Thursday, 13 June 2019
Volume 738
Sitting date: 13 June 2019
THURSDAY, 13 JUNE 2019
THURSDAY, 13 JUNE 2019
The Speaker took the Chair at 2 p.m.
Prayers.
Business Statement
Business Statement
Hon IAIN LEES-GALLOWAY (Deputy Leader of the House): Thank you, Mr Speaker. Next week, the Budget debate will continue. It will conclude on Tuesday, 25 June. Other legislation to be considered will include the remaining stages of the Racing Reform Bill and the Veterans’ Support Amendment Bill, and the committee stage of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Bill.
Hon GERRY BROWNLEE (National—Ilam): I wonder if the acting Leader of the House could indicate whether or not it’s the Government’s intention to bring legislation to the House for enhanced security provisions relating to the APEC schedule of meetings, due to take place in New Zealand in 2020, and if so, if there will be—
Hon Grant Robertson: 2021.
Hon GERRY BROWNLEE: Well, Minister Robertson, there are actually quite a large number—27, I believe—officials meetings during the year related to APEC as well. If there is a bill coming to the House, can the acting Leader of the House indicate when that might be, and whether or not it would get full select committee scrutiny?
Hon IAIN LEES-GALLOWAY (Deputy Leader of the House): I’m not aware of anything being brought to the Order Paper at this point in time, but, on those matters, I recommend that the member address them to the Minister responsible.
Amended Answers to Oral Questions
Question No. 6 to Minister, 9 May
Hon PHIL TWYFORD (Minister of Transport): I seek leave to correct an answer. [Interruption]
SPEAKER: Is that an objection? No, just a noise—OK.
Hon PHIL TWYFORD: On Thursday, 9 May, in answer to a supplementary to question No. 6 from the Rt Hon Winston Peters, I said “Wellsford”, when I meant to say “Warkworth”. I’m taking the opportunity to correct that answer.
Oral Questions
Questions to Ministers
Question No. 1—Prime Minister
1. Hon AMY ADAMS (National—Selwyn) to the Prime Minister: Does she stand by all her Government’s statements and actions in relation to the alleged unauthorised access of Budget 2019 material?
Rt Hon WINSTON PETERS (Deputy Prime Minister) on behalf of the Prime Minister: Yes, particularly the comments made by the Deputy Prime Minister in relation to the ethics and legality of the Opposition’s 2,000 times repeated, unauthorised accessing of the Treasury site.
Hon Gerry Brownlee: I raise a point of order, Mr Speaker. In that answer to that question, there was an allegation made by the acting Prime Minister that there were 2,000 hits on the website by the Opposition. It was a pre-Budget week where one could easily expect many people preparing comparisons to have looked at that site. I think such an exaggeration is unacceptable in an answer from a Minister.
SPEAKER: Well, so is the member debating the number, or is he—I can’t quite see—
Hon Gerry Brownlee: No, no.
SPEAKER: OK, I understand the—
Hon Gerry Brownlee: Well, the Standing Orders—
SPEAKER: I understand the—just wait a second. I understand that the member doesn’t like the reply, but I’d like the member to address himself to a point of order.
Hon Gerry Brownlee: Yeah, that’s right, which would be going to the Standing Orders, which require that Ministers give answers that are in the public interest. Inciting a position by saying something that is completely untrue does not do that.
Rt Hon WINSTON PETERS: Mr Speaker—
SPEAKER: Speaking to the point of order, the Rt Hon Winston Peters.
Rt Hon WINSTON PETERS: —in my answer, I was quoting from information that was given to us and hitherto has not been contested.
Hon Gerry Brownlee: This is—
SPEAKER: Speaking further to the point of order.
Hon Gerry Brownlee: Yes. This is the hitherto moment.
SPEAKER: Well, as the member is aware, it has on occasions happened in the past, and under both Governments, that Ministers have been incorrect in the answers that they have given, but I’m—and if it was absolutely incorrect or deliberately incorrect, then there might be an argument for asking for a correction, or if it was deliberate, it is a matter of privilege. But in this particular case, I thought—you know, I’d need to go back and look at TV programmes that I have seen, but I thought I saw the fact that there’d been 2,000 unauthorised accesses to information being a matter of pride for some members.
Hon Gerry Brownlee: I raise a point of order, Mr Speaker.
SPEAKER: A further point of order.
Hon Gerry Brownlee: Well, it would be very unfortunate if you, as the Speaker, have now compounded things by suggesting that any use of a search bar on a publicly available website was somehow unauthorised. The reason for having a search bar on the Treasury website, on TradeMe, or on any other website that you’d like to name is so that people can use it. It is, by virtue of its being there, an authorisation—a welcome in.
SPEAKER: OK. I’m certainly not going to get into that debate with the member, but I think the House has had it quoted often enough to it in the last week or so what should be done in those circumstances, and I’m not at the point where I am going to require the Prime Minister to correct that answer.
Hon Amy Adams: Does she stand by her response to oral questions yesterday that in relation to Five Eyes members raising concerns with the Government, “I find that very hard to believe”?
Rt Hon WINSTON PETERS: On behalf of the Prime Minister, 100 percent.
Hon Amy Adams: Is she not aware, then, that Andrew Hampton, the Director of the GCSB, has confirmed that that is indeed exactly what happened?
Rt Hon WINSTON PETERS: On behalf of the Prime Minister, no, he is not aware of any such confirmation from Mr Hampton. Quite—
Hon Amy Adams: Read your papers.
Rt Hon WINSTON PETERS: I’m going to read the papers now. Just give me a second here. This is what Mr Hampton said: “The GCSB has a longstanding practice of not commenting on its engagement with its intelligence partners for reasons of national security. However, due to the need for clarity regarding the Treasury incident, I can confirm that Five Eyes partners have not raised concerns with me directly or with my agency.”
Hon Grant Robertson: So can the Prime Minister confirm that the assertion made in the member’s previous question is actually completely incorrect?
Rt Hon WINSTON PETERS: On behalf of the Prime Minister, and with delight, yes—100 percent I can confirm that.
Hon Amy Adams: Is the Prime Minister deliberately ignoring the part of Mr Hampton’s statement when he made it very clear that Five Eyes members had been in contact with the GCSB over the allegations of a systematic and deliberate hacking of the Treasury website?
Rt Hon WINSTON PETERS: On behalf of the Prime Minister, who seeks to support the integrity of Mr Hampton, I want to quote what Mr Hampton said again: “However, due to the need for clarity regarding the Treasury incident, I can confirm that Five Eyes partners have not raised concerns with me directly or with my agency.”—end of quotes. That is the total answer to the question.
SPEAKER: No. I am going to ask Amy Adams to ask her question again, because I think the word “concerns” was not in her question.
Hon Amy Adams: I will try. Sorry, I don’t have it written in front of me, so I’ll do my best to repeat it as I had it. Is the Prime Minister deliberately ignoring the part of Mr Hampton’s statement when he made it very clear that Five Eyes partners had been in contact with the Government about the allegations of a systematic and deliberate hacking of the Treasury website?
Rt Hon WINSTON PETERS: On behalf of the Prime Minister, this was just a collegial contact that went something like this: “What’s going on over there, and can we help?”
Hon Amy Adams: What specific assurances did the Government provide Five Eyes members in relation to the reports of systematic and deliberate hacking of the Treasury website?
Rt Hon WINSTON PETERS: On behalf of the Prime Minister, no assurances at all. None were sought. That was, of course, the kind of loaded inference and innuendo in yesterday’s questions from the Leader of the Opposition, but it won’t work. It didn’t work yesterday, and it won’t work today.
Hon Grant Robertson: Can the Prime Minister confirm that the Director-General of the GCSB said, “Five Eyes partners have not raised concerns with me directly or with my agency.”, that there were three routine information requests and/or offers for assistance, and that Ministers were not briefed on these routine information requests?
Rt Hon WINSTON PETERS: On behalf of the Prime Minister—and she wants me to apologise for being repetitive—yes I can.
Hon Amy Adams: Isn’t it correct that the GCSB in fact assured Five Eyes members that they believe that what had occurred was only an “information management issue”?
Rt Hon WINSTON PETERS: On behalf of the Prime Minister, no, and this House should stop having people barking up the wrong tree day after day. If the Budget is of relevance, please debate that.
Hon Amy Adams: Is this going to be like the Five Eyes contact point, where the Prime Minister one day says she finds it very hard to believe it happened and then is very quickly proven to be wrong?
Rt Hon WINSTON PETERS: On behalf of the Prime Minister, who wants to be helpful, she’s got no idea what you’re talking about.
Hon Amy Adams: Why did the Government leave the public of New Zealand labouring under the view for more than 30 hours that there’d been a serious hack of Treasury systems, when Five Eyes partners had it corrected almost immediately?
Rt Hon WINSTON PETERS: On behalf of the Prime Minister, that questioner is better able to answer that than anyone else in this Parliament, because that was the beginning of the controversy. It was the failure to follow the Computer Emergency Response Team (CERT), which, I might add, was launched by Mr Bridges, which asked, and it said this—can I just quote what was said back in April 2017: “From yesterday, New Zealand officially has its own Computer Emergency Response Team or CERT, just like the big countries do, to keep a watchful eye on bad things in cyberspace.” That’s what happened, and that member wants to find who’s responsible. Go and look at a big mirror.
Hon Grant Robertson: In light of the previous question about the word “hack”, is the Prime Minister aware of a situation where the Ministry of Justice’s search platform was used to get into the administration panel of the Ministry of Justice, and it was described at the time as a “deliberate and malicious attempt to hack into the Ministry of Justice’s IT systems” by the then Minister Judith Collins?
Hon Gerry Brownlee: Now we’re going to show this guy knows nothing about how computers work.
Rt Hon WINSTON PETERS: On behalf of the Prime Minister—and ignoring the number one ignoramus in this House—can I say—
SPEAKER: Order!
Hon Gerry Brownlee: No, answer his question. Don’t call him that.
Rt Hon WINSTON PETERS: No, no—look: if the glove fits, wear it.
SPEAKER: I think the Prime Minister had better sit down.
Question No. 2—Finance
2. Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Finance: Does Budget 2019 support New Zealand businesses; if so, how?
Hon GRANT ROBERTSON (Minister of Finance): The Wellbeing Budget supports New Zealand businesses through a number of targeted investments to help them become more productive and make the most of the opportunities created by the future of work and our move to a low-emissions future. These investments are led by the Government’s $300 million fund to bridge the venture capital gap, something that entrepreneurs have been calling for the Government to support. The Wellbeing Budget also makes investments to support the commercialisation of research and science, boost skills and training, and increase international opportunities, alongside the significant infrastructure investment that the coalition Government is making.
Dr Duncan Webb: How does Budget 2019 support businesses to access the skilled workers they need?
Hon GRANT ROBERTSON: The main issue highlighted by businesses to me is access to skilled labour. This is particularly significant at the moment with unemployment near record lows. The Wellbeing Budget boosts the Mana in Mahi apprenticeship programme to nearly 2,000 places, on our way to 4,000. There is increased funding for He Poutama Rangatahi, and we’re putting aside nearly $200 million to reform vocational education so that we have more people in apprenticeships and trade training, and there is more investment in innovative industries and the future of work. These investments will see the Government take a more active role in supporting businesses to get the skilled workers that they need.
Dr Duncan Webb: How does the Budget help New Zealand’s rural businesses and farmers?
Hon GRANT ROBERTSON: The Wellbeing Budget’s $229 million sustainable land-use package includes a number of investments to provide farmers with the on-the-ground support they need to lift their environmental sustainability and unlock more value from their hard work. We’ve allocated about $43 million to support farmers to upgrade important tools like OVERSEER, which help them make decisions for their businesses, and $35 million to support practical advice, information, and tools for farmers and growers to improve their operations on the ground. I’m particularly pleased to see Federated Farmers “especially welcoming” these investments as we work together to create an economy that is both environmentally sustainable and generates high value for its people.
Question No. 3—Finance
3. Hon AMY ADAMS (National—Selwyn) to the Minister of Finance: Does he believe he has acted in an open and honest way in respect of the early release of Budget 2019 information and in all respects to the standard expected of a Minister?
Hon GRANT ROBERTSON (Minister of Finance): Yes, particularly in relation to the large number of very well-received early releases—or, as they are commonly known, “pre-Budget announcements”—including $320 million to break the cycle of family and sexual violence, $98 million for a new kaupapa Māori pathway to help stop reoffending and imprisonment, the removal of NCEA fees, a teacher supply package—
SPEAKER: Order! The member has answered the question.
Hon Amy Adams: Why, when he had issued a press statement with content that clearly linked the National Party to systemic and deliberate hacking, did he not immediately correct that statement later that same evening when he found out from the GCSB that there had been no hack?
Hon GRANT ROBERTSON: I reject various premises in the member’s question.
Hon Amy Adams: Does he think the decision not to correct his statement immediately when he knew it to be misleading fits within section 2.56 of the Cabinet Manual, which says that Ministers are expected to uphold the highest ethical standards?
Hon GRANT ROBERTSON: I believe that I am, along with other Ministers in this Government, upholding the highest ethical standards. I also believe we are upholding the very thing that the people of New Zealand want from us, which is to focus on the Budget and the content of the Budget. I stand here on the Thursday, in the week that we’ve been in the House after the Budget, not having received a single question from the member opposite about the actual Budget, which might indicate just how good a Budget it was.
Hon Amy Adams: Why did he permit the Treasury secretary to do a full round of Wednesday morning media in his place, where the secretary continued to peddle claims of hacking, despite the Minister having been told the night before by the GCSB that there had been no hack?
Hon GRANT ROBERTSON: I reject the premise of that question.
Hon Amy Adams: Why, when according to his own answers to written questions he found out late in the afternoon of Wednesday, 29 May that the police had found no evidence of illegal activity, did he sit on that information until 5 a.m. the next morning, and does he think that’s upholding the highest ethical standards?
Hon GRANT ROBERTSON: On the day in question—it was the day before the Budget, and my focus, as New Zealanders would expect it to be, was on the delivery of the Budget, not the petty political games of the National Party. I also note that, in the last week, the National Party was particularly upset because they thought I had intervened incorrectly in a Treasury statement; now they want me to intervene in a Treasury statement. You can’t have it both ways, Ms Adams.
Rt Hon Winston Peters: Could the finance Minister advise the House of the comparison of communications he’s had in respect to the Budget, as opposed to the alleged hacking?
Hon GRANT ROBERTSON: With pleasure. Last week, I had the honour of traveling around New Zealand, talking about the Budget with New Zealanders. I met with people from all walks of life. I was in Christchurch; I was in Auckland; I was in Tauranga—all of them had questions about the content of the Budget. Many of them, I modestly say, praised it; some asked questions about it; not a single one asked me about that—actually, that’s not quite right. One of them said, “Why on earth is Simon Bridges focused on something so petty?”
Hon Amy Adams: How is it that when he was first advised of the police investigation, he managed to find the time to issue a press release within an hour, and yet, when he learnt the police investigation had found nothing, he allowed 12 hours to pass before a press release was issued?
Hon GRANT ROBERTSON: As I said earlier, in answer to the member’s question, before, they didn’t want me to interfere in anything that the Treasury did; now they want me to interfere in exactly what the Treasury did. On the evening of Wednesday, 29 May, I practised my speech once, and then twice again. I went to bed that night believing that this Wellbeing Budget would be a good thing for New Zealand, and I go to bed tonight believing the same thing.
Hon Amy Adams: Does he still have confidence in the Treasury secretary?
Hon GRANT ROBERTSON: As I have said previously, I have significant confidence in the work that the Treasury and the Treasury secretary did to create the Wellbeing Budget. On the matters that are under investigation, I will wait for the outcome of the investigation.
Hon Gerry Brownlee: It’s going to be a great speech tonight.
Hon GRANT ROBERTSON: Are you coming?
Hon Gerry Brownlee: No.
SPEAKER: Have we finished? Well, ask another supplementary, then, but stand up before you do it.
Question No. 4—Prime Minister
4. DAVID SEYMOUR (Leader—ACT) to the Prime Minister: Why did the Prime Minister say in her answer to written question 19455 that GJ Thompson took a leave of absence from his roles as a director and shareholder of lobbying firm Thompson Lewis while he was employed as her acting chief of staff when the Companies Register shows he continued to be a director and shareholder during this period?
Rt Hon WINSTON PETERS (Deputy Prime Minister) on behalf of the Prime Minister: Because it was and is a fact.
David Seymour: Does the Prime Minister stand by her answer to written question 19452, which states that Mr Thompson was provided with access to all Cabinet papers while he was her acting chief of staff?
Rt Hon WINSTON PETERS: On behalf of the Prime Minister, yes. To wit, the member had, by written question, asked if Mr Thompson had taken leave of absence from numerous roles. He actually referred to those roles because, on the company website, they were very clear. Mr Thompson did take a leave of absence from these roles, as set out in the member’s question. This included Mr Thompson standing down from various roles as described on the Thompson Lewis website—the company, of course, that Wayne Eagleson, the former National Party chief of staff, is a member of.
David Seymour: Is the Prime Minister saying that GJ Thompson failed to properly update the Companies Office with his arrangements in that company?
SPEAKER: Order! Order! That’s not something the Prime Minister has any responsibility for.
Rt Hon WINSTON PETERS: Well, I can answer that one.
SPEAKER: Well—
Rt Hon WINSTON PETERS: I can, with the greatest amount of ease.
SPEAKER: I want to say to the Prime Minister to resume his seat, because I have ruled that that question is not the Prime Minister’s responsibility.
David Seymour: I raise a point of order, Mr Speaker. I did not plan to ask that question, but it was a supplementary to a matter that the Prime Minister had raised in Parliament. The Prime Minister had specifically described the arrangements Mr Thompson had taken. Now, if I can’t question him about statements he’s made in Parliament, well, what is he responsible for?
SPEAKER: It’s not that hard—as I’ve worked with another relatively senior member this week—to get a question that is in order. It shouldn’t be beyond the member’s wit. It’s just, in this case, he didn’t.
David Seymour: In that case, can I ask—
SPEAKER: No. The member’s used up his questions.
David Seymour: Oh, Mr Speaker, are you sure you wouldn’t like to give us another one?
SPEAKER: The mike’s turned off, so you’re not quite coming down yet, because the member hasn’t got the floor.
David Seymour: Oh well, it appears to be working.
SPEAKER: If I need to stand up and ask the member to sit down, I’ll do it.
Question No. 5—Research, Science and Innovation
5. TAMATI COFFEY (Labour—Waiariki) to the Minister of Research, Science and Innovation: What announcements has she made about investment in innovation as a result of Budget 2019?
Hon Dr MEGAN WOODS (Minister of Research, Science and Innovation): Yesterday, I announced that the Government is investing $75 million into the redevelopment of the Gracefield Innovation Quarter through Budget 2019. This investment will mean that New Zealand’s top scientists, engineers, and researchers will have the modern facilities needed to help transform our economy and grow research and development.
Tamati Coffey: What will this investment deliver?
Hon Dr MEGAN WOODS: The redevelopment will transform the site into a world-class modern research campus. It will allow for three new buildings, extensive refurbishments to four buildings, site-wide lab upgrades, and critical health and safety improvements such as asbestos removal, seismic strengthening, and dangerous goods storage.
Tamati Coffey: When will the redevelopment of the site be complete?
Hon Dr MEGAN WOODS: Work to redevelop the site has started with the new measurements standards laboratory building, and the rest of the programme is expected to be completed by 2023.
Question No. 6—Housing and Urban Development
6. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: Will he meet all of his commitments in relation to the KiwiBuild programme; if not, which commitments will not be met?
Hon PHIL TWYFORD (Minister of Housing and Urban Development): I’ve been clear that the Government will not meet its interim targets. That’s why we’re working on changes to the KiwiBuild programme as part of the reset.
Hon Judith Collins: Why has he withdrawn from his commitment to speak at the Property Institute of New Zealand conference on 20 June?
