child. And, by the way, if you want to talk about welfare of children and the wellbeing of children, children deserve to know who their father is. They shouldn’t be a transactional arrangement between the Ministry of Social Development (MSD) and the mother.

Children have a right to know who their father is, and fathers have an obligation to step up and pay their share of the costs. That is why this side of the House says of course we want to support mothers and children. Of course we need to ensure children are properly supported. We do not, though, accept the Green Party view of the world that no one should be responsible, no one should have sanctions on them in welfare, and everyone should have the right to a universal basic income whether they work or not. That is not reality. That is fairyland, where money grows on trees. Get into the real world and understand there are obligations that come with entitlements. There is no free ride. The Green Party doesn’t know that; National absolutely does.

Just before I come to abatements, because I do want to spend a little bit of time on the issue of changing the abatement rate, I want to talk very briefly in support of a couple of my colleagues’ very good Supplementary Order Papers (SOPs). Maureen Pugh has an excellent Supplementary Order Paper that says that, at the very least, where the mother is in an informal relationship with the child’s father, that should be disclosed to MSD. That makes perfect sense. If there is an informal relationship of support, that is something that MSD should know. This is not free money you’re entitled to over and above everything else. This is there to top up where family support is not provided. I think Maureen Pugh’s amendment is a very good one and certainly should be supported.

The other issue in Part 1 that I particularly wanted to touch on is the changing of the abatement rates. Now, again, over the last few days we’ve heard so much about wellbeing. We’ve heard the spin and we’ve heard the fluff, and we’ve heard the noise, and we’ve heard the virtues. But let’s look at the reality of this, right. The indexing of welfare benefits was the big panacea: “Look what we’re doing for people on benefits. We’re indexing their benefit rates to wage growth.” Well, here’s the reality. By 2023—what is it; $11 a week by 2023? Do you know what that works out to just compared to the extra housing costs those same families are facing over that time? I’ve worked it out. Over the period between now and 2023, that’s the equivalent of about 500 bucks received from this policy. Do you know the extra housing costs those families face because of this Government’s incompetence over that period? It is $2,500 minimum—$2,500.

So the Government here in their Wellbeing Budget is saying to benefit-dependent families, “Go backwards by $2,500 because of our policies, our over-regulation, our inability to understand the market, but here, have 500 bucks in four years’ time and go away and think you’re grateful.” That’s not wellbeing. It is a fallacy. It is a joke. It is an insult. If the Government cared at all about wellbeing, if they really wanted to support families in New Zealand, whether they’re on welfare, whether they’re low-paid workers, whether they’re families who are getting up and working very hard, they would do a couple of things. First of all, they would take serious action to control the cost of living. You don’t ramp up costs in the private rental market that see rents up $50 a week on average and say you care about wellbeing. You don’t put up petrol taxes every year for three years, and another tax in Auckland, and say you care about wellbeing and family incomes. You don’t make it harder and harder to get a job in a slowing economy and say you care about wellbeing, and you’re not going to kid anybody that by indexing welfare to wage changes—which don’t come anywhere near meeting the cost of that—you’re supporting those families.

If you really want to talk about indexation, how about indexing tax thresholds to the Consumers Price Index (CPI) changes? That would make a real change for New Zealanders across the country. But no, no, no—that makes no sense according to this Wellbeing Budget and this “wellbeing Government”. They want to ramp up costs of rent. They want to ramp up costs of fuel. Electricity costs are going up. Food costs are going up. But here they say, “Have a 500 buck a year pittance in 2023 and we’ll call that wellbeing.” Well, that is a joke. It is an insult. It is not wellbeing. This bill should not be calling itself a welfare package. It should be calling itself an insult, a fallacy, and a joke. If you want to help people get ahead, help them get into work; find a thriving job market. Create an economy that creates opportunities. What have we got? We’ve got 13,000 more people on benefits because of this Government’s incompetence. We’ve got $50 million more in hardship grants because of this Government’s incompetence. We’ve got rents up $50 a week across New Zealand because of this Government’s incompetence. And what is their answer? Eleven dollars a week in four years’ time—and call yourselves grateful. That is an insult, and that is why people around New Zealand in the Newshub poll this morning are saying this Budget does nothing for them. This is not wellbeing; it’s a joke.

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put.

MELISSA LEE (National): This is my first opportunity to speak on this particular bill. I have to say that I wasn’t part of a select committee on social development or social welfare in the past, and this is subject matter that I’m not very familiar with. But having actually sat in my office listening to the debate, it dawned on me that I had to come down and talk about this—talk about the issue that actually matters.

Thirteen thousand more people on welfare dependency is something that I baulk at—the very idea. When this Minister was introducing the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill, I’m just trying to find out—I’d like to put a question to the Minister first. How many men are not named by the women who are actually apparently disadvantaged by the previous Government by taking some of their benefits off them as a penalty for them not naming the men who are the fathers of these children, and how many more men will actually get away scot-free to be not responsible, not taking the responsibility for the children, after this bill is, in fact, passed?

I’d like to commend the speaker who just sat down. The Hon Amy Adams made very, very clear mention of the fact that the earlier speaker from the Green Party talked about how some women are disadvantaged, whether they cannot name the fathers or they don’t know who the father is, but those people are carved out, so they’re not part of this debate. We are specifically talking about women who choose not to name the father who can be named.

These are men who want to get off scot-free by not supporting their child. And I know a few of those. I’m a single mother. I’m not suggesting my child’s father is one of those, but I have many friends who have been single parents who have been in difficult times. I’m not one of those people who actually depended on the benefit, but I do know many. I also know somebody who was born in Korea, who never knew her parents, who actually ended up being adopted and now lives in Sweden. She actually became the first Korean-born member of Parliament to become an EU member of Parliament. And when she could not find out who her parents were, I saw how difficult it was for her.

For me, the right of the child who does not know their father, knowing that their father never actually paid towards their welfare, and the very fact that the Government cannot actually collect child support payments from the father, who should rightly pay towards their child, their responsibility—I think this Government is going down the wrong path, making sure that men who do not want to take responsibility and the women who actually aid those men in their irresponsibility should take responsibility, in my opinion.

As far as I’m concerned, I would like to ask, as I said to the Minister, how many more men will actually get off scot-free? Have the calculations been done? Did she ask the officials to do the numbers as to how much this will cost the taxpayers? How many more men and women will actually abscond from their responsibility, as the Hon Amy Adams said? In order for us to make sure that children are not living in poverty—as the Minister actually tried to say that this bill tries to do that, get them out of poverty. If that is so, what does this actually do to that state of affairs, giving them—I don’t know—$6 extra a week? Does that actually lift them out of poverty? Does that actually lift them out of poverty by giving them $22 extra, when this Government is taking away so much more in other taxes that they are introducing in this urgency motion?

I believe that this bill goes so far away from what the Government suggests that they are trying to do: lift people out of poverty. I think this is the very difference between this Government and the potential Government that is waiting—the National Government—that we do not agree with this move, and I think this is very, very flawed and I do not support this bill.

Hon LOUISE UPSTON (National—Taupō): I raise a point of order, Madam Chairperson. Thank you, Madam Chair. I raised a point of order half an hour ago about the two documents that were to be tabled. Only one of them has been tabled, and I would like to know when the second one will be tabled.

Hon CARMEL SEPULONI (Minister for Social Development): Speaking to the point of order, there was only one report. I think that the member’s confused because I said that in the executive summary of the report I was speaking to, it refers to the advice that the former Minister received. So it’s one report, but advice to us as well as advice to the former Minister. Can I also state, given it was online, I actually didn’t have to table it but I did it to be polite.

Hon LOUISE UPSTON (National—Taupō): I appreciate, you know, this is more important because it is urgency and no one else gets the scrutiny of it.

ASSISTANT SPEAKER (Poto Williams): Please, carry on.

Hon LOUISE UPSTON: So the Minister was talking about and referring to quoting from two official documents, at length, in attempting to answer questions that we had asked about numbers and referred on multiple occasions to the briefing to Anne Tolley, and so that’s why she offered, actually, to table the two documents, and we are waiting still for one of them.

CHAIRPERSON (Poto Williams): The Minister has said that it was just one document she was referring to and she’s just shown me the section that she was referring to in the executive summary.

Hon LOUISE UPSTON: I realise that, but there were two documents.

CHAIRPERSON (Poto Williams): Does the member know what the two documents were? If the Minister is saying there is one, what is the other document that the member is seeking? What is the other document you’re seeking?

Hon LOUISE UPSTON: The advice to Minister Tolley in 2017.

CHAIRPERSON (Poto Williams): Was that what the Minister said that she was tabling?

Hon LOUISE UPSTON: Yes.

Hon CARMEL SEPULONI (Minister for Social Development): Speaking to the point of order—

Hon Louise Upston: Well, just table it.

CHAIRPERSON (Poto Williams): It’s a point of order; it will be taken in silence.

Hon CARMEL SEPULONI: This is the document, and what I referred to was that within this document, in the executive summary, there is a statement—that I’ve actually highlighted in that member’s version I tabled, as well—that says in mid-2017 the then Minister for Social Development instructed the Ministry of Social Development to undertake research on the section. This request followed policy advice that she received, and it’s in there. Thank you very much.

CHAIRPERSON (Poto Williams): That is the end of the matter; the document has been tabled. That is the end of the matter. I call the Hon—[Interruption]. Can we just stop it now, please. I don’t want the member to be walking around the Chamber back-chatting. That is not appropriate and it will lead the Chamber into disorder. The member knows better than to walk around the Chamber interjecting.

Hon Louise Upston: It’d be good to answer the question, Carmel.

CHAIRPERSON (Poto Williams): Order! The member will stand, withdraw, and apologise.

Hon Louise Upston: What for?

CHAIRPERSON (Poto Williams): Because you are back-chatting the Chair and behaving in a disorderly—[Interruption]—and you’re doing it right now. I’m standing on my feet. When I’m on my feet, you will be silent. The member will stand, withdraw, and apologise.

Hon Louise Upston: I apologise to the Chair.

CHAIRPERSON (Poto Williams): And withdraw?

Hon Louise Upston: I withdraw and apologise.

CHAIRPERSON (Poto Williams): Thank you. I call the Hon Carmel Sepuloni.

Hon CARMEL SEPULONI (Minister for Social Development): There were questions put to me by the last speaker—[Interruption]—and that was the honourable member—

CHAIRPERSON (Poto Williams): Order! Order! The Minister is attempting to answer questions. It would be courteous if members of the House listened. They have asked questions. I would suggest you would give the Minister a chance to answer those questions. I have made this ruling yesterday in another committee of the whole House. I’m being consistent in this matter. I call the Hon Carmel Sepuloni.

Hon CARMEL SEPULONI: So the question that was put to me by the member Melissa Lee was with respect to the number of parents sanctioned, the children affected, and the amount of money to be gained, or, at least, that was mentioned. So the information that I have from the Ministry of Social Development (MSD) is that the most recent statistics were 12,000 parents sanctioned, 24,000 children affected in total, and that the reduction was actually applied to 15,000 children; so 25,000 children, in total, living in those households. So not all of the children living in those households had a deduction applied to them, but they were living in a household where the deduction was made. Despite the fact that it said that we know that the deduction is, for one child, $22, actually, the average for those households, in terms of the deduction, is $34, which means that once we repeal this section, then those households will be better off by $34 per week.

It’s been raised on numerous occasions that this is not fair. With respect to the absent parent—the parent that doesn’t have the day-to-day care, that is not named to MSD—can I just state that we have said, over and over again, on this side of the House, it is our belief, it is based on evidence, that actually it should not be those women and the children in their households that are held to account for an absent parent.

Also, the information that I’ve been given, with regards to the exemption criteria that was in place, was that many women didn’t actually feel comfortable disclosing to their MSD case manager that the reason they were choosing not to name the other parent was because of family violence situations and fear for their safety, because of potential sexual assault or rape, or, in some cases, incest. So sometimes the exemption wasn’t applied, because it just was not the type of conversation they wanted to have in the middle of a Work and Income office. Also, we have heard horrendous stories over the years of where the sanction was inappropriately or wrongfully applied, including where women were told they actually had to go and get a lawyer to sign a letter backing up their claim with respect to either not knowing the father at all or the family violence, rape, or incest situation. That was unlawful, but the practice has actually resulted in situations that have not been conducive to supporting those women or their children. Hence why, again, we’re doing what we are doing.

But going back to the report that I tabled in the House, the evidence is not there to support that in the first place, it even incentivised the absent parent to pay the child support anyway. So as has been mentioned on numerous occasions, we are not going to support a policy that doesn’t have an evidence base. Some of the ideological rhetoric coming from the Opposition is very, very predictable, and I guess it’s to be expected in this debate.

Just to respond to a few more of the Supplementary Order Paper’s (SOPs), I’ve responded to a number of them, so a few more that are in front of me—one has been put forward with regards to our obligations under the UN Convention on the Rights of the Child (UNCROC) and wanting us to review it, with the inference being that we are not responding appropriately to it as a country. Can I just say that it is consistent with the UNCROC obligation, and this is considered as part of the development of the legislation. That is the official advice that we were given, so we can clear that one up. I also got an SOP from the member Agnes Loheni with regards to wanting us to insert a new social obligation into the Act that would reintroduce the same obligation that is currently being repealed. We won’t be doing that because that will contradict absolutely everything that we’re standing here to talk about with regards to section 192.

Then there also is an SOP that’s a little bit left-field from Simon O’Connor with regards to an issue that isn’t being traversed in this package at all, but I will speak to it out of courtesy. He has asked that we insert a new clause 7A—insert new section 83A “Child disability allowance payable overseas to members of Defence Force”. That is actually not in line with any of the matters that we are discussing today. I would like to propose that if he sees a need in that area, perhaps he finds another avenue for actually pursuing that. I don’t believe something that is so far removed from what we’re discussing here in the House needs to be entertained in any way at all. Thank you.

JAN LOGIE (Green): Thank you, Madam Chair. I’d like to speak primarily to the indexation aspect, in this speech, though I will address one other aspect in relation to section 192 and this idea that there is no incentive for mothers to name the father if we remove the sanction. It assumes that those women see themselves receiving income support for the entire lives of their children, that they never imagine anything more for themselves; that they might be employed and receiving that child support themselves in their future. I think that sums up a particular view that that side of the House has that is not shared on this side.

I would like to reference some of the comments that were made by the member the Hon Amy Adams in challenging this Government around poverty and the housing crisis, and saying how their solution had been tax cuts and it would have been much better. That was the fact that we have deeply entrenched child poverty after nine years of that Government and that we have, absolutely, a housing crisis that somehow is now acknowledged but wasn’t under their “leadership”—and I use that word lightly—and that this Government has had 18 months, and, with the Families Package from the last Budget, really, we’re only just starting to see that have an impact now. So I say: just give us a bit more time.

I would also just say that when they say that the answer was tax cuts—really, when we’re seeing the schools without enough classrooms, when we’re seeing hospitals with mould coming down the walls—

CHAIRPERSON (Poto Williams): We are straying a little bit from the—

JAN LOGIE: This is to the point that was raised by the member, and about income adequacy and the solutions, and the importance of indexation.

We know cutting taxes gives us less money as a country to deal with building those classrooms and addressing the healthcare system. So tax cuts are not the answer to poverty; it actually is a removal of resource for us to be able to deal with our collective challenges. I do want to say, though, that the Greens are supportive of this bill because it really does move us forward, but we are a bit disappointed that there isn’t an increase to base benefits. We would have liked to have seen that.

The indexation—it is a point that it will be $10 to $17 a week over the Consumers Price Index adjustment by 2023. We do support the view of the Welfare Expert Advisory Group that the need is urgent and that poverty, its impact, is really profound. When I see members of the Opposition nodding to that, it just makes me deeply uncomfortable, because we had these conversations so many times in Opposition and all we got was just denial, and the message that I continue to hear: that work is the solution—completely ignoring the fact that there are people who are locked out of the employment market by virtue of disability, by virtue of the needs of their children who need them to be at home parenting, by virtue of health concerns like cancer. I know the Minister in the chair was a champion in Opposition for those changes, so it does not sit well to hear those arguments being made so lightly now where they have no ability to deliver on those changes.

The Greens are committed to getting that increase to base benefits because we know the cost of poverty is deeply profound; it impacts on people’s health, their wellbeing, their ability to participate, and their entire life opportunities. When we talk about addressing core wellbeing, for us, we know all of the evidence points to income adequacy being a central part of driving poor mental health and negative outcomes. We are working constructively to move that along and look forward to the next step in that work.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. Excellent choice—I’ve been up and down countless times in the last hour and a half trying to get a call. I wanted to just pick up on a point made by Jan Logie, which is a very unusual thing for me to do, but she made the point that the Minister in the chair was a tireless champion on wanting to raise benefits in Opposition and, no doubt, she was a tireless champion for our $25 a week increase in benefits back in 2015. [Interruption] Oh, she didn’t vote for it? Well, that is a surprise. I would like the Minister—could she confirm that she didn’t vote for that $25? Firstly, that’s the question I’d like to have answered.

I note that in the departmental disclosure statement it says that the Cabinet legislation committee received advice and that those papers were going to be public within 30 days. I can’t find them on the website. And, as you know, we are quite good at that. Perhaps Gabriel Makhlouf might go and sort your website out so we can find it! That would be helpful. We’re in urgency here, we are judging a piece of legislation that’s not going through a select committee, we’re in the committee of the whole House, and I think it’s incumbent on the Minister to make those papers available. We should be able to understand what advice was given to the Cabinet legislation committee.

Further, I note, on the New Zealand Bill of Rights Act, that there was a report provided to the Attorney-General—a section 7 report—but I’ve checked on the justice website and I can’t find that. Clearly, there was something that was raised in that section 7 report, and it’s not available. Yet we are here in urgency putting a piece of legislation through. We know that we get problems with legislation anyway. Select committees are a great safety measure to ensure that those problems are identified early. Why can’t we read those pieces of advice that have gone to Cabinet and gone to the Attorney-General? I think this is pretty serious, quite frankly—it’s very serious. This is about good legislation. The New Zealand Bill of Rights Act is a fundamental plank to measure our legislation, and that’s why these section 7 reports are so important. Clearly, there is a right being trampled over that is supposed to be inalienable under the New Zealand Bill of Rights Act and yet we don’t have that advice to make a judgment on. I feel deeply uncomfortable with that. So the Minister in the chair, I’m calling on her to tell us what that advice is and to table it. She has the opportunity to do that. She was quite, I thought—well, she didn’t put it very well when she tabled the document that the Hon Louise Upston forced her into doing, and I think if she wants to be generous, she should get these documents out here so that the country can be comfortable that Cabinet made a decision based on sound advice, and that the Attorney-General’s advice hasn’t got something in there that we should all be deeply worried about.

Also, one other question that I think is quite relevant: the $11 that’s been mentioned with the indexing to the average wage. Has that been worked out? We see that as a difference between $11 and $25, which was under us. That nominal difference looks not too bad—it’s bad enough but certainly not as generous as the National Government was—but, actually, inflation has happened in those four years. So that wouldn’t be $25 in today’s dollars; it would be something like $26 or more. I haven’t done the numbers, but I would be certain that the Minister would have received advice on that and the comparison between the $25 uplift in the average baseline benefits versus the $11 by 2023 for indexing. I’d like to know what that number is. What is that number? And what would have been the fiscal cost of making that $25—giving it a bump up for those beneficiaries, if they really believe they need more money? And that’s what they said. What was the cost? You must have got advice on that. You don’t just come in here and make rash statements without advice.

Hon CARMEL SEPULONI (Minister for Social Development): I’m just trying to work through some of the comments that were made by the speaker who has just sat down, Stuart Smith, with regards to what he’s seeking. If he is seeking the Cabinet paper with regards to our response to the Welfare Expert Advisory Group, that is online. That has been online for quite some time. I’ve got the website here. I can even get him a copy of the paper if he’d like it.

With respect to Budget-related advice, that is released by Treasury, and so that is not a Ministry of Social Development (MSD) release of information. And we’ve only just announced the Budget.

Can I speak to an amendment that I have been given, and that is from the member Maureen Pugh. I’ll speak to this amendment. It is another one that we won’t want to support, because it actually duplicates an existing obligation. The member has asked us to require beneficiaries to disclose to MSD any arrangement where they are receiving financial support from the child’s relations. There’s actually an obligation already to declare if they are receiving financial support from another source, so we won’t be implementing that one.

NICOLA WILLIS (National): I have to say, I’m struck by a sense of déjà vu as we debate Minister Sepuloni’s bill under urgency, because, of course, we’ve done this before. I remember the social security bill that the Minister chose to introduce a Supplementary Order Paper (SOP) to very late in the piece—only 24 hours before the second reading.

CHAIRPERSON (Poto Williams): We aren’t talking about that bill.

NICOLA WILLIS: We are.

CHAIRPERSON (Poto Williams): We are not.

NICOLA WILLIS: And what happened in that case, Madam Chair, and the reason it’s relevant to this, is that there were errors, and what had to happen was that another bill had to be brought through this House to repair—

CHAIRPERSON (Poto Williams): Not this bill. Come back to this bill.

NICOLA WILLIS: So my question for the Minister, in relation to this bill, is: why is it necessary for this bill to be passed under urgency? I ask that question because, to my read—

CHAIRPERSON (Poto Williams): I think that question has been asked before and answered.

NICOLA WILLIS: To my read, none of the measures within this bill need to start until 2020. So it does seem quite extraordinary to me, and I think it is worth asking whether the Minister can guarantee that there won’t be drafting errors in this legislation, given the rushed process that it is under.

I also want to talk about the substance of this bill because, of course, what it does is it repeals sections 192 to 194 the Social Security Act and makes changes to the Child Support Act. I wonder if the Minister would, for this House, respond to the comments made by a former Labour Party Minister for Social Development, one Steve Maharey, who said, “It is right, and I’ve said time and time again in this Parliament, that fathers must front up to their obligations, and we will make sure they do.” He said, “It is not unreasonable to expect that single parents bringing up children on their own identify who in the law is the other parent or to expect that they seek financial support for the child from the other parent. It is not unreasonable to penalise financially those who don’t.” I want to know what it is that’s changed so much in the Labour Party that Minister Maharey was able to stand up and make those values statements about the way we see fathers, the obligations they have to their children, the obligations they have to financially support them, and what has changed that the Labour Party of today thinks that, actually, those obligations more rightly fall on the State rather than on fathers? That is my question to the Minister.

Of course, it is right—and National has argued throughout these committee stages—that taxpayers do assume some responsibility. Of course the State should step in to financially support families when they are unable to support themselves, but, in doing so, the Government should expect the other parent to contribute to the cost of raising their child. In fact, what is unreasonable is a parent not providing anything towards the cost of his or her child. That is what is unreasonable, and so my third question to the Minister is: what is her estimate of how many fewer fathers will pay child support for their children as a consequence of this bill?

Hon Ruth Dyson: We’ve done this.

Hon Louise Upston: We didn’t get an answer.

NICOLA WILLIS: And we have not had that question answered, because it is very important, and has the Minister analysed in any way how this will affect incentives for fathers to pay child support? What we have seen in the past is that when there aren’t penalties in this area, we can expect that fewer people will feel the obligation to pay child support for their children, and we on this side of the House believe that is wrong.

I also, in examining this bill, have had these examples talked about in the House, which, I think it’s worth pointing out, the law as it currently stands unamended already provides for. We’ve had the examples of people in situations of domestic violence, in situations where, for very good reason, they don’t want to name the father of their child, and what we have always had is exceptions and clauses in the law that allow for those people to not name the father due to their exceptional circumstances. So, again, I ask the Minister in the chair, Carmel Sepuloni: what is the increase that we can expect, and given that people were already able to have these exceptional circumstances clauses, who are the additional people that will be excluded under this bill?

Finally, I just want to raise the issue of vulnerability, because, of course, we can anticipate that some women are in relationships where they will be vulnerable and where they may choose not to name the father because they have an under-the-table arrangement where he says “I’ll pay you a hundred bucks each week”, and then one week he doesn’t, and the next week he doesn’t. What response would they have with these changes having been made? There are good reasons to name fathers in the law and to require them to pay child support. The National Party opposes this bill because we think it gets those responsibilities all wrong.

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

Ayes 63

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

Noes 56

New Zealand National 55; Ross.

Motion agreed to.

The question was put that the following amendment in the name of Agnes Loheni be agreed to:

insert after clause 4:

4A Amend section 135 (Interview and Reporting)

135(2) MSD must, during the interview in (1), ask the person if they wish to name the father of the child, if that information is not already known.

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

Ayes 56

New Zealand National 55; Ross.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Maureen Pugh be agreed to:

insert after clause 4:

Section 135 amended (Interviews and reporting)

(c) disclose to MSD any arrangement where they are receiving informal financial support from any child’s relation.

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

Ayes 56

New Zealand National 55; Ross.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Simon O’Connor be agreed to:

delete clauses 4, 5, 6, and 7.

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

Ayes 56

New Zealand National 55; Ross.

Noes 63

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

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 241 in the name of Simon O’Connor be agreed to.

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

Ayes 56

New Zealand National 55; Ross.

Noes 63

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

Amendment not agreed to.

CHAIRPERSON (Poto Williams): The question is that the Hon Alfred Ngaro’s amendment to insert new clause 6A to require MSD—

Hon Alfred Ngaro: Point of order, Madam Chair.

CHAIRPERSON (Poto Williams): I’m in the middle of taking the vote—I am in the middle of taking the vote.

Hon Alfred Ngaro: It is relevant to this—

CHAIRPERSON (Poto Williams): I am in the middle of—yeah, thank you.

The question was put that the amendment set out on Supplementary Order Paper 243 in the name of the Hon Alfred Ngaro be agreed to.

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

Ayes 56

New Zealand National 55; Ross.

Noes 63

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

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 246 in the name of Denise Lee be agreed to.

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

Ayes 56

New Zealand National 55; Ross.

Noes 63

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

Amendment not agreed to.

The question was put that the amendment set out on Supplementary Order Paper 242 in the name of Simon O’Connor be agreed to.

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

Ayes 56

New Zealand National 55; Ross.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Simon O’Connor be agreed to:

after clause 7, add:

7A Insert new section 83A (Child disability allowances payable overseas to members of Defence Force)

83A Child disability allowances payable overseas to members of Defence Force

(1) A person whom a child disability allowance granted under section 39A is payable under section 39E in respect of a child may be paid, or continue to be paid, the child disability allowance in respect of the child in the circumstance set out in subsection (2).

(2) The circumstances are that—

(a) The person is a member of the Defence Force; and

(b) The person is carrying out duties of the Defence Force outside New Zealand; and

(c) The child is the absent from New Zealand in order to be with, or near the person.

(3) In this section,

Defence Force means the New Zealand Defence Force constituted by section 11(1) of the Defence Act 1990

member of the Defence Force has the same meaning as in section 2(1) of the Defence Act 1990.

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

Ayes 56

New Zealand National 55; Ross.

Noes 63

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

Amendment not agreed to.

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

Ayes 63

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

Noes 57

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

Part 1 agreed to.

Part 2 Amendments to other Acts

CHAIRPERSON (Poto Williams): We come to the Part 2 debate; the debate on clauses 15 to 21 and the Schedule.

Hon ALFRED NGARO (National): I raise a point of order, Madam Chairperson. I took a previous point of order because my Supplementary Order Paper (SOP) 243 that was submitted to the Table—I did not have a chance. I did seek the call previously, prior to you sitting in the Chair. Also, it was not referred to by the Minister in regards to this Supplementary Order Paper, hence the reason why I wanted to take the call so that I could refer to my Supplementary Order Paper and at least have a response from the Minister.

CHAIRPERSON (Poto Williams): Just in relation to that—I thank the member for your point of order—the Minister had answered several questions. She may not have come to yours specifically, but she did spend a lot of time answering questions put to her. It’s unfortunate that you didn’t get a chance to speak to your SOP. You did actually have a call, I think, during the debate. You could have spoken to your SOP at that point.

Hon Alfred Ngaro: A point of order, Madam Chairperson.

CHAIRPERSON (Poto Williams): We have moved on to Part 2, I’m afraid, so we cannot go back.

Hon Alfred Ngaro: Madam Chair, I did seek to take that call. I had spoken in the first reading and the second reading, and you’ll notice that there, but I did try to seek the call. I wasn’t successful inside of that, hence the reason I wanted to take a point of order to be able to speak to this. The Minister may have referred to other SOPs that were there, but she did not refer to this, which was tabled on the Table.

CHAIRPERSON (Poto Williams): Unfortunately, we have moved on—

Hon Louise Upston: Speaking to the point of order—

CHAIRPERSON (Poto Williams): No, I’m not taking any more speaking to the points of order. I’m making a ruling. Thank you. I thank the member. Thank you. We’ve moved on now to Part 2, and I apologise to the member that you didn’t have an opportunity to do that. You did actually have a call during the committee of the whole House debate on Part 1. You could have spoken about your SOP at that point; you did not. I’m not taking it—are you seeking the call?

Hon Louise Upston: No, it’s a new point of order. I raise a point of order, Madam Chairperson.

CHAIRPERSON (Poto Williams): Point of order, the Hon Louise Upston.

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Chairperson. In the debate on the first part, the Minister referred to a number of Supplementary Order Papers (SOPs), including ones that were not in Part 1, which meant the debate that we had stretched beyond Part 1—

CHAIRPERSON (Poto Williams): That is not a point of order, and we’ve moved on to Part 2 now. Please, I ask the member to resume her seat.

SIMON O’CONNOR (National—Tāmaki): I am very pleased to take a call on Part 2. I must admit it has come quicker than I anticipated, but fortunately I am quick to react. I want to attend mainly to clause 16—in effect, an amendment to the Child Support Act, and this amending section 9. In this case, it’s intending to take in section 9(5B), which says, “before ‘the chief executive of the department for the time being responsible for the administration of the Social Security Act 2018’, insert ‘either the Commissioner or’.”

There are two things I would like clarity on from the Minister, if they can. First and foremost, which commissioner are we talking about? I suspect I know what it is in so far as there used to be called, in the Ministry of Social Development, “regional commissioners”. Is that what is being referred to, or is it a commissioner to oversee, well, in effect, Madam—oh, sorry, Mr Chair. I do apologise; we’ve had a change. In effect, we need a little bit more clarity about who this commissioner is, and I want to be clear, particularly to the Minister’s officials, that I’m not looking for the name of said person but what commissioner we are dealing with. To try and show the lack of clarity, of course, this Parliament’s very aware that we have a multiplicity of commissioners, from family commissioners to human rights commissioners to a multiplicity—

Chris Bishop: Too many, probably.

SIMON O’CONNOR: Probably—arguably—too many. But, in all seriousness, I think there is a lack of specificity here about who this commissioner is, particularly in their relationship to the chief executive, which I assume is the chief executive of the Ministry of Social Development. But I just want to make absolutely clear, because another colleague, Nicola Willis, spoke earlier that, actually, we’ve seen rushed legislation like this before and it’s led to mistakes. So, in short, and I suppose slightly tongue in cheek, I don’t want to see the Commissioner for the Environment involved with applying social benefits, and that’s no offence to that particular person. The other is, then, that if there is a chief executive and a commissioner both able to be responsible, who has precedence? I assume it’s the chief executive, but, again, I think there is a lack of clarity in what’s been presented to us here. So it would just be good to get some clarity from the Minister around that proposed clause 16.

Again, if it’s of assistance, Minister: who is the commissioner? Actually, there’s a third question. So who is the commissioner? Secondly, what is their jurisdiction in relation to the chief executive—do they outrank, under-rank, or are they of equivalence? I think that’s fairly important. And, thirdly, the drafting of this legislation has been quite particular that it’s singular. Again, I suspect we’re not talking about the regional commissioners, but if we are, of course, that’s a plural, and I want to make sure that, if there are commissioners, we don’t have a drafting error here.

I raise a point of order, Mr Chairperson. I’ve had a further tabled amendment also around the United Nations obligations. It’s similar to the one that was, obviously, tabled and voted down in Part 1. If I have an intention to table one that’s, I will be honest, very similar, is that out of order instantly, or because of a new part—I just don’t want to cause disorder.

CHAIRPERSON (Adrian Rurawhe): The way forward for the member is to actually table it through the proper process. The clerks will bring it to the Table and provide me with advice, and I will decide at that point. I can’t make a ruling on something I haven’t seen.

SIMON O’CONNOR: Thank you, Mr Chair. Look, I will then just indicate that I am writing and amending a proposed Supplementary Order Paper that I do intend to table here, which is just asking the Minister to, effectively, provide written confirmation to this committee that these changes remain agreeable to the United Nations Convention on the Rights of the Child, and in particular within clauses 4 to 7, where it suggests in New Zealand—

CHAIRPERSON (Adrian Rurawhe): I must tell the member that he can’t debate something that’s not before the committee. So you’ve advised me that you intend to do that. You cannot debate that until you actually do it. Thank you.

SIMON O’CONNOR: Very good. Thank you, Mr Chair. I will seek advice on that later but not disrupt the conversation now. I’m happy, then, to jump to veterans. I’ve probably got a lot more to discuss there. This is Subpart 2. I think the Minister in the chair will, hopefully, answer a couple of questions for me. First and foremost, the House is working at the moment through a different process for another veterans’ affairs bill. This bill is going to be, effectively, expanding the scope of those who are deemed to be veterans. I would welcome the Minister’s indication to the committee whether or not some thought by her officials has been given to the implications of that particular bill—in fact, it is to the Veterans’ Support Act of 2014. That is only going into committee now, but it would be good to get some assurance that the notion of abatements as discussed in this Subpart 2 has been considered by the Minister and the officials.

Why that’s relatively important is that there are, fundamentally, cost implications. As I’ve indicated in earlier speeches, I think it’s actually a really good part here. I myself am very supportive of what the Minister is doing to look at the abatements, but I think it’s quite important, as we are looking towards financial implications, that we not only look at the current practice but that we’re also about to—[Bell rung] Mr Chair?

CHAIRPERSON (Adrian Rurawhe): Simon O’Connor.

Hon Carmel Sepuloni: Mr Chair?

CHAIRPERSON (Adrian Rurawhe): Oh, sorry, I’ve already given the call.

SIMON O’CONNOR: Thank you. The fates are on my side for once. This is good. I think it would be useful just that there’s some affirmation from the Minister, who’s showing great eagerness, which I am very keen on, that with this proposed legislation—as was indicated in the House earlier in the week, there does appear to be unanimity from the House, so we can anticipate that probably hundreds if not thousands of veterans will now be officially declared as veterans and therefore will come under the role of this abatement. So I just want some assurance, as far as the Minister is willing and able to indicate, that that’s been taken into account.

The other area that I would like to just touch on—and I signalled it, I think, in my first or second reading—is whether or not there’s scope for us as a Parliament, in particular yourself, Minister, as the holder of the purse, if you will, as a Minister of the Crown, to be more generous to our veterans. So, while I acknowledge that what is here in Subpart 2 and the subsequent clauses is about aligning the abatement rates for veterans, in fact, is there a possibility or has any consideration been given to making it slightly more generous? I know that probably puts us into issues of discrimination. It probably, in this case, would be a positive discrimination rather than a negative one, but if any thought has been given by the Minister to that, that would be welcome. If any advice has been sought, that would be particularly useful. I myself haven’t served, but I know a number of members in this Chamber have, and, of course, we are in a Chamber that is a war memorial. These people have served the Realm with honour and, obviously, they seek their entitlements through Veterans’ Affairs. They, like anyone else receiving support from the Crown, can look to work. I’m wondering whether or not there’s a possibility, therefore, in the abatement to be slightly more generous. I’m not going to give a particular number. I think that gets a little bit fraught, but any assistance there would be incredibly, incredibly welcome.

As we move into Part 2—this is to do with the new schedule under Part 2—just some clarity around the dates there. I know we get into title and commencement of the whole package later, but I am wondering why we have April 2020 and why it is so far out? I’m looking for some transitional arrangements there. I may have missed those in Part 2, but any indication from the Minister, again, as to why this is taking so long, would be welcome. I suspect—but the Minister may wish to confirm this—that this is to keep it in line with the other abatement changes, but perhaps it would be a partial solution, as it were, to assisting our veterans in a more generous form, that we actually move to have their abatements put in place fairly quickly.

That probably leads me to my last question: is the Minister able to provide us some details about, of course, the abatement rates across the main benefits, like sole parents and employment support? Also, as a consequence, is she able to give us the numbers of those that she’s anticipating in the veterans’ support space will be affected by her changes?

So there are a few things there that I’ve tried to raise for the Minister in the chair. As I said, primarily it’s around clause 16: the notion of who is a commissioner. Have we used the right term? Is it pluralised sufficiently or is singular OK? Their relationship with the chief executive—I would love, if I can, to have absolute assurance that we know specifically who the commissioner or those commissioners are, and that we’re not going to end up with any confusion there. Then, to assist the Minister around the abatements—again, first and foremost to acknowledge a good piece of work overall—has thought been given to how that’s affecting the current amendment bill to the Veterans’ Support Act? I suppose the fundamental point there, Minister, is that we have a large number of veterans coming on board, I suspect. It’s a fairly large budget. As I flipped through the documents, I saw that that’s being taken care of. And then, really, it’s not a philosophical question but a broad question—whether or not any thought’s been given for us to be more generous to those women and men who have rightly served the Realm.

Hon CARMEL SEPULONI (Minister for Social Development): I might take a different tack this time and not only respond to Simon O’Connor’s questions but actually talk through what Part 2 does—so, hopefully, pre-empting some of the questions that the Opposition could have. So I’ll take my time in explaining it this time, right at the beginning, and hopefully we can pre-empt some of those inquiries.

Part 2 of the bill makes amendments to both the Child Support Act 1991, Subpart 1, and the Veterans’ Support Act 2014, Subpart 2. Subpart 1 is the amendment to the Child Support Act 1991; so Subpart 1 of Part 2 of the bill amends the Child Support Act 1991 so that the Commissioner for Inland Revenue or the chief executive of the Ministry of Social Development (MSD) can decide whether a social security beneficiary is not required to apply for child support under section 9 of the Child Support Act 1991. Subpart 2 is the amendment to the Veterans’ Support Act 2014. Subpart 2 of Part 2 of the bill repeals the definition of income test 3 and amends the Veterans’ Support Act 2014 to remove the detail of the abatement thresholds for income-tested veterans’ pensions from the Veterans’ Support Act 2014 and creates a new regulation-making power. This regulation-making power will result in the detail of the abatement thresholds being shifted into the Veterans’ Support Regulations 2014. This means that, in the future, changes to the veterans’ pension abatement thresholds can be made through regulations by Orders in Council rather than by relying on amendments to the primary legislation, which is why we didn’t have to bring that whole policy proposal to the House today. Most of it can be done through Order in Council, but the veterans’ component couldn’t be, so hence why we’re making the amendment.

In terms of the clauses, I know the member had questions about clause 16, but let’s start with clause 15. Clause 15 of the bill sets out that Part 2, Subpart 1 of the bill amends the Child Support Act 1991. Clause 16 of the bill amends section 9(5B) of the Child Support Act. Section 9 of the Child Support Act sets the obligation for a person receiving a social security benefit, as defined in the Social Security Act, to apply for child support. The amendment at section 9(5B) will authorise the Commissioner of Inland Revenue, as well as the chief executive of the Ministry of Social Development, to decide whether a social security beneficiary is not required to apply for child support under section 9 of the Child Support Act.

Currently, only the chief executive of the Ministry of Social Development is authorised to make that decision under section 9(5B) of the Child Support Act. This change allows a client to have the conversation about whether they need to apply for child support with either the Inland Revenue Department or the Ministry of Social Development. Under current legislation, only MSD can make the decision that a client is not required to apply as one of the exemptions applies. This can result in some clients having intrusive conversations, as we discussed earlier, about private matters with both and the Inland Revenue Department and MSD in order to be exempted from the obligation to apply for child support.

Subpart 2 is the amendment to the Veterans’ Support Act 2014. If we move to clause 17, this clause of the bill sets out that Part 2, Subpart 2 of the bill amends the Veterans’ Support Act 2014. Clause 18 of the bill will repeal the definition of income test 3 under section 158(1) of the Veterans’ Support Act. This has been done so that income test 3 can be defined in regulations, which can then be changed more easily to incorporate future changes to the abatement thresholds.

Clause 19 of the bill inserts new section 171 on the abatement of the veteran’s pension into the Veterans’ Support Act. Under new section 171, a veteran’s pension payable under sections 161 and 164 is subject to income tests and abatement thresholds set out in that section. New section 171 instead makes a veteran’s pension payable under section 161 or section 164 subject to abatement, in accordance with regulations made under section 265 of the Veterans’ Support Act. This will mean that the abatement thresholds will be defined in the regulations in the future. New sections 171(2) to (4) in clause 19 also make clear what may and must be done by the new regulations.

Clause 20 of the bill enables the creation of regulations in relation to abatement thresholds under the Veterans’ Support Act. This is because clause 20 amends section 265 of the Veterans’ Support Act by inserting new section 265(1)(29A), which authorises regulations to be made for the purposes of new section 171. So you kind of need to refer back to clause 19 on that.

Clause 21 of the bill will insert a new Part 4 in Schedule 1 of the Veterans’ Support Act. This new Part 4 is set out in Part 2 of the Schedule of the bill and relates to the transitional arrangements for the repeal of the detail on abatement thresholds from 1 April 2020. This Schedule enables the regulation-making power to be exercised before 1 April 2020, but that the regulations will have effect only on or after 1 April 2020.

Just talking to a few of the points in regards to the amendments to the Child Support Act, with respect to enabling the Commissioner of Inland Revenue to determine whether a person is not required to apply for child support. As I briefly touched on, currently only the chief executive of the Ministry of Social Development is also authorised to make that decision, under section 9(5B) of the Child Support Act 1991. This change allows a client to have a conversation about whether they need to apply for child support with either the Inland Revenue Department or the Ministry of Social Development. Under current legislation, only MSD can make the decision that a client is not required to apply as one of the exemptions applies. This can result in some clients having to have sensitive conversations—as I said, private matters—with both the Inland Revenue Department and MSD in order to be exempted from the obligation to apply for child support.

Just speaking to the amendments to the Veterans’ Support Act 2014—specifically generic points on increases to abatement thresholds—under current policy settings, people receiving a main benefit can earn up to a certain level of income per week, known as the abatement threshold, before their benefit begins to reduce, which is known as the abatement “rate”. This Government has committed to increasing the minimum wage to $20 in 2021, and we want to make sure, in anticipation of that, that people getting main benefits could still continue to work the same number of hours before that benefit is reduced. Under the Budget 2019 income support changes, abatement thresholds are set to increase by between $5 and $10 each year for the next four years to respond to the expected increases to the minimum wage over that same period. It’ll benefit around 73,000 low-income individuals and families by an average of $5 per week on 1 April 2020, increasing to $12 per week in 2023. Obviously, that amount is more for those that work the maximum number of hours or earn up to the threshold. Increasing abatement thresholds of main benefits costs $97.1 million over four years; so that’s the cost implication, if anyone was going to ask.

The changes to the Veterans’ Support Act 2014 mean that future increases to the abatement thresholds can be made in regulation rather than amending the Act. So it’s really just aligning it so that we’re not in this position again where we would need to treat them separately, so that it can actually be done by Order in Council, as is the rest of what we’re attempting to do with our commitment to raising abatement thresholds.

This bill will remove the detail of the different abatement thresholds currently contained in sections 158 and 171 from the Veterans’ Support Act 2014 and create a regulation-making power under section 265 of that Act to enable the detail of abatement thresholds to be included in the veterans’ support regulations 2014. This approach makes adjusting the veterans pension abatement thresholds through regulations more legislatively efficient. It is also similar to the way abatement thresholds are increased for superannuitants and main beneficiaries, which is generally done through Order in Council, as I mentioned before.

Hopefully that—actually, I’m confident that that—responds to the questions that were put to me by Simon O’Connor, and hopefully it pre-empts some of the questions that will come from the other side. Thank you, Mr Chair.

CHRIS PENK (National—Helensville): Thank you very much, Mr Chair, and I also thank the Minister for Social Development for her detailed explanation of Part 2. She was attempting to set out as much information as possible to forestall any questions, and that’s noted and acknowledged. But there are some questions, none the less, that remain and other debating points, and, in fact, there’s a couple of questions that have arisen from her explanation that might be usefully thrashed out now—if you’ll excuse the term.

First, to the amendments to the Child Support Act 1991, and the Minister has explained that that applies to where a decision is made about whether a formula assessment needs to be sought by a social security beneficiary. What the bill is seeking to do is to set up a regime whereby the Commissioner of Inland Revenue, as an alternative to the chief executive of the department that administers the Social Security Act, could also make such a decision, effectively, to waive that requirement. But my question to the Minister is: what happens if those two persons might disagree? I can imagine a scenario whereby a beneficiary might perhaps apply for a formula assessment to both bodies—that is, to the IRD, and have the commissioner take that into consideration, and also to the relevant Government agency as determines the entitlements under the Social Security Act. It might be that those two people come to a different answer, and so which of those would prevail in that circumstance would be my question to the Minister and her officials.

There’s a related question in relation to the IRD element, whereby the commissioner, under separate legislation, has the ability to delegate decision making. So I wonder if it’s intended that the commissioner might have the ability to delegate this particular decision, or if it is perhaps intended by the Minister very much to be the commissioner herself or himself at the time, as the case might be.

A further and final question relating to clause 16 of this bill would be whether there was anyone else that was contemplated by the Minister and her officials to have such a power of waiving assessment. It might be, for example, that the administration of another Act is carried out by the chief executive of another Government department, and it might be that that person is well placed to make a determination in relation to the particular beneficiary involved. So if she can give some guidance on that, that will be helpful for our consideration and for the record as this bill goes through.

I would also request the Minister’s guidance in relation to the provisions that relate to amending the Veterans’ Support Act. My colleague Simon O’Connor has noted that elsewhere in the House, or in another part of the House’s proceedings, the Veterans’ Support Act is being amended, and I join him and others in the House, no doubt, in commending that. But in relation more particularly to Part 2 of this bill, in new section 171, “Abatement of veteran’s pension”, in clause 19, it is noted under subsection (2) that “Regulations made under section 265 may require different abatement”, and the Minister herself has just a few minutes ago talked about this subsection in relation to abatement that “may” or “must” be made. But, in fact, the wording of the clause is quite clear. It’s “may”—it’s discretionary—and yet, actually, I think she might be right in her commentary, more so than in the wording of the proposed legislation.

I think it would be appropriate to make it mandatory that different abatement will apply when regulations are made under section 265—for example, the veterans pension, under sections 161 and 164. Different examples are given under new section 171(2), and they’re phrased as examples—so it says, “(for example, different income tests, abatement rates, and abatement thresholds”—but if there are other bases on which a different abatement might be made, then why would the legislation not simply spell those out? It is unclear to me.

So if the Minister can advise whether that list is meant to be exhaustive or not, and if it’s not, then explain why she wouldn’t just simply set those out. But if it is intended to be exhaustive, then perhaps simply pointing to the relevant section would actually be just as good a way to do it. It’s the difference between “i.e.” and “e.g.”—between providing an exhaustive list and perhaps just giving particular instances that might apply.

My other, final question to the Minister, if I can continue over the five-minute break—[Time expired]

JAN LOGIE (Green): Thank you, Mr Chair. Just a short call to speak to the point about moving the abatement rate for veterans’ support into regulation and how happy we are to see that, and this policy work in general. This is an area that has been long neglected. The initial intent of this was to enable beneficiaries, to really help people to transition into full-time employment through part-time employment so that if they were parents and, actually, that didn’t work for their children, for them to be in full-time employment, they could get that additional financial benefit from those added hours of work, or if they were a person with an illness or a disability—and I suspect many veterans may be in that situation—where, actually, full-time work is not possible for them while maintaining their health. So we want people to get the value of the work that they do, and it’s appropriate for that to sit on top of the benefit that they get.

I think it’s also important to recognise too that this sits within the context of the needs of people within our community and how many people, veterans and others alike, have mental health challenges and disabilities and caregiving responsibilities—so how important these provisions are for so many New Zealanders.

It also sits in the context of the structure of our labour market, because, actually, New Zealand has very precarious employment conditions for many New Zealanders. I think that’s been evident by, in part—this links to, and the abatement discussion does as well—the discussion we’ve been hearing from the Opposition about the need for people to be in paid work and this being the solution to poverty. They typically are talking full-time work, when that’s the discussion, and how you need to be growing the economy to do that. But I was looking at a Salvation Army submission from 2016 where they were noting that, since 2010, the economy had grown by 16 percent while the number of jobs had risen by about 11 percent, yet the number of people on the margins of the labour market without work, with unreliable work, or with short hours remained at a constant of 10 percent of the working-age population—of around 350,000 to 370,000 people. So that’s actually a signal to us that this is built into the very structure of our economy. When we hear the Opposition quite often talking about the need for flexibility for employers, actually, they’re arguing for precariousness of employment for working people in this country. This is built in.

It’s going to take us time. This Government has it on the agenda to deal with that underlying structure of our labour market to give people more security, but, in the meantime, we need to make sure that we’re not penalising people for the situations that they find themselves in—whether that be out of work altogether, or whether that be in precarious work, or limited hours of work. The abatement rate is essential in that, and so we support the increase of that and like it being in regulation, because we’re hoping to see what’s been signalled already by this Government—an increase of $5 more a week each year until 2023.

The Greens hope that, because it’s in regulation, we’re going to speed that up even more so that, actually, it’s not just keeping up with the changes to the minimum wage but enabling the initial intent, when it was first set, of how many hours people would get up to that point, so that we actually recognise we want people to get value from their paid work. I remember a woman who told me that she worked for two years for nothing because she didn’t want to let her employer down, but she was better off on the benefit—that’s got to change.

Hon CARMEL SEPULONI (Minister for Social Development): I will respond to Simon O’Connor, and maybe make some comments to Under-Secretary Jan Logie’s comments as well. So Simon O’Connor asked, “Has any thought been given to the implications about abatement and the other changes to the Veterans’ Support Act 2014 currently before select committee?” Can I just assure the committee that the Minister for Veterans is aware of the proposals. The abatement thresholds will apply to whoever meets the definition of veteran in the future.

Can I respond to what Under-Secretary Jan Logie has just pointed out. I think they were very good comments, and I would agree with the comments made by Under-Secretary Logie. I also want to point out that this issue around the abatement thresholds and the fact that they haven’t been shifted for a number of years—since the 1990s except for one of the measures, I think—has been raised with me as Minister for Disability Issues and, even prior to that, from disabled people who access the supported living payment, who are able to take up a few hours of work but have been put off from taking up maybe two or three more because of the fact that they are actually punished for doing so. So I think this does provide a pathway for people to maintain the level of work that they are taking currently or, if they’re actually undertaking less work, to pick up a little bit more. Moving forward, we do need to continue to look at this, because we’ve always seen—and I think the Greens and New Zealand First would agree—that part-time work provides a pathway to full-time work.

For some people, part-time work is more appropriate given their circumstances. Perhaps they can’t work a full day because of their health condition or disability. Perhaps they can’t work a full day because of their parenting obligations. Perhaps they have children with particular needs that mean they can’t work a 40-hour-a-week job. However, for those who are able, part-time work does provide that pathway to full-time employment. So we support that and we see this as a very important measure to actually incentivise people to take up work and ensure that people aren’t penalised for doing so.

ANDREW BAYLY (National—Hunua): Thank you, Mr Chair. It’s a pleasure to be talking on the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill. It’s very good to hear the Minister—I’ve got to compliment her for standing up and answering the questions that have been put to her. I’ve got to say, I totally agree with what she’s just said. That is, we do want to see people working where they can and if possible, and part-time work is a pathway to full-time work in many occasions. So that’s what we believe in the National Party, and that’s a strong underlying tenet of any change that should be brought about. We all know that, for those who do work, the dignity that comes with that, the improvement in their living standards, and consequential social and health outcomes are so radically improved through getting into work that that is a vital part of making sure that we assist anyone and everyone into work where possible.

Just in terms of this particular legislation, I thought my colleague Mr Penk made an excellent contribution. Just before we carry on, for many of the people sitting at home now late on a Friday—I presume there are not many glued to the TV at work; most of them will be out enjoying themselves socially—it’s interesting to just sort of recap on what we’re trying to achieve here, and I’m talking, particularly, in relation to the veterans abatement component. The abatement rates refer to the amount of money that someone on a benefit can earn while they’re employed before it affects their main benefit—i.e., if you were earning some money outside, if you’re getting a benefit, then there’s an abatement if you’re earning more than what you otherwise might have got just on your benefit. So, for instance, if you’re earning between $100 and $200, there will be, under current rules, a 30c reduction in the dollar to the pension, such as what we’re talking about here under the veterans pension. If you earn over $200, that increases to 70c in the dollar. So this abatement thing is a really crucial part.

The indexing is about tying those benefits to the percentage increase in the net average wage rather than the Consumers Price Index (CPI), as it currently is, and I’m going to return to that in a moment. But I just want to talk about this issue around abatements because, in section 171, “Abatement of veteran’s pension”, it states that “(3) Regulations made under section 265 [will] increase an amount of an abatement threshold (prescribed by regulations of that kind) for abatement of a veteran’s pension under section 161 or 164—”, and under paragraph (a)—this is the crucial part—“must state the date on which they are to have effect (which may be a date before the date on which they were made);”. So the important thing is—and this is something I’d like the Minister to respond to—is this a retrospective section? This could work against the favour of the person receiving that abatement—namely, a veteran. That could mean that a veteran ends up earning less income. That is actually a bad thing.

I don’t think anyone in this committee, even looking across the other side, would like to see a rule come in where a veteran thought he or she was entitled to a certain level of income, probably has gone out and spent it—because a lot of our veterans aren’t earning a lot of money and they’re getting a veteran’s pension for a reason—and then finds that they’re being cut down at the knees by a Minister or a commissioner who has come in and decided to change the rules. I think that is a very worrying thing.

The other thing is that the indexing is about tying benefits to the percentage increase in the net average wage rather than CPI, as it currently is. I thought it was interesting. I’ve just been sitting here looking at some of the numbers, and one of the things, to me, is this move from CPI to this definition of average ordinary time weekly income or earnings. I think it’s interesting—I looked at the series of CPI figures from March 1989 right through—[Time expired]

Hon CARMEL SEPULONI (Minister for Social Development): I’ll speak quickly to some of the points that have been raised by both the member Andrew Bayly and the member Christopher Penk. Just with respect to Andrew Bayly’s comments, there were some comments made about indexation. Indexation is not within the scope of Part 2 at all; so I won’t respond to those. There were other questions, though, that were relevant to Part 2 that I can respond to. The question around whether or not this is a retrospective clause—the answer to that is no. It is prospective from the date the regulations come into effect. I can assure the member that there are no veterans who will be worse off as a result of the abatement changes.

Then also, to the member Christopher Penk—he asked earlier about what happens if the Ministry of Social Development (MSD) or Inland Revenue disagree on whether an exemption applies—I’ve had the assurance that both departments will have quite stringent operational guidelines so there will be consistency in any decision that will be made there.

He also asked whether the clause will be delegated down to members in those organisations—the clause with respect to the commissioner. Yes, clause 16 has been written consistently with the Child Support Act 1991. Therefore, referral to the commissioner and the chief executive are defined under that Act, and both are able to delegate those decisions as part of the State Sector Act.

In asking if there is any intention to allow decision-making regarding child support exemptions to departments other than MSD and IRD—the answer is no.

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

Ayes 63

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

Noes 48

New Zealand National 46; ACT New Zealand 1; Ross.

Part 2 agreed to.

The question was put that the amendments set out on Supplementary Order Paper 244 in the name of Maureen Pugh to the Schedule be agreed to.

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

Ayes 47

New Zealand National 46; Ross.

Noes 63

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

Amendments not agreed to.

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

Ayes 63

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

Noes 48

New Zealand National 46; ACT New Zealand 1; Ross.

Schedule agreed to.

