Thursday, 5 December 2019

THURSDAY, 5 DECEMBER 2019

THURSDAY, 5 DECEMBER 2019

The Speaker took the Chair at 2 p.m.

Prayers.

Visitors

Malaysia—Sarawak State Legislative Assembly

SPEAKER: I’m sure that members would wish to welcome members of the Public Accounts Committee from the Sarawak State Legislative Assembly in Malaysia, led by Mr Aidel Bin Lariwoo, who are present in the gallery.

[Applause]

Business Statement

Business Statement

Hon CHRIS HIPKINS (Leader of the House): Legislation to be considered next week will include the first readings of the Racing Industry Bill and the Urban Development Bill; the third reading of the National Animal Identification and Tracing Amendment Bill (No 2); and the further stages of the Venture Capital Fund Bill, the Education (Pastoral Care) Amendment Bill, the Terrorism Suppression (Control Orders) Bill, the Maritime Transport (Offshore Installations) Amendment Bill, and the Credit Contracts Legislation Amendment Bill.

Hon GERRY BROWNLEE (National—Ilam): I thank the Leader of the House for that list of the Government’s intentions for next week. Can he tell us if, in the next two weeks before the House lifts, the Government intends putting the House into further urgency for bills as yet unmentioned?

Hon CHRIS HIPKINS (Leader of the House): That will depend on how much progress the House makes on the bills that I’ve listed down. I’m sure that with the Opposition’s cooperation, further urgency is unlikely to be required.

Oral Questions

Questions to Ministers

Question No. 1—Commerce and Consumer Affairs

1. Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Commerce and Consumer Affairs: What recent announcements has he seen on the retail fuel market?

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): Today the Commerce Commission has released its final report on the retail fuel market sector. It confirmed that (a) fuel companies have been making persistently higher profits than we would expect from a competitive market; (b) wholesale supplier relationships, including restrictive contract terms between major fuel companies and resellers, limit the resellers’ ability to switch supplier, which hampers competitive pricing for people at the bowser; and (c) an active wholesale market for fuel does not exist in New Zealand. The report confirms our concerns that consumers are paying higher prices for petrol and diesel than they should be in a competitive market. We accept the commission’s findings, and the Prime Minister has said we are ready to act on them.

Dr Duncan Webb: How will the Government respond to these findings?

Hon KRIS FAAFOI: The Commerce Commission study found a lack of competition in wholesale markets. We’ll be introducing the best options to increase competition, which will make prices fairer on the forecourt. The Government will take the Commerce Commission’s findings to Cabinet with a view to swiftly implementing changes such as a more transparent wholesale pricing regime, greater contractual freedoms and fairer terms to facilitate competition in the wholesale market, introducing an enforceable code of conduct for the industry, and improved transparency of premium-grade fuel pricing. The Government intends for these changes to be implemented by the middle of next year.

Dr Duncan Webb: What difference will this make to consumers at the pump?

Hon KRIS FAAFOI: This is about breaking the big—[Interruption]

SPEAKER: Order!

Hon KRIS FAAFOI: This is about breaking the big fuel companies’ stranglehold on supply and getting more competition into the market to benefit consumers. We know that in parts of New Zealand where there is better retail fuel competition, prices are lower. The changes we are working on will make it easier for new entrants to compete in more parts of New Zealand. This view was driven home yesterday by Rangitata MP Andrew Falloon, who told The Timaru Herald, “When new entrants like Waitomo and Gull enter local markets the effect on reducing fuel prices is stark.” I thank him for his support.

Question No. 2—Prime Minister

2. Hon PAULA BENNETT (Deputy Leader—National) to the Prime Minister: Does she stand by all her Government’s policies and statements?

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

Hon Paula Bennett: Why did the Government settle on 14 grams of cannabis being able to be purchased in the proposed bill, three times what’s allowed in the Netherlands but half of what’s allowed in Canada?

Rt Hon WINSTON PETERS: Well, actually, I’ve got to say, I have an example of the kind of amounts that are in other countries. [Holds up photo of Hon Paula Bennett] In this case, it’s very hard to tell the difference between the dope and the weed, but Ms Bennett is a world-class expert on that, and I do defer to her knowledge and experience.

Hon Paula Bennett: If the Minister would like a picture of me for his wall, he can just let me know. What will the tax rate that will be imposed on cannabis be?

Rt Hon WINSTON PETERS: Well, on the question of the picture on the wall, it’s very hard to get a photograph when you’re spending all your time, as that member does, in front of a full-length mirror. But—[Interruption] Well—[Interruption] Ha, ha!

SPEAKER: I think we’ll now leave the pot-kettle-black and get on with the questions.

Hon Paula Bennett: I’ll just repeat the question if I might, Mr Speaker?

SPEAKER: Repeat the question without the “mirror” comments.

Hon Paula Bennett: Thank you. What will the tax rate that will be imposed on cannabis be?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, that decision has not been made by the Government yet.

Hon Paula Bennett: Does she envisage the tax rate on cannabis being the same as tobacco?

Rt Hon WINSTON PETERS: Again, that is not a decision that the Government has made.

Hon Paula Bennett: Does she agree with allowing New Zealanders to privately grow cannabis in their homes?

Rt Hon WINSTON PETERS: On behalf of the Prime Minister, I do not think that that has been announced yet, but I have to say, to use—[Interruption]

Hon Grant Robertson: The view has not been announced.

Rt Hon WINSTON PETERS: The view has not been expressed, with respect. But I have to say, listening to all these questions, it reminds me of that flower-power, hippie era—you know, “Far out, man!”

Hon Members: What?

SPEAKER: Well, come on, it’s an historical reference—we’ll just leave it. Some of us can remember.

Hon Paula Bennett: Does she agree with allowing New Zealanders to grow and smoke cannabis in rental properties?

Rt Hon WINSTON PETERS: The Prime Minister has not expressed a view on that yet. That member sits on the committee, so does my colleague. Of course we’ve got an expressed view, but you’re asking the Prime Minister and not me.

Hon Paula Bennett: Does she believe that the drafting on the proposed bill around legalising cannabis should specify whether or not rental properties can allow their tenants to grow and smoke cannabis?

Rt Hon WINSTON PETERS: Can I just say that there’s a cross-party consortium working on this matter, but here’s the real essence of the answer that that member’s got to grasp: we believe in democracy.

Hon Gerry Brownlee: Oh, don’t start this rubbish!

Rt Hon WINSTON PETERS: We believe in asking the people of this country. We do not think, like Mr Brownlee and others, that they’re too dumb to work these questions out.

Hon Paula Bennett: Should New Zealanders, in the name of democracy, have an answer to the question around rental properties before they vote?

Rt Hon WINSTON PETERS: That member is on the cross-party committee and should be making submissions on that matter, and at the end of it, I hope, with all her wealth of experience on this particular subject—rather exceptional knowledge, I might add—we can advance the outcome and come to a conclusion, but the matter is still a matter of deliberation.

SPEAKER: Order! I am going to ask the Deputy Prime Minister in future replies to be very careful about what can be inferred from the answers.

Hon Paula Bennett: Why did the Government not bring legislation to the House so that it could go through all stages and the public know exactly what they are voting for and so that it was binding?

Rt Hon WINSTON PETERS: Can I say to that member that that has been traversed by the Ministry of Justice already.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. [Interruption] Mr Peters, I think we all know what “traverse” means—

SPEAKER: No, sorry. Do we have a point of order, Mr Brownlee?

Hon Gerry Brownlee: Yes.

SPEAKER: Right, well, points of order are to me, not to Mr Peters.

Hon Gerry Brownlee: Right. Well, with all due respect—

SPEAKER: No, no. It’s to me, and I know what the member means when he says that.

Hon Gerry Brownlee: The question was not answered. The question may have been addressed with some words out of the Minister’s mouth on behalf of the Prime Minister, but it was not an addressing of the question.

SPEAKER: I think the question was addressed.

Question No. 3—Finance

3. Hon PAUL GOLDSMITH (National) to the Minister of Finance: Is he concerned that the Treasury considers it is likely we will see “overall New Zealand GDP growth fall below Budget forecasts”, and what domestic policy decisions, if any, are behind this slower growth?

Hon GRANT ROBERTSON (Minister of Finance): In addition to my answers in oral questions yesterday regarding the same partial quote, I would simply add that it is Treasury’s job to forecast, and, therefore, I am not concerned that they are doing their job. In answer to the second part of the question, I reject the premise. It is my belief that the domestic policy decisions we are making are ensuring that New Zealand’s GDP growth is stronger and forecast to be stronger than the countries we compare ourselves to, such as Australia, the UK, Canada, and the OECD average.

Hon Paul Goldsmith: Does he expect that the Reserve Bank’s capital requirement changes announced today will increase or lower growth over the next five years?

Hon GRANT ROBERTSON: The bank itself has indicated that over the medium term, they believe that it will actually increase GDP growth. I know that that view is contested by others, but that is the view of the Reserve Bank.

SPEAKER: Question No. 4, Willow-Jean Prime.

Hon Paul Goldsmith: No, supplementary.

SPEAKER: Well, sorry. I looked at the member and he didn’t stand up.

Hon Paul Goldsmith: Well, I was on my way; I just hadn’t started.

SPEAKER: The member will resume—the member will go down again. The member might’ve thought he was on his way to standing up, but it actually requires a physical movement. I will wind it back and give him another chance.

Hon Paul Goldsmith: Very gracious. Whose estimate does he prefer on the likely impact on retail interest rates for that decision, the Reserve Bank’s 0.2 percent or the ANZ’s 0.3 to 0.6 percent on mortgage rates?

Hon GRANT ROBERTSON: I of course have confidence in the Reserve Bank.

Hon Paul Goldsmith: Why did he not insist that the Reserve Bank release a full cost-benefit analysis of its proposal to increase the bank capital before they released the decision?

Hon GRANT ROBERTSON: There is a very comprehensive analysis that the Reserve Bank has indeed released, and there’s a summary of it that I think is already available for people. They undertook a long period of consultation, independent analysis was used, and they have done that analysis. Clearly, not everyone is going to agree with it; that’s quite clear, particularly the four large Australian-owned banks, who clearly have a significant interest in the matter that’s at hand here. What I hope is that they will now focus on what really matters, which is making sure that Kiwis’ money is safe.

Hon Paul Goldsmith: What difference does it make to New Zealanders if the economy is growing at around 2 percent, as it is now, instead of over 3 percent, as it was in 2017?

Hon GRANT ROBERTSON: Well, we all know that economic growth can improve living standards, so that’s the difference that economic growth can make. But as we’ve traversed many times in this House, across the world, rates of economic growth have been slowing. In New Zealand, they have also been slowing, but they have been slowing at a far better rate in terms of New Zealanders, because we continue to outperform those that we compare ourselves to.

Hon Paul Goldsmith: Isn’t it true that a slower economy, as we have in New Zealand, creates fewer opportunities for New Zealanders to get ahead?

Hon GRANT ROBERTSON: What we have is a situation where still in New Zealand today, in the middle of a global slow-down, there are more opportunities for New Zealand relative to the countries that we compare ourselves to. Mr Goldsmith knows we are an open, export-based economy. We are susceptible to global trends, but the economy is in good shape to withstand them.

Hon Paul Goldsmith: So how can an open, export-led economy be doing so poorly at a time when we’ve had historically high export prices, as we have now?

Hon GRANT ROBERTSON: I utterly reject the premise of that question. The economy is not doing poorly, and Mr Goldsmith needs to actually get out there and listen to people who are working hard every single day to ensure that we create jobs, that we do have economic growth that is better than it is in many other parts of the world. The New Zealand economy is in good shape. We’re in the middle of a global slow-down, but we have the resources to manage that.

Hon Paul Goldsmith: So is the Minister saying that he is content with 0.5 percent per person growth?

Hon GRANT ROBERTSON: I am never content, and all of my colleagues know that on a daily basis. What I do know, though, is that the New Zealand economy, relative to others in the world, is doing relatively well. We’re in good shape, and the member needs to get on board with the fact that New Zealanders are a positive, optimistic bunch—unlike what we see over there.

Question No. 4—Finance

4. WILLOW-JEAN PRIME (Labour) to the Minister of Finance: What recent reports has he seen on New Zealand’s economy and financial system?

Hon GRANT ROBERTSON (Minister of Finance): Today the Reserve Bank released the final decisions of its review into bank capital, which began in May 2017. It is important to note that the Reserve Bank operates independently in these matters. It carried out four phases of consultation during the process and commissioned three independent reviews. Compared to the draft proposals earlier this year, the Reserve Bank is giving banks seven years instead of five to meet the new capital requirements and greater flexibility on the specific financial instruments that they can use, with a more cost-effective mix of funding options. I am pleased that the comprehensive consultation process has seen interested parties listen constructively to each other as they work through the process. The bottom line here is ensuring that consumers know their money is safe and the banking system is effective.

Willow-Jean Prime: What analysis has he seen on how the new proposals will affect bank lending?

Hon GRANT ROBERTSON: New Zealand’s banking system is one of the most profitable in the world. Over the past 10 years, the four large Australian-owned banks generated $39 billion in profit after tax and distributed $22 billion of that to their parent companies. I am advised that the Reserve Bank thinks the seven-year transition period will allow banks to meet the new requirements through retained earnings and that the Reserve Bank sees no need for them to reduce lending growth. While I am advised that some banks will be affected more than others, as a whole, banks will be able to meet the new requirements and still maintain some dividends to their shareholders. At the end of the seven-year transition under this scenario, the Reserve Bank estimates lending would be no more than 1 percent lower than if the changes announced today were not made.

Willow-Jean Prime: Why is it important for the economy to have a strong and stable banking system?

Hon GRANT ROBERTSON: A strong and stable banking system is essential for the confidence of New Zealand consumers. This process is about protecting the money New Zealanders have in the bank. New Zealanders said during the consultation process that they wanted a safer and more secure banking system, and at the end of the day it is about protecting their money. I am confident that the proposals today will mean our banking system will be able to withstand a one-in-200-year event like a serious global financial crisis. It’s also worth noting that the proposals allow for more competition between banks. A more secure and competitive banking system ultimately supports a stronger economy over the long run. By reducing risk, there will be more confidence in the economy. I know that this process has been a difficult one, but now is the time for everyone who believes in the importance of New Zealand having a safe and secure banking system to work together to make sure the changes are implemented practically and fairly.

Question No. 5—Regional Economic Development

5. CHRIS BISHOP (National—Hutt South) to the Minister for Regional Economic Development: How many times did he receive documents relating to N.Z. Future Forest Products Ltd before he declared a conflict of interest with the Cabinet Office on 14 October, and does he stand by his statement, “I became aware of this formal application on 14 October”?

Hon SHANE JONES (Minister for Regional Economic Development): I stand by the statement “I became aware of this formal application on 14 October”. Since this matter came to light, my office has conducted a search of documentation received that makes any mention of the N.Z. Future Forest Products application. I’m advised between June and November, six documents in total were received by my office. Of these, I personally received three, and the project is merely referenced as the name of the company—someone and something I had never heard of.

Chris Bishop: Is it correct that his chief of staff advised him of this issue while he was on a personal holiday overseas, and what exactly did he advise him?

Hon SHANE JONES: I don’t recall, whilst being at the gun range in Thailand, and other places, receiving such advice. However, I have every confidence that the chief of staff and other relevant officials took all appropriate steps, given that I had identified in 2017 a relationship with Mr Brian Henry.

Chris Bishop: Is he saying, then, that his written answer released to me on Tuesday, which says, “My office was advised of this issue by our chief of staff while I was on a personal holiday overseas.”, is wrong?

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. This penchant for, by way of innuendo, asking a question as though it’s a fact and now—[Interruption]

SPEAKER: Order! Order! Resume your seat. Who interjected?

Nicola Willis: I withdraw and apologise.

Hon Dr Nick Smith: I said, “What?”

SPEAKER: The member will withdraw and apologise.

Hon Dr Nick Smith: I withdraw and apologise. Point of order, Mr Speaker.

SPEAKER: No, I’m not taking a point of order. I’m finishing this one. We’re in the middle of a point of order; the member knows that.

Hon Dr Nick Smith: It didn’t sound like a point of order.

Rt Hon Winston Peters: Mr Speaker, you can—

SPEAKER: Order! Nick Smith, did you interject again?

Hon Dr Nick Smith: I said the Deputy Prime Minister’s point did not sound like a point of order.

SPEAKER: The member is now on a final warning. If he breaches Standing Orders again today, the situation will be very serious.

Rt Hon Winston Peters: You will observe by the supplementary question asked by Mr Bishop that he imputes that because this information was received when the Minister was overseas, it automatically means that the Minister was told about it, and that really cannot stand as a question line.

Chris Bishop: Speaking to the point of order.

SPEAKER: No, you’re not speaking to the point of order. I did listen to the question. It didn’t say that. The Minister will answer it.

Hon SHANE JONES: Please repeat the question.

Chris Bishop: My question was: in light of the answer to the first supplementary, is he saying, then, that his written answer to me, released on Tuesday—and I quote, “My office was advised of this issue by our chief of staff while I was on a personal holiday overseas.”—is wrong?

Hon SHANE JONES: I stand by the answer I’ve already given.

Chris Bishop: What issue did his chief of staff advise him of while he was on holiday overseas?

Hon SHANE JONES: I stand by what I’ve already referred to.

Chris Bishop: When he said last week, “I became aware of this formal application on 14 October”, does he mean that he knew informally earlier than 14 October?

Hon SHANE JONES: I’ve been characteristically candid and incandescently clear on this issue. I became aware of this formal application on 14 October.

Chris Bishop: Why does he not just say then, if the word “formal” has no meaning, “I became aware of this application on 14 October”?

Hon SHANE JONES: I am an expert in language, and the reality is that the role that I have and may have had in an application that was rejected, where no public money was ever allocated, is a formal role. Now, what the officials may be doing down in the boiler room, I don’t see from the bridge.

Rt Hon Winston Peters: Can I ask the Minister: on this matter, has he heard of a call by a member of Parliament for the Serious Fraud Office to investigate why the application did not succeed, and how ridiculous is that?

SPEAKER: I understand what the member’s getting at, but I think that this Minister does not have responsibility either for the Serious Fraud Office or for Mr Bishop.

Chris Bishop: How did his chief of staff come to know about the issue, such that he could advise him of it while he was on holiday?

Hon SHANE JONES: As prescient as I am, that’s why we employ staff, to, from time to time, ensure that Ministers who hold formal roles—a particular Minister, myself, in this case, who recused himself, so I have no idea whatsoever what powers of intelligence gathering that highly decorated individual might have employed.

Rt Hon Winston Peters: I raise a point of order, Mr Speaker. The circle has been complete. In that last question, he did exactly what I said he was going to do; by innuendo, he is saying that advice to the person in that office is advice to the Minister. That’s where he started, and that’s where he’s landed up.

Chris Bishop: Speaking to the point of order.

SPEAKER: No, we’re not speaking to the point of order. I think the member, who is a very experienced member, is aware of the fact that while we attempt to have a straightforward set of Speakers’ rulings and Standing Orders, we have not got to the point in this Parliament where we can rule out innuendo.

Chris Bishop: When did he first learn of the existence of a company called Future Forest Products Ltd?

Hon SHANE JONES: I had no idea of the existence of such a company. It was formally brought to my attention when I was made aware of a formal application. When there are over 2,500 applications for this highly successful fund, I tend to remain aloof from the vast majority of applications. On occasions where I am required to exercise discretion, such as this one, I recused myself appropriately.

Chris Bishop: So is he seriously saying that the first time he learnt that there was a company called Future Forest Products Ltd was when he was formally notified by the officials that he was, at some point in the future, going to have to make a determination about their application to the Provincial Growth Fund?