Hon PHIL TWYFORD: Because I have two papers at Cabinet that day.
Hon Judith Collins: How can he have papers at Cabinet that day when he’s also got Cabinet papers on 24 June?
Hon PHIL TWYFORD: I’m a busy Minister.
SPEAKER: Sorry, can I suggest it might be a good idea, unless Cabinet’s changed its day of the week, that the member adds “committee” into his answer?
Hon PHIL TWYFORD: Because I have two papers at Cabinet committee that day.
Hon Judith Collins: I raise a point of order, Mr Speaker. Do you think, given that—
SPEAKER: You can have another supplementary as a result of that.
Hon Judith Collins: Thank you so much. Will he be meeting the commitment he previously made to be the keynote speaker at the KiwiBuild summit on 24 June?
Hon PHIL TWYFORD: No, because I have two papers at Cabinet committee that day.
SPEAKER: No, it’s the same answer the other way around. Scrub the word “committee”, OK? Thank you.
Hon Judith Collins: If he’s pulled out of the conferences because he is preparing papers on the KiwiBuild reset, why can’t he ask a colleague to present them to Cabinet, allowing him to front to the building and construction industry leaders and stakeholders?
Hon PHIL TWYFORD: Well, as the member probably knows from the diary that’s been released, I front constantly, publicly, on KiwiBuild and all of the other matters I’m responsible for.
Hon Judith Collins: I raise a point of order, Mr Speaker. Do you think the Minister could actually answer the question—address the question?
Hon Grant Robertson: Speaking to the point of order, the question went to whether or not the Minister fronts to the building and construction industry, and he addressed that question.
SPEAKER: He did address part of the question, if not the first part, and that’s all you have to do with those two-legged supplementaries.
Hon Judith Collins: Thank you, Mr Speaker. So is he at all worried that he won’t be the Minister of Housing and Urban Development at the time of these conferences?
Hon PHIL TWYFORD: Not at all.
Hon Judith Collins: Sorry?
Hon PHIL TWYFORD: Not at all.
Hon Judith Collins: Ha, ha! Is he perhaps hopeful he won’t be the Minister of Housing and Urban Development at the time of these conferences?
Hon PHIL TWYFORD: Not at all.
Question No. 7—Education
7. Hon NIKKI KAYE (National—Auckland Central) to the Associate Minister of Education: Does she stand by her statements regarding learning support coordinators, and is she confident that she understands the value of supporting teachers?
Hon KELVIN DAVIS (Associate Minister of Education (Māori Education)) on behalf of the Associate Minister of Education: Yes.
Hon Nikki Kaye: Isn’t it correct that zero new learning support coordinators have been recruited under this policy, eight months after the Prime Minister’s promise and announcement?
Hon KELVIN DAVIS: On behalf of the Associate Minister of Education, decisions around the recruitment of learning support coordinators will be made in due course.
Hon Nikki Kaye: Why did she say in November of last year that it’s too important to wait, regarding learning support coordinators, given eight months on, schools are telling me they don’t have clarity on the policy, they don’t know which schools will—
SPEAKER: Order! Order! That’s—
Hon Nikki Kaye: —get one, and they have no confidence that 600 will be recruited by term 1 of next year?
Hon KELVIN DAVIS: There will be, and we’re committed to this kicking off in 2020.
Hon Nikki Kaye: How can she say she values support for teachers when she got into a Facebook fight with a principal where she said teachers are, effectively, being greedy and are only interested in their pay packets?
SPEAKER: Order! That does not relate at all to the primary question.
Hon Nikki Kaye: I raise a point of order, Mr Speaker. I worded that question very specifically. The primary question says, in the second part, “is she confident that she understands the value of supporting teachers?” Again, if you’d like me to repeat the supplementary question—
SPEAKER: No, I listened to it very carefully.
Hon Nikki Kaye: I said, “How can she say she values support for teachers?” It is absolutely within order. I have—
SPEAKER: The second part of the member’s primary question is read in the context of that question, and it was about learning support and supporting teachers in a learning support context.
Hon Nikki Kaye: I raise a point of order, Mr Speaker. At the time the Prime Minister and the Associate Minister made the announcement, they made it very clear that these roles would be teachers. That is why I worded the question very specifically to link both the fact that these learning support coordinators are teachers and the issue of value of teachers. This question, in my view, is in order. The Government has promised that they’ll be teachers.
SPEAKER: That would’ve been two distinct and separate questions and not two parts of one question. The member has been here for quite a while. She knows that even where a question has two legs, there has to be a relationship between them, and that has not been established. I’ll give the member one more crack at asking a supplementary.
Hon Nikki Kaye: How can she say that she values learning support coordinators when principals are concerned about her comments that she’s made about teachers only being interested in their pay packets?
Hon KELVIN DAVIS: On behalf of the Associate Minister of Education, she can say that because of her fine record in advocating for education as an Associate Minister of Education, as a chairperson of a board of trustees, and just the general hard work that she does.
Rt Hon Winston Peters: With respect to the primary question on the issue of the value of supporting teachers, does the Government tend to rectify the grievous wrong done by the previous Government and restore pay parity for teachers?
SPEAKER: Order! The Deputy Prime Minister has just heard me rule out an area of questioning down exactly that line, and I think he would have seen my lack of tolerance with Nikki Kaye during that time, in her argument with me. For him to continue it is just not showing the sort of leadership that one expects from the most experienced member of the House. He will stand, withdraw, and apologise.
Rt Hon Winston Peters: I stand, withdraw, and apologise. I raise a point of order, Mr Speaker. To quote Tana Umaga, we’re not playing tiddlywinks here. Pay parity was destroyed by the previous administration, it having been put in there by a former Government of which I was a member, and now I’m hearing that it’s of no matter in terms of the value of supporting teachers. This is politics, and people need to hear it.
SPEAKER: I made it very clear, I think on Tuesday, to that member that he was on his last warning. He clearly didn’t listen to my discussion before. He repeated something, he withdrew and apologised, and then he continued to argue afterwards. He will leave the House.
David Seymour: I raise a point of order, Mr Speaker. I raise a related but separate matter with regard to patsy questions asked by members on the Government side of the House with the intention of inviting a Minister to attack the Opposition. Now, that last question was arguably an example of that, but there have been several more egregious examples this week, and I just want to ask you: is it still the case that such questions cannot be asked and should be ruled out of order?
SPEAKER: Well, I mean, I’m frankly getting slightly frustrated with having to give advice to the member, but he knows, my having dealt with this matter now, (1) he can’t refer to that, and (2) he can’t go backwards. If he thinks he has a point of order, he should take it at the appropriate time and not later.
Hon Nikki Kaye: Is she confident that she understands the value of supporting teachers and learning support coordinators when a principal—[Interruption]
Rt Hon Winston Peters withdrew from the Chamber.
Hon Gerry Brownlee: At least the Cabinet table of 1996 would be at that pace.
SPEAKER: That’s three.
Hon Gerry Brownlee: Yeah, it was worth it.
SPEAKER: The Hon Gerry Brownlee will stand, withdraw, and apologise.
Hon Gerry Brownlee: I withdraw and apologise, Mr Speaker.
SPEAKER: The punishment is doubled.
Hon Nikki Kaye: Is she confident that she understands and values supporting teachers and learning support coordinators when a principal recently said, “As the Associate Minister of Education, I would’ve hoped you’d have more respect for teachers than to say they are only interested in their own pay packets. What I believe is it is possible to speak respectfully and professionally even through disagreements.”?
Hon KELVIN DAVIS: On behalf of the Associate Minister of Education, yes.
SPEAKER: Question No. 8? [Member not present to ask Question No. 8] Question No. 9, the Hon Michael Woodhouse.
Question No. 9—Health
9. Hon MICHAEL WOODHOUSE (National) to the Minister of Health: Does he stand by his statement yesterday that it was “not realistic to expect all DHBs to break even in the coming year”?
Hon JULIE ANNE GENTER (Associate Minister of Health) on behalf of the Minister of Health: On behalf of the Minister, yes, because it will take more than one or two Budgets to make up for nearly a decade of under-funding in health.
Hon Michael Woodhouse: Does he think the fact that the Minister has failed to approve the annual plans of the district health boards (DHBs) that make up 54 percent of the projected deficits for this year, even though this year has just two weeks to go, is emblematic of a sector that lacks direction from him and can’t possibly be expected to break even?
Hon JULIE ANNE GENTER: On behalf of the Minister, no.
Hon Michael Woodhouse: Does he agree with his Director-General of Health, who described his own ministry’s and Treasury’s projected DHB deficits of $390 million in Budget 2019 as “speculation”?
Hon JULIE ANNE GENTER: On behalf of the Minister, we must recognise that the issues with ongoing deficits of DHBs started in 2013. It’s an ongoing problem. At the root of it is under-funding of health under that last Government, who didn’t increase funding commensurate with population growth and a population that has increasing needs. We’re working closely with DHBs to make sure that they can meet both the services that New Zealanders want and expect, and be on a pathway to financial sustainability. Some DHBs lack the resources to invest in new models of care. We’re going to support them so that they can get on that long-term track to sustainability.
Hon Michael Woodhouse: I raise a point of order, Mr Speaker. An interesting answer, but it did not go anywhere near addressing the director-general’s comments.
SPEAKER: Have another go.
Hon JULIE ANNE GENTER: All of this is forecasts, so it’s entirely possible there’ll be small surpluses, balanced budgets, or small deficits, all according to circumstances.
Hon Michael Woodhouse: Which of the statements he made yesterday is correct: his comment in the morning that “last year, for example, an additional 331,000 patients benefited from increased access to medicines”, or his statement in the afternoon that “I do stand by the statement that last year over 100,000 gained further access to medicines”; and if not, which figure is correct?
Hon JULIE ANNE GENTER: On behalf of the Minister, I think you’ll have to put that down in writing.
Question No. 10—Māori Development
10. RINO TIRIKATENE (Labour—Te Tai Tonga) to the Minister for Māori Development: What are the social and economic benefits she expects to result from the funding of whenua Māori in Budget 2019?
Hon NANAIA MAHUTA (Minister for Māori Development): Thanks for the question. Thanks to the Wellbeing Budget, we’ve made an investment for whānau to become more involved in developing their whenua. The investment of approximately $56 million will go towards providing a package of whenua Māori reforms that will provide updated information and data, improved Māori Land Court processes, targeted amendments to Te Ture Whenua Māori Act, and a regional advisory service to help whānau succeed, connect, and utilise their whenua for their own future wellbeing. Now, a study showed that underutilised land had the potential to yield over a 40-year period around about $440 million if there was improved development. That is the benefit of a wellbeing Budget that focuses on whenua Māori as a targeted initiative.
Rino Tirikatene: What is the biggest hurdle for Māori wanting to develop their whenua?
Hon NANAIA MAHUTA: A hurdle for many Māori land owners is succeeding to their land interests. We want to improve the legislative and court-related aspects to this. That’s why in the package of reforms that we’re introducing in line with the $56 million whenua Māori investment, a series of targeted amendments will help to improve the succession process and pack in better information and advisory services so whānau can make informed decisions about the best governance structure and the benefits of a collective approach to optimising their development aspirations. This approach will enable whānau to connect back to their whenua, build their shared aspiration for the future, and has the potential to create enterprise opportunities, employment, and training outcomes. It’s a real positive step forward for whānau.
Rino Tirikatene: What type of improvements should owners see in the information that they will have access to, and why is this important?
Hon NANAIA MAHUTA: The investment we’re making through Vote Justice to update Māori land online and in partnership with Te Puni Kōkiri, Te Tumu Paeroa, and Manaaki Whenua through WhenuaViz—whānau will have access to better landowner title information and their land capability profile to make some really good decisions about the suitability of their land for varying purposes. Improved access to better information is a positive gain for all Māori land owners, so that they can have an informed and strategic conversation about the future use of their whenua. There’s also an ability to access finance capital through the $100 million whenua Māori land fund ring-fenced for the purpose of creating value uplift for Māori land owners already on their development path. But what I’m most pleased about also—I hear it anecdotally—is that there is a high conservation ethic amongst many Māori land owners, and their desire to keep whenua in its natural state has definite indigenous biodiversity advantages for them and many others.
Question No. 11—Transport
11. Hon Dr NICK SMITH (National—Nelson) to the Associate Minister of Transport: Has she seen the reports from Police in Northland that more than a third of those who have died on Northland roads this year tested positive for drugs, and that the numbers are double that for 2017 and 2018; if so, will she support the urgent introduction of random roadside oral fluid drug testing, as recommended by the Ministry of Transport?
Hon JULIE ANNE GENTER (Associate Minister of Transport): I understand that police have recently reported that five of the 10 drivers killed in Northland this year who have been blood tested had drugs in their system. It’s obviously too early in the year to draw firm conclusions about the trends in road deaths in Northland. The member will be aware that the number of deceased drivers with drugs or medication in their system decreased from 2017 to 2018 in Northland and across the country. Nevertheless, I acknowledge that drug-impaired driving is a significant road safety issue. That’s why this Government is consulting on an enhanced drug-driving testing approach so that we can test and enforce appropriately. That consultation period will close on 28 June this year. The Government will look to confirm its options later this year.
Hon Dr Nick Smith: Does she stand by her interjection yesterday “We will save more lives”; if so, why has she for 20 months rejected the advice of transport and police officials to introduce random roadside drug-testing, during which time 100 New Zealanders have died as a consequence of drug-impaired drivers?
Hon JULIE ANNE GENTER: I stand by my interjection yesterday, and I reject the assertion from that member that I’ve rejected any advice from police or Ministry of Transport officials. The facts are that under nine years National did nothing on drug testing drivers. This Government is doing the consultation so that we can resolve the complex policy issues so that we can have an enhanced regime. More to the point, this Government has increased the number of road policing officers that are out there on the roads right now, which declined significantly under the last three years of National. There are 111 more police officers on the road thanks to this Government making road safety a priority, and putting our money behind that.
Hon Dr Nick Smith: What did she mean in February 2018, when she stated that she was unimpressed by transport and police officials’ advice to introduce random roadside drug-testing?
Hon JULIE ANNE GENTER: I have not changed my position. We all know that there are complexities with introducing roadside saliva-testing. They can be mitigated and that’s why we’re doing the consultation and the policy work. I suppose those complexities are the reason why three associate transport Ministers under National declined to take any action on drug testing drivers when National was in Government.
Hon Dr Nick Smith: How many more tragic deaths do we need from drug-drivers for her to accept the advice of police and transport officials to urgently introduce roadside drug-testing?
SPEAKER: Just before we go there, I didn’t hear an interjection from this side; was there one which led to Mr Goldsmith’s?
Hon Grant Robertson: There was an exchange.
SPEAKER: Well, we’ll scrub what I’ve just said then.
Hon JULIE ANNE GENTER: Again, I reject the assertion the member is making that I’m rejecting advice. We’re taking action on enhanced drug testing of drivers. We want an effective regime that is going to reduce harm on our roads. What that last Government did—not taking action on drug testing drivers, reducing the number of road police on the roads, reducing the amount of money available for road safety improvements right across the country—has all led to this situation that we are now facing. It will take a few years for this Government to make the progress that we are absolutely committed to, in terms of reducing deaths and serious injuries on our roads.
Hon Dr Nick Smith: What representations has she made as road safety Minister opposing the legalisation of cannabis, given her goal of a zero road toll and the scientific evidence from overseas jurisdictions that legalising cannabis results in more road accidents and more road fatalities?
Hon JULIE ANNE GENTER: The evidence from overseas jurisdictions is mixed. What we’re doing is improving the safety of our roads. We’ve increased the number of road police on the roads, and we’re looking at an enhanced drug-testing regime so that we can improve enforcement of impaired driving; that is vitally important. I think a harm-minimisation approach to drugs and an evidence-based approach to road safety is going to lead to the best outcome, because under nine years of that Government, drug use was going up, harm from it was going up, and road deaths were going up.
Chlöe Swarbrick: Does the Minister think that gangs or the Government is better placed to regulate and minimise the harm of drugs on our roads?
SPEAKER: Order! That’s just getting too far away from the substantive question.
Hon Dr Nick Smith: I seek leave to table the advice provided to the Minister on 7 November 2017 from the Ministry of Transport recommending the introduction of roadside drug-testing that she rejected 20 months ago.
SPEAKER: The source—the source?
Hon Dr Nick Smith: There’s an Official Information Act request received by National on the advice from the Minister of Transport to the Minister.
SPEAKER: Is there any objection to that being tabled? There appears to be none.
Document, by leave, laid on the Table of the House.
Hon Stuart Nash: Is she aware that under the last Government, road policing numbers were cut—
Hon Dr Nick Smith: I raise a point of order, Mr Speaker. Mr Speaker, you’ve just made reference, in response to my colleague David Seymour, that questions deliberately set up to criticise the previous Government or the National Party are inappropriate, and that’s exactly where the Minister is going.
SPEAKER: Well, maybe if we have a question I can make a judgment on it, rather than have it rudely interrupted the way the member just did.
Hon Stuart Nash: Thank you, Mr Speaker. Is the Minister aware that under the last Government, road policing numbers were cut by 111, and it wasn’t until July 2018 that road policing numbers were once again up to full muster?
Hon JULIE ANNE GENTER: Yes, that’s exactly correct.
Hon Dr Nick Smith: How’s that within the grounds of the question?
SPEAKER: Sorry? Because—just to make it absolutely clear—the member got it in order at the end. It took him a while, but he got it into order.
Question No. 12—Housing and Urban Development
12. DENISE LEE (National—Maungakiekie) to the Minister of Housing and Urban Development: Does he stand by all his statements and actions in relation to the meeting he had with Hon David Parker and Auckland Mayor Phil Goff on 2 March 2019?
Hon PHIL TWYFORD (Minister of Housing and Urban Development): Yes, I do, particularly my statement that my office made a mistake in leaving out a meeting with the mayor and Minister Parker when my more than 1,700 meetings were published on the Beehive website.
Denise Lee: When he requested the meeting with David Parker and Mayor Goff to discuss Auckland’s rural-urban boundary, why did he specifically state it was to be a political meeting with no officials?
Hon PHIL TWYFORD: Well, I would say to the member that it is common for politicians to meet without officials present, just as it was under the previous Government. The main purpose of the meeting was to gauge what the likely concerns of Aucklanders may be and what the political response would be.
Denise Lee: How can he stand by his statement to Newshub yesterday, “I’m not aware that my office did refuse to release information.”, given he personally signed the Official Information Act response saying no information about the meeting existed?
Hon PHIL TWYFORD: Because at the time that release was responded to, my office had overlooked emails that had been generated setting up the venue and the time of the meeting. In retrospect, I acknowledge that those emails should’ve been included in the response. When I was asked a question by Newshub yesterday, I didn’t have the documents in front of me and I wasn’t able to answer the question.
Denise Lee: If the failure to disclose the meeting was simply an administrative oversight, as he claimed yesterday, why did he refuse to release the official information that Minister Parker released, which proved not only was the meeting held but further information about it did exist?
SPEAKER: I’m going to ask the member to consider carefully the question and whether the word “refuse” is there as opposed to “fail”, because otherwise she’s got to show some evidence that he did refuse. He “failed to release”, I think you mean.
Denise Lee: Would you like me to—
SPEAKER: No, I’ll substitute it and then the Minister can answer, if you like.
Hon PHIL TWYFORD: First, I’m not responsible for Minister Parker’s release of the documents, and in my earlier answer I explained why that information wasn’t released at the time.
Denise Lee: What is his definition of a political meeting, and how is it different to meetings he organises in relation to his ministerial responsibilities?
SPEAKER: OK, and because there were two interjections from this side and only one from that side, I’m going to let the Minister answer, but I want to warn people that they are not to interject while questions are being asked.
Hon PHIL TWYFORD: In this instance, I would define a political meeting as one where politicians are present, discussing politics.