Clauses 1 and 2

SIMON O’CONNOR (National—Tāmaki): I thought I’d take what might be, in comparison, a relatively short call, but I think a couple of things need to be questioned and noted, as we’ve proceeded through this committee stage. I think it’s important to put on the record, briefly, as we look to set up the commencement and the title of this bill, that this side of the committee is, once again, concerned that we have gone through this at speed. I always say it is the prerogative of the Government, the executive, to do so, but we’ve found in the past, and particularly with social development bills, that errors have come in, which is unfortunate. I think that’s a consequence of rushing, and I do apologise but, for the last bill, we had to do an amendment to a preceding bill, which was also rushed in. It had a problem around commencement, in some of the details in clause 2 about certain parts of the bill. I think it was a social rewrite bill. There was an amendment. Its commencements—well, some; better not exaggerate—were out of whack.

So, really, in terms of commencement, we have, again, two dynamics here: one at Royal assent and then a whole lot of provisions which come into force just under a year from now, on 1 April 2020. I suppose I’m wanting to seek, if the Minister is willing, two assurances. One is that those sections that are to come into force are correct—just an assurance that it’s been double and triple checked, as I say, with the previous social development bill. One of those, let’s say, in clause 2(2)(b)—I’m never quite sure how to say it—there were errors; just to make sure that that’s completely correct. There’s obviously opposition from this side, overall, but we do ultimately want to make sure that, if this passes, the sole parents, the power of the commissioner—and I thank the Minister for clarifying that earlier for me—and abatements are done correctly.

The second question is really around commencement. It’s probably more of a theoretical question, but if, for some reason, Royal assent was not granted before 1 April 2020, what would happen? I’m absolutely sure the Government’s not quite that slow and incompetent, but if, for some reason—I’m trying to be generous, colleagues—that Royal assent was withheld to, let’s say, 2 April 2020, what happens then? Would we end up with quite a big, jolly mess?

Finally, it’s really around the title. I’ve got to—and it’s not going to be too wacky—make a certain series of points. At the moment its title, “Budget 2019 Welfare Package”, I would suggest, should really be termed “Budget 2023”. Colleagues like Alfred Ngaro and others have pointed out that, actually, a lot of the benefits—all puns intended—only appear in 2023, and if I am right, I think that’s only something like $11. Now, every dollar counts, but I think it’s just important that, perhaps, we relook at that title just to indicate that what we’re debating today, in many ways, won’t take effect until 2023.

The final thing I would note is that I think terming this a “welfare package” is highly generous. When one goes to the supermarket and gets a package, there are multiple, multiple items. In fact, a package, by and large, implies that you’re going to go to a queue other than the express lane. We are only implementing through this bill two of 42 recommendations of the Welfare Working Group—what exactly it’s been titled, I always forget. It’s not that particularly relevant. Sorry, the work of the group is relevant, not my lack of memory on it. But, fundamentally, 42 recommendations were put forward. So much has been made of this by, particularly, the Government and its support parties. I think it’s unfortunate that only two of those are coming through. Therefore, I am suggesting the title really shouldn’t be referring to a package. It’s implying more than what is there. Had we maybe done 20 or 25, then maybe we could call this a package. So perhaps we really need to call this the “Budget 2023 Two of 42 Suggestions”. We might call this—well, there’s probably a whole litany of elements we could put in there, but I won’t try the patience of the committee.

I think the message is clear: that, first and foremost, the date in the title should be changed to 2023, when a lot of the benefits are effected, and I would argue we should remove the word “Package” and actually be very explicit that only two of 42 recommendations are put in there. I acknowledge that will make it rather long, but we do seem to have a habit in this House of creating rather long titles, as per my own speech, which is a little long as well.

Hon CARMEL SEPULONI (Minister for Social Development): I think this debate has been very interesting, because, on the one hand, we’re being told we’re doing too much and, on the other hand, we’re told we’re not doing enough. So there is much that is contradictory on that side of the Chamber.

Anyway, in response to the member Simon O’Connor, can I just remind the member and the committee that the estimates in terms of how much people will benefit by indexation stretch out to April 2023, but, actually, the benefits will commence as of 1 April 2020. The difference is that it is cumulative, so it continues to benefit them. So, actually, by 2023, the increase—taking into consideration that the Consumers Price Index (CPI) adjustment would have happened as well, but this is far greater—will actually be $26 to $46 per week by 2023. That’s also inclusive of what a CPI adjustment would be, and I need to note that. It is appropriate that the date is 1 April 2020, and that is when the three provisions in here come into force. So the date is appropriate, the title is appropriate.

With respect to some of the questions we were asked around accuracy, absolutely there are mistakes made in this House with errors in terms of drafting legislation. I’m responsible for one of them. It took us 18 months to fix that particular error that was spoken of earlier, but I know there was a stand-down period one that took about 18 years to be corrected, and that was made back in 1999 or something and it was only picked up by the previous Government in about 2016. So mistakes are made in this House—I recognise that—and that one made me much more cognisant of this particular bill as well, so we have had those conversations. But I’ve been given an assurance that all of the dates that are in here are accurate and that there are no drafting errors.

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

Ayes 63

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

Noes 48

New Zealand National 46; ACT New Zealand 1; Ross.

Clause 1 agreed to.

The question was put that the amendment set out on Supplementary Order Paper 245 in the name of the Hon Louise Upston to clause 2 be agreed to.

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

Ayes 47

New Zealand National 46; Ross.

Noes 63

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

Amendment not agreed to.

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

Ayes 63

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

Noes 48

New Zealand National 46; ACT New Zealand 1; Ross.

Clause 2 agreed to.

Bill reported without amendment.

Report adopted.

Third Reading

Hon CARMEL SEPULONI (Minister for Social Development): I move, That the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill be now read a third time.

This bill gives effect to the Budget 2019 income support changes. These changes mean 339,000 individuals and families will be better off. We have heard today from the Opposition on this bill. It has been a heated debate and, at times, rather ugly. We’ve heard from the other side of the House about how we’re attempting to protect deadbeat dads. We heard from Jo Hayes about the fact that we’re protecting people who play and walk away. We heard from Maureen Pugh about—

SPEAKER: Order! I asked for that expression not to be used.

Hon CARMEL SEPULONI: Mr Speaker, we have heard some nasty things in the debate today, and I wanted to point that out because that really indicates where that side of the House is at. What the bill actually does is ensure that some of our poorest mothers and their children are not punished and thrust into further poverty because of a discriminatory policy that has proven not to work. Contrary to accusations that this bill is purely ideologically driven, it is, in fact, evidence based—evidence that the previous Government chose to ignore. And if there is a message that we want to send, it is that this Government is committed to a fairer, more accessible welfare system, and that’s what this bill supports us to do.

It is estimated that indexing benefits to wage growth will lift the incomes of around 329,000 individuals and families. Most main benefit rates will increase by between an estimated $26 and $46 per week by 1 April 2023. Incremental increases will begin next year. Once again, I need to say that this is significant, and, yes, we’ve had the Welfare Expert Advisory Group report to us, and we look forward to further considering the recommendations in that report as part of our phase two.

I am pleased, however, to hear today that in general we seem to have a tentative consensus on the lifting of abatement rates, across the House. That is something that we can be proud of. The Budget 2019 income support changes that this bill gives effect to will make a real difference to thousands of New Zealanders who rely on benefits, but it should not be seen in isolation. The bill and the changes it supports build on the 2018 Families Package. By 2021, the Families Package and the Budget 2019 income support changes will meaningfully improve the lives of between 50,000 and 74,000 children living in poverty.

The bill is part of the Government’s ongoing commitment to a welfare system that ensures that people have an adequate income and standard of living, are treated with respect, can live in dignity, and can participate meaningfully in, and contribute to, their communities. This bill is part of the Government’s work towards a welfare system that provides people in Aotearoa with the support they need today while we work alongside them to help them reach their potential.

The debate on welfare legislation in the House today has at times been nasty. It really does bring out the worst in right-wing ideology. I genuinely feel sad for those who have to bear the brunt of such misinformed, judgmental, and mean-spirited attitudes. Attitudes like this have never helped any individual family or us as a county to get ahead. There is no place for discrimination of people based on income, beneficiary, or family status in a modern New Zealand, especially if we want to be an inclusive country where everyone can reach their potential and thrive.

What uplifts me is that the vast majority of New Zealanders do not share the National Party’s views on our poorest people, beneficiaries, and solo mums and their children any more. New Zealand has moved on, and can I suggest that the National Party get over their archaic thinking and also move with the times. It is, therefore, with great pleasure that I commend this bill to the House.

Hon ALFRED NGARO (National): Mr Speaker, I do realise I probably have only a minute, and I look forward to, after the break, completing my speech—

SPEAKER: Not even that long.

Hon ALFRED NGARO: Not even that long? OK. Sorry, are you calling it now, Mr Speaker?

SPEAKER: Not yet.

Hon ALFRED NGARO: OK. So, Mr Speaker, I’ll just name the bill just before you sit me down: the Social Assistance Legislation—

SPEAKER: Order! It’s kai time. The House is suspended until 7 p.m.

Sitting suspended from 6 p.m. to 7 p.m.

SPEAKER: The House is resumed. When we broke for dinner, we were debating the third reading of the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill. The Hon Alfred Ngaro had the call, and if he so desires, he has nine minutes and 43 seconds remaining.

Hon ALFRED NGARO: I’m proud to do so, even though in the next half-hour, the Blues will be playing the Bulls. Even though I can’t be there, I’m here doing the work that’s really important in regards to this bill.

On this side, it’s been a long day, and those of us who have championed alongside this bill to see it to its completion—you will know and will have heard that we will vote against this bill. But I want to start off by saying that there have been parts of this bill that we’ve spoken about that we actually agree with. We want to be starting on a positive note, so what are the parts that we agree with? Well, the abatement threshold has never been an issue with us. We can see the fact that we’re going from $80 through to $150. That’s an extension of $70, which is a little bit less than what the Welfare Expert Advisory Group had wished for. They were actually asking for $100, but we think that that’s fair and just and reasonable. It will return itself into an Order in Council, where, under regulations, those adjustments can be made. So we’re actually in support of that.

The second part of this bill, in particular, is around indexing—indexing benefits each year to the average wage growth. Well, we are in support of that. However, I’ve had some expert advice from Mr Andrew Bayly, who’s actually just given me some information. I suppose there’s one thing for the Government on the other side just to be mindful of, which is that when indexing, there’s actually no difference between the Consumers Price Index (CPI) and average wages. In fact, when you move to an average wage, what you’ve introduced is a huge amount of complexity because those rates will change, and he’s proven that. He’s got a schedule that will prove that. In fact, what will happen is that when you change the wages, tax and other deductions will actually mean that you make it quite difficult.

So I just wanted to put that on the table. We do support that. We think that indexing is really important. In fact, we want the members on the other side to remember that, in fact, it was under a National-led Government that we increased the CPI indexing, which was there around the benefit rates.

I know that on the other side, they’ve been crying that this is an amazing, amazing piece of legislation that they’re putting through. It’s the generous spirit that has gone out from this current Government, and they’ve said that what this will do is increase the benefit rates by $11, accumulative, to 2023. I had to remind them. There are some new members on this side that haven’t heard this, but I would just remind them that in 2015, it was actually a National-led Government—

SPEAKER: Order! Order! Order! Now, let’s get back to this bill now, not 2015—all right?

Hon ALFRED NGARO: Yes, Mr Speaker. Well, actually, this relates to this bill. It’s the comparative to that that I am talking about with this bill. In fact, what happened is that when we’re talking about indexing, there was a period of time in the history of benefits that there has been some increase in that base benefit rate. In fact, in 2015, there was an increase of $25—that’s right. It was an increase that hadn’t been made for nearly 43 years.

SPEAKER: Order! Order! We’re now going to get back to the bill.

Hon ALFRED NGARO: Thank you, Mr Speaker. So when we compare the $11 that was given by this current Government, thinking that it’s the hand of generosity that has been spoken out there, well, comparatively, there was previously an increase of $25. There were some independent results that came out here, and this is what $25 will buy you.

SPEAKER: Order! Order! The member will resume his seat. This is a final warning. The member will speak on this bill. He will not speak on the 2015 legislation. We’ve had the second reading. That debate was marginally relevant then. We’re now in the third reading, which is only about this bill as it emerged from the committee process.

Darroch Ball: No—can’t do it.

Hon ALFRED NGARO: Thank you, Mr Speaker.

SPEAKER: Order! Mr Ball will stand, withdraw, and apologise. He will not comment on my rulings.

Darroch Ball: I withdraw and apologise.

Hon ALFRED NGARO: Thank you, Mr Speaker. I do have to say, though, that the parts of this bill which we have been contesting throughout most of today are in regards to the removing of those sanctions.

So in my final speech, I do want to talk about this. In fact, the Minister referred to the report that she was given, and this is the report here. She tabled the report. In fact, the report—[Interruption] This is very interesting. So when the Hon Louise Upston asked for the report in an Official Information Act request, the report wasn’t submitted, but this is the report that is directly related to this bill, and it’s section 70A. Out of the report that the Minister had tabled in regard to this bill, she quoted from the executive summary. She said that “In mid-2017, the then Minister for Social Development instructed the Ministry of Social Development (MSD) to undertake research”, but what she didn’t quote was the next sentence, and I’d like to quote that. It states, “This request followed policy advice from MSD that there was insufficient evidence to assess the policy’s effectiveness in achieving its intent,”.

So this is the fact of what’s there. The Minister kept on saying that the evidence was there and that the Minister at that time could have made the decision—these are the Minister’s own words—in regards to the changing of the sanctions, when, in actual fact, the report and the advice given said that there wasn’t sufficient evidence to make that decision at that time.

Mr Speaker, I want to make my remarks because I’ve actually read through this full report as I’ve been here. Again, it does relate to the bill because on the basis of this, the decision was made by the Minister, as declared by the Minister, in regards to the sanctions. In fact, what it actually says is this. It said that there wasn’t enough evidence and it looked for other solutions and other alternatives, which the Minister didn’t actually talk about. But I’d like to talk about this because it is in the tabled report. There’s an initiative called an early intervention programme (EIP), which is a facilitated approach.

So, when the question was asked of the Minister of whether there were any other solutions and were there any other approaches that she could have taken, there was not a reply to that response. I would like to say to the Minister that in the report that she submitted—on the Table—there were other solutions and there were other options. One of them was called the EIP, as it states in here. It’s called the early intervention programme. This is a facilitated approach, and what was found was that when they have facilitators working with those in that situation where there was the potential for a sanction, then that could have actually happened in this regard to this bill that was talked about.

So this bill actually talks about those sanctions, and I’m hoping—I’m guiding myself, Mr Speaker, clearly to the scope of this.

SPEAKER: Yeah, the member got a long way out. He’s getting closer, but he’d better get closer still.

Hon ALFRED NGARO: OK, I’m returning back to the bill, where it actually clearly states over here—because the bill talks about removing sections 192 and 194 of the Social Security Act, and the basis of that was based on this report that was given. In this report, it added to this debate, and in my final reading speech on the bill, I would like to submit that I would support the recommendations that are in here that could be added. I hope that the Minister might look at this and see that this would be a good way of actually progressing this bill to another potential solution, and it could be added on.

I also want to add to that that one of the things that we did talk about in regards to sanctions was the discretions that currently are actually in the bill. We referred to those and we think that those discretions were actually discretions that would allow for safety concerns that may have been raised. There could have been issues around family violence. There could have been issues in regard to the fact that they weren’t able to find the actual legal and lawful other parent, which is in there. So we raised these issues there with regard to this bill, and those things are really important. We didn’t feel that it was mean-spirited. They were actually appropriate and, again, to this report—it spoke to those sanctions, and the removal of them in removing sections 192 and 194, in the actual bill that is here, is what we were talking about as well.

In my final two minutes, I’d like to talk about the fact that there are other recommendations which we think are important. The Minister did actually mention these recommendations in the—

SPEAKER: Well, if the Minister didn’t mention them and they’re not in the bill, they’re out of order.

Hon ALFRED NGARO: Sorry, Mr Speaker, the Minister did mention them—

SPEAKER: Oh, “did” mention them—sorry.

Hon ALFRED NGARO: Yes, that’s what I’m saying.

SPEAKER: That’s all right—OK.

Hon ALFRED NGARO: I did say that she mentioned these actual bits here—

SPEAKER: OK. All right, very good. Keep going—keep going.

Hon ALFRED NGARO: —hence the reason why I’m actually going to them.

Actually, she mentioned what’s in recommendation No. 5 as potential measures that she would be looking at, so that’s the reason why I’m commenting on them, and I’d like to recommend that the Minister look at these. These recommendations were actually part of Supplementary Order Paper 243, which I put forward, which I think are critically important. They do talk about measurements, they do talk about entitlement, and if this progresses—and it seems like it will progress through—then we think that’s actually a good part of a compromise to the bill, and the Minister has indicated that she’s looking at that, as well.

So we on this side feel that there are parts of the bill that we would support, like the abatement rates and the threshold that is there, and the indexing, even though there will be complexities with those sorts of changes. But when it comes to the sanctions, that’s just one part that we feel we cannot support. We wish that the Minister would look into the recommendations she quoted from the Welfare Expert Advisory Group. We believe that they are a way of both monitoring and increasing the ability to be able to ensure that entitlements could be met by those that this could apply to, but, overall, we cannot support this bill in its final reading. So we say that on this side, we won’t be supporting this bill to the House.

Hon PEENI HENARE (Associate Minister for Social Development): Tēnā koe, Mr Speaker. Thank you very much for this opportunity to support this bill in the third reading. There’s something in this bill for everyone, one would say. From the twinkle to the wrinkle, from our young people and babies, to our families and to our veterans, there’s something in it for everybody. It’s on that basis that I commend this bill to the House.

MAUREEN PUGH (National): Mr Speaker, thank you very much. I wish I’d taken note of some of the quips that we’ve heard in the House today in relation to this bill. I rise to—

SPEAKER: Only some of them.

MAUREEN PUGH: I won’t repeat some of them either, sir. I rise to speak tonight in the third reading of the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill. It’s been a very big debate today, and many details have been canvassed. I think this actually demonstrates the depth of interest and the raft of feeling around some of the content of this bill. There was a lot debated and questioned this afternoon, and full credit to the team over here for their interest in trying to get the very best legislation that you can when a bill is before this House.

But the thing that has troubled me around this bill is: why the rush? Why the rush, when the commencement date of this policy is not until 1 April 2020? So we’re talking 10 months away—so why are we in urgency, debating this bill, when there is still plenty of time to have actually received the scrutiny of a select committee and still come back to this House in plenty of time to have the policy ready for that date? So it does beg the question: what is it that we are trying to achieve here in rushing it through in this omnibus bill?

We’ve seen and we’ve heard examples already today about the benefit of going through that select committee process. It is open then to submission from affected parties, and I’m sure that we would have received very good feedback from the public, but it also would have given the select committee members an opportunity to question the experts and have that advice challenged and tweaked so that we did get the best of bills.

As my colleague Alfred Ngaro has alluded to, there are parts of this bill that we do support. One of those is the indexing of the veterans pensions, and as part of this bill, we are making that change to the Veterans’ Support Act, because if we hadn’t, they would simply be out of kilter with other benefits as a result of this bill. We all respect and honour the part that they’ve played in our country, here and abroad. This move will allow them, if they so wish, to enjoy more of what they earn, should they be in paid employment, and also have their pensions indexed.

But we certainly don’t understand the need to change the policy around indexing of the other benefits, because we’ve heard—once we saw the scrutiny of the impact that this bill was going to have—that the financial benefit to people by the time this bill is fully enacted in 2023, the difference between indexing to the Consumers Price Index as it would have been in 2023 to now being indexed to the average wage, makes a difference of about $11 a week. At the rate of change in the rate of the cost of living going up, rentals going up, and fuel taxes going up, that $11 is going to disappear very, very quickly.

We do also support the abatement rates that are in here that allow people on benefits to be able to find themselves in paid employment without that affecting their benefits to a huge degree. By allowing them a bit more of a free board so that they can go out and earn more money, I personally believe that that gets them well trained and ready for full-time work. That would be the ultimate gain: to have people gainfully employed.

What’s most concerning about some of the background information that was delivered on this bill is the projected rise in benefit numbers, and we’ve seen that in the information that was delivered to us—up by 13,000 already since the 2017 election. The Budget forecast a further rise of 2,500—a cost of $122 million. Sole parent support beneficiaries are expected to increase by a further 1,600.

By removing sections 192 and 194 of the Social Security Act, we have generated quite a lot of debate today. One of the things that we have noticed over here is that there has been no strong case put forward that really supports this change of direction around the removal of the requirement for someone on a sole parent benefit to name the father of a child. I’ll say this: the rationale is completely lost on us on this side of the House, especially when that policy had its origin in the Labour Government—the Clark Labour Government. So it would have been good to have been able to hear that through the committee stage, but that information was not forthcoming. We also have not heard how the Government plans to keep those fathers involved in their children’s lives, because we all know, and the evidence is—

SPEAKER: Order! Order! Back to the bill, please.

MAUREEN PUGH: Sure. The bill in its current form allows that a parent does not need to name the father of the child. So we believe that preventing that requirement is also depriving the children and/or punishing the parents, because it’s contributing to the wellbeing.

I use the analogy of someone that has an investment—and I know this from personal experience—in a racehorse. They have a small amount of money invested in it. At least, they go and watch the horse run. They watch it go and race. If a father has no tangible or financial commitment—they have no tie to that child whatsoever—there is no responsibility or need for that father to be there. We know that the support of two parents is very important to a child.

Now, the claim by the Hon Carmel Sepuloni that it will affect all kids within a family if the father is unknown is actually false in the case of kids with a different parent, because the children deserve to know that their father is actually taking an active role in their life. If the Government wants to hold distant parents accountable, the fathers need to be present before the Government removes their own policy from requiring that that is actually done.

One of the concerns that I’ve also got about not naming a father through this process is that we then run the risk of losing track of the siblings of that child. So, for instance, if the parents were living in a close community, then chances are they would remain in that community. They may go on to have separate relationships. They may go on to have further children of their own. What are the chances, then, of those children finding themselves in relationships with siblings that they are unaware of? I think this is a terrible risk that we run by not keeping track—[Bell rung]

SPEAKER: Sorry. I apologise; I forgot to warn the member. You don’t get extra time.

MAUREEN PUGH: So I think that’s a real risk that we run if these children are not tracked through their lives so that we know that, where there are siblings out there in the same community, we’re not going to end up with some incestuous kinds of relationships later in life.

We don’t fix the problems of society by keeping people dependent on the State, and that’s definitely the direction of travel that this policy is taking us in. We actually fix the dysfunction in our social environment by making sure that people are—[Interruption] Mr Speaker, I have to wonder whether it’s even relevant that I’m even speaking to this bill when you are taking an active role in the Government’s—

SPEAKER: Sorry?

MAUREEN PUGH: —criticism of what’s going on. I find that a bit disheartening.

SPEAKER: Well, I’m listening to them. If the member wants to put it on the record, I will interrupt them.

MAUREEN PUGH: I don’t know what that means, but anyway.

SPEAKER: Well, I’ll explain it to the member, although her time’s up. If I interrupt, or if she interrupts by way of point of order, the interjections become part of the records of Hansard, and I think, given the interjections, the member probably would have desired that that not be the case.

MAUREEN PUGH: Fair enough. Thank you.

DARROCH BALL (NZ First): Contrary to what the National Party’s just been saying, this is a very, very good bill. New Zealand First will support it. It helps to ensure that the robustness of the essential safety net is there constantly, but it also allows the incentivisation of people getting into work. But, most importantly, it gets rid of a demonstrably failing provision, which is the sanctions in section 192 of the Social Security Act.

AGNES LOHENI (National): Talofa lava, Mr Speaker. Thank you. I’m pleased to take this call on the third reading of the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill. It’s been an interesting day. It’s been a long day, as we’ve traversed the various stages of this omnibus bill. But it’s important that we do spend the time to debate this bill—in particular, the parts of it that we oppose. There have obviously been parts to this bill that my colleagues have indicated we are supportive of, but I’d say it’s fair to say the arguments from both sides have been heated and emotional. That’s understandable given the nature of parts of this bill, because, ultimately, it comes down to a clash of ideologies between this side of the House and that side of the House, where on this side of the House we don’t see welfare as wellbeing.

So for me the biggest objection I’ve had to this bill, and I’ve relayed that in my first and second reading speeches, is the removal of the sanctions—the repeal of sections 192 and 194 of the Social Security Act 2018. I see it as an affront to the values of accountability, to the values of personal responsibility, and to the values of parental responsibility. It is not good enough for a sole parent, normally the mother, to not name the father of her child merely because she’s uncomfortable about doing it. I’m not talking about mothers who are at risk of violence, or other cases, because those parts are already covered in the exemptions. So I fail to see why the Minister for Social Development wanted to remove these sanctions. As my colleague Maureen Pugh has said, there has been no case, really, as to why those sanctions are being removed. We have a duty of care to hard-working, taxpaying New Zealanders who have their own families to pay for. We have a duty of care to where we put their tax dollars, and, basically, the Government is saying in this bill that we’re going to let dads off the hook. We’re just going to let them off the hook.

It’s been amusing to hear some of the exchanges from the other side of the House during the course of the proceedings of this bill. There were comments that we “pull the ladder up”, or something like that. “Pulling the ladder up behind”—what does that even mean? No one on this side is pulling the ladder up. This side of the House wants to build bridges so that we can move families out of welfare dependency and into independent self-determination for themselves. That is wellbeing. How about the Government just tries to build some ladders so these people can get up? Why don’t you just actually try and build some ladders?

This bill—in particular, the removal of sanctions—is a shallow patch-up job that does not really address child poverty at all. If the Government really wanted to address child poverty, then there are other ways that we can look at it—for example, addressing the costs of living. Stop adding taxes to everything. These are the taxes that affect the very families that we’re talking about—the ones that can least afford it. And it’s not just us that don’t want to have these sanctions removed. New Zealanders up and down this country also want these dads to step up and take responsibility for their children. We owe it to the taxpayers to challenge this—to challenge this in this House.

As I mentioned in my earlier speech as well, there was no acknowledgement around the United Nations Convention on the Rights of the Child, which New Zealand is signed up to. It protects a child’s right to preserve their identity, including their nationality, name, and family relations, without unlawful interference. So the child is not at the centre of this bill. It is right and just that a child knows the name of their father. That is right and just. They may not have a relationship with them at the point in time that the mother has to name the parent, but it is about a future relationship. It was unfortunate that the Minister did not give any real response as to why they would not consider the amendment in my name, which was merely to insert a clause which would require the Ministry of Social Development to, during the annual interview and reporting stage process, give that parent the opportunity to add the other parent’s name at that point in time. Relationships are complex, and in that year some things may have changed. It would have been great to give that parent the opportunity to maybe put down the name of the father. I didn’t really get a chance to speak to that amendment, and it was unfortunate that the Minister didn’t really give an explanation why she would be opposed to making that amendment to this bill.

I’ve said that we on this side of the House believe we absolutely need to ensure that all New Zealand children, no matter where they come from, no matter where they live, have a warm, dry home, have food on the table, and have the opportunity to have a good education. But why, then, put in a barrier to them knowing who their father is—just having that name down? It’s not just about that: it’s not just about taxpayers having to pay for these dads; it’s also about the State interfering with families. It’s that the State—no, it is. It’s about the State interfering, thinking that they know best. It is absolutely that. So this bill just lowers the bar—lowers the bar—for people to get into welfare and to stay in welfare, and for the communities that I come from, that is an indictment. It is an absolute indictment that we don’t look for more aspirational measures and goals for these families.

I just want to go back to, again, the reasons—all I could hear that the Minister wanted to give—as to why the mothers didn’t want to put down the fathers’ names. Again, we’ve covered that. That has been covered by the exemptions. There is no reason—there is no reason. It’s actually not about the children; it’s actually about removing that responsibility of dads that they should have to their children.

Hon Member: That’s right.

AGNES LOHENI: It is. It is absolutely about that, and it’s about saying, “Actually, you know what? Taxpayers and New Zealanders, you can foot the bill for these. You can foot the bill for your children, and you can foot the bill for these other children because we’re not going to follow up on these dads. We’re not; we’re just going to let them off the hook.” So what does that say? You know what? That sends a really bad message to the children about the values of personal responsibility. It actually does. It sends a really bad message because, actually, children learn from their parents. They do. They learn from their parents. So this is the wrong message that we’re sending to our communities, to our children. On that note, I oppose this bill.

MARAMA DAVIDSON (Co-Leader—Green): I am going to take a short call. I know it’s been a long day, and I just had to sit through that member’s whole entire speech about what messages we are sending our children. Well, when you continue to punish mothers and their children with a cruel sanction, that is not a good message.

So I want to talk about a story, because the Greens are supporting this legislation, which includes changes to increase benefit rates to the same rates as average wage increases, to changing abatement amounts so that you can hold on to more of your income in part-time work, and, lastly, removing a cruel and callous sanction where the mother will lose an amount of money if she is not able to name, and does not name, the father. I want to talk about why that is so important in a particular story of a mother who is close to me—is all I will say—whose son is 18 years old now. She and her son were both sanctioned with this very sanction. They were not included in any exemptions. She desperately would have liked to have held on to that extra bit of money, which would have helped her to live in her tiny little flat that she could afford and was doing the utmost in to be a good mother. But the father of the baby refused to put his name on the birth certificate. She had to take him to court; she had to go through an entire court process—expensive, shameful, stigma-associated—where a judge there then had to order a paternity test, which was another whole and expensive process. Yes, for this father. That’s what she had to go through just to be able to afford an extra bottle of milk in her fridge that week. That is callous. That is a message that we should all be ashamed of in this House.

So that Opposition would rather punish mothers and babies—they would rather punish mothers and babies—on some notion of a sanction which doesn’t even do what they think it is supposed to do, which is to encourage healthy and enduring relationships. Sanctions don’t do that. The evidence has been very clear that imposing this punitive sanction is not the way to encourage enduring, sustainable, loving relationships between children and their parents. The evidence from here, from around the world, has been very, very clear. We all in this House want to encourage good, healthy relationships between children and their close loved ones, but sanctions are not the way to do that. I’m trying to control myself here because I’m pretty frustrated about the ongoing rhetoric that has come from that side of the House.

We are supporting this bill because people just want to be able to live decent lives, and most people are doing their darnedest best to achieve this. The Greens want to re-establish a social contract that supports all people and families to be able to live decent lives, not extravagant lives, my goodness; decent, low-emission lives, actually, to be able to support all people and families to be able to thrive, not just those fortunate enough but for the grace of—who happened to be OK right at this moment but could end up not being OK at any other moment.

The Welfare Expert Advisory Group report, Whakamana Tāngata, was very, very clear that incomes are inadequate. So while we support the indexing of income increases to the growth of average wages, we know that that can only be a first—a vital, but a first—step. We expect to change the fact that too many New Zealanders lead desperate lives with seriously inadequate incomes.

I just wanted to respond to something that I think the previous member, Agnes Loheni, talked about: “We don’t see welfare as wellbeing”. Well, what do you call entrenched generational poverty, then? What do you see that as? Instead, see this as an understanding that people will go through different phases of their lives and, at some point, will need some support, and that those who are so-called successful did not get there on their own backs. They just did not. In actual fact, many of those, the few—the one percent—have actually achieved that wealth by exploiting low-income communities and families in low-wage exploitative jobs. Those very low-wage jobs are a big part of the reason why we need a strong social security system, because people are going in and out of low-paid employment and needing benefit advice even if it’s purely an accommodation supplement and other support, if not a whole core benefit—

SPEAKER: Order! Back to the bill.

MARAMA DAVIDSON: Back to the bill.

It was hard sitting through a lot of Opposition rhetoric today, I have to say. What a callous view of our society, and communities, and people who are just trying to do their best. What a cruel and inhumane logic of families and people who are just trying to do their best. It is downright nasty—it always has been. They are making a decision to sit on that rhetoric once again, while, on this side of the House, we are very clear that we need to uphold a social security contract that allows for everyone to live in dignity, to be able to have the support when times are tough. We have faith in people actually wanting to do their best, whatever their best means in their particular lives, whatever living a life with dignity might mean for them. We on this side understand that living a life with dignity includes not always being in paid employment—that there are dignified contributions happening for people who are not being paid to do it; that it is a dignified life if you are unable to be in paid employment because of, say—

SPEAKER: Order! The member has strayed away from the bill, yet again—last warning.

MARAMA DAVIDSON: Thank you, Mr Speaker. I’m happy to support this legislation and a vision for a much-improved social security contract. Thank you.

JO HAYES (National): Thank you, Mr Speaker. I’m pleased to stand for the third reading of the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill. I am really disappointed that we were unable to make headway with some of our Supplementary Order Papers, some of the amendments that came through, because they would have actually made this bill much better. However, it is what it is.

Here we are on the third reading. It’s been interesting sitting here listening to some of the contributions, especially this contribution around living a life with dignity. Well, at the end of the day, I think that there are some people that can live a life of dignity on a benefit, but many of them actually do strive for employment, at the end of the day.

So, anyway, this bill—and back to this bill—looks at some key areas of indexing the main benefits, which some of my colleagues have already traversed this evening, and removing some of the abatement thresholds, and it also looks at changes within the Child Support Act and that Veterans’ Support Act as well.

The area that has been of contention for our side has been the repeal of sections 192 to 194 of the Social Security Act. That has been because we have felt that the dad must take responsibility, which we have traversed. What we have also said is that the rights of the child have actually been ignored and that nobody has actually listened to what the child actually wants. To me, that is a contravention of the United Nations Convention on the Rights of the Child, especially the principle of all children having the right to an opinion and for that opinion to be heard. In this particular part of the bill that has gone through, the child’s voice has been silenced throughout, especially once they start getting older and realising that dad is no longer in their lives, hasn’t been in their lives, and the only life that they have lived is within a one-parent family.

The changes that have been made to this bill—as you know, sole-parent beneficiaries, because they are no longer able to name the parent, or they don’t have to any more, that reduction that was in there of $22 for each dependent child has actually been lifted, as well as the reduction of $6 a week after 13 weeks regardless. So that has actually been lifted. Will that actually help these parents? I’m not sure. What it will do, as my colleagues on this side have actually said, is give the responsibility for that to every taxpaying New Zealander in this country. Is that the right thing to do? I don’t think so. There will be a lot of people out there tonight listening to these debates and wondering just how much of Parliament is actually listening to those hard-working Kiwis who are paying their taxes, who are looking after their kids, who are proud to be mother and father of those children, and who are thinking, “What on earth is this Government coming to?”

I think the disclosure of sensitive personal information from Work and Income case managers is one of those things that are a big miss in this bill. I think that we do need to keep tabs on and files on our people on benefits, including this benefit as well.

I’ve talked about the child’s right, and I’m going to talk about what I call “whakapapa interrupted”, because this is where, when the father is no longer named, he is out of the child’s life, and I assume that, because if the father is there within the same household as the child is, then the father should be paying, or there should be some reductions made, and that does happen. We would be foolish not to think that that doesn’t happen in our society, where the dad of a sole parent is actually on site even though he has not been named as the parent.

When we then move on with the related amendments to section 9(5B) of the Child Support Act in order to enable sole-parent beneficiaries to discuss with Inland Revenue—all of that has been taken away because of the repeal by clause 6 of sections 192 and 194. That is a shame, and I wouldn’t be at all surprised if, sooner rather than later, we’re back here because things have gone a little bit awry because of this bill. It is one of those bills where there has been a history of that happening—where we have come back to relitigate some of the areas where the bill lost its momentum.

The annual adjustment of rates of main benefits—and this is the abatements—bringing it up to an additional $70 on top of the $1,850, and bringing all of that up to the Consumers Price Index (CPI), which is by Order in Council annually—everybody else has that. We do support abatement as long as it doesn’t favour others over, and I think that bringing the abatement up to the average wage does that.

As I have said, I have traversed this bill quite thoroughly. I have stood and listened to the Minister in the first reading debate, who started her contribution by saying this bill will lift people out of poverty. Benefits shouldn’t be something that people are on for the rest of their life. It should only be a portion of their life and then it sets them on a road to their independence without a benefit. I don’t think that this bill will lift people out of poverty, to be honest. I think it might be a step towards it, but it sure as heck won’t do that. There are a lot more other things that will actually help lift people out of poverty, like good education.

The Minister said that she wanted a welfare system to be comfortable under a benefit—for people on a welfare benefit to be comfortable there. I think that a lot of people that are on a benefit aren’t that comfortable. I think that what they want to do is get off that benefit as soon as they can, and that’s called dignity. That is actually called dignity, at the end of the day.

Finally, the Minister mentioned, in her first contribution, that she felt that people with a benefit should return to work when they are ready. That did concern me, because they might never be ready, and that is a concern for all New Zealanders—that people who are beneficiaries may not be ready, and they need to be encouraged to be ready and to end up going through the various work programmes, etc., to get them ready. I mean, that side over there is laughing, thinking, “Yeah, everything is sweet as and we’re going to win this.”, and whatever, but, really, all they are doing on that side is consigning beneficiaries to something that will actually not be of help to them in the long run. That is a shame, really, and it is shameful when dads are let off the hook, as my colleagues on this side have said.

One day, the Government members may wake up to the fact, when it all hits them in the face, when people who are earning good money realise exactly how much is actually going into supporting these women who will not name the father, and that’s when the proverbial will hit the fan and we will end up coming back here again. So it is no wonder that this side of the House cannot and will not support this bill. It is an ill-thought-out bill. It should have actually gone to a full select committee process so the public out there could have come in and we could have listened to the officials and what the officials had to say and keep asking questions, the way that you normally do it in a parliamentary process. So, again, I do not support this bill. Thank you very much.

GREG O’CONNOR (Labour—Ōhāriu): I know we had a problem with light bulbs in here earlier today, and I have to say that, as I read this Budget, I had a light bulb moment of my own. I understood what a Budget means, where instead of just having a profit and loss account—dollars in, dollars out—we actually had it in the Budget what we want to achieve, and that was where I fully understood what this Budget actually means.

Perhaps, just again, another one of those light bulb moments: the member opposite, Jo Hayes, talked about being on a grant and being able to move on out of there. Well, that’s actually probably pretty true, but to move on I liken perhaps to trying to send a rocket to the moon—you won’t do it with a Morris Minor engine. You need a decent engine, and unfortunately, with how things have ended up, we’ve had people there trying to launch into real life, trying to get their life back together—we’ve given them the equivalent of a Morris Minor to do it with. What we need to do is give them some power, and what this Budget does is give them some power, some opportunity, and some fuel to do it with. So I recommend this bill to the House.

CHRIS PENK (National—Helensville): Thank you, Mr Speaker. You’ve encouraged—indeed, instructed—us to be pretty specific and pretty tight in this debate, and I wish to accept that challenge by giving my most outrageously pedantic contribution yet. In my contribution, I will focus on the placement of the apostrophe in clause 19—“(Abatement of veteran’s pension)”.

The word “veteran’s” is spelt with the word “veteran, apostrophe, s”, meaning that it refers to a veteran, singular—and I might note that all veterans are singular in that other sense of the word, too—rather than veterans, plural. And this is significant to the bill in five main ways.

SPEAKER: The member is wrong. Clearly he didn’t have a good English teacher.

CHRIS PENK: I didn’t realise it was your turn to make a contribution, but I look forward to any heckling that may—

SPEAKER: Sorry, I thought the member was being light-hearted in his approach.

CHRIS PENK: Yeah, OK—very good. Thank you, sir. I’m pleased to maintain the light-hearted approach, and anyone who cares to listen along can no doubt gain some enjoyment as well as some education from the experience.

So we’re talking about a veteran. Now, no doubt that applies to all veterans to whom the legislation applies, but I think it’s significant that we’re talking about a veteran in the singular, notwithstanding that the principal Act that’s being amended by Part 2 of this bill is the Veterans’—plural, apostrophe—Support Act 2014.

The five ways that it is significant, briefly—which I’ll go through more fully, you’ll be pleased to know—are that it personalises the concept of the benefit; second, it stresses the individual relationship to the society inherent in the nature of a benefit; third, it recognises the service that has been provided by the veteran on a very personal basis—

Kiritapu Allan: Leader of the Conservative Party!

SPEAKER: Order! Order! This is actually interesting.

CHRIS PENK: —fourth, it emphasises that the circumstances in relation to the work now being performed by the veteran are different in each individual case; and, fifth, it notes that the pension belongs to the veteran himself or herself. It’s possessive in the best possible sense of that phrase.

I’ll start with the first of those, and I regret that I don’t have more time—I might seek that at the end of my call. Personalising the benefit: while it might be a symbolic point that I make—and I do appreciate the Speaker’s feedback on that point, without wanting to bring him into the debate, despite having just done so—the benefit that we’re talking about, the pension of the veteran, is very much one that belongs to him, or her as the case may be, and that’s appropriate because the nature of service is that it is very personal. It is a personal commitment—sometimes, I suppose we would say, a personal sacrifice—that he or she has made in the service of God, king, and country, if I can use that phrase. I know it’s out of date; all three are out of fashion these days—

SPEAKER: Queen.

CHRIS PENK: —but, in any case, for some to whom this legislation applies, that might be how they feel about the matter.

The second is to understand the relationship between society and the individual involved, and that’s the nature of a benefit, in the sense of the social assistance being provided in this legislation. So it’s a good thing that the veteran has done for their country, and then it is a good thing—literally, a benefit—that is being provided back in turn. It’s something of a contract between the two.

The third point, as promised, is that it’s recognition that the service has been provided on a personal basis. That links back to the first point that I made, in relation to the personalisation of the benefit. Of course, it’s the nature of abatement, as is the particular mechanism of the Act, that it is a very personal situation because it depends crucially on the amount that he or she is earning and the increase in that that the benefit is abated at, and the proportions change, of course, in the way that’s set out in there.

My final point, as my time reaches towards the end, is the fact that we’ve got the word “veteran’s” expressed in that way, seemingly relating to an individual veteran, notwithstanding that there will be many to whom it applies. We’re emphasising the possessive case—literally, the possessive case—and the pension, of course, does belong to the veteran. It’s possessive in the sense of both the semantic and the syntactic, as my colleagues across the House have no doubt picked up on. They are, indeed, heckling grammatical points at me even now, as I speak.

So with that all in mind, it’s disappointing not to be able to commend the bill to the House in its entirety, but there is some interesting education, I think, that we can gain from that particular aspect.

Dr LIZ CRAIG (Labour): Thank you, Mr Speaker. Just following on from that stellar contribution about punctuation, I would like to bring it back up to the bigger picture and just talk about what a pleasure it is to speak on this bill. What this bill does will make a significant contribution to many families. Basically, what it does is it removes sanctions for sole parents who don’t identify the other parent, indexes benefits to the average wage, and allows for regulations to be created to change abatement rates. It’ll make a huge contribution to families’ lives, and I commend it to the House.

SIMON O’CONNOR (National—Tāmaki): Mr Speaker?

SPEAKER: Away you go.

SIMON O’CONNOR: Oh, thank you. I was just waiting for the call.

SPEAKER: I gave the member the nod. We’ve got a bit flexible towards the end.

SIMON O’CONNOR: Jolly good. My colleague Chris Penk, who has just resumed his seat, has, I think, usurped my usual attempt to get into the grammar nomenclature and so forth—the declensions in Latin and so forth—so I’m going to steer away from that. I’m going to acknowledge first and foremost—

Fletcher Tabuteau: Why don’t you go and have a cup of tea together?

SIMON O’CONNOR: No, not yet. Queen’s Birthday is Monday, strictly, and then we’ll have a cup of tea for Her Majesty.

Chris Penk: Huzzah!

SIMON O’CONNOR: Huzzah? It’s clearly been a long time. It’s actually a serious bill, but it has been a long time as we come to this third reading. In fact, it’s been almost eight hours of sitting—that precludes the breaks—that we have been progressing through this bill, to bring it now to a third reading. It has been, I think, a very thorough eight hours of discussion, primarily from this side, into what is a topic of great importance: obviously, the care of our veterans, the care of our beneficiaries in particular, to enable them to seek work and entitle themselves to the money that they’ve earned, and then, of course, the discussion around children.

I do regret that, from the other side in particular, we have not had as much engagement. In fact, as I noted in the second reading, the paradox of a Government pursuing a non-sanction approach has sanctioned itself in terms of its short contributions, but they’ve been indicative themselves—

SPEAKER: Order! Order! We’ll just keep going, because the member is risking breaching the Standing Orders if he keeps going like that. I’ve thought about what he said earlier.

SIMON O’CONNOR: Oh, very good. You’ll have to think of what he said earlier.

There are, effectively, three parts to what this bill is, as we come now to the third reading. We traversed a wide array of topics in the committee of the whole House stage. Not all of those—in fact, none of them—have come through. So where we’ve ended up, first and foremost—again, working backwards—is with an abatement scheme for veterans. This side of the House has been very keen and supportive of that. I think it’s an idea, a conception—which is now soon to become law, I assume—that fits and works well. The scheme is relatively simple; it’s aligning it much more clearly with other beneficiary approaches.

Certainly, one thing that I was keen to seek, and the Minister was kind enough to reply to this, was that they have anticipated the extra number of veterans that will be coming into, effectively, the veterans’ affairs portfolio or area. That’s to do with another piece of legislation, as you’ll be aware—the Veterans’ Support Amendment Bill that’s currently going through the Parliament—but, as I noted earlier, the fact that it seems at this point to have unanimity is a positive thing. So, in terms of that, the Minister has been very clear that they have the budget and the scope through the changes of this bill to cope with that. I had hoped that there might have been a little bit more breadth in the abatement to recognise those who serve the Realm. That wasn’t forthcoming, but I don’t criticise the Government for that, either. I think, again, as it sits in the bill currently, it’s a pretty good system.

I think it’s probably prudent to actually separate out veterans’ benefits and superannuation from other benefits, such as the unemployment benefit or the sole parent benefit—and the abatement rates there are, I think, positive. I still have concerns despite where the bill—well, I should say, where the bill has landed is, I think, fine. Again, nothing has changed, which is always a little bit disappointing, but I don’t think it has started from a bad place. Where the bill has landed with abatements, providing the scope for an Order in Council, is prudent. I think there’s always a bit of an issue in this House if you have to come back with primary legislation time and time again to make the changes.

I think the Government has made a good step to bring it to $150. It sounds like a lot of money, but with a quick breakdown with the minimum wage, that is, effectively, eight hours in a week. I think there will be, potentially, some challenges to come, and I acknowledge the Minister of—is it “Labour”? I’ve forgotten the exact title—“Workplace Relations”? There could be some challenges coming forward, and I’m sure the Government will be able to respond to it, to changing the abatement rates, because, as the minimum wage goes up, of course, we’re going to have—well, they won’t be able to do eight hours, strictly speaking, once they are at $20, I imagine. If they’re at $20 an hour for eight hours, it’s not going to work.

So an encouragement is that, as we put this legislation forward, the abatement provisions and that through Order in Council are well used, because I think fundamentally it seems prudent that a person on a benefit can at least do a full day’s work. I think the benefit of that—again, all puns intended—is that it’s a chance to be part of work, to see the benefit of work. The word “dignity” has been thrown around quite a bit tonight, but it shows the dignity of work. But the real important element is that the dignity of work shows the dignity of the person. That’s fundamental, and it’s one of the elements why on this side we support the abatement scheme, as it’s an encouragement to those people on benefits to begin exploring their work. As I’ve said, I think they’ve got the balance right at this point in time. Ultimately, the benefit plus the abatement provides some income, but not so much that it’s actually an encouragement to remain, effectively, in and on the welfare system.

The most contentious part has been, of course, the removal of the sanction for those sole parents who will not declare who the other parent is. Now, it’s primarily the father, but there are, I think it’s important to note, occasions where it’s a solo dad. To what extent solo fathers do not declare who the mother is is something that we weren’t able to actually get into. I don’t think that was a reflection of the committee stage, but perhaps it’s an encouragement to this House, as we move forward, to understand and get some better reporting around this. Certainly, some of the Supplementary Order Papers put forward are to try and understand these things.

Look, it’s been controversial, and I think rightly so, partly because it does come down to this discussion of social contract. That’s been tossed around a lot in the various readings, and as I mentioned in earlier contributions, I actually think there’s a fundamental misunderstanding of what a social contract is. The social contract, when it comes to this piece of legislation, must remain a two-way street. New Zealanders work hard. They pay their taxes in order that others may seek benefits when required. But the reciprocal nature of that is that those who are getting benefits of whatever nature are actually open and honest with information. The fundamental problem I still have with this bill is that it enables, effectively, an act of dishonesty to occur; that a person who—let’s just use one side of the equation—knows the father, who knows who the father is, will no longer need to share that. We are facilitating dishonesty.

Angie Warren-Clark: There it is.

SIMON O’CONNOR: We’re facilitating dishonesty here, which the other side is very keen on, by the sounds of it. That is actually not a social contract.

Angie Warren-Clark: Shame.

SIMON O’CONNOR: I think they’re saying “shame”, which is interesting because, much earlier on, they were talking about stigmatising and how bad it is to shame people. But I’ve never found much consistency from the left—in fact, it provides me great frivolity at times. The key point for me is that what the bill has done, and will continue to do if it passes, is allow people to not share a piece of information that they have. Fundamentally, in this case, if someone does not know who the father is or, for some reason, doesn’t know who the mother is—I mean, it’s almost nonsensical, but let’s keep it gender balanced—

Angie Warren-Clark: It is nonsensical.

SIMON O’CONNOR: But I want to be gender balanced, because we wouldn’t want to have any bias. So, fundamentally, if they’re not sharing the information, does that consequently apply to other elements of the welfare system? If I happened to be on a benefit tomorrow, do I no longer need to tell the Ministry of Social Development my employment status or the nature of the house that I live in? I know what house I live in and I know what employment I work in, but in line with what this bill is thinking to do, it’s setting a precedent that the person does not have to share the information that they have, and I think that’s fundamentally dishonest.

I think, also, this does sit in a situation—and I did bring it up much, much earlier, but it remains seen that the bill has been unchanged—that, fundamentally, many, many other fathers now are going to be paying for what a father chooses not to do, and that is, actually, to contribute towards their child. I want to put it really clearly on the record: there is far more to being a father than simply money. In fact, I think a number of the speakers, particularly on this side but not exclusively, have talked to the role of fathers and what they need to contribute. I said it, actually, in one of my maiden speeches: love is not an economic commodity and the role of fathers is much more than money. But with bills like this, it’s a subtle change which continues to send out a subtle—well, arguably, a not so subtle—message of the importance of fathers and the importance of their contribution and what should be expected.

So, really, that is about the social contract. I’m not going to get into the deep etymology of it, but a contract is a two-way street, and if we’ve listened to contributions, particularly from the Government’s side, they have not actually put forward any contract; it’s really just a single track—that one person should be able to make their choices and then, effectively, everyone else pays for it. I don’t find that appropriate. I’ve mentioned before that, really, there are no obligations on the Crown and there are no obligations on taxpayers to pay for other people’s choices, and if people are into—what is it?—pro-choice and free choice, they also have to understand that their choices do not create an obligation automatically on other people to begin paying for it, and so—

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

PRIYANCA RADHAKRISHNAN (Labour): Thank you, Madam Assistant Speaker. I’d like to begin with a quote from the Welfare Expert Advisory Group report that is relevant to this bill: “A social contract between the Government and its citizens was established in New Zealand legislation with the Social Security Act 1938. Government would provide financial assistance for New Zealanders unable to achieve an adequate standard of living (which remains central to the social security system), alongside other critical support such as access to health care, education, housing, and adequate employment. In return, people receiving financial support would participate in training or other activities and seek employment when appropriate. This social contract is now out of balance.” This bill takes significant steps towards rebalancing that social contract. I’d like to thank New Zealand First and the Green Party for their support on this bill, and the Minister for her leadership. I commend this bill to the House. Thank you.

A party vote was called for on the question, That the Social Assistance Legislation (Budget 2019 Welfare Package) Amendment Bill be now read a third time.

Ayes 63

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

Noes 48

New Zealand National 46; ACT New Zealand 1; Ross.

Bill read a third time.

Bills

Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill

First Reading

Hon IAIN LEES-GALLOWAY (Minister of Immigration): I move, That the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill be now read a first time.

This bill amends the Immigration Act 2009 to provide for the collection of the international visitor conservation and tourism levy, and to extend Immigration New Zealand’s authority to use automated decision making to include an electronic travel authority (ETA). The tourism sector is a vital part of New Zealand’s economy, and it is experiencing rapid growth. In the past few years, we’ve gone from just over three million international visitors coming to New Zealand to just under four million. Over the same period, those visitors have collectively increased their spending by $1.3 billion to a total of $16.2 billion. Tourism is consistently one of the top export earners for New Zealand. Tourism also creates inclusive growth by distributing economic opportunities and bringing social benefits across our regions, cities, and communities. It allows us to celebrate our unique Māori culture. International visitors buy our goods and services, which contributes to the success of other export sectors and grows our reputation internationally.

Recent visitor growth has increased the benefits of tourism, but it has also had an impact on New Zealand, including increased pressure on our infrastructure and roads, overcrowding at high-demand areas and attractions, and pressure on our natural environment—the very thing international visitors come to see. The recent speed and scale of international visitor growth—35 percent in the last five years—has, effectively, outstripped the capacity of our system to respond in some areas. This means that the economic growth, and other opportunities afforded by this growth, are not being fully realised, and the pressures created are not always adequately managed. Currently, some of those cost pressures are being managed by ratepayers and taxpayers, while others go unmet, particularly where there is limited scope to charge visitors for use or access.

This Government believes it is important that international visitors contribute directly to the infrastructure they use and the natural environment they enjoy whilst here in New Zealand. We are, therefore, introducing a targeted international visitor levy (IVL) that will contribute to substantive changes in the way our tourism system works. It is important that this bill be passed under urgency to enable the levy to be collected from July, and the ETA to come into effect from 1 October. These dates have been widely communicated for both the ETA and IVL. Delays would cause confusion for travellers, potentially having implications for carriers who are gearing up to support introduction. A delay would also reduce the total amount Government would collect in the first year of the levy.

The ETA is an important step in strengthening New Zealand’s border security in line with international best practice. It will provide Immigration New Zealand with more information, sooner, about 1.5 million visitors a year from 60 visa waiver countries. The ETA will enable Immigration New Zealand to refuse boarding to people who do not meet our character requirements, whether they are seeking to travel by air or by cruise vessel.

This bill will allow the Minister of Tourism to introduce a levy on international visitors, which will enhance the visitors’ experience and support local communities. The levy will be used to fund conservation, protecting and enhancing our beautiful landscapes and iconic species, one of the reasons people choose to come to New Zealand. The levy will also fund infrastructure projects, so visitors will be making a direct contribution to those costs, removing some of the burden of hosting visitors from local communities.

The bill also ring-fences the levy for tourism and conservation, consistent with feedback from public consultation. The bill sets out what the regulations used to charge the levy may do. This includes who is liable and who is exempt from paying the levy, the amounts or method of calculating the levy, and how the levy is to be collected. The bill will also amend the Immigration Act to require the Minister of Tourism to undertake appropriate consultation before making any regulations. That requirement does not apply to the first set of regulations made under the amendment Act, as the Government has already consulted widely on the introduction of the levy.

To ensure the levy remains fit for purpose, the bill amends the Act to require the department—in this case the Ministry of Business, Innovation and Employment—to review the levy amount at intervals of no more than five years. Finally, the bill extends Immigration New Zealand’s authority to use automated decision-making to include an ETA, which is mandatory from 1 October. The benefits of automated decision-making include making better use of immigration officers’ time by triaging applications, and enabling faster responses for visitors to New Zealand.

In developing this bill, I would like to acknowledge the efforts of members who have contributed to and supported this bill’s development, especially the Minister of Tourism and the Minister of Conservation. This bill will provide an important funding mechanism for New Zealand’s tourism and conservation sectors. It will support more sustainable and managed growth in tourism, reducing potential negative impacts on New Zealanders. I commend this bill to the House.