Hon SHANE JONES: At the risk of suffering repetitive strain injury, I stand by the answer that I have given. I became aware of this formal application on 14 October. Now, any other suggestions about knowledge of the company, which I remain ignorant of, are never going to change, irrespective of how many porcupine quills he throws.

Hon Grant Robertson: Can the Minister confirm that what occurred here was that he recused himself from the Provincial Growth Fund Ministers’ meeting when it was addressing the application of N.Z. Future Forest Products, and that the remaining Ministers declined the application?

Hon SHANE JONES: I can confirm that I recused myself, separated myself physically from the other three Ministers as they worked through the approvals process. I can also confirm that this mission of maliciousness is being driven by an ill-informed and quite bent out of shape journalist hoping to do damage to the party I belong to.

Question No. 6—Justice

6. JAMI-LEE ROSS (Botany) to the Minister of Justice: Does he intend to further amend the Electoral Act 1993 to make it unlawful for a political party to accept a $150,000 donation from a New Zealand - registered company owned entirely by a foreign shareholder in China; if not, why not?

Hon ANDREW LITTLE (Minister of Justice): No, as we’re getting too close to the 2020 election to make further changes to the Electoral Act. In any event, the changes introduced by the Government through the Electoral Amendment Bill (No 2)—now an Act—would mean that in such a circumstance, the party secretary would have to take reasonable steps to ensure that the donation was not made by or on behalf of an overseas person, as receiving such a donation could amount to an illegal practice.

Jami-Lee Ross: Does he concur with the Prime Minister’s view that the $150,000 donation received by the National Party from Inner Mongolia Rider Horse Industry (NZ) Ltd was “outside the spirit of the law”, and, if so, why did he not make further amendments to improve the law through the Electoral Amendment Bill (No 2)?

Hon ANDREW LITTLE: It’s not for me to express a legal opinion on matters arising under that Act. That is a matter for the Electoral Commission and any enforcement agencies, except that the reason we have the laws in the Electoral Act covering political donations and the rules around disclosure is exactly so that people can see who is supporting political parties—where political parties are getting their sponsorship from. But I remain satisfied and confident that the rule change passed by Parliament this week in relation to banning foreign donations and the associated measures that go with that address this particular issue and require party general secretaries to ensure that donations received are compliant with the law.

Jami-Lee Ross: Is New Zealand at risk from foreign interference in our democracy by foreign nationals that own New Zealand - registered companies seeking to influence Government Ministers by making significant donations, and, if so, what advice does he intend to provide those holding ministerial office on how to mitigate that foreign interference risk when meeting with wealthy foreign nationals?

Hon ANDREW LITTLE: Yes, that risk is apparent, and that is a risk that was notified to the Justice Committee, both in public and in private, as they conducted the inquiry into the 2017 general election, but the reason we have the rules that we do is precisely to provide that level of transparency. But, again, I remain confident that the law changes that we passed this week will require party general secretaries to now take more action and to be more actively involved in ensuring that the donations that political parties receive comply with the law.

Jami-Lee Ross: Is it consistent with any advice he may give his colleagues that are Ministers that if they meet with a foreign national in China and then later invite that person to meet in New Zealand, where electoral donations are discussed, and then take steps to procure an electoral donation from a company entirely owned by that foreign national, it would be unhelpful for New Zealand’s foreign interference risks?

Hon ANDREW LITTLE: The member, in his question, lays out a number of assertions. I don’t know whether they are factual or not, except to say in circumstances like that, that is just the sort of situation that the law changes passed by Parliament this week seek to address. It is important, I think, now that we are on notice from agencies and from conduct around the world that we are at greater risk of foreign interference and undue foreign influence, that all members and all participants in our political process take appropriate steps to mitigate that risk of foreign interference and undue foreign influence.

Jami-Lee Ross: Has he sought any advice on establishing an independent commission against corruption, which could be tasked, in part, with investigating foreign interference in our democracy where a Minister procures an election donation from a foreign national who has business interests associated with that Minister’s portfolio responsibilities?

Hon ANDREW LITTLE: It is true that this Government does intend to embark on a programme of work in relation to our current corruption regime, and it is the view of the Minister of Police and myself that just having the Serious Fraud Office is not enough given the potential issues around corruption. When I was in Australia last week, I took some time to visit the New South Wales Independent Commission Against Corruption to see how they operate. The New Zealand Government work on that has been postponed because of other demands, particularly since 15 March this year, but I am keen to see at some point a more thoroughgoing regime for dealing with issues of corruption. I make no comment about allegations made in relation to political corruption.

Jami-Lee Ross: Should the Electoral Act require a political party to return donations if it can be proved by an inquiry, either by the Electoral Commission or a law enforcement agency, that the source of funding originated offshore in China?

Hon ANDREW LITTLE: The regime that currently exists under our Electoral Act is that if there is an overseas donation or a foreign donation that does not comply with the requirements of that Act, then that donation must be surrendered to the Electoral Commission.

Rt Hon Winston Peters: Can I ask the Minister—to better understand the subject that he is dealing with, and the law that he seeks to cast—will he avail himself of asking Jami-Lee Ross MP what more he knows about the certain activities of a certain political party that’s deafeningly silent today?

Hon ANDREW LITTLE: The way question time operates is that it’s Ministers of the Crown who are subject to the questioning, but the member who just asked the question could refer to Mr Ross’ speech in Parliament the other night.

Hon Paula Bennett: Good try, old man.

SPEAKER: Order! The member will stand, withdraw, and apologise.

Hon Paula Bennett: I withdraw and apologise.

Hon Dr Nick Smith: Supplementary—

Hon Paula Bennett: But it’s appropriate for him.

SPEAKER: Order! The member is interfering with her own member’s question when she is meant to be silent. The other point that I would make is that, going right back to my grandmother, it was suggested that pointing it out in that way was rude.

Hon Shane Jones: Hear, hear! Behave!

SPEAKER: Mr Jones, not again today.

Hon Dr Nick Smith: Thank you, Mr Speaker. Can the Minister explain, given its commitment to openness and transparency, why Labour members blocked the ex-president of New Zealand First—its president and treasurer—from being able to appear—

SPEAKER: Order! [Interruption] Order! The member will resume his seat.

Question No. 7—Defence

7. DARROCH BALL (NZ First) to the Minister of Defence: What recent announcements has he made regarding infrastructure at Ohakea air base?

Hon RON MARK (Minister of Defence): On Friday, I turned the first sod of earth, commencing the first phase of the infrastructure work at Ōhākea—

Hon Gerry Brownlee: Biggest day’s work ever as a Minister.

Hon RON MARK: —for the new P-8A Poseidon maritime patrol aircraft fleet, Mr Brownlee. Phase one will prepare Ōhākea for the arrival of the P-8s—work which will include earthworks, site preparation, roads, utilities, and runway aprons and will be delivered by the defence industry member Fulton Hogan, at a cost of $64.5 million. This announcement reinforces this coalition Government’s commitment to its men and women of the Defence Force through providing them with the necessary tools and infrastructure to maintain New Zealand’s security, respond quickly to events, and to, ultimately, save lives.

Darroch Ball: What are the next steps in the P-8 infrastructure project?

Hon RON MARK: Phase two will focus on building and construction, with work expected to start in the second quarter of 2020. This will deliver crew maintenance simulator buildings, an operations centre, hangars, warehousing, and maintenance facilities to ensure the P-8s are fully supported in the performance of their very valuable role. All infrastructure work is expected to be completed by early 2022, at a cost of over $200 million, in time for the arrival of the first aircraft in 2023.

Darroch Ball: What benefits will this project deliver for the Manawatū region?

Hon RON MARK: There’s so much I could—

SPEAKER: Briefly. Pick one or two.

Hon RON MARK: At peak, this project is going to deliver 300 jobs, employing people in the local region. It will bring about 450 to 500 people into the surrounding region. Every dollar that Defence invests in the region is expected to deliver a twofold boost in GDP, meaning that the investment in the infrastructure alone will add an estimated $400 million to the region’s GDP. These major boosts in the economy will assist the surrounding regions, once again reinforcing this Government’s commitment to the regions. I have to say—

SPEAKER: Order! Order! That’s enough.

Hon RON MARK: Oh—

SPEAKER: No, you don’t have to say it all.

Question No. 8—Police

8. BRETT HUDSON (National) to the Minister of Police: Does he have confidence in New Zealand Police’s ability to keep personal and confidential information of firearm owners secure?

SPEAKER: As I call the Hon Stuart Nash, I will indicate that the Minister has indicated to me this will be a slightly longer than normally acceptable answer.

Hon STUART NASH (Minister of Police): Thank you, Mr Speaker. I have confidence in the Commissioner of Police to ensure police follow the highest standards for information security. An external IT provider has taken full responsibility for the unauthorised change to software regarding the system used to give effect to the gun buy-back scheme. The company, SAP, has unreservedly apologised for its error. I can confirm to the House that police advise that the audit log confirms only one firearms dealer who had legitimate access to the system viewed information about others. He says he did nothing with this information. He viewed the details of 34 gun owners. Police have made contact with 32 of them, and the remaining two are being visited today to follow up on earlier messages. These people have told police that they are generally very appreciative of the contact and are understanding of the circumstances surrounding the breach.

Brett Hudson: Is the Minister aware that that person in question accessed the system using their personal firearms licence information, not their dealer licence information?

Hon STUART NASH: What I can confirm is that SAP has unreservedly apologised for the unauthorised changes that they made to the system, and they have taken full responsibility for this.

Brett Hudson: Would he be concerned if letters were sent to firearms owners from the New Zealand Police clearly showing occupation and firearms licence number on the unopened envelope?

Hon STUART NASH: I am aware that letters have been sent in envelopes that contain windows. I’m also aware that there have been no complaints—well, I’m led to understand—from the people who were sent the letters, and I also understand it would actually be incredibly difficult to identify the information contained within those envelopes.

Brett Hudson: Does he agree that revealing the occupation of an armourer and their address could indicate to anyone who saw that information that there are likely multiple firearms at that address?

Hon STUART NASH: I’m unaware of that, but if anyone wants to know who the armourers are around this country, I’m assuming it’s pretty easy to find out.

Brett Hudson: Does he agree with the Cabinet Manual, which states at paragraph 3.27: “Ministers are accountable to the House for ensuring that the departments for which they are responsible carry out their functions properly and efficiently. On occasion, a Minister may be required to account for the actions of a department when errors are made”—

SPEAKER: Order! Stop the question! This is not an area of responsibility for this Minister.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Have you just ruled that a Cabinet Minister is not responsible for understanding what’s in the Cabinet Manual?

SPEAKER: No, that wasn’t the question.

Hon Gerry Brownlee: Well, it was, in actual fact.

SPEAKER: That was not what the question was, Mr Brownlee.

Brett Hudson: Will he apologise to the individuals who had confidential information about themselves accessed under his watch?

Hon STUART NASH: As I said on Tuesday, SAP have admitted responsibility for this. What I will apologise for is if any of these people have suffered any form of emotional harm or trauma. But as mentioned, the New Zealand Police has been in touch with every single one of these gun owners except two who they have tried multiple times, and they are visiting these two people today.

Question No. 9—Immigration

9. STUART SMITH (National—Kaikōura) to the Minister of Immigration: Does he have confidence in Immigration New Zealand’s ability to process visas in a timeframe that prevents people from being in New Zealand unlawfully?

Hon IAIN LEES-GALLOWAY (Minister of Immigration): Thank you, Mr Speaker. Timely visa processing is important to me. Officials are working hard to address the issues that we inherited from the previous Government. Immigration New Zealand (INZ) is making good progress in reducing processing times across key categories. I’m confident that the extra 177 staff that Immigration New Zealand has employed will continue to improve processing times. For those on expiring interim visas, INZ has issued new visas for nearly everyone affected; the remainder will be issued in the next 24 hours. INZ have also instituted a new process to ensure that new visas are issued to anyone approaching the limits of their interim visa.

Stuart Smith: Why were 108 people given an option by his officials to remain in New Zealand unlawfully once their interim visas expired due to their visa applications not being processed on time?

Hon IAIN LEES-GALLOWAY: That was the wrong thing to do. Immigration New Zealand has apologised, and that process has been changed.

Stuart Smith: Did his officials advise these 108 applicants their unlawful status will almost certainly affect their ability to get visas to enter other countries?

Hon IAIN LEES-GALLOWAY: The people who were affected by this are getting new visas issued. They will no longer be unlawful, and that will no longer be a problem for them.

Stuart Smith: Why were his officials, whose job it is to enforce immigration law, advising people they could break immigration law?

Hon IAIN LEES-GALLOWAY: As I said, that was the wrong thing to do. Immigration New Zealand has apologised, and the situation has been sorted.

Stuart Smith: Will he apologise for overseeing a situation that allowed the reputations of at least 108 people to be compromised due to becoming unlawful persons who will now face difficulty when they apply for visas to other countries?

Hon IAIN LEES-GALLOWAY: Immigration New Zealand has apologised, and that’s the right thing to do.

Question No. 10—Education

10. Hon CLARE CURRAN (Labour—Dunedin South) to the Minister of Education: What reports has he seen on the Government’s investment for 2,050 State schools so that they can upgrade their classrooms and other property over the next 24 months?

Hon CHRIS HIPKINS (Minister of Education): More good news: I’ve seen more reports on the Government’s significant $400 million investment in school property that was announced on Sunday. Bathgate Park School principal Katrina Robertson was delighted with the funding boost and believed it would help the school’s financial position. The Otago Daily Times, in their editorial, stated that “Government acknowledged the need to play catch-up after years of underspending.” and “The prospect of [the] new work is doubly pleasing as businesses prepare for some significant building projects over the next decade.” The Canterbury Primary Principals’ Association president, Shane Buckner, said Saturday’s extra funding was “ ‘a bit of icing on the top’ and could go towards upgrades that fell outside of the scope of the [Christchurch schools] rebuild programme.”

Hon Gerry Brownlee: Oh, here we go.

Hon Tracey Martin: What does the school property funding announcement on Sunday—

SPEAKER: Order! No, sit down, please. Who was that? Who interjected then?

Hon Gerry Brownlee: I spoke. I didn’t mean it as an interjection. It was just my surprise that the tactic used yesterday was once again being deployed by the Government.

SPEAKER: Yes, and the member knows—

Hon Gerry Brownlee: I withdraw and apologise.

SPEAKER: —that calling out something in reference to something that is occurring over on this side, loud enough to hear it, is an interjection.

Hon Gerry Brownlee: And, as you know, I’ve got a loud voice.

SPEAKER: The member will apologise.

Hon Gerry Brownlee: I certainly apologise. I withdraw and apologise.

SPEAKER: The fact that he’s got a loud voice is not news to anyone.

Hon Tracey Martin: What does the school property funding announced on Sunday by the Prime Minister mean for special schools?

Hon CHRIS HIPKINS: There’s some very good news for the 37 special schools across New Zealand, who’ll be $200,000 each in acknowledgment of their additional property requirements. That’s almost $7.5 million over the next two years to allow special schools to upgrade and modernise their facilities.

Dr Liz Craig: Thank you, Mr Speaker. What does the school property funding announced on Sunday by the Prime Minister mean for schools in Invercargill?

Hon CHRIS HIPKINS: Some very good news for the 39 schools in Invercargill, that will receive a total of almost $6 million to upgrade their property. For example, Waihopai School were getting $243,000, Otatara School will be receiving $196,000, and Southland Boys’ High School and Southland Girls’ High School will both be receiving $400,000 each.

Ginny Andersen: What does the school property funding announced on Sunday by the Prime Minister mean for schools in the most awesome Hutt South?

Hon CHRIS HIPKINS: There are 26 schools in Hutt South that will receive a total of around a $5.5 million increase to their property budgets to bring forward their projects, including Eastern Hutt School, who will receive $400,000; my old school Waterloo School will receive $371,000; Arakura School, who will receive $113,000; and Muritai School, who’ll receive $282,000.

Greg O’Connor: What does the school property funding announced on Sunday by the Prime Minister mean for schools in Ōhāriu?

Hon CHRIS HIPKINS: There’s very good news for the schools in Ōhāriu. Twenty-three schools in Ōhāriu will receive nearly $6 million to upgrade their properties. Newlands Intermediate will receive $348,000; Tawa School, $259,000; and Onslow College, who I visited this morning with the member, will be receiving $400,000. But there’s better news for Onslow College, because, as we announced this morning, they’re also receiving $25 million to upgrade their facilities.

Jo Luxton: What does the school property funding announced on Sunday by the Prime Minister mean for the schools in Rangitata?

Hon CHRIS HIPKINS: More good news: 31 schools in Rangitata will receive nearly $6 million in their property budgets, including Temuka Primary School, who will get $172,000; Methven school, who will get $191,000; and Ashburton Intermediate, who’ll receive $280,000.

Question No. 11—Local Government

11. Hon JACQUI DEAN (National—Waitaki) to the Minister of Local Government: Does she stand by all her statements and policies?

Hon DAVID PARKER (Attorney-General) on behalf of the Minister of Local Government: Yes.

Hon Jacqui Dean: What advice has she received on the cost-benefit analysis for the wellbeing framework?

Hon DAVID PARKER: I haven’t got that information before me. If the first question had been more specific, I would be able to answer that question. I suggest she puts that question down in writing, and the Minister will answer it.

Hon Jacqui Dean: Thank you. What are the mechanisms proposed for “central government to engage with local wellbeing priorities”, and does this amount to a central government takeover?

Hon DAVID PARKER: In response to the second part of the question, no.

Hon Jacqui Dean: If, when she said in answer to oral question No. 10 on 23 October, quoting several examples of councils working effectively with the community, including on stream enhancement and with training providers, why does she believe that a whole new wellbeing framework will need to be added on top of all that?

Hon DAVID PARKER: Again, I can’t answer that on behalf of the Minister, who is not present. I’m sure she’d be happy to answer that question either orally or pursuant to a written question.

Hon Jacqui Dean: Which councils are not acting in the best interests of their ratepayers and, therefore, need to implement the wellbeing framework?

Hon DAVID PARKER: I’m aware that the prior Government narrowed the wellbeings that councils were responsible to address, and this Government thinks that was unwise.

Question No. 12—Energy and Resources

12. JONATHAN YOUNG (National—New Plymouth) to the Minister of Energy and Resources: Does she stand by the statement in her Cabinet paper, Just Transitions: Report back and next steps, which says, regarding the people of Taranaki, “There has also been an ongoing need to manage stakeholder expectations around how much resource and funding the Government will bring to a partnership”?

Hon DAVID PARKER (Attorney-General) on behalf of the Minister of Energy and Resources: Yes, because it’s a combination of central, regional, local government, private sector, iwi, and not-for-profit investment that is required. All have a role to make sure Taranaki’s long-term transition is a success, and it’s not something Government can deliver alone. The good news for Taranaki is that the transition is making good progress. Central government has invested $27 million in the New Energy Development Centre. The Provincial Growth Fund has backed hydrogen projects. Local leaders are doing excellent work with their economic development road map. OMV are investing $500 million, and we’ve also seen several hundred million dollars invested by the private sector, in renewable energy. As a consequence, rising wages—5,100 new jobs in Taranaki since we came to office show that their economic future is bright.

Jonathan Young: Well, does she accept that she created that expectation she referred to in her Cabinet paper when she said, in her speech to the 2018 Petroleum Conference, “our Government will take action to support communities that currently rely on fuels that are being phased out. Our Government’s Provincial Growth Fund and Green Investment Fund will invest billions of dollars in local infrastructure and clean energy projects in areas like this.”?

Hon DAVID PARKER: Yes, I do accept that the Minister said that. Of course, that was in respect of the whole of the country. In respect of what’s happened in Taranaki in particular, the Tilt Renewables and Genesis Energy announcement of a $325 million wind farm in South Taranaki is a very substantial contribution to that very outcome.