Kermadec Ocean Sanctuary Bill
Progress To Third Reading Vote—Leave Declined
Hon GERRY BROWNLEE (National—Ilam): I raise a point of order, Mr Speaker. I seek leave of the House for the House to progress to the third reading vote on the Kermadec Ocean Sanctuary Bill, No. 23 on the Order Paper, forthwith.
SPEAKER: Is there any objection to that? There is objection.
Budget Debate
Budget Debate
Debate resumed from 12 June on the Appropriation (2019/20 Estimates) Bill.
Hon Dr MEGAN WOODS (Minister of Energy and Resources): It is my great pleasure to take a call in this debate. Budgets are a chance for Governments to spell out their priorities and their vision, and I am proud to be part of a Government that set out the vision and the priorities that it did in this year’s Budget. This was a Budget that put wellbeing, the wellbeing of New Zealanders, at the centre of everything. It was a Budget that had the courage to govern for the next generation, and not just the next election. It was a Budget that delivered a plan to address the mental health challenges that are facing this country and have been allowed to go on for far too long. It was a Budget that delivered housing to the homeless. It was a Budget that lifted tens of thousands of Kiwi kids out of poverty. It was a Budget that will deliver low unemployment. It was a Budget that delivered low debt, and it was a Government that has delivered a strong surplus.
When I have gone around my electorate of Wigram and spoken to people about this year’s Budget, I know that these are the things that are important to them. These are the things that are important to New Zealanders. We’ve tackled those long-term issues facing New Zealand, and we’re balancing record levels of investment in this year’s Budget over our long-term challenges while maintaining fiscal responsibility, delivering strong surplus, growth well ahead of the OECD average, and near record low levels of unemployment and low debt. That is something that I know, when I’ve spoken to people, that all New Zealanders are rightly proud of.
If we look at the money that we have put into mental health, in many ways the centrepiece of this Budget, this is something that I think there is not a member in this House, on either side of it, that doesn’t have strong personal stories and connections to the struggles that many New Zealanders are facing in the areas of mental health. I know in the city that I come from, Christchurch, the last nine years have really taken a toll on people’s mental health. There are many people in my city struggling with their mental wellbeing, and their mental health, as there are all over the country. This is why this Government set aside a record investment in our mental health services with a new universal front-line service, making it as easy as possible for people to get help early before those small issues become major problems. The Budget includes new funding for suicide prevention, addiction treatment, and housing for almost 300,000 homeless people.
Then, if we turn to the issue of child wellbeing, it is so important that any Government—and I am so proud that our Government has put breaking the cycle of child poverty, and family violence right at the centre of what we’re doing. Our Families Package and Wellbeing Budget are projected to lift 50,000 to 74,000 children out of poverty, and this is something that we can all be proud of. We’re providing record funding for services to break the cycle of family and sexual violence, and new funding to stop kids falling through the cracks. We’re extending the nurses in schools programme, meaning it will reach an additional 5,600 students, and this is something that is so important. We’re doing this while we’re sketching out a long-term vision of how it is we can transform our economy, and how we can grow and modernise our economy while ensuring that we are setting ourselves on the pathway to a just transition to a low-emissions future. We’re backing KiwiRail, to get trucks off the roads. We’re fixing our schools and hospitals, and we’re investing to meet the challenges of climate change. We are not a Government that is content to leave this without adequate provision.
One of the things that I do want to spend some time talking about is mental health services. For all of us, we know that it is something that has been left by the wayside for too long. In Christchurch, we had looked when we first came into Government at some of the critical areas of need, and they were our children. In February last year, only a few months into being in Government, we put additional funding in to help our children. I am pleased now that we have been able to roll out additional support for children and people all over our country who do require those services.
When I speak to my constituents, one of the things that I know families have struggled with has been the increased costs associated with a so-called free education. The school donations have been seen as an increasing burden that families have had to face every January. They’re just getting over that Christmas hump, they’re just getting on top of things again, and school donations come into play, so it is especially satisfying for me that we are looking to offer the help to schools so that they don’t have to ask families for those donations. It is $150 per student, targeted at schools from decile 1 to 7—
Hon Dr Nick Smith: Not what you said; a broken promise.
Hon Dr MEGAN WOODS: —just as we promised in our election costings.
In my electorate of Wigram, there are 18 schools that fall within this decile rating. There are 18 schools that will be eligible to not ask parents for $150 a year. There are 18 schools that, instead, will be able to apply to the Government for $150 per student. In my quick, back-of-the-envelope calculation, that means that $900,000, if every school takes that up, will be put back into the pockets of families of Wigram alone, and I know that that will make a difference. I know that for those families, that will make a huge difference, and I am proud that we are targeting it at this area of need first.
But it is important that while we address these long-run issues, we also address the pressing problems that face us in the 21st century and make sure that we are grasping the opportunities that sit alongside that. Transforming the economy is something that this Government believes passionately in, and we can see this all through Budget 2019. We’ve got the productive and sustainable land use package boosting funding to protect and restore at-risk waterways and wetlands, and providing support for farmers and growers to use their land more sustainably. It is critical that we invest in this and that we get this right.
But one of the things that I am most proud of, as both the Minister of Research, Science and Innovation and the Minister of Energy and Resources is that we are investing in the long-term transition to renewable energy. There is $27 million for a new energy centre in New Plymouth, where we can get right the way in which New Zealand can put in place the plans to get off fossil fuels and plan for a 100 percent renewable future. In addition to the $27 million for the new energy centre, another $20 million fund is being put into renewable energy research, and this is vital. We need to ensure that as we go through this transition, we are ensuring that we are setting up industries that will provide high-paid jobs for people. We don’t bury our heads in the sand and just wait for industries to run out of steam, as it were. This is a Government that is not prepared to leave workers and communities by the wayside as we go through the transitions that economies all around the world are finding themselves facing.
It is critical that we have a Government that is brave enough and that has the courage to look at these long-term problems and put in place the kind of long-term thinking that we need to address these issues. We cannot afford to ignore the problems, like the previous Government did for nine long years. Our Budget this year, built on last year’s Budget, is putting New Zealand on a path of having a very clear plan for the future and a very clear way forward, where we can take advantage of the opportunities and our people are placed at its centre.
Hon Dr NICK SMITH (National—Nelson): Budget 2019 is going to for ever go down in history as the botched Budget. It’s not just botched in its delivery but botched in the sense of the lost opportunities, the broken promises, and the way in which it has failed to deliver for New Zealanders.
Wasn’t it fascinating listening to Megan Woods talk for 10 minutes in the Budget debate without mentioning the word “KiwiBuild”? She couldn’t speak for a minute prior to the 2017 election without reciting the KiwiBuild promise of 10,000 homes a year. She didn’t mention it, because I’ll tell you how bad it is: she promised 10,000 houses a year, along with her colleagues, but 18 months into the programme, they’ve delivered 81. If a building company pulled off that sort of a dirty trick, they’d be in the courts for fraud; such was the failure of the delivery of that policy.
Then, of course, a Budget is about financial management. You can put all the lovely piccies on the front cover, but, actually, it matters as to how we’re managing the country’s finances. I nearly choked on my Kornies when I read the Budget speech and I read that we’re going to borrow an extra $20 billion. Forget the rhetoric about the future—who do we think is going to have to pay back the $20 billion that we’re borrowing at a time when New Zealand’s terms of trade are at their best?
I talked about broken promises. Does anybody remember Jacinda Ardern and Grant Robertson talking about the Budget responsibility rules? They said that they were set in concrete. This was a guarantee. Even after the coalition agreement was signed, we were told that the five Budget responsibility rules were absolutely set in rock. Actually, I think they used the term “concrete”—my phrase today would be “It must have been pretty wet concrete.”, because we’re now told that the debt limit is not 20 percent any more; it’s now 25 percent. That’s another 20 billion bucks of debt that members opposite want to rake up on the future of New Zealanders.
You want to talk about wellbeing? One of the most important things for the wellbeing of Kiwi families is a job. In the last two years of the National Government, every month another 10,000 jobs were created for Kiwis. You know what’s happened this year? Over the first five months of this year, the number of jobs in the New Zealand economy, for the first time since 2011 and the global financial crisis (GFC), has gone backwards by 4,000. Here’s the bit that really worries me: Treasury projections around the level of job creation for the next four years are the slowest that they have been in two decades. Fewer jobs do not mean better wellbeing for New Zealanders.
Then let’s go further in to the broken promises. Do any members of the House remember that wonderful moment during the leaders’ debate in 2017 when the Prime Minister said “There won’t be any strikes on my watch.” Well! The number of strikes in the last year is now at 20 times what they were. We’ve had the mega-strikes in the schools. We have patients turning up at our hospitals being turned down from operations. As a constituency MP, I’ve seen more people this year in grief over getting access to operations than what I have seen since the Clark years in Government, and they have the cheek to talk about social wellbeing.
Then we go to an area like education. Megan Woods was so cute in talking about the policy of removing donations in schools. I have Labour’s policy here. It’s very explicit: all schools will have access to a $150 payment for each student in exchange for not requesting parental donations. I want the next Labour member to say why they have ratted on 200,000 families who were promised $150 and didn’t get it.
Let me tell you what it means for my community. I’ve got four great colleges. My children go to Nelson College and Nelson College for Girls. They’re getting it. They’re decile 7. But Waimea College, my country school, is being deprived of $250,000. They’re creating a two-tier education system in my community of Nelson, and that is wrong. It is not what they promised, and it’s grossly unfair on those 12 schools in my area that are not getting what they were promised.
Then let’s look at health. I remember when David Clark said that the bare minimum—the bare minimum—that was required in Vote Health for district health boards (DHBs) to be able to keep up with health services was $1.4 billion. And what do we see in this year’s Budget? Less than half of that, at the same time our DHBs are pouring out record deficits. Our health boards are in a financial crisis because of the incompetent management, only 18 months into this Government.
They want to talk about wellbeing. If you want to talk about wellbeing, tell me about the patients that are being denied access to cancer drugs. Don’t lecture me about wellbeing when you have not provided a single extra dollar for Pharmac to be able to provide those lifesaving drugs. It truly has nothing to do with wellbeing.
Hon Julie Anne Genter: What did National do?
Hon Dr NICK SMITH: The member asked: “What did National do?” National increased the Pharmac budget every single year, including in the GFC, because we recognised the importance of those drugs, and I’d love to recite for that member the sort of commitment that we made to women that suffered from breast cancer and others during our period in Government.
Finally, I want to come to the issue of both the incompetence and the dishonesty around the presentation of this year’s Budget. I have never witnessed the level of incompetence around the presentation. It is a very serious matter when you can openly google access of a Budget that is meant to be confidential. That was completely incompetent in Roger Douglas’ case and in the case of Michael Cullen—there were rightly calls for the resignation of Ministers for not keeping the Budget confidential. And Treasury has hard questions to answer about that.
But, as always, it’s not the mistake, it’s the cover-up, that actually gets people into more difficulty. The dishonesty that occurred in the week of the Budget speaks volumes about the moral character of the Government. Remember the Prime Minister said on the Tuesday that the numbers released on the Budget were false. That was not true. Those numbers we now know were absolutely accurate and accessed from Treasury.
Remember the statement from Grant Robertson. We now know that after he was told that there had been no illegal access to the information, he continued to run that line and, even worse, reported the Opposition of this Parliament to the police for investigation. Now, I expect that sort of conduct to go on in ratbag fringe democracies, but the exercise of this Government trying to take the Opposition to the police for investigation and the sorts of comments from the Deputy Prime Minister drag the New Zealand democracy down to a level where it does not belong.
But the incompetence went even further than that. This is the first Budget ever in New Zealand history where, rather than picking up detailed financial tables and information, on the cover we have a pretty picture of a mum and her child. Now, if you went to Public Relations 101, you might have checked that the person that you were symbolising your Budget and wellbeing with might have been able to speak a positive word about the Government.
I have put out dozens of documents in my years, and one of the 101 rules was to make sure that, actually, it was an authentic story. The story of the woman on the cover of Budget 2019 actually speaks volumes about the gap between the presentation of the Budget and the reality. That woman’s choice to leave New Zealand last year—
Hon Julie Anne Genter: Her problems were because of the nine years under National.
Hon Dr NICK SMITH: —and move to Australia actually speaks volumes about the failure of this Government and the failure of the member screaming over there, who does nothing while over 80 people die from drug-drivers each year. The Budget is a botched Budget. It’s a Budget of broken promises.
Hon KRIS FAAFOI (Minister of Broadcasting, Communications and Digital Media): It is a pleasure to speak in this Budget debate. It’s always tempting to rebut nearly all of what Dr Nick Smith has to say, but let me start with the point that he made finally about the person on the cover of the Budget. That person was a Green Party supporter, actually, who left just months after the election because of the struggles that she had for the five years that she lived in Auckland. She left New Zealand because of the time that she struggled to pay her bills under the previous Government.
Hon Members: That’s right!
Hon KRIS FAAFOI: That’s right. And I bet that if some of the initiatives that we have introduced in this Budget this year had been around in her time, she could have stayed, but, no, the previous Government was in power then, and there was no hope for that young lady and her family. Just months after the general election, she’d had enough because of the five years of struggle of trying to live with rising house prices and rising rents under the previous Government. So let’s just look at the reasons why she was actually a perfect example of what was going wrong with the previous Government and of the initiatives that we are taking within this Wellbeing Budget to make sure that that kind of stuff doesn’t happen again—to make sure that young mums with children have hope in New Zealand and can say to their children “Yes, we can pay the rent.”, “We can make sure we can pay the bills.”, and “This is a great place to live.” And that’s what this Wellbeing Budget is about.
This time last week, I was in the Tararua and the Central Hawke’s Bay with my colleagues Deborah Russell and Kieran McAnulty—not necessarily heartland Labour territory, but at the meetings that we went to on that day, which were post-Budget meetings, let me tell you how many people cared about the way in which the Opposition was carrying on in the days before the Budget was delivered: zero, nil, zilch, nada, none, not one sausage, because they actually care about the things that matter to them and their families—like whether their families are healthy, whether they can pay the rent or afford a house, whether or not their families and their children have a classroom to learn in. They are the things that I am extremely proud to stand here and say that, while we are dealing with business-as-usual infrastructure issues, we have also tackled some large issues which went unanswered by the previous Government for many years, which we have taken seriously in this Budget. It has had almost universal positive outcomes in the community.
I want to go back to our trip to Central Hawke’s Bay and Tararua, and I want to talk about the announcement of $1.9 billion of funding for mental health. When we were there in rural areas, they were very thankful to the Government for finally taking seriously an issue that isn’t just an urban issue, that isn’t just a city issue, but that has been a rural issue for many, many years. As we know, there have been large mental health issues in rural areas and, under the previous Government, I think people who were supportive of that Government were crying out for some action—the likes of Rural Support Trust, who we met this time last week, who was saying, “We need mental health services delivered in a way that will effectively make a difference to our communities.” And I think that they see in the $1.9 billion investment in mental health some real hope for their communities.
They did have some questions which I think are fair and valid questions about making sure that that funding is meaningful to them and their rural communities—that they can access it and that it is accessible given the distances that some of these farmers and people in rural communities have to go to access primary healthcare in their communities. I think they are valid issues, but what I think we saw last Thursday was some real hope that, finally, a Government was taking mental health seriously. I am extremely proud to stand in this House to say that I think that is going to be a policy and an investment in health that will make a generational change here in New Zealand, because I think, whether you’re in central Auckland or whether you’re in Waipukurau or whether you’re in Pāuatahanui, in my electorate, access to those basic mental health services will be there, and I’m extremely proud of that investment.
The Chamber of Commerce in Dannevirke also asked us about training opportunities for young people. They are struggling to make sure that their small businesses can get the likes of apprentices. We were more than happy to tell them about the investment in Mana in Mahi, making sure we can get young people into apprenticeships and helping those small businesses who are struggling to pay the bills to afford an apprentice to get help from further investment from taking the Mana in Mahi approach from just 150 places to 2,000 paces, with an eye on making sure those numbers go up to 4,000 at some stage. I know that I’ve got builders in my electorate, in Porirua, who have been crying out for something like this for some time because they’ve struggled to get staff. They have struggled to pay for apprentices. They liked the look of Mana in Mahi when it was announced in Porirua last year, but 150 places they thought wasn’t enough. Well, I’ve got good news for them because, in this Budget, we’re going to extend those 150 places out to 2,000 places nationwide. I think that will give hope not just to those businesses who want to take on young people and train them but also to those young people who are looking for an opportunity to get skills in a trade.
Now, before they get there, they have to learn in a classroom, and it’s fair to say that the previous Government didn’t see this demand coming and underinvested in capital to make sure that there were enough classrooms in our schools. So I’m extremely thankful for the $1.2 billion investment over 10 years by the Minister of Education, Chris Hipkins, to make sure, quite simply, that there are enough classrooms for our children to learn in.
You would think that would be something that a responsible Government would do, but when we came to power after nine years of the previous Government there was serious under-investment not only in training teachers but in ensuring we had enough teachers and classrooms to make sure that when more children come into our classrooms we have got the infrastructure to deal with it. So I’m proud to say that not only are we going to train more teachers, we’ll have classrooms for them to teach in, which is going to be extremely good for them.
In my ministerial portfolio areas, in commerce, I’m glad to say there’s more funding for the Commerce Commission to do more enforcement and advocacy work, and around the Credit Contracts and Consumer Finance Act, as we take action against the likes of loan sharks and make sure that we protect vulnerable consumers.
In the area of civil defence is an investment to establish a new national emergency management agency to make sure that central government and central civil defence functions are beefed up to assist our civil defence groups around the country.
I also want to point towards something that Megan Woods, my colleague from Wigram, pointed out too—the way that we are helping parents of schoolchildren. She talked about school donations, but, also, I think, before the election the Minister of Education, Chris Hipkins, was talking about some relief that we will give to students around fees for NCEA exams, which I’m sure those people across the hall will scoff at. But sometimes it’s the little things that mean a lot to a family that is struggling to make ends meet. That is certainly the case when it comes to my electorate, around NCEA fees. Soon after that announcement came out, I got a letter from our local Society of St Vincent de Paul—St Vinnie’s; I’m sure most of us have got those in our communities.
Greg O’Connor: Good Catholic organisation.
Hon KRIS FAAFOI: Good Catholic organisation, thank you, Mr O’Connor. It was addressed to me, and if I can, to finish off my speech—as many people will be hoping—I would just like to read from it. “Dear Mr Faafoi—as the branch of the Society of St Vincent de Paul based at St Theresa’s Church in Plimmerton, we are writing to say that we applaud your Government’s decision to scrap exam fees for students at secondary schools in the upcoming round of NCEA exams.” They go on to say: “We deal all the time with families who are struggling in the Porirua basin and know that this will be one area which will make a big difference to both pupils and parents. Could you please convey our thoughts to your colleagues. Yours sincerely, Margaret Baker.” It’s those kinds of stories—the small ones and also the big ones, when we invest $1.9 billion in mental health—which makes me extremely proud to say that I’m here to stand and support this Wellbeing Budget. It will make sure that people who have struggled mentally will have the help available to them. It sounds like a simple thing but we are doing it.
Hon DAVID BENNETT (National—Hamilton East): Thank you, Madam Deputy Speaker. In a rare show of unity amongst this House, I think the last point that the member Kris Faafoi just raised around the school exam fees is something that I think most members of this House will actually support, because, you know, we don’t want to actually make it harder for people to get an education and go for that next stage. A lot of our families are in very difficult circumstances and those school fees and costs, especially costs of exams, can be a detriment to them doing that. I think that that is one good thing out of the Budget.
But it isn’t all of this Budget, and if that’s all that that member can find in this Budget to really go for and support, then I think that that shows the true nature of this Budget. It was a missed opportunity for New Zealand. New Zealand is about to enter very difficult economic times, and these economic times are not caused by international pressure. You’ve got the US economy booming. You’ve got an Australian economy that’s going to take off again after the election. This is not a poor international economic condition that we are entering. It is all created by a failure on that side to invest in the things that actually make New Zealand strong. That is why the New Zealand economy is slowing down.