Hon TODD McCLAY (National—Rotorua): Madam Assistant Speaker, thank you very much. I normally like to start by saying it gives me pleasure to speak on a bill, but this is very, very poor legislation. It should not be in this House going through urgency. It should not be being rushed. It should be going through a full parliamentary process and a full external committee stage so that those in the sector and the tourism industry have an ability to come before the Parliament—

Hon Kelvin Davis: They have, Todd—the consultation process.

Hon TODD McCLAY: —and talk about what’s happening in this bill, and so that they then get to look at it and see whether it will work. When the Minister over there says in a very deep voice that there’s been consultation, what they tell us is that he does not listen. That’s the problem with rushed legislation. When you have a Minister who thinks he knows what’s best for an industry, you never get the appropriate or the right outcome. That will be the challenge we have here. It’s very bad legislation, and I’m going to come to the challenges of the way it’s been drafted and the unprecedented responsibility it gives to the Minister of Tourism, through regulation, to set all aspects of tax law in so far as international visitors are concerned—a very bad precedent.

The Minister who introduced this—the Minister of Immigration—actually did a very good job in outlining the importance of tourism in New Zealand. I don’t know why it is an immigration bill that is enacting this tax upon international visitors to New Zealand, because it’s not about immigration; actually, it’s mixing the two. So one of the parts, of course, is the way they want to collect, but this isn’t actually about immigration; it’s about attacks on international visitors coming to New Zealand, and then very light in detail on how that money would be spent.

There’s no question that tourism is important to New Zealand. It’s our biggest export earner; $16.2 billion from international tourists is pumped into the New Zealand economy every year. That’s $44 million every day. Almost 400,000 people are employed in and around tourism—one in seven jobs in the country. International tourists pay $1.7 billion dollars in GST every year when they visit New Zealand and they spend money.

So here’s the problem that we have with this international tax that the Government is rushing through without proper scrutiny in the parliamentary process: it actually doesn’t do the things that the Minister introducing the bill said that it would. He’s recognised the importance of tourism. He’s recognised that throughout New Zealand there is a growing need for tourism infrastructure and support for the tourism industry. He’s recognised the case that’s been made by councils up and down the country that the growing burden can be too much for ratepayers alone to bear. That case has been made. It has been accepted.

But this won’t come anywhere near close to delivering the funding that they need or that this Government promised when they were in Opposition—nowhere near it. The reason for that is the suggestion that $80 million will be collected by this international tax. Well, what we also know from the advice given to the Minister is that $70 million less will be spent in the New Zealand economy as a result of this. Halve that amount that will be gathered; they say $40 million is to go to tourism and tourism-related infrastructure. That’s $70 million that the Minister’s officials have told him won’t be spent in the New Zealand economy. It won’t bother the Government at all, but that’s $70 million less that will be spent in small tourism businesses up and down New Zealand. They are paying the price of this Government’s promises and inability to deliver, and, actually, it’s not going to come anywhere near delivering what it is that they have been promising up and down the country.

The Minister of Tourism says he’s been through a consultation. Well, frankly, he just has not listened, not even to his officials, and that’s the problem with this legislation. If the Government truly was committed to supporting the tourism industry, in this Budget we would have seen more money going in there right now. Indeed, we would have seen more money going into the tourism budget last year when they delivered it. But there wasn’t more. There was a cut.

Now, I’m very proud of the record that we had over nine years of Government of creating a true partnership with the tourism industry in New Zealand; the funding commitment we made to work with them, the growth of both expenditure coming into the country from additional tourists, and also the commitment that we had. When we arrived in Government, under Labour there was only $18 million a year spent, and the tourism industry was disassociated with the Government. They were sick and tired of being told what to do. There was no partnership. Well, indeed, in our time in Government, very quickly, we increased annual spend and commitment to spend to tourism by 60 percent. So jump forward nine years. We had very important programmes that we launched that the tourism industry has benefited from. One of the more significant was a $100 million commitment that we made in the Tourism Infrastructure Fund, a fund that continues today and that the current Minister continues to make announcements over.

Fletcher Tabuteau: It was a $45 million dollar fund over three years.

Hon TODD McCLAY: It was $100 million dollars over four years; $25 million a year—more than this Government has committed in these two Budgets. The point there is that, actually, when the Minister of Tourism makes announcements in a moment about Government spending in the tourism sector, it’s coming from the Tourism Investment Fund that remains there from the commitment we made three years ago when we were in Government. We committed funding in a partnership with the industry and put more money into tourism over nine years than any Government ever has before and has since, and what did this Minister deliver for them last year after all of those election promises? He delivered a $7 million cut to the tourism budget. When questioned in the committee he said two things: he said to my colleague in a very disparaging way that she shouldn’t be bothered about this and shouldn’t listen—and he still owes Jacqui Dean an apology—but he said, “Don’t worry. More tourists are going to come. It doesn’t really matter.”

ASSISTANT SPEAKER (Poto Williams): We are straying a little bit away from the bill.

Hon TODD McCLAY: Well, Madam Assistant Speaker, I’m absolutely not. The reason that I’m not is that this comes to the promises the Government gave. In this bill, they’re saying they’re going to deliver money on top of the things that are already there, but they’ve actually cut, they haven’t delivered. I would ask the House whether they think there’s a single problem that this Government has seen that it doesn’t think that more tax or a new tax will solve. Every year, $1.6 billion is collected from international tourists—every year—and they could take some of that money and they could commit a significant amount of it and they could spend it in every part of New Zealand to lift the burden, that they’re saying ratepayers can’t meet, to make sure that, actually, tourism continues to be a growing part of the economy and that there continues to be social licence for it.

In fact, they don’t even need to take the $1.6 billion that’s already spent in tax alone that they get from international tourists. They could look at any other policy of theirs that is failing. The $3 billion that they’ve committed for students who will get the first year free—well, it’s a failure, and we know that because fewer students are studying, and they’ve taken $200 million out of it. That $200 million didn’t go to tourism. It didn’t go to Rotorua or Queenstown. It didn’t go anywhere near it. What this Government has delivered in the last two Budgets—its first two Budgets, after all of those promises to the tourism sector—is zip, nothing, and the suggestion of another tax that means that there could be $40 million that will go to tourism in New Zealand at a loss of $70 million from those tourism visitors themselves.

Now, the biggest problem that we have here—and we will continue this evening to traverse this and go into it in greater detail—is how bad this legislation is. All this legislation says is, through the Immigration Act, it gives the Minister of Tourism the ability to pass regulation to decide how much he wants to tax foreigners, which foreigners he wants to tax, and who he doesn’t want to tax, and it says he can consult whomever he wants to consult. He’s not going to consult the first time out, and the reason for that is he thinks he has already done this. If he’s not even listening to his own officials, how is it the tourism sector can have any confidence that he will listen to them and will deliver for them? That’s very, very bad legislation—very bad legislation and a bad precedent.

Any other Minister—any other Minister—and you might consider it. Any other Minister and you might consider it. But a Minister of Tourism in whom the sector, the industry, wrote to the Prime Minister earlier this year and said they had no confidence—at the very least, get somebody else to come and be an Associate Minister; and now they’re saying to replace him—tells you how little faith the industry has in him, how little he has consulted with them, and absolutely how little he has listened to them.

This is bad legislation. If the Government was committed to tourism, they would have committed hundreds and hundreds of millions of dollars more in last Budget and this Budget. They promised it before the election; we haven’t seen it. We’ve only seen a cut. On behalf of tourism, this evening we will be making the case that the Government should be doing more right now. This is a bad piece of legislation, and the Minister should be ashamed.

Hon KELVIN DAVIS (Minister of Tourism): That’s a pretty ordinary contribution from an ordinary member of Parliament, Todd McClay, and he probably exemplifies the reason that they’re in Opposition—totally irrelevant.

Just to respond to a couple of his points, first of all, he spoke about the Tourism Infrastructure Fund—$25 million every year for four years. That highlights the reason why we need to have a long-term, sustainable funding mechanism for tourism. We’ve used that $25 million very wisely. The trouble is that after four years, it ends. It’s not sustainable.

Hon Scott Simpson: You haven’t used it.

Hon KELVIN DAVIS: The member says we haven’t used it. Well, to be honest, one thing that previous Government did really well was they marketed out New Zealand as a destination extremely well. But that there is the problem: they didn’t do anything to manage the destination, and, instead, we’re now having to deal with all the problems that they left behind, because of their mismanagement of the tourism sector.

He says that we haven’t listened. Well, we had quite a comprehensive consultation process around the visitor levy. We spoke to local government, we spoke to businesses in the tourism sector, we spoke to communities, and we spoke to the regions. They have said that they want this levy, because they know that there was no guarantee under the previous Government that there would be sustainable and consistent funding mechanisms.

So we’re proud to stand here in support of the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill. I do want to acknowledge the Hon Iain Lees-Galloway and the Hon Eugenie Sage for the work and the collaboration that’s gone into the creation of this bill. It will generate $450 million over the next five years, and that money will be ring-fenced and it will be divided between tourism and conservation.

Tourism is one of our biggest economic sectors. It does employ directly 200,000 New Zealanders. It does indirectly employ close to 170,000 New Zealanders. It generates $39 billion in GDP every year. The sector has grown in strength. We’ve had, over the last five years, increasing visitor numbers. Numbers have increased by 35 percent over the last five years. Last year we had 3.8 million visitors to New Zealand, and that’s expected to grow to over 5 million visitors by 2025. So the sector is in good health, but we have to manage the sector better, and that’s what the previous Government failed to do. The growth has brought economic and employment growth but it has also created the challenges.

My first Christmas as Minister of Tourism, I was inundated with the problems around responsible camping, and that is a legacy of the previous Government. That is the problem that they mismanaged. They couldn’t manage New Zealand as a destination, our communities were swamped, and we were in danger of losing our social contract with New Zealand, with New Zealanders, with communities, all because of the legacy of the poor previous Government.

So the combination of population growth and increasing visitor numbers meant that local infrastructure was struggling to keep up, and, further, the wealth tourism has brought has not been evenly felt across Aotearoa. We have pockets of high tourism numbers—Auckland, Rotorua, and Queenstown—but there was neglect in the regions, as we know, which is the hallmark of the previous Government.

But the Government, we’re committed to tackling these problems head-on. I just want to refer to a press release from Stuff. It says, “After years of dilly-dallying over a levy on international visitors, we now have one”. The previous Government, they knew that we needed to have an international visitor levy. They knew that we needed to have sustainable, long-term funding mechanisms, but they twiddled their thumbs, they gazed at their navels, and they did absolutely nothing to establish a sustainable funding mechanism.

We’re committed to tackling these problems head-on. Minister Sage and I, a couple of weeks ago, jointly announced the Aotearoa New Zealand Government Tourism Strategy, and the strategy signals an active and deliberate approach to tourism. The international visitor levy contributes to the strategy in a couple of ways. Firstly, as I’ve said, there’s a long-term and sustainable funding mechanism, and, secondly, we’re going to invest in ways that support the goal of the strategy, ultimately, that tourism enriches New Zealand. And that was one of the problems that the previous Government had, that tourism was actually in danger of dragging down those smaller communities who are overwhelmed with the numbers of tourists.

So the Government, we’re going to use the levy to address the infrastructure issues, we’re going to better manage our destinations, and we’re going to enhance and protect our natural environment. People come here to New Zealand to see our landscapes, and we have to protect those landscapes. They come here to meet our people and they come here to hear our stories. In particular, I want to say that, because New Zealand combines the landscapes, the people, and the stories really, really well, and I have to say that the whole Māori contribution to tourism is something that we need to grow and develop even further.

It’s my belief that tourism should add to the lives of New Zealanders, not take away, and we know that for many communities, under the previous Government, tourists and visitors were taken away from a number of communities. It was left up to local governments, it was left up to New Zealand’s ratepayers to actually have to stump up with the bills to fix that infrastructure that that previous Government was unwilling to support New Zealanders on.

I’m proud to stand here and support the bill. It’ll enable the Government to better support a sustainable tourism industry. Sustainability is essential in tourism and will help communities to create the type of destination they want to become and will protect our iconic species and our landscapes. Tourism has the ability to bring people together, to foster people-to-people connections, and to improve the lives of New Zealanders, as long as we can manage it properly. So therefore I commend this bill to the House.

Hon SCOTT SIMPSON (National—Coromandel): Seven minutes—seven minutes was the commitment to this tourism sector that that mediocre Minister from a mediocre Government with a very mediocre, botched Budget wants to make to the tourism sector. It’s interesting that the Prime Minister should be listening to this debate, because she’s very soon going to be conducting a Cabinet reshuffle. If ever there was a need for a reshuffled Minister, it’s that very mediocre Minister.

Tonight, as we debate the first reading of the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill, there will be people who will be heading to my electorate, the very beautiful Coromandel. [Interruption]

ASSISTANT SPEAKER (Poto Williams): Order! Order! I’d like to actually hear the Hon Scott Simpson’s contribution, and it is bordering on heckling in here at the moment.

Hon SCOTT SIMPSON: Thank you, Madam Assistant Speaker. As I was saying, tonight there will be—as we are debating in this Chamber under urgency some sloppy legislation, some lazy legislation—tens of thousands of people making their way to my electorate for a long weekend. Some of those visitors will be domestic visitors and some of them will be international visitors. They’ll all be coming to my electorate to spend time in one of the most beautiful and lovely parts of the country. When they get there, they’ll find a range of businesses and enterprises that are reliant on them coming and spending time and money in the beautiful Coromandel electorate. So tourism is important to people in my region, to businesses in my region, and this is a bill that puts some of the livelihoods of those people under threat. Because, whilst they are committed to tourism, and the jobs and the economic activity that tourism creates in regions like mine in the Coromandel, they also understand the fragile nature of it. They understand that they need infrastructure, they need support, and they need the kind of funding that this Government seems not willing to provide by a sensible mechanism.

So here we have tonight, under urgency, a debate not going to select committee, not having the full and proper scrutiny of a normal piece of legislation, an immigration regulatory piece of legislation slid under the guise of somehow helping tourism, when, in fact, what should be happening is a full and proper process, and a principled approach to this kind of proposal. One that enables the sector—small-business people in my electorate—to actually make submissions, be part of the process, and not just have the Minister come and say, “Well, we’ve done a few consultations. We’ve talked to a few of the leaders in the sector—the big players at the top end of town—and we’ve decided by decree that it’s going to be a $35 levy, that it’s going to be placed on all tourists visiting New Zealand”—except for Australians apparently, and also Pacific Forum nation members apparently are going to be exempt as well. Then, once it’s in place, the Minister is going to have the ability to change it at whim and without consultation further, or that’s the way it looks in terms of the bill.

So future fees are going to be set by the Minister, and what I want to know—and we’ll be traversing this as we go through the legislation—is with whom, how, and who decides what the process around this will be? This is a Government that doesn’t pay attention to process, and we’ve seen that in all its naked glory this week with the botched Budget. No attention to detail. No attention to process. No attention to form and rigour. It’s becoming a hallmark of this Government, as they enter the second and last phase of their term in office, that they want to try and do things quickly while they still can—while they still have a narrow and decreasing window of opportunity to adopt their ideological and philosophical approach—

ASSISTANT SPEAKER (Poto Williams): We are straying a little bit from the bill at hand. Come back, please.

Hon SCOTT SIMPSON: Well, I want to bring this back to the bill, because this bill represents the basic philosophical approach of this Government and their policy direction, actually, to not only tourism, but to every aspect of their administration, which is simply threefold. They adopt only one of three options—in fact, sometimes it’s all three—to make things either compulsory, to ban them, or to tax them, and sometimes they do all three. But those are, essentially, their policy responses to everything. In this piece of legislation, we see that they want to tax more. Well, that’s a known and accepted view of this Government, that their solution to many things confronting us is just to tax people more. On this occasion, what they want to do is bring international tourists into that tax pool.

Now, I don’t have any fundamental objection to the State, through taxation, helping and assisting a sector of the economy that needs support and help from time to time. We know that in my electorate, for instance, there have been some very good facilities provided from the funding—not fully utilised, I might add, by this Government—that was put in place by the previous National administration. That’s a good way to do it. But there shouldn’t surely be a knee-jerk response to every situation of just tax—just impose a tax. That seems to be the cure-all for everything. After more than a year—after 18 months or so of this Government being in power—the only thing that they are tangibly doing in terms of the tourism sector is to impose a tax on the visitors who are coming to New Zealand.

Now, the information that we have in this bill indicates that, actually, tourist numbers will almost certainly be affected, and not in a good way. New Zealand is already an expensive destination for international travellers to come to, and this Government wants to make it more expensive. Remember, this piece of legislation is focusing on New Zealand’s single biggest export earner; $14.5 billion to the economy and employing more than 180,000 people. So this is a Government that wants to just apply a pretty sloppy process, but there’s no credible plan—no credible plan, no solid sense of direction or purpose or a focus on a plan. And that’s what’s missing. When I talk to small tourist operators in my electorate, that’s what they say. They’ve got no sense of direction about where this is going—a lazy Government that’s kicking to touch, and just really wanting to invent another tax.

So estimates for the Crown benefit from international visitors suggests that $3.2 billion of revenue and some $600 million in expenditure is potentially on the line. What we know is that people do respond to perverse tax measures, and they will make decisions about where they go and how they spend their discretionary recreational dollars. It may well be that they may decide not to come to New Zealand and head off to somewhere else.

One of the difficulties that we have with this piece of legislation is the regulatory nature of it. The process that involves, initially, the setting up of the process through the Minister of Immigration—who we know already has significant challenges—and then somehow sort of sliding that to one side to the current Minister of Tourism. I’m not sure that many people will have much confidence in that kind of leadership at the moment.

Now, this international visitor’s levy—well, it’s a tourist tax—is going to be set seemingly arbitrarily at $35 per head. Now, I want to know, as we go through this process, what rationale was applied to creating that level? We’ve heard from two Ministers that some kind of consultation took place. We’ve got no understanding of how wide that was, who was involved, what the process was, and it is difficult to accept that there was much consultation, for instance, with tourist operators in my neck of the woods. I’d like to know, did the Minister bring his travelling roadshow to the beautiful Coromandel, and did he talk to any of the tourist operators in my electorate?

What we know is that even though there has been record tourism numbers, the economy is slowing, and anecdotally we know that tourists are now looking more carefully about where they want to spend their money. So what we know from this bill is that there are some very serious questions. There are some big questions about process, there are some big questions about form, and there are some big questions about intent and direction. What we don’t know about this piece of legislation is what the impact will be on our tourism sector, and what it will mean for businesses in the Coromandel and electorates like mine around the countryside. It’s a bad piece of legislation, and it’s bad form.

FLETCHER TABUTEAU (Deputy Leader—NZ First): I’m disappointed with the other side of the House this evening. It seems like a whole lot of politicisation and empty words that don’t mean nothing—they don’t mean nothing. Sorry for my grammar; I’m getting a bit excited. I quote Mr McClay. He spoke about the officials and, somehow, this anticipated decrease in tourism numbers. “I actually went out and spoke to tourist operators.” The Minister went out and spoke to the tourism industry and asked the industry: what do you think this will do to tourism in New Zealand? And guess what they said? “Actually, we don’t have any or little to no concern with this levy.” Actually, what they were more worried about—Minister Parker, you’ll be interested to hear this. Minister Parker, they were more worried about the exchange rate. And guess what’s happening to the New Zealand exchange rate now?

Hon David Parker: From 80 to 65.

FLETCHER TABUTEAU: From 80 to 65—never has the New Zealand economy and the proposition of tourism in this country been better, or not for the longest time. All of our exports are going up, including tourism.

Now, there was made mention of the world trend of tourism slowing down. The world economy is slowing down, but guess what? Tourism in New Zealand will continue, and is projected to continue, to grow in this country. They took this levy into their calculations when they made that number.

Hon Jacqui Dean: What? That didn’t make sense.

FLETCHER TABUTEAU: So this is a sensible piece of legislation. Let me put it into perspective for the member opposite. It was all guns and glory, the tourism industry, for the last nine years. It’s been great for New Zealand. World trend has been fantastic. But the members opposite did nothing in terms of infrastructure spend to cope with the huge pressures being put into our regions and the infrastructure in our economy—nothing. Well, actually, to be fair, Mr McClay mentioned the Tourism Infrastructure Fund, and that was about, maybe, 5½ toilet blocks a year around the entire country.

Mr McClay lambasted us for not spending on tourism in New Zealand. I have the proud job of being the under-secretary for the Provincial Growth Fund, or regional economic development, and Mr McClay must have forgotten that Rotorua has received approximately $20 million this year alone from the Provincial Growth Fund for the waterfront upgrade, the lakefront upgrade, and a commitment to enhance the attractiveness and the appeal of our Whakarewarewa Forest to mountain bikers, to New Zealanders, and to international visitors, and it is going to be incredible. I’m incredibly proud to be a part of that.

This is what this Government is doing. This is what I’m proud to stand in support of, and I will continue to do so, and I think we will be doing it for a long time hence. Thank you, Madam Assistant Speaker.

SARAH DOWIE (National—Invercargill): Thank you, Madam Assistant Speaker, for this opportunity to take a call on the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill, which should really be renamed as just the “Tourist Tax Bill”. I too rise in opposition, primarily because this is an extremely poorly drafted piece of legislation.

I note that Mr Tabuteau said that this was sensible legislation. Well, quite frankly, I agree with my colleagues on this side of the House that, in fact, it is lazy legislation. It is a piece of legislation that contains absolutely no detail. It will leave the detail to regulation, which is incredibly bad law. It will leave it to be captured by officials and leave it for them to come up with details as to how this is going to be managed, the scope of it, and where the distribution of these funds will go, and, certainly, on this side of the House, that is something that we will talk about further in the committee of the whole House stage. But “sensible”? Absolute hogwash. It is lazy. It is bad law.

The other thing is that we are now into the third bill of this botched Budget in urgency, and this is the third tax or cost to New Zealanders that this Government is bringing about as part of its botched, so-called Wellbeing Budget. We started, first of all, with an excise bill which increased fuel taxes to a whopping cost of $360 million being charged to Kiwis, and then followed with a social services bill which removed the obligation of mothers to name fathers—the “Deadbeat Dad Bill”—which will cost Kiwis upwards of $113 million. Now, we’re looking at bringing in a tourist tax at $35 per person.

That Government over the other side there is all about price signalling, and within this urgency, when talking about the other bills, they were quick to point out that when you raise a tax such as the fuel tax, you change the behaviours of people, and they were quite keen to link the fuel tax with increased safety on our roads. Yet when we’re talking about a tourist tax, they don’t seem to accept the facts and figures that the Ministry of Business, Innovation and Employment (MBIE) officials have given us, in that the fiscals don’t add up and that tourists will be discouraged from coming to our shores.

Not only will tourists be discouraged from coming to our shores but they will spend less in the communities that they visit. For me, as a regional MP and an electorate MP, many of my smaller communities that may abut the conservation estate or that are simply quite remote and that have forged a future with respect to tourism will not gain the benefit of that revenue at source, and I think that that is a travesty. I think that that is not investing in tourism, it’s not investing in the economy, it’s not investing in growth, and it’s certainly not creating jobs and wealth for ordinary Kiwis in rural or remoter areas. It simply doesn’t work.

I also echo the sentiment from this side that the tourism sector is of great benefit to New Zealand—$16.2 billion in GDP is generated from the tourism sector, and 180,000 jobs are directly involved in the tourism sector.

Brett Hudson: Well, it was, before their tax.

SARAH DOWIE: Well, that’s right, Mr Hudson. What we’ll see is that with less tourists coming to our shores, with less visitors coming here, and with less revenue being spent at source, for the businesses on the ground, these businesses will be forced to lay people off, and, as I say, the revenue generation will be down, and when things start to bite, it’ll be this Government here that will have to turn around and answer the public—

Brett Hudson: So it’ll be the provinces that hurt.

SARAH DOWIE: —and especially, Mr Hudson, the provinces.

This particular bill is actually amending the Immigration Act. The Immigration Act is about governing the movement of people and contributing to our security with the movement of those people—of who comes in and out of our country—and, all of a sudden, here we’re inserting a tourist tax. It’s a tax that’s already been mooted at $35 per person, and there are going to be, apparently, some exemptions to the rules with respect to taxing people who come in on a temporary visa. But, again, it’s already been signalled that Australians will be exempt from that tax. Now, how does that make sense? I really can’t fathom how that makes sense.

I mean, we’ve already seen in news reports and in media about how badly Kiwis are treated over in Australia, and yet this Government wants to make an exemption for the 40 percent of our visitors that come to these shores from Australia. Now, why would Australians be exempt from paying that $35 per person, and who else is going to be exempt? I mean, what sorts of categories is the Minister going to turn to for exemptions, and how is that going to be monitored and how is that going to be fair?

Brett Hudson: That’s their plan—Chinese-sounding names. That’s the plan.

SARAH DOWIE: Well, exactly, Mr Hudson. Who knows what could come about from this Government with regards to exemptions, because with it being made by regulation at the whim of the Minister, there will be no checks and balances and no accountability with regard to that regulation and this tourist tax. It is very, very, quite frankly, frightening that this bill could create arbitrary rules through regulation at the whim of the Minister, and what will that do for our international reputation moving forward?

The other thing that I don’t like about this bill is that there’s no guidance as to how the funds are going to be distributed. We’ve heard that there is going to be a fifty-fifty split between conservation and tourism. Well, that may well be arguable, but how is the Minister going to make plans as to which investments are good ones and which investments have priority? We’ve already heard about the fiscals and heard that MBIE have estimated that this tax is going to generate $80 million worth of revenue. However, on the flip side, they believe it will discourage $70 million in revenue, with the discouragement of visitors to our shores and less spending. But then, when you’re left with those figures, how are they going to prioritise that money?

Allocating $40 million for tourism infrastructure is really nothing. What they could have done was to prioritise the surplus that we’d left them and use it responsibly, rather than on other foolhardy policies such as the fees-free policy, which has devastated the Southern Institute of Technology (SIT), by the way, for your information. Certainly, there was no consultation with SIT with respect to that policy.

Look, I disagree with what the other side have said, which was that National has never supported tourism. We saw it as definitely a growth industry and one that was deserving of support. That’s why we had our tourism infrastructure growth fund and that’s why we had our partnership fund, and, certainly, Invercargill—my region—was well-supported by that. From an ideology point of view, the growth fund certainly worked in my region, and there’s many examples. One in particular that comes to mind is Curioscape in the Catlins, which allowed a project to create an interpretation centre to be driven by a community trust. So it was the people in the community on the ground—

ASSISTANT SPEAKER (Poto Williams): We are straying from the bill somewhat. Please come back.

SARAH DOWIE: Well, it’s to compare and contrast about what sorts of alternatives are available. I’m addressing the fact that the Government said that we didn’t invest in tourism, and that is quite blatantly false. It’s false, because it was through that fund that we supported that project. It allowed a partnership between a trust and Government and tourism—

ASSISTANT SPEAKER (Poto Williams): That’s still not part of the bill.

SARAH DOWIE: —that was quite successful.

This piece of legislation is bad. It’s bad all round, and we simply do not trust the Minister to make appropriate decisions as to how to spend this money. It will discourage visitors from our shores. It will discourage spending in the areas in which tourists do come. We live at the bottom of the world. We need to encourage visitors and encourage growth.

Hon EUGENIE SAGE (Minister of Conservation): Tēnā koe e Te Māngai o Te Whare. I am very pleased to support the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill. This is part of this Government’s joined-up thinking, in contrast to the ideology of the Opposition, which is prepared to promote growth but not in a coherent way and is not prepared to fund the costs of growth. So this bill is about ensuring that our tourism grows in a strategic way. As the Hon Kelvin Davis said, it’s about a much more active and deliberate involvement by this Government with the tourism industry that is set out in the New Zealand Aotearoa Tourism Strategy, which we launched recently. It’s about being active and about being coordinated so that sustainability is a core value of the industry, and we mitigate—[Interruption]

ASSISTANT SPEAKER (Poto Williams): Order! Order! I’d like to hear the member’s contribution, please.

Hon EUGENIE SAGE: —thank you, Madam Assistant Speaker—the industry’s impacts. Because we know that local infrastructure in tourism hotspots around Aotearoa is creaking. Who is bearing the costs of that? Local communities, ratepayers, and taxpayers. What this bill does is ensure that for a very small cost, $35, visitors who are paying thousands to come here and spend time here contribute to the costs of the facilities and the infrastructure that they enjoy and, as importantly, they contribute to the costs of protecting the natural areas and the landscapes that brings them here and that they come to see.

Fifty-two percent of international visitors who were surveyed earlier this year said that our landscapes and our scenery were what stimulated their interest in visiting Aotearoa New Zealand, and that was the top reason by a very large margin. At the moment they are not directly contributing to the costs of protecting those areas. So that is why this bill is so important and the levy that it establishes—through a very efficient administrative mechanism of the electronic travel authority at the border where it can be collected without long queues, without a big bureaucracy, collected very efficiently, and then ensured that it is split fifty-fifty between conservation and tourism.

In Budget 2018, we delivered the biggest increase in conservation funding to the Department of Conservation (DOC) in 16 years. In Budget 2019, with this legislation, we will also be delivering an extra $181 million over four years to the Department of Conservation. That is critically needed because we have a crisis in terms of threatened species and because the department has been investing significantly in visitor facilities. In Aoraki / Mount Cook National Park—which hit a million visitors for the first time this year—since 2010, DOC has spent $16.5 million in visitor facilities there, improving the track up the Hooker Valley so that people get a stunning view of the glacial lake and of Aoraki / Mount Cook. Those costs are being borne by taxpayers. This bill and this levy will mean that visitors can contribute to that infrastructure.

I was intrigued by the opposition of Sarah Dowie, because, of course, it was Eric Roy in 2012 that introduced through a member’s bill a $5 fee to go to Stewart Island / Rakiura that has meant that Stewart Island has benefited from over $700,000 from that fee. So, similarly here, our landscapes and our precious species will benefit from the revenue that international visitors provide. It’s them investing in nature, them investing in the facilities that they come to enjoy.

The Green Party is really proud to support this bill because it implements a policy commitment that we launched and campaigned on in 2017. It is about ensuring that we spread the load, that everybody contributes to sustaining nature and ensuring a quality visitor experience, which ensures that tourism is sustainable—joined-up thinking where everyone contributes.

ERICA STANFORD (National—East Coast Bays): Thank you, Madam Assistant Speaker. Fletcher Tabuteau this evening and Minister Davis both have told us about this extensive consultation that went on. So I imagined some sort of nationwide roadshow where Mr Davis got out of his electorate, got out of his Crown car, and pitched this tax, this tourist tax, and apparently was welcomed with open arms and everyone was pleased with it. But we have our doubts about that. I’ll tell you what’s probably more likely. It’s a tourist sector that is deeply unhappy with the Minister—deeply unhappy because of his lack of performance, and the fact that he’s done absolutely nothing in 18 months. He’s been asleep at the wheel, and done nothing for tourism. In fact, he cut it last year by $7 million dollars, I apologise. So unhappy are they with him for being asleep at the wheel for 18 months, and for all of these cuts, and for giving nothing to tourism, they write a letter to the Prime Minister. They write a letter—[Interruption]

ASSISTANT SPEAKER (Poto Williams): Settle, members.

ERICA STANFORD: —saying “Please”—begging the Prime Minister—“can we have an associate?”, because they’re so deeply unhappy with his performance. What does that say about his performance? Well, I guess we’ll have to read between the lines. So yes, maybe they said, “Perhaps we’d like this tax.”, but it’s probably more likely, if they did say that, that they said it because they knew they weren’t going to get anything else from this inept Minister. Even Iain Lees-Galloway couldn’t even manage barely five minutes in the first reading of his bill, and he’s advancing for the first time in history, as far as I can tell, an immigration bill that is going to be charging a tax for tourism and conservation and not for immigration. There’s actually a lot to say, and he barely got to five minutes. Maybe he didn’t read his notes—that’s entirely possible.

This Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill, as Sarah Dowie so—

Hon Tracey Martin: Eloquently.

ERICA STANFORD: Eloquently; that’s a good word. She did say it quite eloquently. She eloquently called it the tourist tax. We are here tonight to introduce another tax—in fact, the second tax in three pieces of legislation. What a surprise! What a surprise, from the Government of no new taxes. Earlier today, we had the petrol tax on hard-working Kiwis, pushing up the cost of living so that more of these Budget day models will move to Australia, across the Ditch, and now the tourist tax. We always said that Kiwis cannot trust this Government on tax, so now I suppose nobody can trust this Government on tax. As Scott Simpson said, there isn’t a problem that this Government can’t solve with a tax.

Basically, a quick rundown of what this bill does: to introduce this new tourist tax, it collects a tax when visitors apply for visitor visas, and those people who come from visitor waiver countries will pay it through the electronic travel authority. Now, I want to make this first point very, very clearly. On this side of the House, we understand that a lot more investment is required in tourism and conservation infrastructure. That’s not the question, and we’ve understood this for some time. It’s important to say at this point that it’s worth noting National’s spend in tourism over the last nine years—and it’s relevant to this bill, Mr Speaker. We funded the Tourism Infrastructure Fund with $100 million over four years. These guys couldn’t even spend all of it. We funded the Tourism Growth Partnership with $26 million, the Great Walks with $96 million, and the national cycleway.

Labour have failed in tourism. We have this new tax, as I mentioned earlier, because unlike the previous National Government, frankly, this Government, when it comes to tourism, have been asleep at the wheel. Kelvin Davis has been miserable in his portfolio. In their term so far, they haven’t put a single cent into tourism. They’ve shaved money off and they haven’t spent what is available, for all their grand promises, and Clayton Mitchell will remember. He will remember New Zealand First’s grand promises of giving the regions back their GST, spent by the tourists. Not happening—crickets; nothing at all.

Remember Labour’s great promises to fund tourism? Well, in 18 months, they’ve done absolutely nothing, and so now Mr Davis has to put in place a tax to make it look like he’s actually doing something. The reality is they collect $1.7 billion every year from tourists in GST. They collected it last year, they’ll collect it this year, and they will collect it next year, and rather than responsibly directing some of this massive tax take into tourism, the Government are frittering it away, as they always do, on wasteful spending on failed fees-free policies, KiwiBuild—which they don’t like to talk about any more—and the Provincial Growth Fund.

SPEAKER: Order! Order! Now, this is the second warning—the last warning—for the member.

ERICA STANFORD: So although they already get billions in tax from international visitors, what do we get? We get this bill—a tourist tax grabbing more money from international visitors so that Kelvin Davis can look like he’s doing something.

There are many problems with the bill that I will traverse, but the most important problem with this bill—

SPEAKER: Good.

ERICA STANFORD: —is quite simply math, and it’s not Mr Davis’ strong subject, quite clearly. The Ministry of Business, Innovation and Employment (MBIE) have said in the regulatory impact statement (RIS) that $70 million less will be spent in the economy because around about 200,000 tourists will pick to go somewhere else, and while Kelvin Davis says that $450 million will be taken in tax over the next four years, well, that’s $280 million in lost revenue. So, basically, that’s $70 million in lost revenue to gain $80 million in tax, and don’t be fooled, because the knock-on effect of this tax will be that tourism businesses will take a huge hit—$70 million less in their pockets, in their businesses, every day by international visitors. That’s what MBIE’s officials say in the RIS. That’s what they’re telling us.

So it’s a reduction in spend of $70 million to collect $40 million that Minister Davis is going to put back into tourism. It is nothing—it’s a drop in the bucket—for all of that lost revenue. By the time we take out the administration costs, we’re essentially raiding money from tourism businesses and tourism operators to turn around so that Mr Davis can hand it back to those who he decides are worthy, and I’ll go into that in more depth shortly. By the way, $40 million doesn’t even come close to what the tourism sector actually needs, because in the tourism sector, they do want more money, but overall, they don’t want this bad legislation, because a tourism Minister gets to pick his pet projects.

That brings me to my second problem that I have with this bill. It’s bad legislation. It’s a dog of a bill—it’s a flea-ridden, mangy dog of a bill—from an incapable and inept Minister, who has hurriedly put through this bill. It’s an ill-conceived bill that will not achieve the aims that he wants it to.

Hon Kris Faafoi: Read it with more passion!

ERICA STANFORD: Don’t be fooled—I have got lots of passion. Let’s hear you get up and give your passion. This legislation isn’t legislation to collect tax. It’s legislation to give a whole lot of regulations to an incapable Minister that the sector has no confidence in. It’s got no checks and balances, it’s got no scrutiny, and it’s putting huge power in the Minister and his officials.

The legislation describes what the Minister can and can’t do by regulation. Basically, it’s a “do whatever you want” clause. The Minister gets to decide the following, and there’s a whole list: who pays the tax, who’s exempt from the tax, how much the tax will be, how the tax is calculated, if different amounts should be paid by different people, how the tax will be collected, and, finally, how the money is spent.

I read new section 399B(1) in clause 7 of the bill—

Hon Tracey Martin: Oh, great!

ERICA STANFORD: —I know; I read the bill—and I have to say that I felt a little bit relieved when it said that the Minister, before making regulations, “must consult any persons and organisations that [he] considers appropriate.”, and I thought, “Thank goodness—phew!” But then, unfortunately, I looked at the next bit—new section 399B(2)—which says that consultation is not required when setting the regulations for the first time.

So in making what is, effectively, tax legislation, this Minister can do whatever he likes. If it was a more competent Minister, if it was someone like—oh, actually, if it was just a more competent Minister, I’d be feeling a little bit more comfortable, but this is a Minister who has a woeful track record. Like I said earlier, even the industry had to write to his boss because they want an associate because they’re not happy. It’s very embarrassing.

Here we are, putting all of our trust into Minister Davis to decide how much tax will be paid, who pays it, and how it will be spent, with no checks, with no balances, and with no consultation, and it’s highly unusual for tax legislation not to be put in primary legislation. This is as loose as a goose.

I’ve got quite a bit more to say, but I will put that aside for my speech in the second reading of this bill—

Hon Member: I’m looking forward to it.

ERICA STANFORD: —which I’m sure everyone is looking forward to, which I will read with great passion, and I will stick to the bill, of course, Mr Speaker. Thank you.

SPEAKER: Before I call Kiritapu Allan, there are two things I want to say. First of all—right at the end—the member won’t read her speech in the second reading. The second point is that I have noted that members have been taking photos in here. They’ve been doing it often this week and other than during maiden speeches. [Interruption] Mr Greg O’Connor, I’m talking to you. Members are not to take photos from within the Chamber while the House is sitting.

KIRITAPU ALLAN (Labour): Well, after that riveting contribution from Erica Stanford, somebody who I thought was a conservationist, I’m just so perturbed by that anti-sentiment for our environment. I’m so pleased to endorse this absolutely incredible legislation by the extremely competent, extremely smart, and incredible duo of a team, Minister Kelvin Davis and Minister Iain Lees-Galloway. With that said, I absolutely commend this bill to the House.

HARETE HIPANGO (National—Whanganui): This is a split call, Mr Speaker, and I believe that I’ll be one of the last speakers to address the House in the first reading of this bill, where there’s been so much impassioned debate exchanged this evening. The bill, the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill—it’s been suggested that it ought to be rebranded as the “Tourist Tax Bill”, but what I would share with the Government members in the House across from where I’m standing is that we have the brand of the tiaki promise. Mr Speaker, as you and the members in the House well know, this is a commitment of care to New Zealand. Well, I put it to the House this evening that this bill could be rebranded the “Tiaki Promise Tax Bill”.

So, as we know, this bill amends the Immigration Act. We’ve heard debate in the House this evening that this is a tax levy or a tax that’s taking its toll on the tourist, our international visitor to this country. In the discussions that I’ve had with some of the tourist operators, some are of mixed views around whether the levy is going to be of any direct benefit to them, as to how the distribution of this levy would come about and back into the pockets and the pukus of our people in the community. The community that I come from, Wanganui, is an isolated tourist region and our operators struggle there. It’s unknown, and there’s definitely no certainty indicated in the bill, as to how there will be the distribution of this levy back to our tourist operators.

So in the short time that I do have to address the House—undoubtedly this levy is another tax that is imposed by the most transparent Government that has indicated and stated quite clearly, right from the taking of its term and right throughout the tenure of its office, that it is the most transparent and accountable Government. Well, regrettably, that transparency and accountability in terms of the administration of this tax levy is not stated in this bill, and that will be debated further at another stage of the reading.

The key message that has been heard is, really: how is this going to benefit the New Zealand economy? It’s known that there’s a $16.2 billion contribution from tourism, which is our biggest exporter. It’s also known that there’s no denying the pressures that will be put on our visitor infrastructure with the growth and the expansion of the tourist industry, and also the pressure that’s going to be put on the economy in terms of the uncertainty. It’s been heard in this House this evening that the Ministry of Business, Innovation and Employment, with their analysis, has indicated quite clearly that with the calculations that have been done there is an uncertainty about the returns that would come, and the question around whether or not such a tax levy imposition is going to keep international visitors from our borders. It’s also known, in terms of the calculations, that the $35 levy undoubtedly could bring in a $70 million injection but also, undoubtedly, the potential of reduced numbers coming into the country.

So, as I said, this is a brief call that’s been taken. This Government has, in terms of branding our tourism industry with the tiaki promise—undoubtedly that is a promise about caring for our people and our spaces and our visitors, but this is a Government that is caring to tax in spaces and places that are unnecessary. It is only a matter of time as to telling the toll this will take on our tourism industry. I do not commend and support this bill but it will go through to a second reading, as is well known. We will continue to debate the fact that there is very little merit in this being brought into our tourist economy and industry. Kia ora, Mr Speaker.

JAMIE STRANGE (Labour): Mr Speaker, thank you for the opportunity to take a brief call on this bill by a hard-working Government who are still here on Friday night, passing legislation. There’s no other way to say it: New Zealand is a very popular place. But the challenge is, with the huge number of tourists coming to New Zealand, that has put huge pressure on infrastructure, and this Government is dealing with this issue through this bill. I commend it to the House.

SPEAKER: Jacqui Dean.

Hon JACQUI DEAN (National—Waitaki): Mr Speaker? Thank you.

SPEAKER: I have called the member, yes. Jacqui Dean.

Hon JACQUI DEAN: So, by name, sorry?

SPEAKER: Sorry?

Hon JACQUI DEAN: By name.

SPEAKER: Jacqui Dean.

Hon JACQUI DEAN: Yeah. Care to do it correctly, Mr Speaker?

SPEAKER: I beg the member’s pardon. The Hon Jacqui Dean.

Hon JACQUI DEAN: The Speaker is a stickler, so—

SPEAKER: I am a stickler—

Hon JACQUI DEAN: —thank you. Thank you.

SPEAKER: —and I know the member is pretty much perfect too.

Hon JACQUI DEAN: And the Speaker is about to find out just how perfect this person is. So thank you, Mr Speaker. I do sincerely hope that that 16 seconds’ worth of perfection won’t eat into my time, and I am quite sure that the Speaker will indulge, perhaps, a further 16 seconds at the end of my contribution on the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill.

I’ve spent quite a bit of time this evening looking at this bill. It’s a brief piece of legislation and, in a sense, while it’s not a good thing for the Government to be rushing this bill through the House with unseemly haste, perhaps a reason why the Government are doing this lies in the bill itself and in the crafting of the bill, which, when it gets read, really is quite a poor do. There are a couple of comments I would like to make about that.

There are two parts in this bill. Part 1, obviously, amends the Immigration Act. If I turn to Part 1, clause 5, and the definition of “Minister”, I suspect that the definition of “Minister” contained in the bill might have made sense to the officials who were drafting this last Tuesday evening, but it certainly doesn’t make for very clear legislation at all. If I could just mention in passing, the lack of clarity even in this small matter of ministerial responsibility contained in clause 5 surely would be a reason why a more robust process for the consideration of this bill should have been undertaken.

So “Clause 5 amends the principal Act’s definition of Minister to help enable responsibility for different provisions of the Act to be given to different Ministers.” Well, I’ve never read anything like that in any piece of legislation in my time in Parliament. It is as loose as a goose. “It also inserts definitions of conservation and international visitor conservation and tourism levy.” But here’s the bit that is most concerning: “Clause 5 amends the principal Act’s definition of Minister to help enable responsibility for different provisions of the Act”—which provisions? I’ll go on to the Act itself, because we are just in the explanatory note so far. But “different provisions of the Act to be given to different Ministers.”—naturally, the House will assume that those provisions will be very clearly set out in the body of the bill, because, as I say, we’re just talking to the explanatory note at the moment. Furthermore, there are a couple of questions that I will ask, and I am signalling now that I will want to ask, whichever Minister is in the chair.

There is another problem. The bill signals that there will be “different provisions of the Act to be given to different Ministers.” So does that mean, Mr Speaker—a stickler for precision—that when the House comes to the committee of the whole House stage, because there are different provisions of the bill being raised by members, those questions should then be answered by different Ministers? I raise this point very seriously, because this bill does assign responsibilities to different Ministers, and in the committee of the whole House stage, it is Parliament’s opportunity to clarify just what those responsibilities might mean in terms of a tourism levy under the Immigration Act. Some clarity on that would be appreciated, because this side of the House will exercise its right and duty to be able to question Ministers in the committee of the whole House. Some guidance on that would be appreciated at any time.

Moving on to clause 7—the mechanics of this bill. Of course, people may apply for a temporary class visa for travel to New Zealand or rely on a waiver of the requirement to hold a temporary class visa for travel to New Zealand. Then we move on: “The levy’s purpose is, broadly”—it says—“to fund conservation and tourism-related infrastructure and initiatives.” We have so many questions for the House about what that exactly means, given that it is in the primary legislation. Again, will three or four hours of committee of the whole House stage enable the members of the Opposition to tease out just what that means in statute in New Zealand?

I go on: “The regulations may specify who must pay the levy”—and a little is known about that—“and how it is to be collected, and may provide for exemptions from the levy. The Minister may also grant exemptions on a case-by-case basis.” What does that mean? Does that mean that there could be a class exemption, as for the exemption for Australian and Pacific Island travellers? Is it a class exemption, or is it an individual exemption for an individual traveller? I have read the bill. I’ve only had a few hours to do that, but that would be one of those critical things in a bill such as this that should be explained, by way, preferably, of a full consultation and a select committee process. So I will be asking the Minister—Ministers—at committee of the whole House stage to explain to the House what is meant by clause 7 in this bill.

A further question I have—and I’m flagging these because I will be requesting answers, and I don’t know who I will be asking those questions of. Which Minister will it be? Will it be the Minister of Tourism? It doesn’t specify which Minister. Will it be the Minister for Housing and Urban Development? It doesn’t specify. It just says “the Minister”. Well, how loose is that? Or will it be the Minister of Immigration? Will the Minister of Immigration be considering class exemptions, or will the Minister of Immigration be considering individual exemptions? Then the next question that follows from that is, given that we understand that the tourism tax is going to be $35 per person, I will need an explanation of how it can be that a Minister of the Crown and their officials are going to spend a number of hours considering exemptions, all for a $35 fee. If it is the case that this is an individual exemption on a case-by-case basis, then one has got to question whether or not this is good legislation to start with.

I’m going to move on to the regulatory impact statement, because, again, that raises a number of questions to me. So section B, “Summary Impacts: Benefits and costs”, leads on from my previous comments. The question arises: “Who are the main expected beneficiaries and what is the nature of the expected benefit?” Then the advice comes back: “No specific decisions have been made on where [the tourist tax] revenue will be spent.” Furthermore, the advice is “direct beneficiaries are likely to include central government agencies such as the Department of Conservation”—but maybe others, because the advice says, “such as”, so there might be others—“and local government agencies responsible for most”—for most—“public tourism infrastructure”. “Most”? What does that mean? Wouldn’t a select committee process be most helpful in the consideration of this bill?

I have many other points to make on this tourist tax piece of legislation. The final point I do want to make is that the Government—and somewhere in the papers, I have read that this tourist tax is not intended to solve the whole problem of funding for tourism but to just address a part of it. My contention is: why rush this through under urgency ahead of the local government funding and financing investigation of the Productivity Commission? I want answers to that.

GREG O’CONNOR (Labour—Ōhāriu): In times past, I hitchhiked on four continents around this world. As I stood, sometimes for hours, waiting for my next ride, I swore I would never drive past another genuine hitchhiker again; and so I don’t. As I drive around New Zealand, I pick up hitchhikers and chat with them, and invariably they say two things. First, they can’t believe how little they actually pay for in New Zealand; and, secondly, they also lament the lack of facilities in New Zealand. So here we have an excellent bill—the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill—which will solve both those issues, one that all those members opposite will know is absolutely common sense, and there’s no way they will repeal it. Thank you.

A party vote was called for on the question, That the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill be now read a first time.

Ayes 63

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

Noes 48

New Zealand National 46; ACT New Zealand 1; Ross.

Bill read a first time.

Second Reading

Hon IAIN LEES-GALLOWAY (Minister of Immigration): I move, That the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill be now read a second time.

This bill amends the Immigration Act 2009 to provide for the collection of the international visitor conservation and tourism levy (IVL) and to enable the automatic decision-making process with the electronic travel authority. Tourism is one of our biggest industries. It generates around $39 billion in GDP every year, and it employs around 200,000 people. It is a growing industry. In the last few years we’ve seen tremendous growth, and that has brought economic prosperity to New Zealand, but it also has placed a large amount of pressure on our infrastructure and on our natural resources. The benefits of tourism growth have not been evenly felt across the country, with some regions actively seeking to grow their sector. These types of issues highlight why the Government is committing to a more active and deliberate approach to tourism. The Government has already made some progress: recently, the Minister of Tourism and the Minister of Conservation launched the New Zealand-Aotearoa Government Tourism Strategy. This strategy sets out initiatives the Government will take to ensure that our tourism sector is sustainable, is productive, and is inclusive.

The levy this bill enables is an important part of the Government’s strategy. It will create a sustainable revenue system with the scale to invest in a way that substantially changes the way the tourism system operates. The IVL will generate a revenue stream, which we will invest in tourism and conservation. The environment is our most precious taonga. It is a huge drawcard for both domestic and international visitors, as well as local residents. The levy is one way in which we’ll ensure that tourism protects and enhances our iconic places. We’ll also invest the levy in infrastructure that visitors use and in supporting initiatives that improve coordination and planning in the tourism sector. More detail will follow as Ministers finalise the investment plan. This Government acknowledges the existing contributions to tourism and conservation made by taxpayers and by ratepayers, and therefore the levy will only be paid by international visitors.

The international visitor conservation and tourism levy has been extensively consulted on throughout its development. Through the design process we received input from conservation stakeholders, from industry bodies, and from local government on what the levy should look like. Once the design was agreed upon, we consulted extensively with the public. We received well over 100 submissions on the levy. Overall, feedback on the levy was hugely supportive, including from the tourism industry. I thank everyone who made a submission. Their feedback was invaluable to finalising the scope and design of the levy.

Tourism is a key part of our economy. It’s an opportunity for future development. It adds vibrancy to our communities and strengthens international connections. The levy is an important part of realising those benefits by ensuring the sector is underpinned with sustainable solutions to manage growth. I commend this bill to the House.

SPEAKER: The Hon Roger McClay.

Hon Members: Todd.

SPEAKER: Todd McClay—I’m sorry. I do live in the past, don’t I.

Hon TODD McCLAY (National—Rotorua): Thank you, Mr Speaker. Indeed, if I was the Hon Roger McClay, the rules of the House would allow a very, very wide-ranging debate, and you and others would be out there in the snooker hall drinking and smoking right now. The world has moved on.

SPEAKER: He did play for a very good rugby club in Taumarunui.

Hon TODD McCLAY: He did, thank you very much. When it comes to this legislation, Part 2 of the bill is around the electronic travel authority, and that is something that we do believe is important. Indeed, actually, it is a tool to allow our border authorities to undertake their jobs to the best degree possible. Equally, for international visitors wanting to come to New Zealand, to be able to do this with ease electronically is an important means for us to ensure we have the information required to know about them before they get here, before they get on the plane. We have no issue at all with that. Indeed, our spokesperson, Michael Woodhouse, is a firm believer that this is an important tool.

The challenge we have, though, is the speed with which this legislation is going through the House. There have been times when this House has had to pass legislation under urgency and there have been times when this House, on both sides, has used urgency when the need, perhaps, is less obvious. In the case that there is a real need that urgency must be afforded, often the House has been able to come together. This is not one of those times, because this legislation is not urgent. It’s not fixing an urgent problem that’s been sitting there that the Government has just found.

Indeed, the Minister has now had 18 months to work through this to be able to meet the promises that he made before the election, to deliver well-thought-out legislation that has all of the detail that a tax bill should have in it so that a select committee can study it, can question the department, and can bring in experts, and so that anybody in New Zealand can submit on it, to make the legislation better, or to say they don’t need it. But it is a fundamental right of democracy in New Zealand, and this House, that New Zealanders have the opportunity to come before us as parliamentarians, as the decision makers, and make their case. In this legislation, they are being robbed of that opportunity.

Now, the Minister said he has consulted widely and, actually, the first reading speeches are often boisterous but this is a very important issue because, actually, I am not sure that the sector has the same degree of confidence in this legislation to be delivered in the way that the Minister says it is, as the Minister has. I know that his officials don’t have the same degree of confidence that this legislation will achieve the outcomes that the Minister is telling us it will, as he has. The reason for that is when you come and look at the regulatory impact statement (RIS) and you look at what his officials have said there, they have said that, actually, this won’t deliver all of the funding that’s required. Much, much more will be needed; much more was needed last year in the Budget—much more was needed last year in the Budget.

The tourism sector is important. It didn’t deserve a cut to the Budget last year. Even though it was a small one, it sends a signal to them that the Government either is not taking this seriously, or is taking them for granted, or just thinks a new tax later on will achieve everything that is needed. So in the RIS it says that this isn’t enough money; it won’t achieve anything that the Ministers have said in their speeches that they’ve just read in the House. But if you go to page nine on the International Visitor Conservation and Tourism Levy (IVL) impact statement, halfway down under “Consultation” it says “Further targeted consultation is planned to inform the IVL expenditure decisions”. Well, that is important, but this legislation has no guidance at all about how those expenditure decisions will be made. It says, “Legislation will also be subject to select committee process.” So the officials said to the Minister that, actually, more consultation is needed, and that there will be a select committee process.

He’s had 18 months to deliver a full bill to this House, not something that relies upon the Immigration Act to give him the ability to pass regulations on everything, and these regulation-setting powers that are in this bill are extremely broad. This is more than the equivalent of a “Henry VIII” clause, because there is no boundary other than that it’s going to be used for tourism—but the legislation doesn’t say that. It says the IVL will be collected and it will go into the Crown accounts. It’s not being protected for conservation and tourism. The Minister has just said that that’s what will happen, just as it says in the RIS that the “legislation will also be subject to select committee process.” This should be going before the select committee because there has never been a bill in this House that’s been rushed through that hasn’t had problems, that we haven’t had to come back to fix. Mark my words; we won’t have to fix this bill, because it actually does not deliver this tax. All it does is give the Minister the ability to set regulations, and any regulation he wants.

The most concerning part of it is he said he must consult, but he can consult on anybody he deems fit. Well, that’s extremely concerning, because I guarantee you there are New Zealanders who are being robbed of the opportunity to put in submissions and come before the committee of this Parliament to have their say. That Minister’s not going to go and talk to them, and if they email him he’s not going to listen to them, because he’s already made up his mind. This is bad legislative process. It’s bad legislation. I have no faith at all that this Minister will deliver regulations that won’t have to be fixed—the tourism Minister will deliver regulations that won’t have to be fixed and are going to deliver for the New Zealand tourism industry.

Now, the cost to the tourism sector is significant. The Minister of Tourism will say, “But lots of tourists are going to come”, and he is right; the numbers have been going up. But his officials have informed him that 20,000 fewer visitors will come here. I would argue they may not be the richest visitors to our country. They may well be, to some degree, the backpackers, because we are not a cheap destination, New Zealand, anymore. We shouldn’t compete on price but we should be value for money, or people should see there is value in visiting New Zealand. Every extra cost, every extra tax this Government puts on means that visitors have choices and some of them, many of them may choose elsewhere.