Jonathan Young: So in regard to the expectation that that statement created, did she say in a recent Cabinet paper, regarding Taranaki, “This next phase is where trade-offs have to be considered and difficult conversations about costs and responsibilities have to be held.”?

Hon DAVID PARKER: I haven’t seen that particular statement, but I am confident that the transition is under way in Taranaki. When we came to office, unemployment was 6.4 percent in Taranaki; it’s dropped to 6 percent in the last quarter. Of course, it takes more than the period we’ve been in Government to overcome the prior nine years.

Jonathan Young: Considering it was 4.1 percent last year, is it integral for her to say in her letter to Taranaki businessman Mr Newton, in August this year, “Government will also invest hundreds of millions of dollars in new infrastructure and clean energy projects in regions that currently rely on fossil fuels.”, when five days later she is saying to her Cabinet colleagues that the next phase is where trade-offs have to be considered and difficult conversations had?

Hon DAVID PARKER: I think I’ve already well and truly addressed that by reference to the $325 million Genesis Energy wind farm project in South Taranaki.

Jonathan Young: So when she recently said in the Taranaki Daily News, “[We are] seeing record investment in new energy sources”, why did her Government reject the Taranaki Azura wave energy project when New Zealand company CH4 Global say they are needing a wave energy device to help produce the world’s first methane-busting cattle feed supplement made from seaweed?

Hon DAVID PARKER: I’m not aware of the details of that particular application. I am aware that going back to the time of the prior Labour Government, we have tried to stimulate wave and tidal energy in New Zealand, and with significant Government subsidies. That hasn’t yet been brought to fruition. It appears, though, that the economics of wind power are very compelling and beneficial to South Taranaki, which is why Genesis Energy and Tilt Renewables have just recently announced the investment of the $325 million wind farm investment in South Taranaki that I’ve mentioned twice already.

Bills

Venture Capital Fund Bill

Second Reading

Hon DAVID PARKER (Associate Minister of Finance): I move, That the Venture Capital Fund Bill be now read a second time.

Let me start by reiterating the underlying purpose of this bill, which puts in place a key element of the Wellbeing Budget’s economic package. I think we all in this House know that the world is in the midst of a technological revolution, which is borne of the confluence of affordable computing power, mobile positioning systems, sensors, robotics, big data and the internet of things, artificial intelligence, and genetics. We know that digitalisation of many parts of the economy creates challenges that we are dealing with under the banner of the future of work. The flip side of the size of that challenge is the enormous opportunity to improve the efficiency of existing methods of production and to commercialise new products and services that are borne of this revolution. In the opinion of this Government, it’s the duty of this Government to help New Zealand chase down as many of these commercial opportunities as we can in this highly competitive world so that we harness the jobs and the value that can be created for the benefit of our economy.

We know that many high-growth, early-stage New Zealand entities currently struggle to access capital they need when they’re in their expansion phase. This is caused by a shortage of available capital investment at the series A and B stages. New start-ups, earlier in their journey, are already well served by angel investors, with some seed capital support from the Government. And that improvement of that market was actually caused by Government intervention not dissimilar to the one that we’re now proposing.

But the mid-sized capital raising, between $2 million and $20 million in size, normally, is not as well supported in the New Zealand capital markets. So the $300 million Venture Capital Fund (VCF) which this bill creates helps fill this capital gap for these companies as they expand. It’ll help increase the amount of technology that gets commercialised, and this will lift the level of innovation and productivity, not just within those companies but across the country. I expect that the additional $300 million in the fund will be leveraged by investments from the private sector so that more than $300 million will flow into this part of our capital markets. The effect will be that more of our start-ups in New Zealand stay for longer, along with the benefits this brings.

I would add that I’m not arguing that these start-ups shouldn’t be sold overseas, and in a way we’re not even trying to discourage it. But we are keen that they have the access to capital they need to grow and are not forced to sell, or forced to sell too soon, by the current capital constraints. The initiative put in place by this bill will, in our view, keep more start-ups in New Zealand for longer and support the proportion of these firms that stays in local ownership.

The Venture Capital Fund will also help to establish extensive domestic and international networks and develop world-class capability and experience in working with start-ups. And that will, ultimately, give them the ability to raise domestic and international private capital without further Government intervention. Alongside the R & D tax credit, the ring-fencing of losses, and extending the brightline test, it’s all helping weight investment towards the productive sectors, which we think is key to lifting economic performance and productivity.

As we conduct the second reading of this bill, I want to highlight the process to undertake to develop this legislation. We had public submissions on the bill, and we had separate consultation with the venture capital (VC) market to support its implementation. In developing the VCF, we’ve worked hard to listen to the market, as well as to the Guardians of New Zealand Superannuation and the Venture Investment Fund. And I’m pleased to say that our engagement with the market shows widespread support for the initiative. We also received broad support from the select committee, and, as a result of their input, we’ve strengthened the purpose section of the bill to provide a clear signal that we’re doing this to improve New Zealand’s productivity.

As a result of consultation and feedback, a number of other amendments have been made to the bill. We’ve made it clear that one of the purposes of the VCF is to encourage the further development of private VC funds so that capital is increasingly raised from New Zealand investors in the private sector, and to ensure, also, that there is an appropriate focus on the New Zealand market. Progress has already been made in the private sector support for private seed markets, and we want to stimulate this for series A and B capital rounds.

Achieving an inclusive economy is, of course, an important part of the Government’s overall economic strategy, and the bill now better reflects this by including the ability for directions that the Guardians must have regard to in their oversight of the VCF. But, equally, by giving the Guardians the job of independently allocating capital, we’re harnessing the Guardian’s expertise, reputation, and proven track record. They really do have a history of making wise investment choices, and we think their involvement will help. They’ve also got a solid reputation for responsible investing and adhering to an environmental, social, and governance framework, and we’re confident this will carry over into their oversight of the VCF. Of course, the primary focus for the Guardians is to apply best practice to the VCF investments while employing that environmental social governance framework to deliver other objectives of the bill.

By establishing the capital fund, we’re not only supporting New Zealand’s most innovative firms; we’re also stimulating capital available to invest in high-growth firms in the future. By establishing this in the manner set out in the bill, we’re confident that the funds created will attract other investors. So, ultimately, we believe this is going to foster investment and innovation in high-growth, high-wage businesses. We’ll be nurturing a thriving capital market in New Zealand that is more comparable with the global counterparts.

Before I take my seat, I would note that I think New Zealand has made enormous progress in growing the sophistication of our economy since the Catching the Knowledge Wave conference that was held by the Rt Hon Helen Clark. And it was there that New Zealand industry and Government came together and identified that in order for us to increase the value of our offering to the world, in order to pay for the things that we like to import to sustain our standard of living, we needed to broaden our exports beyond our traditional core towards technology and higher-value exports. They identified three main technologies to be supported: ICT, creative industries, and biotechnology.

The subsequent National Government focused biotechnology, quite wisely, on food and beverage, and the related technologies, and as a country we have since made enormous progress, to the point where technology-related exports are now our third largest and fastest-growing source of exports—third, after services in tourism and agricultural exports—and our technology exports are growing in sophistication and value. We’re seeing this recorded in statistics. Not only is it part of the reason why exports are growing strongly but it’s also reflected in the number of offshore hires by New Zealand’s technology companies, who are expanding abroad as they broaden their export reach.

One of the indicators of success is the number of people that they are employing in offshore markets in order to increase their sales efforts. We have capability that is growing in this area. We wouldn’t have had it had it not been for the interventions of the Hon Pete Hodgson back in those days, when he brought the Israeli innovation model to New Zealand and started supporting early-stage capital markets. The earliest iteration of that was through the Venture Investment Fund. It’s had a slightly negative rate of return but has met its overall objective of stimulating the sector. That morphed down to the last Government into support for seed capital, which was appropriate, and this endeavour says, “Look, we’ve got those seed companies coming through. We need to better support their globalisation efforts as they take their goods and services to the world by filling this gap in our capital markets for series A and B capital rounds.”—which, as I said at the start, is generally in the realm of $2 million to $20 million.

I’m confident that we’ve got the mix right: administration, largely through the Venture Investment Fund; oversight by the super fund, who oversee who will be, effectively, chosen as the VC fund managers; and the private sector through those VC funds, bringing some matching money from the private sector and making the investments into the New Zealand economy, which will improve the productivity and growth of our country, which will flow through to better-paying jobs for New Zealanders and higher export earnings in the future. I commend the bill to the House.

Rt Hon DAVID CARTER (National): National will continue to support the Venture Capital Fund Bill as we proceed through the second reading, with a couple of concerns that I wish to address during my contribution.

First of all, the good news and the reason we should support it is it will be a boost to the economy. In the so-called year of delivery, we know this economy needs a boost. The Prime Minister, I recall, at the beginning of the year, promised it to be a year of delivery. I see the Hon Phil Twyford sitting there, holding his head in shame. He hasn’t been part of delivery at all. In fact, I think he lost his portfolio because he failed to deliver KiwiBuild, and that’s only one of the examples of the promises made by Labour as they went into an election campaign in 2017 which they have failed to deliver on. The people—the voters of New Zealand—will not forget the extravagant promises made by the likes of the Hon Phil Twyford as we proceed to election 2020.

But, in saying the economy needs a boost, I do want to comment on the fact that the terms of trade are the best we’ve seen for decades. The economy should be doing substantially better than it is. Business confidence should be substantially better than it is. Therefore, when we look through Budget 2019, it is a surprise to find some initiative in amongst that Budget of misery and non-delivery that actually does give the Venture Capital Fund the chance of being successfully formed.

So two or three points I do want to address: first of all, in the Budget it’s announced as new money: $300 million. But, in actual fact—and the Hon David Parker, who’s just introduced the bill for its second reading, doesn’t mention this in his comments—there is no new money. Of the $300 million, $240 million had already been signalled and appropriated to the New Zealand Superannuation Fund. So what this Government is doing is actually telling the super fund how to invest its money, and that is one of the concerns I wish to raise very, very shortly.

The second contribution to make from $240 million to $300 million is a call, an instruction to the New Zealand Venture Investment Fund to direct $60 million of its money already available for venture capital to this newly created Venture Capital Fund. So let’s dispel any notion that this Government has found $300 million more that it wants to give to business. It is simply smoke and mirrors: reclassification, re-appropriation, and the direction of money that has previously been committed elsewhere.

Can I then move to the particular concern that worries me the most, and it is connected to the $240 million that is now going to be invested by the New Zealand Superannuation Fund. The New Zealand Superannuation Fund has been highly successful, and it is worth noting that the current Governor of the Reserve Bank, of course, is part of the reason for that success—

Hon Phil Twyford: Why did he stop contributing to the fund if it was so successful?

Rt Hon DAVID CARTER: Why did we stop contributing? Because we dealt with the global financial crisis and we dealt with the Christchurch earthquake. If the Minister wants to actually come occasionally to Christchurch, and if the Minister wants to actually bring the Prime Minister occasionally to Christchurch, Christchurch would be grateful to see you both in Christchurch to have a look at what that contribution has done.

But returning to the New Zealand Superannuation Fund and the way it has performed, why then does this bill give the ability for a Minister to start to direct the Guardians of New Zealand Superannuation to where those investments must be placed?

Hon Phil Twyford: It doesn’t.

Rt Hon DAVID CARTER: And Mr Twyford says it doesn’t. There is another case where this Minister sits around blindly around the Cabinet table, and discusses legislation that he either hasn’t read or doesn’t understand. No wonder Jacinda Ardern sacked him from KiwiBuild.

Hon Phil Twyford: Read the bill.

Rt Hon DAVID CARTER: Well, Mr Twyford interjects that I should read the bill. I spent time on the Finance and Expenditure Committee studying the bill, Mr Twyford—

Hon Phil Twyford: Obviously didn’t read the bill.

Rt Hon DAVID CARTER: And I have read the bill. But the Minister himself clearly doesn’t understand how it works, and that is why he’s no longer looking after the KiwiBuild programme. He mucked up that one completely—mucked up that one completely. And if he’d had any involvement in this, I suspect that’d be the very reason why National wouldn’t want to support it.

Hon Phil Twyford: David, you’re hurting my feelings!

Rt Hon DAVID CARTER: I’m not here to hurt the poor Minister’s feelings. I would have thought that he was hurt enough when Jacinda Ardern had to fire him because of his incapability. How he still manages to sit on the front bench, God only knows. But I know one thing: he was the tactician at the last election for Labour, and Jacinda Ardern doesn’t trust him with that position this time. That says it all.

Now, if I can return to the legislation. The second concern that I have is, of course, that there is already an institution—an organisation—that provides this service to the New Zealand economy, it is called the New Zealand Venture Investment Fund. It’s been operating now for in excess of 10 years.

Hon Chris Hipkins: Yeah, who set that up?

Rt Hon DAVID CARTER: It has a good track record. It was, I think, set up in the dying days of the Helen Clark Government, so back prior to 2008. So it was probably established around 2007, for the Hon Chris Hipkins, who should have actually known that and interjected to ask me.

Hon Chris Hipkins: I did know that.

Rt Hon DAVID CARTER: Now, he says he knew it! But he still had to ask me! But, anyway, my point is that it has operated successfully. Its funding was boosted by the National Government. It has the expertise. It has the expertise in this area, and, therefore, the question that I did ask at the select committee, which was not answered satisfactorily by the officials appearing before the select committee, was: why didn’t they just expand the New Zealand Venture Investment Fund instead of creating a new fund altogether?

I suspect the reason we’re debating this legislation and the reason the announcement is in the Budget is, of course, that investors don’t favour New Zealand and its economy at the moment, and that’s not surprising when you see a Government who moved immediately to do all it could to banish foreign direct investment from this economy.

Hon Phil Twyford: Rubbish.

Rt Hon DAVID CARTER: Well, Mr Twyford is part of the rubbish; that’s the problem. He moved straight away to reduce the opportunity for foreign investors into the apartment market in Auckland particularly, and then he argued that that would bring the price of housing down. So let anybody who wants to measure the success of the Hon Phil Twyford have a look at what’s happened to the price of housing since that legislation came into vogue in—what?—2018. It’s had absolutely zero effect on reducing the price of housing.

He moved also to remove foreign investment from agricultural sales—unless it was forestry. Now, Mr Twyford has suddenly gone very quiet. He can’t explain that. Well, I can. It’s because the Hon Shane Jones had a programme of planting a billion trees and they suddenly realised they’d never achieve it if they banned foreign direct investment from New Zealand. So we then passed—or this House passed; not supported by me, I hasten to add—special legislation to make it easier for overseas forestry interests to buy land in New Zealand. In fact, we had a case recently of the Hawke’s Bay - based company Pan Pac Forest Products, which has given early approval to land that it hasn’t even bothered to visit yet to make sure it can go through the Overseas Investment Office process to make it easier for that company, with its foreign investors, to buy land in New Zealand.

So schizophrenic-type Government policy exists all over the show. We will support, and continue to support, the establishment of the New Zealand Venture Investment Fund, but I do hope we do not see this being used by the Government, by a future Labour-led Government, if there is one—and there may not be one, but there could be one. So, accepting there could be one, I do hope we don’t see a Minister of the calibre of the Hon Phil Twyford getting a portfolio role when he can then start to interfere with the investments by the New Zealand Superannuation Fund, where he, as a Minister, thinks Government money should be going to assist in venture capital establishment. If that’s where this ends up, it will be a sad day for the venture capital industry of New Zealand and a very sad day for the economy of New Zealand.

Hon PHIL TWYFORD (Minister for Economic Development): What a nasty, toxic, and bitter and twisted contribution that was from David Carter, the member for the landed gentry. It was notable in his attacks on Government policy that he was very concerned to defend the role of speculative offshore housing investment, which actually shows how far we’ve come in the last two years in reallocating the economy towards a much more productive focus on firms that generate jobs and exports.

The whole problem that we inherited when we became the Government was that the whole strategy for economic growth under the former National Government was based around immigration and housing speculation and cashing in the insurance cheque from the Christchurch rebuild. There was really nothing going on other than that, and if the former Minister had actually taken the trouble to read extensive commentary on the positive effect of our Government banning offshore foreign speculators from buying and selling houses in our residential housing market, it’s actually contributed to the quietening down of the Auckland housing market, which saw house prices double under the National Government.

There’s an enormous amount of work and reform going on across the economic development programme of this Government. My colleague Chris Hipkins is in the process of reinventing the entire vocational education system, that has been utterly broken. Chris Hipkins is fixing it, and that’s a good thing because we desperately need to grow the workforce that the new economy requires. Shane Jones is overseeing the Provincial Growth Fund, a $3 billion boost to infrastructure, workforce, and sustainable job growth in regions that have been neglected for far too long. Megan Woods is developing our whole strategy around research, science, and innovation, and work to develop affordable and sustainable energy for the future; and there’s David Parker’s Resource Management Act reform process, cleaning up fresh waterways. We are determined to see the best land use possible without depleting our natural capital for future generations.

There is a huge amount of work going on, and one of the critical pillars in our economic development plan is deeper pools of capital so that we can invest in a growing and productive economy. I want to acknowledge the leadership that David Parker has shown in developing this bill. It was his thinking, they were his ideas, and it was his analysis when he was Minister for Economic Development that saw the development of this bill, designed specifically to plug the gap in our venture capital system that currently sees the shortage of series A and B capital driving New Zealand firms offshore sooner than they otherwise would have because of the capital constraints in our system. David Parker gave quite a good history of the development of the Venture Investment Fund under the Clark Government. The SCIF, the Seed Co-investment Fund, I think has performed well. We’re seeing, actually, pretty good, pretty healthy investment in New Zealand by angel investors in the very early stage firms.

But the clear gap is in series A and B investment. International research shows that a market that’s performing properly should have a 25 percent conversion rate between seed capital and venture capital stages. So that would mean that for every 100 start-ups, 25 of those firms would successfully go on to raise a series A round investment. Now, in New Zealand, the current conversion rate is only 10 percent. Twenty five percent’s the benchmark for a healthy market; in New Zealand we’re only achieving 10 percent, and that’s largely because of the lack of venture capital investment funds in New Zealand for firms that are at this stage. Where around 30 to 40 firms should be expected to be closing their first venture capital funding round annually, there are less than half of them achieving that in New Zealand, and most of those go abroad to get that funding. So that’s the problem that this fund is trying to solve.

I want to acknowledge the work of the Finance and Expenditure Committee. Their report has only really three significant things that I think rate a mention in this debate. There are a number of small technical improvements that they’ve made, and I thank them for that. But the three things that they’ve recommended that we change are that we set out more explicitly in this bill what we mean by developing New Zealand’s venture capital markets. And in clause 24(b)(iii), they’ve recommended inserting reference to this in the purpose statement of the bill.

There has been some interesting debate as this bill has gone through the House about the extent to which the investment of $300 million will make a difference to New Zealand - based funds. And there’s no question—let’s be really clear about it; there’s no question—that’s what we’re trying to achieve. The fund will take a fund of funds approach by investing in New Zealand - based funds and some offshore funds who will be required to invest that money in New Zealand firms. We are trying to grow the venture capital ecosystem in New Zealand. That’s what we’re trying to achieve. Putting some of that money through Australian and other offshore funds in order for them to then invest in New Zealand firms is part of actually leveraging and stimulating a much bigger investment, much bigger than the $300 million that we’re talking about investing in the Venture Capital Fund.

Secondly, the select committee has helpfully invested clause 32, which would require the Guardians of New Zealand Superannuation to use best practice investment management when investing the fund’s capital. And some submitters expressed concern with the limited scope of directions that the policy statement could contain. And the committee has very helpfully recommended that we amend clause 35 so that the policy statement could include the Government’s commitment to an inclusive economy and the possible directions that that policy statement could contain.