It’s only a matter of time before it slows, because in New Zealand we have a very delicate economy. We’re not like the Australian, American, or British economies, that can withstand a stupid Government every so often. The New Zealand economy will tip over as soon as the fundamentals are changed. You are in that spiral now. The Labour members just need to wake up and acknowledge that that debt spiral has already started because of their policies. That cannot be stopped in the New Zealand economy until you reach a low point. Time and time again we have seen that, and we don’t know what that low point is going to be, but it is coming.
People out there in the business communities are not investing now. People in the farming communities, at the field days, where I was yesterday, are dead scared of what this Government is going to do. The banks are running for cover, the investors are running for cover, and the people that actually make the productive decisions in this country are running for cover. They know what is coming, and it will come, and it will come in the next year or so. Now, I hope it’s before the next election, because the true colours of that party will be shown to New Zealanders and they’ll be able to make an economic judgment as well as a political judgment when they go to the polls. Potentially, it might happen after the next election. Then the Labour Party will go into that election saying what great economic managers they are, when they’re not. It will happen, because they have set it on that motion.
That was the opportunity that was missed, because this Budget should have been a Budget to invest in New Zealand and to promote the growth of this country. Where is the infrastructure investment in this Budget? It’s not there. Where are the tax cuts that would have given New Zealanders a reward for hard work? Not there. What have we got instead? We have got an economy that is falling down. We have got a Government that just wants to control everybody’s emotions, control everybody’s thought processes, and control their income streams. That is what they are doing. They are dumbing down New Zealanders. This Budget is another example of that.
What was progressive in that Budget? Nothing. What was out there to say to somebody—I look at our two fine new members of Parliament, that have come in to represent two new communities in New Zealand—some not new, actually. They represent the future of New Zealand that is aspirational and wants to achieve. What was in that Budget for those communities? Nothing. What was in there to encourage someone to come to New Zealand and work hard to invest and go ahead? Nothing. What was in there, if you’re in the Labour Party and you want to control and dictate—
DEPUTY SPEAKER: I’m not—I’m not.
Hon DAVID BENNETT: That’s what the Labour Party was doing.
This Budget is a missed opportunity for New Zealand on two levels. First of all, in the current economic situation, we needed to make some serious, smart economic decisions. We needed to invest in the infrastructure in New Zealand and we needed to get the economy going with those tax cuts. They didn’t do those. The second one, which is the one which really hurts, is that they did not give the direction, the aspiration, and the ability for New Zealanders to make their own future. Everything now is reliant on a Government deciding that “It is your year to get paid out, that it’s your year for us to show some benevolence, that it’s your year for us to come and support you.”
We don’t want that. Kiwis don’t want that. Kiwis want to know that a Government enables them to support themselves. They don’t want to know that it’s Labour’s year to pick you or somebody else. They want to know that it’s their future that they make. That’s why people come to this country, that’s why people stay in this country, and that’s what this room should be about. It shouldn’t be about trying to pay off everybody every year to keep them in their power base.
I want to say, look at the great region of the Waikato. What did we get out of this Budget? Diddly squat. We got nothing. We got absolutely nothing out of this Budget. We are one of the most productive regions in this country and we got nothing. Now, I want to tell you a little story—a little story. Now, this is only a small thing in Hamilton. It’s not a big thing, but it is indicative of what this Government has done to Hamilton. Now, for the last couple of months the Mayor of Hamilton has been running around saying what a great Government they are because they’re going to give us a drug and alcohol court in Hamilton.
We have many people that actually have addiction issues, going through our court system. We have a very high Māori population in our community that are afflicted, just like in all parts of the community, with these drug and alcohol issues. These drug and alcohol courts have been shown to work. They’ve been shown to work overseas, and in Auckland they’ve been very successful. I know that the mayor came down here and met with the Prime Minister, and the mayor advocated for this drug and alcohol court. We’re not talking about $10 million or $20 million; we’re talking about probably one $1.5 million, if that, and it would have made a huge difference to our people. Guess what happened? Six weeks before the election, suddenly there was no response from the Government. They would not ring back. They would not return emails. They would say nothing. And then when we look at the Budget, nothing is in there.
Louise Upston comes from a seat that has an amazing potential to grow if that motorway had continued through, that had been taken away by this Government. That expressway was actually approved by the New Zealand Transport Agency before the last election. It was taken away by that Government to pay for infrastructure in Auckland, which won’t actually happen because you can’t actually get ready to do that rail investment yet—and the Waikato people lost that investment. What do they get in return, in this Budget? They got to pay another 8c on every petrol dollar they buy, just to keep that Government paying for its promises. That is not right. We are 9 percent of this country and we will not stand to be taken advantage of by the Labour - New Zealand First Government any more.
When I came into this House, I made it my desire and passion to make sure that we got our share of money. I was sick and tired of the Waikato being walked over and used as a cash cow for this country. We got our money. We got our share and we’re not going to let these guys get away with taking it back. The Waikato deserves more. We deserve our money. We deserve to be paid. We deserve to get a share of the growth of this country. And we’re not going to take it any more. That’s why Labour don’t win any seats in the Waikato. They will never win any seats in the Waikato, because the people there know that they want to be looked after and they want to be well and truly looked after.
This Budget is a disaster. It is a failed opportunity for New Zealand. It does not create the New Zealand that we need, going forward, and for one of the most productive regions in New Zealand it is an insult that we got nothing out of this Budget. In fact, all we got out of this Budget was the ability to pay for other regions, and we are sick and tired in the Waikato of paying for other regions. We will not stand for that any more. So that is what is going to happen. We wish to see a Government that is actually aspirational for New Zealand and commits to that infrastructure, the taxation system, and also with kindness and compassion so that people can achieve their full potential. That didn’t happen this time. I know that Nanaia Mahuta is going to get up and stand now. I ask her to say what was in it for the Waikato. Name something that was in it for the Waikato specifically, and I’ll bet you she can’t. She can’t because there was nothing.
Hon NANAIA MAHUTA (Minister for Māori 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.
Debate interrupted.
Bills
Oranga Tamariki Legislation Bill
Third Reading
Hon KRIS FAAFOI (Minister of Broadcasting, Communications and Digital Media) on behalf of the Minister for Children: I move, That the Oranga Tamariki Legislation Bill be now read a third time.
This omnibus bill gives full effect to policies that will be enacted by the Children, Young Persons, and their Families (Oranga Tamariki) Legislation Act 2017. The most significant of these policies is the expansion of youth justice jurisdiction to include 17-year-olds. The bill will ensure the intent of the expanded youth justice jurisdiction is applied consistently from 1 July of this year. The bill also ensures urgent interim court orders related to custody, guardianship, or restraint are made in line with intended and established processes. The bill also makes technical and consequential amendments to 11 Acts and a related set of regulations, which have been discussed in the House before. The bill will come into force on 1 July 2019.
The bill had its first reading on 2 April this year, where it was widely acknowledged that Parliament should ensure there is consistency across the youth justice system. The bill does this through changes that are consistent with, or consequential to, the policy to include 17-year-olds in the expanded youth justice jurisdiction; for example, to bail laws, sentencing laws, and aspects of criminal procedure.
I know that some of the bill’s amendments, while consequential to that policy, are technically complex, and on behalf of the Minister for Children I acknowledge the Social Services and Community Committee for grappling with these technical issues quickly and efficiently and recommending changes to the bill which mean that the bill covers a number of common scenarios, including where 17-year-olds are facing related charges.
The select committee’s recommended changes were discussed at the second reading and committee of the whole House. Some of the select committee’s amendments covering related charges were clarified by the Minister’s Supplementary Order Paper 247, which was discussed earlier. I want to thank the members of the House for their contributions, on behalf of the Minister, in the committee of the whole House.
Together, the bill and the Supplementary Order Paper will improve the certainty and workability of the law. The bill in its final form will give clear guidance on procedure within the youth justice system, including for related charges. This bill will support the judiciary, the New Zealand Police, and other key stakeholders to treat 17-year-olds consistently through all parts of the youth justice jurisdiction.
As has been outlined throughout the parliamentary process by the Minister for Children, the bill also clarifies the operation of urgent interim orders that may be required in court proceedings under the Oranga Tamariki Act 1989. The processes surrounding urgent interim court orders were developed to serve the best interests of the child and should be maintained. The bill makes sure these processes will continue to operate effectively from 1 July. The bill also fixes other minor drafting errors in the Children, Young Persons, and Their Families (Oranga Tamariki) Legislation Act 2017 and a cross-referencing error in the Children’s Commissioner Act of 2003. Again, the changes, while technical, mean the law will function as clearly as possible for all relevant stakeholders.
Overall, the bill makes a positive contribution to the workability of the law, particularly where it concerns treating our young people consistently. I commend the Oranga Tamariki Legislation Bill to the House.
Hon ALFRED NGARO (National): Thank you, Madam Deputy Speaker. I rise to take a call in this third reading of the Oranga Tamariki Legislation Bill. I want to acknowledge the Minister who has just read the speech in the third reading, Kris Faafoi, and acknowledge that on behalf of the Minister herself, the Hon Tracey Martin as well. In fact, we couldn’t think of a better Minister to do this. He is kind, he’s caring, and, in some cases, he’s cuddly to his community. I just want to commend him and thank him for his words. I think his words—even though he wasn’t part of the process—were very genuine, and I want to congratulate him on eventually, at the end of the month, becoming a Cabinet Minister, because I think he deserves that as well. He emanates the very heart of this bill.
I want to acknowledge, first and foremost, the work that was previously done by the Hon Anne Tolley. The work around this was the transformation and change of the Children, Young Persons, and Their Families Act, then moved on to the Oranga Tamariki legislation which is before us in the second part of that amendment to that work as well. I want to also acknowledge the Hon Tracey Martin, who’s taken on and championed this cause.
Madam Deputy Speaker, you will know—oh, sorry, I do apologise; I do not want to bring you into the debate, but the Hon Anne Tolley knew and was aware of the importance of allowing a whole of community—those who are stakeholders, those who have been impacted by the system, not only in the care and protection but also in the youth justice, which particularly relates to this bill. We needed to make the system fairer, just, caring, and, in a way, deal with the transitions of change through many of our young people who come in to the system as well. So the heart of this bill—an omnibus bill, so it reflects a number of different changes; 11 in particular—is about tightening up a process and procedures, particularly relating to 17-year-olds within the youth justice jurisdiction. There was a time previously, in 2015 to 2016, when there were changes to the care and protection, and the age of State care for young people was raised to the age of 18. This again aligns that to the youth justice jurisdiction, which aligns that age for 17-year-olds up to the age of 18 in the system as well.
We also want to acknowledge that this is part of a transformation that’s significantly important. Those of us right across the House are supporting it for that particular reason. The purpose of these changes is in particular for vulnerable children, and as has been discussed through the second reading and also the committee stage, often the victims of crime are in particular, in this case, those in the youth justice system as well. So we want to ensure that the system deals adequately with the consequences of those actions. It could be dealing with recidivist behaviour, but at the same time, too, it wants to ensure that we have a transition of change that allows them to go on to live normal, productive lives in our communities as well. So the purpose of the changes to be made is to ensure that vulnerable children and young people have the best chance to have a safe, stable, and loving home, which will help them to grow into successful, independent adults as well.
The majority of the reforms under this Children, Young Persons, and Their Families Act, now the Oranga Tamariki Legislation Bill, will come into force on 1 July as well. Now, we do note that the only objection to this process has been in regards to the timing, but, that being said, we’re here now. We do support this right across the House.
I do want to say that there have been times in the debates, even in the committee stage, where the small things actually count, when we’ve joked across with each other about the counting of paper clips. More importantly, how do we count those little things that actually do make a difference? My colleagues across the House there Greg O’Connor and Priyanca Radhakrishnan will know we had many debates about this. Is it important to count the little things that actually matter? I think they do, and this bill goes to prove that. Supplementary Order Paper 247 talks about the small, technical changes that do make a difference. They may be as small as a paper clip, but in actual fact, if we don’t reverse that, then, retrospectively, we will not have made changes to ensure that we follow through with the intent of this bill as well. So those changes—and I won’t go through the Supplementary Order Paper; we did discuss it in the committee stage. We felt it was fair and just. We hope, again, that the intent of this was to create a fairer process.
The only thing that we would say—and the caveat that we had in some of our debates was ensuring that there’s capacity and capability within the system when those changes are made on 1 July in 2019, this year. We’ve been assured of that. We just hope that there won’t be unintended consequences. We know that currently, even for those in care at the moment, because of raising the age, we have approximately 6,300 children in care. That has been increased. We hope that this process will start to reduce that number and there’ll be greater efficiencies. Inside of the bill, part of the reducing of that is the efficiency so that if there are Schedule 1A offences, which carry a maximum penalty of up to 14 years—the severity of those offences—and non - Schedule 1A, they can be heard in one place, in a District Court, and in those cases, then it’s up to the judiciary to then preside over that situation and make the decisions accordingly.
So we commend this bill. We think it’s actually an important part of what will help change the system. We on this side support that. Again, the only caveat that we have is that we would hope that the capacity and capability of the system—we’re talking about residential care facilities for youth justice, we’re talking about the extra social workers that will be needed, those who are counsellors, lawyers. There are a number of key stakeholders inside of this. So while we will pass this legislation today, heading through to Royal assent, then being implemented on 1 July—that’s actually so that now begins the ability for the action to begin. So our hope, again, is that that will be carried out in a way that will benefit the outcomes of our youth and our young people in our communities as well.
So we on this side of the House again acknowledge all the work. We want to acknowledge the officials who spent some time with us over this process as well, and, again, finally, we want to acknowledge that at the end of the day, though we’ve had this debate, though as legislators we’re now putting this bill before the House and then out, eventually, into the community, our intent and our hope right across Parliament is that in our communities—where there are young people who have become the victims of crime and who have become perpetrators of crime as well—this will be a pathway and a process that allows them to be able to continue to go on to live better lives. We would hope that whānau and family that are out there will also see that there’s a role of opportunity to participate in the rehabilitation and changing of lives as well, and at the same time, too, the outcome is what we intend would happen so they will continue to go on to live productive, independent lives. We commend this bill to the House.
PRIYANCA RADHAKRISHNAN (Labour): Thank you, Madam Deputy Speaker. It is with pleasure that I rise to make a short contribution to the Oranga Tamariki Legislation Bill, particularly, with pleasure, having been part of the select committee that considered this bill, the Social Services and Community Committee—a select committee that works very well together but, as the Hon Alfred Ngaro alluded to, does talk about paper clips an awful lot.
Anyway, this bill, the Oranga Tamariki Legislation Bill, will, when it’s passed, give full effect to the policy to expand the youth justice jurisdiction to include 17-year-olds. It is an omnibus bill that will make amendments to 11 Acts to ensure that the intent of that expanded youth justice jurisdiction is applied in a way that is consistent across all criminal justice processes from 1 July 2019, through changes that are consistent. As members have said before, it makes some very technical but very important changes to ensure that our criminal justice system can work well when it comes to 17-year-olds and the change that was made by a piece of legislation in 2017.
There were some changes that were worked on and were recommended by the select committee that have been included since into this bill, and those are changes around managing the process for related charges for 17-year-olds. These were quite technical changes that officials, sort of, walked us through. There were different permutations and combinations that we worked through, but, ultimately, they’ve been included to reduce costs by avoiding inefficiencies in the legal system and not wasting court time and resources. So there were quite a few technical changes that we considered through the process at select committee, and so I want to thank officials who took the time and made the effort to step through those changes with us. I also want to thank submitters who took their time to put in written submissions to this bill to improve it. With that, I commend this bill to the House.
SIMON O’CONNOR (National—Tāmaki): Oh, look, I’m delighted to be talking on this bill again. It’ll become a—
Hon Ruth Dyson: Ten minutes—you’ve got 10 minutes, Simon.
SIMON O’CONNOR: Whether it’s a surprise for the Hon Ruth Dyson or not whether I take 10 minutes or not, we’ll be yet to see. Look, I’m really pleased to speak on this third reading. For me, the themes are somewhat similar to what I raised in the second reading but not completely, and that’s, obviously, that this side of the House supports the bill. We think it’s overall a very good bill, and in twofold sense: one, it’s making sure that some minor drafting errors are tidied up, and, secondly, it’s to bring about, effectively, a policy intent to allow 17-year-olds to be tried in the Youth Court rather than in the full adult courts. I mentioned before that I think that, by and large, is a good idea. Fundamentally, I think it’s actually an expression of being young and youthfulness, the acknowledgement by this House that at 17, you are in many ways still young—not quite a child, but, rightly, not in the full adult court.
The second is, again, just from experience of dealing with young people that have gone through the system and those that eventually ended up in the prisons: that any way we can find to keep them out of that situation as early on as possible will make an enormous difference, first and foremost to them, and to society as a whole. We know through the research—in fact, those who have been Ministers in this field before would probably know a lot more than I do, but, fundamentally, a lot of time, money, and effort is saved if we can actually get to these young people first.
The concept of the bill is relatively simple. As I say, it’s just ensuring that those who are 17 can be tried in the Youth—not adult—Court, but, importantly, there’s lots of little technicalities, as the speaker who’s just resumed her seat, Priyanca Radhakrishnan noted. There are a whole lot of situations that we need to account for, and this bill does that. First and foremost, there’s been a requirement that there are family conferences if there’s an intention to charge—that is, the police intend to charge. That will not be the case if someone has done an incredibly serious offence. In fact, I’ve been remiss in not noting that the bill—very quickly; I think it’s in Schedule 1—makes a distinction for a young person that has done, well, effectively, an incredibly serious crime versus a non-serious crime. I’m not going to go through all of those, but, basically, if the youth is involved in, well, murder—let’s just go to the extreme—they’re still going to go through the adult court. But in cases where it’s a lesser offence—I won’t get into what that might be in case I put my foot in it or begin to; yeah, we won’t get into the distinction or nuances. But I think the House can understand there is a difference.
So we’re saying through this bill that a family conference, when it’s not needed—they, effectively, can be suspended if it’s a much more serious crime. The bill looks at what happens if the 17-year-old is jointly charged with another person. It makes provisions there, in effect, to make sure that there is going to be one trial. In my view, that’s not, first and foremost, for the need of the 17-year-old; it’s for the needs of the victims—or the alleged victims, sorry. They don’t need to turn up to court twice for two, three, four different people who might be charged with the same offences.
There’s obviously a question around mixed pleas. Again, often criminality is not a singular action; a person will have done two, three, four, five, etc. actions which lead to the subsequent number of charges. The bill looks at that quite specifically—that if, in effect, the 17-year-old has done some minor but also so incredibly major, very serious crimes, it’s the latter that, in effect, takes precedence. In other words, again, to use a very simple or simplified example, if the 17-year-old has committed murder and, I don’t know, a bit of shoplifting at the same time, the former charge takes precedence as to the court.
So we think it’s a prudent bill. As I said, it was always the intention, as I understand things, for the National Party, as it introduced the changes to Oranga Tamariki, to bring about these changes. They take time, they take thought, so I think, again, this side of the House is pleased that we’ve reached this stage. We hope, ultimately, that it’s good for the young people and for their families and that through this system, if they do find themselves before the courts, the experience is slightly better than it would be in the adult courts. Look, thanks does go to all those who have been involved.
This was a very speedy process. I probably will end somewhat by indicating a little concern continuing, certainly from myself on this side, at the speed of the process. It was good that some people had an opportunity to speak, but we would certainly encourage the Government, when it’s bringing legislation like this to the House, to allow people to have time to share their views and for us as the Opposition to do our job alongside the Government to critique the bill. We still feel that the bill, while we understand that it needs to be done and dusted by 1 July, hence the rush—just an encouragement to the Government to actually table these bills earlier so we can get going.
So I’m really pleased to commend this bill to the House, to support it, and not to annoy the Hon Ruth Dyson for another 4 minutes and 34 seconds.