Now, what we also know, in the advice he’s been given, is that $70 million less will be spent in the New Zealand economy because of this tourist tax. Now, that doesn’t sound like very much, I suppose, when there’s $16 billion spent. But when we look at that, $70 million less being spent in small tourism businesses in New Zealand is the equivalent of the annual revenue for 80 small, family-owned motels in New Zealand—80 small, family-owned motels in New Zealand. In fact, every single motel in Havelock North in Hastings—it adds up to just about 80. That’s the equivalent annual revenue they get.

This Minister is saying, “Doesn’t matter what the officials say because I’ve already consulted. I’ve already decided that $70 million is going to harm small businesses in New Zealand that rely upon tourism”. He’s right; more visitors will come. But we shouldn’t say it doesn’t really matter that this tax that we’re putting in is going to actually have an impact upon the value that people see in New Zealand and whether they come or not. It doesn’t matter that some won’t come, because, actually, he made a promise to the New Zealand electorate to deliver money for them, extra money for tourism, and in 18 months he’s only delivered a $7 million cut in the Budget last year. There is no new money in this year’s, but there is a tax. That tax is only going to deliver $40 million to tourism; none to those small businesses.

Every single council in the country has been saying to him, when he’s been visiting them, that it won’t even come close. There are councils in the country that have said they won’t even apply for this money because it’s not even worth it—it won’t even come close. Therein lies the challenge—$40 million, Mr Minister of Tourism, doesn’t cut it. It doesn’t meet your commitment to the New Zealand tourism industry. It doesn’t show that you are interested in them. It certainly doesn’t show that you understand the challenges.

When the Minister stands up here and says, “We’re going to do all of these things”, well, announcements are not going to build those roads; announcements are not going to promote New Zealand overseas. His announcements of what he hopes to do in the future, by the way, so far have rested solely on—the sole delivery has been on—the money that we committed in tourism funding previously over a four-year period. Those sorts of things are actually not going to buy the social licence and not going to convince the New Zealand tourism sector—who employ 400,000 people in this country; one in every seven jobs is tourism—that you have their best interests at heart.

This $40 million is nowhere near enough. He had the opportunity to make the case for hundreds of millions of dollars in the Budget last year, and this year, and, sadly, he has failed them.

Hon KELVIN DAVIS (Minister of Tourism): Thank you, Mr Speaker. It gives me pleasure to rise in the second reading here. I just want to address a number of the sort of issues and the misinformation that’s been propagated by the Opposition.

First of all, the speaker who just finished, Todd McClay, said there is nowhere in here that says what the fund will be spent on. He says it could be used for anything at all. He just needs to look at clause 4, which amends section 3. It says this “enables a levy to be charged to fund, or contribute to the funding of, costs associated with conservation or tourism.” That’s pretty specific: “conservation or tourism”. That’s not “anything at all”. That’s exactly what this bill does.

They raised some other issues. “How does it make sense to exempt Australians?” was one of the questions. Well, it’s really quite simple. If someone is flying from, say, the States and pays $1,500 for a fare and they have to pay $35 extra for this visitor levy, that’s a 2.3 percent increase on the fare. Compare that to, say, paying a short-haul fare of $180 from Australia. That’s about a 20 percent proportion of the fare there. So what the National Party is saying is that they are prepared to jeopardise our biggest tourism market—1.5 million Australians come to New Zealand every year, and they are prepared to jeopardise that, because what they’ll do is make Bali a lot more attractive and Fiji a lot more attractive rather than having them come here. What they are saying, by opposing the international visitor levy (IVL), is that they want to put the costs on ratepayers, because that’s where the costs are borne—by local governments, by ratepayers.

They’re saying tourism numbers will drop. Well, the advice—because they’ve been reading from the advice—says that any impact will be negligible. In fact, it’s so small that it’s almost impossible to bother reporting on. We know that we’re going to have 5.1 million visitors by 2025, up from 3.8 million visitors now.

What’s the price of doing nothing? The Opposition is a party that knows the price of everything but the value of nothing. The cost of doing nothing means that we risk losing our social licence in tourism. It means we risk the degradation of our environment. It means we threaten our very brand proposition in tourism. But that Opposition party is happy to do this.

Both Todd McClay and Harete Hipango have said words to the effect that they want the fund to go to tourism operators. Look, this isn’t a business development fund. This is a fund that will support the infrastructure and conservation to make sure that we protect our brand proposition and that we don’t lose our social licence. They talk about the pressure on infrastructure, but they won’t say how they will pay to ease the pressure on the infrastructure. They say that the fund was arbitrarily set at $35. Sorry, the fund was not arbitrarily set; this was a process that went through months of consultation with the tourism sector and tourism businesses. It went through consultation with local government, it went through consultation with the conservation sector, it went through consultation with communities, and it went through consultation with the regions. The $35 tourism levy equates to US$22. It equates to €20. That is not going to prevent people from coming here.

They ask, “Why is this part of an immigration bill?” It’s quite simple. This Government is looking for efficiencies, and we found a very, very effective efficiency by using the Electronic Travel Authority (ETA) as a mechanism by which to collect the IVL. Now, I’ve seen an app that people overseas are going to use. The app takes a photo. If you take a photo of the passport, you take a selfie, you tap in your credit card details, and you answer a couple of questions, the ETA and the IVL can all be sorted out and paid for in a matter of seconds.

They ask, “How will decisions be made on how it will be spent?” Those decisions will be made by an advisory group. That advisory group will be made up of folk from conservation, it will be made up of folk from local government, it will be made up of folk from the tourism sector, and it will be made up of folk, probably, and hopefully, from Māori communities, and they will form an investment plan—a plan—a plan to make sure that we protect our brand proposition.

The Opposition are making stuff up. They are trying to deliberately confuse exactly what this is doing. They want local communities to foot the bill, and they need to go out there to all those communities—

SPEAKER: Order! Sorry, I am going to interrupt the member. Members are not allowed to say in the House that other members are making things up. The inference that people take from that is that they are deliberately misleading them—that they know what they’re doing and that they’re deliberately misleading them. That’s not something you’re allowed to say in here.

Hon KELVIN DAVIS: They are confusing the issue entirely because they want local government and they want ratepayers to have to foot the bill for our infrastructure, because that’s where the costs will fall. The costs will fall on the mayors and the councillors. They’ll fall on the ratepayers all around the country.

Now, this is an important part of the funding toolkit for tourism. It is not the silver bullet, it’s not going to fix every ailment, but it’s going to go a long way. We’ve made spectacular use of the Tourism Infrastructure Fund—$8.5 million last year invested in consultation with councils and communities on how best to address the responsible camping issue. The number of complaints this Christmas was probably less than 80 percent of the number of complaints that I had in my first Christmas as Minister of Tourism. The previous Government had marketed New Zealand as a destination, they had completely failed to manage New Zealand as a destination, and we had to clean up the mess—myself and Minister Sage. We were the Ministers who had to fix up the bungling, the hopelessness, of the previous Government, and all they need to do, Minister Sage, is look us in the eye and say thank you. We don’t ask for much. Just say thank you because we have averted a catastrophe again—averted another catastrophe—because if that Opposition was still in Government, then the issues around responsible camping, the overloading of communities, and the facilities that visitors use would still persist and we would be at risk of losing our brand proposition.

Part of taking a more deliberate and active role in tourism is strengthening the Government’s stewardship of the tourism system. The stewardship involves looking across the whole tourism sector to make sure that it’s working effectively across our regions and that local governments, businesses, communities, iwi, and hapū have the tools and don’t actually have to front with the costs of fixing up the mess that that previous Government left behind for us to clean up.

In the past, our role as a steward has involved setting up Tourism New Zealand as a national tourism marketer. More recently, we’ve established the Tourism Infrastructure Fund, and that was a good fund—$25 million a year for four years from the previous Government. The thing is, as I said in the first reading speech, that $25 million fund for four years doesn’t go on for a fifth year. It wasn’t long-term, sustainable, consistent funding, and what we’re saying with the Tourism Infrastructure Fund is that for five years we will have this fund. It allows the tourism sector and conservation to plan five years in advance. It’s not something that is at the whim of Governments as they come and go. We know that individual tourism businesses have been benefiting from tourism growth, but the broader system didn’t have those long-term funding arrangements needed to respond quickly to significant shifts in the number of visitors we’ve received. Again, I commend this bill to the House.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Mr Speaker. Normally in a second reading debate, the House would have the benefit of having a select committee report back. The House would have the benefit of being able to scrutinise and look at a departmental report that had analysed the detail made by submitters, recommendations that submitters had made, and also a sense of what the departmental officials had made of those submissions. Of course, when we’re operating under urgency on a piece of legislation like that, we don’t have the benefit of that kind of scrutiny or feedback, so we are left in a situation where members of the Opposition are going to have to rely on the regulatory impact statement (RIS) prepared by officials from the Ministry of Business, Innovation and Employment. In the time that’s available to me, I’d like to go through just some of the points that are raised in the regulatory impact statement in relation to this short but not very specific piece of legislation.

My colleague the Hon Jacqui Dean made, I think, some very good points around definitions, particularly the looseness of the definition of “Minister” in clause 5(2). Now, there are further issues of concern that point to this bill having been thought about for some time but obviously prepared with haste and in a hurry, because when one looks through the regulatory impact statement, frankly, more questions are raised than answered. The very first question that is raised by a quick look at the RIS is that it says that the proposing Minister is the Hon Kelvin Davis. Well, actually, it’s not; it’s Iain Lees-Galloway. He’s the Minister of Immigration. This is an immigration bill in the name of Iain Lees-Galloway, and yet it’s the tourism Minister that clearly has done most of the work on this bill. So that raises an interesting question as to the process that members on this side of the House asked questions about in the first reading debate.

When we come down to section B of the RIS, there’s a section that’s headed up “Summary Impacts: Benefits and costs.” It says, “Who are the main expected beneficiaries and what is the nature of the expected benefit?” And it says right at the beginning, in that very first sentence, “No specific decisions have been made on where [the levy] revenue will be spent.”—no specific decisions have been made on where the revenue will be spent. It’s envisaged—just envisaged—that revenue will be used to support conservation and tourism infrastructure.

Then, if you go to the actual bill, again it’s suitably vague. It just says that the levy will be charged to contribute to the funding of costs associated with conservation or tourism. So there’s nothing terribly certain or fixed or defined about that in the bill. Indeed, when we go further through it, if we look in Part 2, there’s a new section 399A, inserted into the principal Act by clause 7. Subsection (5) of that says, “All levy money collected under this section must be paid [to the Crown account]”. Now, that’s actually the consolidated account. So the money gets put into the consolidated account and then we hope, and we hope with the goodwill of the Minister of Finance, that he’s actually then going to make an appropriation to redirect that funding from the consolidated account—funding that’s been collected at the border, collected by the electronic mechanisms, on the hope that the Minister will make a funding decision, in a Budget, presumably, that will direct funds to conservation and/or tourism infrastructure. But there’s no certainty about that.

Then we get further into the regulatory impact statement. The question is asked: where do the costs fall? It says in the statement that, like any other charge, it may—may—have impacts on commercial activity. I mentioned in my first reading speech the potential impacts on small tourism operators in electorates like mine in the Coromandel. So there is—and it’s acknowledged by officials—a potential impact on commercial activity, and none of the Government members who have spoken so far have paid any attention to that or attempted to answer the questions that we’ve raised on this subject.

The RIS goes on further to say that “Information on price effects of charging the IVL is limited”. We don’t know what the information is, because there hasn’t been information prepared, and it’s unlikely that we’re going to get it before this bill is passed. So, as my colleague the Hon Todd McClay mentioned, when we pass, as a House, legislation under urgency—rushed as it is, without the scrutiny of a select committee, without the scrutiny of officials looking at submissions that have been made by submitters—we are almost certainly going to have to come back at some stage and look to some kind of amendment to tidy up this legislation.

I want to go further into the RIS, because there is an issue that has been mentioned by Ministers on the Government side relating to the consultation process that took place ahead of the introduction of this bill. Now, it seems that, clearly, there was some pre-engagement. In fact, the RIS mentions that.

It says, “pre-engagement with key stakeholders”, including Tourism Industry Aotearoa, Local Government New Zealand, and aviation and cruise representatives. But there is no mention of consultation or engagement with any of the smaller operators that make up the large bulk of tourist operators in the country. A public consultation process, it says, was held in July 2018 and 107 submissions were received, with 45, just under half of those submissions, being from the general public—so they weren’t even from tourism sector operators or local government people or anything like that at all; they were simply members of the general public, who I’m sure made a valuable contribution to the process. But the point I’m trying to make is that the number of submitters in this consultation process was actually very, very small. It was a narrow band of quite narrowly defined tourism operators and local government people.

But what’s most telling in the RIS is the sense that this was clearly meant to be a piece of legislation that was due to have the full, proper process of a parliamentary legislative introduction—a select committee and then a report back, a second reading, a proper committee of the whole House, and then a third reading—because in the RIS it says, on page 9, “Further targeted consultation is planned to inform IVL expenditure decisions.” Then it says, boldly, “Legislation will also be subject to select committee process.” So, clearly, there was an intention from officials and from the people who did make submissions that this was a bill that would go through a proper parliamentary process and would not be one that was passed in the dead of night, under urgency—

Hon Iain Lees-Galloway: Oh, there it is—“the dead of night”.

Hon SCOTT SIMPSON: —on the back of a botched Budget. So those people who did consult—

Kieran McAnulty: Dead of night—bingo!

Hon Iain Lees-Galloway: Oh, what? I was one off!

SPEAKER: Order! Order! We’re a Parliament, not a drinking game.

Hon SCOTT SIMPSON: Thank you, Mr Speaker. Those people in the process who were consulted, who did make submissions, did so, clearly, on the basis that they’d have another go—that they’d have an opportunity to make a submission to a select committee and come to the Parliament and present their views and opinions and ideas to the Parliament. That’s the way it would normally be done. So for the RIS to actually say, “Legislation will also be subject to [a] select committee process.”, I think, actually shows that this is a piece of legislation that the Government’s just sort of snuck in, trying to create this under the guise of a botched Budget process. And I say to those members who interjected: that’s another one for you.

I want to, in the time remaining, just talk quickly about the exemptions, because it seems that the Australians have been exempt, visitors from Pacific forum countries have been exempt, and there is also a category of others that have been exempt, which seems to be a little bit arbitrary. One of the challenges, I think, is that, as far as I am aware, the electronic travel authority system doesn’t apply to Australians, so possibly there was literally no mechanism for collecting levies from Australians. So when we get to the committee of the whole House, it’s my intention to put forward a Supplementary Order Paper that will look at some of these issues, and I know that other colleagues of mine will have Supplementary Order Papers as well, and we’ll be wanting to detail those in the committee of the whole House.

FLETCHER TABUTEAU (Deputy Leader—NZ First): Thank you, sir. It’s a pleasure to rise for the second reading and acknowledge Karen back home and some of the friends I’ve been speaking to about this legislation. Basically, the conversation was, “Well, if it’s so bad, get Todd McClay to stand up on behalf of the National Party and commit to repealing it.”—commit to repealing this legislation which they say is so bad, which we on this side of the House say is going to go towards dealing with infrastructure stuff-ups and blockages in our environment and the conservation estate. That’s what we’re going to do over here. And with that, I’ll sit down.

SARAH DOWIE (National—Invercargill): Mr Speaker, at the risk of surprising you at 10 o’clock at night, I too rise in opposition to this bill, the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill, otherwise known as the tourist tax bill.

Look, I am really quite concerned as to what this Government is signalling to our visitors from overseas but also to our tourism industry. I think some of the things that this Government is trying to moot—or not moot, because this bill is such a lazy piece of drafting, given that it basically defers everything to regulation—and some of the things that are being signalled are going to be to the detriment of an industry that contributes $16 billion in GDP. Let’s just think about that—$16 billion. That is a mammoth source of income and revenue to this country. Tourism contributes $1.7 billion in GST. It is phenomenal what this industry gives to our country, and that’s before you start talking about the jobs that this industry generates, the indirect jobs and servicing that it generates, and the way that it places our country on the international stage to attract more visitors to our country and increase that growth.

Now, given that the second reading is very wide ranging, I’m going to address some of the things that were laid at the National Party’s feet with respect to tourism, and the first is with respect to sustainability. Somehow, throughout this argument it was put to us that we don’t care about the environment and we are not interested in sustainability. Well, look, that is absolute rubbish. There are many blue-greens sitting here on this side of the House at the moment, and we believe that there is a balance to be had between our economy and our environment.

I mentioned before some of the projects that the National Party, through our Tourism Infrastructure Fund, had contributed to, in my first reading speech. Again, I mentioned that one of those was Curioscape at the Catlins, and that investment was in direct correlation to avoiding and remedying some of the adverse effects that were occurring from visitors to a fledgling tourism site. Now, that site at Curio Bay is growing in popularity. There were over 100,000 visitors to that site last summer, and there were serious concerns about the movements of those visitors, not only to a scientific reserve managed by the Department of Conservation (DOC), the petrified forest, but in respect of their toileting and their behaviour around wildlife.

Now, that investment in that interpretive museum was to educate visitors about appropriate movement and behaviour in that environment. That was part of the National Party’s mantra, and that is why we invested from central government in that process and in that project. It was a coming together of the community, of central government, and of local government, and that partnership is flourishing today.

The other thing that I want to address is the Minister of Conservation’s noting that there is a Stewart Island levy in my very own electorate of Invercargill. Yes, the National Party does support that levy. It was brought in by Eric Roy, my predecessor, the MP for Invercargill. However, there are some very wide-ranging differences with respect to that levy compared to this tourist tax. Now, the first that we’ve got to note is that Stewart Island basically has a resident population of just under 400 people and, certainly, the GST generated from that community is significantly low. Given that they are a remote island at the bottom of New Zealand, they do need investment in infrastructure, and this is a levy that is put on to the ticket price of people entering Stewart Island and that is administered by the Southland District Council—

Hon Kelvin Davis: What about all the other small communities around New Zealand, Sarah?

SARAH DOWIE: —and goes directly to infrastructure in that community. Well, Minister, that brings me back to the next point, and that is that this piece of legislation is lazy. We have absolutely no idea as to how you will administer the funds—I’m sorry, Mr Speaker—how the Minister will distribute the funds. I have no idea how the Minister is going to prioritise projects, how the Minister is going to look at different environmental effects, how the Minister is going to apportion the different funds, given you said that there’s going to be an equal split between conservation and infrastructure. But how is that money in conservation going to be apportioned between the different national parks and reserves? We have absolutely no idea.

For some reason, over that side of the House, they fail to come back to the fiscals. They talk about consultation with the tourism industry, but I bet if they were up front with the fiscals, the tourism industry’s reaction would be very, very different. The Ministry of Business, Innovation and Employment (MBIE), their own officials, have come back and estimated that the tax will generate $80 million. Yet, on the other side, they say that that tax—

Hon Stuart Nash: It’s not a tax; it’s a levy.

SARAH DOWIE: —will discourage—it’s a tax. It’s a tax. It’s tax and spend, tax and spend, tax and spend from that Government, and ruining our economy, with GDP absolutely decreasing and this economy failing, with growth moving from 4 percent to 2 percent under that Government, a Labour - New Zealand First - Greens Government. Without that growing economy, Mr Nash, there will be limited jobs and there will be limited opportunities for families to get ahead. This is just another tax that will continue to discourage visitors to our shores.

Hon Scott Simpson: Another handbrake on the economy.

SARAH DOWIE: It is absolutely another handbrake on our country. MBIE, your own officials, have said that this tax will discourage approximately 20,000 visitors from our shores, and that will result in a loss of revenue of $70 million. How is that of any benefit to our tourism sector with respect to building up infrastructure? How is that of any benefit to conservation when there is practically nothing left? If the Government had been more prudent with the finances and less foolhardy on some of these extreme policies, where the ramifications weren’t thought through—failed policies, like fees free—then they could have reprioritised money into the tourism sector rather than cutting $7 million from the Budget last year. They could have reinvested in tourism as a growth industry in a sustainable way and produced jobs—created a framework that would grow job opportunities for our families, especially in the regions.

Now, there are a number of smaller communities that abut the conservation estate and are located in remote areas, and they are reliant on tourism activities. You look at some of the initiatives that the Rt Hon John Key brought in, like the cycle trails. Look at the Otago Central Rail Trail and some of the businesses that have sprung up in remote areas from that rail trail, where mum and dad can get on their e-bike and ride along the trail and stop and have cups of coffee and enjoy the scenery that Otago and other places around New Zealand have to offer. It creates jobs, it creates wealth, and this tourist tax will simply put a handbrake on our tourism industry.

The signal that it’s giving to our overseas visitors is absolutely appalling. We want to be opening our shores to visitors so that they come and have a very good experience, a valuable experience, and they go away—after spending money in our country, creating jobs and wealth for our families—back overseas and talk about the wonderful experience that they have had here in New Zealand. But this is a Government that doesn’t care about tourism, that doesn’t care about attracting visitors to our shores, and growing it in a sustainable way. It’s an appalling tax and appallingly thought-out.

Hon EUGENIE SAGE (Minister of Conservation): Tēnā koe, Mr Assistant Speaker. Thank you. The tourism sector is built on an ethos of manaakitanga, of hospitality, of New Zealanders welcoming visitors to our country. If we let that be undermined because of a feeling local communities have that the areas that they enjoy are being overwhelmed with visitors, that they as local ratepayers and taxpayers are funding all of the facilities and the infrastructure from toilets to camping grounds, from dump stations to camper vans, then they feel burdened by tourism. It loses its social licence to operate. So, far from being a handbrake, as the National Opposition is portraying, this bill—this levy—is about ensuring a sustainable future for tourism, because it preserves the social licence by ensuring that there is a means of funding infrastructure and of funding the protection of the landscapes and biodiversity that visitors come to see.

The Opposition has been quoting very selectively from the regulatory impact statement. As the regulatory impact statement says, “If these issues”—of loss of community support for the tourism sector, a perception that locals are paying the financial burden, and that there is overcrowding at visitor hotspots—“are not addressed, the costs of tourism could potentially outweigh the benefits we enjoy as a result of a thriving tourism sector, including employment, amenities, economic benefits and connections with our trade partners. The sector could also contract as a result of deterioration in the visitor experience, or loss of local community support for the sector.” That is why this levy is so critical, because it’s about visitors paying their fair share. I commend this bill to the House.

ERICA STANFORD (National—East Coast Bays): Thank you, Mr Assistant Speaker. I rise to speak in opposition to this, frankly, atrocious and outrageous tourist tax. I will start by just speaking to Ms Sage’s point that tourists don’t pay their fair share. Tourists in this country pay $1.7 billion in tax each year—each year. Like I said, they paid last year, they paid this year, and they will pay next year. They pay their fair share. It is this Government’s choice not to use that tax in a prudent way to fund conservation, infrastructure, and tourism initiatives. That is their choice. There is plenty of money. Tourists pay their fair share every single day.

I’d be furious, frankly, if I was a tourist operator tonight. Kelvin Davis has done nothing for tourism, as I mentioned earlier. If I was a jetboat operator or a tour guide operator, I would feel angry because he’s done nothing in the last 18 months for the sector. He cut $7 million. He hasn’t given them any additional funding, and then he brings this bill. He brings a bill that his own officials say is going to bring 20,000 fewer visitors to our shores and cost $70 million in lost revenue. He’s going to take $40 million for his tourist initiatives and divvy it up as he decides, back to the sector—to a sector that already doesn’t trust him. They don’t even get their say. These poor tourist operators—these mum and dad small businesses out there trying to make their way—don’t even get to have a say, because he hasn’t been out to consult them. Now with this rushed process—in the dead of night, as Minister Mr Scott Simpson said—they don’t get to have their say through the consultation process. It doesn’t sound great.

As he has often done—I have heard it before from him—Mr Davis says, “Well, actually, National just obviously don’t want to do anything.” But that’s not the case at all. We just want to do it smarter. That, I think, is the point. Just because we oppose the bill doesn’t mean we want to do nothing. In fact, what we’d like to see this Minister do is use some of the $1.7 billion that he gets, or even the Provincial Growth Fund. We’ve got another Minister racing around the country splashing cash out willy-nilly—can’t spend it fast enough—and with absolutely no probity, on his own pet projects. We’ve got plenty of money to spend, but this Government is hell-bent on taxing everything that moves, including our international visitors, and putting our tourism at risk.

Now, I want to go back to talking about Australians because I didn’t get to it in my first speech. What I wanted to say was that 40 percent of the visitors that come to our shores are from Australia. If we were to apply this levy to them, they would bring in an additional $36 million. Now, the Minister came out tonight and he defended exempting Australians, and he made the excuse that, “Oh, actually, we don’t want to put this at risk, because they don’t spend as much as everybody else and it’s a greater proportion.” You know, he made all these excuses. But the reality is not that. The reality is not that at all.

Firstly, in the bill, he has the regulation-making powers, if he so decides, to prescribe different amounts or methods of calculation in the levy, in respect of different categories or classes of person. If he wanted to, he could charge Australians less. By his own rationale, he could actually, as the bill points out, charge them less so that they pay their fair share, as Minister Sage wants everyone to pay their fair share. So it’s clearly in there. There’s nothing stopping him. The reason that he can’t charge Australians the visitor levy is he’s got no mechanism to do it. That’s what he won’t tell you. He can’t levy the tax on the electronic travel authority (ETA), because Australians won’t be able to use the ETA. So that’s actually the real reason. He has every other ability, under this bill, to charge them a smaller amount. So his excuses tonight don’t make sense.

What Minister Davis is saying, though—and I found it quite interesting—is “We don’t want to put this very important market at risk—this 40 percent.” But he’s quite prepared to put the other 60 percent at risk, for some reason—that doesn’t matter. But these people have choices. New Zealand is an expensive place to come to, and already we are losing. I read the other day that German, Dutch, and many other European tourists are being put off by the high cost of coming here. This is just another thing that will make them pick somewhere else.

Now, one of the other things I wanted to do in my contribution is to talk about the process. We’ve heard a bit tonight from the Hon Todd McClay about the unnecessary speed of this bill. Mr Davis had 18 months to bring this bill to the House, and—let’s be honest and let’s be fair—there’s not a huge amount to it. We can tell, clearly, that not a lot of thought’s gone into it. So what was stopping the Minister bringing this bill to the House months and months ago, or, indeed, last year? It’s not a huge bill. It doesn’t do anything, particularly, apart from the fact that it just gives Minister Davis all of these fancy regulation-making powers that we’ve got no idea what he’s going to do. Even the Ministry of Business, Innovation and Employment officials have said that more consultation was needed and a select committee process should take place. But no, Minister Kelvin Davis knows best.

International visitors already pay their fair share. Now, if this Government was serious about tourism and they were serious about conservation infrastructure, they would have already funded it over the last 18 months from the $1.7 billion they get every year. But they chose to fritter that away. They chose to use it on wasteful spray-and-walk-away working groups and many other failed policies. Instead, our tourism industry is going to be put at risk and we’re going to probably see 20,000 visitors fewer each year because of their inability to look past anything other than tax. For those reasons, we will be opposing this bill. Thank you.

ASSISTANT SPEAKER (Adrian Rurawhe): I call Marja Lubeck—five minutes.

MARJA LUBECK (Labour): Thank you, Mr Assistant Speaker. This is a very short call because the bill really speaks for itself, but a previous speaker mentioned the Dutch and the Germans, who somehow seem to think that it is too expensive to spend their time here. Well, actually, it’s absolutely incorrect. From all of the family and friends who quite frequently come all the way from the other side of the world, every single one of them is always saying that they cannot believe how cheap it is or how little they have to pay to use our beautiful spots. So what this bill does is actually ensure our international visitors contribute their fair share to the infrastructure that they use. It’s only fair. Tourists absolutely agree, and if the Opposition would go out, they would hear that feedback. So I commend this bill to the House. Thank you.

ASSISTANT SPEAKER (Adrian Rurawhe): I call Harete Hipango—five minutes.

HARETE HIPANGO (National—Whanganui): Thank you for the opportunity to address the House in the second reading of this. It’s interesting that members in the House, the Government particularly, are grand at the blame game, often lack good grace and graciousness, and speak loudly about kindness—talks up the wellbeing, care, and kindness—but somehow lack the sense of decorum to exhibit that.

So moving now on to the bill. Just in terms of the process, one has to question the due diligence in the care associated with the tiaki promise that’s espoused under this tourism brand from the Government. The tiaki promise is about acting with care and manaakitanga. One questions whether this bill actually does that.

So talking about due care and diligence, I refer specifically to the provisions of the bill and also the risk impact statement, which my colleagues have also mentioned. I turn again to page 9, where it talks about the process of consultation. It’s quite apparent, based on the advice from the officials, that there were two rounds of consultation. That was held in July 2018. However, stated very emphatically and quite clearly, and again to be emphasised and restated in the House this evening, is that further targeted consultation is planned—further targeted consultation is planned—which is clearly indicative that the officials were of the view that this due process ought to be adhered to. Well, regrettably, it hasn’t, and, regrettably, that has to question the integrity not only of the process but the haste and the speed with which this bill is being introduced under urgency.

It’s also indicative in terms of the gaps and the lapses that are obviously and identifiably noted within this bill. It’s a hastily drafted bill, and there are flaws that my colleagues here this evening have addressed.

I challenged the Minister at the first reading of the bill around the collection of this levy, and how that’s going to go back into the pockets and the pukus of our tourist operators out in the regions. The Minister is of the view that that’s going to be done. However, it’s not stated here within this bill, and I make it very clear and emphatic, again, that under the proposed section 399A(5), in clause 7, “All levy money collected under this section must be paid into a Crown Bank Account.”—a consolidated fund. There’s nothing there specifically in the bill that states there will be an allocation of these funds out to those tourist operators. It is purely at the discretion of whoever is making the decision. There is no compulsion. There’s no transparency. There’s no accountability.

So the Government talks the big game. When things break down, it points the finger and blames. It’s time to step up and to honour that tiaki promise, all about care and due diligence.

So I also turn to the part within the impact statement. The Minister had stated and sought to justify why there is an exemption to the Australian market, the Australian tourist operator. It was stated that there is concern that there’s a choice of other countries that the Australians may prefer to go to because of the cost imperatives. Well, precisely. That is the very reason why this side, the National Party, is arguing against the imposition of this tiaki tax to the international visitor: for the very reason that it will be a disincentive to pay to travel so far to come and then to be met, our manuhiri to be greeted, with a tax.

I conclude by saying that this bill as it’s proposed is a tiaki promise to tax our manuhiri. There’s no tick from this side of the House on that tiaki tax promise.

ANGIE WARREN-CLARK (Labour): Kia ora, Mr Assistant Speaker. Thank you. It’s a pleasure to rise and speak on the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill. This bill does two things: it sets up a levy to ensure the environment and our infrastructure can support a very successful tourist industry, and the bill also allows for the automatic electronic collection of fees when visitors pay for their visas. It’s a wonderful bill. Everyone knows about the difficulty we have in this country around our conservation community and our conservation land, that is absolutely being visited. We love visiting it, but, let’s face it, nobody wants to see toilet paper on the Tongariro track. I commend this bill to the House.

Hon JACQUI DEAN (National—Waitaki): Well, thank you, Mr Assistant Speaker. It was very concerning in the first reading speech of the Hon Eugenie Sage when she noted that, with regards to how money was going to be spent by conservation—I quote—“[There is] a crisis in … threatened species”. Well, that seems an awfully long way away from providing tourism infrastructure, and the comment by the Minister of Conservation was—

Hon Eugenie Sage: They come to see them.

Hon JACQUI DEAN: Ah, there we are. So the conservation Minister has just confirmed over the House, well, “They come to see them.” Yes, they do. So does that mean that this tourist tax is what it looks like it appears to be? Is this tourist tax merely a blank cheque for Ministers to ply towards their pet projects? It certainly sounds like that, and from the dearth of information and clarity in the bill and all the many questions that are raised in the regulatory impact statement (RIS), I am so looking forward to the committee of the whole House stage, because I have a number of questions.

I have a number of questions for whichever Minister is in the chair, and I do hope they take it in turns. If it is the Hon Kelvin Davis, I have questions around the tourism spend. If it is the Hon Iain Lees-Galloway, I have questions around the Immigration Act and the application of that. If it’s the Hon Eugenie Sage, I have questions about how it can be that a tourist tax gets distributed so widely and diluted through the conservation estate.

Angie Warren-Clark: Read the bill.

Hon JACQUI DEAN: Well, you see, “Read the bill.”—there’s not much there. If I could direct the member opposite who just resumed her seat, if she cast her eye over the bill, it might confirm to her as well that this bill is extremely vague, unclear, and, if I might say, when it was hurriedly thrown together on Tuesday evening, I don’t know that the officials really had their hearts in it.

I want to just mention a matter of concern to me. In the RIS, under section B “Summary Impacts:”, it asks “Who are the main expected beneficiaries and what is the nature of the expected benefit?” That’s the question asked and answered in the RIS. The RIS says no specific decisions have been made where the tourist tax revenue will be spent. Well, I suppose that’s fair enough, because the bill is just going through the House, and with the benefit of a select committee process, we might have had a bit more direction. The only direction we’ve had so far is the Minister of Conservation, who is welcoming with open arms the carte blanche blank cheque, which she will spend in whatever way she likes, because—to quote—“They just want to come and see the threatened species.” So if that isn’t loose, I don’t know what is, and if there is a danger signal in there about the lack of rigour in this bill and by the receiving Ministers, then we should be very, very concerned about that.

In the committee of the whole House stage, I’d also like to see the Hon Nanaia Mahuta take a turn in the seat, because she is also one of the receiving Ministers, and it does say in the RIS who the main expected beneficiaries are. It notes they are the local government agencies responsible for most public tourism infrastructure. So I am expecting the Hon Nanaia Mahuta to come down and take a turn in the chair to answer questions in the absence of a select committee process. This is, after all—they tell us—the most transparent, open, and kind Government in the history of New Zealand. Let’s just see them deliver on that.

ANAHILA KANONGATA’A-SUISUIKI (Labour): Talofa lava. Quoting the Hon Kelvin Davis, “We need tourism to enrich New Zealand.” Section 399A(2)(a), (b), and (c) will ensure this money will be ring-fenced for tourism. I commend this bill to the House.

A party vote was called for on the question, That the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill be now read a second time.

Ayes 63

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

Noes 48

New Zealand National 46; ACT New Zealand 1; Ross.

Bill read a second time.

In Committee

Part 1 Amendments to preliminary provisions

Hon JACQUI DEAN (National—Waitaki): I have several questions for the Minister of Local Government on aspects of this bill. I return to the regulatory impact statement (RIS), and I’m on “Section B: Summary Impacts: Benefits and costs”, noting that “No specific decisions have been made on where [the tourist tax revenue] will be spent.” In the RIS, “It is envisaged that $80 million of revenue will be used to support conservation and enhance tourism infrastructure.”

Question number one to the Minister of Local Government is: does she anticipate that half of that $80 million revenue will, in fact, go to the local government agencies responsible for most tourism infrastructure? The question matters because while the $80 million revenue is in the RIS, it’s just a projection. What we do know about the New Zealand economy is that it is slowing, and that it is slowing fairly quickly. Part of that slow-down, of course, is an adjustment in tourism numbers. The Minister of Tourism, at some point, no doubt, will make the point that tourism numbers are still growing, and that is true, but what is also true is that tourism numbers—the growth is slowing.

So for a sustainable funding model—which this purports to be—I’d like the Minister of Local Government to answer the question. Given that the roughly half—but we don’t know, because it doesn’t specify in the legislation. There are after all, only four pages to this bill, and one of them is blank. It is only estimated that $40,000—sorry, $80,000—

Hon Scott Simpson: No, million dollars.

Hon JACQUI DEAN: Sorry, $80 million. Gosh, it must be 10.35 p.m., right? Apologies to the committee.

So roughly half of $80 million and sinking will go to local government. How will that be distributed?

CHAIRPERSON (Poto Williams): Can I just check with the member—sorry to do this—are you speaking on Part 1 or Part 2?

Hon JACQUI DEAN: Yes, yes, very closely. Thank you.

CHAIRPERSON (Poto Williams): OK, thank you. I’m just struggling to—yeah, I just want to bring you back to that.

Hon JACQUI DEAN: Thank you. And I will zero in even closer to Part 1, because I think that would be useful.

Perhaps a bit of context for the Chairperson might be useful. I’m referring to Part 1, clause 5(2)(a), around the definition of Minister. And while I was talking about the amount of the tourism fund, it is integral to the discussion. But I’m very interested to know, in the provision (2)(a) “in relation to provision of, or made under this Act (or to such a provision for particular purposes)”, which Minister is being referred to here? Is it none of them? Is it all of them? Is it any portfolio Minister who has an interest, such as the Minister for Local Government? I am interested in her views in the course of this committee of the whole House.

Is it the local government Minister, because she will be concerned and interested to know how much revenue she may get from this tourist tax? Or is it the Minister of Conservation, because the Minister will be very concerned with how she is going to spend a portion of this tourist tax on the crisis in threatened species. Or is it the Minister of Immigration? I don’t know. The bill doesn’t specify, and yet this committee needs an answer in the absence of a select committee process.

So does the Minister of Immigration plan to be one of those Ministers who may have an interest in the tourist tax for the provision of a particular purpose, and what might that be? Well, it could be a lot of things. It could be addressing the issues of exemptions—whether it’s a class exemption or whether it’s an exemption for a particular person. Is some of this projected $80 million going to be used by the immigration Minister in the administration of this tourist levy? Therefore, is the Minister of Local Government and the Minister of Conservation and, of course, the Minister of Tourism—are their allocations going to be impacted by that?

I think we need to know. The visitors need to know, who are coming from South Korea, paying $35 at the border, plus an extra $7 for an electronic travel authority if they organise that from their phone and $9 if they do it from their PC. Those tourists really need to know whether or not this tourist tax is going to be used by the Minister of Immigration to administer aspects of this tourist tax. And if that is so, how is the Minister of Immigration going to account for that? How is the Minister of Immigration going to come before the Estimates examination in the next financial year and account for that amount of funding from the tourism levy, arguably, being diverted into matters such as considering individual exemptions from the tourist levy? Thank you, Madam Chair.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Madam Chair. I too want to take a call on Part 1, clause 4, which relates to section 3 of the amended principal Act. As we, on this side of the House, have been debating through the first and second readings, we’ve indicated that we are very unhappy with the lack of focus, the lack of definition, and the lack of substance in terms of what this bill is actually going to do in real terms. If we look at new section 3(2)(h), it says, “enables a levy to be charged to fund, or contribute to the funding of, costs associated with conservation or tourism.” So I’ve got a number of questions that just relate to a few of those words, for the Minister in the chair, the Minister of Immigration.

What does “contribute” mean? How will a contribution be defined? Does contribution mean “fully fund”? Does contribution mean “partially fund”? Is there a formula? Is there some kind of mechanism? Is there an algebraic formula or algorithm to try and figure out what the size and the quantum of that contribution will be? Who is it that will make the decision about what that contribution that’s referred to in new section 4(2)(h) will be?

Then it goes on to say, “enables a levy to be charged to fund, or contribute to the funding of, costs associated with conservation or tourism.” Then we need to, I think, address the definition of the word “funding”. Again, is this going to be the funding of a complete business entity? Is it going to be funding fully and completely, or just partially, of a project that’s being developed or run by a local government agency—a council or a regional council? Will that funding be, actually, all dollars and cents? Could it be funding that is made up proportionally of advice by consultants or by advisers, maybe Ministry of Business, Innovation and Employment officials or tourism ministry officials? We don’t have any sense of what the definition of funding will be, in terms of that clause.

Then we go on to the next little word that needs addressing, and that is “costs” associated with. Costs? What are the costs going to be? I don’t know what the costs are going to be. Could it be the costs of building or construction? Is it the cost of running a car? Is it the cost of lunch? Is it the cost of afternoon tea? There’s absolutely no clarity around what the funds that will be collected by way of this levy are going to be applied to or for. “Costs” is an incredibly loose word. That is not defined, not set out in any definitive way in this piece of legislation, and it seems, again, to be just a reconfirmation of the concerns that we have on this side of the committee that this is a loose piece of legislation that is not clear in its intention.

One of the things that I learnt over a long number of years in the commercial area before coming to Parliament is that one person’s costs are another person’s expenses, or another person’s slush fund, or could be used for all kinds of different things. It’s a question of how tight—how tight—that is going to be. I can assure the committee of the whole House that, actually, we do need some definition around that.

Then we go on to the last important words in this little section: “conservation or tourism”—so costs associated with conservation or tourism. How are we going to define exactly what conservation and tourism are? Conservation and tourism are a bit like beauty: they’re in the eye of the beholder. Is this the Department of Conservation that is being referred to here? Is this a community conservation group? Is this a beach clean-up group? Is this the provision of public conveniences in a park in a council area? Where do we go in terms of tourism? Does that include somebody that’s going out for a drive in their electric vehicle on a Sunday afternoon? Does that count as tourism? Or is it someone that’s travelled halfway across the world from the Northern Hemisphere to come here? Clearly, they are a tourist, but what is the definition of how this funding is going to be spent?

The regulatory impact statement indicates that, potentially, some $80 million is going to be contributed. I think the committee can legitimately ask questions as to “Where?”, “How?”, “What?” Where is this money going to go, who is going to make the decisions, and how are those decisions going to be implemented in reality?

SARAH DOWIE (National—Invercargill): Thank you, Madam Chair, for this opportunity to take a call on Part 1, “Amendments to preliminary provisions”, in this Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill, otherwise known as the “Tourist Tax Bill”.

This is, basically, the clauses that come together that enable a tourism tax to be charged, as part of amending the Immigration Act. I think that this comes back to the ideology and some of the matters that have been raised throughout the first and second readings, in that when we look at section 4 being amended, and the definition of “international visitor conservation and tourism levy”, it means “a levy imposed by regulations under section 400 for the purposes of section 399A”. This comes back to the very fact that this is a process that is being run under urgency, that we are not going through a full process to select committee and hearing from submitters and getting to truly analyse and question the bill. Yet, within this amendment bill there is a deference to regulations, and that is set out, obviously, in Part 2. But this is the problem with the amendment bill, in that Part 1 basically says that this levy is going to be set out as functioning—the way it’s going to be used is going to be defined by the Minister by regulation. This side of the House has a real problem with this, because that is quite arbitrary, and, quite frankly, for a Government that says that it prides itself on fairness, I have a real problem with the fact that these arbitrary decisions are going to be made by a Minister.

I defer again to my colleague the Hon Jacqui Dean, who raised another important point about the definition, under Part 1, of “Minister”. I would add to her questions about which Minister, and how Ministers are going to make decisions, how it would actually work in practice with respect to the number of Ministers that these portfolios transverse. I would like to know how these decisions are going to be made, what priority is going to be given to the distribution of these funds, how these Ministers are going to come to these conclusions to appropriately distribute—well, first of all, to collect; second of all, to prioritise projects, and then to distribute. Because, quite frankly, it comes back to the fact that this tax is going to be governed by a set of regulations that we have no idea as to what they are going to contain. We have no idea as to how they are going to be set, and that is an absolute problem for us on this side of the House.

We just simply have a real problem with the ideology that this Government is bringing another tax into play. It’s a tax and spend Government, and the signals that it is sending to the tourism industry and to our international visitors are appalling.

This side of the House believes that infrastructure is important for tourism and on the conservation estate. We absolutely believe in that and that’s why we had several initiatives, such as the Tourism Infrastructure Fund, where we were investing in this industry. But Part 1 here brings about the power for another tax, but, again, with a process that is flawed. We are not going through an appropriate process to challenge officials and the Minister as to what will be in those regulations. We do not have a line of sight as to how they’re going to work, and, quite frankly, I feel that this tax could be misused, could be ineffective, and, again, if you go back to the RIS, and you look at the finances, it’s hardly worth bringing it in at all.

Hon DAVID BENNETT (National—Hamilton East): Thank you, Madam Chair. I’d just like to follow on from that excellent speech and the points that were raised there around ministerial roles in this regard. When you look at Part 1, clause 5, it amends the principal Act’s definition of “Minister” to enable responsibility for different provisions to be given to different Ministers. I just want to encourage the Labour Party to reflect on what that actually means. Now, I’m no great fan of the Labour Party; you know, we disagree on virtually everything. But I do—

Hon Ruth Dyson: I’m shocked.

Hon DAVID BENNETT: I know, and this will come as a shock. I do respect the Labour Party because it is one of the major political parties in New Zealand. I don’t believe what they think, but they do genuinely believe what they think, and they have a certain position that they wish to see for the future of New Zealand, and that’s fine. That’s their personal belief. They’re a party that’s been there for many, many decades and have governed this country, sometimes well, sometimes averagely, and sometimes poorly, as in the case we are at the moment. But—

CHAIRPERSON (Poto Williams): Where are we going with this?

Hon DAVID BENNETT: No, it’s a very important point that the Labour Party needs to reflect on. So I’m saying that when you have a combination of Ministers, there can be an issue. You could have a Labour Minister who is relatively sensible and could do the right thing—might be misguided but might do the right thing. Then you could have a coalition partner Minister that doesn’t do the right thing, that is not sensible, and that is not reasonable.

Hon Scott Simpson: Can you think of an example?

Hon DAVID BENNETT: I can think of an example. Well, actually, I can think of a few examples but many of them aren’t to do with this bill.

Hon Scott Simpson: Can you think of a recent example?

Hon DAVID BENNETT: I can think of a recent example that directly impacts on this bill.

Hon Todd McClay: Which one?

Hon DAVID BENNETT: That is the example where a very reasonable member of the Labour Party, David Parker—puts himself out there as a reasonable member of the Labour Party—listened to what his officials said, and came to a conclusion that was what the official said. This is about ministerial conflict. He did exactly what his department recommended. But then his ministerial approval required another Minister to agree with him, and that other Minister went against her department and went against a reasonable Minister that was upstanding. That is a member that declined an application when she had a 96 percent approval rate of all other applications. She has had over $5.5 billion of land sold under this Government to overseas interests and approved them all, basically, apart from one—apart from one. One time she overrode the other Minister.

This is something I want the Labour Party to reflect on, because this legislation creates exactly the same problem where you could have a reasonable Labour Minister being overridden by an unreasonable Green Minister. Then it happened in the OceanaGold case just recently. That Minister overrode a reasonable Labour Minister—overrode a department, just for her own interests. And we know that—

Hon Member: Say “communists”.

Hon DAVID BENNETT: No, no I’m not saying “communists”, because I don’t think the Green Party are communists. I think they’re worse than communists. Communists actually believed in what they were doing. The Green Party don’t believe in what they’re doing. They go out there and fly this green flag every election but they don’t believe in it. Look what they do when they’re in Government: nothing for the environment—nothing. All they do is pounce around this country on planes, using up carbon. I remember the Green Party, when I first came into this Parliament, every Green member used this word all the time, “peak oil”, “Peak oil; it’s coming.” Where did that go? Now it’s “climate change, climate change”. What’s it going to be in 10 years’ time? The Green Party has got no principles. The Labour Party has principles. Even if they’re wrong, they have principles. Eugenie Sage has no principles. She did exactly the opposite of what her department requested.

Hon Tracey Martin: I raise a point of order, Madam Chairperson.

CHAIRPERSON (Poto Williams): A point of order, the Hon Tracey Martin.

Hon DAVID BENNETT: New Zealand First Party, well, they’ve got no principles either. But we know that. Their leader has got no principles.

CHAIRPERSON (Poto Williams): Mr Bennett, I have called a point of order. Will you resume your seat, please.

Hon DAVID BENNETT: I thought you were going to give me another five minutes—OK, sorry.

CHAIRPERSON (Poto Williams): Thank you.

Hon TRACEY MARTIN (Minister for Children): I raise a point of order, Madam Chairperson. I realise it’s late and that member is tired, [Interruption] but that has absolutely nothing to do with—[Interruption]

CHAIRPERSON (Poto Williams): Thank you. I thank the member—[Interruption] No—thank you. Everybody just sit down, please. No, no, just sit down. I’m going to rule on that point of order. I’m just going to say I was actually letting the member’s time run out and then just bringing the committee back to order. I think you’re right; it is late and it is also important that we have a little bit of levity. We’ve been at this all day today, so I was allowing for that to happen. Now we’re going to bring the committee back to order. I’m sorry, Mr Bennett, your time has actually expired.

Hon DAVID BENNETT (National—Hamilton East): I raise a point of order, Madam Chairperson. It’s a common theme of the New Zealand First Party that when they feel attacked they breach a speech with a point of order.

CHAIRPERSON (Poto Williams): Is this a point of order?

Hon DAVID BENNETT: Yes, it is a point of order. And they constantly do that when they feel that they’re being attacked. They use the point of order process to break a speech, and especially a fine speech that was going along well. So that member over there needs to withdraw and apologise. Now, I don’t normally ask for that.

CHAIRPERSON (Poto Williams): Order! Order! Order! Mr Bennett, that is not for you to determine. [Interruption] Please, Mr Bennett, will you resume your seat. I am on my feet. Now, you will stand withdraw and apologise for that gross disrespect of my position in the Chair.

Hon David Bennett: I withdraw and apologise.

CHAIRPERSON (Poto Williams): Thank you very much.

Hon Todd McClay: I raise a point of order, Madam Chairperson.

CHAIRPERSON (Poto Williams): No, just a moment. You made a point of order, Mr Bennett, and actually what you ended up doing was creating disorder. You cast aspersions on what is actually a very useful process in this Chamber. Everyone has the opportunity and the right to make a point of order. When you make frivolous points of order, that brings the House into disrepute. Now, I allowed you some levity because it is late and it’s a good way for the committee to express and actually let off a bit of steam, but it will stop.

Hon TODD McCLAY (National—Rotorua): I raise a point of order, Madam Chairperson. In defence of my colleague, it’s not that he did that purposely; it’s just that he’s from Hamilton! But my actual point of order goes to the heart of what just happened there. When we have a committee stage, it is free ranging.

CHAIRPERSON (Poto Williams): It is not free ranging.

Hon TODD McCLAY: Sorry, it is free ranging in as far as seeking information from the Government, firstly. Secondly, in this committee stage it is the only opportunity we have to question the Minister, and indeed we can’t question officials because it is not the full parliamentary process; we’re in urgency. The point that David Bennett was making was absolutely correct. He had posed questions and was still giving examples as to why they were important and was about to bring it back to that question. We do need an answer to that. The point of order is that when a member comes into the Chamber towards the end of an intervention like that and takes a point of order and accuses the member of being tired because it’s late—

CHAIRPERSON (Poto Williams): Now, I’ve already ruled on all of these matters, Mr McClay.

Hon TODD McCLAY: Well, that is correct; you have on that one. But the point that I’m making is we may well be here seeking questions and answers from these Ministers for an extended period of time this evening, because this is our only opportunity. I would ask you to perhaps tell the committee if it is appropriate for a member to come to disrupt the flow of another member, particularly so late at night when one’s breath smells of mouthwash.

CHAIRPERSON (Poto Williams): Thank you, Mr McClay. Thank you, Mr McClay. Now, I’ll make myself very clear. I am the arbiter of these decisions. What you have done is you’ve also called into order my ability to manage the committee. Now, what I’m saying very clearly, what I said very clearly to the Hon Tracey Martin was that I was allowing that member’s time to run out, so I did not continue to rule on that point of order. So we are now going to get back to the matter at hand and I’m going to call the Hon Iain Lees-Galloway.

Hon IAIN LEES-GALLOWAY (Minister of Immigration): Thank you, Madam Chair. I’ve been listening closely to the debate and the questions raised by members opposite, which I will attempt to address.

The Hon Jacqui Dean asked—the only question I think she asked of me as the Minister in the chair is how well the various responsibilities of different Ministers would be allocated. There is a small number of Acts where there is responsibility held by more than one Minister, and the allocation of that ministerial responsibility is carried out in the usual way. The Prime Minister allocates that responsibility, and the register of assigned legislation appears on the Department of the Prime Minister and Cabinet website, so it’ll be clear which Minister is responsible for which parts of the Act.

The Hon Scott Simpson asked for definitions of various words: “contribute”, “funding”, “costs”, and “conservation”. I discovered that there’s a dictionary up here. I was tempted to reach for it, but the member is a capable fellow and I’m sure he’ll be able to look those words up himself. But “conservation” is defined. He just needs to look down at clause 5(1), immediately below the clause he was referring to, and “conservation has the meaning given to it in section 2(1) of the Conservation Act 1987”.

I listened closely to the contributions from Sarah Dowie and the Hon David Bennett, and I did not detect any questions.

Hon TODD McCLAY (National—Rotorua): Madam Chair, thank you, and I thank the Minister in the chair, Iain Lees-Galloway, for that clarification. So if I understand correctly what he’s just said, in Part 1, clause 5(2), the reason they’re inserting the word “Minister” there is so that it is clear, should the Prime Minister decide it is the Minister of Tourism or any other Minister that would be responsible for this new part of the Act, not automatically the Minister of Immigration. If that’s the case, that is important. Of course, it is up to the Government to make these decisions. But as this is immigration legislation that is being amended to deliver tourism policy and tax policy, it’s extremely important that the Minister is absolutely sure.

I suppose the reason I would ask him to be absolutely sure is because if it isn’t correct, we will have problems in the future when it comes to these definitions. So perhaps with officials here, he could seek an absolute assurance that that is correct, and the reason I ask him to do that is not to question what he said, but, again, we don’t have the ability to ask those officials ourselves, and no one else in New Zealand has the ability to come before the committee and ask the committee to seek an absolute assurance that what the Minister has just said is correct.

If it is correct, there is yet another problem, because in the principal Act, it actually talks about the department that is responsible for the implementation of the Act, and in that case, it must be the ministry of immigration. So it is necessary in the final part of Part 1 to change the definition to allow for the Minister of Tourism or the Minister of Conservation to be responsible for this part of the Act if it enters into force. Therefore, I ask the question of whether or not it is also necessary to have a similar clause so that it’s not the ministry of immigration that will be responsible.

Now, the reason that’s important—and we’ll come to it in Part 2, but in Part 2 it says that at least every five years, the parts of this provision of the Act must be reviewed and they can be reset. Therefore, as this is tourism policy and implements a new tax and, therefore, it’s also tax legislation, it’s also important in this case that it wouldn’t be the ministry of immigration that would be responsible for that review. It would be the department of the Minister who is responsible for this part of what will become the new Act.

The reason we need that decision now is because this is a rushed process, and we’ve canvassed that in the first and the second readings. It is a rushed process. We would have time to make sure we’ve got it right at a full select committee stage if it was a normal process, even if there was only one day where we could have a committee outside of the House so we could have the opportunity to talk to the actual experts—the people that I suppose gave advice and drafted that. So we do need to know whether or not that is the case, and it will be important that it’s not the ministry of immigration. They have many other things to do.

Of course, they will be the ones that are responsible for the mechanism that collects this, but that’s just the mechanism. You actually wouldn’t want the Minister of Tourism or the Ministry of Business, Innovation and Employment, or the Department of Conservation being involved in setting the rules or the regulations, or assessing whether or not that mechanism is working properly, because they actually have nothing to do with immigration, and in this case, because this is enacting tourism policy and it’s a new tax and, therefore, it is tax policy also, it is important that that’s cleared up.

I’m assuming that, actually, it does need to be clarified, because I’ve spent some time looking through this today. The original Act is quite extensive, but this bill is very, very short. I assume the regulations will be many, but we can’t wait for the regulations because we don’t have an opportunity to see them before Cabinet will decide upon them, and we do need to deal with that now.