And, lastly, again sort of, I think, mindful of the statutory independence of the Guardians, the committee has recommended that we should allow an amendment to clause 56 to give the Minister the power to direct the Guardians to report on additional matters in their annual report—for example, the work that they are doing in managing the Venture Capital Fund.

So those are all fairly small amendments, but I think they are well considered. I thank the select committee for them and I look forward to the further progress of this bill through the House. I commend this bill to the House.

LAWRENCE YULE (National—Tukituki): It’s my pleasure to take a call on the second reading of the Venture Capital Fund Bill, and as other speakers have said, and as the Rt Hon David Carter said, National will be supporting it as it did at first reading. But I do want to correct some things that are being said both by the Associate Minister of Finance and the most recent contribution from the other side from Phil Twyford.

This sounds all very good: $300 million going to support businesses who probably need capital in the $10 million to $20 million range as they move from start-up to the next phase of their development. Well, we now know that $240 million roughly of that money is simply being reallocated from the New Zealand Superannuation Fund and it’s really instructing that fund on how to invest that money. It is important, and I do support this, that we work, where at all possible, for New Zealand start-ups to stay in New Zealand.

However, there are a number of factors that influence decisions made by start-ups as to where they operate from and how they operate. And I do think it’s important that we recognise in a global environment, where capital can be obtained in other countries, that we look at things like business confidence, the sentiment around how Government operates. And it is important to recognise that business investment has fallen from 5 percent to 0.6 percent since this Government has been in power. Job growth has dropped from 10,000 jobs a month to more than 3,000; 22,000 more people are on the dole. These are all contributing factors, and simply reallocating some money to venture capital will not resolve all those ills nor some of the sentiment, including the GDP growth, which has fallen to just 2.1 percent from 3.1 percent, when this Government took office.

So National understands that economic growth is really important for New Zealand, and the surest way to prosperity and to how you lift the living standards of New Zealanders. We, ultimately, support this bill largely because, as we assessed the 2019 Budget, it’s really the only pro-growth policy that was put in the entire list of opportunities and funds that were made available in that Budget. And we do support the need to grow future capital, venture capital.

We do like some of the changes that were made in the select committee process. We are, however, worried that the Minister has new intervention powers in terms of setting direction for the Guardians of New Zealand Superannuation. And if you look at how funds have traditionally worked in New Zealand, and the New Zealand Superannuation Fund is a classic example, then it makes a real difference that those Guardians are impartial. So it is a change to allow the Minister to give some directions to those Guardians. And I sit here and reflect on that. That really allows a lot more political interference than we’ve ever seen in these types of funds before. And in our view, some of that is risky.

I also draw to the attention of the House, and particularly to the member Mark Patterson, who sits just across from me, that while venture capital is important, there are also a lot of other things that are influencing investment decisions made in New Zealand. And the previous speaker, Phil Twyford, has spoken about changes to the foreign ownership and investment rules, and he particularly focused on housing. What he didn’t focus on was the fundamental changes that are occurring in other forms of investment from foreign investment. Traditionally, we have welcomed foreign investment into companies that support agriculture, to some vertically integrated processes of farm ownership, right through to the market, to other foreign investment opportunities around viticulture and horticulture—largely all of which have now stopped dead in their tracks, with the exclusion of planting trees.

Yesterday, it was sobering for me to be told at the Finance and Expenditure Committee, when the Reserve Bank came in, that about 200 large-scale and significant dairy properties in New Zealand were going to be unable to meet their commitments to their banks and were in serious trouble. Now, we’re waiting to get further information about the scale of those commitments, but, see, what happens is when that happens and there are no alternative buyers, and the contraction of the credit industry in New Zealand by things like today’s announcement and Government policies—

Mark Patterson: So you’d flog them off to foreigners?

LAWRENCE YULE: What happens is the value of land drops. All those farmers, they lose value right across New Zealand because of that. And now they do not have foreign-owned investment or companies available to help buy some of those distressed assets.

Now, Mr Patterson might say that’s a good thing.

Mark Patterson: It is.

LAWRENCE YULE: You go and tell—sorry, members should go and talk to, and that member should go and talk to, thousands of farmers in New Zealand, particularly in the dairy industry: if that proceeds on that basis, with 200 seriously indebted farmers, there will be a loss of value to New Zealand companies. So we support the Venture Capital Fund Bill as it’s proposed, but let’s not kid ourselves: it is not the panacea. There are many other things wrong with the economy at the moment, largely because of this Labour-led Government.

MARK PATTERSON (NZ First): Thank you, Mr Speaker. It is a pleasure to rise on behalf of New Zealand First to speak to this Venture Capital Fund Bill. Of course, this bill looks to amend the New Zealand Superannuation and Retirement Income Act 2001 and enable the Guardians of New Zealand Superannuation to take on this new role, managing the Venture Capital Fund. I welcome the opportunity to speak after the previous member, Lawrence Yule, and address some of those issues; I’ll get to that shortly.

But in terms of this Venture Capital Fund, it has two roles, really: to increase venture capital available to new entities, and particularly, as we’ve heard, those entities that have got to about $2 million to $20 million. That’s the gap that has been identified. We will now have some capacity—or the super fund will have some capacity to use their track record, which is world-leading, to identify those opportunities. It’s all to develop New Zealand’s venture capital markets, and this is a catalyst for more funding coming in from other private sector funding opportunities. So it’s a catalyst.

The reason we need to do this is because if we are to grow our economy to its maximum, it is about productivity, and this country has not fared well in productivity for decades. We’ve had a volume over value mentality, which we’ve got to the end of to some extent, particularly in our agricultural sector where we’ve come up against some of the ecological limits for our environment. So we must do things smarter, and that starts out with investing in R & D. Of course, we know that our R & D is about—well, it’s less than 1.5 percent of GDP, our investment. So that is quite an indicator, actually, across the OECD—the level of investment in R & D spending as a percentage of GDP is almost a direct correlation with the wealth of the countries that are on that OECD ladder. So it is incredibly important. This Government has a goal of getting our R & D to GDP ratio up to 2 percent, and we have started out on this road. I’ve heard from the Opposition some plaintive cries over there about “What are we doing for the economy?” It reminds me of that old Monty Python skit about “What have the Romans ever done for us?” I mean, this $300 million Venture Capital Fund is actually one of the more modest steps we’ve taken—if you look at the $1.25 billion R & D tax credits—of course, to get us up to that 2 percent.

Of course, being New Zealand First, it would be remiss of me not to mention the $3 billion Provincial Growth Fund (PGF). Let’s just put some context on that: under the last Government, the Ministry of Business, Innovation and Employment had a regional development fund of $11 million. It is now $1 billion a year—under the previous Government, it was $11 million. So there has been a hundredfold increase in the Government’s investment in our provinces. And, in fact, this Venture Capital Fund will do—the PGF is actually making very similar sorts of investments, and we saw it, actually, down in my neck of the woods, down in Otago and Southland, recently. Minister Jones was down there in the heavy industry, the manufacturing industries; those old legacy industries that are a bit disparate and ad hoc, but with some investment and tooling them up and joining them together with a sort of overarching strategy and an entity that can help them pull together to win bigger contracts and give them some funds to, as I say, to tool up and fill their order books and revive some of those great industries that we have down there—and there’s some really smart people and some really, really clever thinking going on. And, of course, if we’ve got some of the other stuff around the $100 million Green Investment Fund that the Greens will be unveiling, some of that—they’ve been squirrelling it away a wee bit. We’re hoping to see some action there, but they’ll certainly have some exciting projects to come there.

But this is an important thing. Last night, some of us went to the Speaker’s Science Forum and we had two presentations, actually: one from the Cawthron Institute around aquaculture and one from Plant & Food Research around some of the developments in horticulture. It struck me there that the opportunities are so exciting—and using what we grow in different ways that we would never ever have thought of. It’s how do we get those technologies from being developed in those science labs and those experiments and get them up to being companies that are producing millions and, hopefully, billions of dollars for New Zealand. Of course, one of those has been referenced a little bit, the seaweed—the red seaweed, which has some enormous potential in terms of its methane inhibiting potential. It is being developed—actually, the PGF invested $500,000 down there in Southland last week and Cawthron are also doing some work on this. So it’s that sort of thing: how do we get that sort of initiative from a $2 million company or a $20 million company, up to a billion dollar company.

I fundamentally disagree with the last speech by Lawrence Yule. It is important that we own these assets. It is important we own those value chains. We don’t want to be, in the words of our previous Prime Minister, Sir John Key, “[peasants] in our own land”. We need to own these assets. We need to reach into the international marketplace and bring that money back to New Zealand, not have it just disappear away to foreign jurisdictions. We are not, on this side of the House, in favour of that, and we have taken many measures to do that. Mr Yule, in terms of the dairy farm prices, I see Fonterra have just lifted their payout today, and that’s what should drive the price of land. It’s the productive value of that land, and there’s plenty of money in New Zealand to buy those farms should the return on that investment be where it is at the moment; of course, we’ve got record exports.

So there’s a 15-year timeline on this bill, and we note the Finance and Expenditure Committee worked through a number of small changes, but it’s good to see, actually, cross-party support for this bill because it is important that we get our innovation going in this economy, and getting ourselves away from being—those companies that start and then they just sell off overseas, and those ideas disappear off elsewhere. We can innovate and take some of those great ideas that have been developed in our institutes and universities, and in small companies up and down the country, and turn them into taxpaying entities and powerhouses for our economy, here in New Zealand.

So New Zealand First absolutely supports this bill, as we do all those other measures that I indicated earlier as part of a wider suite of packages that we are bringing in for the long-term good of this economy. This is not a Government that looks at immigration and housing speculation as the elixir of an economy. That is not a sustainable position, so we do have to do some of these hard yards. We have to build up those fundamentals in our economy. This bill does go some way to addressing that, and we hope that it builds some momentum and helps assist some of those private entities, as well, come on board, which, of course, has been the experience of the Provincial Growth Fund. That’s often co-funding, or almost always co-funding, these. It is the catalyst, the enabler, for greater things to happen, and we’re seeing that up and down the country.

So without further ado, New Zealand First will enthusiastically support this bill through to the next reading. Thank you.

BRETT HUDSON (National): Thank you, Mr Speaker. I rise to speak on behalf of the National Party in support of the Venture Capital Fund Bill in its second reading. Look, you know, we’ve got some reservations, but we’re going to support this because, after all, it was pretty much the only pro-growth announcement in the Government’s Budget this year. They’re not doing much, but, you know, we’re going to have to support them doing something, at least.

Let’s say that it’s suboptimal at best, but the country needs some sort of stimulus, because here we are in the heart of the best terms of trade that we’ve seen in a while and the exporters should be doing well and the country should be doing well, but we’re going backwards. Growth has halved. Jobs are down by 70 percent. We had 10,000 new jobs each month under National. It’s a 70 percent discount from this Government. They’re giving stuff away—mainly people’s prosperity.

So at least they did something in the Budget that was targeted at pro-growth, and we will support it for that. But the reservations are real and they should be reservations that New Zealanders hold, as well. First of all, there is no legislative objective for the New Zealand Superannuation Fund, who will administer this, to provide a return to taxpayers—no objective to provide a financial return. As members on this side of the House in the Finance and Expenditure Committee said, name one—name one—investment fund around the world that operates, particularly at arm’s length, or supposedly at arm’s length, from a Government that isn’t modelled on a certain level of return, at least as an objective, and this one doesn’t. So its success will be inordinately difficult to measure, because even if it loses most or all of the money that’s invested in it, there’s still not an objective goal that it can be measured against.

The second part, which is really quite worrying, is we don’t believe that the Superannuation Fund should be subject to any sort of Government influence in what it invests in. While the Government will have said and those members will try to say “Oh, this money’s new money.”, the reality, we fear, as this thing continues to roll on, is the Superannuation Fund will be influenced, if not strong-armed, into using some of its invested funds to put into this fund, and that does risk real returns to New Zealanders.

We have faith in the fund managers under the New Zealand Superannuation Fund. They do a good job. There’s probably a bit of rivalry between them and ACC as to who does the better job. They do a good job, including that the investments they make are rationally based ones that are designed to give good returns to New Zealanders. To force them—which we think is where this will end up going—to put that at risk in what are very high-risk and not necessarily high-reward sorts of venture fund investments such as this thing is targeted at actually risks compromising some of those returns to New Zealand taxpayers for a fund which is there to help offset our future superannuation costs.

So we will support the bill. As I’ve said, it does at least do something to try to stimulate some growth, but it’s not without reservation. So I will say the words: I will commend this bill to the House.

Hon JULIE ANNE GENTER (Minister for Women): Tēnā koe, Mr Speaker. Tēnā koutou e Te Whare. I’m very pleased to take a call on this bill and to be the first woman in the debate, at No. 7. It’s interesting how gender-segregated some of our legislative topics can be.

The Green Party of course will be supporting the bill. For a very, very long time, our economics and finance spokespeople have been—a succession of them—speaking about the need in New Zealand to deal with the challenge of our small start-up companies scaling up without having to go overseas for investment and then New Zealand losing the benefits of those companies and their innovations.

First, let me just talk about why this is important and why the economy is important. It’s important that people have what they need to live good lives, and it’s important, in order for us to live good lives and in order for our children and their children to live good lives, that we respond to climate change and that we radically reduce greenhouse pollution in the next decade—that’s what the United Nations panel of scientists are telling us. So we need investment in our economy in the things that make it possible for us to live good lives, like food production, the building of houses, transport networks that enable people and goods to move around, and investment in education. It’s really important that all of that is done in a way that benefits the environment, that reduces pollution, and that is inclusive, because the more people are able to benefit from our activities, the more sustainable that will be.

We know we’ve had growing inequality across the world. That’s not good for democracy. That’s not the kind of country I think we want to be. We don’t want to be a country where the rich get richer and the poor get stuck. We want to continue to be a country of opportunity, and as a small nation, it is particularly important—although it’s probably true in large nations, as well—that Government takes a really active role in looking after our education, infrastructure, housing, and all of those things that make it possible for people to thrive and develop, and that includes looking after our economy and ensuring that the Government and the people of New Zealand are actively involved in investing in our own businesses and in our own organisations and are able to retain the benefits of that investment over time.

So, in 2013, the OECD specifically urged New Zealand to provide more support for expansion of early-stage firms to help address our productivity problem. We know we have a productivity problem. We’ve had an issue with wages staying low, and the top 1 percent of the top 10 percent of New Zealanders in terms of wealth and income have tended to benefit much, much more from growth of the economy than the rest of the country. That’s not fair, it’s not right, and it’s one of the many things that this Government wants to address.

So, despite the OECD recommending something like this in 2013, the previous National Government, of course, did nothing because they have a very ideological approach to the economy, which isn’t supported by evidence. Generally, National tends to be quite hands-off. It tends to try to ensure that the rich are able to get richer and that companies aren’t required to pay their employees living wages, but, generally, that stagnates the economy. There’s no evidence that that’s good for the economy, and there’s certainly no evidence that that’s good for society, but this Government takes a much more enlightened view. It looks at the evidence. It responds to recommendations from the OECD, and that’s why we’ve had wages growing much faster than inflation since this Government has been in office.

Of course, we have more work to do to ensure that there is secure, affordable housing for people. We have more work to do to ensure that the signals and incentives are right so that we can start to really reduce carbon pollution and greenhouse pollution so that we can do our bit in the global fight against climate change, and what we need for that to happen is for there to be support for innovation and innovative companies here in New Zealand.

So in the Budget, we announced the creation of a $300 million pool of capital available to be invested through a new fund of funds model to support New Zealand’s venture capital markets, and I think that will dovetail nicely with some of the other initiatives we’ve announced, like the $100 million Green Investment Fund and many of the other steps that we’ve been taking to ensure that we have the right signals so that investment is going into the productive part of our economy, not the speculative part of our economy.

Speculation on housing may make some people richer, but it doesn’t make us better off as a country; it makes us worse off as a country. Investment in really innovative companies that are able to, you know, take things like seaweed and reduce greenhouse emissions from agriculture; investments in new approaches to transport like e-scooters—all of that has the potential to be pretty transformational to reduce emissions, to make life better for New Zealanders, and we want to make sure that those small companies that start out in New Zealand with a great idea don’t have to go overseas to grow. This is just a first step that will help us achieve our goals as a society. The Greens are happy to support this bill.

MELISSA LEE (National): Thank you, Mr Speaker. I shall only take a short call on this one, as I actually haven’t sat through the Finance and Expenditure Committee—I’m not part of it. I took great care in listening to all of the speeches, right from the Minister, when he opened up the session, trying to learn a little bit about this particular bill in its second reading. I have actually read my notes and listened very carefully to the debates, on both sides.

Obviously, as previous National members have stood up and said, I stand with them in support of this bill. Having said that, I’d like to, perhaps, bring some perspective to some of the comments that have been made in this House. One of the things that I always found very interesting, as a speaker of English as a second language, was the saying, “rob Peter to pay Paul”. I couldn’t quite understand what that literally meant, but it’s actually about the going around of things, like, you know, borrowing or robbing someone to pay someone else—it’s the same pocket of money.

I think that’s what some of the earlier speakers were actually talking about, in terms of the supposed $300 million Venture Capital Fund, where $260 million is actually coming from what was already in the Superannuation Fund, and $60 million from the New Zealand Venture Investment Fund’s existing assets. So, literally, when the Government made an announcement that they were going to create a completely new $300 million Venture Capital Fund, it wasn’t actually creating a new fund, but they were literally robbing Peter to pay Paul. So I guess I’m using the terminology correctly—I hope I got that right.

I guess that is, sort of, the state of affairs or the standard of this Government. For example, the super fund—I think it was earlier that Brett Hudson was commenting—doesn’t have to return a dividend. I mean, to me, it just seems ridiculous. When you create a Venture Capital Fund, you would want some markers for success. You create any business, any venture; anyone would want to know that this is successful. Where are the markers? I guess when you put a Minister in charge of a portfolio, you want markers to suggest that the Minister is doing well. Perhaps that’s where the Hon Phil Twyford failed, because he had no markers for him. Well, there was, actually—there were 1,000 KiwiBuild homes to be built in the first year; 5,000 KiwiBuild homes to be built in the second year; and 10,000 KiwiBuild homes to be built in the third year, but he literally only built 258 homes, and he got dumped—the whole idea got dumped.

So I guess that is the standard of this Government—in the year of delivery—that there are no markers for this Venture Capital Fund that the Government is creating. They don’t have to deliver a dividend. For example, half of all State homes that were supposedly built by this Government were started under the National Government. Seven out of nine child poverty indicators, which basically suggest that perhaps they might be doing well—but seven out of nine child poverty indicators are worse under Labour. These are some of the markers that people can use to see if this Government, or anything that this Government creates, is actually doing better or not. Like everything else that this Government is doing, this Venture Capital Fund has no markers to show whether it is performing well or not.

One of the things that I’m a little bit confused about—I think one of the things that the select committee have actually, sort of, disagreed on, that members of the National Party have disagreed on, is this whole idea that the Government or the Minister can decide what the Venture Capital Fund can actually invest in. I would have thought that you really don’t want politicians involved in deciding what the fund can invest in. You would want to leave it up to the experts to decide what to invest in, so they can gain something out of the fund, but obviously not. The politicians—the Ministers in charge—are apparently going to be making the decision.

The other thing is that the decision to tax the Venture Capital Fund was not removed from the bill at the select committee stage. I guess this is contrary to what they have actually done in terms of the treatment for the Provincial Growth Fund, or the Green Investment Fund, in that there wasn’t going to be—I guess the policy’s intention behind the fund should be treated the same way, but apparently this is quite different to the other. I don’t understand why they are treating this fund differently to the Provincial Growth Fund or the Green Investment Fund when it actually comes to the tax area.

