Tuesday, 28 July 2020

TUESDAY, 28 JULY 2020

TUESDAY, 28 JULY 2020

The Speaker took the Chair at 2 p.m.

Prayers.

Sittings of the House

Sittings of the House

Hon CHRIS HIPKINS (Leader of the House): I move, That the sitting of the House today be extended into tomorrow morning to continue consideration in committee of the Appropriation (2020/21 Estimates) Bill.

Motion agreed to.

Bills

Appropriation (2020/21 Estimates) Bill

Instruction to Committee

Hon CHRIS HIPKINS (Leader of the House): Following discussions across the House and to facilitate the availability of Ministers to answer questions, I seek leave for the committee’s consideration of the education and workforce sector to consist of two debates, one on the Votes related to education and one on the Votes related to immigration and workplace relations and safety and employment, with all questions on all Votes in the sector being put at the conclusion of the second debate.

SPEAKER: Is there any objection to that course of action being taken? There is none.

Oral Questions

Questions to Ministers

Question No. 1—Finance

1. KIRITAPU ALLAN (Labour) to the Minister of Finance: What recent reports has he seen on the New Zealand economy in the context of the global COVID-19 pandemic?

Hon GRANT ROBERTSON (Minister of Finance): Today, Statistics New Zealand released its latest data on employment indicators for the June 2020 quarter. The data showed that the economy continued to add jobs in June, following a strong rebound in May when most lockdown restrictions had begun to ease. The number of filled jobs rose by 2,053 in June, building on the 14,399 rise in May. Although this only partly reverses the drop seen during the lockdown in April, filled jobs remain above where they were at the same time last year. We all know that the road ahead for many will be tough, but this is an encouraging sign of the economy bouncing back from lockdown, with Kiwi businesses and workers now seeing the benefits of our decision to go hard and early to control COVID-19.

Kiritapu Allan: What reports has he seen on the performance of New Zealand’s exports?

Hon GRANT ROBERTSON: On Friday, Statistics New Zealand released overseas merchandise trade statistics for June 2020. These showed total exports were up from the same time last year. Goods exports in June were worth $5.1 billion—up $107 million from June 2019. The rise was led by dairy, with milk powder, butter, and cheese up $90 million, or 7.9 percent. The value of log exports was also up by 7 percent since June 2019. This strong performance from our exporters contributed to a monthly trade surplus of $426 million in June. The trade deficit for the year ending June was $1.2 billion—the smallest annual trade deficit since December 2014. All of this effort by our exporters demonstrates the continued strength of that part of our economy, despite the difficult prevailing conditions arising from the COVID-19 pandemic.

Kiritapu Allan: What reports has he seen on the place of the housing market in New Zealand’s economic recovery from COVID-19?

Hon GRANT ROBERTSON: I’ve seen Reserve Bank figures released on Friday which show that first-home buyers took a bigger share of new mortgages than property investors in June for the first time since 2013 when this series began. First-home buyers committed to $1.1 billion in home loans last month, taking on 20 percent of all new mortgages, while loans to investors dropped to $1 billion, or 19.4 percent of new mortgages. This Government continues to be focused on ensuring more affordable housing is available. While growth in the housing market cannot be at the centre of any economic plan, after years of struggling to get a look in, it’s good to see first-home buyers finally getting a fair go.

Question No. 2—Prime Minister

2. Hon JUDITH COLLINS (Leader of the Opposition) to the Prime Minister: Does she stand by her statement in the House on 22 July, “On 1 April, we created the Infrastructure Reference Group. On 17 May, we received over 1,900 potential projects; that was then provided to Ministers. We worked through a shortlist of 800. On 29 June, very quickly, they were signed off, and on 1 July they started to be rolled out”; if so, why hasn’t her Government released the full list of projects?

Rt Hon JACINDA ARDERN (Prime Minister): Yes, I note my very next sentence after the quote the member used provides the answer to the second part of her question: “We’ve already had hundreds of millions of dollars’ worth announced. Some we continue with due diligence, but we are moving as swiftly as we can.”

Hon Judith Collins: If these projects have been signed off, why has the construction sector not been informed of the full list of projects?

Rt Hon JACINDA ARDERN: As I have just said, where there are projects that we have not yet announced publicly that is because we are still in some cases undertaking due diligence. In some cases, that will mean that applicants have been advised of the outcome but I’m not willing to compromise the Crown’s negotiating position as we work through some of those projects and, equally, I’m not willing, just to satisfy the member, to pre-emptively announce projects when we owe it to, of course, taxpayers to go through a process properly. I think on this we’ve got the balance right.

Hon Judith Collins: If, as the Prime Minister says, she’s protecting the Crown’s negotiating position and there is still due diligence being made, then why did she announce that they were signed off?

Rt Hon JACINDA ARDERN: Because, of course, we wouldn’t want officials going into a process negotiating a project that we haven’t had Ministers agree to.

Hon Judith Collins: How was the Government able to issue a press release detailing how much funding was allocated for projects by region and an estimate of jobs if the Government had not confirmed the details of these shovel-ready projects?

Rt Hon JACINDA ARDERN: Because in-principle decisions were made and then that gave the mandate to officials to go into the negotiating position or to finalise details of those individual projects. Again, though, despite that, the speed at which we have been moving on this area I think means that we should be congratulating Crown infrastructure partners, the Provincial Development Unit (PDU)—those who have predominantly been involved in moving very, very quickly to strike that balance between investing in infrastructure in our local communities but also doing it in a very managed way. We would not be making this more than $2 billion investment in these projects were it not for COVID-19, but the fact that they have enabled us to respond so quickly and communities have benefited from that I think deserves congratulations to them.

Hon Judith Collins: How is it possible to issue a press release detailing exactly how much funding was allocated for projects by region if, as the Prime Minister has said, those projects and the prices of them still need to be negotiated?

Rt Hon JACINDA ARDERN: For the same reason that of a $3 billion contingency, we put aside $2.6 billion into infrastructure projects but allowed a $400 million contingency. We have been able to create brackets of funding to demonstrate where that likely investment is going to go, but we still have needed to complete due diligence. I remind the member that, actually, last week in the House when she asked me the same question, at that point we had announced funding of roughly $750 million, and at that time I believe it was 50 projects that had been announced. Now we’re over halfway there with announcements and spending of over $1 billion. So if the member wishes to ask me again, I’m sure I’ll have another update for her in the House next week again.

Hon Judith Collins: Why is the Government drip-feeding projects via ministerial visit and press release instead of releasing the full list of projects and delivering certainty for the construction sector as her Deputy Prime Minister has confirmed last week in the Wellington Chamber of Commerce?

Rt Hon JACINDA ARDERN: Obviously, I would not characterise the process and the due diligence we are going through in the cynical way that the member has. I would remind the member we would not making these announcements were it not for COVID19 and that it’s my expectation that the vast majority of projects will likely be announced by the time this House rises or shared directly with applicants by the time this House rises. I would be very surprised if that member’s list of the $80 billion worth of cuts she intends to make will be announced by then.

Hon Judith Collins: Well, then, if the Prime Minister is going to accuse me of being cynical on this, was her Deputy Prime Minister also cynical last week when he said that the list of shovel-ready projects should be released?