Indeed, in the case that this is an omission because it is rushed, I have an amendment here which I will now table that would follow the language in as far as making sure the Prime Minister can decide which other Minister is responsible for this part of the Act. Also, it would denote that that would mean that another department other than immigration would also be responsible for this part of the Act. I haven’t said which one it is, although we could have put quite an extensive list in there—more extensive than we’re going to hear about in Part 2 about what the Minister might consult on, because it’s entirely up to him—but, ultimately, it’s the same department. It’s mirroring the language, and the reason I believe that is important is that we won’t have an opportunity to come and fix this at all. So I will table that in a second.

The second part here is—the Minister was right—there is a definition of “conservation” in this, as he said to my colleague. There is, and it’s good. But there is no definition of “tourism”, and I wonder whether that’s an error or it’s an omission or whether, actually, there doesn’t need to be one, and if there doesn’t need to be one for “tourism”, why is there the necessity for there to be a listing or a definition for “conservation”?

I am assuming the reason there is one for “conservation” is because the drafters of the bill—or, in this case, Cabinet—wanted to ensure that the funds that will be collected from international tourists through this new tax will go to conservation. In the same way that it is left very broad for the Minister to decide what the funds will be spent on, in as far as tourism is concerned, if there is a reason to narrow the scope of what the funding can be spent on when it comes to conservation, then I feel that we must also do the same for tourism.

It’s not that you would say, “Well, it’s not clear what tourism is.”—of course it is—but this is a legal document. It is legislation. We haven’t got the opportunity to have a full select committee stage and to have people submit on what they think the money should be spent on. We don’t get to bring the experts in and to ask them about what this definition is, and indeed, the Minister may already know. He may have made up his mind, but he has not shared that, and in Part 2 we’re going to see that, actually, it’s him that gets to make these decisions, and these decisions alone, with his Cabinet colleagues. So therefore, we need to know what the definition of “tourism” is.

Now, maybe it’s not needed, but I ask the Minister why, if it’s not needed, do we have one specifically for “conservation”? I just think that since the fund is going to be split and the Minister—or Ministers—have said that it’ll be a fifty-fifty split, but, actually, this bill doesn’t say that. It doesn’t dictate that. It will be up to Cabinet to make the decision some time in the future. It is very important, therefore, that if the Government is going to define “conservation”, we also do so for “tourism”.

It’s not actually that we necessarily would disagree, but when it comes to what these funds will be spent on, that’s where the problem will be, because there will be councils up and down New Zealand who say “There’s no point bidding for this money, because it’s going to be spread too thinly. We’re not going to get any.”, but some may want to, and they need to have a clear idea of what it can be spent on and what it can’t be spent on. A Government has an obligation, not to the taxpayer in this case, but to those they are collecting the money from to make sure it is being used for what they have said the intention is. The intention is to spend around tourism, but without that definition of “tourism” in legislation, it will be up to the Minister, I suppose, to define it in regulation. I don’t think that’s good enough for this House, because, ultimately, we are talking about what the Minister says is going to be a large amount of money—let’s wait and see. But, actually, we should have that definition in here, and then councils and others will be able to plan. They’ll know what it could be used for and what it might not be used for.

Ultimately, I suppose the Minister is going to do one or two things when it comes to how the money is spent. He’s either going to be very open and transparent, there’ll be clear rules around this, and the wider tourism sector will have an understanding, or he could adopt Shane Jones’ approach, and if he likes a policy, he’ll do the proposal. If he doesn’t like it, he won’t—because that’s happening everywhere. That’s why this is so very, very important, because the Government have said that they are going to give a significant amount of funding—the big commitments they’ve made to the tourism sector. This is not going to come close, but unless we have a clear definition of the view of what tourism is, then there will be many who are unhappy, who don’t get the funds, who may just not bother to apply, and that would be a travesty. In that mind, it may be that there is very good reason for there not to be a definition of “tourism” in this bill, which is amending the Immigration Act, but I would imagine nowhere else in the Immigration Act is there a definition of “tourism”, just as I’m sure there’s no other definition of “conservation” in the Immigration Act that this is amending. Therefore, I would ask that the Minister would look at that.

I too have an amendment that I’d like to introduce, that brings a definition. Now, the problem we have is that I don’t think this is a perfect definition, because we’ve only just found this, and we’ve had to rush; we haven’t had 18 months to think about this. We’ve only seen the legislation today, and it may be the officials would say “Actually, yes, a definition is needed, but this isn’t the best one.” Well, actually the Opposition is saying that we don’t want to risk this, so I too will be tabling an amendment.

Hon JAMES SHAW (Minister for Climate Change): Thank you, Madam Chair. To the Minister: I’ve got a few questions, some of which are embellishments on questions that I heard in earlier parts of the debate. I just wonder if the Minister could help us out with the answers to some of these questions.

I heard, before, some concerns that the entire economy was going to collapse and that the whole tourism sector was going to be destroyed by the introduction of this levy. I just wanted the Minister to confirm for me if it is correct that the United Kingdom has a NZ$127 visitor levy, and just to check to see whether the UK economy has collapsed as a result of that levy—

Hon Member: Heard of Brexit?

Hon JAMES SHAW: —and whether it’s due to the levy—and if the Minister could confirm if it is correct that Australia has a levy between NZ$58 and NZ$85, and just to check if the Australian economy has collapsed due to the introduction of that levy, because I’m not aware that it has.

Also, just in relation to clause 7, new section 399A(3)(b), in terms of prescribing the amount of the levy, I just wanted to check whether the implication that was being raised before is about the collapse of those two large trading partners of ours? Under 399A(3)(d) there was a question raised about exemptions as well, and I know that there’s been some discussion around why it is that Australians are exempt from paying this. I just wanted the Minister to confirm whether we have an arrangement with Australia known as Closer Economic Relations, and that what that means is that if we don’t charge New Zealanders then, also, we can’t charge Australians. In fact, if you reversed it, the reason why Australians charge New Zealanders is because they also charge themselves, and I just wanted the Minister to confirm whether, in fact, Closer Economic Relations exists as well.

Further, I just wanted to check in relation to 399A(2)(c), where it’s talking about other initiatives related to tourism, there were some concerns raised about the fact that people weren’t going to be able to get into our national parks and so on, and just to confirm that, in fact, entry to our national parks will continue to remain free because we have this tourism levy coming in. I also just wanted to check—further down on that page under “consultation and review”—whether the Minister can confirm that when the Green Party launched this policy in 2016 there was a tourism conference and that 76 percent of operators at that conference said that they wanted a tourism levy to help pay for conservation and tourism infrastructure, and whether the views of those people will be taken into account as part of consultation. Further, I just wanted to also ask if the Minister could confirm that when the Green Party launched this policy in 2016, whether it’s correct that the then Prime Minister, Sir John Key, said that the idea had merit and should be explored and whether his views will be taken into account under the consultation section of this bill.

I also just wanted the Minister to confirm—flipping back to Part 1, under the amended purpose—whether it’s correct that 80 percent of people who come to this country visit our natural heritage, and 50 percent of them visit the Department of Conservation estate, and whether there are costs associated with that, and whether the Minister considers that, given those numbers, it would be fair to say that when it comes to tourism the environment is infrastructure. If you don’t have a natural environment there’s not a lot of reason for people to come here, given those sorts of numbers.

So I just wanted the Minister to confirm some of those things for me and maybe allay some of the concerns about the impending wave of destruction that appears to be bearing down upon us from the introduction of this $35 levy.

MAUREEN PUGH (National): Thank you very much, Madam Chair. I am very excited because I do have a really special interest in this bill, even though I’ve only just seen it tonight. The topic is of high interest to me—

Dr Duncan Webb: How’s the Punakaiki toilets?

MAUREEN PUGH: —and I can assure you that this topic is of huge interest to the—

Dr Duncan Webb: Shit.

MAUREEN PUGH: —people of the West Coast. The reason that is of high interest—

CHAIRPERSON (Poto Williams): Order! Order! Order! The member will stand, withdraw, and apologise.

Dr Duncan Webb: I withdraw and apologise.

MAUREEN PUGH: Thank you, Madam Chair, for maintaining some standards in this place. The people of the West Coast have a huge interest in this bill and this topic because, of course, the conservation estate is 85 percent to 87 percent of the land mass of the West Coast. Of course, we have the most conscientious guardians living in that area of the Department of Conservation (DOC) estate. So, with this particular bill that we’re talking about, I have a special interest in clause 4, after section 3(2)(g), the new paragraph (h) that is going to be inserted, which says, “enables a levy to be charged to fund, or contribute to the funding of, costs associated with conservation or tourism.”

Now, my interest in this is around thresholds. I would like to know from the Minister how they are going to set about establishing thresholds for the funding and how they are going to set those standards that will enable applications to be considered fairly. The reason I’m asking that is because of the 1 million tourists that travel through the West Coast every year. This season, in particular, has been a particularly hard one for the tourist sector. So I’m wondering whether or not these events that have happened will actually trigger those thresholds. For instance, we have had three highway closures—one of those included the washout of a major link, the Waiho River bridge. Will the Minister consider the impact of some of those events on the tourism industry, considering also that they happen within the DOC estate?

One of the things that you may not know about this particular area that I’m talking about is that it is one of three World Heritage sites that New Zealand has. We have the Subantarctic Islands; we have the Tongariro National Park; and we have Te Wāhipounamu, which is the south-west of New Zealand. So they are particularly precious sites. At the moment, we have an old landfill that has been exposed. We have waste from that landfill spilling into a national park—a World Heritage site—washing up on the coastline, depositing on beaches, and finding its way into the Ōkārito marine reserve. Now, this is probably the most pristine of environments, it reaches Unesco standards, and yet even today, we have had only a pittance of contribution from the conservation Minister, and we have had no support from tourism.

So, in terms of thresholds, I’m really concerned about the standards that are going to be set in this legislation. How important does it have to be before you actually trigger some support out of this fund? It seems to me that this is a very loose piece of legislation. I have heard the call for standards and I’ve heard the call for criteria. At the moment, all I can see is poacher being gamekeeper. We cannot have a Minister who will not say to us, “This is the standard we are going to set.” And if we cannot, at this point, trust the ministries for conservation and tourism to support such a huge environmental disaster down on the West Coast in a World Heritage site—in a marine reserve—that has now been left to volunteers, how on earth can we ask, or expect, really decent support for the maintenance and the clean-up of such an environmental disaster?

I think there is a huge amount of work to be done on this bill. I believe, because of the impact that this is going to have, that it deserved the input from those in the sector that are most impacted by it, and it deserved the scrutiny of the community. Thank you very much, Madam Chair.

Hon IAIN LEES-GALLOWAY (Minister of Immigration): Thank you very much, Madam Chair. I just want to respond to some of the points raised by members since I last made a contribution. The Hon Todd McClay asked some very sensible questions, actually, around which departments would be responsible for various parts of the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill. The good news, of course, is that Immigration New Zealand and Tourism are both parts of the Ministry of Business, Innovation and Employment (MBIE). So the bill is correct in the way that it is drafted, and it ultimately, then, will be a decision for Ministers and MBIE as to which parts of that organisation carry out the review, which I think was the part that the member was most interested in.

The other question that he asked was around the definition of tourism. There is a fair question to ask as to why tourism is not included when conservation is. The answer is that “conservation” is already defined in legislation, and that definition is required because the law needs to use consistent meanings. “Tourism” is not defined elsewhere in legislation, and, therefore, it carries its ordinary meaning.

The Hon James Shaw asked me to confirm a variety of things, and I can confirm all of the things that he asked. There is no impending wave of destruction coming. Just like in other jurisdictions that have a similar levy, we can expect our tourism industry to continue to thrive. Maureen Pugh asked about how criteria and thresholds will be set for those seeking funding available from the levy. That will be set out in the investment plan that will be written up by the Minister’s advisory group. So I thank members for their questions and I hope that that information is helpful.

Hon MARK MITCHELL (National—Rodney): Thank you, Madam Chair. It’s a pleasure to stand and take a call on this, the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill. I’d like to address some comments that were made by the leader of the Green Party the Hon James Shaw, and also the Minister in the chair, the Hon Iain Lees-Galloway. I thought that the comments were a little bit alarmist when the Hon James Shaw got up and said that the implementation of this levy was going to create a collapse of the economy. I don’t think anyone on this side of the House, in the Opposition, has mentioned anything about a collapse of the economy.

But one thing that we are very worried about—one thing that we are very worried about—is the fact that we’re in this House in urgency debating bills where the Government is taxing Kiwis. If they’re not taxing Kiwis, they’re going to be taxing visitors to New Zealand. The point is quite simply this. I think most Kiwis—most people in New Zealand—accept that in our political cycle, there’s something that happens. You get a Labour Government that comes into Government and they borrow more and they tax more and they spend more—and it’s normally untargeted spending—and, actually, then the economy starts to slow down, as well. That does have an impact on the welfare and the wellbeing of Kiwis. When you keep implementing tax—and that’s all we’re doing, really, in urgency over these couple of days, is implementing more tax—we feel that that can start to have a detrimental impact and effect on the economy. I think that is the point that the speakers have been making on this side of the Chamber when they’ve been taking calls.

I’m going to speak to Part 1. I do have some questions around this, and I think fundamentally it is very important in terms of where the funding is going. I’m still recovering, actually, from the speech that my good friend and colleague the Hon David Bennett delivered. He made some very nice comments, I thought, in relation to the Labour Party. I thought that in that spirit of bipartisanship around our Department of Conservation estate, and, certainly, our tracks and our huts, which do need ongoing investment and maintenance, without a doubt, to make sure that our visitors do have a great experience—I remember in this House, a few years ago, in the spirit of that bipartisanship, the Hon David Parker making a very nice offer to the Hon Gerry Brownlee to accompany him on a trekking weekend into the mountains. The Hon Gerry Brownlee came back, and he thanked him for that offer, and he said, “What do I need to bring? What clothing do I need?” The Hon David Parker came back and he clarified. He said, “All you need is tramping boots.” So you can understand why the Hon Gerry Brownlee came back and politely declined a weekend in the mountains trekking with David Parker only wearing tramping boots.

But in the spirit of that offer—

Hon Todd McClay: Why did you leave that picture with us?

Hon MARK MITCHELL: Yeah, that’s very true. I apologise for that. But in the spirit of that offer, I’d like to extend an offer to the Hon Iain Lees-Galloway and the Hon Eugenie Sage—I see that she’s in the Chamber—and the Hon Kelvin Davis: come and join me. Come and walk some of the great tracks that we’ve got in Warkworth. But I just want to make clear: yes, you need sturdy footwear, but please bring some shorts and a Swanndri as well. The Minister doesn’t seem that interested now—ha, ha!

Hon Todd McClay: Why didn’t anybody invite Kelvin?

Hon MARK MITCHELL: No, I invited Kelvin. The invitation’s extended to Kelvin, as well.

CHAIRPERSON (Poto Williams): Can we come back to the bill, please? Thank you.

Hon MARK MITCHELL: So—Part 1 of the bill. The reality of this is we don’t know where the money is going. Actually, is that a serious issue to raise? Absolutely it is—absolutely it is. We need to know where the money’s going. I’d like the Ministers to stand and take a call and tell us how it’s going to be treated, because otherwise we’re going to believe that it could just disappear into a consolidated fund. It could be reprioritised. It could end up anywhere. It could end up funding a working group. I actually want to know. I want to have clear advice from the Minister in the chair that this money, this levy that’s being collected, is actually going to be used to develop the facilities, to develop the tracks, and to look after the outstanding infrastructure that we already have in place, and, actually, that the previous National Government made a huge commitment to and a huge investment in.

So I’d just like the Minister to stand and take a call and clearly outline—actually, I’d like to know how the levy’s going to be collected, too, because I believe there’s going to be a big compliance cost attached to that, but we’ll talk about that in the next part. Just get up and explain to us exactly how this money is going to be treated and that we can be confident that it is actually going to be spent in the right places, supporting our tourism industry with infrastructure.

Dr DEBORAH RUSSELL (Labour—New Lynn): I move, That the question be now put.

Hon NATHAN GUY (National—Ōtaki): Thank you, Madam Chair. We’re having a good debate here at 11.27 p.m. on 31 May on a bill that I don’t think needs to be going through urgency. I’m not sure what the panic is. Reading this bill, I’m just not sure whether Cabinet was awake to allow this bill to come into the House in its present form or not, because—

Hon Scott Simpson: Deep contemplation.

Hon NATHAN GUY: Yes, there could have been one member in deep contemplation in Cabinet. But the reality is that this is a bill that just allows the Minister to have carte blanche responsibility for all of the regulations. There’s nothing in the primary legislation that gives tourism operators any comfort in the fact that Cabinet can just go out and strike any levy it wants. If I was a tourism operator—Mr Davis has talked earlier on this evening, saying there’s already been widespread consultation. Well, I wonder: why does it need to go through urgency? I want to hear from the Minister in the chair this evening, Hon Iain Lees-Galloway, what consultation there will be about striking the levy. How did he or his officials—

CHAIRPERSON (Adrian Rurawhe): Order! Thank you. Part 1 is actually a very narrow part of this bill. The question that the member has just asked is actually relevant to Part 2. So we’re going to tighten up on relevancy. There are only two clauses in Part 1; the first one simply enables the levy to be struck. The question that you are asking, Hon Nathan Guy, is in Part 2.

Hon NATHAN GUY: Thank you for clarifying that, Mr Chair. I do want to make some introductory remarks, but I want to keep them quite specific to the principal Act and the purpose which is covered in Part 1. We need to have questions answered this evening about what the purpose is? What is, indeed, the intent of this bill? Why has it been decided that it’s going to cover conservation and immigration? I’m aware that the potential revenue that they may generate is around $80 million. I also have questions on the purpose, about exemptions, because if the Government is going to strike, indeed, a levy of this magnitude—

Hon Member: Tax.

Hon NATHAN GUY: Well, it will. Yeah, there’s going to be quite a debate on the tax as well—whether, indeed, a levy is a tax. But I want to hear from the Minister this evening about the principal Act, the purpose, and the definition of “the Minister”, because, in effect, this inserts the Minister right into the decision-making powers. In my mind, the Minister has—through the purpose of this Part 1—wide-ranging powers. What I also want to have clarified is, what about the exemptions that are going to be covered at some point? We need to have a good wide—

CHAIRPERSON (Adrian Rurawhe): That’s in Part 2.

Hon NATHAN GUY: I know it is. I’m just foreshadowing—

CHAIRPERSON (Adrian Rurawhe): I’m just giving the member a second warning on relevancy.

Hon NATHAN GUY: Keeping it relevant. We need to be aware on Part 1 about the definition of the “Minister” and the definition of “conservation” and the international visitor levy—why, indeed, is it called a levy and not a tax? because it will be seen as a tax. It is a very blunt instrument. When I was in the House, here in 2015, I brought in a border clearance levy, and I heard from the Opposition at the time when Labour and New Zealand First voted against it. They screamed from the backbenches, over there, that it was going to be a tax. Of course, what happened at the time was the Opposition—Labour and New Zealand First—voted against that and they cried from the backbench about it being a tax. The reality is, they voted against that levy—

CHAIRPERSON (Adrian Rurawhe): And the reality is that’s irrelevant to this bill.

Hon NATHAN GUY: And the reality is its context to the purpose of Part 1, because this gives the Minister wide-ranging powers.

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put.

A party vote was called for on the question, That the question be now put.

Ayes 63

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

Noes 47

New Zealand National 46; Ross.

Motion agreed to.

The question was put that the following amendment set out in the name of the Hon Todd McClay to clause 5(1) be agreed to:

insert, after the definition of “international visitor conservation and tourism levy”, the following definitions:

tourism is defined as an organisation, event, activity, business, or facility where the primary purpose is to facilitate international recreational visitors in New Zealand; and

tourism infrastructure is defined as those facilities or capabilities that deliver the objectives as outlined in the definition of tourism.

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

Ayes 47

New Zealand National 46; Ross.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment set out in the name of the Hon Todd McClay to clause 5 be agreed to:

insert, after subclause (2), the following new subclause:

(3) In section 4, definition of Department,—

(a) after “Department”, insert “, in relation to a provision of, or made under, this Act (or to such a provision for particular purposes),”; and

(b) replace “of this Act” with “of the provision (or for its administration for those purposes)”.

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

Ayes 47

New Zealand National 46; Ross.

Noes 63

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

Amendment not agreed to.

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

Ayes 63

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

Noes 48

New Zealand National 46; ACT New Zealand 1; Ross.

Part 1 agreed to.

Part 2 Main amendments

Hon JACQUI DEAN (National—Waitaki): Thank you, Mr Chair. Part 2, which contains the main amendments of this three-page bill, is like—

Hon Scott Simpson: Spaghetti.

Hon JACQUI DEAN: Yes—it’s very vague. It’s hard to get; it’s like a jellyfish, I guess—

Hon Scott Simpson: Blancmange.

Hon JACQUI DEAN: Or blancmange, more like a blancmange, you’re right, because it’s very hard to get a grip on what it may or may not apply to. So there’s just a couple of points I want to make. I know I’ve got colleagues with many, many questions, but, for a start, I am interested to know from the Minister—I have a question around the processing of requests by the Minister.

The first one I want to know is: what might the nature of those requests be? Would they be requests for an exemption on behalf of a family? Would they be requests for inclusion by someone from Australia, for example? I’d like clarification from the Minister around the provision which says that a request “may be processed, accepted, or refused by an automated electronic system”. I’d also like clarification around the system’s decisions. So what is the system—I think it’s pretty critical that the committee, in the absence of a select committee examination where this kind of question exactly would have been asked, knows—what is the system that makes the decisions? Is it an existing system? Is there extra software that needs to be installed? What is the cost of that? Because it could be considerable, given that there are a number of exemptions, depending on whether or not people have a temporary entry class visa or need to apply for a waiver. I think it’s important for the understanding of the committee, given that it is not at all clear in this bill.

I think it’s very important that those questions are addressed by the Minister. Which Minister—which Minister? Is it the Minister of Immigration or is it the Minister of Tourism? Could it be the Minister of Conservation, or could it be the Minister of Local Government? Could it be the Minister of Internal Affairs? I think we need to know. So if the Minister could address those questions, I think we would all be very grateful.

What assurance have the Ministers or Cabinet sought that the automated electronic system will be adequate and will be, let’s say, not subject to somebody going into a search bar and pressing on “Search” and entering a certain selection of words—for example, such as “Budget 2019-20”—and then getting a lot of information? So what assurances has the Minister—whichever Minister—or Cabinet sought about the level of security in the system, which, after all, deals with some pretty personal details and confidential information?

Goodness knows, I know this is a Government which sets great store in protecting confidential information. It’s well known for it, in fact. So I think it’s important that the committee really does have an understanding and can assure the Parliament, in fact, because I know that the Green Party will be very concerned about breaches of security in the New Zealand whole-of-Government systems. Of course, the shining light is Treasury! They, of course, protect information very, very—OK, no, sorry, I’ll start that again.

So I do think we need to know that, if my relation from the United Kingdom wishes to come into New Zealand—their application or their transit—how will that work? I think it’s important that the Minister of Tourism gets to his feet and explains just how the process will work, because I know he knows it, because it will have been part of the consideration of this bill. We haven’t had a chance to know it through the select committee process, but we know that the Minister of Tourism knows exactly how the process of transitioning—[Time expired]

Hon TODD McCLAY (National—Rotorua): I raise a point of order, Mr Chairperson. I draw your attention to the Standing Orders, which say that when the Minister responsible for the bill is in the Chamber during the committee of the whole House stage, either he must be in the chair or he must, I suppose, in this case, leave. I don’t mind if he goes in the chair, because we’ll get sensible answers.

CHAIRPERSON (Adrian Rurawhe): I thank the member for bringing that to my attention.

Hon JACQUI DEAN (National—Waitaki): Thank you, Mr Chair. I need a bit more time now—

Hon Todd McClay: And there lies the confusion we’re talking about.

Hon JACQUI DEAN: Well, that’s right. I need a bit more time now, because I just spent five minutes asking for clarification from the Minister in the chair, who was the Minister of Tourism, and now where does that leave the committee? Because I just asked a number of questions, maybe a dozen questions, of the Minister in the chair, being the Minister of Tourism, and now I find that my questions, sadly, are—well, I hope they won’t go unanswered, because the questions maybe I’d like to move over to the Minister of Immigration. I do think I’d like a fairly full exposition of how someone coming to New Zealand, what the mechanism is to calculate the tourist tax that they’re going to pay.

So, for example, it’s a family from the UK, and it’s a multigenerational family—and we see this all the time. All the time we see whole families coming to New Zealand, and it’ll be for something like a family wedding. Gosh, you see it all the time—a fabulous family wedding in Queenstown and, of course—

Hon Scott Simpson: Or Coromandel.

Hon JACQUI DEAN: —the whole family—mostly Queenstown, maybe Wānaka—comes along. So there’s three or even four generations of family coming through Queenstown Airport on their way to Wānaka, and there’ll be the grandparents, and there’ll be the parents, and there’ll be children, of course, and then there’ll be aunties, because, after all, this is a family wedding we’re talking about. They may all have the same surname but, equally, they may not. So how does immigration deal with a joint application or their application? How does that work? How does that family—

Hon Scott Simpson: What if they are Chinese-sounding names?

Hon JACQUI DEAN: Well, indeed, and I think that is a very important question. What if it’s a family from China and—

Hon Scott Simpson: —with names that all sound the same?

Hon JACQUI DEAN: Well, I know my colleague the Hon Scott Simpson is very keen to traverse that question. I will leave that up to him because I do want quite a lengthy exposition on how that is going to occur and how it can be that that family can come into New Zealand secure in the knowledge that their private personal details are safe, that the correct amount of tourist tax has been levied for them, which, in the case of—somebody else is going to have to do the math, because it’s getting awfully late—10 people; what’s that going to be? Chris Penk will know—10 people at $35?

Chris Penk: $350.

Hon JACQUI DEAN: Thank you—$350. That’s exactly what I was going to say, which is quite fortunate. So once that family of 10 comes through immigration and has the tourist tax taken off them, I am interested in the process. But I’m also interested in that family being lightened by the amount of $350, and, in fact, if it’s a family from South Korea, on top of that would be an extra fee—and I have got it written down on the page—

Melissa Lee: 9 and 12.

Hon JACQUI DEAN: Yes, 9 and 12, but what’s it called? It’s the electronic transfer—

Hon Todd McClay: ETA.

Hon JACQUI DEAN: That’s right. So there’s that on top. So this is a considerable amount of money just crossing the border. Now, when does that get paid? Does it get paid at the border? Does it get paid when the person purchases the ticket? I know that my colleague the Hon Todd McClay is interested in knowing that, and he will be following on from my contribution.

Hon KELVIN DAVIS (Minister of Tourism): Thank you, Mr Chair. Just in regards to clause 6, I’d just like to ask the Minister a few questions as well. Can he tell us whether there is an app that’s been developed that’s going to be put out there to 60 countries? Can he confirm that all the languages of those countries will be part of this app? Can he confirm that the use of the app is as simple as opening it, taking a photo of a passport, then somebody taking a selfie, then using the app to load their credit card payment details in, then answering a few questions that the app asks them, and, basically, submitting it? Can he also confirm that the use of this app can be done, basically, anywhere—anywhere at all—and that even if the person who was travelling to New Zealand had forgotten to do all of that, had turned up to the counter and the person at the airline had said, “You haven’t yet filled in your ETA for New Zealand.”, the person could do all that and fill out that electronic travel authority using that app right there and then, and everything could be done and paid for at that time? Just wondering if the Minister of Immigration is aware of what a fantastic app has been developed by his ministry.

Hon TODD McCLAY (National—Rotorua): Mr Chair, thank you very much. I have some specific questions for the Minister in a moment, but I want to make an observation because, in the first part, in this part, we have been talking about the confusion that exists over which Minister is responsible. I’ve got to tell you that if anybody in the tourism sector in New Zealand had a small amount—even a small amount of confidence—in the Minister of Tourism, it’s now walked out the door because the Minister of Tourism didn’t even bother to ask those questions of the Minister of Immigration in Cabinet when they decided to put this through. That’s just crazy, by golly.

Hon Ruth Dyson: Doesn’t quite recognise sarcasm—having a joke at your expense.

Hon TODD McCLAY: To Ms Dyson, on the other side of the Chamber, she wouldn’t know because, sadly, she doesn’t get to go to Cabinet, but I guess we know why that is.

In particular I want to ask the question of the Minister of Immigration, but herein lies the problem, because I assume, based on the explanation he gave in Part 1, that it will be the Minister of Tourism that actually is responsible for implementing the policy under Part 2. It says in here the Minister of Tourism will specify categories or classes of people that will be liable to pay this tax. It also says the regulations will provide exemptions from the tax, or refunds of part of the tax. Then, finally, it gives the Minister the ability to exempt by special direction—not by regulation; special direction—any person or persons from their obligation to pay. We need to know much more about how that will work, because one is going to set a regulation about who will be included and who won’t.

It doesn’t matter about this special app that he’s talking about, which he seems to have designed himself. It doesn’t matter how many languages it’s in or how they’ll be able to put their own credit card in—gee, there’s a lot of confidence going on there! Actually, what we need to know is what the detail of the regulation will be, because, fundamentally, as we’ve said before, this is tax policy in the area of tourism that is being enacted at some stage in the future by regulation. All this does is it gives the Minister the ability to set lots and lots and lots of regulations, and there’s just not enough detail in it.

So we need actual answers from the Minister who will be responsible for this. I guess it’s the Minister of Tourism, so maybe his colleague responsible for the bill—because it’s an immigration bill—might have to leave the Chamber so that he doesn’t have to get up and ask questions of him, the Minister of Tourism. But specifically, what categories or classes of people is he going to include in the regulation? Since he’s the one setting the regulation to give himself the ability to exempt, who is he going to exempt?

Then, finally, this legislation will give the Minister of Tourism the ability, through special direction, to exempt people. Actually, we need to know that he is going to take this seriously—seriously—and not just exempt people because he feels like it, because it doesn’t have any scope, any definition, any control, or even any advice in this legislation about how he would exempt people—none at all. All it says is that by special direction he can. Now, when it comes to the Immigration Act, the Minister has the ability in immigration issues. He has special direction powers as well, but there is a lot of definition and there is a lot of case history and a lot of precedent.

This is something—this immigration bill will allow the Minister of Tourism to do virtually whatever he wants as long as he passes a regulation, and if Cabinet doesn’t agree with the regulation of who should be exempt, he can just do it by special direction, and there is no limitation on that in this at all. It’s very, very concerning.

I want to table an amendment on this which says “Any exemption by special direction under this Act must be reported to Parliament by the Minister with the reasons for the exemption or exemptions and the impact of any exemptions.” Now, this isn’t to say that he shouldn’t have the ability to—

CHAIRPERSON (Adrian Rurawhe): Order! The proper process for tabling—I’m on my feet. The member well knows what that is. Until it is tabled and processed, he cannot speak to that amendment.

Hon TODD McCLAY: I raise a point of order, Mr Chairperson. I’m not speaking to this amendment; I’m speaking to—

CHAIRPERSON (Adrian Rurawhe): Order! Oh yes, you were. Do not do that.

Hon TODD McCLAY: I raise a point of order, Mr Chairperson.

CHAIRPERSON (Adrian Rurawhe): A point of order, the Hon Todd McClay, and it better not be questioning my ruling—

Hon TODD McCLAY: No, it’s not questioning your ruling—

CHAIRPERSON (Adrian Rurawhe): —in any way.

Hon TODD McCLAY: —but it’s helping with your definition of what I was doing, Mr Chair.

CHAIRPERSON (Adrian Rurawhe): No. Sit down. No, I made a ruling, and the member must follow the correct process. He must not, as I said before—and if he questions my ruling again, there will be a consequence.

Hon TODD McCLAY: Thank you, Mr Chair. If some member, at some time shortly, in the very near future, should table an amendment in this committee and that amendment should look to have some transparency over the ability that the Minister has—

CHAIRPERSON (Adrian Rurawhe): Order! No, no, no. The member will stand, withdraw, and apologise.

Hon TODD McCLAY: I withdraw and apologise. I raise a point of order, Mr Chairperson. What am I withdrawing and apologising for? You weren’t clear.

CHAIRPERSON (Adrian Rurawhe): The member fully knows well, and if he takes another such point of order, questioning my ruling, he will be leaving the Chamber.

Hon TODD McCLAY: Thank you, Mr Chair. The problem we have with this vague legislation is we have a Minister of Tourism who didn’t ask the Minister of Immigration the appropriate questions in Cabinet, obviously, because he’s come down to the Chamber to do it, and he’s not allowed in the chair because the Government couldn’t even work out which Minister should be sitting there and what the Standing Orders are. There lies the problem with rushed legislation.

So, specifically, my questions to the Minister are: when it comes to the ability that this bill will give him under the Act, to exempt any person or persons from the obligation to pay all or part of that levy, why is there no definition or narrowness of that; will there be a regulation he’ll set; will there be any guidance at all, or can the Minister just do what he wants? Ultimately, it’s my view that what is necessary is changes to this bill. There needs to be some scope put into this, or restriction, that at the very least allows for transparency, and that transparency should mean that the Minister, by special direction, would have to report to Parliament over the reasons for any exemptions.

So I ask the Minister: will he commit to do that? Will he commit to making sure that he informs Parliament every time he uses a special direction to exempt people or persons from this tax; and if not, why not? If he will, why isn’t it written in here so that it’s clear for all future Ministers; and, if he won’t, how does that speak to transparency? Based on his answer, I’ll then have to contemplate very carefully what it is this side of the committee should do, because I believe this is far, far too broad.

Coming back to my earlier questions, I want to be very specific here so that we don’t have to get into whether or not amendments or changes would be needed. Specifically, which categories or classes of person will be liable? We’ve heard outside of this House that he’s received information, and the Government has published press releases that have said this, but there is nothing in here. He’s going to set a regulation—he could change his mind; he could have got it wrong. We need to know. It should be much clearer. There shouldn’t just be a clause that gives him the ability to set this by regulation; it should be set in here. Perhaps he should have the ability by regulation to change that, but, ultimately, anybody that picks this up would be extremely worried that the cowboys are now in charge, because that Minister gets to do whatever he wants.

The final part of this—I have been asking—is it “provides exemptions from”. This isn’t by special direction; the Minister just has that power automatically. It’s about the regulation. The Minister can write and pass a regulation on who is exempt and any refunds, and it says he has to consult, but not the first time. He has to consult any changes, but it says specifically in Part 2: consult with whomsoever he deems fit. That isn’t responsible and it’s not good lawmaking. Yes, there should be flexibility to make changes if they’re needed, but I guarantee changes will have to be made, because there will be mistakes along the way, because this is rushed. But, ultimately, if the Minister is saying he has to consult because this is so rushed that the public haven’t had the opportunity to come here and follow a proper democratic parliamentary process of a full committee outside of this Chamber, then, ultimately, there should be much more scope and guidance as to whom he has to consult with. He might decide to get up and consult with his Cabinet colleague, but, as we’ve just seen, he won’t do it in Cabinet; he’ll come down here and do it in the House by way of a question, and that’s not how this should be run.

We have two Ministers who are responsible for this legislation in as far as policy is concerned. It’s been brought to this House by the Minister of Immigration. You have the Minister of Tourism that wants to answer questions, but they don’t understand the Standing Orders, and he’s doing it by way of questions. That’s really not good enough. This bill is rushed, and there will be mistakes.

MATT DOOCEY (Junior Whip—National): I raise a point of order, Mr Chairperson. It would be helpful for me and other members if you could tell us the Standing Order that doesn’t allow members to speak to an amendment that is yet to be tabled.

CHAIRPERSON (Adrian Rurawhe): No. I made the ruling at the time, and if the member had a point of order, he should’ve taken it at that time, OK?

ERICA STANFORD (National—East Coast Bays): I would like to take a call tonight mostly around Australians. I’m speaking specifically to new section 399A(3)(c). In my earlier speech—and, in fact, in a number of speeches—we noted the point that Australians are exempt from this levy. A lot of us have made the point that that’s a considerable number of people—that’s 40 percent of our tourist market.

Debate interrupted.

Sitting suspended from 12 midnight to 9 a.m. (Saturday)

THURSDAY, 30 MAY 2019

(continued on Saturday, 1 June 2019)

Bills

Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill

In Committee

Debate resumed.

Part 2 Main amendments (continued)

CHAIRPERSON (Adrian Rurawhe): Talofa lava, manuia le aso, manuia Samoa. Members, when the committee suspended last night, we were considering Part 2 of the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill. Erica Stanford had the call and has four minutes and 30 seconds remaining if she so wishes.

ERICA STANFORD (National—East Coast Bays): Thank you, Mr Chairperson. I wasn’t sure if you’d recognise me. I was looking a bit rough at midnight last night—

CHAIRPERSON (Adrian Rurawhe): I think we all were.

ERICA STANFORD: —it was a long day—so was the Minister, to be fair. In fact, you’re not looking much better this morning either, to be honest. I want to pick up where I left off last night.

Hon Chris Hipkins: Gerry looks that way all the time.

ERICA STANFORD: That’s uncalled for. I want to pick up where I left off last night. Just to remind the House, I was talking about Australians. [Interruption] I know, it’s pretty rough for a Saturday morning on a long weekend to be talking about Australians, but here we go. It is actually quite important, because, obviously, in reading the bill—which, frankly, didn’t take long—and all of the information surrounding the bill, we realised that Australians are exempt.

Now, when we look at this, we realise that Australians make up a huge portion of our international visitors—in fact, 40 percent of our international visitors—and they are big users of our conservation estate. They walk and they partake in many tourist activities. In fact, everywhere you go in New Zealand, you meet an Australian when you’re out touring around. They are big users of our infrastructure, so to exempt 40 percent, which is quite a big proportion of our international visitors, is a big step. We looked at how much that would bring in if they were to be included, and that was $36 million, which is a sizeable chunk. We did actually think that that would have allowed the Minister to reduce the overall visitor levy, had he included Australians, making it a bit fairer for everybody and encouraging more people to come rather than not encouraging them.

So my question to the Minister is—because I asked this question in the House last night, or I made the point in my speech, and Minister Kelvin Davis in his contribution told us the reason why Australians were exempt, and he was quite clear. He said that Australians don’t spend as much to come here, they don’t come for as long, and so the proportion of what they would spend would be far greater than compared to someone who was coming from, say, America and spending more to come here, and he didn’t want to put at risk 40 percent of our international tourist market. You know, that makes sense, but I pointed out in my contribution later on, in the second reading, that, actually, he has the power under regulation to prescribe the amount of that levy in respect of different categories or classes of person. So, in fact, he has the ability to reduce the amount that Australians could potentially be charged for this visitor levy. It’s in the regulation; he has the ability to do that to make it fairer for everybody.

Now, I suspect that’s actually not the case for why Australians are exempt, and he wasn’t entirely forthcoming with the real reason. We suspect—as per James Shaw’s contribution, when he came down last night to ask some very pointed questions—that it’s more likely to be the fact that we are unable to use the ETA system to collect the levy from the Australians; so it’s actually more a difficulty around the process than it is around anything that Mr Davis was saying. But I want to come back to this particular part, 399A(3)(c), where it says the Minister is allowed to change the calculation “in respect of different categories or classes of person”, because I want to ask him specifically what that means. Why didn’t he, firstly, use it for Australians so that they paid a lower amount, more in proportion with what they pay to get here and the shortened length of time they stay here? But I also want to know what else that might mean. Would the Minister perhaps say, “Look, most of our tourists from Germany are backpackers. They don’t spend so much when they come here. We might actually make that calculation a bit less for them.”, because, you know, they also don’t spend so much. Or perhaps he might take someone else who’s relatively close to New Zealand who doesn’t spend as much or come here for as long.

The regulation is in here, and I want to know exactly what he’s using it for, because the problem with this bill is that there is no explanation as to why a lot of these things are in here or how they’ll be used and how they’ll be applied. So I am very interested to find out exactly for whom, and in what circumstances, 399A(3)(c) would perhaps be used if it’s not being used for Australians.

Hon IAIN LEES-GALLOWAY (Minister of Immigration): Thank you very much, Mr Chair. There have been a number of questions about the operation of the regulations that can be made under new section 399A. There are two types of exemptions for the levy; both are quite normal in the immigration system. The principal Act, the Immigration Act 2009, provides for special directions that allow the use of exemptions from immigration requirements in special or unusual circumstances. The special direction provision in this amendment bill is consistent with, and is, in fact, modelled on, those existing provisions. Standard practice is that the decision is delegated to an immigration officer, so individual exemptions will largely be delegated to an immigration officer.

The regulations also provide for exemptions for groups or classes of people. Again, this is a normal part of the immigration system. For example, refugees do not pay fees for the immigration system. It could be possible, for instance, to determine that people who were coming to New Zealand for medical purposes that were legitimate medical purposes may not be charged an international visitor levy. That’s the way in which the exemptions will operate. I know members were interested in that last night.

Just picking up on some of the comments that Erica Stanford just made, questions about why the Government has chosen to exempt Australians from paying a levy rather than setting a lower levy for Australians. That was feedback that we received from the industry during the extensive consultation that occurred in the lead-up to this legislation—that, you know, they would prefer that Australians were not charged, because of their proximity, because their airfares are cheaper and, therefore, as a cost of the overall spend in New Zealand, it would be a larger proportion.

Also, of course, there is the point that James Shaw made that we have reciprocal arrangements with Australia and we need to make sure that we are consistent in our treatment of Australians. Australians, of course, when they come to New Zealand, actually are provided with a residence visa upon arrival in New Zealand and have freedom of movement, just as we have freedom of movement in and out of Australia. So it’s consistency—it’s a consistent approach. By and large, Australians are treated the same as New Zealanders for movement across the New Zealand border, and we would want to do the same with this international visitor levy.

Again, I thank members for their questions and comments and hope they found my responses useful.

Dr JIAN YANG (National): I’m really concerned about the message that this bill will send to our international visitors. Basically, they are saying that you are not equal. Some people will be more welcome; some people will be less welcome. The Minister just said that the criteria for exemption is that, well, Australia is closer to us and airfares are cheaper. That should be exactly the reason why Australia should not be exempt, because they pay less to come to New Zealand. Other people will pay more to come to New Zealand, but at the border they will be charged more—another $35, or even more. So this is a signal, I believe, that will be wrong to our international visitors.

What are the criteria for the Minister, really, to decide who should be exempted? Now, they say it is international interests, but how do you define international interests? For example, the Chinese market has been so important to us and the growth of the China market has been substantial in the past few decades. We have worked very hard to build up the China market. I have a table here. You’ll see the growth of the China market—well, it is in Chinese. In 1992, only 2,789 Chinese visitors, and ranked 30th on our table, right? Then, in 2012, it was ranked No. 2, after Australia, with 180,000 visitors. That’s the growth of the China market.

Now look at this table. This is for the year ended October 2018. The total number of international tourists was 3.8 million—3.8 million international visitors. Australian visitors were 1.48 million, about 40 percent of our total international visitors. Then you have some other South Pacific nations like Fiji at No. 17; Samoa at No. 20; and Tonga at No. 24. These people from these countries are a large number but they won’t be charged, but people from far away, who pay a lot of money, will come to New Zealand and then be told, “Oh sorry, you have to pay more.”

Another reason why I believe this is wrong is when you look at the contribution of individual visitors, right? Here’s another table. This is a bit old. This is 2011: the top 10 countries who sent visitors to New Zealand. Well, No. 1: Australia, with 1.1 million visitors—well, this was in 2011. No. 2: the UK, with 230,000. Then there is the USA and then China. Well, look at individual spending.

Kanwaljit Singh Bakshi: India?

Dr JIAN YANG: Sorry; India’s not on top. It’s not in the top 10. The No. 1 spender was South Korea, individually over $4,000, and then you have Japan at $3,000 and China at over $3,000. Australia, in terms of the number of visitors, is No. 1, but in terms of individual spending, it is No. 10. So we are turning away our valuable visitors by charging them more. This is what this Government is trying to do. What kind of signal are they trying to send? I’m just wondering why this is happening. We do need more money for our visitors and for the tourism sector. We do need more money, but, by turning away more valuable visitors, this Government is actually collecting less, so, in the end, we’ll get less by having this tax. This is a no-brainer. I don’t know why they have done this.

This whole process is so rushed, and, in the end, we have no say. The Minister will decide or set regulations. The Minister will say, “Well, we did a thorough consultation.” But my feedback—the feedback I have gotten from Chinese tourism operators in New Zealand—is they hate this. They hate this. They believe this will do damage to the China market, which the previous Government spent a lot of time and energy trying to expand. So, really, this is a very bad bill.

Hon RUTH DYSON (Senior Whip—Labour): I move, That the question be now put.

CHAIRPERSON (Adrian Rurawhe): The question is that Erica Stanford’s tabled amendment to clause—sorry, we’ve just got some new tabled amendments. So the first question—

Hon Todd McClay: I raise a point of order, Mr Chairperson.

CHAIRPERSON (Adrian Rurawhe): I’ve already started putting the question.

Hon Todd McClay: But the member moved a closure motion and you haven’t taken that vote yet.

CHAIRPERSON (Adrian Rurawhe): No, I didn’t accept it, and no one sought the call, so I’m obliged to put the question.

The question was put that the following amendment in the name of the Hon Todd McClay to clause 7 be agreed to:

insert in new section 399A the following new subsection:

(4A) Any exemption by special direction under subsection (4) must be reported to Parliament by the Minister with the reasons for the exemption/s, and the impact of any exemptions.

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

Ayes 47

New Zealand National 46; Ross.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Todd McClay to clause 7 be agreed to:

insert in new section 399A the following new subsection:

(6) Notwithstanding subsections (3) and (4) the Minister may not exclude or exempt persons from the levy due to them holding an Australian Passport.

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

Ayes 47

New Zealand National 46; Ross.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Erica Stanford to clause 7 be agreed to:

replace new subsection 399B(1) with the following new subsection:

(1) Before recommending the making of regulations for the purpose of section 399A, the Minister must consult:

(a) Regional territorial authorities

(b) Local authorities

(c) Relevant tourism authorities

(d) Relevant tourism operators

(e) Any other persons or organisations that the Minister considers appropriate.

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

Ayes 47

New Zealand National 46; Ross.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Harete Hipango to clause 7 be agreed to:

insert in new section 399B the following new subsection:

(4) The Department of Conservation, Tourism New Zealand and Immigration New Zealand must report on the levy in their annual reports. Reports made by these agencies must include:

(a) The amount of levy collected for that financial year

(b) Where the levy funds have been directed within the agency

(c) The total cost of administering the levy incurred by the agency for that financial year

(d) Any levy refunds made to individuals

(e) The number of individuals that applied for an electronic travel authority and were exempt.

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

Ayes 47

New Zealand National 46; Ross.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Scott Simpson to clause 7 be agreed to:

insert, after new section 399B, the following new section:

399C International visitor conservation and tourism levy: review of legislation

(1) The Department must review the effect of clauses 399A and 399B by December 2020 and consider:

(a) The effectiveness of the regulations:

(b) The amount of funds collected in total at the time of review, and the amount of funds collected annually by each agency:

(c) The disbursement of levy funds to tourism and conservation infrastructure and initiatives:

(d) Any exemptions made for individuals.

(2) The Minister must present a report to the House of Representatives before 31 December 2020.

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

Ayes 47

New Zealand National 46; Ross.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of Sarah Dowie to clause 7 be agreed to:

insert, after new section 399B, the following new section:

399C Preparation of information for consultation

(1A) Before recommending the making of any regulations for the purpose of section 399A, the Minister must prepare a recommended programme of investment for consultation which must include

(a) The types of projects that the levy will be used to fund consistent with section 399A(2)

(b) The regions that are proposed to receive funding for projects consistent with section 399A(2).

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

Ayes 47

New Zealand National 46; Ross.

Noes 63

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

Amendment not agreed to.

The question was put that the following amendment in the name of the Hon Todd McClay to clause 7 be agreed to:

insert, after new section 399B, the following new section:

399C Preparation of information for consultation

(1A) Before recommending the making of any regulations for the purpose of section 399A, the Minister must prepare an impact statement on the estimated impact of any levy on:

(a) Persons affected by the levy

(b) International visitor numbers

(c) International visitor spending

(1AB) The impact statement must be consulted on as part of any consultation undertaken by the Minister.

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

Ayes 47

New Zealand National 46; Ross.

Noes 63

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

Amendment not agreed to.

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

Ayes 63

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

Noes 48

New Zealand National 46; ACT New Zealand 1; Ross.

Part 2 agreed to.

Clauses 1 to 3

Hon TODD McCLAY (National—Rotorua): I have an amendment on this, and so I’ll speak very briefly on it. My colleague Erica Stanford was talking about it late last night. It’s good to see that, on this side, all members have been off and got enough beauty sleep. I think the Ministers were up very, very late by comparison.

But I want to give them an early present, and I think that the title should be changed so that international visitors and New Zealanders are very, very clear about what this bill is, and what it does. We said earlier in the first and second reading, and certainly during the committee stage, that there isn’t a problem that this Government doesn’t think a new tax can solve, and, equally, already $1.6 billion is collected from international tourists every year. This Government could deliver significantly more money for the tourism sector in this Budget or last year’s Budget should they wish, and they haven’t done so. Instead, they’re dressing up their commitment to the tourism industry under the guise of a new tax.

My amendment, which was tabled earlier, offering me the opportunity to speak to it, proposes to change the name of this bill, the title, from the Immigration (International Visitors Conservation and Tourism Levy) Amendment Bill to what this actually is, and I propose that it should be renamed the Immigration (International Visitors Conservation and Tourism Tax) Amendment Bill. That will bring great warmth to the members opposite, because there is not a tax they have seen they don’t like; there is not a problem they don’t believe a new tax will fix.

The question was put that the following amendment in the name of the Hon Todd McClay to clause 1 be agreed to:

replace “Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill” with “Immigration (Tourist Tax) Amendment Bill”.

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

Ayes 47

New Zealand National 46; Ross.

Noes 63

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

Amendment not agreed to.

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

Ayes 63

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

Noes 48

New Zealand National 46; ACT New Zealand 1; Ross.

Clause 1 agreed to.

CHAIRPERSON (Adrian Rurawhe): The question is that the Hon Jacqui Dean’s tabled amendment to replace “1 July 2019” with “1 July 2020” in clause 2 be agreed to. All those in favour say aye, to the contrary no. The noes have it.

Hon Members: Noes have it!

CHAIRPERSON (Adrian Rurawhe): Can I, the chairperson of the committee, warn the junior whip of the Government that she only calls out if she opposes the ruling of the Speaker or the Chair. OK? Thank you.

The question was put that the following amendment in the name of the Hon Jacqui Dean to clause 2 be agreed to:

replace “1 July 2019” with “1 July 2020”.

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

Ayes 47

New Zealand National 46; Ross.

Noes 63

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

Amendment not agreed to.

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

Ayes 63

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

Noes 48

New Zealand National 46; ACT New Zealand 1; Ross.

Clause 2 agreed to.

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

Ayes 63

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

Noes 48

New Zealand National 46; ACT New Zealand 1; Ross.

Clause 3 agreed to.

House resumed.

Bill reported without amendment.

Report adopted.

Third Reading

Hon IAIN LEES-GALLOWAY (Minister of Immigration): I move, That the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill be now read a third time.

This bill amends the Immigration Act 2009 to provide for the collection of the international visitor conservation and tourism levy and to include the electronic travel authority in Immigration New Zealand’s automated decision-making. Tourism provides New Zealand with greater prosperity, employment, and the opportunity to make face to face connections with people from other countries. Tourism has also seen a surge in recent years, with visitor numbers expected to exceed 5 million in 2025. This surge of visitors has seen emerging pressures in tourist hot spots and puts strain on local infrastructure. It has become apparent that additional steps are needed to protect our biodiversity, uphold our reputation as a world-class destination, and address the way critical tourism infrastructure is funded.

The levy is a step in the right direction to solve these issues. The bill acknowledges the impact tourism has on our environment and infrastructure and provides a means of collecting money directly from the visitors who use it. The bill also extends Immigration New Zealand’s authority to use automated decision-making to include the electronic travel authority, which will be mandatory from 1 October. This extension will enable fast and efficient decision-making for the 1.5 million people who visit New Zealand from 60 visa-waiver countries.

The bill allows the Minister to introduce regulations for a levy on international visitors. Those regulations will set out who is liable, who is exempt from paying the levy, the amount or method of calculating the levy, and how the levy is to be collected. To ensure that the levy remains relevant, the bill requires the levy be reviewed at least once every five years. The bill also ring-fences the levy revenue for tourism and conservation. The Ministers of Tourism, Finance, and Conservation will shortly be seeking input from an advisory group on how best to spend that money to put our tourism sector on a more sustainable footing.

Support for this bill is strong across the tourism industry, conservation stakeholders, local government, and members of the public. The bill has been widely consulted on, receiving 107 submissions, 90 of which supported the levy. The sector itself has been very supportive. Tourism Industry Aotearoa surveyed its own members and found strong support from those businesses, and some of the larger players have also published a report in favour of the levy.

New Zealand as a whole has recognised the need for a stronger and dedicated investment in tourism and in conservation. This bill will introduce a key funding mechanism to ensure that New Zealand can sustainably manage and grow this country’s tourism sector. It will ensure that both conservation and tourism initiatives are supported, and it will ensure that taxpayers and ratepayers are not unfairly shouldered with some of the increased costs that come with increased tourism. I’m proud to commend this bill to the House.

SPEAKER: The Hon Roger McClay—Todd McClay.

Hon TODD McCLAY (National—Rotorua): Mr Speaker, thank you very much.

SPEAKER: There’s clearly a mental block occurring here.

Hon TODD McCLAY: He’ll be on the phone asking for some of the salary very soon.

SPEAKER: I’m sure the member will be generous enough to give it to him.

Hon TODD McCLAY: This has been an appalling process. There was no reason at all for this bill to be rushed through urgency. Yesterday, we made the case that, actually, urgency should be used sparingly and when there is urgency—there is an emergency. There is absolutely none here.

The Minister of Tourism, who actually didn’t have the opportunity to answer any questions at committee stage yesterday because he’s not the mover of this bill—he’s not able to sit in the chair, because he’s not responsible for this bill, even though this is a tourism bill dressed up to be snuck through in the equivalent of the dark of night, around the detail, in the guise of immigration. Largely, what has happened is that this shows no commitment to the tourism sector. The tourism Minister has had 18 months to actually do something for the tourism sector. I give him his dues—he has announced projects around the country that have come from a funding mechanism, a commitment that was put in place by the National Government, not by his Government. So far he has delivered no extra money to tourism from the Government’s Budget.

The point of this is that the bill talks about a new funding mechanism, but there is no need for a new funding mechanism for tourism if it is as important to this Government of the country as the Minister has just said in his speech. The reason it’s not necessary is because the Government has inherited significantly large surpluses. They could be delivering funds to the tourism sector today. They could pick any amount of money. A great one would be the $200 million they’ve pulled out of the failed first year study free policy. They could have given that to tourism this year, and the tourism industry would have security of knowledge that the funding was available to do the things that they need.

There is no doubt that the case has been made for more infrastructure around tourism and that the burden upon many ratepaying bases is now too large. The reason for that is that the number of visitors to the country grew significantly over the last nine years because of a partnership between tourism and the Government. This Government, and this bill, does not build upon that partnership. It doesn’t do anything for tourism. The Minister will say the $40 million that he’s putting into tourism because of this new tax will fix the problems—it just won’t. His officials have said in the regulatory impact statement that, actually, it hardly comes close to scratching the surface. There has been no commitment from this Government when it comes to tourism, actually, other than rhetoric, and this bill, on top of the previous rhetoric, is just more.

I say to the Minister: in the regulation-setting ability it says he can go and consult with some people, but whomsoever he sees fit. Well, the problem with that is—and we’re already starting to see it only after 18 months—the people he would choose to consult with are the ones that are going to tell him what it is he wants to hear. That’s why this has been an appalling process. He has robbed New Zealanders in the tourism sector and elsewhere of the ability to come to this Parliament and to have their say. Yep, there was some consultation that went on, but not the same as the degree of scrutiny that takes place in a parliamentary committee. There was no need for this to be rushed through. It’s very bad legislation.