I guess we have some reservations, as earlier members have commented, and I stand with my colleagues in our reservations. I think, all in all, anything that grows the economy has to be a good thing, or any attempt to grow the economy is a good thing, because, at the moment, the 10,000 a month job creation that the National Government delivered for New Zealand is actually providing only about 3,000 jobs a month, and so this Government is actually not doing as well as it should, especially under great economic conditions.

You know, how people can tell whether the country is actually doing well is if businesses are confident enough to invest. Business confidence and business investment—both have failed. Business investment has actually fallen from 5 percent to 0.6 percent. That means that businesses are not confident in this Government.

So I say, as I said earlier, anything that can boost a little bit of confidence in our economy, to grow our economy, has to be a good thing. So I commend this bill.

WILLOW-JEAN PRIME (Labour): Tēnā koe e Te Māngai o Te Whare. Thank you, Mr Speaker, for this opportunity to take a brief call in the debate this afternoon. I just want to start by actually rejecting the comments that have been made by the previous speaker, Melissa Lee. Our economy is in good shape. We know that unemployment is down—its lowest in a decade—and we have the highest annual wage growth in a decade. Our minimum wage is up. Our economy is actually growing faster in spite of what is happening internationally in terms of in the United States, between the United States and China, what’s been happening with Brexit, and other global uncertainty and destabilisation around the world.

So we are actually, here in New Zealand, doing really well in spite of what’s happening in the global markets. But we do acknowledge and we do recognise that lifting New Zealand’s productivity is absolutely crucial. I find it interesting, some of the points that have been made today, because actually it was identified in 2013: the OECD specifically urged New Zealand to provide more support for the expansion of early firms to help them address our productivity problem. It wasn’t until now, in 2019, when we are in Government, that we are actually taking steps to do that.

We used this year’s Budget to create a fund of $300 million for capital to be invested, to be available to be invested, to support the type of growth and scaling up that we want to see in Aotearoa New Zealand. So I want to commend particularly the Minister who is sponsoring this bill, whose name this bill is in, because it was the Hon David Parker’s idea, as acknowledged by our Minister of Finance in the speeches in the first reading of this bill.

So what we’re really talking about here is the opportunity to have a pool of funds available to support our start-up companies beyond the initial, sort of, seed funding or angel investment that they are able to get, where they are able to scale up their businesses without having to go overseas.

Last night, I had the absolute honour and privilege of attending the national award dinner for the Youth Enterprise scheme. We saw our taitamariki, the regional winners, all converge in Wellington to put their pitches for their business ideas to what is, essentially, a taniwha’s den or dragon’s den and the—

Dr Duncan Webb: Ha! Red taniwha.

WILLOW-JEAN PRIME: Yeah, that’s right—taniwhas. We saw them receive national awards and overall awards. I want to mention two in particular that stuck out for me which having this type of fund may give them some hope that their businesses could potentially scale up with the support of New Zealand funding, and not necessarily having to go overseas.

The first one I want to talk about is particularly interesting because it is in the area of technology and it’s in the area of sustainability, which is an area that we as a Government are particularly interested in. Now, that is Mud Tech—they are from Kaitaia College, Kaitaia Abundant Life School, and Te Kura Taumata o Panguru, Papa Taiao, and they have developed a remote underwater camera drone designed and built for inspecting the bottom of boats for pest species. Now, they are currently working with our regional council in the Far North, but they are looking to work with other councils throughout Aotearoa if there is interest there. This is something that could potentially be used throughout the world. We have a serious threat in terms of marine pests. They received one of their national awards from our Minister for Primary Industries, the Hon Damien O’Connor. So I’m so proud of them—and watch this space, I reckon.

The second one I want to talk about in the time that I’ve got left was Sharndre from Crimson Education—they received a Young Enterprise Emerging Alumni Award—25 years old, 24 offices around the world, more than 200 employees, and worth over $400 million. Now, if our youth can see that there is a fund available where they could scale up their businesses without having to go overseas to look for that capital to scale up their businesses, then I think there is a lot of hope for them.

So I want to thank the Finance and Expenditure Committee for the work that they did on this.

Dr Duncan Webb: You did it.

WILLOW-JEAN PRIME: I also want to acknowledge—I am on that committee—the submitters for their feedback. One of the points that we did take into consideration was the inclusion of an inclusive economy in the list of things to be considered.

Hon JACQUI DEAN (National—Waitaki): Thank you, Mr Speaker. National does support this Venture Capital Fund Bill at its second reading, but, as a number of members have pointed out before, we do have some comments to make about the bill, and I do have some comments to make about one particular change that was brought in at the select committee process. I’m not a member of the Finance and Expenditure Committee; I do, however, take a close interest in small business in New Zealand, as, no doubt, many of us have.

I speak to a number of small businesses throughout New Zealand, and in the term of this business, access to capital, particularly for early stage ventures, has been raised as an issue for me, which is why I do support this Venture Capital Bill. But I would also say that the Labour-led Government are ignoring what is, effectively, the elephant in the room, with regards to the changes that they have made to labour laws, to the sudden rise in the minimum wage, and other uncertainties that they have engineered into the small business environment, which has led to a sustained loss of confidence across the small business sector. And that loss of confidence is based mainly on Government policy. So I speak to small businesses from Northland to the South Island and all points in between, and there are some very common threads coming through.

Yes, there is an access to capital that is being addressed in a number of ways. There are a number of sources of capital now, ranging from banks, other lenders, private institutions, and now we have this Venture Capital Fund proposed—and that is a positive thing for small business and start-ups. But on the negative side of the ledger, there is a real impact of the sudden rise of the minimum wage, particularly, I have observed, in the services industries, including hospitality but also retail, which is also experiencing a number of other pressures and competitions, particularly with regards to online trading. And, of course, in the hospitality business, Uber Eats is making a fundamental and disruptive change to that industry. That is what business is all about; it is about change. But it behoves a Government not to add to those uncertainties in the way that this Government is.

So I speak to people in hospitality who have extremely busy cafes and restaurants but they’re no longer taking a drawing or a wage themselves because that portion of their net profit has now been eaten up in other costs which have been brought in by this Government. So we’re now finding business owners not even taking drawings for themselves and covering shifts, which means it is having a negative impact on their private and personal and family lives, and I and my colleagues see this around New Zealand. There has been no recognition by the Government of these factors.

However, the availability of venture capital funding is a positive. When I say “However”, I want to draw the House’s attention to the change that was made in the select committee process, whereby the Minister can now direct the Guardians of New Zealand Superannuation to give regard to the Government’s commitment to an inclusive economy.

Dr Duncan Webb: That’s a great idea.

Hon JACQUI DEAN: Now, it seems to me that contrary to members on the other side of the House not as well connected into the business community who think this is a wonderful idea, I differ in that view. I think that there is something a little dangerous, there is something a little concerning, around ministerial intervention in a capital fund, particularly when it is a capital fund for people’s superannuation. So I think anything that impinges on this fund’s independence is something that should not happen. I would urge, in the committee stage, the Minister in the chair to listen—listen—to members’ views as we go through the committee of the whole House stage.

Yes, sure, a venture fund is a good thing to have, but what New Zealand really needs is certainty. It needs labour laws which make sense, labour laws which don’t impose restrictions on the employment relationship between the worker and the employer and which has taken us back 40 or 50 years in terms of labour relations. A regime in small business—

ASSISTANT SPEAKER (Adrian Rurawhe): Order! The member’s time has expired.

TAMATI COFFEY (Labour—Waiariki): There has never been a better time to launch your own tech start-up company here in New Zealand. Why? Well, just as of last week, we heard that the Reserve Bank was keeping the official cash rate at a very super low 1 percent, which means that if you’re going to borrow money, now is a really good time to do it. Why else? Actually, the Government wants to be part of that ecosystem too, which is the premise for this. The Venture Capital Fund is going to help to assist in that ecosystem. At the moment, we’ve got a whole lot of help down one end, if you’re a start-up business and you want some seed funding; we’ve got lots of agencies spread far and wide around New Zealand that can help you out. But there comes a time, when, actually, you cross an invisible boundary, when you actually need to spread, you need to grow, and you need to expand your business, but that capital isn’t quite there.

So that’s what this fund does. It ensures that our start-up companies have got somewhere to go, that they don’t need to head off overseas and sell all their intellectual property to the highest bidder over there. In fact, this is a great thing for our tech sector in New Zealand—and isn’t it brilliant, because we’re developing a great reputation in the tech sector. In fact, I’ve also heard that it’s taken over as New Zealand’s third- largest export sector, earning us more than $12 billion in revenue in the last financial year.

We can, here in New Zealand, boast a series of privately owned New Zealand start-up companies that are worth more than $1 billion—the likes of Rocket Lab, the likes of Xero, the likes of Pushpay. These are businesses that started here in New Zealand with an idea, and what they needed was somebody to back them. So that’s exactly what we’re doing through this bill, as the Government; we’re stumping up $300 million so that we can send a really clear message to those start-ups, the techs, the innovators, to say, “We’re here for you, we support you.” Yeah, it’s risky—because new ideas are risky. If it’s a safe business, you’ll no doubt find some nice, safe investors that like a good, safe investment, but, actually, there is absolutely an argument for looking after start-up businesses, tech businesses, that are on the frontier of new stuff. We know that disruptive technology is taking over our country. It’s taking over the world. We need to be part of that, and, actually, if we just keep doing what we’ve always done, then we’re never going to get a slice of that pie.

At the moment, we’ve got some real innovative businesses here in New Zealand that are doing just that. But what do they need? They need that investment. They need a Government that stands next to them and says, “You know what? Yeah, it’s risky. We’re not sure if this venture is going to work over here—if this business plan, this idea, is going to work. But, actually, we’re going to take a gamble, and, hopefully, we can get our settings right.”

Just today, we were talking to Callaghan Innovation in our select committee, and what a brilliant job that they do. But, actually, they are going to be very excited that they’ll be able to make sure that they can hand over some of these start-up businesses so that they can access that kind of capital. Callaghan Innovation do a brilliant job around the country. They’re partnering with all of these organisations who are at the cutting edge of development—tech start-ups, software, and all of that kind of stuff. New Zealand Trade and Enterprise also do a brilliant job in that space, making sure that we connect all of our New Zealand businesses with overseas, whether it be investors or other businesses, to help them to develop their idea.

But what we’ve heard time and time again from people within these organisations, these Government departments, is, actually, we need to make sure that we’ve got the money to be able to pathway people into opportunity, and that’s exactly what this fund is doing.

It is a really exciting time for New Zealand: a great opportunity for any young person who has ever, ever dreamed about creating a start-up and also taking on the world. So that’s why I wholeheartedly support this bill and commend it to the House.

ANDREW FALLOON (National—Rangitata): Thank you very much, Mr Speaker. We’ve heard this afternoon that this Venture Capital Fund Bill will establish a new $300 million fund, and, of course, it will. But sitting here, as I have for the debate this afternoon, you’d almost think that it’s $300 million of new money, such are the self-congratulations that are going on opposite in the House. Of course, it’s not $300 million of new money—$240 million of it is coming from the New Zealand Superannuation Fund, and a further $60 million is coming from the Venture Investment Fund.

I do just want to touch on a couple of points about that $240 million that’s coming from the super fund, because what it’s doing, by bringing it into this new fund, is actually putting some additional obligations or additional requirements on it with the oversight of Government, and, certainly, with the oversight of the Minister.

In one of the amendments that the Finance and Expenditure Committee has made, which is an amendment to clause 35, it says in there that the Minister can now direct the Guardians of New Zealand Superannuation to give consideration to the Government’s commitment to an inclusive economy in its investment decisions.

I don’t know about other members, but I actually find that quite chilling. What they’re doing is they’re taking $240 million from the Superannuation Fund, which is set up to try and gain as much money as it can to fund future super obligations, and instead they’re diverting it off into another fund, which is going to have ministerial oversight, ministerial direction, which will allow for a Minister to give guidance or direction to the Guardians to then put it into things that fit with the Government’s economic policy.

In fact, that’s spelt out quite specifically in the bill as well. Not only is it in relation to a commitment to an inclusive economy; it also refers to the Government’s commitment to a low-emissions economy and also the Government’s wider economic policy.

I have concerns about that, because what it means is that you can have a future Minister—and I’m not suggesting that Ministers opposite might do this, but you can have a future, I don’t know, Green Party Minister—who might determine that, actually, the Government’s economic policy now is for no economic growth, because we want to hear this, I don’t know, great leap backward—and that’s something that they used to advocate in the past. If they were to do that, and they were to say “Right, we now want to have zero or low economic growth in this country because we want to pursue other economic outcomes.”, that means that, actually, this fund will not be making an economic return. It will be set up with the explicit purpose of diverting money off into other things, other projects that the Government of the day might favour, without actually funding things that will get a return.

I now want to cover off some of the submissions that were made on the bill, and one of those came from—where is it?—the Guardians themselves, who have said that the Provincial Growth Fund (PGF) and the Green Investment Fund are exempt from paying income tax and that this bill should be as well. I unfortunately didn’t sit on the Finance and Expenditure Committee, that considered this bill, but that is one question I’d like to raise with the Minister during the committee of the whole House, which is: if funds like the PGF and the Green Investment Fund are not going to be subject to income tax, then why would this fund be subject to a tax as well?

During his contribution, Mark Patterson referred to this as being just part of a wider economic strategy, and that made me laugh a little bit, actually, because what it seems to be—what we seem to have from this Government, actually—is when there’s anything to do with the economy, it’s either a negative or it’s throwing money at the problem. Their proxy for good policy seems to be simply establishing funds or to set up new funds to throw money at the problem. But it’s unfortunately not a proxy. They can’t simply bring in $3 billion funds, in the way that it is with the PGF, or $300 million funds, as it is with this, as a proxy for good policy. We see that, actually, when we look at economic confidence and when we look at farmer confidence. That’s now flowing through to economic growth. That’s flowing through to job growth, which is now flat-lining. In fact, in some parts of the country it’s going backwards. Unemployment in the Ashburton District, for example, has now tracked up for the first time in several years—1.7 to 1.8 percent. That’s seeing a real impact, actually. Instead of doing the real work—instead of doing things that will actually move the dial and grow the economy—they’re setting up small $300 million funds of existing money—not even new money; existing money—and that seems to be their proxy for economic growth.

However, as has been heard on the side of the House this afternoon, we will be voting for the bill because we do see it as a very small tweak, a slightly positive change. As my friend and colleague Brett Hudson pointed out, it was the one positive economic announcement that was made in the Budget. We on this side of the House actually think that we should be trying to encourage the Government to take on really good economic policy and really, really good ideas. So, in the spirit of encouraging them to do that, we’ll be voting for this bill, and we hope that encouragement leads to some better economic policy in the future.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you. Look, I love Thursday afternoons, with the Opposition getting tired and grumpy. They really need their afternoon tea. The funny thing is I don’t think they’ve read the select committee report, because it says that the Finance and Expenditure Committee examined the Venture Capital Fund Bill and recommends that it be passed with the amendments shown—unanimously, it was. Here we have them chipping away at these suggested improvements—fantastic improvements, they were, from a fantastic committee—that they agreed to. So perhaps they should chat amongst themselves before they come to the House.

This is a great piece of legislation—yet another building block in this country building a strong, sustainable long-term economy, not one that’s built on the back of overseas speculation and immigration but one that is built on genuine investment in a productive, forward-looking economy. We know that New Zealand has low productivity levels. That’s what the OECD report that Willow-Jean Prime was referring to said. They said, “You know what you want to do? You want to invest in innovation.” We also know—we heard very good evidence in select committee—that there was a gap: a real gap, not in the initial start-up, not in the few hundreds of thousands of dollars it takes to start a business, but in the $2 million to $10 million or $20 million that it takes to really take off.

You know, I was at the Westpac Champion Business Awards in Canterbury not long ago—best attended business awards in the country in the best area in the country as well. There were some really good businesses there. Ethique is a great business that creates sustainable cosmetics without using any plastics. Fantastic company—won the small business area. But it’s one of those companies that is poised to go worldwide, and it can’t hesitate. It’s exactly the kind of company that would benefit from this, and benefit because we would expect the Guardians of New Zealand Superannuation to enter into a funding arrangement or an equity arrangement, which is fair and reasonable, not rapacious. That’s the problem a lot of these businesses are having. They are having to go out to market and, essentially, sell their soul to get into the next stage of their business. But doing it—having a market leader that’s filling the gap and then creating a fair and reasonable venture capital market is what we absolutely need.

I find it extraordinary, the suggestion that the members of the other side have suggested: that it’s inappropriate that the Minister indicate that the Government’s commitment to an inclusive economy is not a reasonable thing to direct. The fact is—let’s face it—that we have an exclusive economy, an economy that excludes huge parts of our population, whether that be in wealth, race, or gender. The fact that we want to say that, for example, we have Treaty partners and that when we’re investing money, we want to recognise that ongoing relationship, that obligation to walk side by side with Treaty partners—if that’s not a reasonable suggestion, what is? That’s an absolutely reasonable suggestion—and our Pasifika cousins as well, and women in business as well. They’re all great ideas, and that’s why the committee unanimously adopted that recommendation.

I’ll tell you what I’d commend: I’d commend that the Opposition read this legislation before they say one thing and then commend it to the House. This is a great step forward to a sustainable, long-term, growing and productive New Zealand economy. I commend it to the House.

Bill read a second time.

Bills

Education and Training Bill

First Reading

Hon CHRIS HIPKINS (Minister of Education): I move, That the Education and Training Bill be now read a first time. I nominate the Education and Workforce Committee to consider the bill. At the appropriate time, I intend to move that the bill be reported to the House by 4 May 2020.

It will be abundantly obvious to all members of the House who picked up a copy of the Education and Training Bill that this represents a very significant piece of work. To deal with perhaps the least publicly appealing parts of this process first, the bill obviously repeals and replaces several existing enactments of Parliament. It creates a new legislative framework for the administration of New Zealand’s education system that is simpler, that is drafted in more plain language, and that will be easier to follow.

The laws around education in New Zealand are currently spread over several different Acts of Parliament: the Education Act 1989 is the most substantive of those; the Education Act 1964 has largely been repealed but continues to have some provisions that remain in force; the Industry Training Act 1992; and, of course, the State Sector Act 1988. The Education and Training Bill draws together all of the relevant provisions of those enactments into one easy to follow piece of legislation.

To deal with an administrative issue first, members of the House may be aware that there are two bills currently before the select committee: the Education (Vocational Education and Training Reform) Amendment Bill, which repeals the Industry Training Act and puts the relevant clauses into the Education Act; and the Education (Pastoral Care) Amendment Bill, which is before the House at the moment, which deals with the code of practice around pastoral care of students in New Zealand’s tertiary institutions.

The provisions in the Education and Training Bill reflect the provisions in those two other bills as they were introduced to the House. As this bill progresses through the House, it will be updated to reflect the provisions in the two bills currently before the House, or previously before the House, as they are finally enacted. It is just a question of timing. It wasn’t possible to update the Education and Training Bill to reflect the consideration of those other two bills before it was introduced into the House.

To deal with some of the more symbolic or the more cosmetic changes, the bill has been reordered to put in place modern language, to streamline the content, and to improve the overall structure of the bill. It now follows a life-course progression. So it deals with early childhood education first and then moves all the way through into adult learning. The bill also makes a significant number of policy changes, and some of the changes it makes will shift existing primary law into regulation, recognising that the current education legislation is incredibly technical and prescriptive, and, in many cases, that detail is better dealt with through regulation.

In terms of the policy changes the bill makes, in preschool education or early childhood education, the bill strengthens police vetting requirements for home-based early childhood education and care and strengthens the role of the Education Review Office, particularly giving power to enter and inspect homes where education and care is being delivered. A new licensing criteria for early learning services is put in place that will allow for more active network management for new early childhood education and care services and home-based services who may be looking to enter the market. That’s going to allow future Governments to ensure the provisions are more closely aligned with the actual needs of communities.