GREG O’CONNOR (Labour—Ōhāriu): Just those closing comments by the speaker opposite, Simon O’Connor, regarding his intention or his teasing of the whip about whether he would speak for 10 minutes—I was afraid he would and I’d have to be nudged by one of my fellow MPs to awake for my turn to speak. Well, I’m pleased that 6 minutes and 43 seconds was the length of the speech.
This whole concept around this legislation, which is that 16-year-olds and 17-year-olds will now come under the youth justice legislation—there’s a moment that relates to the relevance of this. I remember sitting in a briefing of police officers about to go on duty at Auckland Central, and the intelligence officer was briefing the staff, and he announced that one of their prolific offenders, who was a 16-year-old, would be turning 17 at the end of the month. That news was met by a cheer from all the police officers present, because their concept was that all of a sudden this person could be dealt with in the adult jurisdiction, and there would be some meaningful sanctions applied. So with this legislation, that’s why this bill actually becomes very important, and what we’re doing, the work we’re doing today, becomes very important, because if we don’t get it right, it will simply move that situation to 17, to 18, and those same cheers will come up when someone turns 18.
Looking at this, I think there are some safeguards in here that put some more strength in this to achieve what it sets out to achieve. Previous speakers on both sides have spoken about the mistakes that people make deliberately, or they end up in bad company, but things go wrong when they’re youths, and it’s important that those mistakes, those actions, don’t put them on the escalator which means that they will never be able to get off. Of course, what we’ve seen is the older you are when you get into the system, and the longer you are in the system, the more difficult it is to get off that escalator.
So in terms of things in the bill like Schedule 1A offences, people who are 17-year-olds who are committing adult offences will now be dealt with in the general court, the adult court, but they can also be dealt with as youths. So I think that the basis of this bill gives the youth offenders one more year to actually get themselves off the escalator of crime, off the escalator of a life that will end up going down a path where nobody wants them to go. So that’s why I look at this bill and I’m quite happy to commend it the House, because I think it does do those things that it intended to do. So I commend this bill to the House, Madam Deputy Speaker.
AGNES LOHENI (National): Thank you, Madam Deputy Speaker. Today we stand to pass a series of provisions that we should simply not have to do, because the Oranga Tamariki Legislation Bill deals with the end result of lives of abuse and degradation that so many children in New Zealand face today. The specifics of the bill that we are supporting at third reading today deal with youths who have fallen through the cracks and ended up in the justice system at the beginning of their adult lives. What a waste, to have to have this bill, yet we must have it, because the youths this legislation deals with have committed serious crimes punishable by sentences of 14 years or more.
Yet these youths are not the product of chance. They are not an unavoidable consequence of growing up—not all. These children, these young people, were placed on paths laid down by the parenting they received, the abuse they faced, the lack of care in their lives. It is beyond comprehension that any healthily raised child, the product of supportive parents, supportive households, supportive whānau and friends, and a supportive society could end up committing heinous crimes such that they face a sentence of 14 years or more at the age of 17.
Let’s think about that, fellow members of this House. Let’s for a moment put aside our political colours and think about our own children. Let’s ask ourselves what we would have to neglect to do with the raising of our own children to have them facing a prison sentence of 14 years or more. Let’s ask ourselves what we as parents would want, should we have been responsible for placing our children on a pathway that would lead them to the prospect of prison at the age of 17. There’s no ifs and buts—we would want them taken out of circumstances that would lead to an awful outcome such as prison and placed in a caring and supportive environment to ensure the best possible life prospect for our children. That’s what Oranga Tamariki is really about: trying to get the best possible outcome when a child’s life circumstances see them bereft of the parenting that would enable them to lead healthy, productive, and loving lives.
Let’s not kid ourselves. This bill is not even the ambulance at the bottom of the cliff; rather, it is the undertaker taking away the cadaver of a life that could have been. It is the undertaker taking away the remnants of hope, of dreams, of desires that all children have for their lives that are then shattered by horrible decisions these same children make in their youthhood that see them facing 14 years or more in prison. Even in the worst of upbringings, children still see others leading good lives and wish desperately that that was them. Of course, this is not all children raised in depravation. My heart soars every time I hear a story of a child refusing to be a statistic through force of will, determined to walk the path of goodness, of decency, of compassion, and through strength of character, able to steer away from a path that would see them otherwise exposed to the provisions we are dealing with today.
Yesterday in the Social Services and Community Committee, I asked the Hon Tracey Martin, “What does change look like? What is transformation?” I asked in tears, not to put the Minister under the spotlight but out of distress and wanting to make a difference so I wouldn’t have to read about the lost lives of children and other abuse we hear too often in society today. The Minister replied in tears herself, because the murder of a baby in our country is not only distressing; it transcends politics. It forces the Minister and I, as mothers, to face the reality of poor parenting in this country, and it forces us to have to work collaboratively to try and put an end to this horror and to make the provisions we are passing today obsolete.
The bill before us today is but part of a wider attempt to stem the tragic loss of children’s lives at the hands of people they need to be able to rely on to bring them to the fullness of their lives. This bill is but part of an attempt to ensure the provisions we are passing today do not have to be used by the courts for children who have fallen through the cracks. This is not about politics; this is about trying to stop the relentless stories of child murders, child abuse, and those abused children becoming the perpetrators of crime that the provisions before us today deal with. There are no winners in the passing of these provisions today. There is only tragedy.
Oranga Tamariki is about supporting families to prioritise stability, education, and engaged and connected parents and extended families to ensure a child never need to be removed from his or her home, and to never be subject to the provisions we must pass today. It’s about moving us as a society that in the future does not have to wake the news of another child murdered, another child abused, another youth standing ready to be convicted of a crime that their dysfunctional upbringing and inability to make good decisions set them on that path. Mr Assistant Speaker, I commend this bill to the House.
MARAMA DAVIDSON (Co-Leader—Green): Tēnā koe. Tēnā koutou, ngā mema o Te Whare nei. I’m pleased stand in support of this Oranga Tamariki Legislation Bill in the third reading. It’s primarily a bit of a tidy-up and to get some consistencies happening between legislation that needed to be changed, and fixing some errors related to interim orders in the Oranga Tamariki legislation from 2017, particularly because we’re about to start the effect of some of those legislation changes from July 2019—very soon.
My other colleagues have already gone through the, sort of, technical details of fixing up some of those errors and catching up on some of the changes that we needed to make, given the drafting errors in the 2017 Act and the Children’s Commissioner Act in 2003, so there’s a bit of cross-referencing that needs to be done. In my short contribution, what I wanted to focus on is the important start, I’ll say, of the consequential amendments of this bill that were missed when previous changes were made to raise the upper age of the youth justice jurisdiction to 17 years old. So we’re tidying that up—we’re catching up and tidying that part of the legislation up. Why I’m pleased to help progress this bill through the House is to make sure we’ve got this start nice and tight for July.
I say “start”. I was pleased to see Minister Little refer to it being, you know, a bigger conversation about preventing further offending—and, in fact, that we had long been chastised for not including 17-year-olds by the United Nations for a long time. So it’s good to see that we’ve finally started, and that perhaps this is a start. We could look at, for example, Croatia and the Netherlands, who actually go right up to the age of 23, understanding cognitive and emotional development, the types of behaviours that exist around the sort of late teen adolescent behaviour age group—the brain working that stuff out and people finding their way through that age range actually continues through to the mid-20s. And everyone is different—a little bit early, a little bit after that. But what that means is there but for the grace of—any of us could probably think back, some of us further, some of us nearer, to where we were at that time. We’ve probably got some stories, each of us, but, more importantly, some safety support systems that kept us OK while we fumbled around through that part of life. The court jurisdiction recognises that. The court jurisdiction recognises the extra support that is need. That doesn’t suddenly change when you turn 17 or 18. Even Germany, I think, goes right up to 21.
So this is a good start, but I’m really open to an ongoing conversation that is focused on preventing further reoffending, that is focused on: how do we really approach young people coming before our justice system, what is our approach to their offence, how do we involve community and whānau and how do we ensure supports are put in place, and what are the punitive measures that we are doling out? You know, because we’ve all been at that place of peer pressure and risk taking and impulsive behaviour. As my colleague Greg O’Connor also referred to, then once we’re in adult prison at a young age, what are the links and what hook-ups happen in there for us to be put on a risky path of further reoffending or not?
This is important. This is crucial to a better, a safer, way of dealing with young people appearing before our justice system. This is crucial to the wider discussion of preventing further reoffending, which all of us, I think, have touched on tonight. So it is for that reason that the Greens—and we have a restorative justice approach—support the catch-up and tidy-up changes that are made being made in this bill. Thank you, Mr Assistant Speaker.
MAUREEN PUGH (National): As we draw this legislative process to its conclusion, I take the opportunity today to pay tribute to its genesis, back in 2017, when the then National-led Government passed the Children, Young Persons, and Their Families (Oranga Tamariki) Legislation Act; and to the recognition that day by the Hon Bill English and the Hon Anne Tolley that our statistics were showing us that the lives of some of our more vulnerable young people were not improving and that simply throwing more and more money at the problem was not actually improving the outcomes of some of our more vulnerable and deprived families. So the Oranga Tamariki Act was the transformational legislation, and it progresses here today into this new Act that brings 17-year-olds into the youth justice system.
We know—because we are getting better and better at recording the data—that children that live in those benefit-dependent homes have poorer educational outcomes. They have more chance of coming, in those days, under the influence of Child, Youth and Family services or police; and that we needed to change direction because that was also becoming quite a significant burden on the hard-working taxpayers of New Zealand. That approach was called the social investment approach, and Oranga Tamariki is the change that we, as a country, needed. So I acknowledge the Minister, the Hon Tracey Martin, for her support of that change, because the change needs to transcend electoral cycles. It deserves longevity if it is going to make a change to the lives of our most vulnerable in New Zealand. It will take some time for it to be fully implemented; this is another step along that journey.
Now, the purpose of this bill is to bring 17-year-olds into the youth justice system. It is considered—and this was confirmed by the Children’s Commissioner Judge Andrew Becroft—that 17-year-olds were considered too young to be dealt with in the adult court because the likely outcome for them was to then be involved in an adult prison. That is not a place for a 17-year-old; we are all agreed on that. So it is, indeed, a good move to see this legislation being put in place so that our under-18s are no longer being treated as adult criminals, with the risk of heading off into adult prison.
Because they will now come under the guardianship of Oranga Tamariki, they will have all the opportunities and support provided to them by Oranga Tamariki and their support agencies. It’s been part of the interrogation of the Social Services and Community Committee throughout the process to ensure that the systems are completely ready for 1 July when this legislation will be enacted, because we need to make sure that the homes are fit for purpose, that the legal system and the judiciary are prepared, and that our staff are fully trained to deal with the extra workload. We have been given absolute assurance that that is the case but I will pay some attention, especially, to the facilities that are provided for in rural areas, because it is very easy to look at economies of scale and often that happens in the big cities, the metro areas. But it is completely inappropriate for a 17-year-old to be remanded in custody in a police cell, and we do need to have those facilities available throughout the country.
The opportunity that is given to 17-year-olds now through the youth justice system means that they do have an opportunity now to change their direction. We heard a statistic that about 80 percent of those who are supported at that age do not reoffend, and so I think this is a very good investment into their lives but also into the New Zealand community as a whole. I was very impressed, too, when we spoke with Oranga Tamariki and the Minister, that they have implemented their care plans, and I was also very impressed to learn that they had maintained the input of care-experienced young people in the development of that plan. I think that bodes well for the future because it is appropriate for the age group.
I did want to make one point of clarification about what members of the public may be thinking if they think that the National Party is getting soft on crime, because that’s not the case, because 17-year-olds that are charged with Schedule 1A offences—the more serious end of the offending scale, and they are cases where they can attract a prison sentence of 14 years or more—will still be dealt with in the adult court. So this is not providing an easy out, because some of the concern was that we would see the likes of gangs recruiting 17-year-olds because they would get a lighter sentence. Well, that’s not the case. They will be dealt with in the adult court for those more serious offences.
This has been a non-contentious bill. The Social Services and Community Committee has worked well together to come to this point, because we all believe that the impacts of this bill and the rights and interests of our 17-year-olds are well-served by it. I commend the bill to the House.
CHAIRPERSON (Adrian Rurawhe): This is a split call, five minutes.
Hon RUTH DYSON (Labour—Port Hills): There are many big things that we do in this Parliament, there are many important things that we do. But it’s hard to think of what would be more important than using our opportunity and privilege as members of Parliament to turn around, in a positive way, the lives of young people so that they might get back on track and be able to contribute fully in our society, rather than going down the path of leading a life of crime. This bill, even though it’s primarily technical in its nature, contributes to that goal. It’s really refreshing to hear the whole of Parliament’s view in support of this because that gives us a much more solid platform to go forward on in our youth justice system, because there’s still a lot to do in this space.
So the bill clarifies the operation of urgent interim orders that may be required during the proceedings of the Act. It fixes some drafting errors—they happen—in the 2017 changes, and particularly the cross-referencing with the Children’s Commissioner Act. It ensures that the expansion of our youth justice system—which the member who just resumed her seat, Maureen Pugh, noted—to include most 17-year-olds is implemented efficiently and effectively. It supports the judiciary, the police, and other key agencies to ensure that 17-year-olds are treated consistently through the youth justice system by the variety of agencies that they might come in contact with. So it’s not a big policy shift. This is primarily a technical bill, but it is reflective of some very significant changes that have been made in the past.
I want to commend the leadership, the vision, the passion, and the sheer hard work of the Minister responsible for Oranga Tamariki, the Hon Tracey Martin. It isn’t an easy space to lead work in—I can attest to that myself—but I think she’s doing a magnificent job and it’s great that we’re going to get near the end of this parliamentary week on such a note of unanimity around such an important issue.
JO HAYES (National): Tēnā koe. It is my pleasure to stand and support the Oranga Tamariki Legislation Bill in the third reading. The contributions that I have been privileged to hear today have been very thoughtful. The purpose of the reason that we are here today, as members have said, is around tightening up some technical errors within this bill. I too want to aid my congratulations to Tracey Martin for shepherding this part of the bill through the House, and to all of the members of Parliament for supporting the bill because it is always a great day when all the members of Parliament can see the value in supporting a bill, especially one as important as this particular one.
I just want to focus my contribution on the areas around the bill that talk about the capability and capacity issues, and ensuring that they are being met within community providers to keep our rangatahi safe—to actually help them through to be able to contribute to our society fully and also to help them to address their offending and to either stop their offending or to reduce any forms of reoffending. I understand that in order to do that, community providers do need to be supported fully. It is a tough world out there for them. It is tough because the issues that rangatahi face—as adults we might think we know where they’re at, but in many cases they move around a bit. You need to have diverse workers in behind the scenes who can actually address the needs of these rangatahi. I just want to say congratulations that there will be some recognition, I guess, of capacity and capability issues within that particular area of this bill.
In closing, I want to acknowledge the former Minister, the Hon Anne Tolley, who took the Child, Youth and Family services restructure by the horns and did an amazing job within Oranga Tamariki. This today is really just, as I said in my opening kōrero, a tightening up of technical changes. So, again, without any further ado, I commend the bill to the House. Thank you.
Hon AUPITO WILLIAM SIO (Minister for Pacific Peoples): I’m happy to rise to support the Oranga Tamariki Legislation Bill at its third reading and acknowledge the hard work of the Minister, Tracey Martin, who has enabled the legislation to go through its full process to its finality, and it is for us to simply now implement it. I acknowledge also all of those who have been involved in it.
The bill gives full effect to policies that were being enacted by the Children, Young Persons, and Their Families (Oranga Tamariki) Legislation Act 2017. The expansion of the youth justice jurisdiction to include 17-year-olds is the most significant of these policies that the bill provides effect to. The bill will ensure the intent of the expanded youth justice jurisdiction is applied consistently from 1 July 2019. The bill in its final form will give clear guidance on procedure within the youth justice system, including for related charges.
This bill will support the judiciary, the New Zealand Police, and other key stakeholders to treat 17-year-olds consistently through all parts of the youth justice jurisdiction, including, for example, bail laws, sentencing laws, and aspects of criminal procedure. The bill also clarifies the operation of urgent interim orders that may be required in court proceedings under the Oranga Tamariki Act 1989. The processes surrounding urgent interim court orders were developed to serve the best interests of the child and should be maintained. This bill makes sure these processes will continue to operate effectively from 1 July this year. On those grounds, I’m happy to stand with others to commend this bill for support.
SIMEON BROWN (National—Pakuranga): Thank you, Mr Assistant Speaker. Thank you for the opportunity to take a call on the Oranga Tamariki Legislation Bill, which is at its third reading here in the House. I would like to rise with my National Party colleagues in support of this piece of legislation, which continues the great work that the Hon Anne Tolley was doing as the Minister in the previous National Government. I would also like to acknowledge the Hon Tracey Martin for the work that she is continuing to do in this area of Oranga Tamariki and the reforms that are being progressed here—in particular, in the Youth Courts.
This is an issue which is very challenging—it’s about how we turn the lives of our young people around—and I would like to commend the provisions in this legislation, which do ensure that our young people have a consistent approach when there is youth offending, and ensure that if a young person does offend, there is a consistent approach as to how the courts and the Youth Court will approach that offending.
I’d like to, in particular, point out the provisions in this legislation which will ensure that if a young person does commit an offence which is of a substantive nature in Schedule 1A, they will face the adult court system, which could be through the High Court or the District Court. But if the offending is of a less serious nature, then the provisions in the Youth Court will prevail, and they will go through a consistent process. I think that’s an important distinction to be made, because I think it’s important that when there is serious offending committed by young people—17-year-olds—they are going through the appropriate court which can deal with those serious offences. I’d like to acknowledge that as a key part to this piece of legislation.
I’d also like to just point out some of the provisions here which deal with suspending family group conferences. When police have sufficient evidence to charge, an intention to charge, a family group conference is required. The Act specifies that family group conferences are required when a young person is arrested and brought before the Youth Court and the young person does not deny the charge. The requirements of family group conferences will not apply in respect of Schedule 1A charges.
There are provisions here which deal with joint charges with another person, and it has provisions which ensure the process where children and young people are dealt with in the Youth Court wherever possible. I think that an important point which is made throughout this is to ensure that, wherever possible, the Youth Court is the court where young people are tried and where they are charged, and where they face all parts of the process through the Youth Court process wherever possible. That is about ensuring that we do everything we can to turn the lives of these young offenders around.
We know that if some of these young people were to go through the adult court, they would be treated differently, and the likelihood of being able to actually turn those lives around would be substantially reduced. The Youth Court is the appropriate place in many of these instances, so that the lives of these young people can be turned around, so that an appropriate course of action can be applied to those young people’s lives, so that they are given a future and an ability to turn their lives around and make a difference, and so that they aren’t facing further court appearances in the future.
The last thing we here in Parliament want is for young people to continue a life of crime. We want young people to be turning their lives around. We want young people to be leading ambitious lives where they are positively contributing to New Zealand society. This piece of legislation is part of that process. I commend it to the House.
ANAHILA KANONGATA’A-SUISUIKI (Labour): Kia ora, Te Mana Whakawā. It’s an absolute privilege to be the last speaker on the Oranga Tamariki Legislation Bill. Twenty years ago, when I was a youth justice social worker, I don’t think I could’ve expected that I would be standing here talking on the amendments to the bill. But before I do that, I just want to correct some applications from the other side about the genesis of this bill, attributing it to a member on their side.
Actually, if I can just correct the genesis of this bill, it was the Hon Ann Hercus who was the Minister of Social Welfare—a good MP from Lyttelton—in 1986 who commissioned the Ministerial Advisory Committee on a Māori Perspective for the Department of Social Welfare. It was led and chaired by Mr John Rangihau, and they brought the document—they named it Pūao-te-ata-tū – Daybreak, which is the daybreak. They had 13 recommendations. This is actually the genesis of the Children, Young Persons, and Their Families Act, which is now the Children, Young Persons, and Their Families (Oranga Tamariki) Legislation Act 2017. I just want to air it and moist it that it is the genesis. In the guiding principles, they stated “To attack all forms of cultural racism in New Zealand”. So, actually, that’s the genesis of this. It was the leadership of a Labour Minister in 1986.