Rt Hon JACINDA ARDERN: Again, I have worked through the timing of what we are doing and the process of what we are doing. I remind the member that the point I was making is that these projects exist because of COVID—no other reason.

Rt Hon Winston Peters: So could I ask the Prime Minister: is the process that Ministers look at the projects, the PDU does the serious hard work, they put together the fiscals, and then it goes to tender, and if there’s a successful one we’re off and running—and that’s what the Deputy Prime Minister was saying?

Rt Hon JACINDA ARDERN: Obviously, the Deputy Prime Minister will be well placed to give the context of that statement, but I stand by the process that we as a Government are going through with these projects and the speed at which we are moving, which, given the scale of what we are trying to do but also the impact on communities, I think we are to commend the Public Service for the work that’s been done.

Hon Judith Collins: Were the projects she announced in Taranaki on Thursday signed off by Cabinet on 29 June, and, if so, why did it take a month for them to be announced?

Rt Hon JACINDA ARDERN: As I have mentioned a number of times, once the in-principle decision has been made by Ministers, there is still additional detail to go through. The reception that I received and heard from those on the ground in Taranaki demonstrated to me that they were very pleased with the process that they had gone through, that they felt engaged in the process, and that the community would benefit from the outcome.

Hon Judith Collins: Did that process also include when the Prime Minister would be in Taranaki to make those announcements?

Rt Hon JACINDA ARDERN: Again, I reiterate: these projects only exist because of COVID. Now, the member and her party either supports infrastructure investment or will continue to claim that this is political when it is not.

Question No. 3—Finance

3. Hon PAUL GOLDSMITH (National) to the Minister of Finance: Does he agree with the opinion of Marama Davidson that “tax is love”?

Hon GRANT ROBERTSON (Minister of Finance): That’s not a phrase I am using. For me, tax is what we all pay to ensure a fair society where we look after each other, or, in the words of Gerry Brownlee, “tax is something that people contribute in order to have the sort of society that they live in.”

Hon Paul Goldsmith: So is—

Hon Gerry Brownlee: Always go for the wise words.

SPEAKER: We’ll ignore that and we’ll start again.

Hon Paul Goldsmith: So is tax not love?

Hon GRANT ROBERTSON: As I’ve already said, for me tax is what we all pay to make sure that there is a fair society where we look after each other.

Hon Member: What is love?

Hon Paul Goldsmith: And why does it do it to me? I don’t know. [Interruption] Does he think that Kiwis would feel the love if the Government continues to take more money from their pockets?

Hon GRANT ROBERTSON: I think what New Zealanders feel is that this is a Government that’s looking after them; in fact, to coin a phrase, “Love is all around.”

Hon Paul Goldsmith: Does he anticipate that some New Zealanders will have to pay tax at higher rates or new taxes in the next three years if he remains Minister of Finance?

Hon GRANT ROBERTSON: I am responsible as the Minister of Finance for this Government’s policy, and we’ve been very clear that we aren’t increasing tax rates. In fact, over the last three or four months, we’ve done a number of things that have used the tax system to help put money back into the pockets of New Zealanders.

David Seymour: Does the Minister believe that the next generation of taxpayers will love paying back the $140 billion of borrowing forecast at Budget time?

Hon GRANT ROBERTSON: I think all New Zealanders would recognise that when you’re faced with a one-in-100-year shock to the New Zealand economy, it’s important that the hard work done by a number of Governments to put us in a position to be able to borrow money and to be able to use that to protect the lives and livelihoods of New Zealanders is the best thing to do.

David Seymour: When does he forecast the Government will get back into surplus and start lovingly repaying the debt that he has borrowed?

Hon GRANT ROBERTSON: The Budget that we released in May indicated it would take us around about eight years to do that.

Hon David Bennett: 80 years, you mean.

Hon GRANT ROBERTSON: Treasury will—eight years.

Hon Scott Simpson: 80 years.

Hon GRANT ROBERTSON: Eight years. Treasury will no doubt update their forecasts in the pre-election fiscal update.

Hon Chris Hipkins: Would New Zealanders have to pay significantly higher taxes or experience significant cuts to public services in order to meet alternative debt reduction targets that are being proposed by some?

Hon GRANT ROBERTSON: Well, absolutely. I mean, the bottom line here is whatever we do, whether it is spent money or whether we try to reduce debt, that actually has to be paid for. I’ve seen a proposal to see us try to get back down to 30 percent net debt within a decade. That would require $80 billion worth of cuts. People who propose that need to explain where that’s coming from.

Hon Paul Goldsmith: So is it his view that it’s always a simple choice between public sector cuts and higher taxes?

Hon GRANT ROBERTSON: Absolutely not. And in fact, as this Government has shown, we’ve managed to keep tax rates relatively stable after we got rid of the unfair tax cuts that the National Party had proposed and we’d managed to spend more money on public services. We can walk and chew gum, Mr Goldsmith.

Hon Paul Goldsmith: Will he rule out introducing newer, higher thresholds for income tax in the next three years if he remains Minister of Finance?

Hon GRANT ROBERTSON: I thank the member for his confidence in the re-election of this side of the House into Government. I am responsible for the tax policy of this Government.

Question No. 4—Housing

4. Hon JAMES SHAW (Co-Leader—Green) to the Minister of Housing: What recent announcements has she made about the Government’s Progressive Home Ownership scheme?

Hon Dr MEGAN WOODS (Minister of Housing): On Friday, I announced the first phase of the Government’s $400 million Progressive Home Ownership Fund, which will enable up to 4,000 families who could not otherwise afford home ownership to get into their own homes. This Government inherited a housing crisis, with an increasing number of New Zealanders locked out of homeownership, and we’re committed to turning things around. One provider in Auckland and another in Queenstown are the first two partners selected due to the severe affordability issues in those cities, and more providers will follow. The Progressive Home Ownership Fund is yet another step forward in this Government’s plan to address housing affordability.

Hon James Shaw: How will Māori benefit from this programme?

Hon Dr MEGAN WOODS: The progressive homeownership programme has a dedicated iwi and Māori pathway, with a specific focus on providing more secure, healthy housing for Māori. We know that the gap that’s been created between house prices and what is affordable disproportionately affects Māori. This programme will help these families by sharing the cost of a mortgage and addressing the deposit barrier to getting their own home. The fund will also scale up funding for organisations already providing progressive homeownership schemes, with wraparound support services, such as budgeting advice.

Hon James Shaw: How many families will be supported into homeownership and how quickly?

Hon Dr MEGAN WOODS: The first tranche of funding will support a hundred families into homeownership, and I expect the first of these families to have their own home by November this year. Phase one is providing us with a good opportunity to learn what is required to deliver a fully effective fund so we can streamline the systems and the processes as needed and ensure we target the priority groups the fund intends to assist. Ultimately, this investment will help up to 4,000 New Zealand families buy their own homes.

Hon James Shaw: How does progressive homeownership fit in with the rest of the Government’s housing programme?

Hon Dr MEGAN WOODS: This Government is proud of its investment and commitment to building affordable housing for New Zealanders, and this is yet another milestone in the Government’s broader housing programme. In addition to getting families in homes they may otherwise be unable to afford, this will also provide confidence to the construction sector and create jobs for Kiwis. This is a Government that has ramped up its public house builds to levels not seen in decades. We have also committed to providing warmer, healthier, and high-quality homes for New Zealanders to live in. I stand by our record of getting to work and addressing the crisis we inherited three years ago.