We’ve already seen yesterday, in committee stage, we put in some Supplementary Order Papers where they weren’t able to find the answers, actually. One of them was which department would be responsible for doing the review—up to every five years—of the amount that’s collected and also the mechanism. The answer was: “Well, don’t worry, because tourism’s in the Ministry of Business, Innovation and Employment (MBIE) and so is immigration.” But here’s the problem: under the last Government, there was no such thing as MBIE. Under the last Government, MBIE was created—that’s the point. At the start of the last Government, there was not MBIE—it was created. Ultimately, the problem we have here is members opposite, at that time, said that they would pull MBIE apart. Well, actually, the challenge you’ve got is maybe today MBIE sits there, but what will have to happen for that review to take place in the future if a future Government decides that tourism should sit somewhere else? Perhaps there is real commitment from this Government—tourism should sit separately and be its own department or its own ministry, as they’ve said they’re going to try to do around forestry but haven’t. You’ll have to come back and amend the legislation.

It is rushed through. It is bad legislation. It creates “Henry VIII” powers for a tourism Minister that does not have the backing or the confidence of the tourism sector. They will be back fixing this. It’s very bad legislation.

Hon KELVIN DAVIS (Minister of Tourism): Thank you, Mr Speaker. First of all, I’d like to thank my colleagues the Hon Iain Lees-Galloway and the Hon Eugenie Sage for the wonderful work and the collaboration that has gone on to get to the stage where we’re at. I think the Hon Iain Lees-Galloway spelt out the need for the conservation visitor tourism levy extremely thoroughly.

One of the points that the Opposition have totally missed—when the Hon Todd McClay gets up and says that we haven’t put any money into tourism, he forgets the Provincial Growth Fund, which has put tens if not hundreds of millions into tourism. They’re very quick to forget that.

Look, we’ve spoken about the benefits of tourism to New Zealand. We know that 216,000 New Zealanders are employed directly in tourism. We know that 170,000 New Zealanders are employed indirectly by tourism. We know that there’s been a 35 percent growth in tourism numbers over the last five years. We also know that our visitors from overseas spend some $16 billion in New Zealand when they’re here. We know that the numbers are going from 3.9 million now up to 5.1 million by 2025. But here’s the thing. We know how important tourism is to New Zealand, but the Opposition over there, what they want to do is strangle the golden goose. They want to grab it by the throat. They want to wring its neck. They want to pluck it. They want to gut it. They want to boil it and they want to serve tourism up to the New Zealand public on a cold plate of contempt, because that is what they are showing. That is what they are showing to the New Zealand tourism sector. Everything that they have said over the last few hours that we’ve been debating this, and last night, has meant that they don’t understand tourism. They don’t care about tourism. They don’t want to protect our natural capital in the conservation estate. All they want to do is have more and more people turn up. They want to market New Zealand as this paradise, but they don’t actually want to manage New Zealand as this paradise.

Kiritapu Allan: Strangle the golden goose.

Hon KELVIN DAVIS: They want to strangle the golden goose.

So here’s the point. Here is the big thing. If they hate this conservation and tourism levy so much, will the National Party, in their remaining speeches, stand up and promise the tourism sector that they will repeal this law? Will they repeal it? Will they say, “We don’t want the $450 million to protect our tourism and our conservation estate.”? I challenge them now to stand up, when they have their time, and promise the country that they are going to repeal this—promise. Promise also that the $25 million a year for four years—that has been set out; that was their idea—is going to continue. But that $25 million has to come from somewhere as well—it has to come from somewhere. We’re creating a long-term sustainable funding mechanism for tourism, for conservation, so that those sectors can plan well into the future. There are a number of areas in this country that are struggling under the weight of visitor numbers, but the Opposition don’t care. So with all the bluff and puffery that has gone on for the number of hours that we’ve been sitting here, I can guarantee that not one of them will stand up and promise to repeal this law.

We talk in tourism about the investment framework, which is the five A’s. We have the attractions that visitors need. They need things to do when they go somewhere—the attractions. We need awareness. We need visitors to know what the attractions are that are on offer. They need access. Visitors need to be able to get to where they want to go safely. We need the amenities. Visitors need accommodation, they need retail and hospitality, they need car-parks, they need ablution blocks, and they need good and safe water. We also need the attitudes of our communities. Our communities need to know that tourism is good for them. But all that is in jeopardy because of those people sitting over there. Let me say that the best place for them is to be sitting over there. God help the tourism industry. God help the conservation estate, if they ever get on this side and throttle and strangle and pluck and gut the golden goose.

New Zealanders expect visitors to this country to actually contribute to the costs of the infrastructure in protecting and enhancing our natural environment. That is what New Zealanders expect. That motley crew over there think that strangling the golden goose is actually going to do New Zealand good. It is not, and I am very proud of what this Government has done, very proud that we are ensuring that we protect the ongoing viability of tourism and of the conservation estate, and I commend this bill to the House.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Mr Speaker. Over the last 24 hours or so, and the rest of this long weekend, there will be tens of thousands of people travelling to the beautiful Coromandel electorate—tourists, visitors from domestic places around the country, and, indeed, international visitors. They will be enjoying all that the wonderful Coromandel has to offer. There’s no doubt that some of the tourist infrastructure is under strain, because mine is a region that exemplifies some of the pressures that the Ministers and the Government, in this bill, seek to alleviate.

Throughout this debate we have not sought to argue against the concept—the broad thrust of what is trying to be achieved here. What we have argued about is the woeful, inadequate process. This has been a process of shocking proportion. Here we are, sitting under urgency on a Saturday morning of a long weekend, and the Government has had 18, nearly 19, probably 20, long months to bring this piece of legislation to the House. They’ve chosen to do it on the back of a botched Budget, under urgency, with no scrutiny of a select committee, with no opportunity for tourist operators in my electorate to make submissions, to offer their point of view, and to have their say. That’s an appalling process for a piece of legislation that actually could be so much better if the Government had attempted to do a little bit more work on it.

Some would say—and indeed some on this side of the House have said—that this is a knee-jerk taxation reaction from the Government. This Government does have a policy of tax, tax, and more tax. This is just another good example of that. But to describe it as a knee-jerk reaction would be to overstate the case, because “knee-jerk” implies something quick and fast and spontaneous. It’s more like an arthritic process, where a very slow-moving, aching bone has been finally moved into action.

We argued during the course of the first and second stages of this bill about process, and during the committee stage we had probably the best example of why this bill is so fraught. This is an immigration bill. This bill seeks to amend the principal Act—the Immigration Act. It’s not a tourism piece of legislation. A piece of legislation like this deserves to have its own principal piece of legislation, and if the Government was really keen on it, that’s what they would do. We had the ludicrous situation during committee stage where the Minister who was proposing, sponsoring, and moving this bill through the House was actually sitting in the Chamber. The Minister of Tourism was sitting in the chair and a point of order had to be taken because even the Government didn’t understand the basics of who was responsible for this piece of legislation.

We argued about the lack of definition. We know that in this amendment bill there is a definition of “conservation” and it’s the definition that exists in the Conservation Act. But there is no definition of “tourism”. There is no defined, careful, thought-out process around how this bill is going to work. What’s more, there’s no thought-out, clear, obvious pathway for defining how the revenue—the $80 million that’s expected to be collected—is going to be allocated, where it’s going to go, what the definition of “tourism projects” is going to be, what the definition of “conservation projects” is going to be, who’s going to have access to this money, how it’s going to be allocated, and who by.

We don’t even know which Minister is going to be responsible. In the bill there is a definition that is as loose as a goose about Ministers. In fact, my colleagues on this side of the House spoke at length about that during the debate. So here we have a Minister who made, in his contribution, a waffly, sort of vague approach at trying to address some of the questions that we’ve raised on this side of the House. He said that there was a cold plate of contempt. Well, the cold plate of contempt is actually just to impose taxes. There’s nothing that says more about a cold plate of contempt than a Government that just wants to raise taxes at every possible opportunity, and this is just another example of another tax on the back of a botched Budget.

FLETCHER TABUTEAU (Deputy Leader—NZ First): Now, this seems to be more than opposition for opposition’s sake. I say that because this is kind of upsetting. You go into any one of their electorates in the regions and you know that their tourism operators want this, need this. The industry supports what we’re trying to do here. The industry supports the fact that international tourists are going to pay a levy when they come into our beautiful country, to help keep it clean and green and to help unblock those infrastructure pressures.

Here’s the kicker—and this is why I know there’s a problem in the Opposition benches. One of the best Ministers of Tourism—this is the only credit I can give the guy. One of the best Ministers of Tourism this country has seen in recent history—and actually, to be fair, I best describe him as the one of the former Leaders of the Opposition there—Sir John Key, has come out publicly in support of this levy on international visitors to New Zealand. And on that, I say they are lost and confused, and we are doing a good thing here today. Thank you very much.

SARAH DOWIE (National—Invercargill): Thank you, Mr Speaker. I rise in Opposition also to this tourist tax bill to take a short call. But, before I go on to my particular abhorrence with this bill, I say that we rise in support of the tourism industry and we rise in support of conservation. I categorically reject what the Minister of Tourism had to say about this National Party’s record and the fact that he believes that we would simply rape and pillage the conservation estate. That is absolutely nonsense and evidenced by our investment in the conservation estate.

Coming back to the bill, I think that with respect to the Conservation Act and this poor piece of legislation, there is a stark difference. When we look at Part 3B, for example, under the Conservation Act, it is quite prescriptive as to how we go about authorising commercial activities on the estate. In contrast, this bill holds absolutely no detail about how this tax is going to be administered or distributed, and it gives the Minister “Henry VIII” powers to arbitrarily decide that.

It is a very poor piece of legislation, and I believe that if this Government had gone out and properly consulted with the tourism industry and disclosed what was in the regulatory impact statement that meant the fiscals didn’t add up—with an estimated revenue of $80 million coming in and discouraging around about $70 million worth of our tourism attraction and spending to these shores—it would not be supported. Certainly, the uncertainty with how it is going to be distributed and what projects are going to be prioritised—this is just simply a bad, bad piece of legislation.

So while we are in support of the tourism industry and conservation—and a National Government has in the past and will in the future do everything it can to support that industry, because we understand that tourism helps grow the regions and helps grow New Zealand, and produces many jobs and opportunities for New Zealand—another tax is not going to encourage growth in a sustainable way. It is not going to provide further opportunities for New Zealanders. With that, I simply oppose this bill.

Hon EUGENIE SAGE (Minister of Conservation): Thank you, Mr Speaker. I am very proud to support the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill. None of the speakers on the Opposition benches have responded to the challenge of the Minister of Tourism, the Hon Kelvin Davis, that they will repeal this.

This bill is about delivering for New Zealanders. It is about the joined-up thinking in this Government, which has agencies working together to solve the challenges, to invest in tourism, to invest in conservation, to fill the gaps that that former National Government left us.

This bill is much needed because there are major challenges. There is a mismatch between the sources of revenue for conservation and for tourism infrastructure, which are largely funded by New Zealand taxpayers and ratepayers, and the increasing and large numbers of international visitors who benefit from these investments when they come to Aotearoa New Zealand. While the natural environment is the top factor in encouraging visitors to come here, there’s currently no targeted mechanism for enabling them to contribute to protecting the places they come to enjoy, to contribute to paying for the infrastructure that they use. So that’s what this levy does. It provides that mechanism. And, thirdly, there’s been significant growth in visitor numbers, and that’s putting pressure on communities, on our environment, and on the infrastructure that supports these visitors. So this levy is the mechanism that will enable us to meet that visitor demand and to ensure that tourism is sustainable.

The Opposition has claimed there is no clarity around what’s going to happen to the money. This money is in the Estimates document. It will be scrutinised by Parliament. It will be scrutinised by a select committee. The National Party hasn’t been listening. There will be an investment plan which is developed, which is signed off by myself, the Minister of Tourism the Hon Kelvin Davis, and the Minister of Finance. There will be an advisory panel which contributes to the priorities in that investment plan.

In the conservation space, my first priority is investing in biodiversity—doing more in predator control, doing more in terms of our threatened species to protect them. That’s what visitors come to see and experience. Doing more to support initiatives like the ambitious one in the Mackenzie Basin to do predator control over 300,000 hectares to enable species like kakī to flourish. The other priority is investing in the facilities that visitors use, things like the toilet blocks, the camping areas, the picnic grounds. The increase in visitors has put significant pressure there—

Angie Warren-Clark: The tracks.

Hon EUGENIE SAGE: —the tracks, the huts, thank you. We’ve seen major growth in sites like Punakaiki and Milford Sound / Piopiotahi. The Government is responding there with significant grants from the Provincial Growth Fund, but the Department of Conservation (DOC), just over the last four years, has spent more than $42 million more in capital expenditure to improve visitor assets, whether it’s roading to access glaciers, toilets, car parks, campsites. Just last summer, DOC spent an extra $3.6 million to maintain the facilities on conservation land, cleaning toilets, dealing with toilet waste, track maintenance—those are pressures from increasing visitor numbers. This is why this bill and the levy that it establishes is a very good solution, because it will enable those international visitors to contribute to the costs of those facilities and to protecting nature. It’s their contribution to our nature and our facilities. It will help maintain the social licence that tourism depends on in New Zealand. It’s about a sustainable and a bright future for tourism, and I really congratulate the Hon Lees-Galloway as Minister of Immigration and the Hon Kelvin Davis as Minister of Tourism for ensuring that we’ve got joined-up thinking in this Government to deliver the things that New Zealanders care about. I commend the bill to the House.

Hon Dr NICK SMITH (National—Nelson): No amount of spin will hide the fact that this Government simply has an insatiable appetite for tax. We saw that with the first bill after the Budget, which was to whack New Zealand with another $280 million of fuel tax, and we see it also with this bill.

There is absolutely no debate that we need to invest in conservation and that we need to invest in tourism facilities. Here’s the real question: what is the correct way to fund that, and is this a fair and efficient tax?

Hon David Parker: Yep.

Hon Dr NICK SMITH: If you go to Tax 101—and I’ll be keen to have this debate with Mr Parker—there’s three rules that should apply for a tax: is it fair, is it certain, and is it an efficient tax?

Well, let’s firstly test the issue of fairness. Is it fair that New Zealand’s biggest tourism market, all those Australians, do not pay a bean? How can members opposite justify that if a person comes from China, they will pay this new tax, but one from Australia does not? It is unfair, and it’s particularly contradictory in a week in which the Minister of Immigration is saying that he wants to have a fairer immigration policy that treats everybody from different parts of New Zealand more equally. But it’s equally unfair in this respect: for the tourist that comes into New Zealand for a very short period, a single day—and there are those that come in for a conference for a very short period—they pay exactly the same levy as someone that may spend six months here and walk the entire length of New Zealand. That is not fair. Let’s think of a tragedy like the beautiful young woman from Britain who was killed. Her family comes out for the funeral; they are going to be hit with that tax. Is that fair? Actually, the fact that someone comes through the airport from any country other than Australia is very disproportionate to any demand that they may put on the tourism sector.

What’s a far fairer way of funding? It’s actually GST. GST means that every time that tourist stays for a night in a hotel, gets in a rental car, rents a campervan, travels down the road, and uses a bus or a domestic airfare, there is no question that the GST in their expenditure in New Zealand is far closer and more related to the amount of pressure that they put on our tourism facilities than whether they have come through the airport.

Then we ask the question of efficiency. We know that with GST, GST costs less than 0.1 percent to collect. It’s a very efficient tax. Does this new tax pass the efficiency test? It’s expected that it’s going to cost 15 percent—15 percent of the cost is going to be in bureaucracy, in the collection of it. That means that every year, something in the order of $11 million to $12 million is going to be spent in simply collecting that up. That is inefficient. That makes it not a good tax.

Then, the third thing about taxation we should test is whether it is certain—do people know how much they have to pay? Well, here’s my problem, and this was so clearly exposed in the committee stage: this bill says that it should fund infrastructure. Well, what the heck is the definition of infrastructure? Should tourists have to pay for hospitals? Well, they’re part of infrastructure. There is the occasion when a tourist may need to get to a hospital. Can they impose this levy for roads? Well, they’ve already whacked them with a petrol tax. There is nothing in this bill that stops the Government being able to use this tourism tax to fund roads. The definition of infrastructure in this bill is so loose that it is the exact opposite of certainty.

So I go again and say, actually, that the tourism sector is the only foreign exchange - earning sector that pays GST. If you’re in the meat sector, if you’re in the dairy sector, or if you’re in any of those, you do not pay, and that was substantially debated. The fairer way to pay for those facilities is through GST.

My very last point is that I want to quote Ronald Reagan, because, man, it describes everything about this Government. He said that the Government’s view of the economy can be summed up in a few short phrases: if it’s successful, tax it; if it continues to succeed, tax it some more; if it keeps moving, then regulate it; and when it fails, subsidise it. The tourism sector has been an incredible success story by the previous Government, led by John Key. The only thing this Government knows how to do with success is to tax it. It will be an extra imposition on the tourism industry. The very sector that is providing so many of hundreds of thousands of jobs and foreign exchange earnings and that is making the New Zealand economy successful is simply being hit with another crude, horrible tax from this Government.

ANGIE WARREN-CLARK (Labour): Thank you, Mr Speaker. In response to that speech, I did not hear the Hon Nick Smith say that he would repeal this legislation.

It’s a pleasure to rise and speak to the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill—a bill that takes care of the infrastructure and takes care of the conservation reserves. It is a pleasure to commend this bill to the House.

HARETE HIPANGO (National—Whanganui): Thank you, Mr Speaker. I will keep this brief. I sum this bill up with the following questions around: does it have integrity, does it pose a risk, and what is the compromise? In terms of the integrity, there’s a real concern around the lack of due process, and we’ve heard that repeatedly in the House. So I leave it with the Government and the members there: does this bill stand the test of integrity?

The risk that is being posed to the tourism industry, as we’ve heard about the compromise with the numbers of our tourists, is whether that flow will continue. Coming back also to the risk associated with the bill, the purpose of the Immigration Act makes no mention whatsoever of tourism. The purpose of the Immigration Act is to manage immigration. There is no amendment within this amendment bill that addresses the purpose of tourism. The risk to this bill is that it does not stand the test of integrity.

Finally, the compromise—the compromise in the promises that this Government has made in terms of the sustenance and the sustainability of our tourism industry here in Aotearoa New Zealand. The tiaki promise to care has been compromised. Its integrity, the risk posed, and the compromise to our New Zealand tourism industry is most definitely compromised by the lack of substance and the flaws that are within this bill. The National Party continues to maintain its opposition to this bill and the risk that it poses to our tourism market.

RINO TIRIKATENE (Labour—Te Tai Tonga): I just wish to add my support to this bill and to our Government. Can I acknowledge the Ministers, Minister Iain Lees-Galloway for immigration, Minister Kelvin Davis, the Minister of Tourism, and Minister Eugenie Sage for their fantastic work with this bill. This bill is all about making those on a visitor experience pay for their way in terms of the use of our infrastructure and assets—$450 million collected over five years will take the pressure off Kiwis.

So this is a fantastic piece of legislation. It’s going to do wonderful things for my electorate, right across the magnificent taonga that we have in Te Wai Pounamu. I wholeheartedly support it, and I commend this bill to the House. Kia ora.

Hon JACQUI DEAN (National—Waitaki): Thank you, Mr Speaker, and good morning. I just want to make a couple of final points, I think. All the points from the National Party have been made very well. I just want to add one last, perhaps, plea to the Government. The only reference in any of the debates—there is no reference in the bill—and the only reference in the whole passage of this bill to the Minister of Local Government has been made by members on this side of the House, and yet half the money raised from this tourist tax will be potentially allocated to local authorities to disburse. So the question I have for the Minister, and he might want to take it away and think about it over the weekend—unlikely—and the question I would dearly love to have answered is: why, then, rush this through?

The Productivity Commission is not far away from releasing its report into local government funding and financing. Surely, given the fact that local government is going to be in receipt of a moderate amount of money for expenditure on tourism infrastructure—unspecified and undefined—it would make good sense in a policy setting to have a look at that and regard the two—[A member’s cellphone rings] That was—yes.

SPEAKER: Well, Stuart Nash is shouting.

Hon JACQUI DEAN: Yeah—scones and cream, I think—tea. Surely it would be a better process for this Government to look at those two things together, and then come up with a decent piece of legislation.

Dr LIZ CRAIG (Labour): Thank you, Mr Speaker. It’s a pleasure to rise in the third reading of this bill. Down South, we’ve got a lot of iconic destinations. We’ve got Queenstown, we’ve got the Catlins, and we’ve got Milford Sound, but we’ve also got thousands and thousands of visitors a year, and so what this bill will do is it will assist those communities that are really struggling to keep up with the basic infrastructure that those international visitors need. What it means is that those visitors will contribute their fair share to the infrastructure they use, but it also means that we can invest in our conservation estate and in protecting our unique biodiversity. So it’s with pleasure that I commend this bill to the House.

A party vote was called for on the question, That the Immigration (International Visitor Conservation and Tourism Levy) Amendment Bill be now read a third time.

Ayes 63

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

Noes 57

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

Bill read a third time.

Bills

New Zealand Business Number Funding (Validation and Authorisation) Bill

First Reading

Hon STUART NASH (Minister of Revenue): I move, That the New Zealand Business Number Funding (Validation and Authorisation) Bill be now read a first time.

The New Zealand Business Number (NZBN) is a globally unique identifier available to all Kiwi businesses whether they are a sole trader working from home or a large corporate.

Hon David Parker: Great initiative.

Hon STUART NASH: Thank you. The New Zealand Business Number links to core business information which organisations are most often asked for.

Brett Hudson: You never liked this when you were in Opposition, Faafs. What are you going to say about it now? You hated it in Opposition.

Hon STUART NASH: For New Zealand to succeed it’s important to have infrastructure in place that makes it efficient and easy to do its business.

SPEAKER: Order! Order! The member gets his chance in a minute.

Hon STUART NASH: This Government has a vision to improve New Zealand business, encouraging them to become digitally enabled and directly transacting with each other in an efficient, automated, and standardised way. By making it faster and easier to share core business information, the New Zealand Business Number saves businesses time and money when interacting and transacting with each other and with the Government.

GST numbers have recently been added to a range of key business information available, via the New Zealand Business Number or companies. Currently, 60 Government agencies have, or are building, the New Zealand Business Number into their systems right now. The New Zealand Business Number supports and enables high quality, flexible, and cost-effective public services. When a business’s details change, it’s quick and easy to update everyone in their business network by notifying them all at once, including Government. This allows businesses to spend more time on their business and less time on the administration of that business. The value of the NZBN is also greater than the sum of its parts. The true potential of the NZBN lies in its power to connect, and I expect many businesses will find new and innovative ways to use the information on the register.

It is estimated that once the NZBN is fully implemented, the benefits to New Zealand businesses will be around $60 million per year. This only includes savings calculated from businesses’ interactions with Government. The savings are likely to be more when business to business interactions are included.

The idea of a single identifying number for businesses is not new internationally. Unique business identifiers are relatively common now, and are used in many countries in Asia, Europe, and North America.

The New Zealand Business Number provides a platform for a number of digital innovations like e-invoicing, which will transform how New Zealand does business in the future. It’s crucial that New Zealand businesses are ready for the technology powered by the NZBN, like e-invoicing. If 60 percent of the transactions of businesses that currently use internet or desktop accounting solutions are e-invoicing, within five years the estimated benefit is $1.27 billion each year to the economy.

Hon Member: Wow.

Hon STUART NASH: Amazing.

This bill addresses a technical issue in the design of the New Zealand Business Number Act 2016. Late last year, the Government became aware of a problem with the way the New Zealand Business Number Register was being funded. About 80 percent of the costs of running the New Zealand Business Number Register previously came from fees collected under the Companies Act. This practice was consistent with previous decisions about how the NZBN would be funded. I have received advice that the way this money has been spent is not consistent with the fee-setting provisions in the Companies Act. After I became aware of the problems with funding the NZBN Register in this way, I authorised Crown funding to be used to fund the NZBZN Register. In order to preserve the value of the New Zealand Business Number Register and the initiatives that depend upon it, legislative change is needed.

There is currently no way for businesses to explicitly share the costs of providing the New Zealand Business Number Register. It has always been intended that businesses would help meet the costs of the NZBN. The New Zealand Business Number provides benefits to businesses, not the general public. For this reason, the Government is maintaining the previous policy that businesses should pay most of the costs of the New Zealand Business Number.

This is being done now, under urgency, because of the need to also validate the way the New Zealand Business Number has been funded historically. If this were done through a normal statutory process, the way the company’s regulations had been set out could be challenged, and money historically used to fund the New Zealand Business Number Register may need to be refunded.

This bill is also designed to permit amounts obtained under the Companies Act to be used in the short term for NZBN purposes and to put in place a robust legislative framework allowing the costs of the NZBN to be recovered from businesses in a transparent way. It will not, in itself, lead to any changes to the fees obtained from companies to meet the costs of the NZBN.

Before I finish, I would just like to wish Will and Isabella Nash all the best in their soccer tournaments they’re playing in Napier today. I commend this bill to the House.

Hon JACQUI DEAN (National—Waitaki): Good morning, Mr Speaker.

SPEAKER: Good morning, again.

Hon JACQUI DEAN: Again.

SPEAKER: It’s great to have you here.

Hon JACQUI DEAN: It is wonderful to be here.

Brett Hudson: It’s the same day. It’s a long morning.

Hon JACQUI DEAN: Yes, well, I’ve got all day. It is a pleasure to speak to the New Zealand Business Number Funding (Validation and Authorisation) Bill through all stages of the House. National is supporting this bill.

The New Zealand Business Number is a good initiative for New Zealand business. I’ll just give a bit of background to the establishment of the New Zealand Business Number, and I want to congratulate the Minister, the Hon Stuart Nash, for picking up this piece of work and developing it even further, because it will be of huge benefit to all New Zealand businesses, particularly when the uptake is as good as it should be.

Since 2013, companies registered in New Zealand have had a New Zealand Business Number, and that is a unique identifier for businesses. They can use those in their interactions with Government agencies and departments; but not only that, businesses can use this number in interactions with other businesses, and that is what makes it so valuable. The National Government, in our time, used it as part of the Business Growth Agenda, and that was used to focus on and build a productive and competitive economy.

In Budget 2015, the intention to introduce legislation to allow the New Zealand Business Number to be allocated to all New Zealand businesses operating in New Zealand was brought about, and that included sole traders, partnerships, and also incorporated societies. The legislation that these were contained in was passed in 2016. So the New Zealand Business Number established a register and enabled the allocation of New Zealand Business Numbers to businesses and to individuals operating as businesses, such as sole traders, partnerships, and the trustees of trusts. More than 500,000 enterprises have been allocated a New Zealand Business Number, and the benefits are many. The benefits of a New Zealand Business Number reduce costs to business, and it’s about making doing business faster. It makes doing business easier and simpler.

I was talking to a small-business owner just a couple of evenings ago who was complaining loud and long about the time it takes to do paperwork—GST; wages, of course; compliance; all those activities that businesses must do on a regular basis. Across many Governments over the years, measures have been taken to improve the processes and the support around small businesses. I think the Minister referenced that working on your business is far more important than working through the administrative detail, which, while important, is up to a Government—any Government and every Government—to make as smooth and as accessible as possible. So making business faster, making it easier, and making it simpler, particularly moving on to the online platform, is part of the reason that, when National were in Government, we were ranked number one in the world for ease of doing business.

The New Zealand Business Number simplifies how business works with Government. It greatly reduces the costs and time and hassle of doing business and dealing with Government agencies, because businesses, under the New Zealand Business Number, no longer have to keep updating their data with a number of different Government databases. The New Zealand Business Number will enable all sorts of innovative and time-saving administration solutions between businesses, between their suppliers, and between Government, giving them more time to spend on growing their business. There is a matrix, a diagram, you could cast with the New Zealand Business Number and businesses who operate with their suppliers, their customers, other businesses, Government agencies, regulatory authorities, local Government. It is a complex matrix and the New Zealand Business Number traverses them all. All businesses in New Zealand are eligible for a unique New Zealand Business Number and to be registered on a New Zealand Business Number register.

So, in essence, the New Zealand Business Number does away with the need for businesses, every time they wish to sit down and work with a different Government agency, to update and file their details time after time after time. The New Zealand Business Number cuts through all that. It is calculated that the New Zealand Business Number could save business up to $60 million a year; so the sooner more and most businesses sign up, the sooner those benefits will be seen across the sector, which is experiencing some strong headwinds at the moment with some of the measures that the current Government has brought in—measures such as increasing the minimum wage so very quickly and some of the labour-relations requirements going in.

Some businesses now no longer have the ability for 90-day trials, meaning that it’s harder for larger businesses with over 20 employees to take on—it’s becoming much more risky—employees. The 90-day trial was, in fact, one of those, and I won’t traverse that for too long. We have, over this side of the House, spoken to many, many small-business employers who have said, “It enabled me to take on a youngster and give them a chance, and guess what? Most of the time it’s worked out just fine.” So while we regret—and this is a side bar, Mr Speaker; I will return to the bill with great haste—that small business is certainly under the pump at the moment, the New Zealand Business Number is probably the one measure that this Government have adopted to benefit small business. So it’s by no means evening up the scales.

The Labour - New Zealand First - Green Government are not a business-friendly Government. That is demonstrably true. Businesses—

SPEAKER: Maybe we’ll get back to the bill now. I know the member’s trying to excite the House, but I think we’ll get back to the bill.

Hon JACQUI DEAN: Thank you.

Hon Scott Simpson: And it’s working.

Hon JACQUI DEAN: Well, I’ve got the Speaker’s attention and that’s wonderful. Another measure where the New Zealand Business Number is good for business is the e-invoicing, which is another programme which has been picked up by this current Government. The New Zealand Business Number has been expanded to include more of the information businesses need at their fingertips. Companies can now update their primary business data—that’s “PBD”—to include their GST number through the company’s register.

E-invoicing, which was also an initiative under the previous National Government, was first considered in 2016. I think the first work began on e-invoicing then and is now progressing under this Government. I do wish they wouldn’t try and take all the credit for it, but here I am today to remind the Government that this very good piece of technology for small business was commenced under National, grateful though we are that this Government—

SPEAKER: Right, back to the numbers.

Hon JACQUI DEAN: —for once have seen the sense and have carried it on. So with invoicing, businesses—

SPEAKER: Order! [Speaker holds up copy of the bill]

Hon JACQUI DEAN: Yeah, OK—all right. Well, can I just try and weave it in—

SPEAKER: Oh, have a go—have a go.

Hon JACQUI DEAN: —because I think I can.

SPEAKER: Go on. I’ll be generous.

Hon JACQUI DEAN: I think I can, because with e-invoicing, where businesses no longer need paper-based invoices, that falls in to support the ability to use their New Zealand Business Number capability in invoicing their clients, by using the same data as the unique identifier. So that is why I raised e-invoicing as part of one of the few things that this Government is doing to support small business.

Hon KRIS FAAFOI (Minister of Broadcasting, Communications and Digital Media): It’s a pleasure to rise on the New Zealand Business Number Funding (Validation and Authorisation) Bill. I think the initial two speakers have spoken a lot in detail, with varying degrees of success, about what the New Zealand Business Number sets out to do. Seeing as the previous speaker, Jacqui Dean, wanted to take credit for some things, I think they should probably take credit for this piece of legislation actually having to go through the House, because, essentially, the New Zealand Business Number, which we have no qualms with, was set up but the previous Government didn’t set up a mechanism in order to pay for its administration.

So we are validating some of the expenses that have been expended to date and making sure that we can pay for those functions going forward in order to make sure that the Business Number is a success—something that the previous Government should have done. We are validating the expense, and we are making sure that there is money to make sure the administration of the number is done. So they can take credit for some of the success, but they should also take some of the responsibility for us having to be here this Saturday morning because they didn’t have a mechanism in order to pay for it. So credit where credit’s due. We are here doing this because the previous Government couldn’t do that, but, you know, that’s what happens.

So I’m glad that the New Zealand Business Number will be funded in the future. If I were the Opposition, I wouldn’t worry too much about the New Zealand Business Number. I would be worried about their polling numbers, which would see some of them disappear very soon at the next election. Thank you very much, Mr Speaker.

BRETT HUDSON (National): Thank you, Mr Speaker. It is actually, for the first time, a pleasure to speak on a bill. We’re going to support the New Zealand Business Number Funding (Validation and Authorisation) Bill.

Before I get on to the substance, I just want to comment on some remarks. Mr Faafoi: a rather gratuitous swipe at officials’ advice to the previous Government, and for once—unlike Minister Sage—a Government actually taking advice from officials and executing it. Mr Faafoi, I think your fixation on the less than relevant might go some way to explaining why the Minister is still outside of Cabinet, but give it a bit of focus and you might yet get there.

It’s only taken till the fourth bill on the Order Paper to finally have a reasonably justified cause to pass a bill under all stages under Budget urgency. The first bill simply put an unnecessary tax on motorists. The second bill put a greater tax burden on people that shouldn’t be required. The third bill is going to hurt businesses by placing a $70 million cost on them, but finally we have a bill—we finally have a bill—where the Minister is able to articulate very good reasons—

Hon Kris Faafoi: Bye, bye, Brett. You’ll be gone—you’re a listee.

BRETT HUDSON: —as to why this bill should be passed under urgency in all stages.

SPEAKER: Order! Order! I might be gone but it’s not relevant. If the member’s referring to that member, he should not refer to me. Thank you.

BRETT HUDSON: Wonderful. Nice to know I touched a raw nerve there, Mr Faafoi.

Hon Kris Faafoi: Ta, ta, Brett.

BRETT HUDSON: You’ll get there! You’ll get there, son, just keep working on it!

So finally we have a bill where the Minister is able to give good justifications as to why this should come under urgency. The potential implications, if this were to go through a full process, could be rather detrimental to the interests of businesses and certainly to New Zealand. We do support that this bill be worked through the stages in the way it is.

Another remarkable point, because we absolutely—we instituted the New Zealand Business Number, so of course we support this. What is remarkable is how being in Government changes people’s views. I sat on the Commerce Committee last term, when the Business Number was enacted, and I can tell the House and tell New Zealand that members who sat opposite to us now were not glowing in their praise of the New Zealand Business Number when the National-led Government was seeking to legislate it.

In fact, it was quite the opposite. The number of times I heard Dr David Clark tell us how it was a complete waste of time, a complete waste of money, and shouldn’t be done is quite remarkable. But here they come with a bill to validate the proper funding for it—which we do support—and all of a sudden they think it’s almost the best thing since sliced bread. Well, we agree with them on that too because, one thing: usage of the New Zealand Business Number as it develops is expected to save New Zealand businesses—how much is it, Mrs Jacqui Dean? Is it $80 million a year?

Andrew Bayly: $60 million.

BRETT HUDSON: $60 million a year. Not quite enough, but it’s good—$60 million a year—because that Government has just cost New Zealand businesses $70 million a year through the tourist tax, but we’re most of the way to recovering that gap that they have created, through the New Zealand Business Number that we put in.

We agree that it has been found that the funding mechanism—which was agreed—is a sensible way where businesses could contribute most of the expense towards a thing that they benefit from most of all. Now it’s been discovered that although that was a very sensible idea, it wasn’t in line with what is permitted under the Companies Act. It is appropriate that we take these steps to not only retrospectively permit that and to validate the payments made but to make sure that we will be able to collect levies for the New Zealand Business Number—80 percent of them, at least—from businesses, because it does reflect that they are the principal beneficiaries of the system.

The system has enormous potential. The reason we put it in place was to help speed interactions and efficiency of interactions between businesses and Government. The previous practice—and it will still exist to some degree or another—is that every entity, every business, but also, actually, every individual will have a unique identifier with every Government entity they have to do business with whether it’s a lot or a little, frequent or very infrequent. The New Zealand Business Number gives a unique identity that can be shared across Government entities, which means that certainty of authorisations of identifying the correct parties is so much easier, so much more efficient, and that will streamline interactions between business and Government. Into the future, one hopes, it will be expanded so that it can also be used across the private sector as well, and can do the same thing to streamline and make more efficient interactions between businesses and their customers’ businesses, their suppliers, and all entities.

It is a great idea. I’m very pleased that we instituted it in the first place. While it’s regrettable that the advice we took and acted upon wasn’t as effective as we would have liked, this is a good measure to address that. I commend this bill to the House.

FLETCHER TABUTEAU (Deputy Leader—NZ First): Members, do you realise what we just heard in that contribution from that member opposite? I’d just like to point out to the House that that member had the gall to stand up in front of this House and admit to everyone in here that he was the chair of the committee that oversaw this piece of legislation.

Brett Hudson: I raise a point of order, Madam Speaker. I was the deputy chair of that committee; the member could at least try to be correct.

ASSISTANT SPEAKER (Poto Williams): That’s not a point of order.

Hon Kris Faafoi: Oh, so no authority then.

FLETCHER TABUTEAU: Ha, ha! So, the deputy chair. If I were the members opposite I would be embarrassed. I would not be standing up talking about how wonderful this legislation is, which New Zealand First voted for and supported. If you go back and look at the notes, we were concerned about the funding, funnily enough, and here we are, quite frankly, on this side of the House, fixing up their mess. We’re happy to do it because we know it’d be good for business. Therefore, we support it. Thank you very much.

ANDREW BAYLY (National—Hunua): Thank you, Madam Assistant Speaker. It’s an absolute delight to be talking on this bill—

Hon Kris Faafoi: He definitely wasn’t the chair!

ANDREW BAYLY: —and I didn’t even have anything to do with it! But it is the New Zealand Business Number Funding (Validation and Authorisation) Bill, and as my colleagues have rightly pointed out, this is a very important thing for New Zealand businesses. As you know, we have 530,000 of those thriving businesses in New Zealand, creating all those jobs, providing all those services to New Zealand. That’s the backbone of New Zealand that we all refer to. But what people don’t realise is it’s the people behind those 530,000 businesses that make this the great country it is. That’s why this bill is so important, because what we want to do, and what we always wanted to do as a Government, when we were in power, was that we wanted to support small businesses. That’s not about imposing big costs on them, but to make sure that they can get on with as little interference from Government—those dreadful words: “I’m here from the Government to help you”. That’s not what we see as the way to help New Zealand businesses.

So when this was originally introduced under our watch, it was about promoting a way for small businesses to interact much more easily with New Zealand Government agencies. As we’ve heard, there are 60 Government agencies that, if you use your New Zealand business number, you can access all that range of entities and not have to continuously fill out all those mind-blowingly repetitive requirements that are often required. IRD numbers, GST numbers, all those sort of things—that’s the type of information that you would normally see on a New Zealand Business Number, and all the information that goes with it. So it’s not about the number; it’s the data behind it. So the whole purpose of this was to make sure that you only had to enter that data once, and so when you interacted, if you had to, with the 60 Government agencies, you could do it easily. That’s what we set about—and it’s been in place for a number of years.

The whole purpose of this, as I’ve said, is really about reducing the cost on small businesses. I thought it was interesting—my good colleagues have highlighted a $60 million a year saving for small businesses. We know that compliance costs are one of the greatest banes of the lives of the owners of small businesses, but, as the proposer of the bill, the Hon Stuart Nash, highlighted, the benefit is $1.2 billion if 60 percent of those using internet services currently were to actually go on and use this over time. So we’ve heard some of the talk about e-invoicing—the Hon Jacqui Dean talked about it—and it is very important. Recently, we’ve signed the Pan-European Public Procurement Online, which are all fancy words, but it’s Pan-European, and, actually, part of this, the first step, has been to join up with Australia to make sure that we can interact with Australian Government entities as well in a much easier way.

So this bill is about working through and making sure that that system has the right background to it. One of the issues that has been alluded to before—this has traditionally been funded out of levies that companies pay when they’re on the New Zealand Companies Register through the Companies Act. But, of course, this piece of legislation relates not only to companies but partnerships and sole traders. So this bill actually makes sure that the funding that is used to operate this system—and it’s a very small fund, or cost—is actually taken from the right source. This is what this bill is; that’s the validation and authorisation part of this bill.

I think this is very good. I think New Zealand small businesses—I would urge them to take the opportunity to take up their New Zealand Business Number. Everyone has been allocated a number; all they need to do is fill in all the background information once, keep it up to date, and you are in, ready to go, and it makes it so much easier for them. I’m looking forward to hearing the debate as we progress through this bill.

Hon JULIE ANNE GENTER (Minister for Women): Tēnā koe, Madam Assistant Speaker. Tēnā koutou e Te Whare. The Green Party supported the New Zealand Business Number when it was introduced by National. The reason we’re here today is, unfortunately, they didn’t do all their due diligence, didn’t do the legislation right, so now we have to pass this legislation under urgency to fix a problem around fee collection to ensure we’re not charging fees in an illegal manner.

The bill will also create a framework for future funding of the New Zealand Business Number, which is essential as it has the potential to revolutionise the way in which New Zealand businesses interact with each other and the Government. I think that’s something that we can all agree on. This Government is here to carry on the work, to do it properly, and to fix the mess that we inherited from National, because they’re so often so ideological. They don’t realise that all New Zealanders, whether they’re in business, whether they’re employees, whether they’re carers, whether they’re volunteers, whether they’re young people or old people—they all benefit from infrastructure and services, which are funded by taxes. They should be proud to pay tax, because that’s how we invest in our infrastructure. That’s how we invest in education, healthcare, and the services and infrastructure that New Zealanders actually want and believe in, because they are not selfish and ignorant like the National Party members.

TAMATI COFFEY (Labour—Waiariki): Thank you, Madam Assistant Speaker. I just rise to take a very short call on this bill. It’s a good bill, two parts to it—very simple. I commend it to the House.

Bill read a first time.

Second Reading

Hon STUART NASH (Minister of Revenue): I move, That the New Zealand Business Number Funding (Validation and Authorisation) Bill be now read a second time.

This bill does three things. First, it amends the Companies Act to provide that regulations under that Act can authorise fees collected from companies to be used to fund the New Zealand Business Number Register. Secondly, it amends the New Zealand Business Number Act to insert a regulation-making power to enable fees and levies to begin being charged under that Act. Thirdly, it validates the past use of fees charged under the Companies Act to fund the New Zealand Business Number Register.

Part 1 of the bill amends the Companies Act to expressly provide that the fees collected from companies can be used to fund the New Zealand Business Number Register. The vast majority of entities which have been issued with a New Zealand Business Number are companies. The fees that these businesses are being charged under the Companies Act already factor in an amount for the New Zealand Business Number. These amendments will not lead to any changes to the fees obtained from companies to meet the cost of the New Zealand Business Number; it will simply make transparent to businesses what they are paying for. It will continue to be possible to use the Companies Act fees to fund the New Zealand Business Number through to 30 June 2023.

Part 2 of the bill will amend the New Zealand Business Number Act to insert a regulation-making power to enable fees and levies to begin being charged under that Act. Charging businesses for the New Zealand Business Number in this way will not mean businesses will need to pay more than they otherwise would have, but it allows those charges to be set in a transparent and principled way. Businesses will be able to see what they are charged, and the bill requires that they are consulted before any fees, charges, or levies are set. Fees will need to be set under the Business Number Act by 1 July 2023. After this date, the ability for fees charged under the Companies Act to be used to fund the New Zealand Business Number will fall away.

The bill will also retrospectively validate the historical collection and use of fees set and charged under the Companies Act to fund the New Zealand Business Number Register. Validating the practice of using Companies Act fees in this way avoids the risk of the way the companies’ regulations have been set being challenged, and money used to fund the New Zealand Business Number Register needing to be refunded.

This bill is validating something that was understood and intended to be lawful but was not because of a technical error. If this issue had been identified as part of the development of the New Zealand Business Number Bill, I expect that the same businesses would have ended up being charged roughly the same amount. I commend this bill to the House.

BRETT HUDSON (National): Thank you, Madam Assistant Speaker. I rise to continue our support of the New Zealand Business Number Funding (Validation and Authorisation) Bill. It would be customary, particularly under an urgency motion, at this time to rail against the lack of a select committee process and the voices of New Zealanders and interested parties not being heard, and we have in fact done this on this Budget day on several occasions. But in this instance, we are firmly of the view that this is a very appropriate measure. In fact, as I said in my first reading speech, this is the first time in this Budget urgency that we have a bill that very legitimately does deserve the treatment of going through all stages under urgency.

It is regrettable that, in good faith, Government and, indeed, Parliament at the time, in the last term, sought to institute the New Zealand Business Number and to fund it through the levies under the Companies Act, believing at the time that that was a completely legitimate way and legal way of going about that. It certainly did reflect the reality and the fact that businesses themselves are the ones who benefit very much most from the efficiencies and gains that come from the implementation of the Business Number. So it is and remains absolutely appropriate that they pay the lion’s share of the cost of the systems in regime.

Regrettably, though, it has been determined—and as the Minister of Revenue said late last year, he received advice that the Companies Act does not actually legally permit the levies that had previously been raised to be used in the way they had been for the New Zealand Business Number. So, particularly in Part 1 of this bill, we will validate the levies that have been charged, and so, with the power of sovereignty of Parliament, we will actually make legal that which technically hasn’t been up until the final passage of this bill. But it is the right thing to do.

I don’t even believe that we will hear much in the way of comment at all from businesses or people in New Zealand. I think they can acknowledge that it was an error—although completely unintentional—that it is the right thing to do to correct it, that it is not harming anyone in the correction. No one is losing anything. No one is being charged more than they would otherwise have been charged. It is, in a sense, in a way, a little bit more than a typographical error but it is still in the nature of a small administrative error that needs to be tidied up, and it is appropriate that we do tidy it up through this urgency process. We continue to commend this bill to the House.

FLETCHER TABUTEAU (Deputy Leader—NZ First): I put it to people who watch the parliamentary debate to listen to the previous contribution given by the Opposition member Brett Hudson, and I put this to the House: all morning we have been regaled with comments about the process of urgency and what a travesty it is and how terrible it is, but when we’re fixing up the mistakes of the previous Government, it’s a case of “It’s not a problem and I think people won’t have an issue with it.” It’s quite an interesting juxtaposition of two lines of thought.

With that, I just need to make mention that whilst this did come in under the previous Government—New Zealand First supported it then—it is a sensible measure that needs fixing, and we continue to support it now. With that, I recommend the bill to the House. Thank you, sir.

Bill read a second time.

In Committee

Part 1 Amendments to Companies Act 1993

BRETT HUDSON (National): Thank you, Madam Chair. It’s a pleasure to rise and speak on Part 1, the part that will, despite one of the members opposite—the deputy leader, in fact, of the New Zealand First Party—wanting to make a mountain out of a molehill, validate the collection of levies up until this point, which, as we have discovered and the Minister of Revenue was advised late last year, do not fit within the legal realms or constructs of the Companies Act.

We have an opportunity which we’re taking in Part 1. Obviously, the bill itself is going to not only make sure that the levies are correct going forward but, in this Part 1, make it clear that although there was an error, the error itself didn’t invalidate the purpose of that levy that was collected and didn’t invalidate the reasons nor the actions that were taken with it in terms of instituting and running the New Zealand Business Number. But it does, of course, just give legal certainty. In fact, it could be no more certain in what it does to set out in legal stone that the levies that have been collected to date are deemed legal.

I do have a question for the Minister, and it may actually be under Part 2, so I’m going to hold it back for that, but I’ll flag the question now so that the Minister can consider it. That is: why didn’t he just choose to continue and make this a levy that would continue to be collected under the Companies Act into the future? Why a New Zealand Business Number Act levy?

Part 1 agreed to.

Part 2 Amendments to New Zealand Business Number Act 2016

ANDREW BAYLY (National—Hunua): Thank you, Madam Chair. I think one of the important things about this bill is the actual revenue-making power—the ability to charge entities a fee for, obviously, being able to access the New Zealand Business Number mechanism, and for its maintenance. I think, just in terms of its general overreach, or the extent of this bill, this bill has, obviously, got three elements to it. One of the primary aspects is it amends the NZBN—the New Zealand Business Number—Act to insert a regulation-making power that will enable the New Zealand Business Number Register and related functions to be funded from fees, charges, or levies payable by entities that have been allocated a New Zealand Business Number.

I think the regulating powers—and I’m talking specifically here about clause 9, new section 37A. One of the things I would like to ask the Minister is I think it’s very important for businesses in New Zealand to have clarity around what sort of fee they are likely to have imposed on them in the future. One is the quantum of fee, which is obviously very important, because that should be no more than what the system is required to operate on—and be kept to a minimum, of course. But I think, obviously, we’ve been using a mechanism through the Companies Act, and that’s one of the reasons why we’re putting through this validation and authorisation bill, but I’d quite like to know from the Minister for Small Business what the future intent is.

I know this gives a regulation-making power, which is a very wide power. It basically means the Minister can make changes without having to come back through Parliament. What is the likely form of those charges? Is it going to be a levy of some sort, or is it going to have some other sort of aspect to it, as noted before? I think that the mechanism is really important, because the whole intent of this was to make sure—not only is the business number very useful for people to be able to interact with the 60 Government departments but also we don’t want to now impose another imposition in terms of how they pay for it.

The simplicity of the model as it is at the moment is that it is charged under the Companies Act, even though it relates not only to companies but also to partnerships and sole traders. So perhaps the Minister could provide us with some more clarity around the future levy- or fee-making mechanism that he’s intending to pursue. Of course, there is some time, but one of the things about today, and the reason why there is urgency, is because in the bill itself, there is a requirement to make sure that we only—we have to make a change. This bill has to go through today, because some of the powers expire at the end of today, and so it’s very important that this happens today. But just that clarity around the future revenue-making power and the mechanism would be very helpful. I look forward to the Minister’s contribution on that matter.

Part 2 agreed to.

Clauses 1 and 2

ANDREW BAYLY (National—Hunua): Thank you—

Brett Hudson: Andrew, you don’t want to go home yet.

ANDREW BAYLY: No. We’re back on to the—

Hon Ruth Dyson: Clause 1 and 2.

ANDREW BAYLY: Yeah—1 and 2. I think the very important thing here is about the date, the actual name of it and also the date that’s been—

Dr Deborah Russell: Wake up, Andrew.

ANDREW BAYLY: I am here with us. Of course, that is very, very important, and that’s why I think the Minister for Small Business spent a lot of time considering these aspects about when it is going to commence. I think that is the point I was making before about the due date, when it’s going to commence. I think part of that, as I said before, this date—actually, one of the provisions in this bill expires today—expires today. I would love the Minister to stand up and actually take a call and also talk about some of those matters that I have just raised previously.

Clause 1 agreed to.

Clause 2 agreed to.

House resumed.

Bill reported without amendment.

Report adopted.

Third Reading

Hon STUART NASH (Minister of Revenue): I move, That the New Zealand Business Number Funding (Validation and Authorisation) Bill be now read a third time.

As I have mentioned, this bill fixes a structural problem within the New Zealand Business Number Act. It was a problem that we inherited under the previous Government and one that requires urgent legislation. In the short term, it provides a clear legislative signal to companies that the fees they are being charged under the Companies Act are being used to pay for the New Zealand Business Number. This bill also resolves the uncertainty over how the New Zealand Business Number has been funded in the past and draws a line under it.

In the longer term, this bill provides a legal framework for how incorporated businesses will be charged for the New Zealand Business Number. The exact amount businesses will be charged will be set after a transparent and principled consultation with businesses. This will provide businesses with greater transparency about how the Government is spending the money it collects from them and the value of the money being provided. Because companies are already charged for the New Zealand Business Number, separating this out into a discrete fee should not impact on the overall amount that businesses are charged.

I thank my officials for their work on this bill and my good colleague and mate the Hon Kris Faafoi for his support in getting this problem fixed. I commend this bill to the House.

BRETT HUDSON (National): Thank you, Madam Assistant Speaker. I rise to continue our support in this rather shortened debate on the New Zealand Business Number Funding (Validation and Authorisation) Bill. It has been acknowledged through the course of this debate that there was an error in the mechanism for collecting the levy. It was an absolutely valid levy. This bill takes care of that. That is the action of the bill, but it isn’t actually the import of the bill.

The truly important part of this bill is it validates and ensures that the New Zealand Business Number will continue to be in force, continue to be able to be used by about half a billion companies—half a million companies, sorry; we haven’t got that many companies in New Zealand. Half a million companies—500,000 companies in New Zealand. It will help and continue to ease transactions in business between small business in particular and Government. In the future, one can hope that it might also expand to help ease transactions between businesses and between businesses and customers.

It has always been a very good idea. Its implementation was important for New Zealand. Its objectives and the benefits it can deliver for the country and for the businesses that are part of it remain valid, and the actions we are taking today, the true import of them, go beyond fixing an administrative error and makes sure that the New Zealand Business Number can continue. We commend this bill to the House.

Dr DEBORAH RUSSELL (Labour—New Lynn): I rise in support of this excellent bill, the New Zealand Business Number Funding (Validation and Authorisation) Bill, which supports an excellent piece of business apparatus that enables business to be conducted with ease in this country. For that reason, it’s important to have the New Zealand Business Number properly supported, and this is what this legislation does. I commend this bill to the House.

ANDREW BAYLY (National—Hunua): Madam Assistant Speaker, I’m sure you’ll agree that there’s been a wide-ranging debate on this bill.

Dr Duncan Webb: Misleading the House.

ASSISTANT SPEAKER (Poto Williams): Order! Dr Webb, that’s not needed.

ANDREW BAYLY: Thank you for making some of these members more confined in their comments. I thought it might be useful just to re-summarise—oh, the other point. I find some of the comments from the Government members very uncharitable—very uncharitable, particularly that deputy leader of New Zealand First. When this very good piece of legislation was originally passed, and everyone now is claiming credit for it and saying what a great thing it was—and it is. It is. But there are things sometimes in bills, and we’ve seen it many times before, where there are errors made, and people take responsibility for the errors. But this was an administrative oversight, and I think some of those comments, particularly from Mr Fletcher, were unkind and uncalled for. In the light of a wellbeing Budget, I think he should reflect on those comments that he’s made. We on this side, we’re generous to people; we want to look after them. That’s why we want thriving businesses, and that’s why this bill is so good.

So, just to recap, it’s got three things to it. First thing: it “retrospectively validates the imposition, collection, and use, for NZBN register and related functions, of fees prescribed and collected under the Companies Act”. That’s what we’re talking about—that’s the error that we’ve got to try and address. It “amends the Companies Act 1993 to provide that regulations under that Act may authorise fees collected under the Act to be used to fund the NZBN register and related functions”. So now that’s giving the power to do it under that mechanism.

But this is the third thing, and I must admit I was very disappointed that I didn’t hear from the Minister on this issue, because I thought it was a very important thing: it “amends the NZBN Act to insert a regulation-making power”. That means the Minister has the ability to do this, of his own volition, without oversight of Parliament. He can insert a regulation-making power that will enable the New Zealand Business Register and related functions to be funded from fees, charges, or levies payable by entities that have been allocated a New Zealand Business Number.

Now, if it was a National Party Cabinet Minister, maybe some of us would have more, sort of, comfort in that thought. It’s a warm feeling. But because we do not know the Minister’s future intent—and that’s why I thought it was very important to take the opportunity when it was asked. He chose not to, and I’m very disappointed. But I think it’s important that the principle is that these fees must be the minimum possible, and the imposition of any future fees by the Minister should be in a way that does not make an increased administrative burden on our fantastic 530,000 small businesses in New Zealand—the backbone of our economy, and the people that employ the vast majority of all people, including some of the members of this House.

FLETCHER TABUTEAU (Deputy Leader—NZ First): It’s a pleasure to take a call on this—where are we up to?—the third reading. Ha, ha!

ASSISTANT SPEAKER (Poto Williams): It is third reading, if the member needs help.

FLETCHER TABUTEAU: I apologise. I just wanted to address the comments from the previous speaker, Andrew Bayly. Credit where credit’s due—let’s acknowledge the mistakes made by the previous chairman of the Commerce Committee and the member himself. This is requiring this parliamentary process to go—

Hon Shane Jones: The leaker—the leaker’s arrived.