Well, we’ll fast-forward it to today. When I was a youth justice social worker in 1999—I know, I can’t believe it; that’s 20 years ago. In 1999, I was at the Youth Court, and what happened was there was a young person who appeared before the court, jointly charged with an adult. They had a lot of charges, and on one of those charges, the young person had pleaded not guilty. Trial by jury was chosen, and it was transferred to the District Court together with the adult person. All the other charges that were laid in the Youth Court remained in the Youth Court. So what that meant was that the young person, along with the adult on the adult offences, went along to the District Court and the matters were dealt with there on a different day, by a different judge. All the victims went that way on a different day with the judge, and all the young person’s support went on a different day. All the other matters relating to the Youth Court remained in the Youth Court, and that was heard by a different judge in the Youth Court with different lawyers.
So what the changes basically mean is that if a young person is charged with an offence under Schedule 1A, if he or she has similar charges that are actually within the realm of the Youth Court, it all goes as one portion to the adult court, where the adult court deals with it.
If the adult court finds that those charges are actually charges that the young person is to be held accountable for in the Youth Court, then once the adult matter is dealt with all, the matters that are within the realm of the Youth Court are then transferred back to the Youth Court. So it underlines the principle in Part 4 of the Children, Young Persons, and Their Families (Oranga Tamariki) Legislation Act 2017. It aligns with the principles of section 208. Well, it actually takes a young person’s age is a mitigating factor, victims, and submit it as a factor, and also supports of the young person.
It’s an honour for me to contribute in this bill in the House, and it’s also an honour for me to acknowledge those who had leadership on the genesis of the Children, Young Persons, and Their Families (Oranga Tamariki) Legislation Act back in 1988 which led by John Rangihau and the committee. On that note, I commend this bill to the House.
Bill read a third time.
Bills
Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Bill
Second Reading
Hon STUART NASH (Minister of Revenue): I move, That the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Bill be now read a second time.
I’d like to thank the Finance and Expenditure Committee for considering the submissions on the bill, which has broadened scope and contains a variety of measures to make the tax system fairer. Many changes have been made to the bill in response to public submissions. These, together with the committee’s recommendations, make this a better bill by making important adjustments. First and foremost, this bill proposes a solution for the Government to collect GST on low-value imported goods in a cost-efficient manner and without holding goods up at the border.
Right now, it is not economic for customs to collect GST on goods of very little value. Under the proposed offshore supply registration, offshore suppliers and online marketplaces that supply more than $60,000 worth of low-value goods to New Zealand consumers will remit GST directly to Inland Revenue. This limit of $60,000, of course, is the same limit that New Zealand businesses have to reach before registering for GST. With a steady growth in online shopping from offshore suppliers, a significant amount of tax revenue is being lost. Initial forecasts project this initiative will boost revenue by $112 million per year by 2022. But in my view, this is not so much about increasing the revenue, but rather about the integrity of the tax system. It evens the playing field between all suppliers of low-value goods, and local retailers, in particular, will benefit, as they will no longer, of course, be at a 15 percent disadvantage, having to charge GST.
There are about 26,000 small businesses in New Zealand, employing more than 62,000 people in the retail sector. Many are in competition with foreign firms who sell exactly the same product into our market without collecting GST. This changes that. We also want to make sure this works well for offshore suppliers, and, following significant consultation with affected parties, the select committee proposed pushing back the application date from 1 April 2019 to 1 December 2019, and Ministers are still consulting on this point
This measure also simplifies compliance and reduces administration costs by removing tariffs and border processing charges on imported consignments of less than $1,000. Broadening the GST base is simply one of the many initiatives this Government will bring to bear on cross-border transactions to make the tax system fairer for all Kiwis. Last year, we legislated to crack down on base erosion and profit shifting, and we’ve recently released a discussion document on options to more fairly tax digital service providers who operate in New Zealand. All entities who supply goods and services to New Zealand need to pay their fair share of tax, regardless of their origin.
This bill is also about fairness, so I’m pleased that this bill proposes to ring-fence tax deductions on rental properties so they cannot be used to reduce tax on other income. Currently, the tax is applied on a person’s net income, which means if a property investor makes rental losses, those losses reduce the overall income and, therefore, their tax liability, and it’s my understanding that investors collect about $600 million in losses. The persistent tax losses that many property investors declare on their investments indicate that they rely on capital gains to make a profit, which we don’t believe makes for a healthy housing market, or encourages sound investment decisions—aren’t I right, Mr Twyford?
Negative gearing benefits property speculators to the detriment of most other sectors of New Zealand’s productive economy. By removing the ability of investors to gain a tax advantage from leveraging rental properties, we’re incentivising investment in more productive areas, while giving more opportunities for first-home buyers to enter the market. This bill also proposes to empower the commissioner of Inland Revenue to address errors or gaps in tax legislation that do not reflect the policy intent. Normally, such inconsistencies are addressed through remedial amendments and taxation bills passed once or twice a year. However, where there is a good case, it makes sense to provide certainty to taxpayers by allowing for an Order in Council or a commissioner’s exemption to modify the application of tax law without having to wait for, literally, months for the wheels of Parliament to turn.
Taxpayers will not be disadvantaged by the proposal, as it will include a number of safeguards, including limiting the application period of the Order in Council or the commissioner’s exemption to three years, and any changes will be optional for the taxpayers to apply in all cases. These measures were originally intended for the recently passed Taxation (Annual Rates for 2018-19, Modernising Tax Administration, and Remedial Matters) Act 2019. However, the Finance and Expenditure Committee rightly identified a need for more consultation to gain the confidence of the law and tax communities. I believe that following for further work with the Legislation Design and Advisory Committee and others within the tax community, this proposal strikes the right balance between protecting taxpayers and enabling efficient tax administration.
This bill makes several smaller policy improvements to the tax system. Businesses and community groups will now be able to retain tax records in New Zealand’s first official language, Te Reo Māori. It is time Parliament codifies Inland Revenue’s current operational practice, which has been in effect for over 20 years, and I’m pleased to amend the Tax Administration Act to achieve this. This bill proposes making it easier for the commissioner of Inland Revenue to exempt victims of sexual offences from paying child support for children born as a result of sexual violence. At present, exemptions can only be given where an individual has been convicted of a sex offence. Penalising a victim of sexual assault, simply because the perpetrator hasn’t been convicted, is a perverse outcome, and is at odds with a cultural shift this Government wants to see away from victim blaming.
This came about due to three letters I received as the Minister of Revenue, outlining women’s cases who had conceived as a result of rape, and, as we know, there are very few—about 10 percent, I think—of sexual assaults that are actually reported to police, let alone convictions. So this is fantastic, because it deals with a situation of inherent fairness for a small group of women who have had a very, very rough time, and, until this change, the IR had no ability to not seek child support from this group of women, so I’m pretty proud of this, actually.
The bill will also allow Inland Revenue to collect student loan deductions from schedular, election day, and casual agricultural income to reduce end-of-year repayment obligations for student loan borrowers. The bill contains a number of smaller remedial amendments to ensure our tax system continues to work effectively and efficiently for taxpayers and businesses. Finally, this bill sets the income tax rates for the 2019-20 tax year, with no change from the previous year.
In conclusion, I would like to thank the policy officials and drafters who worked on the details of this bill, the organisations and individuals who made submissions on the proposed legislation, and the Finance and Expenditure Committee for its consideration and recommendations to improve the workability and fairness of the provisions. This is a good bill for New Zealand, and I’m proud to commend it to the House. Thank you.
ANDREW BAYLY (National—Hunua): Thank you, Mr Assistant Speaker. This is a great opportunity to talk on the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Bill in its second reading. I think this Government is going to be known in time as that rapacious tax gatherer—rapacious tax gatherer—because since this Government has come in to play, they have introduced three lots of fuel excise tax. I see the Minister of Transport is over there, and he was the last one to do that. There’s also the regional fuel tax, which has particularly affected people in Auckland—only one and half million New Zealanders—the brightline extension to five years—
Hon David Bennett: How many?
ANDREW BAYLY: —one and half million, or maybe a bit more, Mr Bennett—the ring-fencing of losses, which I’m about to talk about; GST on mobile roaming; WorkSafe levies; and a tourism tax. So this bill is a further enhancement of a higher-tax structure in New Zealand, because the primary purpose of this bill is to reinforce the higher than necessary tax rates in New Zealand.
This is the difference between this coalition Government made up of Labour, New Zealand First, and the Greens, who want to impose more tax at a personal level on ordinary New Zealanders. We, in our last Budget, wanted to bring about a personal tax rate of $1,060 per person, on average, and what this bill does is reinforce the continued high tax rates without any amelioration of people.
Hon David Bennett: Shame.
ANDREW BAYLY: I think that is a shame, as Mr Bennett says. It’s a lost opportunity. I think it doesn’t recognise the fact that sometimes it’s better to give New Zealanders more money back in their pockets, and that’s why we will not be agreeing with this bill.
The other thing about this bill, though, is that since this Government came into power they have campaigned on a remit of not introducing new taxes, but since they’ve come into power, they’ve introduced, already, $2.3 billion of additional taxes, and then, in the very first thing after the Wellbeing Budget, what did they do with taxes? The first two bills they pushed through in urgency—which requires no select committee oversight, no public intervention, and no submissions from anyone—was to bring forward the fuel tax excise tax, and you’d have to say that that was totally unnecessary. It raised a mere $30 million, but for some reason the Minister of Transport thought, “We must rush that through in urgency.” The second thing was the tourism tax, which is going to raise, roughly, about $80 million a year. Those are the first two things they did in urgency. That is not what a wellbeing Budget’s about, and it’s certainly not transformational. Anyway—
ASSISTANT SPEAKER (Adrian Rurawhe): And during the Budget debate, you can talk about that. But it would be good if you spoke to the bill.
ANDREW BAYLY: Good—thank you. So that is the tax tonight, and that’s why we’re not supporting this bill.
But there are some elements of this bill that are good, and I just want to now turn my mind to those. I think, on the issue around how we’re dealing with capital-raising costs for companies who are raising financing, there’s been quite an issue about whether, in fact, you could deduct some of the capital-raising costs for businesses. So this is a good thing for businesses, because it was unclear, and sometimes capital-raising costs are quite significant. But the other major thing that was dealt with—and, of course, it was started under the National Government—was this so-called Amazon tax that deals with the issue of overseas suppliers providing goods and services to New Zealand. This bill finally brings that to a conclusion. We, of course, introduced it—and when I say “we”, the National Government was dealing with this—and it’s good that the Minister of Revenue has taken this forward and that we’re seeing it here in this bill.
The Finance and Expenditure Committee did make some changes around this issue. Basically, overseas suppliers—and that might be a digital platform; it might be anyone, such as a US supplier of services or goods to New Zealand—will now have to register for GST and not only receive that GST but remit it back to New Zealand if their gross sales exceed 60,000 a year. That is a good thing.
Part of the debate in the select committee was around when this thing might come in to play. There was quite a lot of debate, and one of the issues that a number of the digital operators—platforms like Google, Alibaba, and those sorts of people—made strong submissions around was when they could reorientate and reprogram their systems to be able to comply with this arrangement. As a last change to the bill that the select committee considered, that date was pushed out to 1 December, whereas at one stage, it was going to be 1 October. I think that’s a good thing because we do want our overseas suppliers to have the systems in place to be able to comply with the New Zealand requirements now. Also, what is means is it’s a good thing for our retailers in New Zealand, who now are not disadvantaged—particularly on low-value items worth below $1,000—and I think that was a very good thing.
The main issue that we do have with this bill is the ring-fencing of rental losses, and this is quite a significant thing. The bill proposes to limit the ability to transfer any losses that you may have made on a property and to offset that against your other income. That’s the traditional approach, and that’s been the approach for a long, long time. What this bill has done is limited it to only carrying forward those losses and applying them against future sales of property, and that is a significant restriction on people.
What I don’t think people realise is that 42 percent of all houses in New Zealand are owned not by rich people, actually, but by mums and dads, because they see it as a wonderful opportunity to make some money, and they understand it; less so than what they might otherwise for the stock market, unfortunately. But they have chosen to make an investment in rental property. They own 40 percent of all properties, and what this now means is that they cannot offset any losses against their current income.
The whole excuse for doing this was to make sure that we were evening up the market and we were going to make it easier for first-home buyers, and, of course, everyone wants to see first-home buyers in the market—everyone. Everyone across the House here wants that. But what this will mean is that for those people, they are now going to be incurring higher costs. It’s estimated that this will haul in another $190 million in tax for the Government, but, of course, who are paying that tax? They are the mums and dads of New Zealand who own these rental properties. Of course, they will pass on that cost to their tenants, and that is the missing piece in the logic of this proposal, because passing on $190 million in costs to renters—and that’s 630,000 households in New Zealand—would imply that their rents are going to go up by $300 a year.
When you put that in the context of rents that are already, under this Government, increasing by over $50 a year, that is a further—
Hon Paul Goldsmith: A week—a week.
ANDREW BAYLY: Per week. That’s right—$50 per week. That is an outrageous imposition on renters. Of course, who are going to be adversely affected by that? It is certainly the people who are starting out in their careers, who haven’t yet assembled the money, and it is the more vulnerable members of our society. This thing will hit those people the hardest, and that’s why we’re are implacably opposed to this particular clause.
Even Treasury, the hard nuts of economic management, wrote and said—and I quote—“Rental loss ring-fencing will reduce after-tax rental returns for some landlords. This could encourage the transfer of housing stock from investment housing (i.e., rental housing) to owner-occupier housing, putting pressure on the remaining rental stock.” Of course, they go on to say what that means about rental pressures, and what this is doing is it’s going to be a bad thing for those people who choose or have no other choice but to rent from the market. I think that is a particularly bad thing about this bill.
We will be opposing it. There are some other goods aspects in this bill which I’m sure my colleagues are going to cover. But, on that basis, we will be opposing the bill.
MICHAEL WOOD (Labour—Mt Roskill): It’s always a very hard act, following on from Andrew Bayly—the Scotch terrier of the New Zealand Parliament—a man whose level of excitement builds and builds and builds around certain issues when we approach a tax bill. It’s like a little Scotch terrier at the ranchslider when a van pulls up on the driveway, and, boy, does he get excited.
Can I say that Mr Bayly’s performance in respect of the annual rates in this bill is also like a Scotch terrier or another small kind of domestic animal at a ranchslider. I’m sure for all of us in this House who have had a small dog or a cat: they’re at a door; you open it. They say they want out. They’re out; they want in. The National Party is just like that when it comes to rates of tax, because they want it all at the same time. They want to cut taxes, but they also say they want to reduce debt, but they also say that they want to spend money. They just can’t pull together a credible fiscal approach.
Of course, that is what this Government is delivering, and this bill is a part of it. It’s about signalling a stable tax regime that is able to fund the services and the infrastructure that New Zealanders demand. Every member on this side of the House can stand up, based on this bill and the tax rates that it sets, and based on the appropriations set out in the Budget this year, and show the investments that we will make, show the surplus that the Government is running, and show our critical fiscal approach. Those members want to have it every single which way.
My challenge to Mr Bayly and any other Opposition speakers who get up and speak in this debate and spend half of their time talking about the annual rates—a small portion of this bill—is, at the same time as doing that, to identify where the cuts would come, because you simply cannot have one without the other and maintain a credible fiscal stance.
This is an important bill. The annual rates bill comes to the House every year, and, as well as setting the annual rates for the year ahead, it is generally also an opportunity for the Government of the day to deal with a range of other matters within the tax system. This bill deals with a number of quite significant matters. It was a complex bill, as all of the bills which come to the Finance and Expenditure Committee are—particularly the tax bills.
I do want to, on that note, acknowledge members of the committee across the House for their diligence and application in terms of considering this bill and the submissions that were received and the advice that came in from officials. The committee works well on these bills, and, as a result, we have an improved bill at the end of the process. Can I also acknowledge the officials, who gave good advice to the committee, and the quite large number of submitters who gave the committee the benefits of their views and who, in quite a few cases in respect of this bill, were able to effect changes that, as I say, have improved the bill.
I would also like to acknowledge the Minister of Revenue, the Hon Stuart Nash, a very busy Minister of Revenue. He’s carried on, picked up the torch, from another very busy Minister from the previous administration, the Hon Judith Collins—certainly busier and more active than her predecessors in the previous Government. We would all acknowledge that, I am quite sure.
There are a number of other important measures brought in by this bill. The bringing in of low-value goods coming in from overseas into the GST net is one of the most important, and it’s important because it does what I think most of us agree we want to have within our tax system, and that is to have a fair system in which people are treated equally. The situation that we have had for a long time is that these goods, most commonly now purchased by people online, are able to be purchased without the application of GST, whereas for the same good, if one was to walk down to the local bricks and mortar store and purchase that good—or service for that matter—GST would apply. That is not a level playing field, and so organisations such as Retail New Zealand and others have for many, many years been calling for a level playing field in this area.
So I think this bill makes an important advance in that area. It creates a level of fairness within our tax system. It certainly does support the revenue base as well—I think to the tune of around about $190 million when it’s implemented, from memory. But, actually, the most important thing is the fact that it creates a level playing field within the tax system.
The select committee did carefully listen to submissions that were received in respect of this part of the bill, and there are a number, quite a few, in favour. Some of the online market places, it would be fair to say, submitted against this part of the bill. That’s probably no big surprise. There were some in principle objections from them that I don’t think the committee was persuaded by, and then there were also some technical objections, primarily focused on the ability to implement the collection of GST in an orderly fashion before the bill is implemented. It’s on that basis that the committee is recommending in its report that the implementation date is pushed back by just a couple of months to 1 December, and I think that’s a good example of the committee process working well: members across the divide in the committee supporting the principle of the bill but listening to the submissions and making sure that it is implemented in a way that is going to be orderly and not cause too many problems.
There are a number of other smaller changes to this part of the bill that were made at select committee. We’ve dealt with some matters in respect of contracts that may have been entered into before the application date to make sure that people aren’t sort of caught between the two regimes.
One of the other important matters that people who buy goods online will be familiar with is how you deal with discounted goods. You might have a good that is originally put up by a supplier but then is funnelled through a market place—someone like Alibaba, for example. The market place applies a discount to that good—which price do you apply the GST to? The clarification is that it is the market place price—the price that you actually purchase the good from. But these are the important sort of questions that come up through the select committee process that we’re able to clarify in the text of the legislation.
The other very important provisions that the Minister talked about in this bill are the provisions around the ring-fencing of losses on rental properties. This was a very clear policy that has been signalled for a long time. It was part of the approach, certainly, that the Labour Party, at the time of the previous election, took to addressing runaway house prices and the housing crisis, which has locked so many young first-home buyers out of our housing market. Ultimately, it’s about shifting to a more rational market which isn’t driven by irrational exuberance, in which first-home buyers do have a shot and aren’t going to be out-competed by people who are fundamentally in the market to invest and, in some cases, to speculate.
It’s important to note that people will still be out to carry those losses forward. They will still be able to offset them against other residential property investments. They, simply, won’t be able to offset them against other forms of income. The important point about that is that, effectively, what the current regime means is that those people who are investing and able to offset that income have an advantage over and above the first-home buyer, who may be competing for the same property. That is something that this Government is simply not prepared to countenance.
I am very proud—and I acknowledge the Hon Phil Twyford, who’s in the House with us at the moment—about the fact that in the wake of that significant housing crisis, which pulled homeownership rates down to the lowest since 1951, we are finally seeing a turn-around with higher numbers of first-home buyers coming into the market under this Government. The same criticisms that have been made about this provision in respect of the ring-fencing of losses on residential properties—those very same criticisms—were made, I remember, when the brightline test was extended to five years by this Government. In actual fact, what we see is that, combined with other measures from this Government, has started to support more first-home buyers coming into the market. That’s a good thing, and I think this House should certainly be supporting it.