Question No. 5—Housing

5. Hon GERRY BROWNLEE (Deputy Leader—National) to the Minister of Housing: Does she plan to introduce and pass legislation before the House rises on 6 August to allow for people returning from overseas to be charged part of the costs of undertaking managed isolation?

Hon Dr MEGAN WOODS (Minister of Housing): As the member is aware, the Government has been considering this for a number of weeks now, and extensive work has been ongoing. As I have stated publicly, this is a complex area, and we have to carefully and methodically work through all the implications. The work is almost complete, and I’m happy to inform the member that we’ll be making an announcement very, very shortly.

Hon Gerry Brownlee: What is the policy detail that the Prime Minister said yesterday was being finalised ahead of an announcement?

Hon Dr MEGAN WOODS: The member will need to wait and see.

Hon Gerry Brownlee: Well, does she hope to announce the detail of the charging regime ahead of the election?

Hon Dr MEGAN WOODS: As I informed the member in my primary answer, the announcement is very, very soon.

Hon Gerry Brownlee: Does she accept that there is some urgency around implementing a charging regime, given that managed isolation is currently costing taxpayers around $10 million a week?

Hon Dr MEGAN WOODS: This is a Government that is well aware of all the different factors that go into managed isolation, one of those being what an important line of defence the proper operation of our managed isolation and quarantine facilities have been in our fight against COVID. I know that member is a member of a party that is playing fast and loose with the border, but we are a party committed to maintaining a strong line of defence.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. That is a completely unreasonable thing for the Minister to say in an answer—after all, we’re not the Government. We’re not—

SPEAKER: Order! [Interruption] Order! Order! The member can’t get up and say he doesn’t like an answer.

Hon Gerry Brownlee: No, I said it was dishonest.

SPEAKER: The member—if the member said that, which I missed, he will withdraw and apologise.

Hon Gerry Brownlee: I withdraw and apologise. I raise a point of order, Mr Speaker. I said it was unreasonable for a Minister to make an accusation like that in an answer, and I think it is. We don’t control the border; they do.

SPEAKER: Does the member have a further supplementary?

Hon Gerry Brownlee: Yes, I do. Is the real problem of not getting a charging regime in place prior to the election that she’s been unable to convince all partners in the Government coalition to agree to it, and if that is the case, will she reach across the aisle, where there is a clear understanding of what needs to be done?

Hon Dr MEGAN WOODS: In answer to the first part of the question, no, and in answer to the second part of the question, we always welcome the Opposition supporting the wonderful legislation that this Government may put up.

Question No. 6—Energy and Resources

6. Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Energy and Resources: What recent announcements has she made about the Government’s target of 100 percent renewable electricity?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): On Sunday I announced the Government has taken another step forward on our pathway to 100 percent renewable electricity. We’ve set aside $30 million to commence work on what could be the largest single infrastructure project since the 1980s. The initial phase of this project will be a detailed development of a business case focused primarily on pumped hydro storage, a key recommendation of the Interim Climate Change Committee. If the business case stacks up, a pumped hydro scheme could deliver significant benefits for New Zealand, including the widespread electrification of transport and industry, thousands of jobs, and more affordable power for New Zealanders in the long run. If the project proceeds, it will see us become one of the few countries in the world with 100 percent renewable electricity and enable the widespread decarbonisation of our economy.

Dr Duncan Webb: How could this project deliver cheaper power in the long run for New Zealanders?

Hon Dr MEGAN WOODS: What we know is that renewable sources of generation are a lower cost than generation by fossil fuels, but they don’t provide reliable round-the-clock supply, and therefore our system is currently reliant on expensive fossil fuels when the wind isn’t blowing or the hydro lakes are low. A pumped hydro scheme works like a battery, where renewable energy is stored in an upper reservoir and is released back down into a hydro power station to generate electricity when demand is high. It is then pumped back up to the reservoir when demand is low and prices are low. This would drive down prices for consumers by removing the reliance on fossil fuels in the system and support more renewable energy generation.

Dr Duncan Webb: What response has she seen to the Government’s announcement?

SPEAKER: Short—short.

Hon Dr MEGAN WOODS: OK. Well, it’s hard to keep this one short, Mr Speaker, but I’ll try. The response to the announcement has been overwhelmingly positive. Vector chief executive Simon Mackenzie welcomed the announcement, saying pumped hydro would provide a smooth and reliable transition to a 100 percent renewable system as fossil fuel generation plants are retired. Greenpeace chief executive Russel Norman has also welcomed the news, suggesting pumped hydro would have massive climate benefits for New Zealand.

Question No. 7—Health

7. Dr SHANE RETI (National—Whangarei) to the Minister of Health: Which public hospitals have staff that are also employed in isolation facilities, and what is the impact of staff moonlighting?

SPEAKER: Oh, there is another business!

Hon CHRIS HIPKINS (Minister of Health): District health boards that have managed isolation and quarantine (MIQ) facilities in their region include Canterbury, Lakes, Auckland metro—including Waitematā, Counties Manukau, and Auckland—Waikato, and Capital and Coast. They manage medical staff across hospitals and other facilities as is required. These services are currently provided in MIQ facilities by contractors. From Saturday, district health boards will take over the delivery of health services in managed isolation and quarantine facilities. I expect DHBs to employ dedicated workforces for those facilities, even if they rotate in and out for periods of time. At my request, independent experts are currently auditing managed isolation and quarantine facilities’ infection prevention and control against nationally developed standards. After that work has been completed, ongoing monitoring will be undertaken by HealthCERT. I’m advised by the Ministry of Health that they are not aware of any circumstances in which medical procedures have been cancelled or delayed due to hospital staff also working in secondary employment.

Dr Shane Reti: How many staff in DHBs are also currently employed in isolation facilities?

Hon CHRIS HIPKINS: I do not have those numbers. As I’ve been very clear, they are a contracted workforce.

Dr Shane Reti: Has he read the incident review report on COVID-19 staff infections at Waitakere Hospital, and have staff at Waitakere Hospital also been employed in isolation facilities?

Hon CHRIS HIPKINS: In answer to the first part of the question, I haven’t read the report myself, but I have been advised that the findings from that report have been used as the basis for tightening up the infection prevention and control that is done across the board with regard to responding to COVID-19 cases.

Dr Shane Reti: How can he state, as reported, that it is safe for DHB staff to also work in isolation facilities when his office wrote last week that personal protective equipment (PPE) is not a requirement for staff in managed isolation at all times?

Hon CHRIS HIPKINS: I’d have to check the second part of the member’s question. But with regard to the first part of the member’s question, I do trust the staff who are working, in all aspects of the response to COVID-19, to follow the professional standards that they would normally adhere to. So I do have faith that nurses who are trained in both the use of PPE but also in infection prevention and control will be following best practice.

Dr Shane Reti: Has there been any impact on DHB services due to staff also working in isolation facilities?

Hon CHRIS HIPKINS: I’m aware that there has been an impact on Capital and Coast because staff at Capital and Coast spent some time in the last 24 hours investigating whether or not the claim that significant proportions of their theatre workforce had been on sick leave because of their moonlighting was correct, and they found that that claim was not correct. So the biggest impact on their workforce was following up false claims being made by the National Party once again.