At the primary and secondary school level, the bill clarifies that the right to a free State education includes the right for all enrolled students to attend the school in which they’re enrolled for all of the hours that the school is open for instruction. This may seem like stating the obvious, but the true reality is that for some students, particularly those with additional learning needs or disabilities, that is not the case at the moment, and that needs to change. This will help us to improve our compliance with related international obligations.

The bill renames “special schools” as “specialist schools” to better reflect the wider role that these schools now have in supporting inclusive education within the entire schooling system. The change reflects the shift in focus from the school itself to the specialist nature of the services provided to support students with disabilities and additional learning support needs.

The bill will make it easier for teachers to re-enter the profession after taking a break from teaching, whilst still ensuring that they are competent to teach.

The bill proposes changes to the legal framework for using physical restraint in schools, and I want to speak about those in more detail, because they are likely to be one of the more controversial aspects of the bill. The bill replaces the term “physical restraint” with the term “physical force”, which is a term that teachers are more familiar with, and it aligns with the use of that terminology in other Acts of Parliament. It will allow a teacher or other authorised staff member to use physical force on a student if that teacher or staff member reasonably believes that it is necessary to prevent imminent harm to the health, safety, and wellbeing of that student or of another person.

The bill makes it clear that physical force is a last resort. The term “physical force” will be defined by rules made by the Secretary for Education within six months of the bill’s enactment. These changes address the lack of certainty that the school sector has about the current provisions allowing for the use of physical restraint. Those provisions have been worked through very carefully with the teaching profession to ensure that we come up with something that is workable, understandable, and sensible.

The bill makes a minor change to the 1964 Act’s provisions regarding religious instruction, which is not part of the New Zealand curriculum, and it occurs currently where a school is not open for instruction. Under the bill, a student’s attendance at religious instruction in State primary and intermediate schools remains voluntary, and, particularly important, parents who want their children to attend it must confirm that in writing to the school. Currently, an opt-out approach applies. Parents who don’t want their children to attend religious instruction must confirm this in writing. However, that’s not always possible if the parents don’t know that that religious instruction is proposed to take place in the first place. The bill’s opt-in approach will help ensure that attendance at religious instruction only occurs with fully informed parental consent.

To protect the quality and reputation of the National Certificate of Educational Achievement—the NCEA, our national qualification system in schools—the bill prohibits the awarding of NCEA offshore, with two exceptions, being that distance schools can continue to award NCEA to domestic students based offshore, and NCEA can still be awarded in Pacific Realm countries.

At the tertiary education and vocational training level, the bill makes a number of changes in relation to the student loans and allowances provisions administered by the Ministry of Social Development, to make those systems easier to administer. The bill undertakes the legislative amendments necessary to support the Government’s response to the final report of the Tomorrow’s Schools Independent Taskforce. Several of those measures are aimed at strengthening school governance, including the fact that the statutory objectives for school boards of trustees have been revised to focus on a broader range of primary objectives. A mandatory national code of conduct for school board of trustees members will be introduced, and the bill enables that.

The bill shifts responsibility for developing and consulting and reviewing enrolment schemes from boards of trustees to the ministry, who will give effect to that at a regional level. Now, this will help to reduce the compliance burden for school boards of trustees who are volunteers, and it will improve transparency and consistency within the system of how we manage school enrolments.

It’s essential we’ve got strong leadership in the schooling system. The principal role—the role of the school principal—is demanding and complex. It’s critical to the role of the school. So to strengthen school leadership, the bill requires the Minister to issue minimum standards, or minimum eligibility criteria, for appointments to school principal roles, and these criteria will come into force six months after they are issued and will apply to future principal appointments made after that date. School boards will still be able to set additional criteria.

The bill enables the Education Review Office to make a written request for information to inform on-site reviews. This aligns the legislation with current practice by the Education Review Office.

Finally, the bill enables the establishment of a dispute resolution scheme for the schooling sector, allowing local dispute resolution panels to be established to resolve serious rights-based disputes within a school. The panels will be primarily focused on resolving disputes through mediation, but if not possible, they can, at the request of the student and their whānau, determine the dispute.

The Government is making a lot of changes in the area of education. This bill builds on the work that we have already done. It is a comprehensive piece of work. I’d like to thank all those involved in the process of drawing it together. I look forward to the select committee process. As with any piece of legislative change that is as large as this, there are bound to be further refinements that can be made during the select committee process. I look forward to engaging constructively with members on all sides of the House to ensure that that happens.

Dr PARMJEET PARMAR (National): Thank you, Madam Speaker, for the opportunity to take this call. I want to make it clear from the start that National will be opposing this legislation, the Education and Training Bill, in the first reading. I believe that the Minister of Education, before introducing this bill, would have done his numbers, and the bill will definitely go to the select committee. That is my assumption at this stage. So in the select committee, I look forward to working on this legislation with various members from both sides—that is, Government and Opposition—and I also look forward to hearing from submitters what they have to say about this legislation.

This is wide-ranging legislation which covers early childhood education (ECE), primary, secondary, and tertiary education. As the Minister pointed out, this is a big piece of legislation—500-plus pages—so I believe that the work on this legislation has been happening for a number of months now. If that was not the case, then I’d be really nervous if the Minister produced this legislation in just a couple of weeks’ time.

So what I want to highlight here is that while this legislation was being worked on, the Minister introduced the Education (Vocational Education and Training Reform) Amendment Bill and also the Education (Pastoral Care) Amendment Bill. I can fully understand the circumstances around the introduction of the Education (Pastoral Care) Amendment Bill, which was because of that unfortunate incident that happened in the South Island at one of the universities, where one student lay dead and nobody knew about that student. So I can fully understand about that legislation. But for the Education (Vocational Education and Training Reform) Amendment Bill to be introduced while this big piece of legislation was being worked on, I don’t understand why that has happened.

So, to me, it looks like there has been a disjointed approach towards this Education and Training Bill, because it’s clear that, as the Minister said, those two pieces of legislation will be incorporated into this Education and Training Bill. Then, based on what the final version of those two pieces of legislation will be, the Education and Training Bill will be updated later on. So, to me, it looks like it could have been part of the Education (Vocational Education and Training Reform) Amendment bill—especially that bill out of those two bills could have been part of this Education and Training Bill. So in the select committee process, we could have dealt with the whole legislation together—this legislation that deals with the education sector, so that we could deal with that big picture that is needed for the education sector.

As I said, we are opposing this legislation in the first reading, but we reserve our position going forward, because it will all depend on how we deal with this legislation in the select committee process—what kind of changes are made to this legislation in the select committee process. There are some provisions that we think will work OK for the education sector, but then there are other provisions that we have some serious concerns about.

One of the concerns that we have with this legislation is about boards of trustees losing their right to develop, consult, and review school enrolment and school zones. So this is something that boards of trustees understand better, in our view, because they understand their communities, they understand what will benefit their communities and what needs to be done through their school to deliver for their local communities. That power coming to the Minister, in my view, looks like the Minister wants to control all enrolments and zones. In my view, that is going to lead to a loss of that independence that boards of trustees of schools have. So we really want to see that local communities have that control, schools have that control for their local communities and for their local students, which is going to be lost because of this legislation. So we have concerns about this, and we look forward to seeing what submitters have to say about this provision in this legislation in the select committee process, and what kinds of changes will be made to this provision in the select committee process.

We also see that educational achievement has now become one of the four objectives for boards of trustees. So educational achievement for any parent, any student, or any school should be a primary objective, or it should be the primary objective, but now it becomes a primary objective because it becomes part of four primary objectives, and all these four primary objectives are at the same level. Given that all these four primary objectives are at the same level, we are concerned about the effect of this on the educational achievement objective. We believe that because of this, this objective will be diluted—the focus from the boards of trustees on this will be diluted—and we don’t want to see that happening. Again, this is another area where we are concerned and we really want to see how this legislation will come out after the select committee process.

As I said, there are some provisions in this legislation that we think are good, like, for example, the Minister being able to set minimum eligibility requirements for principals. We believe in quality education, and quality education comes only if people that are delivering that education are of that standard. So we really want to see that the quality of our teachers and principals is really good to be able to deliver to the expectations of students, parents, and our country. But at this stage we don’t have much information about what this setting minimum eligibility requirement means. We want to see what it means in regard to the standard, or the quality, of principals in various schools. So we, overall, would support this if it is to improve the quality, but we want to see what this actually means.

The Minister also talked about offshore institutions not being able to award NCEA. I fully understand the argument there; that is about the integrity of our education system. But the concern I have, and the concern that we have, is about various agreements that we have with various countries about export education. We know that in various free-trade agreements, we include education. We include export education in that, especially with developing countries. They want to go to developed countries to gain education, and New Zealand, being a developed country, is an attractive place for various developing countries to come and gain education. Also, in those agreements is the ability for New Zealand to provide this facility to students—this is without them coming to New Zealand, gaining NCEA in their own country. So how this provision will affect that export education sector is something that we want to know more about.

Then, as I said, this legislation covers all areas—that is, early childhood education, primary, secondary, and tertiary. In early childhood education, especially home-based early childhood education, the changes that this legislation makes do raise some concerns for us. All home-based early childhood education centres, even people that are not involved in providing that service, will have to go through a vetting process—a police vetting process. But then this legislation says that without the requirement of a warrant, police will be able to go in and inspect home-based early childhood education centres. We have concerns about that because, in our view, that makes those home-based early childhood education (ECE) centres feel like criminals, and we don’t want them to feel like criminals, because this is an area, this is a service, that is needed by all communities. Parents with young children have other commitments, so they need these early childhood education centres and home-based early childhood education centres, which are actually doing quite well providing that service for their local communities. Already we are seeing a shortage of ECE teachers. We don’t want to see home-based ECE centres put off because of this provision in this legislation and create an even greater shortage of ECE service providers.

So we have these various concerns, and, as I said, the select committee process will be really important for us to consider our position going forward on this legislation. We will not be supporting this legislation in the first reading, but in the select committee process, if the concerns that we have are addressed, then we will reconsider our position. But at this stage, we are not prepared to support this legislation. Thank you, Madam Speaker.

Hon JENNY SALESA (Associate Minister of Education): Thank you, Madam Speaker, and I’d like to first of all acknowledge the Minister of Education, the Hon Chris Hipkins, for his huge amount of work and leadership in this space. I’d also like to acknowledge and thank the Ministry of Education, the Tertiary Education Commission, and all of our education agencies who have spent months and months to ensure that we have this Education and Training Bill in front of us.

I’d like to say that this bill establishes and regulates an education system that ensures New Zealanders have lifelong learning opportunities so that our people are able to engage fully in society. This bill is a very important step forward in ensuring that we improve the success for all of our learners.

Thirty years ago, under the Rt Hon David Lange, Tomorrow’s Schools, which is what we have today, was brought in under Labour Government. We know that it is an education system that is no longer fit for purpose. We only need to look at the educational outcomes of our Māori learners, our Pacific learners, our learners with disabilities, and our learners with learning support needs—as well as those from disadvantaged backgrounds—to know that this is an education system that does need to be changed. And it is not surprising to me that members on the opposite side of the House are not (a) acknowledging that the education system needs to change or (b) even agreeing that these are changes that need to be made.

We are a Government that when we see issues that need to be addressed, we actually address them. We don’t bury our heads in the sand and hope that it will just magically fix itself. This bill will implement the policy changes that the Government has agreed to implement from the education work programme, which is our response to the independent Tomorrow’s Schools final report.

The Education and Training Act is one that will be more simple. It will be modern. It will be less prescriptive than the current legislation. And we have legislation that goes as far back as 1964, and it is time to make changes. The Education Act of 1964 and the Education Act of 1989 underpin the operation of early childhood education, of compulsory schooling, of tertiary education, as well as our vocational education. But some of those provisions are now pretty dated. When Tomorrow’s Schools was implemented, they thought that they would address inequality of educational outcomes. However, when we look—and I’d like to discuss our Pacific people, in particular. We know that two-thirds of Pacific people live in Auckland. We also know, when we look at the numbers of Pacific students that we have, that in 2018 we had just over 27,000 Pacific students in our secondary schools, and we know that over 50 percent of our Pacific students in those secondary schools attend only 26 secondary schools across Aotearoa New Zealand. But when you look closer at that number, 25 of those schools are in Auckland. Only one of those high schools is outside of Auckland, and it’s Porirua high school.

So when we look at some of the effects of Tomorrow’s Schools, we see that not only are some students, including Pacific students, concentrated in certain areas—in this case, Auckland—but when you look at where they currently attend schools, we know that close to 70 percent of our students attend decile 1 to decile 4 schools. And when we look at the educational outcomes of our students, this is one of the reasons why we are making these changes. We also need to ensure that we do right by our tangata whenua—our Māori. This bill makes significant changes that are aimed at giving better effect to Te Tiriti o Waitangi, to ensure that we have equitable outcomes for our Māori learners. At the school level, boards are going to be required to give effect to Te Tiriti by working to ensure that their plans—their policies and local curriculum—reflect local tikanga Māori, mātauranga Māori, and Te Ao Māori, to ensure that they are taking all reasonable steps to ensure the instructions are available in Te Reo Māori and tikanga Māori, and to achieve equitable outcomes for our Māori learners.

At the system level, this bill also enables the Minister of Education and the Minister for Māori Crown Relations: Te Arawhiti to jointly issue and publish a statement of expectations specifying what agency serving the education system must do to give effect to Public Service objectives related to Te Tiriti.

This is a wonderful piece of legislation, the Education and Training Bill, and I strongly support it.

DENISE LEE (National—Maungakiekie): Thank you very much for the opportunity to speak to the Education and Training Bill this afternoon in the first reading debate. As outlined by my colleague Dr Parmjeet Parmar, we oppose this bill at the first reading, but we wish to reserve our final support or non-support for the remaining stages of this bill, for some very sensible reasons—because we like to take a sensible approach, a pragmatic approach, to anything that comes across our desk, our party, our table, and our select committee team when it comes to education.

We do believe that it’s a good idea to consolidate educational legislation, and that is what this bill is doing. However, we’ve just got some serious concerns around several topics, and, again, Dr Parmar outlined it. Zoning is one of them. I’m going to come back to that particular topic and attempt to address it in a little bit more detail in terms of where we’re coming from on that.

We wish to say that we’ll be looking for sensible changes, and support for those changes, come select committee time. I’m here in the House this afternoon with several of my colleagues on the select committee team from the National Party side, and we’ll look forward to taking this through that process.

This, of course, is coming out of some of those Tomorrow’s Schools reforms. We supported the Government on NCEA reform. What I’m trying to do here is show how we take a pragmatic approach, piece by piece, to education legislation. We’re very pleased that education hubs—the big 125 schools per hub idea—has gone from the Tomorrow’s Schools reforms. So kudos to the Government and others for seeing the sense in that.

But now we’ve got here a bill that incorporates some of the other changes that Tomorrow’s Schools reforms and others are putting forward. What we oppose in the bill—just some of the headlines—is, of course, and I’ve just referred to it, that school zone issue: developing, consulting, reviewing. Currently, school boards do that, but this particular legislation strips that away. We don’t believe that that’s a good idea—it’ll lead to less school choice, and I’ll come back to it. We don’t think that educational achievement should now just be one of four objectives. It used to be the primary objective, and now, of all things, educational achievement is only one of four. Now, if anyone on the other side of the House might think, “OK, well, the National Party’s overly hanging their hat on principle.” one need only look at local government and the careful consideration from the other side of the House around principles and wellbeings. Well, here we are, wanting to make our say and our stance on these particular principles. Educational achievement should always be the primary—not one of four but the primary; the only primary—objective for our nation’s education system.

Now, there’s a couple of items in the bill that we think—well, we actually know we’d like to see more detail on. So it’s OK to raise the discussion, it’s OK to have them in there, but where is the detail? One is the Minister setting minimum eligibility requirements for principals. So we’ve wanted to see standards lifted in this area, but what does that look like? What is the detail on that? Before we can even remotely start to give support, what will that look like? We’ll see what happens during the select committee process.

Offshore institutions will no longer be able to award NCEA—again, what does that look like? We really value export education, but can we be confident that the case is truly being made adequately for creating this particular cut-off for offshore institutions, Pacific specifically, to stop awarding NCEA?

One more area we would like more detail on is boards following a mandatory national code of conduct set by the Minister. Where’s the detail on that? That could be incredibly wide scoping, and we’ll want to interrogate that during the select committee process.

Now, there are four areas where we think there’s some good merit in the bill. One is enshrining rights for enrolled students to attend the school where they’re enrolled. So making sure that it’s locked in for students, we think that’s a good idea. Where a school board is invalidated, right now the Minister can’t appoint a commissioner to run the school. Previously, he or she had to reinstate the previous board. Now this legislation allows for that. We think that’s a good idea. We also think that it’s a good idea that you are able to—we live in a modern-day era now—advertise for board vacancies online. Previously, you had to go to the old school community newsletter. There are a few bits of legislation in these past couple of years, I must say, where the good old looking online is coming back in vogue; that’s great. And then, finally, another good area is boards consulting with staff and students when making bylaws. That’s obviously a good thing to do—making sure that consultation takes place.

Now, as I said earlier, I wanted to then head over and touch on the zoning issue. I was a school board chair for a number of years. I have—like other of my colleagues who have been involved, either as parents or as board chairs and board members—been through many a zone issue, and they are highly controversial. They are highly contested. There’s a high expression of interest in what takes place. And we’re very clear that that should be local, by local, for local. We are very clear that that should stay as it is, and that is with the school boards doing both the developing and the consulting on the enrolment scheme. That’s what we’ve got right now, and that’s what we want to keep.

So what we’ve got in the impact summary on this bill and specifically this zone issue is basically a retort that an enrolment scheme—developing, consulting, working with it from a school board perspective—is just too much for them. We’d take exception to that. I’ve been through it myself. It’s not too much for school boards to do it. It’s exactly what they want to do and be involved in, because they know the area, they know the impact. We got down to the point in one particular zoning issue where we were down to a single house, a real estate agent had said something different, the school had said something different, and the Ministry of Education had said something different. There were crossed wires, cross-communication. This particular family was incredibly distraught and then wanted to make the issue much wider to the entire community. It was a massive issue.

I very much struggle to see how taking that out to the regional option is going to work. Ministry officials will not know and cannot know the nuances that local communities do. School board trustees get elected for that stuff. They get elected because they want to know that they can back not only their community but back their school and back their families, and this bill takes that away from them. We should be incredibly weary of that.

Then we’ve also got one massive reality check with this zoning issue—massive reality check—and it’s right here in the impact summary statement. There is an admission when you read it that going to this regional option two for school zoning will make the entire process of developing and implementing a zone “longer”. “The consultation”—and I’m reading here from the impacts—“may be broader and more likely to involve multiple schools.” So now you’re making it bigger than Ben-Hur. It’s going to be longer, it’s going to be more complex, it’s not just by parents for parents and working with the school; it’s now bigger than Ben-Hur. So be careful what you wish for. We don’t like this part of the legislation. We will be interrogating it during the select committee process. We reserve our judgment for final support in the end. Thank you.

MARK PATTERSON (NZ First): I’m sure I’m not the only member of the Education and Workforce Committee that was looking forward to reading the odd novel over the Christmas break but didn’t quite envisage it would be this potboiler: the Education and Training Bill, all 578 pages of it. Thank you, Minister Hipkins. He’s got a bit of previous here, I might add too: we’ve got the massive State sector bill that he just put forward the other day, the vocational training reforms, and a number of other reforms that are coming through our select committee. I often think when I’m hearing about the non-delivery from this Government that you couldn’t get a more reforming Minister of the education sector. Of course, we’re looking at overhauling the Education Act 1989—that seminal Act that brought in Tomorrow’s Schools, which really did revolutionise the way that education was governed and delivered.