The final thing I want to touch on is the changes to the care and management powers within this piece of legislation. These are captured in Supplementary Order Paper (SOP) 193, and these, as Minister Stuart Nash outlined, enable either the commissioner by exemption or the Minister by regulation-making power to address, effectively, small errors that may make their way into the incredibly complex tax legislation that go through this House, which, ultimately, take a long time to rectify through the legislative process.
I want to highlight this SOP and those changes because, to me, it’s an example of how our Parliament and our select committees work well. These changes came before the select committee in the previous annual rates bill. They’re quite significant, in a way, because they do give powers to either the commissioner or the Minister that previously would have been the preserve of the Parliament. The select committee was not entirely satisfied by the protections at that time and asked for further work to be done. I give credit here to the Minister and to officials, who took that message on board and came back with reworked changes in the SOP to come into this bill, which I think have met the satisfaction of the select committee in terms of ensuring we have that flexibility to deal with obvious errors in tax legislation while ensuring that there are also checks and balances within that to ensure that we don’t have major changes being made that might disadvantage taxpayers or that are against the will of this Parliament.
This is a good bill. It deals with complex issues and ensures the fairness of our tax system. I commend it to the House.
Hon JUDITH COLLINS (National—Papakura): Thank you, Mr Assistant Speaker. Well, thanks for the contributions that we’ve heard so far. I think the member who has just resumed his seat referred to my colleague Andrew Bayly, MP for Hunua, as a Scotch terrier, and I would say this to Mr Michael Wood, in that pre-ministerial speech that he just gave now, “Better a Scotch terrier than a weasel!”
Michael Wood: I support you too, Mrs Collins.
Hon JUDITH COLLINS: Ha, ha! So now we’ve got that out of the way, let’s get back to business. We do actually have, mostly, a very good time on our Finance and Expenditure Committee, and Michael Wood MP, no doubt soon to have the housing portfolio, is someone who does—we do enjoy quite a good relationship across the aisle and the desks there.
The main reason that we are not supporting this bill is not because of so much of the excellent work that we did in Government and which has now been continued on—for instance, around what’s called the “Amazon tax”, which, basically, means GST on low-value or under-$400 goods coming into the country. Of course, when GST was first set up—in 1986, I think—by the then Labour Government, not many people would have bought anything from overseas except for, possibly, cars and big items like that, and machinery, but certainly not clothing; not to the extent that we do now. We have, over the years—I certainly did, as Minister of Revenue, for about 10 months at the end of our term of Government—heard from retailers that this was actually causing them great distress, and New Zealand economically, and there were certainly a lot of submissions from and lobbying from the members of Parliament from the National Party for this to be brought in because of provincial towns that were finding that they were missing out on work and goods and money, and it was something that we needed to address.
The issue that Inland Revenue certainly told us about was that the system that they had was not something that could cope with that. There were also issues regarding customs, as well, and the collection of the GST, and I well remember meetings that we had at that time with the then Minister of Finance, Hon Steven Joyce, myself, and the Minister of Customs, working on how we could make all this happen. Obviously, the officials were there to make sure that something actually did happen. What we found was a way through, and it’s great that this is now coming through in this bill.
The other point that we needed to do to actually allow the systems to work well was to invest in things like the Business Transformation project through Inland Revenue, which has actually given Inland Revenue an opportunity to expand out how they do things and to look at a more electronic way of dealing with issues. That cost about a billion dollars—I mean, only a third as much as what Shane Jones has got to go and spray around the country. But it certainly was a big amount for us for something that was never going to get everybody in the country saying, “Yay, let’s give Inland Revenue another billion dollars.” Strangely enough, people don’t vote for Inland Revenue to get money, but the point of it was to make a system that was going to actually be better at collecting the money but also in a more fair manner.
Mr Wood also made a comment about how it should all be equal, and it’s all about equalising tax or equalising things. I think it’s actually, really, more about equity, isn’t it? I think it’s more about equity rather than equality, because even though everyone is equal under the law, the fact is that some people are older, some people are younger, some people have more earning capacity than others, and so it is important that there be a degree of equity under the law, and under the tax law in particular.
We are opposing this bill primarily because it is another increase. It’s yet another increase in taxes, and that is particularly around the ring-fencing of rental losses. The reason for that is, actually, that increases rents. What we’ve seen in the 18 months of this Government is that, according to the TradeMe rental site, which seems to be one of the best records of what’s happening in the rental market, rentals have increased by $50 a week on average. That is a lot of money. That’s a lot of money for people who have to rent because they can’t afford their own house. It does not help them to get their deposit together to have to pay an extra $50 a week. It’s a lot of money for people who don’t have it.
I think one of the things that we’ve seen over the last 18 months is quite a Grinch-type attitude towards mum and dad investors. So many New Zealanders who are coming up to retirement may have one or two properties that they rent out, and they do that because they understand that a house is a house—it’s a property. They don’t trust always the sharemarkets. Maybe they got caught in 1986, under a Labour Government, in the great collapse of the share markets in New Zealand? Maybe—
Hon David Bennett: That’s right. And Labour caused it.
Hon JUDITH COLLINS: I don’t think they actually did cause it, but they probably had a lot to do with it, Mr Bennett—probably did! It was probably them! Anyway, the stars were definitely aligned badly, and a lot of people lost a lot of money. They also learnt pretty quickly that they couldn’t trust everything that they were being told by some of the companies and the wide sort of behaviour that some of them had. So what they do is, having lost once, they don’t want to lose again.
What this does is this is actually going to make it harder for those people, those New Zealanders who have saved up a deposit for a house that they want to rent out because they want an investment property and they want to see their money when they go past it every day. For those people, it’s going to make it harder for them to buy that house. I’ve heard Mr Wood say, who’s resumed his seat, that this is because they’re competing with first-home buyers. Well, on that basis, let’s let nobody buy anything, because they’ll be competing with somebody else, or we should go down the path of just having the State own everything, because then nobody will be competing. It’s not just about competing. On the one hand, we’ve had house prices drop and, on the other hand, we’ve got rents going up. So it just doesn’t make sense. In the last 18 months, house prices in, say, Auckland—an area that used to be in quite high demand—have gone down. Yet rents have gone up. What there is now are fewer rental properties now available for people to rent, because if there were more places to rent, then the rents couldn’t go up, because they wouldn’t be sustainable in terms of getting tenants into them.
This is actually quite a serious issue, and with so many of this Government’s policies when they bring them in—it’s often all with good, fluffy, cotton-woolly, candyflossy type ideas around them about how they’re going to stop some evil—we end up with the unintended consequence of more people sleeping in cars this winter, with more people needing emergency housing, with a waiting list for State houses that has gone up by 70 percent.
Hon David Bennett: No!
Hon JUDITH COLLINS: Now, that’s not 17 percent, Mr Bennett; it is 70 percent for State waiting lists, and yet every message has gone out to mum and dad investors: “Get out of the market. We don’t want you.” Phil Twyford has said to these people words to the effect of “If you don’t like it, get out of the market.” And he’s said that to them in their association meetings. My message is that, actually, these are the people who provide most of the rental properties that are needed by New Zealanders. It is really important in our housing market, and in our rental market in particular, that we have a good combination of community housing, of State housing, and of privately owned housing. We need more people providing rental accommodation, not fewer people providing rental accommodation, and we don’t need great big overseas corporates with enormous capital to come in and shove mum and dad out of that market and instead take away a rental property.
FLETCHER TABUTEAU (Deputy Leader—NZ First): Thanks, Madam Assistant Speaker. It’s a pleasure to rise on behalf of New Zealand First and the Government to speak to this, the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Bill.
I just want to address—if you’ll allow, Madam Assistant Speaker—some of the claims made by Opposition speakers. They both used their contributions to talk down the Provincial Growth Fund. They used this opportunity, somehow, to talk about Minister Jones. But I challenge those members opposite to go into the Hawke’s Bay today, tomorrow, next week, and talk to the people in the provinces about what the Provincial Growth Fund has done for them—
Hon David Bennett: They’re laughing at it.
FLETCHER TABUTEAU: They’re loving it, because Hawke’s Bay—more water, grow more fruit, pay more taxes, and they’ll be happy for it. Gisborne—
Hon David Bennett: Waikato.
FLETCHER TABUTEAU: Yeah, Waikato. I’ll be in the Waikato soon, Mr Bennett, and do more than you ever did or have done in your time—
ASSISTANT SPEAKER (Poto Williams): Order! Order! Do not bring the Speaker into the debate and—
FLETCHER TABUTEAU: I think I’ve made my point. Thank you for your patience, Madam Assistant Speaker.
ASSISTANT SPEAKER (Poto Williams): Thank you. Shall we move on.
FLETCHER TABUTEAU: This bill is a bill that I am happy to support, because it is about building resilience in a modern economy. It is about growing this economy that is working for all New Zealanders, and it is a bill that improves outcomes. As I said, it is about fairness, which is integral to a good tax system. New Zealand does pride itself on a long history of a fair and transparent tax system.
I suppose that leads me to one of the first major changes or efforts here in this around the GST and low-value goods. So there was—and I’m proud to say—much consultation. The National Party, in their time in Government, did start us down this road, and I acknowledge that. They brought in what was maybe unfairly coined the “Netflix tax”, but they were prepared and ready to go down phase two. And here we are—this Government agrees. When I was in Opposition at the time, I did a lot of consultation with retailers in particular, to ask them what they thought. I just brought up a quote from Retail New Zealand, who were passionate advocates on behalf of their membership, who said that this piece of legislation is “outstanding news” for the retail sector here in New Zealand.
I just actually want to acknowledge some of the issues that this bill will ensure don’t come about. I’m quoting former pro vice-chancellor Bob Buckle from Victoria University, who said the number of items crossing our New Zealand border but slipping through that GST net threatened the sustainability of New Zealand’s tax system.
So here we are today, after much consultation, like I said, when I was in Opposition—but again, much consultation. Actually, it’s an appropriate time to acknowledge the members of the Finance and Expenditure Committee, who have done more on this. Here we are, making sure that there is a framework to collect GST on low-value imported goods. Why is that important? Because it creates a level playing field for New Zealand retailers. We’re talking about 26,000 small businesses out there, employing about 62,000 New Zealanders in the retail sector who, up until this point, have been at an unfair disadvantage from foreign firms who have been able to send goods into New Zealand, because the de minimis at the border has meant that they haven’t had to pay their GST contribution. Now, that’s a 15 percent head start, and that is not fair to New Zealand retailers, the people employed, and the hard-working business owners who have made retail their life. So this is an incredibly important step forward for this Government but also for those people working incredibly long hours in their small businesses, trying to make a living selling books, for example—all these small items that Kiwis love buying online, but we want them back in our shops as well. So this is a fantastic thing, and I’m proud to be a part of it.
The other conversation that the members opposite were having in their contributions was around the loss ring-fencing measures. Look, to be fair, I would have expected more from a former Minister of Revenue in terms of the contribution to the House, because she spoke about mum and dad investors and their rental properties—using the income from that when they retire. Well, by the time that they are in that position where they can enjoy the income from their rental properties, this ring-fencing provision doesn’t apply to them. This is very much about the initial stages of buying property and getting into that positive cash flow. So once you’re in that position, there’s nothing to claim against—there’s nothing to offset. Actually, as was pointed out, initially I was quite worried, as a New Zealand First MP, about what this would do to the rental market, but actually I went to one of our biggest rental property owners in Rotorua and asked the question: “Look, what’s this going to do?” And he quite bluntly said, “Look, it doesn’t affect me and I don’t care one iota.”, because he has positive cash flow. He’s making money off his rental properties, and he will continue to do so as he adds to the stock.
So this means the sky-is-falling contribution from the other side of the House is not the case at all. In fact, there’s more to it than that. Not only is the provision applied to a small number, and, over time, they become cash-flow positive, but actually, they can ring-fence their losses and claim that in future—forward ring-fencing. So you can do this and you can continue to claim on those losses. You might not get the money straight away, but it will be there and you will be able to offset it on the profits as you move forward.
So this is a good piece of legislation. I’m pleased that the House will support it in majority, and New Zealand First absolutely commends it to the House. Thank you, Madam Assistant Speaker.
Hon PAUL GOLDSMITH (National): Well, that was a very interesting speech from Fletcher Tabuteau, a man who, in the normal course of events, might have expected to be a Minister by now, given that in any normal Government, Shane Jones would have had to resign over his outrageous interference in the New Zealand Transport Agency incident. But such as it is in this Government, he might have to wait a little bit longer.
The point he was making about going to the Hawke’s Bay and finding out how everybody was happy about the Provincial Growth Fund money and how it is being spent is an interesting one, because it’s not actually very difficult to take $3 billion if you’re a Government and then wander around the countryside and hand it out. I mean, it doesn’t take particular genius to just take $3 billion and say you’re going to spend it. It’s actually a bit trickier to actually get something useful for the money and actually go about it in a proper function. As we’ve seen, his boss, Shane Jones, has announced $1.7 billion of funding, but he’s only actually managed to get $62 million out the door because of the incompetence of the way that it has been managed.
But the point I’d make in relation to this bill is that this is another tax increase—well, two tax increases. Obviously there’s the tax increases for renters, which will flow through from the ring-fencing, but also another year when there’s no inflation adjustment in the tax regime. Lots of people in New Zealand get some reflection of the impact of inflation on the way that they are looked after. So we’ve just recently had legislation around inflation adjusting benefits in this country to help those people, but workers and taxpayers don’t get any inflation adjustment. So every year a little piece is snuck out of their income as inflation pushes the tax thresholds further down into people’s incomes and savings. Over time, that accumulates in an enormous amount of extra tax for the Government. That’s what this Government loves, because they love nothing better than spending more, than borrowing more, but they have no economic plan and they haven’t shown any ability to deliver on their promises. So in this regard that’s why we’re not very impressed with this further tax increase.
The other point around the ring-fencing of losses is—look, there is a widespread concern about the affordability of housing, so people want to make a difference on that. But the point I’d make, and that they have to be careful about and consider, is that it’s not compulsory for people to rent out their houses. If you make it too difficult and expensive—and there’s been a wide range of things added on to the burden of landlords recently around requirements around all sorts of things, putting in heat pumps, and you name it, and various things that have been taken away from them. That’s fine. They all individually might seem like a good idea, but collectively the consequence may be that a number of people say, “Well, this is all too hard. It doesn’t work for me. I’m getting out.”
In the long term that will all sort itself out, but in the short term I predict we’ll have a real shortage of rental houses in this country in the next year or so. We’re already seeing that, because of the massive increase in requests for State housing and emergency housing, and homelessness. A considerable amount of that has been driven by this Government’s housing policies, which have reduced the supply of rental properties. You have to think about the consequences of what you’re doing, in the short term, and this is another example of that. On that basis, we are not at all convinced. Thank you.
Hon JAMES SHAW (Minister for Climate Change): Thank you, Madam Assistant Speaker. I’m pleased to be able to take a call in support of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Bill—one of the most snappily titled bills I’ve had the chance to speak on yet this year! I’d like to just focus on five of the really primo parts of the bill, some of which haven’t had a lot of air time, and to kind of focus on some of those areas that haven’t gotten a lot of attention. But I will come back to some of the points that have been a matter for debate in the House, such as the ring-fencing deductions on rental properties and also the online GST issue.
But I just wanted to start with one of the provisions of the bill allowing tax records to be kept in Te Reo, which I think—you know, not a lot of people know that about this bill—is a fantastic innovation. It’s one of those, frankly, quite small things that we can do that, I think, sends a really big signal both in terms of ensuring that the Government is living up to its Te Tiriti o Waitangi obligations, but actually just to say to people, “Look, tangata whenua should be able to conduct their business with the Government in their own language.” To me, that’s just a basic right that you’re able to do that, and I’m really pleased that this bill has enabled that. It just shows that we are slowly edging towards a more inclusive and responsible society through measures like that.
The second measure in this bill that I just wanted to focus on, that again don’t think has had a lot of debate today, is around allowing the Commissioner of Inland Revenue to consider other information when exempting victims of sex offences from paying child support for children born as a result of sexual violence. I think, again, particularly given the programme of work that we’ve got in this Government on domestic and sexual violence, that this is particularly important, because at the moment the way that the system is set up is that it looks like we’re penalising a victim of sexual assault simply because the perpetrator hasn’t been convicted, and that’s obviously a perverse outcome that’s really at odds with the culture shift that we’re trying to generate in this.
If you think about those two provisions, the ability to hold your tax records in Te Reo and making it easier for the Commissioner of Inland Revenue to exempt victims of sex offences from paying child support for children born as a result of sexual violence, those are, kind of, deep social issues that you don’t normally see come up through tax law, and it is great to see this bill extending those out.
There’s also a great little provision in this bill which allows Inland Revenue to collect student loan deductions from things like people who are working casually on election day or from casual agricultural work and so on. That will reduce end-of-year obligations paid by student loan borrowers. So, again, it’s just one of those small provisions, making life a little bit easier for people who are often in pretty tight financial conditions—making life easier for them. Those are three of the smaller provisions that I don’t think have had a lot of air time, which I just did want to bring to the surface and to people’s attention.
I know there has been a lot of debate in the House today around the ring-fencing of rental properties so that they can’t be used to reduce tax on other income. I just want to pick up on one of the comments that was made by Judith Collins before, because she talked about how people may have been burnt by the 1987 stock market crash and are therefore wary about investing in the stock market, because of the 1987 stock market crash. I do know that the stock market does have its ups and downs and that there are members present who may have had their fingers burnt in the 1987 stock market crash. The logic that Ms Collins is applying is saying that because people have been burnt on investments in the stock market, we should therefore maintain preferential tax treatment for investment properties over investments in the other parts—particularly in the more productive parts—of the economy. Pretty much every economist agrees on this point, that we have a massive over-investment in investment properties and not in the productive parts of the economy. It’s a huge imbalance in our economy.
The idea that because people might be worried about the stock market going up and down, we should therefore continue to tilt the playing field away from productive investments and towards property is completely absurd. It is utterly absurd. So I just think that this provision, which in the grand scheme of things isn’t actually all that big, goes some small way to trying to create a more level playing field between investment property on the one hand and the productive parts of the economy on the other. So to me it’s an absurd proposition that because there was a stock market crash in 1987, and previously in 1929, we should therefore have this massive over-investment in property because somehow that kind of makes sense.
I think the other point to make on this point is that when you look across the investment categories, there are persistent tax losses that are being declared by property investors on their properties—like, persistently—which suggests that they hold those for capital gain, which, of course, they don’t pay tax on, rather than actually the rental income, right? So they’re not actually renting these houses out for rental income; they’re renting them out and declaring losses in order to maximise their capital gain, which, of course, they don’t pay tax on. So to me it’s completely absurd that you would maintain those kinds of existing settings. I do really strongly support the loss ring-fencing, because I do think in some small way it will help to level the playing field between the productive part of the economy and investment properties.
The last piece that I just wanted to pick up on, which my colleague Fletcher Tabuteau spoke fairly extensively on before, is about the requirement that offshore suppliers of low-value goods register for, collect, and return GST when their sales exceed $60,000. This has been a long time coming. Deborah Russell has made a point of this before, which is that this is a really pragmatic response to a changing world in which it is at least as easy, if not actually easier, to buy goods online than from your local retailer outlet.
So, at the moment, we’ve actually got this quite absurd situation where we’re actually encouraging people to buy small goods overseas from internet giants that generally don’t pay any tax in New Zealand anyway, or pay very little tax in New Zealand anyway, rather than from small New Zealand businesses. As Mr Tabuteau pointed out, we have 26,000 small businesses in this country that employ something in the order of 62,000 employees, and the idea at the moment is that, actually, there’s an advantage going to the likes of Amazon and so on, which, last time I checked, is not short of cash. So I think that this does go some way towards levelling the playing field, and to me this provision isn’t really about collecting revenue; it’s much more about ensuring that there’s a level playing field between small retailers in New Zealand and some of the big offshore internet giants overseas.