Question No. 8—Social Development

8. Hon LOUISE UPSTON (National—Taupō) to the Minister for Social Development: What proportion of the working age population is receiving the COVID19 Wage Subsidy, COVID-19 Income Relief Payment, or Jobseeker Support?

Hon CARMEL SEPULONI (Minister for Social Development): An estimated 6.3 percent of the New Zealand working-age population were receiving jobseeker support, and an estimated 0.3 percent were receiving the COVID-19 income relief payment as at the end of June 2020. Can I just say with regard to the COVID-19 income relief payment, it is not only those who are deemed of working-age population that can access it, like with benefit; it does extend beyond the 18 to 64 category. So it does take a little bit longer to pull together that information, hence why I’ve used the end of June 2020 information. The wage subsidy is paid to the employer, and the Ministry of Social Development reports on the number of jobs associated with the subsidy. I can advise that the wage subsidy has supported 1.7 million jobs. These initiatives are examples of how the Government is responding to the needs of people, families, and communities in supporting the long-term economic recovery for New Zealand.

Hon Louise Upston: What is the total number of people that are currently being supported by the COVID-19 wage subsidy, the COVID-19 income relief payment, or jobseeker support?

Hon CARMEL SEPULONI: So the figures that I used earlier for end of June were because we had to work out the working-age population, and, as I said, with COVID, the COVID job loss cover, they can access that from 16 to over 65, actually, if they’d been working. So the most recent numbers for the COVID job loss cover at the end of last week was about 18,500. Those on a main benefit currently is at about 352,000, and, as I said, the number of jobs that have been supported through the wage subsidy is currently at around 1.7 million.

Hon Louise Upston: Is she confident that the 436,922 Kiwis who are currently receiving the wage subsidy will continue to have a job when the subsidy ends; and, if yes, why?

Hon CARMEL SEPULONI: We put the wage subsidy in place to provide some support for businesses, so that we could provide some certainty for those that do currently have jobs. We’re hoping that as many of those businesses are able to survive this unprecedented event as possible, but we certainly can’t put a number on that. And we do know, and we’ve always said, that, unfortunately, the reality for us as a country and the reality globally is that there will be job losses. We just want to see as few of those as possible, and I think it is heartening that the New Zealand economy is continuing to perform better than expected by most economists.

Hon Louise Upston: Is the current number of people on temporary income support, which is 455,514, showing that Treasury’s forecast of 300,000 people who will be unemployed too high, too low, or about right?

Hon CARMEL SEPULONI: Unemployment is actually, at this point, expected to peak slightly lower than previous forecasts. However, the Pre-election Economic and Fiscal Update will include the next official Government figures. We are in uncertain times, and this Government has put every measure into place that we can to mitigate the risk of job losses, and we continue to invest in not just the creation of jobs but opportunities for upskilling and training to ensure that we are looking after New Zealanders during this really difficult period.

Hon Louise Upston: Is she aware that the number of Kiwis currently receiving the wage subsidy and income relief payment is almost equal to the amount of people living in the Waikato region, and, if so, what is the plan to get Kiwis back to work?

Hon CARMEL SEPULONI: We’re not going to apologise for providing New Zealanders with financial support during this very difficult time. We put the wage subsidy in place for that purpose. We put the job loss cover in place for that purpose. We bolstered the support that we can offer through the Ministry of Social Development, not just with respect to income but also with respect to supporting people to get into work. What is heartening, can I say, is that, actually, in June we had more exits off benefit into work this year than what we did last year. I think it was around 7,500 exits off benefit into work, as opposed to 5,200 the same time last year. So I think this Government has shown itself to be very proactive and focused on what is most important, and that is New Zealanders during this time.

Question No. 9—Education

9. JAN TINETTI (Labour) to the Minister of Education: What response has he seen to the Government’s initiative to encourage vocational training and apprenticeship during New Zealand’s recovery from the impact of COVID-19?

Hon CHRIS HIPKINS (Minister of Education): I’ve seen a report on the Government’s Targeted Training and Apprenticeships Fund, which abolishes fees for those in areas of training that will give them better employment prospects. The report estimates that as a result of the policy, about 5,000 Kiwis are now studying qualifications in more than 130 subjects, providing what the report calls, “A huge boost for the tertiary sector.” This includes just over 2,000 extra enrolments at The Open Polytechnic of New Zealand, 730 at the Wellington Institute of Technology, nearly 500 at the Manukau Institute of Technology, over 300 at the Western Institute of Technology at Taranaki and the Universal College of Learning, and about 100 at the Nelson Marlborough Institute of Technology.

Jan Tinetti: What response to the Targeted Training and Apprenticeships Fund has he seen in relation to Otago Polytechnic?

Hon CHRIS HIPKINS: Vocational enrolments at Otago Polytechnic are reportedly up by more than 400 compared to the same time last year. As the chief executive has said, this equates to them being almost 7 percent above budgeted numbers of domestic equivalent full-time students for 2020, and that is largely as a result of the Targeted Training and Apprenticeships Fund.

Jan Tinetti: What response to the Targeted Training and Apprenticeships Fund has he seen in relationship to Toi Ohomai Institute of Technology?

Hon CHRIS HIPKINS: There’s reportedly been a substantial increase in carpentry and construction courses at Toi Ohomai Institute of Technology, with a spokeswoman commenting, “In the past, we’ve had little interest and some years this course doesn’t run. This year we had 34 applicants for 16 available spaces.” This is good for the trainees, good for the sector, and it’s very good for our country’s economic recovery.

Question No. 10—Transport

10. CHRIS BISHOP (National—Hutt South) to the Associate Minister of Transport: Does she stand by all her statements and policies on road safety?

Hon JULIE ANNE GENTER (Associate Minister of Transport): Yes. In particular, I stand by this Government’s record investment in road safety, which in just the past two years has already seen $470 million invested in targeted safety improvements to over 2,500 kilometres of State highways. This is already twice what the last Government invested over a similar time frame, and I’m happy to report that the New Zealand Transport Agency is on track to have invested close to $1 billion in safety upgrades by the middle of next year.

Chris Bishop: Why, as of 1 June 2020, have only 18 of the promised 198 kilometres of median barriers on State highways been completed?

Hon JULIE ANNE GENTER: I think all of us would like to see many more median barriers rolled out, certainly no one more than I. The New Zealand Transport Agency’s progress on median barriers reflects that this safety programme is a step change compared to what they were doing under the last Government, and that significant community consultation is required before installing median barriers. But I can reassure the members on the other side of the House that to speed up the delivery, the New Zealand Transport Agency has simplified and standardised the planning process for median barriers, which will shave nine to 12 months off their delivery.

Hon Dr Nick Smith: Why has she failed to deliver on her press release last December that—and I quote—“A bill to introduce random roadside drug testing will be introduced early in 2020 and prior to the referendum on recreational cannabis use.”?

Hon JULIE ANNE GENTER: I reject the premise of that question, and I can assure the member that this Government will be making an announcement very soon.

Hon Dr Nick Smith: Does she stand by her press statement dated 18 December—and I quote—“I … [will] introduce a bill to … Parliament early next year to enable oral fluid drug testing to begin in 2021.”?