FLETCHER TABUTEAU: —into urgency to fix up a mistake from the previous Government.

ASSISTANT SPEAKER (Poto Williams): Order! Order! Mr Jones, it’s not needed. Carry on, Mr Fletcher Tabuteau.

FLETCHER TABUTEAU: Thank you. So, in conclusion, I’d just like to stand in support of the legislation itself, not only having to fix it up—but, yes, the original legislation, New Zealand First did stand in support of the intent of that work because we do want to see the ability for business to do business in a smoother and easier way, and we agree that that’s what this legislation will do. With those words, I thank you in the House.

Bill read a third time.

Bills

District Court (District Court Judges) Amendment Bill

First Reading

Hon ANDREW LITTLE (Minister for Courts): I move, That the District Court (District Court Judges) Amendment Bill be now read a first time.

This bill will amend the District Court Act 2016 to increase the maximum number of District Court judges that can be appointed at any time from 160 fulltime-equivalent judges to 182 fulltime-equivalent judges. Judges, as many members of this House will know, are appointed by the Governor-General on the advice of the Attorney-General. This bill is being considered under urgency because Budget decisions to appoint an additional 10 District Court judges and two further Youth Court judges cannot be implemented until the District Court Act has been amended. Recruitment will commence immediately after the enactment of this legislation. The new judges will, as I’ve said, be appointed by the Governor-General on the advice of the Attorney-General.

I consider urgency to be appropriate because of the technical nature of the bill and because its primary purpose is to give effect to Budget decisions. The usual parliamentary process will delay these appointments for several months, and the reality is that the backlog is here now and the workload pressures on the District Court are great. There are already long wait times, and these will continue to increase until more judicial resources are added.

The courts play a vital role in New Zealand’s democracy, as every member in this House knows. They help to ensure social stability by giving confidence that rights can be upheld and that offenders will be held to account. Courts also provide a very important forum for the resolution of private differences and conflicts.

The District Court deals with over 200,000 cases each year. Over the past few years the amount of time it has taken to resolve cases, especially in the family and criminal jurisdictions, has increased. This is largely due to increases in the volume and also the complexity of cases. Family Court cases involving family violence, protection of children, custodial disputes, and family separations have all added to the workload that that court faces. The criminal jurisdiction deals with serious offending such as rape and aggravated assault. As District Court judges are required to deal with more cases, and more difficult cases with more events, more judges are needed to help manage the increased workload.

The more time people—whether they are plaintiffs, defendants, offenders, witnesses, whatever—spend in the court system or are waiting around for it, the greater the adverse impact on their mental, emotional, and, in some cases, physical wellbeing. These people are already vulnerable, stressed, and sometimes traumatised before they come to court. The pressure of having to recall everything that happened to them for months afterwards while the court case progresses can have a serious impact on their wellbeing. Delays also cause defendants who may not be guilty to spend more time in prison on remand. This severely disrupts their lives.

The two additional Youth Court judges will assist the Youth Court to deal with the additional work arising from the expansion of its jurisdiction to include 17-year-olds. In future, the Youth Court will deal with young offenders in the 14 to 17 year age range. This expanded jurisdiction is expected to improve reoffending outcomes for 17-year-olds—when I say “improve” reoffending outcomes, I mean “reduce” reoffending for those in that age bracket—because of the Youth Court’s rehabilitative focus. Those dealt with in adult courts have a 15 percent higher reoffending rate than those dealt with in the Youth Court.

This bill will also create a buffer of a further 10 unfunded positions to enable further judges to be funded through future Budgets without the need for further legislative change. I commend this bill to the House.

CHRIS PENK (National—Helensville): Thank you, Madam Assistant Speaker, for the opportunity to lead the debate on this side of the House in relation to the District Court (District Court Judges) Amendment Bill. The National Party supports this bill. Our message and our emphasis in relation to court matters is to support good initiatives that will help to increase the timeliness of the courts’ processing ability, and policy and practice in that area. The Minister has set out some of the difficulties that arise for our society as well as our justice system when justice is delayed. I will only resort briefly to that cliché about justice delayed equals denial of justice, and simply say that, to the extent that this bill is able to help to rectify that matter, then we do indeed support it.

A couple of notes that I would make, for the sake of providing some scrutiny to the bill: we do acknowledge that the bill arises from the line in the Budget whereby additional funding is allocated for the appointment of more judges. So perhaps that’s not inappropriate as far as it goes, but it does mean that there are some matters that we do need to give at least some attention to before such appointments are made, in the interests of understanding how they might go some way to achieving the aims that the Minister has set out.

So while we do acknowledge, as I’ve said, that this may assist to reduce the courts’ backlog, clearly there are other system reforms that can and should be contemplated. So we look forward, whether it be in hope or expectation, that there might be something forthcoming that area. Certainly, the Government has made noises about reforming the Family Court system and it’s currently conducting a review for that. Once those findings are known, that’s something that we will look forward to participating in, and, as needed, being constructive to resolve any genuine issues there, but also, of course, holding the Government to account in terms of what the actual results might be.

So on that note, it’s beyond my reading of any of the documents that have been provided—which I think indicates that the information is not there, but I’m happy to be corrected if that’s not the case—that there isn’t any kind of analysis about the extent to which this might actually improve matters. We don’t know, for example, how much we can expect by way of reduced waiting times for people to come up before the courts and then to be processed at that point. So while the Minister does make a good point in relation to the need to reduce remand times whereby people are awaiting trial, we don’t know how much bang there will be for this new buck in that regard. So that’s something that we would welcome ministerial or official advice on as soon as possible, I suppose. I say “as soon as possible” in the context of the bill, no doubt, being passed today.

Detail that we would also like on this side of the House is on where exactly these judges might go. I think the Minister in his speech was giving some detail about the jurisdictions within the District Court. I actually didn’t catch those fully, so that’s perhaps a shortfall on my part, but I’ll return to that. But, of course, there’s also the geographical aspect of where the judges might go. I’d be interested in any thoughts from the Government’s side of the House about where the need is greatest and where the priority will be in terms of those appointments.

Hon Andrew Little: The Chief District Court Judge decides the allocation.

CHRIS PENK: Sure. I understand, of course, that the Chief District Court Judge determines the allocation. That’s constitutionally appropriate, and the Minister points that out, but, of course, the decision to provide a certain number must surely be based on some calculation by the Chief Judge, if not the Minister. So presumably there’s been some advice to determine that if a certain number are needed here and a certain number are needed there, then that’s why we have the total number that has been sought and, indeed, given in this 2019 Budget.

One little discrepancy that we do have in terms of the numbers is that it appears that the departmental disclosure statement says that there will be an increase of 12 judges, but the bill says it will be an increase of 22. So perhaps that’s merely a typo, or perhaps some misunderstanding, but I will be asking the Minister at the committee stage of proceedings, unless he or one of his team can advise prior to that, which of those two is the correct number or if there is indeed some other explanation for the discrepancy between those.

I don’t need to take the full time of my contribution, but I think it is worth placing this change in the context of some other developments within the justice sector. One is that there has been some increase in legal aid funding, but just a one-off injection of, I think, $32 million. It’s hard to know exactly how that correlates with the additional amount of funding going on to the bench, but presumably some analysis has been done on that. I would like to think that that’s the case. So that’s something that we look forward to hearing from the Minister. Again, the committee stage might be the appropriate time for that.

So there’s not much more that I need to say in this, the first reading. I’ve indicated that we in the National Party will support the bill. We support it for the reason that reducing the backlog and processing times in the courts is a good thing, but with some questions around how it will all play out and, in particular, what kind of accountability the taxpayer and all those affected by the justice system can expect by doing so.

RAYMOND HUO (Labour): Thank you, Madam Assistant Speaker. It’s a great pleasure for me to rise to take a call, following my learned colleague Chris Penk, to support this bill. First of all, this bill is about numbers. This bill seeks to increase the maximum number of District Court judges from 160 to 182 fulltime-equivalent judges.

There are good reasons behind this bill. This is not only about numbers; the bill helps to ensure that victims achieve justice sooner and criminals face their day in court quicker. The coalition Government’s justice package will ensure that we have less offending, less reoffending, fewer victims of crime, and victims are better supported and protected. I commend this bill to the House.

Hon MARK MITCHELL (National—Rodney): Thank you, Madam Assistant Speaker. It’s a pleasure to stand and take a call on this, the District Court (District Court Judges) Amendment Bill. Can I just reiterate the support of our first speaker, Chris Penk, in saying that we will support this bill. I feel very strongly that this is a band-aid and I was very disappointed to see in the Budget that there wasn’t more money allocated to the justice sector. In fact, there was very little investment at all in the justice sector. I’d invite one of the Government members to stand and take a call to explain to us why there seems to be such a low priority, when you see figures like a 25 percent increase in serious harm coming before the courts.

Now, I acknowledge that we actually made some changes in Government, which I think are very good changes, especially in terms of youth offenders aged 17 being treated throughout—

ASSISTANT SPEAKER (Poto Williams): Back to the bill please, Mr Mitchell.

Hon MARK MITCHELL: Thank you, Madam Assistant Speaker. I am actually referring to the fact that in the bill they refer to 17-year-olds and I wish to address that issue, because that is legislation that we passed whilst in Government. I acknowledge the fact that now that 17-year-olds will be coming into the youth justice system there will be more pressure on the system. So I do support this bill. It goes a small way; not a long way. Like I said, it’s more of a band-aid, but it goes a small way in terms of trying to relieve some of that pressure and help some of the pressure that will be coming into the court.

But, anecdotally, we have got a big issue. Right now, we’ve got front-line police officers who are dealing with youth that are being referred back into the youth justice system, who are back out on the streets within five or six hours of actually being apprehended for serious offences. I had a very clear example given to me the other day: three youth offenders in a stolen car were pursued from the North Shore down to Ōtara on the wrong side of the road. They were arrested for serious offences; they were put into the youth justice system; they escaped and were back out on the street reoffending the next day, creating more serious harm.

So I want to see more investment. I said to the Minister—I was very clear with the Minister, when we came into Opposition and I met with him—that we would support any good reform that is brought to this House that we can see is going to have a positive impact on us as a nation and our communities. We’ll support that. I was very clear and said that we would not support the diluting of our parole laws, sentencing laws, or our bail laws. We don’t believe it’s right to transfer the risk back into the community.

ASSISTANT SPEAKER (Poto Williams): Second warning, Mr Mitchell. Back to the bill, please.

Hon MARK MITCHELL: Thank you, Madam Assistant Speaker. Sadly, we haven’t seen that investment; we haven’t seen those reforms in this Budget round. We’ve got this bill instead. We’ve got what I think is a very minor bill, which is actually a band-aid that is trying to be applied here with the increase in some judges; that’s good. Let’s get some more judges into the system. Let’s try and clear the backlog. I think that when you look at that number—a 25 percent increase in serious harm cases—it probably actually relates to the fact that they’re getting clogged up in the court system.

So in relation to that, it’s actually a good bill. It could go a lot further, but that’s the reason why we’re supporting it. But I would appeal to the Minister—and maybe in the committee stage we could have more of a debate around this—there’s got to be more investment. We have to see the plans. We have to see the reforms that were promised.

Just very quickly, the alcohol and other drug treatment courts: can someone please tell us—and be clear about this—are we retaining what’s been an extremely successful pilot with our drug and alcohol courts? Is the funding remaining?

Hon Andrew Little: Read the document, page 115—all there.

Hon MARK MITCHELL: Page 115—I’ll go back and have a look at page 115.

Hon David Parker: The answer’s yes.

Hon MARK MITCHELL: The answer’s yes—we’re retaining the alcohol and drug courts, and they’ll continue to be funded. The Attorney-General’s confirmed that. That’s great to hear—that’s great to hear—because we certainly couldn’t find that commitment. We would like to see that. If we were in Government, we’d expand that. We’d be expanding that pilot—

ASSISTANT SPEAKER (Poto Williams): The Hon Mark Mitchell will resume his seat. I have warned you several times about relevance.

Hon DAVID PARKER (Attorney-General): The Wellbeing Budget, this is another part of it. The Hon Mark Mitchell mustn’t have been here for the central part of the Budget, which was increased funding for family violence, mental health, and addiction services, which is the holistic way in which you actually reduce pressure in our courts, because you actually deal with the problems.

I just want to briefly catalogue the history to this. Some time ago, the number of District Court judges was increasing markedly. The prior Attorney-General, with the best of intentions, was increasing the number of temporary judges. The number of temporary judges ballooned; therefore the number of total judges ballooned and the cost to the Crown increased substantially, and there was a controversy as to whether there was any increase in output as a consequence. There was also the problem that temporary judges who hadn’t previously been judges were thought to somehow be accountable to the executive—cosying up to the executive in order to get a permanent warrant. The former Attorney-General thought that was wrong, and he was correct. So he stopped the appointment of new temporary judges and put a cap on the total number of District Court judges, which was a bit of an estimate because at that time there hadn’t been a judicial resourcing model completed to properly assess the number of District Court judges that were necessary.

Those temporary judges have since progressively been made permanent judges, but, as they become permanent judges, you can’t appoint a new temporary judge, and the effective number of judges—unless we fix this—decreased over time. Virtually all of those temporary judges are now District Court judges, and we have a problem with the number of District Court judges.

The problems have been made worse by some appalling reforms of the Family Court. The Family Court has some problems at the moment. Those so-called reforms from the Hon Judith Collins pulled lawyers out of it, as if lawyers were the problem, but said that a person who was applying for custody of their children following a separation—or not even related to a separation—could get an ex parte order if they alleged violence or sexual misconduct. As a consequence of that and the exclusion of lawyers from inter partes processes, the number of ex parte applications has exploded. Now, 70 percent of applications to the Family Court are decided on an ex parte basis. Families are dislocated, and the other party to that dispute has had to wait months if not years to get an inter partes hearing to actually put their side of the case.

As a consequence of that and our Government’s concern about that, the Chief District Court Judge has moved resources from the criminal jurisdiction to the Family Courts. The risk is then that the District Court criminal lists will get longer. The District Court has been very effective at dealing with their criminal list, but they’re now suffering this consequence of failure in the Family Court and have had to move resources as a consequence.

This measure that’s been brought forward by the Minister of Justice with my support increases the cap so that we can appoint some more permanent judges. In the meantime, we have actually been filling this resource gap by appointing previously fully warranted District Court judges post their retirement as temporary judges. That doesn’t raise the constitutional problem that temporary judges do in advance of a permanent warrant. That’s the way we’ve been filling the gap, but we need more permanent District Court judges. How they will be applied will be for the Chief District Court Judge, but I would posit that she will fill in the hole that’s been left in the criminal jurisdiction by the need to push people across to the family jurisdiction.

So as Attorney-General, I am supportive of this increase to the cap in District Court judges from 160 full-time judges to 182 fulltime-equivalent judges.

CHRIS BISHOP (National—Hutt South): Thank you very much, Madam Assistant Speaker. I want to thank the Attorney-General for that erudite explanation as to why this bill is needed. The National Party supports the bill. I agree with him that temporary judges are constitutionally suboptimal, and it’s good that we are increasing the number. As the Attorney-General has rightly highlighted, the volume of work going through the District Court is increasing at pace and is likely to continue to do so. It’s appropriate that Parliament responds by increasing the number of full-time judges that can be appointed.

I do want to make a point about why we are here on a Saturday morning doing this, because, frankly, although this bill is needed and important, I’m not sure it warrants the use of urgency post the Budget. If I may be so bold as to suggest this is an example of the Government making use of the ability to just quickly slip something through so that they don’t have to waste ordinary House time on a Tuesday, Wednesday, or Thursday. I won’t belabour the point too much, because past Governments of both stripes have utilised the opportunity of post-Budget urgency to do that, but I have to say, this would really—

Hon Andrew Little: At least this relates to the Budget.

CHRIS BISHOP: Ha, ha! The Minister of Justice says it would be a waste of a Budget otherwise.

Hon Andrew Little: At least it relates—“relates”—to the Budget.

CHRIS BISHOP: Well, sort of relates to the Budget. On that basis, everything relates to the Budget. On that basis, you could pass whatever you like, in the sense that the Budget appropriates money for literally the entire realm of Government expenditure. So I’m not really sure that’s the greatest excuse: on the basis that it “relates to the Budget”. Literally everything the Government does relates to the Budget. That’s the whole point. But the point is whether or not this is actually needed in the short term and is urgent. I do not believe that it is. We do support the bill anyway, but I hasten to add that I think it could have been put through its ordinary parliamentary process. It’s a sensible bill, and we support it. Thank you, Madam Assistant Speaker.

GOLRIZ GHAHRAMAN (Green): Thank you, Madam Assistant Speaker. I do believe, in fact—to respond to Mr Bishop’s point—that this is urgent. It’s certainly urgent at the front lines of our criminal justice system. I know the courts in Auckland—so Waitakere, Auckland City, and Manukau District Courts—regularly sit well beyond their daily 9-5 time slots into 6 or 7 o’clock at night, just for lack of courts available to get through the workload—

Chris Bishop: The hardship—6 o’clock. They have to work till 6!

GOLRIZ GHAHRAMAN: —particularly in the family violence court. Well, it does mean something, Mr Bishop, to court staff, who have to stay longer just to get through their workloads because there are not enough judges. So it is urgent for those workers in our District Courts at the front lines, and it does mean something to the victims waiting for their case to come to court, to trial, or to hearing. It does mean something for people waiting to have access to justice as accused persons.

So this is something that we commend. The criminal justice system is certainly the ambulance at the bottom of the cliff, and we do need to invest in all of the things that in fact keep our communities safe. That is, mental health care and domestic and sexual violence prevention measures, and we need to invest in eradicating poverty. We are doing some of those things, and we will continue to invest in those in future wellbeing Budgets. But I do commend this particular bill to the House today because it is urgently needed. Thank you.

Bill read a first time.

Second Reading

Hon ANDREW LITTLE (Minister for Courts): I move, That the District Court (District Court Judges) Amendment Bill be now read a second time.

As I said earlier, this bill will amend the District Court Act so that we can lift the cap, currently set at 160, to 182. We’re not intending to appoint an additional 22 judges at this point, but the Budget provides for additional funding for an additional 10 judges in the District Court and an additional two judges in the Youth Court. The bill is being passed under urgency because the need for those District Court judges is now urgent. The backlog of District Court cases—particularly in the criminal jurisdiction, because of the extra number of events related to each criminal case—is growing. The need for the Chief District Court Judge to have reallocated more judges to the Family Court to deal with that extraordinary backlog has meant that the pressure is really on the court.

The further consequence of that is that those alleged offenders who have been remanded in custody spend longer in custody. It takes longer for them to get a successful bail application through, and that is putting their liberty and freedoms at risk. We know that of those who are remanded in custody, only 40 percent wind up with a custodial sentence following conviction as a result. So there is some unfairness in that if we cannot equip the District Court to be more effective in the administration of justice in that respect. This will allow the District Court to manage cases and dispose of cases more efficiently and more effectively. Not only is that good for the public confidence in the justice system and the judicial system but it’s good for the individuals whose mental and emotional and physical wellbeing are often at risk or at play in these matters.

So passing this bill today means that as soon as we get back into things next week, we can start the recruitment process and, within a matter of months, we’ll have those additional judges administering justice, helping people dispose of their cases, and administer justice for those who are accused of offences, and that’ll be good for all of New Zealand. I commend the bill to the House.

CHRIS PENK (National—Helensville): Thank you, Mr Assistant Speaker. On this, the second reading of the District Court (District Court Judges) Amendment Bill, I wish to emphasize—but only briefly—a couple of the points that we’ve made previously, just for the sake of the record, but also to respond to a couple of comments that have been made by the Attorney-General. His historical explanation about the history of temporary and permanent judges has been interesting and actually helpful in terms of the debate.

The phrase cosying up to the executive by members of the judicial branch in relation to appointments, I think, some might regard as unfortunate, but it goes equally with an observation that if we’re looking at the relationship between the judiciary and the executive branch, then we need to note that it will be quite something that 12 new judges will be appointed in one hit by him. That’s a large exercise of individual power, discretion, and, I hope, judgment—if you’ll excuse the term in this potentially confusing way in relation to this bill. Let’s hope that his judgment is up to it, and I won’t make any comment about that for fear of making a comment, effectively, on the appointments that he makes. But it’s a large number to be making by one single Attorney-General at one time. So we’ll just see how that goes.

A couple of other points in relation to the way that the additional appointments might be made. The point about the general zeitgeist about decriminalisation in the Parliament at the moment—or at least some parts of it—I think is interesting when you consider whether we will be needing more or fewer judges as a result. If police, for example, in the realm of drugs—looking at reforms or, rather, changes to the Misuse of Drugs Act—are encouraged, indeed, directed, in the sense of the legislation, not in any individual cases, to send fewer cases to court, then, arguably, we would need fewer judges, not more. So we’ll watch with interest the way that that plays out in terms of the number of cases, as well as the number of judges and, of course, the processing times that I referred to earlier.

My final point, actually, is just a bit of a plea for a bench that appropriately reflects New Zealand today. I understand—and I haven’t seen it in any official documents, so with that disclaimer I’ll say—that there are relatively few judges of Asian extraction, and certainly, outside the Indian subcontinent, relatively few—in fact, possibly none. I might be incorrect on that, and, if so, then I shouldn’t place too much emphasis on it. But certainly it is incumbent upon the Attorney-General—any Attorney-General, I hasten to add—to ensure that an appropriate mix of perspectives and philosophies and community representation is achieved in those appointments, of which, as I say, he will be making many in a very short space of time.

Melissa Lee: Hear, hear!

CHRIS PENK: My colleague Melissa Lee says “Hear, hear!”, and I thank her for the guidance that she’s provided me in that matter.

So I will only emphasize, before resuming my seat on this, the second reading, that we do support the bill for the reasons outlined, but also flagging that there are a number of issues related to that and the way that it will play out in future years that we will be watching very closely indeed.

GINNY ANDERSEN (Labour): Thank you, Mr Assistant Speaker, for the opportunity to speak on the second reading of the District Court (District Court Judges) Amendment Bill. This bill does a fine job of unpicking nine years of damage under the past National Government by having more judges, because justice delayed is justice denied. Victims before our court system need to make sure they get a fast trial and they get their rights and their abilities to see justice quickly. That has been denied for a long time, as we’ve seen our courts grind to a halt under the past National Government. There are members opposite, as well as I, that saw that first-hand.

So I would like to say good work to the Government on making sure that this gets done quickly to make sure that people who are before our courts get heard promptly and that they get the justice that they deserve. Therefore, I commend this most excellent bill to the House.

Hon MARK MITCHELL (National—Rodney): I’m very happy to take a call on this—the second reading of the District Court (District Court Judges) Amendment Bill. It doesn’t seem that long ago that we were in the House debating the first reading of the District Court (District Court Judges) Amendment Bill. It seems like only yesterday!

Can I acknowledge the previous speaker, Ginny Andersen. Look, we do support this bill. We think that it will help expedite and clear some of the backlog. We haven’t seen a lot of detail around it. So if I cast my mind back to the first reading debate, the Green member Golriz Ghahraman made a very good point, and she raised the issue around whether there are going to be enough courtrooms available for the extra judges. So it’s just simple things like that that we need some detail on. Where are the judges going to go? How are they going to be prioritised so the pressure actually in the system is relieved? So I’m going to just take a short call to say that we do support the bill but, I guess, in committee stage we can start to actually dig into some of the detail around it. Thank you.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Mr Assistant Speaker. Very briefly, I just want to acknowledge the immense amount of work that the District Court judges do. It is absolutely the workhorse of our justice system and the entry point for most of the justice that goes on. I also recognise the intense work that judges do in the Rangatahi Courts and the Youth Court, and the fact that these judges will be able to address those issues with young people in the way that they do so well and thereby, hopefully, keep our prisons less full, and also clear those remand queues—the people who are on remand, often in custody—and then, again, lower the prison muster. So on all those bases, this increase in the District Court judge numbers is very much appropriate, and I commend this bill to the House.

Bill read a second time.

In Committee

Part 1 Substantive amendment

Hon ANDREW LITTLE (Minister for Courts): Thank you, Madam Chair. Just very briefly, the first part is the substantial part to the bill. It is the part that changes the number in section 12 of the District Court Act 2016 from 160 to 182. I’m advised by officials that the information that went up on the website on Thursday night had a typographical error, and notified that the figure was to be 172. For the avoidance of doubt, and for every member who is gathered here to debate this very important issue today, I just want to be very clear that the figure is 182. The Budget, however, provides funding for an additional 10 judges, plus two Youth Court judges. There is still some gap. That means in future years, as the Chief District Court Judge applies the judicial resourcing model, we can calibrate what is needed in terms of the number of permanent judges at any particular point in time.

I know that members opposite, in the first and second reading debates, have raised issues about broader criminal justice reform, and they are right to be aware of that. What I think we are realising is that there is a number of initiatives that need to be considered before you even get to legislation. One of those is a District Court being fully equipped to do the job they must do efficiently and effectively and in accordance with the accepted principles of justice that we all in here believe. We do that when we resource the court and the bench properly, which is what this seeks to do.

CHRIS PENK (National—Helensville): Thank you very much, Madam Chair. In this, the committee stage of the debate on the District Courts (District Courts Judge) Amendment Bill, I would like to just raise some very quick couple of questions. I can ask them very quickly and I’m sure the Minister can answer them very quickly, with the word “No” being one of the shortest in the English language—if you’ll excuse the Blackadder reference.

My questions are as follows. The first is whether analysis has been done about the extent to which we can expect faster court processing times. This is very much the raison d’être for the legislative proposal and indeed the Budget appropriation. On this side of the committee, as we’ve explained, we think that that’s a good thing in itself, but I would like to know, and we would like to know, whether some calculations have been made about the extent to which an improvement can actually be expected. So, for example, if 12 new judges are to be appointed now and then some other number that’s greater than that, up to and including 22 full-time equivalents, as allowed by the legislation, were to be made, then how much expected improvement is the Minister banking on by this extra allocation? So that’s my first question: whether the analysis has been done.

A second question, although effectively much the same, really, is whether he can give a commitment that there will be an improvement of some material degree in the processing times. I expect that in answering that question he’ll take into account whether other system reforms might be made to achieve that—for example, in terms of maybe the sitting hours of the courts or the physical structures in which judges will be sitting and so forth.

I look forward to the Minister’s answers on those questions in this, the committee stage of the bill. Thank you.

Hon ANDREW LITTLE (Minister for Courts): Just to respond briefly to those questions, just on the latter point. It would be inappropriate for the Minister of Justice, or any politician, to be making commitments about the way judges should conduct themselves. That would be to overreach the role of the executive, the politicians who make the resource decisions, and those who have to exercise judicial authority and judicial capacity.

This has been based on comprehensive work done by the Chief District Court Judge, with the support of the Ministry of Justice, and consulted on with the Attorney-General over using a judicial resourcing model that is internationally recognised, that has established that we have a structural shortfall in the number of judges to administer the number of cases and the case workload that we have going through our District Court.

On the issue about other resources, particularly buildings, we have a lot of District Courts that are underutilised throughout the course of any week. So I’m totally confident that, with the additional judicial complement, we will find spaces for them to sit and preside and dispose of more cases. The reason we are bringing this here is that we have great confidence that this will assist in the more rapid disposal of the District Court case workload, criminal jurisdiction, the family jurisdiction, the Youth Court jurisdiction, as well as the civil jurisdiction in their court.

HARETE HIPANGO (National—Whanganui): Madam Chair.

CHAIRPERSON (Poto Williams): The question is that—apologies. It’s moving quite quickly. I’d appreciate members seeking the call quite quickly as well.

HARETE HIPANGO: Yes, noted. I commend the Attorney-General and the Minister of Justice in relation to the increase of numbers of our District Court judges from 160 full-time to 182. It’s a matter where there has always been—certainly in the years of my experience practising as a lawyer for about, as is known, 30 years—a demand on the work of our judges, and that it has never been enough.

So to express to the Minister the concern associated—it’s acknowledged with the increase of an appointment of another 22 judges. There is the issue of the attrition rate. We have a number of very senior, experienced judges who are nearing their retirement age. I’m well aware—because I do continue engagement with my colleagues and also judges serving, and that is in a private capacity—that we are going to experience in the next two years a very high attrition rate with our senior judges reaching the retirement age. So how is that going to be addressed by the Government, in relation to maintaining the numbers that are required on the bench, and how will that be managed, because that will be an issue? Of course, that will continue to be an issue, in terms of managing the volume of people who are utilising the services of the courts and the flow-on into the remand period of time. So if we do have a number of judges retiring, those positions haven’t been—with reappointments made in the appropriate time, we’ll see that those longer periods of waiting time on remand may well be reactivated.

Hon MARK MITCHELL (National—Rodney): Madam Chair, thank you. Just very quickly, I wanted to address the Minister in the chair, the Minister of Justice, and thank him for clarifying. Like him, I’ve got a high level of confidence in our officials at the Ministry of Justice. They would have done the background work on this. I am just interested to know, does the Minister feel that this bill is going to significantly address those issues, or is there still some way to go in terms of the analysis that has been done on this? I think that an earlier contribution is that justice delayed is justice denied. We all accept that. Getting cases through into court and through as quickly as possible is not only good for the person that’s been accused but, of course, for the victims and everyone involved. So I’d just be very interested, if the Minister has it now, in terms of the analysis, what impact is this actually going to have in terms of being able to start to clear that backlog? Thank you, Madam Chair.

Hon ANDREW LITTLE (Minister for Courts): Just responding to that query, this is not a linear equation. We know that the way that—certainly in the criminal jurisdiction—many of those cases are being conducted is changing, partly in response to the Criminal Procedure Act. But, actually, the response to the Criminal Procedure Act is to try and push the envelope on the scheduling requirements that that Act sets out. We’re seeing more of that. In addition to that, what we’ve seen is a growth in the number of cases where more serious charges have been laid but, through successive appearances in the court, eventually an alleged offender is persuaded to plead guilty to a lesser charge. That leads to more court events and a longer period of time before the case is disposed of. So there are all those sorts of things going on.

I am totally confident that adding this extra number of judges will make a material difference to the time delays that are currently being experienced in all the jurisdictions across the District Court. Quantifying that is, of course, almost impossible, because every case is different. Part of the challenge of justice is to make sure that the parties involved—victims, defendants, plaintiffs, respondents—are able to respond effectively to what is lodged on the charging sheet or statement claim. They can respond effectively, prepare their case, so that justice is done. But this will make a difference.

Part 1 agreed to.

Part 2 Consequential amendment

Hon ANDREW LITTLE (Minister for Courts): This part of the bill need occasion no debate whatsoever. It refers to a part of section 12 of the Act that simply lays out an example. It describes the difference between the absolute number of judges and the equivalent full-time number of judges, and it substitutes the number 159.5 with 181.5. It is a part of the section that is illustrative only, and there can be absolutely no debate about the merits of it at all.

Part 2 agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

Clause 3 agreed to.

House resumed.

Bill reported without amendment.

Report adopted.

Third Reading

Hon ANDREW LITTLE (Minister for Courts): I move, That the District Court (District Court Judges) Amendment Bill be now read a third time.

I don’t want to delay the time of the House much longer, except to say that this bill has been exhaustively and thoroughly debated and examined by the House in its first and second readings and in the committee of the whole House stage. Without wanting to speak on behalf of the members opposite, I think the House can be thoroughly assured that the bill is justified and that the maths adds up. That is to say that when we say that we are providing for an additional 22 judges on top of 160, that 160 plus 22 equals 182. We’ve had that verified. In the illustrative part of the bill, clause 5 amending section 12, the reference to “159.5”, when we add 22 to that we get to 181.5. I think that has been verified by international experts, mathematical and otherwise.

I go back to the substantive justification for this bill, and that is that our District Court is overloaded. It has a phenomenal workload, not helped by the growing workload in the Family Court, and, of course, the jurisdictional changes in the Youth Court. So even without the changing nature of counsel and other conduct in the criminal jurisdiction, just in the Family Court and just in the Youth Court those changes there alone would have justified an additional judicial complement.

The way this bill is structured means that if following application of the now accepted judicial resourcing model in the future calls for additional judges, we won’t have to come back to Parliament for an incremental adjustment. That can be made. That said, I want to say, constitutionally it is important that Parliament determines the maximum number of judges. That should not be left up to the executive alone. That pays proper respect to the place of the judiciary and its relationship to both the legislature and the executive, and it is right that it is this Parliament that should determine the maximum number of judges. It is up to the executive to make sure that they are properly equipped and resourced. This bill does that, and I commend it to the House.

CHRIS PENK (National—Helensville): Mr Assistant Speaker, thank you. On this, the third and final reading, “good morning” is the word. Can we ask: are we still in the morning? Unless we decide that we’re still in Thursday, as I think is technically the case, in the arcane ways of this place. But I can probably be relatively brief as well. I’ll just take a few moments to set out for the record, as is traditional in a third reading speech, even in a truncated process, just to place a bit of emphasis on the themes that underlie our support for the bill and also to just raise again for the record a couple of notes about our expectations about how the system can and should be improved, as we’ve, effectively, heard promised here today.

So, first, the most obvious point is that fast, effective justice is needed for society in general; in particular, those who are going through the system at any given time. I make particular mention of those who aren’t going through the system but are waiting to go through the system: that time spent awaiting trial is particularly egregious from the point of view of alleged offenders and also victims or complainants and so forth. I think that the Minister of Justice makes a good point in that regard, and that goes a long way to underpinning our support for this move.

We’ve heard about the need to reduce the courts’ backlog, and that’s something that we support, if that can be achieved by this bill. I think probably the other side of the House wouldn’t overstate the case and suggest that this would be some sort of silver bullet, but, having said that, the comments of Ms Andersen do raise the stakes somewhat. She’s laid at the feet of the last National Government the increasing backlog of cases that’s been around actually for quite some time. So my clear expectation is that she accepts responsibility if those do not reduce. While the comments of her colleague the Minister were much more measured in understanding the extent to which Parliament, or the executive for that matter, can and should influence the judicial branch, her expectation is that she and her side of the House will be able to count themselves responsible for an immediate improvement in that regard.

Of course, as is traditional in debates about the judiciary, I’ll quote Spider-Man, which is to say that with great power comes great responsibility. The legislative equivalent, of course, is that with great urgency comes great accountability.

Hon Chris Hipkins: We’ve jumped the shark.

CHRIS PENK: So with—and this is perhaps the sequel, but, spoiler alert for the Minister of Education opposite, no doubt it will become part of the curriculum soon—great urgency requires greater accountability.

With such an immediate change being made, with appointments being able to start as early as next week, perhaps Tuesday—I would suggest the Attorney-General might reasonably give himself Monday off, it being a public holiday. But with Tuesday morning seeing the start of the process of additional appointments to the bench, we can expect an immediate change in results, seeing as that’s what we’re being promised today. I do acknowledge, for the record, that the Minister has said that there isn’t a linear equation whereby we can say X number of judges will increase the speed of processing at a certain particular rate, and I think that’s a fair comment. I wouldn’t suggest there would be some sort of sliding scale that could be so applied in such a straightforward manner. But we do expect and hope and will hold to account the Government for its statements that this will be making a material effect—excuse me, a “material difference”. So for that reason we welcome those commitments and we will hold them to it. We support the bill, therefore, in hope and expectation that these things will come to pass, noting, of course, that the reason behind it is important, as we acknowledge on the side of the House.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you. It is with great pleasure I rise in this third reading—just acknowledging the workload of the District Court and the fact that with that huge workload they are struggling, simply to manage these cases. I think what’s happened is that tipping point has been reached where the efficiencies have simply been lost. What we’re trying to recover here with these additional District Court judges is, really, to give them the resources to both hear those cases and manage them effectively. It’s hoped, I think, that greater efficiencies will be achieved over time, once that backlog’s been cleared, once those systems are put back in place and those hard-working judges are not simply running just trying to keep up with the workload as it is. So with this great bill, a great initiative by our Minister of Justice and our Attorney-General, as you’d expect—I commend this bill to the House.

Hon MARK MITCHELL (National—Rodney): It’s a great pleasure to take a call on this, the third reading of the District Court (District Court Judges) Amendment Bill. I don’t know if I’d necessarily agree with the Minister for Court’s comments around the vigorous debate that’s taken place on this bill, but I think that we’re all united on one thing, and that is that if this makes a difference in people’s lives in terms of victims and their families getting through the court process quicker, people having justice delivered more quickly, then it’s actually a good thing to do.

I appreciate the fact, in all seriousness, that during the committee stage the Minister did answer the questions that we put to him. He did a good job of that, but we will be watching very carefully to see that the information and the stats being presented to him by the justice officials, which I know will be good—but what are the measurable outcomes? What are we actually achieving here? I think that’s going to be very important.

I want to acknowledge the chair of the Justice Committee, Raymond Huo. Although we did bypass the select committee process, he made a strong one-minute-30 contribution throughout the passage of the bill. So I want to acknowledge him. The Green Party made a valiant effort as well—we got to about two minutes—and Ginny Andersen. I want to acknowledge Ginny. She’s got a great background and she’s passionate about law and order issues. I think she might have over-egged it a little bit when she said that this is the greatest policy that we’ve seen in nine years. I’m not sure whether you should be announcing this, but maybe this is the reform that we’re waiting for.

Can I acknowledge the Attorney-General. We were lucky to have the Attorney-General in the House at the first reading, and he made a very good contribution around the technicalities in the bill that was acknowledged by my colleague Chris Bishop. Finally, can I acknowledge Dr Duncan Webb for taking a call in the third reading.

We will be watching carefully, just to make sure that the effects and the impacts that we want to see in our justice system are achieved, and there may be an opportunity to even extend a bill like this if it shows that it’s starting to have the effect and the impact we want to see inside our criminal justice system. I’m very happy to recommend this bill to the House. Thank you.

KIRITAPU ALLAN (Labour): As a new graduate straight out of law school, my first job was clerking for the District Court judiciary in the Hawke’s Bay. I saw first-hand the work burden on those courts, and it’s incredibly pleasing to be able to see that this Government, under the leadership of the Hon Andrew Little, is increasing the number of judges that we will have in the courts to ensure that that workload is reduced. So I do thoroughly commend this bill to the House.

CHRIS BISHOP (National—Hutt South): Thank you, Mr Assistant Speaker. Just a brief contribution from me. It’s a funny phrase, “wellbeing”. I’m not sure what is particularly “wellbeing” about Saturday morning urgency, but, anyway, here we are—the new, family-friendly Parliament.

We support this bill. The Attorney-General has outlined for the House exactly why it is required, alongside the Minister of Justice. I think some of the comments around the Family Court reforms and various other aspects of the last National Government are mean-spirited, but, in the spirit of wellness and wellbeing, we will leave those aside—[Interruption] Yeah, that’s right—that’s right. We will leave those aside for now, and I think it’s for the Parliament to note that it’s doing the right thing here.

We on this side of the House look forward to speedier and more effective resolution of disputes, and we commend the bill to the House. Thank you.

GINNY ANDERSEN (Labour): Thank you for the opportunity to speak on the third reading of the District Court (District Court Judges) Amendment Bill. I’d like to acknowledge my colleague the Hon Mark Mitchell for his fantastic contribution towards this. It’s always a pleasure to be on a select committee with the Hon Mark Mitchell, but I would like to clarify that in my previous statement I did not say that this bill, this policy, was the greatest thing in nine years; what I did say was that the former National Government did diddly-squat in the nine years that they were doing it. So I think it’s a great bill. Victims are getting justice, offenders are being held to account, and I commend this bill to the House.

Bill read a third time.

Bills

Education (School Donations) Amendment Bill

First Reading

Hon CHRIS HIPKINS (Minister of Education): I move, That the Education (School Donations) Amendment Bill be now read a first time. I nominate the Education and Workforce Committee to consider the bill and, at the appropriate time, I intend to move that the bill be reported to the House by 19 August 2019.

This bill delivers on the Government’s commitment to restore the right to a free schooling for all New Zealand students. The Wellbeing Budget reflects our commitment as a Government to break down financial barriers to participation at all levels. Budget 2019 is about reducing child poverty and improving wellbeing.

The Education Act of 1989 provides that every person who is not an international student is entitled to free enrolment and free education at any State school from their fifth birthday until 1 January after their 19th birthday. However, we know that while this is the legal commitment that we have to free schooling in New Zealand, it is not a commitment that has always been delivered on. Many schools are dependent on financial contributions from parents, and that does need to change. The request for donations can place significant financial pressure on parents, and there is often significant pressure to pay what are supposed to be voluntary contributions.

Access to free education is the best way to ensure that every New Zealander has a fair shot at success. This year’s Budget delivers the largest Vote Education increase in 10 years. There are around 1,703 schools in New Zealand who will be eligible for an additional $150 per student if they choose not to ask their parents for donations, if they choose to accept this policy. Boards of trustees who opt in to receive the $150 per student per year will have to agree to certain conditions, the main one being to stop asking for donations from parents. This will be in place from the beginning of the 2020 school year. The scheme will be delivered through a new discretionary grant for decile 1 to 7 schools, and it will result in the largest increase in schooling operations grants for those schools in 10 years. By decreasing the number of schools that request donations, we’ll be reducing the pressure and the widespread expectations that schools need to ask parents for donations.

The Education (School Donations) Amendment Bill amends the Education Act of 1989, and it will support schools’ compliance with the donation scheme. It’s a very simple bill. It creates a new category of grants called “discretionary grants”. Discretionary grants are grants that the Minister of Education may pay to boards, subject to the condition that a board does not solicit voluntary payments from parents. The bill enables the Minister to seek conditions on the payment of this extra funding—primarily, that boards stop soliciting voluntary payments from parents—and if these conditions are breached, the bill enables that funding to be recovered from boards. These changes will give participating schools a strong incentive to understand and comply with the conditions of the donations scheme. It will alleviate the risk of schools double-dipping, and it will ensure that parents are relieved of the pressure.

Schools that opt in to the donations scheme will be able to ask parents and caregivers for payments related to additional activities outside of the curriculum—for example, Saturday morning sports. They’ll also still be able to run general fund-raising activities, like school fairs and galas, and it does not prevent them from seeking donations from sources other than parents—for example, community trusts and other forms of grants. It doesn’t prevent them from receiving unsolicited donations. So, if parents do want to make a donation to the school that hasn’t been asked for, of course they are welcome to continue to do that. It simply prevents the school from asking for it.

This initiative builds on other commitments the Government has made to break down financial barriers to participation in education at every level. Fees-free tertiary education, the scrapping of NCEA fees, the scrapping of scholarship fees—these are significant advances that have already been progressed. This year’s Budget also increases funding for early childhood education to reduce the financial pressure on parents. This bill allows us to take the next step towards a genuinely free schooling system by ending the pressure that many parents face to pay school donations, and I commend it to the House.

Hon NIKKI KAYE (National—Auckland Central): I am pleased to take a call on the Education (School Donations) Amendment Bill. Firstly, can I just acknowledge that at the heart of this bill, we are having a conversation about how we reduce costs to parents, but I do want to acknowledge the irony that we are in urgency and we have been rushing through a range of taxes that are going to increase the cost of living for many New Zealanders. I take the fuel tax, that will increase the cost for, particularly, disadvantaged New Zealanders and those people on fixed incomes.

National will support this bill through its first reading. However, we have massive concerns, and I want to look to Andrew Little in part of those concerns. If you look at the history around this issue, Labour previously promised that they would scrap school donations. Under Andrew Little as leader, they said that school donations would be gone. What we know is that then Chris Hipkins, effectively, came in and said, “No, we’re not going to scrap school donations. We’re actually going to try and incentivise them to be gone.” So they dialled back their policy, and it became a $150 incentive to try and incentivise people to not charge donations.

The reality is there still is a group of parents out there that believe that because of Labour Party press releases where they said “We’re going to end donations.” that that’s exactly what they would do; instead we got the watered-down version on the eve of the election. However, when they came into Government, just like everything else, we know they’ve had bad priorities—they spent money on planes and trees and a whole lot of other things—and so education has missed out. We know that there are at least 50 broken promises in education, and we know that they’ve got bad priorities.

So, again, what happens? We have the Budget read, and it is dialled back again. I am getting emails in my in-box from principals who are saying, “I want Labour Party members to tell me why they have tens of thousands of dollars less than they expected.” Some schools said to me that they actually relied on those promises. I’ve got schools that are tens of thousands of dollars short. I’ve got a school in a town area that is literally the only school that will not apply to this policy.

So National will support this bill through to its first reading, but we will certainly be pointing out the inequities—the huge inequities—that this Minister of Education is creating with this bill. One of them, as I’ve mentioned, is around these decile 8, decile 9, and decile 10 schools that are excluded. Also, it’s really important to understand that this is on the backdrop of Labour stalling the policy around scrapping deciles and investing additional money into deciles. So I have examples of schools that, again, expected to have a much more fair funding system because National had put in the funding review, but it also argued to scrap decile systems and put additional funding in. So you’ve got schools that are now losing twice. They’re losing because they don’t have that fairness of a new equity funding system with additional cash, and now they’re losing because they’re excluded from a policy where they don’t have to charge donations for an incentive payment. So you’ve got huge inequity that National will be talking to.

The next part is that I’ve just been on the phone to the integrated schools; that is, 90,000 children in New Zealand—330 schools. This is typical of the Minister of Education. He doesn’t care about partnership schools. He doesn’t care about integrated schools. He doesn’t care about private schools. He tries to get rid of partnership schools, which he pretty much successfully did. Integrated schools—you’d think that the Minister’s office would have made a basic phone call to the integrated schools to say, “Hey, you’re in.” or “You’re out.” So there are 90,000 children and 330 schools that don’t know whether they will be part of this policy.

So National will not only be raising the 600-odd schools that have been excluded because Labour ran out of money and spent it on bad things, but we will also be raising the 330 schools that have no clue, no idea, as to whether this legislation applies to them. There are disadvantaged children in decile 8 schools, decile 9 schools, decile 10 schools, and also in integrated schools. So we have some serious, serious issues of equity to deal with. And I do want to acknowledge that this is absolutely on the backdrop of National doing a funding review that said we’ve already got huge inequity in our school system and we need to make changes to the decile system, but to then put on top of that a new donations-type system—that’s going to exclude a whole lot of people.

I want to talk about some very individual stories. So one principal has said to me that their school will be the only school in their town that misses out on this. It is in the order of $100,000. That is so much money. We will certainly be hoping that the select committee process will be robust so that those hundreds of schools can turn up to the Education and Workforce Committee and talk us through their operational grants, their decile funding, and also now this inequitable policy that the Minister has put up.

I want to make some other comments about the cost of education. National has, obviously, said, “Where we can, we want to work across the House on reasonable policy to reduce the cost to parents.” A great example of that was in reducing the NCEA fees. National previously had a different position; we changed our position and we said, “We should scrap NCEA fees.” I want to acknowledge the work of the Minister on that. All political parties are supportive of that policy.

We certainly believe that there are a number of other areas where we do need greater clarity. My message to the Minister is that it’s all very well to have a policy around donations, but he knows as well as I do that there is a lot of grey and there are a lot of conversations going on about what exactly schools can charge for. This issue of whether schools can be charging around curriculum-related activities—there are going to be schools that are going to come to the Education and Workforce Committee and ask those questions. We know that the ministry has, really, had, sort of, what I would call inequitable treatment around some schools in New Zealand about what they can and can’t charge for. So my other plea to the Minister is to say not only have we got an inequitable policy but there are some really serious issues that we need to deal with generally about what parents should or should not be paying for in terms of our school system. So National will certainly be raising a number of those issues.

The other issue that I want to raise in terms of the bill—and, again, I’ve had a range of people contact me in the last 24 hours about this—is that there is a clause in there, and, again, we’ve got to dig deeper to find out what the Minister’s thinking is. It basically indicates that the Minister has maximum discretion to change the payment. So what does that mean? Does that mean that if he sees a board that ends up potentially asking for donations, he can, obviously, say no, he’s not going to enable them to get that grant, or does it mean something else? What some schools are saying to me is that they are deeply concerned that someone could be sitting in the Beehive, or you could have other officials, that could somehow make a decision that schools would get less, depending on their whim of a judgment. So National will certainly be saying, “We need greater clarity in law around exactly what the Minister’s powers are.” Of course we want to reduce costs to parents; that’s why we’re supporting this bill through the first reading. But we absolutely need to have clarity about exactly what the Minister’s powers are.

So, finally, I just want to raise a few wider issues around education that are very relevant to this bill. The first is that we had the largest education industrial action in our nation’s history, and people have been asking why—and it’s very relevant to this bill around school donations. It cuts to the heart of how much money is left in the pot in terms of education, and that is relevant for a bill that has a price tag of $265 million. We know that there are about 50 promises that haven’t been delivered in education. We know that we’ve got additional strikes coming. So people are asking, “What are the priorities in terms of this Government around education funding?” As I said before, we think that the Government has prioritised planes and trees over education, but we will support this bill to the Education and Workforce Committee, because at the heart of our desire, which we think we share with the Government, is to reduce costs to parents. That’s why we supported the $50 million around getting rid of NCEA fees, and that’s why we fundamentally want to reduce costs to parents.

However, we are only supporting it through this first reading, at this stage, because of the hundreds of schools that have inequitable treatment, and the major issues of clarity that we need to get around schools, like integrated schools, that represent 90,000 children in New Zealand. So National supports this to the first reading, because we support reducing costs to parents, but the Minister needs to resolve all of the holes that are in this bill. I support this bill to the House.

JAN TINETTI (Labour): I’m delighted to take a call in the Education (Schools Donations) Amendment Bill. I just think this is an incredible bill that is going to make the biggest difference to education in this country.

I’ve been commenting to a couple of people in the last few days, saying that if I was still in my former job that I would be really, really excited. In fact, this was probably the first Budget in a long, long time that I would have been incredibly excited about. Now, an example of that is how that played out. I can remember, I think it was the 2015 Budget from the previous administration—I think it’s either that or the 2016 Budget—but I remember at the time being so despondent after that Budget. It was probably the Budget that made me feel very, very upset because our school operations grants at the time were frozen, and that made a big difference to my school and to the money that we had to work with.

The previous speaker that just sat down, Nikki Kaye, talked about their funding review at the time, and how they had targeted funding to children. I know in my particular school that 75 percent of my children were actually under the targeted scheme. We were told that that would bring in more funding. Well, it just so happened that the following year my funding went down by $9,000. It was the same amount of children—exactly the same amount of children. With that funding freeze in place, $9,000 was what my operations grant went down by.

Yesterday I spoke to the now principal of my former school, who could not thank me enough for this particular bill coming through. He said to me that this is going to make between $25,000 to $30,000 difference to that school, and that will make a huge difference to those children in that school and what the principal can actually offer. So this bill will make a difference.

I do need to tell one more story. I got another call from a principal yesterday, a local principal, saying “Thank you, thank you, thank you.” It was a decile 5 school, because we often hear about the decile 1s, but let’s hear from the mid-decile schools and how this bill will make a difference to them. A decile 5 school principal said to me, “I can never get my donations in. I’m so excited because this bill will make $85,000 difference to my school.”—an $85,000 difference. I can only imagine, as a former principal, what I could do and the plans that I could be making for next year with that big difference.

So with that, I’m very, very excited about what this bill will mean for the children of this country, and I have no hesitation in commending it to the House.

Dr PARMJEET PARMAR (National): Thank you for the opportunity to take this call on the Education (School Donations) Amendment Bill.

The first point is that I don’t understand why we are debating the first reading of this bill under urgency. The normal turn-around time for bills is up to five to six months. Yes, there are exceptions, like the euthanasia bill, but to put under urgency the first reading of this bill—I don’t understand what the need for this is, because in this school year, half of the school year has already finished and it’s too late to implement this policy this year. So we will have to wait for this policy to be implemented in the next school year. Normally, schools start in February. For that, there is enough time for this bill to go through the normal process, so I don’t see any need for this first debate to be going through urgency.

I think it is being done under urgency only because last year, the Minister of Education failed to put forward this policy, and now, because of the pressure that we created, a pressure has been put on them to deliver on their election promise. The Minister wants to look like, yes, he is doing something about it, so we have this bill in front of us and we are debating the first reading of this bill under urgency.

Schools would have already sent out letters at the start of this term to all the parents, asking for their voluntary donations. I know that parents would have already made arrangements with their school, if they haven’t been able to pay that full amount, to pay in instalments. It is going to be really messy if schools go back and say that they’re going to return those donations and actually are going to take up this grant. It’s going to actually create a very messy situation for those schools, and I’m sure that schools don’t want to opt for that.

Now, looking at this bill exactly, decile 1 to 7 schools—that is what this bill is targeted at. Why? It’s because the Government’s policy that they campaigned on before the election was to make schools donation-free. They said that they would get rid of all donations. This is not going to get rid of donations from all schools, only for schools that are in deciles 1 to 7. The basis of this policy, as I understand it, should be actually to address the hardship issue—the hardship issue. It’s not like parents don’t want to pay anything for their child’s education, or for the school to be able to deliver on their curricular or extracurricular activities. It’s the hardship issue, and that is not addressed. The Minister has completely failed to address that issue.

Very quickly, without taking too much time, I would like to present two scenarios here. There are families, and it is their choice where they want to live, but they could be a family who, because of their hardship issues, could be living in a low socio-economic area, but they have this desire and they choose to send their child to a school that is in a high-decile area. We know that schools run ballot systems, so they’ll put their child’s name in that ballot to be drawn, and if their child’s name is drawn from that ballot, the child gets admission into that school.

What happens in that situation? That family is in a low socio-economic area because they’re on a low income. They cannot afford to rent in a high socio-economic area, or there are other circumstances, but they’ll have to pay this voluntary donation to their child’s school. So how is this going to address that hardship issue? It doesn’t. No, it doesn’t address that hardship issue. Yes, I’ll repeat that.

Now, let me go on to my second scenario. So this family, if they think that they really want their child to be in that school that they have picked for their child and their name is not drawn from the ballot, the family could push their financial circumstances and move into that area so that they are in that zone, so that their child can get admission to the school that they have picked for their child. Now, this family’s already pushing themselves financially. This is a reality that, yes, rents differ from low socio-economic areas to high socio-economic areas. So this family will be paying a higher rent than what they would be usually paying in a low socio-economic area, and that family will have to pay this voluntary donation for their child. Again, this bill doesn’t help this family that has that hardship issue.

It’s not like parents don’t want to pay. There are parents who contribute to their community, who contribute to their school, not just for their own children but sometimes, if there is any fundraising going on, they make contributions for that too. In this bill, I think what the Minister is doing is creating a lot of inequality amongst people. I’m really disappointed to see that the first line in this bill says, “[It’s] intended to reduce the widespread expectation that parents should pay voluntary contributions”. But their policy was actually to get rid of school donations. So where has that policy gone?

I, quickly, want to finish by saying that we are supporting this bill only in the first reading so that the select committee will have the opportunity to work on this bill during the select committee process. I really hope that Government members will be willing to work on this. I’m on the Education and Workforce Committee, which is a very busy committee, a very hard-working committee. We look forward to receiving this bill, and I hope that we will be able to hear from all schools—that is, schools in different decile areas—from parents, and from students as well on this bill. Thank you, Mr Speaker.

MARK PATTERSON (NZ First): What a negative bunch the National Party over there are. It’s with a growing sense of incredulity that I have witnessed, this sitting block and this bill in particular, the National Party rail against user-pays funding for our much-needed transport infrastructure or charging foreign tourists to come here and use our conservation estate or to build our much-needed facilities in our regions. Won’t those local councils and won’t the conservation department be looking for that funding? Now, to cap it all off, I see them in the House today railing against a measure to take the fees away from our poorest families—$150 a year per student; $265 million over four years, and they are grudgingly saying that they may support it. What a miserable bunch.