I know that retailers and small businesses in New Zealand will be delighted with this, and I think that they will probably be scratching their heads at why the National Party, which likes to talk about itself as the champion of business, and in particular small business, would be voting against a bill that actually explicitly creates a more level playing field for New Zealand small businesses rather than these big offshore businesses that don’t pay a lot of tax domestically. If I was a retailer in New Zealand, I would be really wondering what on earth the Opposition was doing voting against that provision. If I was Māori and wanted to be able to conduct my business with the Government, I would be scratching my head at why the Opposition is voting against a bill that allows me to keep my tax records in Te Reo. If I was a victim of domestic and sexual violence and I felt that the current set-up was discriminating against me, I would be scratching my head about why it is the Opposition is voting against a bill that explicitly changes that requirement there. If I was someone who wanted to buy my first home and to be able to have that Kiwi Dream—
ASSISTANT SPEAKER (Poto Williams): Order! I apologise to the honourable member; your time has expired.
Hon James Shaw: I commend this bill to the House.
ASSISTANT SPEAKER (Poto Williams): Thank you.
Hon DAVID BENNETT (National—Hamilton East): Thank you, Madam Assistant Speaker. Well, aren’t we so lucky to have the Green Party tell us about economics? These are the peak oil people from 20 years ago that are now banging on about other issues.
But there was one line in that speech that I think we need to really delve into. He said that it was preferential treatment that was being talked about, and I want him to just think of a scenario of company A. Now, company A is a business and it has two or three rental properties. It owns those properties, and company A is also a retailer. So it is a retailer that uses those properties for its business, and it may have a structure in there with a number of companies between, but, essentially, it is in the retail business and the rental business. Are they able to net off the income losses on that rental against the profits they make on the retail? Of course they are. That’s how they do it. That’s what businesses do. The pie is put together, and they pay tax on the profit at the end.
Now, the member over there, James Shaw, was saying that, no, this is unfair, that the losses on rental properties shouldn’t be able to be used against other income. That is simply not true. It is fair that people are able to do that, because they are providing an investment in our economy. They are providing a service to our people. They are putting capital at risk, and they should be able to net that off against the other investments that they make as part of their business, which is their salary and income and their investments.
We can go overseas and see how that has worked in the Australian example, for example. The Labor Party over there has campaigned on negative gearing for many, many years, and we can see how well that worked in the last election. The public react to an attack on negative gearing. When you have rental properties like this and the ability then to be able to claim or ring-fence those losses against other income—as in the case that you can do now, but this legislation will stop that and will ring-fence it—that means that there isn’t that incentive for someone to go out there and invest in property.
The Green member said the 1987 crash—well, there have been many crashes in the New Zealand stock market since 1987. Only going back six or seven years ago, we had the global financial crisis, which was a major impact on New Zealand’s sharemarket. New Zealanders are burnt, as the Hon Judith Collins says, because we don’t have a massive sharemarket compared with some other countries, and a lot of people do invest in property as their security mechanism. So when that member was saying that this is something that—he was trying to portray that it was many, many years ago and New Zealanders should’ve moved on. Well, that’s not the case in the practicality of how people work.
Dr Duncan Webb: Balanced portfolio—balanced portfolio. That’s all you need.
Hon DAVID BENNETT: Balanced portfolios—well, that’d be interesting coming from the Labour Party, a balanced portfolio. Have we seen a balanced portfolio out of the Labour Party?
Dr Duncan Webb: Like our superannuation. Like the Cullen fund we set up.
Hon DAVID BENNETT: Oh, the Cullen fund. That was a balanced portfolio—the borrowing money to invest in shares. Did the Cullen fund have land assets? No, it didn’t, because the Cullen fund was all about shares. That was a very balanced portfolio, wasn’t it? It was all about shares on the international market, and they were buying shares in New York and other places like that. But that’s the other economic brilliance we’re getting from the Labour Party. Their idea of a balanced portfolio was to borrow money and put it in the sharemarket. That’s what that member was just saying.
This actually will hurt ordinary New Zealanders, the ordinary people out there that work hard, go out there and make some money, and want to invest it in a little bit of property. Why should they be at risk now? Why should they be attacked by this Government? They are providing a very valuable service for this country, and if the Government thinks that it can provide all the housing in New Zealand, other than people that own their own homes, and if the Government doesn’t believe there should be a rental market out there, then fine, say that, but then I’d love to see them actually do it, because we have seen how KiwiBuild has been a failure. We’ve seen that their Housing New Zealand growth is only to a limited amount. They just can’t do it. There’s no physical way, if Labour and the Greens actually wanted to, for the Government to deliver all the houses in the New Zealand market. We need people to go out there and take a risk and invest, and to do this we’re penalising people that want to take a risk.
Greg O’Connor: No, to build—no, to build.
Hon DAVID BENNETT: To build—so the only exemption is to build, according to Mr O’Connor. Now, Mr O’Connor is another economic genius from the left. He’ll be coming up and he’ll be doing hand signals as he does his speech, and the waves will move as he speaks. We’re looking forward to that, Mr O’Connor, the economic genius that you are in the Labour Party as well—
ASSISTANT SPEAKER (Poto Williams): Thank you very much; I am an economic genius. I just remind you not to bring the Speaker into the debate.
Hon DAVID BENNETT: Oh, no, I would never bring the Speaker into the debate.
Greg O’Connor: At least I’m some sort of genius.
Hon DAVID BENNETT: Oh, he’s some sort of genius, is he? That’s going to be interesting.
ASSISTANT SPEAKER (Poto Williams): Can we get back to the bill, please, Mr Bennett.
Hon DAVID BENNETT: Well, I just wish that the Labour Party would actually look at this and in a practical sense actually support hard-working Kiwis that actually want to go out there and invest in property.
ASSISTANT SPEAKER (Poto Williams): I understand this is a split call. I call Kiritapu Allan.
KIRITAPU ALLAN (Labour): It is always a delight to follow the previous speaker, David Bennett, when I get to listen to claims about ordinary New Zealanders. Ordinary New Zealanders in my electorate, for example—I’ve got one particular ordinary New Zealander who’s acquiring so many properties—in surplus of 50, actually—who really loves ring-fencing. It’s prohibited a whole range of people—pretty much anyone—from being able to buy into that particular area. I’ve got homelessness on the rise, and so I just want to acknowledge the Minister who’s in this House, the Hon Phil Twyford, who is working very hard alongside my senior colleagues to fix perverse behaviours that have been allowed to run rampant under the previous Government.
But I turn now to the bill, and it is a delight to be able to speak in respect—and I want to actually just acknowledge the camaraderie that we do show within our particular select committee, the Finance and Expenditure Committee. We do have enjoyable debates. I too want to acknowledge our new independent adviser, Professor Lisa Marriott. This is the first particular bill, I think, that she’s advised us on all the way through. To our colleagues from IRD, they tolerate a lot of sometimes probably very ignorant questions—ignorant or insightful; perhaps just the ignorant ones are from me—but I do thank them for their contributions.
There are a couple of areas I particularly want to speak to this afternoon. For me, one of the key aspects in this bill for small regions like mine has been the application of GST to low-value goods. So for small local retailers in areas like mine—I’m thinking of Muirs bookshop up in Gisborne, or whitegold down in Whakatāne. Small-business owners—there’s about 26,000 of these throughout the country. They employ about 62,000 people through New Zealand. Now, those companies, in this new era of economic commerce, argued to say that they’ve been at a disadvantage, and this bill brings about some equity and equality. We received substantive submissions, and I want to acknowledge the submitters, and we’ve made a number of amendments. But this particular provision I just think is absolutely fantastic, and it brings us up to speed with the rest of the world. Australia brought in legislation like this last year; the EU are about to do it pretty soon. For a lot of those small businesses within our regions—and all of us have them—who’ve felt like they’ve been operating at a 15 percent disadvantage, this will, hopefully, restore some of those shops that we’ve seen close down in our front windows. The GST system was introduced in 1986. It’s been around most of my lifetime, and e-commerce wasn’t really anticipated in any big form when I was a young ’un, so it’s good to see the modernisation of this bill.
The other particular thing I wanted to highlight was the—and I want to acknowledge the Hon Stuart Nash for responding to the exemption for child support payments as a consequence of sexual violations. I’m thinking of a woman in particular. She was 15 years old when she conceived a child as a consequence of sexual violation. Very shortly after the child was born, that child went to her mother, and that woman was then sent letters from IRD requiring her to pay child support—17 bucks a week by the time that she was 17 years old. She commenced her adult life with a relative noose around her neck, and she went through a process. But it’s a relatively consequential matter that the Minister has picked up, and I do really want to acknowledge him for his foresight and his empathy, and I’m very proud to see that go through in this bill. Madam Assistant Speaker, I’m pleased to commend this bill to the House.
Hon JACQUI DEAN (National—Waitaki): Thank you very much. Just a couple of matters I wanted to refer to in the debate on this bill. First of all, introducing a GST component on low-value imports—when this was looked at in the past, it was deemed that the cost of recovering that GST made the exercise not worthwhile. While that looked like a pretty Government-centric type of policy, it just seemed that adding compliance cost into the economy made it not worthwhile; however, the significant investment that has been made into Inland Revenue’s data systems has made it now possible for a GST regime to be introduced on low-value imports. Of course, that should be and is welcomed by small business. I’ve had a number of constituents, small-business owners, discuss this with me over the years, and it is good to see that now, due to the investment largely started by the former Government, this regime is now coming to pass.
I can’t and won’t speak more favourably, though, around the ring-fencing of rental losses, because there is only one impact on rising costs in any business, be it a landlord in a rental situation or any other type of business. There’s only one way—two ways—to deal with rising costs. In this instance, either exit the rental market, which is happening with a lot of landlords—I also talk to a lot of real estate agents, and a lot of landlords are now selling out because the return is simply not worth it. So you can exit the market, or you can do what is happening here in Wellington, and we are seeing a lot of that: the cost of rentals goes up.
So I fail to see—and I would love to know the rationale, apart from blind ideology, coming from the Government—why, in the context of wellbeing, which they seem to be pushing with every breath they take, on the one hand they talk about wellbeing, and yet knowingly, against the advice of Treasury and against the advice of the Inland Revenue Department, are introducing a regime into the taxation system which has the impact of raising, yes, $190 million in extra revenue a year from landlords. But as I’ve said, you put the costs up, either the housing stock available for rental is reduced—yes, that’s happening—or rents rise. It’s simple. It’s very, very simple.
So I do fail to see, and I am interested in the views of members opposite, how they can justify a regime which raises a not considerable amount of taxation revenue against the social cost, the wellbeing cost, of people who are in the rental market who then find their rents going up or the landlord selling the property while they are still renting. So, you know, it simply doesn’t—
Dr Duncan Webb: We’re winning.
Hon JACQUI DEAN: Winning? The member opposite says “winning”. Who’s winning? Certainly not people in the rental market, because in Wellington, where we are here, the rents are at an all-time high. Why? Why? A number of impacts of policy—the capital gains tax certainly put the wind up the sails of landlords, and now to introduce ring-fencing of tax losses is simply the icing on the cake, if you like. The only loser—the only loser—are those people who the Labour Government purport to support.
Dr DUNCAN WEBB (Labour—Christchurch Central): Well, it gives me great pleasure to rise and speak on this bill. It’s a great example of a tax tool being used not only to raise revenue but also to change markets. We know that the rental market has been one where people have been investing on the back of capital gains, making paper losses but real money and getting subsidised by the Government whilst they’re doing it, and that’s not right. So this ring-fencing proposal is fantastic. It’s part of an excellent package of reforms around the property market that this Government is implementing. Only today, I read that at last, first-home buyers are dominant buyers in the market in New Zealand today, and that is due to a Government that’s committed to making houses available to genuine, hard-working New Zealanders, wherever they may be. That is absolutely fantastic.
Levelling the playing field as well are our GST reforms. I think it’s fantastic that at last, as my colleague Kiritapu Allan said, small retailers are now not disadvantaged because overseas suppliers have a 15 percent head start on them. We now have got a very workable, very simple system for any overseas retailer whose turnover is $60,000 or more. Look, I must say, some of the large suppliers came in and said, “Look, you can’t rush us. Don’t impose it before Christmas, because we can’t possibly get our systems up to speed by then.” I must say, we were very sceptical of that. Now, the committee did recommend pushing the date to 1 December rather than 1 October—that’s going to be very carefully considered. It has an $18 million revenue impact, using some rough figures, so let’s think about that. But I don’t for a moment accept that these large internet suppliers are going to exit our excellent market, our profitable market, simply because they’re asked to put some systems in place.
So this is yet another excellent piece of legislation, making the playing field both in respect of rentals and tax and in respect of GST and retailing fair, equal, and also revenue-positive for the Government so we continue with the great project of making New Zealand a better place. Thank you, Madam Assistant Speaker.
IAN McKELVIE (National—Rangitīkei): Thank you, Madam Assistant Speaker. Before I start I want to remind James Shaw that some of us are older than 1987—one or two other speakers as well—and what, in fact, Judith Collins said was quite true. It was also true of 2007, of course, when the finance companies collapsed and there were a whole lot of New Zealand investors caught up in that. So the diversity of our opportunity in New Zealand is not great.
I also want to take the Green Party’s speaker up on one other point. There are some very good parts of this legislation and there are some pretty average parts, and that’s why we can’t support the legislation. Not because of the very good bits—which we do support, we fully support them and we realise they’ll get passed—but there are some parts of this legislation that we don’t like, and I want to talk about two bits, really. One is Supplementary Order Paper 193, which I don’t know whether I like or not because it effectively gives Inland Revenue, or the commissioner, the prerogative to change some tax rules, I suppose. That’s the first time that I know of where this House has, effectively, given the power to tax to an outside body. Now, there are some safeguards around that, in that it’s got to be put into legislation after three years if that does happen, but, none the less, it is a first and it’s an interesting proposition. I suppose, given the kind of democracy we have, it does speed things up from that perspective and also corrects things much quicker than they otherwise could have been corrected, but whether that’s sound or not I’m not so sure, because it does take some of the power away from the Parliament.
I now want to go to the bit that I really think is extraordinary, and that’s the ring-fencing of losses and the way it affects some people in the market and not others. It, effectively, has an impact on the small rental investor; it doesn’t have an impact on the larger rental investors, because those businesses are self-sufficient. So even someone with, say, 10 houses can very well be self-sufficient. They won’t be affected by this tax at all, because they won’t need to be writing off their income against their rental property expenditure, because a portfolio of that scale will deal with the issue for them. So that’s the first thing: I think it’s unfair.
The second thing that I think is very likely to happen is that—because about, I think, something like 40 percent of the rentals in New Zealand are held by small investors—this is likely to force the rental price up further. The ironic thing about that is that the small investors will still be penalised in the way they were. They’ll get some more rent but the big investors in the property market will get a free ride, basically, on the back of that. So they’ll have a bonus that they wouldn’t have anticipated. Again, it’s an ironic effect and it’s not an effect I think is at all sensible. So there are some anomalies, I think, that will be created by this.
The other thing I just want to briefly mention was the issue that, again, Judith Collins touched on to some extent—the issue in New Zealand of the diversity of our market. We’re unique in the world, almost, because we’re a well-off small country with a very small market. We don’t have opportunity in New Zealand of large sharemarkets and large alternative markets. So the effect that has is to force people to invest in New Zealand, and New Zealanders, because we’re so isolated from the rest the world, tend to trust themselves more than they’ll trust anyone else, so they’ll invest at home. What do they invest in? They invest in property because it’s the only thing that they can touch and see and be secure with. So you look at the two crashes that are being talked about, 1987 and 2007, both of those had a significant impact on New Zealanders who had no alternative investments from property; it didn’t have an impact on the property investors.
So it is an anomaly. I think it’s unfortunate, and I think that that piece of legislation contained in the bill that otherwise is pretty good—in fact, I think most of the bits of the rest of the bill we support. I think containing this piece of legislation in there is unfortunate because we need to vote against it for that reason. So Madam Assistant Speaker, that’s my lot, thank you. I commend the bill to the House—don’t support it, though.
Dr DEBORAH RUSSELL (Labour—New Lynn): It’s a pleasure to take the last call on this debate. We began the debate by—Michael Wood began it by comparing Andrew Bayly to a Scotch terrier. I have to say that if Andrew Bayly is a Scotch terrier then I think Paul Goldsmith is probably a whippet, David Bennett might be a Weimaraner, Jacqui Dean a bichon frise, Ian McKelvie a spaniel, and Judith Collins is, of course, a sweet friendly golden Labrador. Michael Wood, the chair of the Finance and Expenditure Committee, I think is a Border collie—highly intelligent and friendly, and he shepherded this bill through the select committee with great skill. I commend him to the House for his work in organising this bill through a long series of submissions and the like.
But in terms of the substance of this bill, it is, as my friend and colleague James Shaw said earlier, a response to a changing world. The world has changed in the years since we introduced goods and services tax in this country. As he pointed out, we are no longer just dealing with bricks and mortar; we are dealing with goods that can be shipped from anywhere across the world, services that can appear almost with the click of a finger as we download books or music from across the internet, or other services. In response to that changing world, we need to change our Goods and Services Tax Act to ensure that we tax consumption in New Zealand. Up until now, we have not been taxing consumption in New Zealand if the goods and services were purchased from overseas. Now we will. That is the effect of this bill, and I think it’s an important change.
In the select committee—as our chair, Michael Wood, has pointed out—we did shift a little bit on what happened in the bill as presented. We shifted the implementation date for the new way of charging goods and services tax, giving online retailers a little bit more time to adjust to the new law. I think that is a sensible change.
The other big issue that the Opposition has raised with respect to this bill is the issue with ring-fencing. That too is a response to a changing world. We used to have ring-fencing of rental property losses a long time ago. They were called specified losses, and they were actually limited to claiming $10,000 of specified losses a year. We lost that particular provision. Then, in the meantime, our housing market took off, and it meant that people could invest in rental properties. They could claim losses, they could withstand losses year on year on year—which ordinary business people can’t, because the money runs out—in anticipation of an untaxed capital gain. The world has changed, and we need to respond to that change. The ring-fencing is a response to that change.
People can still claim rental losses; it’s just that they must claim them against rental profits. It’s a straightforward proposition. What that ring-fencing does then is encourage people to invest on the understanding that they will earn a return on an ongoing basis, not just if they ever sell the property. So that is a sensible response to a changing world. This is an excellent tax bill. I think it deserves support. It’s a shame that the Opposition won’t support it, because these are just and fair measures. I commend this bill to the House.
The question was put that the amendments recommended by the Finance and Expenditure Committee by majority be agreed to.
A party vote was called for on the question, That the amendments be agreed to.
Ayes 63
New Zealand Labour 46; New Zealand First 9; Green Party of Aotearoa New Zealand 8.
Noes 57
New Zealand National 55; ACT New Zealand 1; Ross.
Amendments agreed to.
Bill read a second time.
Bills
Administration of Justice (Reform of Contempt of Court) Bill
Second Reading
Debate resumed from 29 May.
HARETE HIPANGO (National—Whanganui): I seek to resume and continue the debate where I left off last time in addressing the House, and it will be a brief call so that we may expedite this through to the third reading. The National Party supports this bill, and when I last addressed the House, I was sharing the experiences that I had had as a practitioner in the court with the contempt proceedings and how the judicial bench delalt with such matters.
Just in summary, as is known, this is a bill that had been put up and drawn as a member’s bill in the name of the Hon Chris Finlayson, now adopted by the Government to advance in the name of the Hon Andrew Little, the Minister of Justice. In saying that the National Party supports this bill, the particular provision that I was addressing the House when the proceedings were last disrupted—and are about to be again—was on the very point around disruption to court proceedings. It appears that this may occur again. I’m going to wrap it up. I would like to share with the House—
ASSISTANT SPEAKER (Poto Williams): I apologise to the member. The time has come for me to leave the Chair.
Debate interrupted.
The House adjourned at 6 p.m.