Hon JULIE ANNE GENTER: I’m not sure if that member noticed, but there was an entire shutdown for several months due to the COVID-19 pandemic, and despite this, the Government will be making an announcement on the introduction of that bill very soon.

Hon Dr Nick Smith: How can she blame COVID for the delays in introducing legislation for random roadside drug testing when officials presented her with detailed proposals in November 2017?

Hon JULIE ANNE GENTER: I understand that it might be hard for the member to understand this, but for several months the entire Government was responding to a COVID-19 pandemic. We had the options, we worked through, and I’m sure he’s going to be very happy to see the bill introduced to the House very soon.

Michael Wood: Does she stand by her road safety policies, which have led to a reduction in the road toll every year during which time she has been Minister, following on from four consecutive years of increases before she was Minister?

Hon JULIE ANNE GENTER: I can confirm that those numbers are correct. The number of deaths and serious injuries increased year on year from 2013 to 2017 under the last Government. They have reduced since then, but I do think that the true benefits of our Road to Zero safety strategy and action plan, which was supported by people right across the sector—local government, police, the Automobile Association, and the Road Transport Association—will lead to a sustained reduction in deaths and serious injuries over the next 10 years. That’s how long it takes to achieve that kind of outcome.

Hon Dr Nick Smith: Does she stand by her statements on Radio New Zealand in February 2018 that random roadside saliva testing is “too intrusive” and “extremely expensive” when she rejected officials’ proposals, and is that the real reason why she has failed to introduce legislation as promised?

Hon JULIE ANNE GENTER: No.

Chris Bishop: Is it still Government policy to make 7,500 kilometres of speed changes by 2021 when the Government has delivered just 56 kilometres, or 0.74 percent, of that target?

Hon JULIE ANNE GENTER: If the member is suddenly expressing his support for huge, sweeping changes to speeds on our network, I would certainly support that. But what this Government has done, and what we always said we would do, is take a targeted approach to speed reductions. We have already consulted on 26 speed reviews, and there will be more coming, and I look forward to the member’s support for that.

Question time interrupted.

Land Transport (Roadside Drug Testing) Amendment Bill

Introduction—Leave Declined

Hon Dr NICK SMITH (National—Nelson): I seek leave of the House for the Land Transport (Roadside Drug Testing) Amendment Bill to be introduced and set down as the first members’ order of the day on the next members’ day of 29 July.

SPEAKER: Is there any objection to that? Yes, there is.

Question time resumed.

Oral Questions

Questions to Ministers

Question No. 11—Corrections

11. SIMEON BROWN (National—Pakuranga) to the Minister of Corrections: Does he stand by his statement regarding community sentences, “we expect offenders to complete their hours”?

Hon KELVIN DAVIS (Minister of Corrections): Yes. Eighty percent of community sentences are completed, so there is still room for improvement. I also expect my officials to balance attendance against individual’s employment and family responsibilities, as well as other potential barriers such as health concerns or, for example, a global pandemic.

Simeon Brown: How many offenders sentenced to community service had hours remitted under COVID-19 alert level 1, and how many hours were remitted?

SPEAKER: Hang on, I’m just going to review that question and contemplate whether, in fact, it flows from the original question. I’ll let the member answer it, but I do want to warn members that there has to be a relationship either between the question and/or the answer and the supplementary, and jumping from a very general statement to a very specific one is not absolutely allowed.

Hon KELVIN DAVIS: Well, we did have a lockdown that kept people safe from COVID, and Corrections did its part. Now, this member has a very unhealthy fixation on a very few number of people who have traffic offences and the non-payment of fines.

SPEAKER: Order! Order! Can I just say to the member, I think suggesting that members have unhealthy fixations in current times is not a good thing to do.

Simeon Brown: Why, when businesses were allowed to open and workers go back to work, was Corrections still remitting hours for offenders sentenced to community service during level 1 according to parliamentary written question No. 14424?

Hon KELVIN DAVIS: Well, again, if the member had listened to the answer to the primary, I also expect my officials to balance attendance against individuals’ employment and family responsibilities—

Hon David Bennett: They broke the law.

Hon KELVIN DAVIS: —as well as other potential barriers such as health concerns or, for example, the pandemic. And I hear someone over there saying, “Oh, they broke the law.” We’re talking about the lowest level of offenders who had traffic offences and the non-payment of fines on the very day that his leader jokes about 29 people escaping from prison under her watch. It goes to show that the National Party has got their priorities wrong, and it’s certainly not the party of Key and English.

Greg O’Connor: What other reports has he received on adherence by offenders to sentences imposed on them?

Hon KELVIN DAVIS: Well, I’ve seen one report that claims that between 2008 and 2011, and in the year 2016, there were no escapes from prison. I understand that the member in question said her eyebrows were raised, indicating she was joking. So let me be clear: my eyebrows are level. This is just not true: 29 people escaped Corrections’ custody under that member’s watch. The new leader and her false claims are just proving again that the team opposite just ain’t what it used to be.

Simeon Brown: How does the Minister stand by his statement “we expect offenders to complete their hours”, when over 138,000 hours have been remitted from the sentences of more than 5,500 offenders, with hours continued to be remitted even under level 1 when New Zealanders were going back to work?

Hon KELVIN DAVIS: Well, again, Corrections deals with 40,000 offenders on any given day; three quarters of them are dealt with by community corrections. So what this member is talking about, over a long period of time, is a very small percentage of offenders—those who have traffic offences and the non-payment of fines, compared to the Leader of the Opposition, who jokes about 29 serious offenders escaping from prison under her watch. She thinks it’s a joke. That is not the party of Key and English any more. They have got their priorities very mixed up.

Simeon Brown: So is the Minister telling the House that people serving community service sentences shouldn’t have to complete their sentences?

Hon KELVIN DAVIS: No.

Question No. 12—Social Development

12. PRIYANCA RADHAKRISHNAN (Labour) to the Minister for Social Development: What recent announcements has she made about supporting New Zealanders towards financial security?

Hon CARMEL SEPULONI (Minister for Social Development): Today, Minister Faafoi and I announced the strengthening of debt solution advice and services across New Zealand to combat debt in the wake of COVID-19. This Government is putting an additional $4.3 million over two years towards two key initiatives. Firstly, we’re investing in existing specialist debt solution services. These have qualified experts that our budgeting services can access free of charge to support their clients with more specialised advice on debt restructuring and repayment agreements between debtors and creditors. Secondly is the expansion of debt consolidation loans for clients who would be able to repay their debts if these were restructured into low-cost or interest-free loans. This Government knows that the COVID response and recovery is about responding to people’s immediate needs while also planning for the future. That’s why we will also be working with stakeholders and communities to develop a comprehensive national debt solution for all New Zealanders.

Priyanca Radhakrishnan: What difference will this make for families in debt?

Hon CARMEL SEPULONI: This funding is about sheltering indebted individuals and whānau from the financial, health, and social impacts of overwhelming debt. For many families, a reason they don’t have enough money is that their income is drained by high interest rates, repayments, and penalty fees. Well-supported low- or no-interest debt consolidation loans are a way to help them out of this trap. We estimate that around 2,000 people will get access to specialist debt support and 1,400 people could get access to, and benefit from, debt consolidation microfinance loans or help with variations to high-cost loans. Through these initiatives, families will not only be able to have support to address their immediate needs but will help develop the skill set to enable them to move forward from situations of problem debt and build more prosperous futures.