This will make a material difference, as Jan Tinetti pointed out before, for our lowest and poorest families in those February months, when they’ve just come out of Christmas, when they’ve got to buy their school uniforms. There they are lumped with these extra charges, and we are taking them away. That is the core of what this Wellbeing Budget is all about. So New Zealand First will be absolutely supporting this measure without any hesitation or grudging, as we’re seeing from over the fence. You need to re-evaluate your values over there, because it’s just not good enough to be railing against this thoroughly sensible measure. New Zealand First supports this bill to the House.

NICOLA WILLIS (National): Contrary to the remarks of the previous speaker, Mark Patterson, National does commend reductions in costs to parents. We think efforts to reduce costs to New Zealanders across the board are a good idea and we do commend efforts to give schools certainty of funding, but it is our role, as the Opposition, to hold the Government to account for their policies and to ask the questions that New Zealanders are asking about this policy.

I just want to highlight the reality of the way the decile exclusions in this policy will come into effect, and I want to take the example of Wellington Central. I am a list MP. I am based in Wellington Central, and in that electorate there are only three schools that will be eligible for this policy. What that means is that there will be 8,192 students who will not be eligible for assistance from this policy at all, because they attend schools that are decile 8, 9, and 10.

Hon Andrew Little: It’s a decision by the school.

NICOLA WILLIS: Now, you can argue, Mr Little, that there are no families in Wellington who lack the material income, who lack the ability to pay donations, but you would be wrong, because, in fact, the decile system is a very rough and ready reckoner. In all parts of the Wellington Central electorate—whether you’re looking in Karori, whether you’re looking in Mount Cook, whether you’re looking in central Wellington—there are families who earn below the median income and struggle with the costs each week. They are not eligible for this policy. Mr O’Connor there, he should be aware too that in Ōhāriu there are only two schools that will be eligible for this policy—6,952 students will not benefit from this policy. So we here on the Opposition ask the simple question, which is why is that fair? Why is that equitable? Why is that the right way to divvy up the pie? We will look forward to examining that question at select committee.

We ask other questions too: what is the impact on integrated schools? Again, here in Wellington Central, St Teresa’s School, St Bernard’s College, Cardinal McKeefry School—they want to know, does the policy apply to them? We want to know what is the definition of the donation? In the bill it suggests that it’s something that is not legally obligated to be made, but then we have the Prime Minister out there saying this will mean that “children no longer miss out on extra activities just because parents can’t afford voluntary donations”. Well, what is an extra activity versus what is an optional activity? These are questions that are already live in our school system, and we need to know how it will apply.

Finally, I just want to point to the example of what will be excluded from this policy. I want to give you the example of Wellington College. It’s a decile 10 school, and I can guarantee to members of this House that there are students who attend that school who are from lower-income families. At Wellington College, to attend that school the voluntary donations that are requested are a $90 general curriculum donation, $170 for school development projects, $330 technology donation, $190 extra curriculum activities donation—a $780 donation. So the question that I then ask is how is it that these higher decile schools will be able to cover these costs?

Finally, I say: what is the monitoring regime going to be for this policy so that it is applied fairly? How will we ensure that it works? These are the questions we will examine at the select committee. So, as I said, National commends efforts to reduce costs to parents, but when we do it we need to make sure it’s effective and we need to make sure it’s fair. That’s why at the select committee we will examine those questions. Thank you, Mr Speaker.

MARAMA DAVIDSON (Co-Leader—Green): One of the most delightful parts of this morning’s debates was when the Hon Nikki Kaye tried to stand up and outline how the Labour Party was not doing a good enough job in education, promptly followed by the wonderful Ms Jan Tinetti, former principal of Merivale School in Tauranga, who said, “As a principal, I can tell you exactly how much nine long years of National did to cut out”—the school that the member comes from in the community that the member came from is one of those struggling very much.

The Greens are very proud to see this policy in place. We have always said that we want to see State schools funded to a level that means they are not dependent on the collection of fees or donations. I am advised that this policy ensures that integrated schools are indeed eligible for this initiative. So I’m very pleased to hear that this Government is taking a whole approach to making sure that operational funding, which stood shamefully stagnant under National, is actually getting some love. What this bill actually does is that boards can either ask for voluntary donations from parents, or they can opt in to receive $150 per student under this bill. The bill wants to make sure that there is no double-dipping, and so it reserves the ability to recover funds that did not adhere to the criteria of this discretionary grant, alongside operational funding.

I just thought immediately back to before I became an MP, as a single mum having three children to pay school fees for, and what incredible stress that did, yes, to the budget, of course, but also to the shame and the guilt of wanting to make the best contribution I could for my children and their school, who were wanting to do their best for our low-decile community. Understanding that in other schools—and hearing stories about what some other schools were doing to try and recover those fees when they were genuinely struggling, and some of the guilt and shame associated with not being able to pay those fees. I remember some schools were also having to take up penalising tactics to try and encourage parents, and we should never ever be doing that. This policy will ensure that we don’t have to put any child or family into that predicament.

Yes, I am open to the conversation of seeing how we can, in the future, look at supporting low-income families from schools outside the decile 1 to 7 range. But why on earth would you bash the whole of this proposal to highlight that that’s just a further question to be continued?

We’re very pleased with the leadership that has been shown finally—finally. We should always see the right to education as an obligation and responsibility for the State and for the Government to ensure that everyone achieves, because it’s a good thing to do for our future, for our present, and for building communities and connections—ensuring that all of our children are well equipped for a modern world and for the thinking that is going to be required to address the biggest challenges before us of climate change, and inequality, and connecting ourselves back to each other and to our planet.

So we’re very pleased with the leadership and the inspiration shown in this. We look forward to having more conversations about how we can absolutely make sure that all families who are struggling do not need to share this burden on education. Thank you.

DENISE LEE (National—Maungakiekie): Thank you, Mr Speaker. At least this bill is going to select committee—that’s my opening line. We want to reduce costs to parents, and we want to examine this in select committee, and we will look forward to the chance to do so. It’s important that we do so. This is a very big topic and it is partially delivering on a promise from this Government.

It has been delivered—partially delivered, I would say—in a very erratic fashion, and here’s why: they’re using an outdated system to deliver this. By their own admission, it’s time for the decile system to be relooked at. What we have here is using, on the one hand, a lot of debate against our own team. Erica Stanford had a member’s bill to relook at the decile system. There is an arm’s-length approach to the work that the Hon Nikki Kaye has undertaken. And, by their own admission, the Government is using a Tomorrow’s Schools review to review the decile system. Yet they are using this mechanism, the decile system, to deliver on a partial promise to “scrap donations” to everyone—not to some, to everyone; that’s what we were promised. So this bill will create confusion for the parents who thought that they’d all be captured by the campaign promise. Struggling parents in decile 8, 9, and 10—and yes, there are some struggling parents in decile 8, 9, and 10, and to say otherwise would be completely disingenuous. There’s also going to be massive variable take up in deciles 5, 6, and 7, and I know that the Minister can’t argue with that. I spoke to two colleges, both decile 6, they have clearly said to me that they will not benefit from this policy—two colleges, decile 6. By the way, they’re not in my area. Integrated schools—are they going to be covered? We don’t know.

I would like to give a final say to a principal of a decile 3 college, and he said, “Financially, Denise, it’ll be likely quite good for us. However, in my opinion, the money should go towards teachers and settling the strikes. The greatest need and thing that makes the most difference is high-quality teachers.” We’ve had the largest education industrial action undertaken in history—thousands of teachers taking to the streets in protest. The Budget’s underwhelming. We’ve got cuts in the Investing in Educational Success initiative—that programme, which will, ironically, see fewer salary payments to teachers. That is very ironic, given the industrial action that we’re in the middle of right now.

We support this to select committee, but we want to hear from parents, integrated schools, and educators on how they see the priority spend of this Government. They’re using an outdated decile system to partially deliver their promise.

KIERAN McANULTY (Labour): Yet again we’ve seen another example of the National Party trying to make noises and a song and a dance and carrying on about something that makes sense and the profession actually wants. We’ve had speakers like Jan Tinetti stand up and give real examples from real teachers and real principals in charge of real schools telling them that this policy is going to make a real difference. And I say to the National Party that their approach throughout this debate, where you’ve got some speakers saying one thing, saying that this is a bad idea, and then you’ve got other speakers saying that this doesn’t go far enough—they’ve got to forget the gun and grab the cannoli and stop being distracted.

The thing is that here we are in a debate about the Budget, and the National Party are thinking that there is always money in the banana stand—that they can stand up and they can speak in opposition to absolutely everything. The rest of the country is looking at them—particularly in this instance, on this bill, which is a good idea and is hugely popular—and they’re saying, “They don’t represent us.” This Government is standing up for what matters for this country.

ERICA STANFORD (National—East Coast Bays): Thank you, Mr Speaker. I would just like to start my contribution by making it very clear that on this side of the House, we support reducing education costs for families and for parents, and we will support this bill through first reading, but we have many concerns. Let’s not dress this up as anything other than what it actually is, and that is a massive broken promise by this Government and this Minister, and we will hold them to account for this. At the 2017 election, Minister Hipkins came out and he said, “We will end school donations for all parents and for all students.”, and parents were swayed by that. They put their trust in this Minister. They believed what he said, and he is now reneging on that, because what is happening is not all students and all families. In fact, parents have been waiting, and nothing has happened for 18 months. Parents have now paid two lots of school donations. So out of their three-year term—which I’m sure is all it will be—in two out of the three years, families are not getting what they believed they were getting because they believed the Minister’s word. And they, Jan Tinetti, are very despondent about that.

So many times, when we reminded Mr Hipkins of his broken promise—I love this; it’s always my favourite saying from Mr Hipkins—he said that it was a promise yet to be delivered—not a broken promise but a promise yet to be delivered. And today his language follows on from that. He calls this a “next step along the way”, and says many parents will benefit—backtracking language, because he knows it is a promise that he is breaking. Mr Hipkins has let parents down, and now is further letting them down, because only decile 1 to 7 students will be eligible if the school takes it up. So, firstly, it was a broken promise because it’s not all kids, and now, secondly, it’s only decile 1 to 7.

I pointed out earlier last year, on my member’s bill, the Education (Social Investment Funding and Abolition of Decile System) Amendment Bill, that the decile system is a terrible way of figuring out where need sits, because not all parents and families in need are in low-decile schools. It is a poor way of allocating need. I argued that, the Tomorrow’s Schools report argues that, and the Minister well knows it and his department knows it, because he’s working on a bill to get rid of the decile system. We know that, and yet here we are delivering to parents in need through the decile system, an outdated method.

Just to wrap up, I want to talk about my electorate. In all decile 10 schools, or almost all, in fact, we have struggling families. We have the single parents, like Marama Davidson, who have multiple children, who are struggling, and they will get nothing. They put their trust in this Minister, and they will get nothing. It was originally a promise that they have yet to deliver on, and today it is a partially fulfilled promise. Although we will support this at first reading, we will be strenuously looking at this bill in the select committee stage to make sure that these guys are being held to account and that they fulfil their promises and that this is actually fair and what parents were promised.

GREG O’CONNOR (Labour—Ōhāriu): Thanks, Mr Speaker. I think everybody that ever comes to this House, of whatever hue, wants to actually make a difference. We want to make a better society, and when we actually sit down and start thinking about whether we could do this, or whether we could actually implement something that’s going to make life better generally, we’ll go back down to education—educate, educate, educate. The gap that’s opened in our society between the haves and the have-nots, the alienation that results—so much of it arises out of a lack of education and a lack of opportunity.

So what better way, when we sit down to fix that which ails this country, than to look at those at the bottom end, those who find it hardest to pay the bills. I’ve actually had the experience of sitting down with police officers, who are reasonably well paid, and pulling apart and dissecting their spending, and it was these sorts of costs that really just did add up. These are the ones that really put on the pressure. It was the cash you had to find for something like this that did cost the shoes, that did cost the ability to play in a sports club. Those things actually alienate those from the lowest socio-economic schools or lower-decile schools from those for whom paying $100 or $150 isn’t really an issue.

So when you look at it, it makes so much sense to do this. It makes so much sense in so many ways that this is another impost that parents won’t have. This actually will mean a little more cash. It’s not the fact that there’ll be more cash left over; it’s just trying to find that money. It’s when the uninsured car gets stolen, it’s when the car breaks down and there’s no money—these are things where probably many in this House don’t understand just what an impost that is, or how impossible it is when there is no money to fix those little things.

So this is one of those things we can do. By itself, it won’t fix all that ails us. It won’t by itself create a fairer society, but it will be part of those necessary strategies that will help us go a long way towards it. So I commend this bill.

Bill read a first time.

Bill referred to the Education and Workforce Committee.

Hon CHRIS HIPKINS (Minister of Education): I move that the Education (School Donations) Amendment Bill be reported to the House by 19 August. This is a very simple bill. It has five clauses. It puts into law a very straightforward idea, which is that if schools don’t comply with the requirements, then the money should be able to be recovered. The shortened time frame is required so that schools will have certainty when the new regime is introduced and when they’re setting their budgets for next year.

SPEAKER: I just want the member to put the motion again. He omitted to say which year.

Hon CHRIS HIPKINS: Oh, did I? OK. I move, That the Education (School Donations) Amendment Bill be reported to the House by 19 August 2019.

NICOLA WILLIS (National): As I understand it, this is the first that we have heard on the Opposition bench that there’d be an early report-back for this—

SPEAKER: Order! Can I just say that the Minister of Education, when he introduced the bill, quite properly gave notice of that.

NICOLA WILLIS: Well, we here on this side of the House cannot see why the report-back needs to be so early. We think that a full select committee process is warranted. Already in our first reading speeches, we have raised a number of questions that will require detailed feedback, not only from ministry officials but also from school leaders, from parent organisations, and from communities across the country. For that reason, we would seek a longer time for the select committee to consider this bill. We think that would be proper.

A party vote was called for on the question, That the Education (School Donations) Amendment Bill be reported to the House by 19 August 2019.

Ayes 63

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

Noes 56

New Zealand National 55; Ross.

Motion agreed to.

Bills

Kāinga Ora—Homes and Communities Bill

First Reading

Hon NANAIA MAHUTA (Associate Minister of Housing and Urban Development (Māori Housing)) on behalf of the Minister of Housing and Urban Development: I move, That the Kāinga Ora—Homes and Communities Bill be now read a first time. I nominate the Environment Committee to consider the bill.

Kāinga Ora reflects our Government’s commitment to take a hands-on approach—

SPEAKER: Order! Can I just check with the Minister: I have her giving a much longer introductory point. If that’s changed, it would have been good to have had notice of it. It involved a reporting date and a select committee arrangement.

Hon NANAIA MAHUTA: Just to restate, I move that the Kāinga Ora—Homes and Communities Bill be now read a first time. I nominate the Environment Committee to consider the bill.

SPEAKER: So I’m now looking at the Leader of the House. The Government has changed its mind?

Hon Chris Hipkins: Yes.

SPEAKER: Right. Sorry, I apologise to the Minister. It’s just that, when I’m briefed in a particular manner, I expect that to occur.

Hon NANAIA MAHUTA: Kāinga Ora reflects our Government’s commitment to take a hands-on approach to tackling homelessness and unaffordable housing. Kāinga Ora will be our housing delivery arm right across the housing continuum. Kāinga Ora reflects a new approach to housing and urban development. It reflects a number of our commitments. Public and affordable housing are at the heart of our housing agenda. They are places where generations of young families have come to get a start in life and to put down roots in their community. We are strengthening the promise.

We believe Government should be an enabler of urban development to partner with the private sector, local government, and iwi to build vibrant communities rather than crowding out or replacing the private sector. Our message to developers is: we want to help you grow. We understand your constraints. We want to work together on the solution. We want to implement good urban design and develop well-connected communities with great transport connections, vibrant town centres, community infrastructure, and affordable homes. Mana whenua are at the heart of these developments as developers, builders, housing providers, and partners, and we want to support them too.

Creating an urban development authority (UDA) has been considered in New Zealand for some time. In their final term, the Clark Labour-led Government created a sustainable urban development unit, prepared Cabinet papers, and released a discussion document. Since then, the Productivity Commission has published three reports highlighting the need for an urban development authority to address New Zealand’s housing supply and urban development issues. In 2017, as the national housing crisis became most acute, the previous National Government also released a discussion document on establishing a UDA. This is the first of two bills to establish Kāinga Ora. A second bill will be introduced later this year that will enable Kāinga Ora to undertake specified development projects, which are large-scale, complex urban developments designed to drive real change and urban renewal.

I’ll come back to why Cabinet decided to split the bill in two and accelerate the entity legislation, but, first, Kāinga Ora is a new agency to partner with local government, iwi, and the private sector to build quality State and affordable and market homes and create thriving master-planned communities. Kāinga Ora has two core roles: being a world-class public housing landlord and leading and co-ordinating urban development projects. It will be a powerful delivery entity, capable of integrated urban development that provides a mix of public, affordable, and open-market housing. It will consolidate all three essential centres of development capability: Housing New Zealand (HNZ) and its subsidiary HLC and KiwiBuild. Kāinga Ora will undertake a range of large and small urban development projects throughout the country for some large-scale, complex development projects.

The second bill will provide for a range of statutory powers that will better enable development. The authority will have a streamlined resource management planning and consent process. It will develop project master plans that will replace local plans. It will be able to build and change infrastructure, and this will de-risk developments and enable us to partner with builders and build homes and undertake quality intensification. It will have the ability to levy or charge local residents to fund infrastructure and development activities. It will be able to bring together parcels of land; it can reconfigure reserves, create new parks, and the important public infrastructure that makes a suburb a community. The authority will be able to build much-needed housing and infrastructure at the scale and pace needed to tackle the housing crisis, as well as delivering quality urban developments that will connect homes with jobs, open spaces, and transport links.

By bringing these entities through, we are demonstrating our commitment to public housing. Proving this commitment, Housing New Zealand’s new social objectives to provide decent housing, be a fair and compassionate landlord, and to help sustain tenancies will be enshrined in the authority’s legislation, as will an obligation to assist tenants to sustain a tenancy, to support tenants to be well-connected to their communities, and to help tenants to lead their lives with dignity. Kāinga Ora’s overarching objective, functions, and operating principles will establish a strong social mandate with an overarching focus on promoting the wellbeing of current and future generations. Clauses 13 and 14 set these objectives out.

We’ve split the bill to accelerate the development progress. The reason Cabinet is establishing Kāinga Ora on a quicker time frame is the benefits that come from maximising scale and integration. Consolidating Housing New Zealand, HLC, and the KiwiBuild unit as soon as possible will enable us to integrate the full Government build programme across our development efforts, reducing complexity and improving co-ordination. Builders and developers tell me that we are often talking with three heads. HLC has one set of procurement rules, HNZ another, and KiwiBuild a third. Some have been known to play these agencies off against another. By working together, we can get more out of our procurement programmes. Integration enables us to make it easier for builders to get on and build, including by rationalising processes and procurement across Government, move to long-term agreements with builders where we contract a large number of homes a year across the full Government build programme, giving them certainty and scale to reduce costs, invest in offsite manufacture, train staff, and build faster.

Finally, this bill also provides for a Government policy statement (GPS) on housing and urban development to promote a housing and urban development system that contributes to the wellbeing of New Zealanders. The GPS will allow the Government to set out its overall direction and priorities for the whole housing and urban development sector and how it expects Kāinga Ora and other agencies to meet them. The GPS will have a long-term outlook. It will be developed in consultation with stakeholders, with the first to be issued by 1 October 2020 and then reviewed every three years. This bill will enable Kāinga Ora to begin the vital work of contributing to thriving, sustainable, and inclusive communities for all New Zealanders. I commend the bill to the House.

SIMON O’CONNOR (National—Tāmaki): I rise, obviously, to take a call on Kāinga Ora—Homes and Communities Bill at this first reading. The National Party will be opposing the bill. In a strange way, I would suggest we may have been better to actually support it, because this bill is an admission of the Government’s failure. It’s a glaring, bold statement of the Government’s failure, particularly around KiwiBuild—

Hon Scott Simpson: An abject failure.

SIMON O’CONNOR: An abject failure, as my good friend and colleague Scott Simpson says. And, in a sense, because it is such a failure—the Government’s housing policies—perhaps this side of the House should have supported it, just to really highlight that fact.

But this is poor legislation. It’s poorly thought-out, and I’ll elaborate a bit on that later as to why. But to make it absolutely clear to the House, the National Party opposes this bill.

Look, fundamentally, the idea to merge Housing New Zealand, to merge HLC, the Hobsonville Land Company, and, importantly—and the Minister who’s just resumed her seat, Hon Nanaia Mahuta, barely mentioned it—to merge the KiwiBuild Unit is, as I say, a huge admission of failure. This is an attempt to push under the rug the failure that is KiwiBuild, and then—well, not quite with any slickness—an attempt to grab, if you will, the success which is the Hobsonville Land Company and to rebrand it as KiwiBuild; to try and take where there is success and to try and play that into this whole new entity with a nice-sounding name, Kāinga Ora, to make it sound like it’s new and novel, but really what it’s doing is bringing two tired entities and one entity doing well to try and play off that success. One of the key aspects—

SPEAKER: Oh, I apologise. I apologise. The member’s on overtime; we had 10 seconds of lunchtime. I suspend the House and I’ll resume the Chair at two o’clock.

Sitting suspended from 1 p.m. to 2 p.m.

SPEAKER: The House has resumed. When we adjourned for the lunch break, we were debating the first reading of the Kāinga Ora—Homes and Communities Bill. Simon O’Connor was speaking, and he has eight minutes and six seconds remaining.

SIMON O’CONNOR: It’s the six seconds which can be most important. Look, I have to acknowledge, actually, Ruth Dyson, who very kindly was offering to take this call, but seeing as we are opposing the bill, I didn’t want to put her in an awkward position of being up against the Minister. Look, a couple of messages which I think are quite important, if not three: as I said, we don’t support this bill because we really see this as just simply rearranging the deck chairs, effectively, on a Titanic, or a KiwiBuild Titanic, that is sinking. To blend Housing New Zealand (HNZ), which has always had its own struggles, both in asset management and tenancy management, and KiwiBuild, which is dead in the water—not only has an iceberg hit it; it’s hit it several times—but then to try and link it to HLC, to the Hobsonville Land Company, which, to be fair, has been doing a very, very good job—to link it in there is, effectively, a way to take the success of HLC and try to transmit that across those areas which are failing.

Importantly, there are about 27,000 houses that HLC are working on in the pipeline—27,000. That’s a great number, and I’m happy to say it’s a great number because they were all consented and started under National. I’ve got a sneaking suspicion—yes, I better repeat that: all of those 27,000 houses were started under National—that this Kāinga Ora bill is an attempt, by blending that work together along with HNZ and KiwiBuild—actually, I just realised I’ve spoken about KiwiBuild more than anyone else has done in the Budget in the last few days, but it’s an attempt—

SPEAKER: Order! [Interruption] Order! We’ll get back to the bill now, not the Budget.

Hon Gerry Brownlee: Yeah, well, it’s in it.

SIMON O’CONNOR: Absolutely it’s in it. They are trying to take those 27,000 houses and make that sound like something that this Government’s achieved, and I expect that by bringing it in, they’re going to claim that as KiwiBuild.

I think, fundamentally, as well, one of the real issues is we’ve had a Government that keeps talking about not selling off State houses, but under this proposed legislation they’re going to be bulldozing houses in the likes of my electorate in Tāmaki, putting three or four of these Kāinga Ora houses on them, and, strangely enough, selling them—selling them. I think that’s shameful. I think this is a bad bill—a very bad bill. It’s an admission of failure.

Look, from a process point of view, I’m very concerned that this bill is the first of two. I’m becoming a little tired of the Government, in effect, introducing in set stages legislation, in that we are not able to see the entirety of their project at one time.

Hon Gerry Brownlee: Well, they don’t know.

SIMON O’CONNOR: In fact, a suggestion has come to me that they themselves don’t know. This is perhaps an indication that they’re rushing this through, but I want to indicate from this side of the House a concern that there is a second bill coming and we don’t know exactly what’s in that.

There was also going to be, I understand, an attempt to have a shortened report back. I want to acknowledge now that that does not appear to be the case and, to be generous, seeing we’re on a Saturday afternoon, to the Minister and the Government, we’re actually going to get a full process in select committee where people are able to have, rightly, their say.

The last thing I’d like to say, if I might, is I think, as I said right at the start, this particular piece of legislation is an admission of failure, and I’m going to suggest, particularly to the Minister who’s here, that this bill, this attempt to, as I say, rearrange the deck chairs and, in a sense, try to pull the wool over people’s eyes to make a success—

Hon Gerry Brownlee: A flash cover-up.

SIMON O’CONNOR: —yeah, a flash cover-up—is still not going to work. The Minister himself knows that, because as I’ve gone through the Budget documents, when it comes to social housing, which this bill is set to address, the Government is admitting that emergency housing grants are not only going up but are going to go up even higher—even higher. What that is saying to us is that regardless of what this bill is trying to do, which is creating an extra supply of social houses, of State houses, the Government is still expecting there to be an enormous waitlist. In other words, everything that this bill is trying to do will fail. It was budgeted about $25 million on emergency housing grants. That’s to help people into—well, for the Government, still into motels and caravans, $25 million. The current budget said they’ve spent $70 million—$70 million—and over the next year they’re expecting $120 million to address State housing.

SPEAKER: Keep relating back.

SIMON O’CONNOR: I think what’s really important is this is aimed at those people. It is very difficult to reconcile how this bill, put to us to solve the housing crisis, can sit in parallel to almost half a billion dollars of emergency housing grants in the next four years. That is an admission of failure. It’s an admission that there will still be enormous numbers of Kiwis in need no matter what this bill does—no matter what this bill does. It’s probably not really a surprise to me, because as I said right at the start and repeatedly, this bill is an admission of failure. Blending three entities together, two that are failing, taking the good of one—and I’ll end on this—the one that’s doing well, the Hobsonville Land Company, those 27,000 homes, which was started under National—started under National; it’s as simple as that.

I give a quick shout out to my stepson and wife in the gallery—good that there’s two members of the public here. Thank you very much, Mr Speaker.

Hon PHIL TWYFORD (Minister of Housing and Urban Development): Thank you, Mr Speaker. The Kāinga Ora—Homes and Communities Bill establishes a new Crown agency that will be the Government’s delivery agency for housing and urban development. It’s going to have two main jobs. One is that it will be our public housing landlord, so it will inherit the great tradition that Housing New Zealand currently has stewardship of. It will manage the assets and the tenancies for some 68,000 State houses, but alongside that, it will also be responsible for delivering for the Government a programme of large-scale urban development projects. This is something new, and it’s something that New Zealand cities desperately need.

We haven’t had in this country a tradition that has been common for the last three and a half decades in Australia, going back to the Whitlam years, in New South Wales, Victoria, and South Australia, of public agencies whose job it is to lead and facilitate large-scale either urban regeneration projects, brownfields and greyfields projects, or large-scale greenfields developments. These entities, often described as urban development authorities, are very common in North America and Europe, and their purpose is, essentially, to de-risk for private investors what otherwise would be developments in our cities that are too complex for the private sector to do on their own. We need public agencies who can do the master planning, handle the resource consenting, invest in the infrastructure and the public realm—the parks for the neighbourhoods, civic amenities—and then provide the opportunities for private sector investors to come in and do what they do well, which is to build great places for people to live, play, and work.

I said we haven’t had that kind of track record in New Zealand of doing that—there are some good examples, and Hobsonville Point is one of the finest. It has been, without doubt, a brilliantly successful development commercially, it has demonstrated a way of working that has changed the model for so many property developers and construction companies, and it has created a new normal for medium-density suburban development in our country’s biggest city. So HLC, the subsidiary of Housing New Zealand that have led that project, deserve enormous credit for that.

The Auckland and Wellington waterfronts, actually, are also really great examples of urban renewal led by, in this case, local government, and the urban regeneration that we’ve seen at Wynyard Quarter, led by Auckland Council subsidiary, is another great example of that. The Britomart development is also a good example. New Lynn in Auckland: an example of transit-oriented development. All of these projects demonstrate elements of what we want to achieve, but we’re looking to scale it up and we’re looking to be able to do this throughout the country.

The companion piece of legislation to this, which will be tabled in the House in the next few months, will legislate a set of special powers that the new urban development authority, Kāinga Ora, will exercise, almost always in partnership with local government or local government development agencies, but also with private sector, investors and developers, and mana whenua. They will be joint-venture vehicles at the local level, designed to unlock private investment and deliver large-scale master plan developments at scale and pace and deliver vibrant new communities, with all of the transport infrastructure, the urban design—all of the things that modern communities look for.

I want to say something about Housing New Zealand, because that is something, for parties on this side of the House, that is incredibly important to us. Public housing or State housing is part of the great New Zealand tradition, and it will find under this legislation a new home within Kāinga Ora—Homes and Communities. Why are we doing that? The first reason is that we want State housing to be at the heart of all of our urban development work. We want public housing, affordable housing, to be in the mix whenever we do these large-scale developments—big, medium, or small.

The other important thing is that in recent years, Housing New Zealand has developed an impressive non-profit developer capability. It’s currently building several thousand new homes a year all around New Zealand, and we want that capability to be alongside the KiwiBuild procurement programme, and alongside the precinct planning and land development capacity that HLC has built up off the back of Hobsonville Point. We’re bringing all of that together so that the Government has tooled-up capability to engage directly with the market, to build the volume of homes—the affordable homes with high-quality master planning—that we desperately need.

One of the things that so many people in the private sector have said to me over the last 18 months is that the Government’s had multiple agencies—HLC, KiwiBuild, Housing New Zealand’s development unit—that are out there in the market, often competing against each other and sending different messages. So we are bringing them together into one consolidated capability.

The other critical thing that’s in this legislation, which I just want to mention—there will be plenty of time to debate this as the bill makes its way through the different passages—is that we are, in this bill, mandating a Government policy statement for housing and urban development. It mirrors in function the way that the Government policy statement works in transport. It has a 10-year horizon and a three-year cycle. It gets renewed in sync with the parliamentary cycle, so every new term of Government, there will be this high-level policy statement that sets out the Government’s goals, its strategy, how it’s going to work with other players and partner with others to deliver so that everybody in the system, from non-profit community housing providers through to the property development sector and local government, know exactly where we’re going, what we’re aiming to achieve, and how we can work together to deliver on these goals. That will not only provide that high-level policy statement for industry and for the sector but will also provide Kāinga Ora with its riding instructions.

I’m going to leave it there. I want to thank all of the people, particularly the public servants, who have done a huge amount of policy work bringing this bill to this point over the last 18 months. I’m sorry to hear that the National Party are opposing this bill. It’s worth mentioning that the Hon Dr Nick Smith, over the course of 2017, took this very concept of an urban development authority to Cabinet. In fact, he published a discussion paper with very similar policies and took it up and down the country, consulting. So I’m sorry that the Opposition is not going to support this bill, because they did actively promote and support these ideas and these policies in their last year in Government. Thank you.

ANDREW BAYLY (National—Hunua): Thank you, Mr Speaker. It’s an interesting thing to be talking on this Kāinga Ora—Homes and Communities Bill, and I think that Minister Phil Twyford should actually apologise to people on this side of the House for the failings that he has set about doing over the last 19 or maybe 20 months.

In fact, it’s interesting that this is the first time we’ve even heard KiwiBuild talked about in the Budget—the so-called Wellbeing Budget. Why is that? Why is that? We all know why. We had—what? What were the targets we had? KiwiBuild were going to do 1,000 houses in the first year. That became—what?

Alastair Scott: No, it was 10,000 in the first year.

ANDREW BAYLY: Oh, 10,000. Then it was 1,000, then it was 300. Now, it’s 200—isn’t it?

Hon Gerry Brownlee: No, 74.

ANDREW BAYLY: Oh! Well, I think, Mr Brownlee, we’ve achieved 74 so far.

This is a Minister who is in trouble, who is not across his portfolio. It’s taken 20 months to get to this stage and, hey presto, we’re going to bang three organisations together, and that’s going to solve it. That’s going to solve it.

Hon Gerry Brownlee: Straight under the carpet.

ANDREW BAYLY: Yep—yep. It’s interesting. You know, the three entities are quite good—well, at least one of them. I think HLC, run by that well-known person Chris Aitken, has actually achieved a lot. He has achieved a lot. They have done a good job out in west Auckland and, of course, now in central Auckland, but the—

Simon O’Connor: And Tāmaki.

ANDREW BAYLY: Yes, that’s right, Mr O’Connor—and in your electorate, Tāmaki. But the issue around slashing and burning, and hashing these three entities, Housing New Zealand; its subsidiary, HLC; and KiwiBuild, which is now turning into a bit of a branding disaster, together into one entity—that’s going to solve it!

I think the issue is, you know, we all know that KiwiBuild is on life-support. If there’s anything that needs oxygen, it would have to be KiwiBuild.

Hon Gerry Brownlee: They’ve pulled the plug on it today.

ANDREW BAYLY: Well, yeah, I know, Mr Brownlee. But the thing I find quite interesting about this, Mr Speaker, is that this is the Kāinga Ora bill—right? But, actually, on looking, I’m reliably informed by a colleague that Auckland District Health Board and Waitematā District Health Board also have an entity called Kāinga Ora, and that was established in 2013 by—guess who?—National. National. In fact, it was further enhanced in 2016.

Do you know what it does, Minister? Do you know what that entity does, the one that’s owned by the district health boards (DHBs)—this Kāinga Ora entity? What it does is it provides heaters, insulation, and curtains for people who have got homes that are cold and damp—right—and we chucked money into it. It’s a great proposal.

My first question to the Minister is that you’ve just nicked the name of another Government entity that’s part of the DHB, so are they going to have to now rebrand? Are they going to have to rebrand? All the wellbeing money that you’ve thrown into the DHBs, the so-called millions of dollars—are they now going to have to spend some of it rebranding Kāinga Ora in the Waitematā and Auckland DHBs? I think that would be a travesty, Minister.

I also love this thought about—and I love these terms—having urban development “at pace”. Well, I’ve got to say, the only thing that Mayor Len Brown used to talk about doing was “at pace”. Everything was being done “at pace”, and it’s good that the Minister is now picking up on this phrase. “Vibrant communities”—that is something, I am sure, that by the time this bill is finished, we are going to be sick and tired of hearing. Then the other one is the “high-quality master planning”—ooh, yes. These are phrases that just roll off the tongue and, of course, sound beautiful—absolutely beautiful. One might also say it’s in the context of a wellbeing, warm feeling.

I think, Minister, we will be testing you during the course of this bill as it progresses through the House, because putting three entities together and rebranding them and hoping that that will solve your problems will not—

SPEAKER: Order! Order!

ANDREW BAYLY: —actually, and we will be chasing—sorry, Mr Speaker. Thank you very much.

MARAMA DAVIDSON (Co-Leader—Green): I’m very pleased to be supporting Kāinga Ora today—Kāinga Ora—Homes and Communities. The Greens have always understood that we need to move away from using houses as a commodity, and from building houses as opposed to co-designing communities with the very groups of people who are going to be living in the very houses. So this particular bill is the start of a new approach to developing homes and communities, bringing under the Crown purview a collection of agencies and organisations, including Housing New Zealand, HLC, the KiwiBuild unit, and the housing assistance part of the Ministry of Housing and Urban Development. The problem that we have long faced—in fact, far too many decades long faced—is the ad hoc, poorly planned, particularly urban fringe development approach, but, actually, our across-country development approach.

So we are looking towards a solution where the Crown housing development overview has joined-up thinking to make sure that we are connecting people, homes, and designs to public transport, to infrastructure, to where people need to go to school and go to work and go to play. This is why we, the Greens in particular, have a particular interest in this direction, because this new approach has incredible potential to transform the way that we do housing—a transformational approach that the Greens have long advocated for, because the private sector has absolutely failed on its own to provide the affordable, connected, and sustainable communities that New Zealanders want and deserve.

So we do need to do things differently, and, also, as we tackle the challenge of climate change, we need to ensure that we have buildings that are sustainable and inclusive in our future. Every housing development, we think, should have high-quality public transport linkages, should be inclusive of the ways that diverse communities live and work and play and connect, and should really recognise the interconnected wellbeing of people and the environment. We have not taken that overview and holistic approach in this country yet, and we are today trying to clean that up and deal with the impact of a lack of joined-up thinking and less of a capability to be able to address the challenges—the very, very real challenges—both on a daily, house-by-house level and also the big challenges when it will come to designing communities around climate change but also inequality, energy costs, rising unaffordability, and so forth.

So we’re excited by this potential. Yes, we know that change brings risk, so we want to be clear that we should ensure that we are building more State and public houses—absolutely. I want to congratulate Minister Kelvin Davis and Minister Nanaia Mahuta, alongside Minister Phil Twyford, for a specific section of the bill—here it is—that refers to the Māori interests. I think that needs to happen across bills and legislation, which is a more enduring and sustainable way of approaching legislation in this House and will actually add value to how we design and do things. In Part 1, Subpart 1 “Preliminary provisions” of the bill—I think it’s clause 4—the Māori interests section provides recognition that the Crown needs to respect its “responsibility to consider and provide for Māori interests”. It’s not just a good thing to do to uphold the Tiriti partnership, and there’s quite a bit in that particular part of the bill, but it is actually about drawing on the relationships and the knowledge, the mātauranga, from indigenous ways of thinking and living, and adding that to our Crown approach and working properly with our partners to ensure that when Māori interests are upheld, so are everyone else’s. So I wanted to particularly congratulate the cohort of Ministers for working on that together, and the Greens will be very interested in supporting and monitoring how all of that goes.

Just to finish—

Hon Gerry Brownlee: Oh, thank goodness.

MARAMA DAVIDSON: —the sustainable, inclusive, and—well, for that—I know that the Hon Gerry Brownlee in particular likes to have a good listen. For that, I might just outline some of the visions again of thriving communities in this bill, which is what I’m talking about. This bill is about providing people with good quality, affordable housing choices that meet diverse needs. This bill needs to uphold throughout its legislation supporting good access to jobs, amenities, and services—and that’s why, again, the Greens are supporting this—sustaining and enhancing overall economic, social, environmental—

Simon O’Connor: This sounds very expensive.

MARAMA DAVIDSON: —and cultural wellbeing. What is expensive—coming from the Opposition—is if we don’t maintain these sustainable visions for all of us. That is what is expensive. So this is leadership again, and the Greens will be very interested in seeing that this reaches the potential that it should have. Thank you, Mr Speaker.

Hon Dr NICK SMITH (National—Nelson): When I heard on Budget day the introduction of this bill, picking up the concept of an urban development authority for New Zealand, I became incredibly excited. I thought, “At last, we are going to get some real action on the issues that will make a difference to the housing challenges New Zealand has got.”

I put a discussion document out in March 2017 around the notion of an urban development authority that would be able to cut through some of the red tape of the Resource Management Act and the need to be able to reconfigure roads and infrastructure in areas where we have a second phase of development. Further to hearing the interjection from the Minister, I thought, “Oh, good, there must be something in the bill along those lines.” It is absolutely vacant. This bill does nothing more than reorganise a few Government agencies in the housing sector. I have to say, the only times I see Ministers fiddling around with different Government agencies is when they have become so vacant of real reform and real ideas that will make a material difference. This makes a bigger hole of the issues around housing.

Now, the Government started off with a policy of KiwiBuild. I remember Phil Twyford first saying it was going to be 10,000 houses a year, and they were going to be an average of $300,000 each. I also remember opening a whole set of the housing estate in Awatea with my colleague Gerry Brownlee. Those houses averaged $430,000 each. The Minister opposite said, “How could the Government possibly believe that $420,000 was affordable?” Isn’t it interesting how now he’s selling KiwiBuild houses at $580,000 and, magically, they have become affordable.

Barbara Kuriger: Or not selling them.

Hon Dr NICK SMITH: Well, not selling them, for that matter. I do challenge the Minister and say “You can rejig these Government agencies around, but if you really want to talk about establishing an urban development authority—of which there are good models in Australia, and there are good models in the UK and Canada and the US—you are going to have to sort the issues out with the Green Party over what we do with the Resource Management Act.”, because, actually, it is the price of the sections and it is the barriers to being able to do major developments like Hobsonville or others. If you want to get pace and momentum, they will be critical to it.

The last point I’d want to make is actually a very concerning report that came out from Statistics on the same day as the Budget. For the last six years, we have seen compound growth in the number of homes that are being built in New Zealand of about 20 percent per year. Back after the global financial crisis, new house construction levels in New Zealand got down as low as 13,000 per year. They grew every year for six years—31,000 when the Minister took office. We’re now up to 33,000. The part that should concern every member of this House that’s genuinely worried about housing, recognising that supply is key, is that the report on Thursday from Statistics New Zealand said that we are seeing the first decline in the amount of new housing activity, and that we are seeing a decline in the expectations of investments.

The Minister is going to have to do a whole lot better than this bill, and I suggest he does pick up the concepts and work that was done by the previous Government on an urban development authority that would make a material difference rather than this very superficial rearranging of Government departments.

A party vote was called for on the question, That the Kāinga Ora—Homes and Communities Bill be read a first time.

Ayes 63

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

Noes 46

New Zealand National 44; ACT New Zealand 1; Ross.

Bill read a first time.

Bill referred to the Environment Committee.

Bills

New Zealand Public Health and Disability (Waikato DHB) Elections Bill

First Reading

Hon JENNY SALESA (Associate Minister of Health) on behalf of the Minister of Health: I move, That the New Zealand Public Health and Disability (Waikato DHB) Elections Bill be now read a first time. I nominate the Health Committee to consider the bill. At the appropriate time, I intend to move that the bill will be reported to the House by 17 June 2019 and that the committee have authority to meet at any time while the House is sitting, except during oral questions; during any evening on a day on which there has been a sitting of the House; on a Friday in a week in which there has been a sitting of the House; and outside the Wellington area, despite Standing Orders 191, 193, and 194(1)(b) and (c).

The bill will provide for the Waikato District Health Board (DHB) to be exempted from holding an election for its boards, scheduled for October 2019 in the triennial cycle, as currently required by legislation. The effect of this bill is to allow for the term of the Waikato DHB commissioner to be extended until the triennial elections scheduled for 2022. This provides the commissioner sufficient time to develop, oversee, and implement a financially sustainable plan for Waikato DHB and improve clinical service performance. Without legislative change, the commissioner would have had less than seven months to improve Waikato DHB’s position.

Earlier this month, the Minister of Health dismissed the board of the Waikato DHB and appointed a commissioner for the DHB, following serious dissatisfaction with the performance of the board. In particular, ongoing clinical service performance and poor financial performance had caused the Minister to lose confidence in its ability to deliver on its strategy for the region.

Financial deficits have been a feature of Waikato DHB’s performance for some years. However, earlier this year, the situation deteriorated considerably. The DHB recorded a deficit of approximately $37.2 million for the 2017-18 year, which was unfavourable to budget by $27.2 million. The DHB’s planned budget for 2018-19 is a deficit of $56.1 million, and the forecast budget for 2019-20 is a deficit of $61.6 million. The Minister has not approved the DHB’s 2018-19 annual plan, given the scale of the deficit and the clinical service issues.

There has also been instability at the board and executive management level. Former Waikato DHB Chief Executive Nigel Murray resigned in October of 2017, following an independent inquiry into his expenses. The chair resigned a month later. A separate State Services Commission review was critical of the DHB’s financial management and controls. When the Minister appointed Dr Poutasi as commissioner at Waikato DHB, he intended to extend her appointment beyond the 2019 DHB board elections, to allow her an appropriate period of time to address the significant governance, clinical service and delivery, and financial concerns. Minister Clark has asked Dr Poutasi to assist in addressing these financial and service issues through developing a sustainable operating plan, to ensure collaboration with Waikato’s neighbouring DHBs and to strengthen the DHB’s leadership role in the Midland region as well as to confirm a stable and effective leadership team within the DHB, to help ensure that the financial and service issues do not continue into the future.

As the commissioner will need to introduce significant changes to achieve all of these objectives, the Minister would like to give her an appropriate term to achieve sustainable change. We believe that extending her term until 2022 will provide an effective time frame to achieve these outcomes. The Minister does not propose cancellation of a district health board election lightly. The bill therefore impacts only one election at the Waikato DHB and will ensure that the next board to be appointed as part of the 2022 local board elections will begin its term on a more secure financial footing and with more stable governance in place.

The appointment of a commissioner offers an opportunity to resolve the DHB’s financial challenges and to help secure more sustainable health services and health facilities for the people of the Waikato District. These challenges will not be addressed overnight, and cancellation of the upcoming election is necessary to give time for that action to be taken. I commend this bill to the House.

Dr SHANE RETI (National—Whangarei): Thank you, Mr Speaker. I want to start with two statements: first of all, we support the democratic district health board (DHB) elections, and, secondly, I want to acknowledge that Waikato DHB was also struggling in our hands. There were some challenges that are quite clear to everyone and that we were making our way through as well.

What we’ve heard here are the reasons for the bill and the reasons for why Waikato DHB has been struggling. But while we’ve heard these issues, what we haven’t had is any acknowledgment from the Minister as to whether he has had a hand in these past 18 months in contributing to the reason we find ourselves with this bill before us today. So whereas I’m happy to acknowledge we had some issues that we needed to deal with, I’ll help the Minister out and give the gracious speech he maybe should have given, acknowledging his failings that bring this bill here today.

Now, for background, none of us should take the removal of democratic processes lightly. In fact, I believe this is only the third time that a DHB board has been sacked. The first was in 2008, under Tony Ryall, when Hawke’s Bay DHB was replaced by Sir John Anderson. The second was in 2015, when Jonathan Coleman sacked the Southern DHB—I’ll come back to that later—and Kathy Grant took over. And here we are today, with David Clark sacking Waikato DHB and putting Karen Poutasi in the commissioner’s role—who I rate, actually; Karen Poutasi’s a very skilled and knowledgable lady.

So here are the acknowledgments that maybe the Minister should have made around his own failings that bring us here today, and there are three of them: first of all, ministerial leadership. Now, the Minister has many tools at his disposal, some of which he’s used to bring DHBs into line—for example, the letter of intent at the beginning of each year is a very clear message from the Minister to the DHBs of what he expects them to do. Waikato DHB had a very weak copy-and-paste that pretty much every other DHB had, which did not, in my opinion, firmly and strongly give them good guidance as to what the Minister’s specific expectations for them were. So what the Minister admitted in his speech was to apologise for his leadership failing with the letter of intent.

The second failing was with the Crown monitor. The Minister appointed Ken Whelan to be the Crown monitor to Waikato DHB—yeah, how has that gone? We wouldn’t be here today if that had gone well, and so I think what the Minister also admitted in his speech was to apologise for a failed Crown monitor.

I think the third and final acknowledgment that is missing is operational decision-making, where the Minister specifically gave instructions to Waikato DHB in July last year, and those instructions were around the National Oracle Solution—a multi-platform, very expensive piece of IT software that was struggling. In July last year, the Minister said to the sector, “Stop. All of you, stop on the National Oracle Solution.” This was after, of course, he’d appointed the independent review panel to review the National Oracle Solution. Deloitte, as you recall, had already worked on it—whatever.

In July, the Minister said to all the DHBs, “Stop on the National Oracle Solution. We’ve got problems with it, except for four DHBs. You can continue.” Who were those four DHBs? Canterbury, Bay of Plenty, West Coast, and Waikato. They were struggling already with a major IT platform that’s a challenge for everyone, and the Minister gave them permission to continue. We will hear more about that because the National Oracle Solution continues to struggle, but, in the Minister’s own hands, he gave permission for Waikato DHB to continue with the National Oracle Solution, and I’m sure that’s part of what brings us here today.

So, three areas where the Minister could have fessed up and said, “Ha! Maybe I could have done better as well.”: ministerial leadership, the Crown monitor, and operational decision-making around the National Oracle Solution.

I want to briefly talk to the departmental disclosure statement, which points out some issues with the Treaty of Waitangi obligations—particularly that “The exemption of the Waikato DHB from the 2019 elections means that there would no longer be a Board with Māori representation.”, and it fills out a bit further than that. Now, this is going to be a problem here today. It’s going to be a problem for the Greens and New Zealand First, and I’ll tell you why: when Jonathan Coleman sacked the Southern DHB board, it was New Zealand First and the Greens who voted against that bill, an identical bill to what we’re seeing here today that suspends democratic elections.

New Zealand First and the Greens voted against it. Here’s what they said in the House. The Greens: “The whole point here is making sure that we maintain the strongest possible, the most open, the most transparent, and the most engaging democratic process around the world. New Zealand prides itself on … democracy. We can maintain that pride only if we respect the right of New Zealanders to have a say. This bill strips that away. This Government has no respect for the right of New Zealanders to have a say over their democracy. This is yet another attack, which the Green Party will not support.” Where will they stand today? If it was good enough for us for them to stand on their morals and principles and say “We will not support this.”, I challenge them to offer the same morals and principles today.

And New Zealand First—exactly the same. Where are they going to stand: morals and principles or a coalition agreement? Well, we’re going to find out soon enough, because when we brought the similar bill in 2015 to the House, here’s what New Zealand First said: “But, first, what this bill means for democracy in this country. One of the basic principles in this country is the right to vote. It is how I got my job; it is how the Minister of Health got his. In New Zealand First we respect democracy, but this bill is an appalling affront to democracy.” So let’s see later in the day exactly where those two parties sit. Are they going to stand by their 2015 morals and principles, or have they shifted towards the coalition agreement?

This is going to be a problem for them; it’s not a problem for us. We understand fiscal responsibility and we understand the Waikato DHB has been struggling, so we will be supporting this bill. Let’s see what the other parties around the House do later in the day. Thank you, Mr Speaker.

JAMIE STRANGE (Labour): Mr Speaker, thank you for the opportunity to take a brief call on this bill. As a member of Parliament who’s based in the Waikato region, I’m certainly very proud of the work that the staff do at the Waikato District Health Board (DHB). The challenges in the leadership have certainly been well documented over the past few years, and I’d like to acknowledge the leadership of our Minister of Health, the Hon David Clark, for the work that he’s done around bringing stability to the DHB.

The reason this bill is here is to cancel the elections, and that’s to give the commissioner time to bring about that sense of stability and return to a stable pathway moving forward. I commend this bill to the House.

Hon TIM MACINDOE (National—Hamilton West): The purpose of this bill has already been articulated by Minister Salesa and my colleague the associate spokesperson for health in the National Party Dr Shane Reti. I’m mindful of the fact that we’re coming to the end of an urgency period and that colleagues want to get home, but please bear with me for a couple of minutes. This is a very, very important issue for our region, and I do just want to put a couple of points on the record.

As Dr Reti has just indicated, the National Party indicated at the time that the Minister’s decision was announced that we gave it our cautious support, notwithstanding the fact that no MPs wish to see the abandonment of local democracy in their areas. I note that there does seem to be understanding of this decision in my electorate, in Hamilton West, and throughout our region.

I have to say that understanding even seems to be apparent from some of the discussions I’ve had with former district health board (DHB) members themselves. Most of them offered their resignations when the Minister’s intentions were mooted about a couple of months ago, and so there were only two who were, technically, dismissed by the Minister. I want to thank those DHB members for their service to our region, notwithstanding the fact that their departure clearly signals that all is far from well.

It has been widely reported that the Waikato DHB has had serious issues in recent times, especially the unjustified spending of the former chief executive, who, frankly, let us all down very badly, but also the board’s inability to find a replacement for Dr Murray; a forecast deficit of $56 million, which Dr Reti has just indicated; and also the fact, as Minister Salesa noted, that the Minister has not approved the Waikato DHB’s annual plan.

I do want to put on record, as a Waikato MP—and Mr Strange has just made a similar comment—that it is our view that the clinical staff at Waikato Hospital and, in particular, the outgoing acting CEO, Mr Derek Wright, did a superb job after the ignominious departure of Mr Wright’s predecessor.

Hon Nanaia Mahuta: That’s right.

Hon TIM MACINDOE: And it’s good to see also the Hon Nanaia Mahuta endorsing that view. Those clinical staff and Mr Wright have all worked extraordinarily hard to maintain clinical and financial viability. Blame should not be levelled at any of them. On the contrary, they deserve our thanks and support, especially as they continue to serve through this challenging transitional period.

Dr Reti noted that there are a number of issues behind the Minister’s decision, but he must also take responsibility for his inability to deliver on the promises that he made to communities about DHB expenditure and budgets. It is his failure to rein in many of the DHBs that has led to the period of instability that many now face, and I note that there will be a lot of DHBs around the country who will be looking over their shoulders at what has happened in the Waikato DHB and thinking, “Are we next?”, because, frankly, in many respects, their circumstances are very similar.

Because of the fact that most MPs are taking fairly short calls, I will do so as well. But, on behalf of my disenfranchised constituents, I urge the Minister to make good on his promises to DHBs not just in my region but right around the country. I wish Dr Karen Poutasi, the commissioner, all the very best in the challenging and important work that she is now undertaking. I very much look forward to the restoration of local democracy in my region. I’ll leave it there for now, but I do anticipate having more to say on this matter if, and presumably when, it returns to the House for its second reading.

Bill read a first time.

Bill referred to the Health Committee.

Hon JENNY SALESA (Associate Minister of Health) on behalf of the Minister of Health: I move, That the New Zealand Public Health and Disability (Waikato DHB) Elections Bill be reported to the House by 17 June 2019, and that the committee have authority to meet at any time while the House is sitting, except during oral questions; during any evening on a day on which there has been a sitting of the House; on a Friday in a week in which there has been a sitting of the House; and outside the Wellington area despite Standing Orders 191, 193, and 194(1)(b) and (c).

The reason for the need for the shortened select committee hearing period is that polling day for local government elections, including district health boards, is 12 October 2019, and this bill needs to be passed well in advance of that date before significant steps in the election process occur. This is in order to provide certainty around the local election processes, to avoid unnecessary cost and resource being applied on preparation toward any election, and to ensure transparency for the public, including any persons who may have been considering standing as candidates, that the election is not proceeding. Thank you, Mr Speaker.

Hon GERRY BROWNLEE (National—Ilam): We certainly understand the need for a shortened period of consideration by a select committee, but it does seem that the 17 June date is particularly short. Given that this week coming is a recess week, and so the select committee itself is not likely to meet this week, and, even if they did, public submissions that might come on this bill would not be available for the committee to consider, it leaves just one sitting day for the committee to make consideration to hear anybody who might want to put a counter view—and I’m sure there will be; that’s the way it is with these things—before the report-back date of Monday, 17 June.

It would therefore not seem unreasonable for a three-week period to be considered by the select committee, given, particularly, the ability of the House to get this bill finished in the early part of August. The ballot papers for this election will not be printed before the closing date for nominations, which is a date in September, so there is plenty of time. While I can understand some caution, I think caution that denies some public opportunity to make a comment, particularly when the whole House today has said this is an appropriate course of action as far as the bill is concerned, is a little bit off. So would it be appropriate for me now to move an amendment to the motion?

SPEAKER: I’m going to check as to whether it’s an amendable motion, and I’m also looking at the Government to see whether they’d be willing to move it by a week, as requested by leave. I’ll get advice on both at the same time. Yes, the member can amend it if he—

Hon GERRY BROWNLEE: Well, then I would move that the report-back date for this bill—

SPEAKER: No, I think what you are moving is that the date of 17 June be changed to 24 June.

Hon GERRY BROWNLEE: If that is an extra week—24th or 25th—that would be fine.

SPEAKER: The 17th to the 24th—seven days.

Hon GERRY BROWNLEE: I’ll take your maths over mine any day, Mr Speaker. Thank you very much.

SPEAKER: I sense there’s an agreement, so what I’ll do rather than do all the written stuff is I’ll seek leave to amend the date in the motion. Is there any objection to that? There appears to be none.

The question was put, That the New Zealand Public Health and Disability (Waikato DHB) Elections Bill be reported to the House by 24 June 2019, and that the committee have authority to meet at any time while the House is sitting, except during oral questions; during any evening on a day on which there has been a sitting of the House; on a Friday in a week in which there has been a sitting of the House; and outside the Wellington area despite Standing Orders 191, 193, and 194(1)(b) and (c).

Motion agreed to.

The House adjourned at 2.50 p.m. (Saturday)