I would say, just from my cursory reading of the bill and the feedback I’ve had from the task force and the initial report, that the Minister has actually listened to a lot of the wider concerns there were around maybe some of the more radical parts of the reform and has listened and has pulled back from some of that. So he is to be commended.

Of course, there’s the 1989 Act, and some of that was the 1964 Act, and there are parts of the State Sector Act of 1988 and the vocational training legislation of 1992. So there’s a lot to tidy up in here, and it has been noted. It’s hard to see how it’s simplified when it’s 578 pages, but apparently it’s going to be simpler and more flexible. At least it’ll be in one statute, but it does take—one of the good things it’ll probably do in terms of flexibility—some out of core policy or legislation and into regulations to add some flexibility.

There are a number of issues. There’s new licensing for early childhood education. Jo Luxton, I’m sure, will be able to tell us a bit about that with her background, and there are new measures in respect of the Education Review Office, to oversee home-schooling. Some of the stuff is around the NCEA qualifications and protecting the quality of those qualifications and how they’re administered, so that’ll be worth looking through in the select committee, just to see how that plays out.

It’ll be easier for teachers to re-enter the profession under that, and I think this is an absolutely outstanding initiative, because we have got a teacher shortage, and we will have a number of previous teachers that would possibly like to re-enter the workforce. Of course, they’ve had a significant wage rise after having a decade of stagnation and all of a sudden it’ll be quite an appealing profession again for a number of those, perhaps, former teachers that would like to get back in.

Any way we can remove the barrier to getting more teachers in front of our kids is great, because we know that we had a shortage—I think we had a drop of 40 percent in the number of trainee teachers under the previous Government. So we’ve got a lot of catching up to do there. So this will be good—anything that can improve the pathway there—and, of course, the classrooms will be all sparkly and new, with the new R & M funding that got announced the other day in that $1.2 billion of capital expenditure that Minister Hipkins has recently announced as well. There are new schools and new classrooms going up all around the country, including, actually, at my children’s school, the Lawrence Area School, which is getting quite a major rebuild.

There’s all sorts of other stuff as well around the election process. There’s some stuff there in terms of if there is an invalidated election. It does streamline a process for the Government to appoint a commissioner. There was a bit of a grey area there, apparently, earlier, where the only real method was to put the old board back in. So it makes it a bit easier to put a commissioner in.

Religious studies—opt in. I think it’ll be interesting to see, when we get the submissions come through to the select committee, that religious studies will now be an opt-in proposal as opposed to, as it is now, an opt-out. You know, we have a much more diverse population now. We are not, the statistics would say, as heavily religious as previously, and we’re following different religions as well. So it’ll be interesting to see how that dynamic plays out. I would expect the select committee to get a lot of feedback through that submission process.

Tertiary and vocational—there’s some stuff around the student loans and the interaction with the Ministry of Social Development. Again, the select committee, I guess, will look at the sharing of that information and how that process works and whether that’s an appropriate measure—if there’s anything that can streamline that situation and make it a bit simpler for those students going to university to get their student loans.

Governance—there’s been a bit referenced a little bit around governance. There are some references to the Treaty being more appropriately recognised, a minimum code of conduct for board members, and a disputes resolution process. I actually think that’s a really good one, because they can be very, very difficult. A small school like Lawrence would be a good example. The teachers and the principal all live in a very small community. Everyone’s interacting with each other all the time and it can be quite hard to differentiate the personal and professional life and put another hat on. There are lots of other pressures. So I think a disputes panel of some sort would be quite handy. And, you know, we’ve got some social issues out there. There are students at schools who have got a lot of issues that they bring to school. I think that disputes resolution process and having an independent process is a very good one.

The other thing I noted—and I think it will get some mention—is the discipline and the physical restraint, and where that lies. As I said just previously, not all kids at school are angels; they’re troubled. The teachers often these days, I believe, are under a bit of threat, and they do need to know where that line is, and we do have to show them where that line is and decide where that is appropriate. I would imagine there’ll be a lot of feedback on that through the select committee process.

I go back, actually, to the days before Tomorrow’s Schools—that’s actually making me feel a bit old—when you got corporal punishment, the strap. I don’t think I was a bad kid, but I did get the strap a few times. I did famously get the cane once, and it was actually a travesty of justice. It was a travesty of justice. I was fiddling the screwdriver in an already countersunk hole and my woodwork teacher at the time, who must have been giving us a bit of a final warning—I was marched outside and given the cane at Ellesmere College. That woodwork teacher, rather famously, was one Gerry Brownlee.

Matt King: He reckons that’s not true.

MARK PATTERSON: I bet I remember it better than he does. I do remember it because he may be a halfway decent shadow Leader of the House but he was rat shit with the cane, because the first strike was round the hamstrings, and I think I can still feel it. I was going to reference that in my maiden speech, but I thought I would keep it for another day, and they do say that revenge is best served cold.

So, with that said, this is a substantive piece of legislation. The select committee has got a task at hand, wading through this, and New Zealand First will look forward—and I will look forward to sitting on that select committee—to working through this very important piece of legislation. Thank you, Madam Speaker.

Dr SHANE RETI (National—Whangarei): Thank you, Madam Speaker. It’s a pleasure to speak to this bill. I particularly want to focus on the tertiary interface and the tertiary aspects of this bill, which is quite a small part, but it is certainly mentioned in the general policy statement. There are three particular tertiary parts that I want to address that are mentioned in the general policy statement, but it will be a short call.

The first part is the amalgamation of student loan information with other Ministry of Social Development information. Pragmatically, this actually makes some sense. It certainly serves a useful purpose, although we will wait to hear from the Privacy Commissioner and others around the inter-agency agreements, because, when you have informatics like this where you join different databases, there will always be concerns around the linkages that you form and whether they are appropriate linkages. Now, I believe this Government can technically make those linkages, but I don’t believe they can be safe stewards of the data that they’ve then created. I think our ongoing data breaches give clear concern, and I hope the Privacy Commissioner and others will offer some submissions in the select committee process.

I think the second interface with tertiary is removing some of the items from the Education Act, the primary statute, and putting them into regulations. I’ll be interested in some of the legislative committee advice, for example, around the implications of that. When you take something from statute and pass it into regulation, what happens? Now, for the member who has just sat down, Mark Patterson, who was commenting that there’s something useful about creating disputes resolutions, let’s quite clear: what this bill does doesn’t create it; it takes the existing provisions and simply moves them from primary statute to regulations. The main provisions that are being moved are the code of practice for the pastoral care bill, which has concluded its way through the select committee process and will come back to this House; the export education levy; and the disputes resolution schemes. So they already exist; they’re just being moved. I think, fundamentally, this is probably a good thing, but I’d interested to hear, again, in select committee, the implications of moving from statute.

I think the third part that certainly interests me greatly is the slow dismantling of the Industry Training and Apprenticeship Act 1992, an Act that Lockwood Smith and many others had a hand in. If we look back at that time, the problem they were trying to solve was apprentices who were coming out who had time-based competency but not competency-based competency. That was one of the things they were trying to fix, and they had issues with the training that was through providers such as polytechnics and said, “Look, we believe industry are better trainers.” So that was what the 1992 Act was trying to figure out, and, of course, this slowly dismantles it, puts the umbrella for vocational training back under this one mega polytechnic.

The explanatory note of the bill states that the bill replicates provisions from the Education (Vocational Education and Training Reform) Bill. Certainly, I’ve been corrected for grammar in the House before, but it reads, “The Bill replicates provisions from the introduction version of the Education (Vocational Education and Training Reform) Bill”. From the “introductory” version? Maybe others can offer a comment more than I. It just doesn’t seem to be quite the flow I would have expected. But, of course, we’re going to have that battle on a different field; that’s going to be with the Education (Vocational Education and Training Reform) Bill, which is commented on here in the general description, and that’s really where we’re going to roll up our sleeves and, certainly, not be as condescending—not condescending, as useful as we are with this bill, where we’re saying to select committee, to the first reading, we will support it and then see what comes from that.

We have issues right from the beginning with the bill that’s mentioned here—the removal of up to 18,000 industry learners and certainly the 2,310 apprentices that will go from the Minister’s own programme business case—his own statements. So, again, that’s a battle that I’ll leave for another time and another theatre. But I just comment that the obvious tertiary interface with this bill has some useful parts to it. Certainly, we will be looking for more advice from submitters who are maybe more learned than we are here at the moment, and I’ll look forward to seeing its progress through the select committee. Thank you.

JAN LOGIE (Green): Thank you, Madam Speaker. With pleasure I rise on behalf of the Green Party to offer our support for this piece of legislation, which, I’ve just heard, the Opposition is also supporting at this stage, which was news to me because previous speakers seemed to suggest they were opposing it. So maybe they just need to spend a bit more time talking to each other and reading their notes. Despite the level of detail—picking up “introduction” versus “introductory”; it did seem like there was a level of attention to detail coming from that side—it didn’t seem to flow through into knowing what their vote was, I think.

I think it’s been pointed out that this is a very significant piece of legislation, and rather large—578 pages—and the overview is setting up a learning journey: a piece of legislation that follows the learning journey from early childhood through primary, secondary, tertiary, and vocational training into one piece of legislation. I guess it’s come out of a lot of the Tomorrow’s Schools conversations around the country and there is a huge amount of detail in this with a range of different policy, new policy initiatives, while bringing together pieces of legislation: I understand the 1964 Education Act as well as the Education Act of 1989, as well as the legislation covering some of the tertiary education.

I wanted just to point to some of the particular policy points that drew my interest, possibly the least of which are some of the points around updating the legislation where it is removing the reference to standards and forms. It was way back in my time in the education system where we still had those, and while I still have to have people explain to me what standard or form year 9 refers to, not many people are asking that question anymore. So it’s time that that was updated. It also removes the requirement for teachers to take an oath of allegiance, which does seem kind of a feature of another time. And it removes the ability to exclude students in situations where the principal has reasonable grounds to believe the student is not clean enough to keep attending school—a philosophy or a concept that’s quite hard to get your head around in today’s world, and it certainly seems very timely, and well overdue, to have that kind of concept removed from legislation.

Some more substantive points—and there are many of them in this. This is actually providing a more robust framework around home-based early childhood education (ECE), which is really important. This is an area of early childhood that has developed significantly over the last few years, but we haven’t had good oversight of it, and that means that the quality of care of children can’t be guaranteed in the current context. So what this puts in place is police vetting for all adults in the home, regardless of whether they are likely to be there during the hours of the home-based care, to provide that certainty. And it gives the Education Review Office the power to enter a home where ECE is taking place so that they have that power of audit and check, and I think that is incredibly important.

I think there’s some amazing work happening in some home-based ECE, and in my community where the kindergartens in East Porirua have been supporting community members to get qualifications to be able to provide home-based ECE, that’s also led to them supporting them to get their homes insulated to be quality environments. That’s provided employment as well as improved parenting know-how in the community as well as improved the standard of housing. An amazing initiative—so much kudos for them—but we need to make sure that all of those home-based ECE initiatives around the country have that same degree or a basic standard of care and that we can feel confident in the delivery for our kids.

So also, the legislation allows the Minister of Education to approve or decline applications to open a new early learning service based on specified criteria, and, as part of the application process, to request further information. It is clear that we need more oversight of ECE. It’s incredibly important in terms of our kids’ development to have quality early childhood education and certainly it’s the Green Party’s view that we have not been stepping up to the plate to the degree that we need to in that area. This legislation will make it an offence to operate in an early childhood education centre without a licence.

Some of the other aspects that I think are really important in this are around recognising the teacher shortage that we have, and it will enable the Teaching Council to renew teachers’ practising certificates where the applicant either has recent teaching experience or professional learning and development or has agreed to undertake a refresher course. I will be interested to hear the submissions around that point to make sure that we are addressing that teacher shortage while ensuring the adequate professionalism within the profession which has been well protected up to this point.

The legislation also, I think, clarifies that satisfactory recent teaching experience will include overseas teacher experience, and that just seems eminently sensible and good to have that clarified within legislation for many reasons. As we have a more diverse population, it’s good to have a teaching population that also has connections to other countries where our students may come from or indeed a teaching profession that reflects the diversity of our students. So that seems a quite simple measure that may help with that.

So the legislation also provides a mandatory code of conduct for members of school boards with sanctions for non-compliance and broadens the objectives of the boards from the primary focus being on educational achievement to now include objectives to give effect to Te Tiriti o Waitangi and relevant student rights under the New Zealand Bill of Rights Act and the Human Rights Act. When we see in the recent report around student educational achievement concerns around that and an increase in bullying in our schools and a gap in terms of educational outcomes, and that we know as a country that we have not been able to deliver equitable outcomes for Māori, actually it’s really important that we recognise systemically that we need to change the way we do things to be able to deliver the standard of education that we expect for all of our children and particularly for tamariki Māori.

The legislation also clarifies that the right to education includes the right to hours and puts limits on the variation in how long those hours can be varied for. That’s about ensuring that children of all abilities are not being partially excluded from schools. We know that that has been happening and I do recognise that it’s going to take a significant shift for our schools to be able to deliver that, but our students, our kids, deserve it. The right to education is an absolute right and we have to do more to ensure that right is realised.

NICOLA WILLIS (National): I rise to speak on the Education and Training Bill, a bill that National opposes. As our previous speaker, Dr Shane Reti, said, we do support a number of provisions in the bill and we do think it makes sense to consolidate education legislation, and to do some of the tidying up that this bill achieves. However, there are significant areas where we hold concerns and it is for those concerns that we oppose the bill. As previous speakers have said, we hope to be heard both in this House during this reading and, if it is to progress to select committee, in the select committee process. We don’t rule out supporting the bill if sensible changes are made.

I want to, in this contribution, take you through a few of the areas where we have serious concerns, and, in particular, I want to focus on some provisions in the area of early childhood education that I have particular concern about. But, first of all, let me turn to the changes around zoning, because, in effect, this is the Government’s major response to the Tomorrow’s Schools Review. Now, let’s just remember the context in which these zoning changes have been proposed. Of course, what the Tomorrow’s Schools task force really wanted to do was completely centralise control of our schooling system. What the task force wanted was to get rid of parent-elected boards entirely, and to instead have one grand bureaucracy operating in each part of the country dictating what a school could or couldn’t do. Now, that raised concerns across the entire community, not just in the National Party, but principals, teachers, even teacher unions were highly concerned about what that kind of centralisation would mean for our schooling system. Parents were very concerned as well. So the Government, we are pleased, has backed down on some of that, but we on this side of the House remain sceptical that the stain of that intent remains in this bill—that intent to centralise and take control away from communities and parent-elected board of representatives. The zoning changes—

Hon Andrew Little: You’re disappointed the change was made, just say it.

NICOLA WILLIS: No, we are very concerned, Mr Little, about the changes proposed in this bill in relation to zoning because this is very significant for schools and for communities.

One of the key responsibilities that a board has is the ability to develop, consult, and review its enrolment scheme. Now, we already have a situation where the Ministry of Education gets to say, “Well, we think it’s time you have an enrolment scheme”, and I’m sure I’m not the only member in this House who’s sat down with school principals who say, “We really lament that we’re having to have a enrolment scheme put on us. We know that we’re doing a good job for children who choose our school, for families who choose our school because of the particular kind of provision, and we’ll now have to exclude them because of the ministry’s requirement.” But, of course, schools at the moment do have power in this regard. They can consult with the community. They can talk to groups of interest about where that zone should sit, how it can include families that have historically been connected with the school, communities that have historically been connected. It can offer the opportunity for parents to have their say too, as elected, accountable board members have been put there by those very parents, through a democratic process, to be accountable to them about what their zone looks like and then to be responsible for reviewing it.

Well, what this bill does is it completely removes those fundamental powers. It says, “No, no, actually, we will not trust democratically elected school boards to make those decisions anymore. We’ll take those powers away and we’ll instead place them with the Ministry of Education.” I don’t blame the schools around the country, the boards around the country, the parents around the country, who are a little bit sceptical about how good a job the Ministry of Education will do with that, because, frankly, the Ministry of Education’s connection to, and relationship with, and knowledge of, individual communities is not as good as the elected parents on school boards. So National takes particular issue with the zoning changes in this bill.

There are a number of other areas where we have concerns, but I want to turn now to the changes in early childhood education, because, taken as a whole, the changes that relate particularly to home-based early childhood education will potentially treat families who choose that form of education like criminals. Home-based education is a choice that many families make for a divergent range of reasons. Sometimes it’s because families are shift workers and the normal hours of provision of early childhood education and a centre-based service don’t suit them—if you’re a nurse that’s working the night shift and you’re a single parent, you require education and care to be provided at different times; if you’re a family who are in a rural community and there isn’t actually a nearby kindy; if you’re a family that has difficulties with accessing transport. There are all sorts of reasons why people choose home-based early childhood education, and that’s the reason it has grown significantly—because it’s flexible and it can meet the needs of families.

However, what this bill says is that what should happen now is that in a family who have chosen home-based early childhood education, every single person who lives in that home has to be subject to a police vet. Now, the bill is explicit—it doesn’t matter if that person won’t be there when the child is being educated. That doesn’t matter at all. They will be vetted whether they want to be or not, whether the family thinks it’s necessary or not. The intent is clear: to take away a parent’s discretion about who they trust to be in their home and give it to the State instead. And why does that apply? There are homes all around the country where there are people living with children who don’t face a police vet. But why is it necessary? Because that family made the choice to have home-based education take place. I have some concerns about that, and we’ll explore those at select committee and we’ll see whether there is, in fact, value in that provision.

The second area I have some concerns about are the enormous new powers that are granted to the Education Review Office (ERO) here—that they are allowed the power of entry into a family home at a time of their choosing, whenever they want, without a warrant. And the concern I have here is: why is that necessary? Why can’t the process simply be that a parent says, “Yes, well, I’ll give you permission to come in at this time on that day.”? Why is it necessary for the ERO to have a universal right to enter? The concerns here relate to quite basic rights and freedoms in our community. I want to quote from the Cabinet papers that have been released. They say that this provision of warrantless entry into private homes, “potentially engages the rights and freedoms affirmed in the New Zealand Bill of Rights Act 1990 and the Human Rights Act 1993.”

Erica Stanford: The Greens will be upset.

NICOLA WILLIS: I’m sure the Greens will be interested in this, and I’m sure that those on the other side of the House who have particular concern with New Zealand Bill of Rights Act issues when it suits them will be concerned about this.

I am interested that there is no section 7 report on the table. I understand that advice will have been provided to the Attorney-General on this matter, and I will be very interested to see that advice and to explore these New Zealand Bill of Rights Act implications at select committee, because, at its core, what this provision means is that if you’re a family who choose home-based early childhood education, you will be treated like a criminal when it comes to people’s ability to enter your home without your permission. Warrantless entry into a private dwelling is a significant new power, and I raise my concerns with it.

The second significant change in relation to early childhood education relates to the licensing framework. Now, I, like members around the House, have spoken to teachers and early childhood services who are concerned that many new centres are opening in their community and the pressure that places on them. At the same time, I’ve spoken to parents who are thrilled that, unlike with their first child, with subsequent children they haven’t had to wait on huge waiting lists. They’ve been able to get early childhood education when they need it, they’ve been able to choose from a diverse range of services, and they’ve been able to choose a service that suits their particular needs. So we shouldn’t say that having lots more services is always a bad thing.