Priyanca Radhakrishnan: How does this align with other Government work to address problem debt?

Hon CARMEL SEPULONI: Today’s announcement builds on the $35 million of extra funding for core building financial capability services that I announced recently to address cost pressures for our budgeting services and enable them to increase their capacity as part of the COVID response. In December last year, the Government passed the Credit Contracts Legislation Amendment Bill, which required significant improvements to lending practices. Due to COVID, we brought forward the cap on the total amount of repayments, so, from 1 May this year, anyone who takes out a high-cost loan never has to repay more than twice what they have borrowed. We have also put in place regulations for all mobile traders and truck shops, including ensuring they assess affordability before agreeing to sell goods on credit. This Government is investing in the wellbeing of our people and communities in the wake of COVID-19 and putting in place our plan for a strong and stable future for New Zealand.

Estimates Debate

In Committee

CHAIRPERSON (Hon Anne Tolley): Kia ora tātou, colleagues. Look, bear with me while I go through some rather lengthy explanations of what we are about to embark upon.

The House in committee for consideration of the Appropriation (2020/21 Estimates) Bill. The Standing Orders provide for 11 hours of debate on the Estimates, divided into 10 separate debates covering the sectors set out in the Estimates of Appropriations for 2020-21.

The time for the debate has been allocated to parties on a proportional basis, and may be taken as parties see fit during the 10 sector debates. New Zealand National has four hours and 59 minutes, New Zealand Labour has four hours and 15 minutes, New Zealand First has 50 minutes, the Green Party of Aotearoa New Zealand has 44 minutes, ACT New Zealand has six minutes, and Jami-Lee Ross has six minutes.

Each debate will be led by a call from the chairperson of the select committee nominated by the Government as the major committee reporting on the sector. At the end of each debate, the question will be put that the Votes in each sector stand part of the Schedules.

The time taken on each question is in the hands of members, depending on the parties’ use of their allocation of time. However, this debate expires after 11 hours—and we have a bank of people here who are keeping track of each party’s time taken, and members can check with them at any stage as to how much time is available.

The Estimates debate should be relevant to the Government’s current spending plans as contained in the Estimates of Appropriations. All of the Votes are available for debate. A compendium of the reports of select committees on the Votes is available on the Table.

Education and Workforce Sector (relating to education)

CHAIRPERSON (Hon Anne Tolley): Members, I understand that the Minister of Education is available to speak to the relevant Votes in the education and workforce sector volume (B.5, Volume 2). The question is that Vote Education, Vote Education Review Office, Vote Labour Market, Vote Pike River Re-entry, and Vote Tertiary Education stand part of the Schedules.

TIM VAN DE MOLEN (Third Whip—National): I raise a point of order, Madam Chairperson. Thank you, Madam Chair. Just seeking clarity there: obviously, we’re in a different environment now with the committee stage not being set five-minute calls, and so in terms of the allocation of time, I understand we’ve got some support to measure that, but are the questions and responses from the Minister part of our allocated time? For example, if I made a two-minute contribution and the Minister responded, and then I took another two minutes, is his response to my contributions part of my time allocation?

CHAIRPERSON (Hon Anne Tolley): The question is part of your time as a member of the National Party. The Minister’s answer is also part of his time as a member of the New Zealand Labour Party. So everyone is on a time, and that’s why I say it behoves people to—but the whips can apply for that on a daily basis.

Sorry, I will give the call. I’ve got another one little bit to read: in accordance with the leave of the House, other responsible Ministers will be available to speak to the remaining Votes in this sector later in the debate.

Dr PARMJEET PARMAR (Chairperson of the Education and Workforce Committee): Thank you, Madam Chair. As the chair of the Education and Workforce Committee, it’s a pleasure to take this call and summarise the Estimates hearing—the 2020-21 Estimates for Vote Education, Vote Education Review Office, and Vote Tertiary Education.

As we have just one Minister for the whole education portfolio, the Hon Chris Hipkins, he appeared for all these Votes within Vote Education before the select committee, and we went through several topics. The select committee noted that in Vote Education, the appropriation sought in 2020-21 for Vote Education totalled approximately $13.941 billion. In that, the allocations breakdown is nearly $9.977 billion for educational services from schools; just over $2.617 billion for services from the Ministry of Education; nearly $1.172 billion for capital expenditure by the Ministry of Education, which related mainly to school sector property; nearly $52 million for allowances, scholarships, and awards for students, teachers, and trainees; just over $89 million for other educational services; nearly $55 million for capital expenditure for Crown entities and schools; and there was a capital injection to the Ministry of Education that was of nearly $593 million.

In the Vote Education Review Office, the appropriation for 2020-21 is $34.7 million; for Vote Tertiary Education, the appropriation totals $3.54 billion, which covers tuition subsidies and reserves for tertiary education organisations, first year fees-free study, Tertiary Education Commission funding and funding for services from Education New Zealand, funding for tertiary scholarships and other awards, services from the Ministry of Education, and establishing a single national vocational institute.

During the select committee process, the select committee focused mainly on primary and secondary schooling and tertiary education, in that there were several topics that were discussed. In primary and secondary schooling, a wide range of topics were discussed and the main focus was on COVID-19—how primary and secondary schools responded to COVID-19, and especially during that time when we went from level 4 to level 3 and the kind of confusion that was caused because of that. So the Minister responded to those questions which were asked by the select committee. We also dealt with the communication with schools from the Ministry of Education during COVID-19, and, according to the Minister, the communication was quite good and it was quite frequent.

The other thing which we really focused on was our preparedness for future events. This was in relation to a college in Auckland where a cluster was identified. The committee wanted to understand how the Minister saw that the ministry would be prepared for such incidents happening in the future. There was a focus on personal protective equipment (PPE) as well, because PPE is something that is talked about a lot. So it was noted during the select committee process that if there was any decision made around use of PPE in schools, that will be based on apolitical or psychosocial kind of decisions, not actually a public health response—that was the response given by the Minister.

Then, digital delivery during COVID-19 was a very important topic that was discussed during the select committee process in the Estimates hearing. This was in regard to the survey that was done in 2018 which identified that 52 percent of schools had 25 percent or more of their students without home internet access. So we discussed the dispatch of modems and laptops that was done during that lockdown time, and we also discussed missed delivery of these modems. The Minister’s response to that was that it was important that the equipment is available as soon as possible rather than sitting and making sure that the data is accurate. We also asked about how many of those modems had been returned; we were told 404 modems until that point were returned, but the latest data wasn’t available.

And then, in this limited time, if I quickly jump on to tertiary education, one topic that was discussed was Massey University’s science degrees issue, because we also have a petition on this issue before the select committee. The Minister’s response was that it doesn’t reach the Minister’s threshold to intervene. Wide-ranging topics were discussed in tertiary education, as well. Fees-free was another focus, and student hardship and international students were also discussed during the Estimates hearing in the Education and Workforce Committee. Thank you, Madam Chair.

NICOLA WILLIS (National): Thank you for the opportunity to ask some questions about these Estimates. An issue that our select committee did examine, but which I would appreciate some more input from the Minister in the chair, the Hon Chris Hipkins, on, was predictions around what early childhood education participation may look like over the next months and, indeed, years. The reason this is important, of course, is that the Estimates estimate how much expenditure the Crown will make on early childhood education (ECE) on a demand-driven basis, i.e., how many hours we expect children of each age to enrol in services by type of service and, therefore, how much Crown expenditure will be incurred. What we have seen during COVID-19 is reductions in participation by children, both in terms of the hours that they’re attending and the number of children who are enrolled in early childhood education.

I think it is of concern to me and to National, and I think to many of us, that in an economic environment where we can expect to see increasing unemployment, where, in some households, parents will no longer have work or will have reduced incomes and therefore will make choices not to enrol their children in early childhood education or may, on the margin, decide to reduce their participation—this may have a significant impact, because it has been agreed by Governments of both stripes in recent times that increasing participation in ECE, particularly for three- and four-year-olds, sets a good foundation for future learning.

So my question to the Minister is around what the latest view is on what we can expect to see in early childhood education enrolment patterns. But, secondly to that, if there is any view that there may be a reduction in that attendance, has there been any thought given to whether any underspend in this area would be reallocated within early childhood education? In previous Budget years, we’ve seen that when there has been an underspend in early childhood education, it hasn’t been reallocated within that sector. I would be interested to see what the Minister’s view is there, and whether he has engaged at all with the Minister for Social Development, who, in a separate Vote, has funds that are associated with subsidising early childhood education for lower-income families in particular. And in relation to both of these questions, I’m interested in what steps have been considered to monitor, respond to, and evaluate any changes in early childhood participation across the country, and particularly across at-risk demographic groups. So I’d invite some commentary on that.

Hon CHRIS HIPKINS (Minister of Education): I think the questions the member asks are incredibly reasonable ones. Early childhood education participation, as she’s noted, has declined both during the COVID-19 lockdown period, as we would have all expected, but also it has yet to rebound to the level that it was pre - COVID-19. At the moment, the data that we have on that is survey data. It is not the most reliable data, as the member will appreciate. Survey data is a rapid response, so it gives us some information to work from, but the most reliable data takes a wee while to come through in the data return exercises that centres go through, and then that will need to be rigorously crunched in order to give us the best picture possible.

I guess what I could give her is a high-level response and say the bit that I would be concerned about is if we were losing children out of the system altogether, because I think a lot of work has gone into getting particularly under-represented groups into early childhood education. If the data shows us that we’re seeing shifting participation patterns, depending on what those patterns are, it may or may not be something that we’d be worried about. So if we were seeing, for example, a reduction for some children from, say, 40 hours a week down to 30 or 20 hours a week based on their parents working less and therefore having them at home more, we might be concerned about the overall employment outcome for the parents. But for the children, that wouldn’t be such an issue, because, you know, 20 hours is still a very credible amount of early childhood education participation. So we don’t yet have that data to be able to do that detailed number crunching around that, but, of course, I want to see that data as soon as I can, the same as everybody else in the House does.

In terms of the childcare subsidy that the member mentioned, we did have an issue with the childcare subsidy during the lockdown. We provided the subsidies for early childhood education participation during the lockdown as if a lockdown hadn’t happened. So it was if the participation was at the pre-COVID levels, because during level 4 there was next to no participation, and during level 3 the participation was very, very low, and even at level 2 we still weren’t back to normal levels; level 1, we’re getting closer, but we’re still not there completely. So we have kept the Ministry of Education - provided funding at the level that it would have been.

The childcare subsidy, however—under the rules of the childcare subsidy, centres were not able to access that because it was attached to children attending, and if they weren’t attending, then they couldn’t get the money. So we worked very quickly to put an alternative in place, which is basically a fund that centres could apply to if they’d been financially disadvantaged by not having the childcare subsidy, recognising that, actually, many of those centres that are heavily reliant on the childcare subsidy are also in the lowest socio-economic communities, which is where we can least afford to lose early childhood education provision. So we have taken steps to make sure that we’ve kept those services going.

With regard to underspend, of course, all of those things are subject to further Budget consideration. At this point, we don’t have an accurate estimate of what any underspend might be and what it might look like. But, of course, you know, I’ll go into those Budget negotiations attempting to get as much money for early childhood education as I can.

CHAIRPERSON (Hon Anne Tolley): Just before I take the next speaker, can I just clarify: the chairman’s speech counts in the time—the chairman of the select committee—and that doesn’t stop the chairman from asking questions.

DAN BIDOIS (National—Northcote): It’s a pleasure to rise and take a call in this Estimates debate, and the first time I’ve had this type of format in the Estimates for the committee of the whole House, so, really good, and I want to thank the Minister in the chair, the Hon Chris Hipkins, for appearing before us.

Look, as was noted in the select committee process for this Estimates, the Minister talked about the response from the ministry to the COVID response and how schools coped with that. I’ve gone out there and spoken to a number of schools in my electorate, and what is quite clear from the schools that I’ve spoken to and the principals I’ve spoken to is that the way schools have handled COVID and the ability for them to handle it depends, by and large, around the uptake of technology and the level of maturity that these schools are at with respect to, say, bring your own devices.

So the first question I had for the Minister, and in relation to kind of the Estimates stuff that we talked about in select committee, is what are the ministry’s plans to help reduce the inequalities in some of our schools around the digital divide? Even though I’m on the North Shore, and a proud Northcote electorate MP, there is a lot of inequality in some of our schools, and I want to just get a sense from the Minister around how he’s looking to bridge those digital divides so that if we, touch wood, have to go back into lockdown or anything of such a degree, that these schools can cope more adequately. So that’s the first question I have for the Minister.

The second question I have is around roll growth. I know that the Minister answered a couple of questions that I had around the roll growth, and in response to his response, really, which was around how the ministry calibrates their models in order to make sure that the projected roll growth that the ministry uses is, in fact, accurate. Now, I really appreciate the Minister’s answer in the Education and Workforce Committee; however, I want to just clarify with him how the ministry calibrates those models. So just giving an example: if the ministry produces estimates for roll growth to 2025, they present them to the school, the school flat out rejects them and says, “Hey, we’re already actually at 2025 figures.”, what is the process by which the school directly—dare I say—vetoes those projections? Ultimately, it’s the schools who know their communities. And we’ve talked about this and the role of schools and the authority and autonomy that they should have because they know their communities better than the ministry.

So I want to get a sense of how the ministry calibrates their models and what level of, I guess, would I say, “weight” that the schools and the principals and the boards have in helping the ministry calibrate their models, because the feedback that I’m hearing loud and clear from my community is that the ministry’s protections are not accurate, and I feel like I’m talking to a brick wall because I can’t get the ministry to update their models. So I really would just appreciate some clarification based on the Minister’s discussion in select committee on the digital divide and the roll growth and how that’s calibrated in our schools.