What this bill says is that, in future, rather than centres having to apply for a licence subject to particular objective criteria that will be assessed by the Ministry of Education, there will now be a two-step process, and the first step of that process provides considerable discretion to the Minister to decide whether the applicant for a new centre is suitable and whether there’s a need for a new service. Now, I am concerned about the complexity that will create and I am concerned about the potential for that to create ambiguity, when people are deciding whether or not to start a centre, to know whether or not they’re actually going to get that permission at all. It is fundamental when we give discretions like this to a Minister that we’re clear about the way in which they exercise them, and my concern would be a Minister using this power to simply pick on providers they don’t like, to say no where it suits them, and, frankly, to be subject to lobbying by competitors who don’t want a new competitor entering the Wellington market or the Christchurch market—who don’t want a new centre opening up because it won’t suit their bottom line.

So we have concerns. We oppose the bill.

JO LUXTON (Labour): Thank you, Madam Speaker. I am absolutely thrilled to stand here in full support of this bill that the Minister of Education has brought to us, before the House. Before I begin my contribution, there’s just a couple of points I want to raise and discuss. One was brought up by Parmjeet Parmar, who said that people that provide home-based early childhood education (ECE) will now be subject to police vetting, which will mean that police can enter their premises to check on them, whether they’ve been police-vetted or not—false and incorrect.

The next thing I want to bring up is what Nicola Willis, the National Party spokesperson for early childhood education, said, which was that people who choose home-based early childhood education are now going to be treated like criminals. Well, I suggest that member do a little bit more research into home-based early childhood education, because it does not just mean that a home-based educator may come into my home; it also means that my child may go into a home-based educator’s home, and why should children that attend home-based early childhood education not have the same safety requirements as they do in the early childhood centre? Early childhood teachers and staff all have to be vetted before they start work in an early childhood centre, so why should it be any different for children who attend home-based education? That’s the second point I wanted to raise.

The other thing I would like to talk about—there are so many things to talk about, but I actually don’t have a lot, so I will stay in the ECE space, because, prior to coming into Parliament, I was an early childhood teacher for well over 20 years, so I do know just a little bit about that sector. The new licensing criteria that is going to be a two-stage process makes perfect sense, because we have centres opening up next door to each other all over the place in the city. The regions are missing out, and, therefore, parents aren’t able to access, necessarily, or have a good choice of, the early childhood centre that they may like to send their child to. So this will allow for better planning and better network organisation. Therefore, parents will be catered to, communities will be better catered to, and whānau will be better provided for and will be included in all these decisions. These things will be for the benefit of all these people—our children, our communities—and I absolutely commend this bill to the House.

ERICA STANFORD (National—East Coast Bays): Thank you, Madam Speaker. I’m pleased to rise to take a call on the Education and Training Bill in its first reading, which we are opposing, as we have said on a number of occasions. Be we are reserving the right, should this bill be tidied up in select committee, to, in fact, support the bill, because there are a number of things in the bill—I mean, you would expect that with such a brick of a bill there are some things in there that we do support. I mean, in essence, it’s a consolidation of a number of education Acts. It brings together early childhood, primary, and tertiary education into one, single piece of legislation, and there is merit in these ideas and we supports parts of the bill, as you’d expect.

But the bill also aims to implement some of the Government’s response to the final report of the Tomorrow’s Schools review by the independent task force into law. Now, the Tomorrow’s Schools task force had a number of very controversial recommendations. Nikki Kaye travelled the country. She talked to principals, boards of trustees, and chairs, and she spoke to parents, and she heard their feedback. She came to the East Coast Bays, in fact, and sat down with all my principals and chairs of boards of trustees. They gave their feedback loud and clear, and we were able to put the kibosh on some of those very gnarly and backward-looking recommendations and they’re off the table now—like the education hubs. But there were a number of proposed changes to boards of trustees’ powers. Some of them, again, we managed to put the kibosh on, because they were backward-looking, but there are a few of those changes to boards of trustees’ powers that have wound up seeping through and getting buried in this brick of a bill.

I want to focus on zoning—like some of my colleagues have done today—with a particular emphasis on a case in my electorate. As has already been mentioned, at present school boards are responsible for both developing and consulting on each enrolment scheme, and under the Education Act 1989, the Secretary for Education can provide written notice to a school to say “Hey, there is some growth coming up.”, or “You’re overcrowded at the moment and you need to change your enrolment zone.” The board of trustees then have to go out and develop an enrolment scheme and undertake consultation in their area. So they gather evidence, they undertake public meetings, they do surveys, and there’s a formal consultation process.

Now, in the task force’s opinion that we’ve read, the board of trustees—in their opinion—jimmy things around to try and get better areas for their school, they are not focused on the long term, they’re only focused on short-term trends, and basically, in a nutshell, boards of trustees don’t trust parents to know their own area, because that’s what it boils down to. In the local example of my primary school, which is about to hit a thousand—by the by, that’s because the Minister has put on his wish list that there be a new school in Albany, but he hasn’t actually committed any funding or said it’s going to go ahead. So it’s just this sort of Santa list that might happen some day.

So they’re about to hit a thousand students, and it had to change. They’re having to go through a process of changing their enrolment zone—so I’ve been through this recently—and they’ve done a great job. The reason they’ve done such a great job is because that board of trustees, made up of parents—local people—know their area. They know that the bit that the ministry wants to carve off, on paper, looks right. It’s closer to another school which isn’t full, and that would make sense—you would take that bit out and you would put it over there. But there are so many local conditions that the ministry simply doesn’t understand, and in this case, it was a cultural reason, because there is one particular ethnicity that lives in that area that is very, very much connected to the school that they’re about to be kicked out of, potentially.

I do not believe these considerations will be taken into account by the ministry. It is this local knowledge that is so very important. I’ve been through this so many times with the ministry, where they think they know where growth is happening but, in fact, it turns out to be completely wrong. I’ve got schools in my electorate with classrooms that are sitting empty, and other schools that are begging for classrooms and can’t get them, because the ministry isn’t able to account for growth properly. In this case, the board of trustees knew exactly where the growth was. They knew, and the ministry didn’t even know, where the new subdivision was about to go.

The thing that I want to focus on, though, is that the Tomorrow’s Schools report basically says, “Look, there’s always a problem when the ministry and the school eventually come to a compromise over these zones, and that’s not good.” Compromises aren’t good. But remember, “school” in this instance, in this equation, represents the community and their views, so, actually, a compromise is a good thing.

Now, the regulatory impact statement says that they’re trying to avoid this compromise, which basically means—we can decipher this—that it’s going to be the ministry’s way or the highway. That’s what it’s going to be. It’s not going to be about what the community, what the teachers, what the parents, and what the local people want. I can tell you, it’s going to be the ministry’s way. It’s not going to be the highway, because we know very well that this Government doesn’t build roads. We back principals and parents over bureaucrats.

Hon CLARE CURRAN (Labour—Dunedin South): Thank you, Madam Speaker. This is a big reform; it’s a very meaty piece of legislation. It is a big reform. I just want to take us up a little bit to talk about principles, because it’s always important, when you are doing a reform, to start from a position of principle.

What the Minister, Chris Hipkins, is doing with this piece of legislation is a part of a much bigger education framework programme, which is ultimately about high-quality, inclusive education. It’s about adapting to a modern world, and taking all of the existing pieces of legislation that are looking at the reform of Tomorrow’s Schools, and the early learning strategic plan, and creating new reform around that. I want to take us back to the late 1930s, actually, and another great reformer, Peter Fraser, a Labour Prime Minister, and his secretary of education, Clarence Beeby, who said that “The Government’s objective, broadly expressed, is that all persons, whatever their ability, rich or poor, whether they live in town or country, have a right as citizens to a free education of the kind for which they are best fitted and to the fullest extent of their powers. So far is this from being a mere pious platitude that the full acceptance of the principle will involve the reorientation”—

Hon David Bennett: It worked well, didn’t it?

Hon CLARE CURRAN: —“of the education system.”

Hon David Bennett: He ruined so many lives.

Hon CLARE CURRAN: Now, I know that the member David Bennett doesn’t like—

Simeon Brown: Socialism. He doesn’t like socialism.

Hon CLARE CURRAN: —referring to first principles. Oh, and I heard somebody yell out “socialism”. Well, goodness, this is ultimately what underpins this legislation. It’s powerful; it’s important; it’s meaty. I’m glad that we’ve clarified that the Opposition is opposing it, because we were unsure.

Of the 578 pages, 621 clauses, and at least 40 substantive changes that are contained in this legislation, the Opposition have said that they are likely to support four, that they think that they’re a good idea. Hopefully, after we hear a lot of submissions and consideration on this legislation, they’ll come to a different position. I’m looking forward to that. I commend this bill to the House.

SIMEON BROWN (National—Pakuranga): Madam Speaker, thank you for the opportunity to speak on the Education and Training Bill, which I think has been described as a brick. It reminds me of the Yellow Pages—of course, those have now ceased, thank goodness. But it’s a pleasure to take a call on this bill, which the National Party does not support, but there are parts of it that we do.

I’d like to just start by making a few comments about why we’re here and why we’re debating this bill. The Minister Chris Hipkins, in his speech, spent the first seven minutes talking about how this is a rewrite of six pieces of legislation, bringing them all together, and it’s about trying to update them and bring them into plain English, and all of this. But he took till the eighth minute till he actually referred to the Tomorrow’s Schools review. I would have thought that would have been the first thing he spoke about when he came down to the House and said, “Look, we’ve had a Tomorrow’s Schools review. We’ve gone around the country and we’ve spoken to people, we’ve sought their feedback, and this is the response that the Government is making to that to that review.”

But no, it took till his eighth minute of his speech till he actually made any mention of the review of Tomorrow’s Schools, which was undertaken by the Government. Why was that? Well, the reason is because this bill represents a major back-down by the Government, a major back-down by a Government which was intent on centralising our education system and taking power away from parents and from principals and from local communities, and centralising that power into hubs, which would then control what happens in our schools up and down our country.

We don’t see those hubs in here. That is because of the advocacy of schools, parents, and boards of trustees, up and down our country, who campaigned against the Government’s proposals. I just want to put my word on the record to acknowledge the efforts of all those people who worked so tirelessly to ensure that the power would remain in local communities for our education system.

On this side of the House, we actually believe that local communities matter and that local schools, boards of trustees, and parents have an important role in our education system and in educating our children for the future. So this bill represents a major back-down by the Government, and for that, I’m very pleased.

I come to some of the aspects of this bill that we cannot support on this side of the House. The first part that I’d like to touch on is the part which changes the purpose for school boards of trustees—their primary objectives. Now, under the current legislation, school boards of trustees have as their main objective to raise educational achievement in their school. Under these changes, they will now have three additional primary objectives including inclusion, the physical and emotional safety of their students, and Treaty obligations. Now, we don’t say that those objectives are wrong—in fact, they’re a very important part of what it is to have a school and what we expect of schools and the role that they play—but, essentially, what this bill does is put all four of those objectives on exactly the same level. So the objective of educational achievement will go alongside the other objectives of inclusion, the Treaty, and physical and emotional safety.

I think it’s important to note the research which was recently put out by The New Zealand Initiative to highlight the reason why it’s important that we have educational achievement as the primary objective of our education system and for our schools and the schools boards. It’s important because one of the things The New Zealand Initiative did was a survey to try and ascertain some key questions and key answers around what New Zealand’s general knowledge was. One of the questions which they asked was: how long does it take for the Earth to go round the sun? Only 53 percent of New Zealanders could answer that question correctly. Which country was the first to give all women the right to vote? Well, 85 percent of New Zealanders got that answer correct.

Marja Lubeck: Who was it?

SIMEON BROWN: It was New Zealand, Marja Lubeck—New Zealand. But another question was: in what year was the Treaty of Waitangi first signed? Only 32 percent of New Zealanders actually answered that question correctly. The point that this raises is the point that knowledge is important in our education system and our schools exist for the purpose of educational achievement and raising the educational achievement of the young people who are in their care and that they have responsibility for. I think if you talk to parents up and down the country, that is why they send their children to school: for their educational achievement. Those other aspects are important but they should be ranked in order of importance, and that is one of the issues that we will certainly be focusing our attention on during the select committee stage of this bill.

The second area—and it’s been traversed already—is around school boards being responsible for setting the zones. This bill strips away the power from school boards to set enrolment zones for their schools and puts the power to set these enrolment zones in the hands of the ministry. The point that I would make here is that one of the key roles of the board of trustees is to set an enrolment zone, to decide what area that school will serve and then to be able to go through the consultation process, to listen to parents, to listen to the needs of the community, and then to set that zone. Of course, the ministry already has the responsibility of finally signing that zone off, but now the ministry takes the entire process and the power of running that process, as well. I know how controversial this can be. There are currently two schools in my electorate which are going through the process of putting in place enrolment zones; it does cause controversy in the community. But when you have such local decisions, such as setting a school enrolment zone, it should be up to local people to make those decisions, to be able to talk to local parents to be able to understand the local streets and the people who live in those streets, to be able to hold public meetings, and to be able to engage in that process. This bill takes that power, and says, “No, the ministry will do that job better than the boards of trustees.” The ministry will come into the community and will tell the community what is best for them; the school will no longer be able to say what is in the best interests of the school community in consultation with families. I think that is something which is a real shame, and we will oppose that. I look forward to submissions from schools and parents and boards of trustees from around the country, to feed in their views on this particular issue.

A third area that I want to comment on briefly is around the changes to the NCEA requirements, which are trying to, essentially, ensure that offshore providers aren’t able to provide NCEA qualifications. I think this is something on which there are questions which need to be answered, in particular what impact this will have on our export education as a country. That’s a significant part of our economy—around $5 billion of income to New Zealand’s GDP from export education—and I think we’ve got to be very careful about these changes and we’ve got to understand the reasons why and any potential unintended consequences that that might have on the international education that this country does and does very well and which I am very proud in this House to be supporting.

Lastly, I do just want to touch briefly on some of the changes which we do support, and one of those is around refresher courses for teachers who are returning to teaching and to education. I think this is something which, when I’m out and about in Pakuranga, and you’re talking to principals or you’re talking to people in the community, they raise as something which does need to be looked at, because we do need to make it easier for people to be able to return to education, return to teaching. It is such a valued role in our community, and it is something which needs to be made easier so that we can get the teachers in front of our students, in front of our learners, so that they’re able to provide the teaching and the education that they need.

Other changes around renaming the “correspondence school” to the “distance school” I think is a positive change, and also allowing more integration there around the online and distance teaching they do online and, basically, recognising that in this education bill. Also there’s changes there around dispute resolution. Whilst these seem to be positive, hopefully that doesn’t end up being some sort of semi-judicial process.

Overall, yes, there are some changes, but, as I said at the start, this is a major back-down by the Government. They’ve backed down from one of their biggest reforms they hoped to have in the education system. It’s a victory for parents, but there’re issues in here which we need to continue to oppose, and we look forward to the select committee process. Thank you, Madam Speaker.

MARJA LUBECK (Labour): Tēnā koe e Te Māngai o Te Whare. Thank you, Madam Speaker. An absolute privilege to be the last speaker in this first reading debate on the Education and Training Bill. Now, it has been said that bigger is not necessarily better, but I have to say that in this case this is a very significant piece of legislation. I actually take offence to the previous member, who’s just sat down, Simeon Brown, for calling this a back-down. This is a huge amount of work led by the honourable Minister Chris Hipkins and his team to make sure that we are actually addressing a lot of those long-term challenges that the previous Government shied away from. This Government is not scared to pick up those challenges and make sure that we are making the education legislation fit for purpose.

The Minister has already said on a previous occasion that the rewrite of the education legislation is long overdue. Basically, it’s our whole legislative framework that needs a revamp. With this bill, we are creating a new Education and Training Act, once it’s gone through all the stages.

So what the bill does—I’ll just recap what we’ve heard in the House—is that it brings legislation on early learning, schooling, tertiary, and vocational education into a single statute by merging the Education Acts of 1964 and 1989 and updating the language that we find in both those Acts.

Mentioning the 1989 and 1964 Acts, this is legislation that is in some places 55 years old, and it hasn’t been amended or has haphazardly been amended, and it’s well overdue that we’re looking at some of the outdated language that, actually, in some of the provisions, could be referred to as somewhat discriminatory.

Basically, we’re introducing a new structure with this bill that is more easy to follow, and thereby creating a bill that deals with a journey of students that starts at early education, early learning, schooling, and then goes through to tertiary and vocational education.

I was going to mention some of the examples—many examples—that this bill has of updating and bringing into the current times some of these provisions, but also making the whole system more fluid. But they have actually been very well covered by my colleagues on this side of the House, and sometimes also even on the other side—I’ll give them that. I do want to make a specific mention of one particular provision that I’ve found that is mentioned in the Education Act 1989, and that goes to the fact that there is at the moment a provision where a principal can actually stop a student from attending school because the principal has reasonable grounds to believe that a student is not clean enough to continue attending school. That’s the wording at the moment in that Education Act. So, obviously, that is something that we do need to change.

Another really significant piece in this legislation is the fact that school boards’ primary objectives should be a little bit more than focusing just on achievement. So there is a very broad range, and in all of these nearly 600 pages that I was up late with last night, sitting on my desk—it is focusing on not just achievement; it is actually broadening that out to make sure that there is a safe and inclusive environment for our students that’s free from racism, and free from discrimination and bullying. Also, schools are giving effect to Te Tiriti, so the bill is making sure that the schools’ plans, policies, and also the local curriculum actually correctly reflect local tikanga Māori.

Now, the Minister already spoke at length regarding the use of what is now referred to as physical restraint, and we had a marvellous speech from my colleague Mark Patterson earlier on that I’m going to enjoy watching again and again as soon as we finish here in a few minutes’ time. But I just want to finish off by saying that this is a great piece of legislation, and it shows so clearly the contrasts with National, who basically left us an education system with increasing financial and other barriers to access. So this Government has started to tackle that, making sure our children can make the most of the opportunities of the future, building more schools and classrooms, planning for future growth, taking financial pressure off, scrapping NCEA fees, and even providing funding to many of the schools so they don’t have to ask the parents for donations.

This is a positive Government focused on tackling the challenges that are facing New Zealand, and these nine years have taken effect, but we will take our time to fix it, and we’re making good progress in the meantime. So we’re looking forward to this 600-page bill, and I commend it to the House.

A party vote was called for on the question, That the Education and Training Bill be now read a first time.

Ayes 63

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

Noes 56

New Zealand National 54; ACT New Zealand 1; Ross.

Bill read a first time.

Bill referred to the Education and Workforce Committee.

ASSISTANT SPEAKER (Hon Ruth Dyson): And a Minister’s going to move the report-back date.

Hon PHIL TWYFORD (Minister for Economic Development) on behalf of the Minister of Education: I move, That the Education and Training Bill be reported to the House by 4 May 2020.

Motion agreed to.

Bills

Farm Debt Mediation Bill (No 2)

Third Reading

Debate resumed from 3 December.

ASSISTANT SPEAKER (Hon Ruth Dyson): Members, when we were last debating the Farm Debt Mediation Bill (No 2), the Hon David Bennett had the call and has eight minutes, 50 seconds remaining to speak, should he wish to take it.

Hon DAVID BENNETT (National—Hamilton East): Madam Speaker, I won’t take all that time. I just want to say that it’s been canvassed quite a bit during the earlier debates on the bill. It’s not going to really achieve a lot, but it is something that the Government has put forward, and the Primary Production Committee worked together to get the best bill out of it as possible, and we commend it to the House.

ASSISTANT SPEAKER (Hon Ruth Dyson): Thank you for that contribution.

KIRITAPU ALLAN (Labour): It’s a delight to be able to round this fantastic week out with a riveting contribution, in the time that I have, on the Farm Debt Mediation Bill (No 2).

ASSISTANT SPEAKER (Hon Ruth Dyson): I’m sorry to interrupt the member, but the time has come for me to leave the Chair.

Debate interrupted.

The House adjourned at 6 p.m.