Hon CHRIS HIPKINS (Minister of Education): Thank you, Madam Chair. With regard to the digital divide, we’re still doing work to analyse the success of our initiatives during the lockdown period. So the member will be familiar with the fact that we did send out modems, laptops, and other digital devices to get people connected during that lockdown period. We did not get them to everybody that needed them. What became very clear during that time as well is that while we had good macro-data, our micro-data wasn’t quite so good, if I could put it that way. So we had a rough idea of how many people weren’t connected, but actually pinpointing where they lived proved to be a little bit more challenging then we might have thought. In some cases, we may have missed some young people who needed to be connected; in other cases, we’d identified them as needing to be connected when they didn’t need to be connected. Overall, we still got pretty good numbers: 45,000-odd modems, I think, got sent out. We’re talking now about a couple of thousand of them, potentially, that have either been redistributed or would be in the process of being redistributed. That work will continue, and, of course, the Government has plans to continue to close the digital divide, and that’ll be, no doubt, the subject of future budget debates as well.

With regard to roll growth: nothing new in this particular debate. As long as I’ve been around education, it’s been a case where schools have hotly contested the Ministry of Education’s roll projections for their area. Of course, in some cases where it’s more immediate, their grounds for doing so are very good. It is a bit of crystal-ball gazing the further out that you get though, and the ministry use a variety of different sources to make those projects. They’ll use census data, obviously, and data from Statistics New Zealand, but they also do use data from local government and that around where extra houses are being built in order to try and forecast where the growth is going to take place. Of course, it’s going to be very interesting to see how that shakes down in the next 18 months or so, given that all of those projections will have been affected by COVID-19, because, with the closure of the borders, then obviously our population demographics and the projection around our demographics will have changed as a result of that.

SIMEON BROWN (National—Pakuranga): Thank you, Madam Speaker, for the opportunity to take a call in this debate, and I’d like to focus my remarks at first around tertiary education, in particular around fees free for first-year students. It seems very interesting, this Government came into power and promised fees free and their intention at the time was that the purpose of their fees-free policy was to increase participation amongst—

Hon Member: That’s what they said.

SIMEON BROWN: That’s what they said: increased participation, more students going to university, more students in tertiary education, and that this policy of paying for their first year, or giving them a free first year, was going to do that. Of course, the evidence that we’ve seen has been to the contrary. In fact, there’s been a drop in the number of students participating in tertiary education over its first year. The data for the second year is, I don’t believe, fully complete, but if the Minister of Education, the Hon Chris Hipkins, would like to take a call and enlighten the committee around what the 2019 figures were, that would be greatly appreciated.

But the interesting thing is that this target has then shifted. So it was, firstly, “We’re going to increase participation.” Then came the second line, which was, “Well, increased participation is just one of the goals of this fees-free policy. We’re just wanting to do a few things. Increased participation is great, but, you know, it’s not kind of working. So we also just want to—just really it’s just about paying for the first year, making sure students don’t have to borrow their first year, despite the fact it would have been interest free.” And now, of course, we come to Budget 2020, and we look at the new Budget measure, and the new Budget measure’s got nothing to do with participation. It’s simply: what is the average payment per learner? So we’ve got this policy which the Government has in place, and its measurement is by how much they can pay people. In this Budget, it’s how much they can pay each student an average of $5,787—and that is the new Budget measure.

I just find it absolutely ironic that the Government has gone from a policy position of wanting to increase participation. It’s realised it’s a fail and now it’s simply come down to how much they can pay each—or how much per student they can give in fees free. I’d like to ask the Minister if he could explain that transition in the language and the policy intent and how come the Budget measure simply is now about “How much?” And going forward, is that about, you know, a target? Can we get to $5,787? Is that the aim? Is it that the goal—we want to get it close to $5,787? What if we want to get a bit higher? Is this Budget measure going to be increased in future years? Is it simply going to be around how much money the taxpayers have to fork out for this failed policy, which has not—which has not—achieved its intended aim, the aim that was sold to New Zealanders about increased participation for New Zealanders to get into tertiary education?

A couple of very sad statistics is we’ve actually seen a 2 percent drop in Māori participation and a 0.5 percent drop in Pasifika participation—greater drops than on average. So this policy is particularly not working for those demographics. So I ask the Minister to take a call and explain to the committee: why are we now measuring a policy simply based upon how much money per student is being paid out, and why has he dropped the target, dropped the measure, on actually increased participation? Is it because he’s failed or is it because of something else?

Hon CHRIS HIPKINS (Minister of Education): Of course, if the member goes back and looks at the statements I made when we launched the fees-free policy for the first year free, he will see that—the things the Government was talking about: breaking down barriers to participation to ensure that those who might not otherwise participate in tertiary education were able to do so; making sure that those who complete their tertiary studies have less debt at the end of their tertiary study, something that I know a lot of New Zealanders are anxious about—the level of indebtedness that our young people have when they complete their tertiary studies.

In terms of that second one, the policy’s been very successful. It has, of course, resulted in hundreds of millions of dollars less borrowing by young New Zealanders, which will mean that they’ll have smaller student loans when they finish their study and they’ll be able to pay them back more quickly.

So with regard to participation, of course, there are other factors that come into play around participation, including the fact that up until COVID-19, we had one of the strongest labour markets in the developed world. We had very, very low unemployment and the lure of paid employment for young people was particularly strong. And you can see that in the declining participation, particularly in the polytech system and that participation now—as the labour market loosens up and we see an increase in unemployment—is starting to rise exponentially. And so what we’re doing with the extension of the fees-free approach and moving to targeted areas of vocational education and training is helping to ensure that that additional growth is targeted into areas where we know the employment prospects are best.

SIMEON BROWN (National—Pakuranga): In relation to the statement the Minister of Education made around the extension of the fees-free policy, can the Minister then confirm to the committee that it is his intention to extend fees free to the second year of tertiary education if his Government is, unfortunately, re-elected?

Hon CHRIS HIPKINS (Minister of Education): Of course I have no ministerial responsibility for what a future Government may do.

Dr PARMJEET PARMAR (National): Thank you, Madam Chair. I would like to focus on digital delivery during COVID-19, which was discussed during the Estimates hearing, and I appreciate that 80,000 houses were identified where students didn’t have access to the internet, and then modems, 50,000 modems, and 23 laptops were dispatched. We also heard that 404 were returned because of mis-delivery. At that date, we were told that we didn’t have the total number—the Minister didn’t have the total number—of how many were mis-delivered and how many were returned. So I would like to actually know from the Minister of Education how many have been returned; how many mis-deliveries happened; and once these modems or laptops are collected, what is going to happen to these modems and laptops—where are they going to be utilised; and what has been done? So there are several questions here.

The next question is: originally, 80,000 households were identified where students didn’t had access to the internet, so, obviously, these many modems were mis-delivered, so what is being done to identify it so that we have this data for where houses don’t have the internet for any future requirements? And then we were also told that the Ministry of Education is contacting schools as well to see if there were any surplus units which they had received that they didn’t need. So what’s happening there? It would be good to have an update to see what progress has been made to collect that information or to collect those modems or units back which were dispatched since that time, since the Minister appeared before the Education and Workforce Committee. Thank you, Madam Chair.

Hon CHRIS HIPKINS (Minister of Education): I think, as I indicated in my previous answer, we’re now talking about several thousand; it’s in the low thousands, but there are a number of modems where work is being done to redistribute them. It’s useful, though, to clarify for the member the process here. The Ministry of Education are contracting with ISPs—internet service providers—for successful connections. So only once a household has been connected does the Ministry of Education end up paying for that. So if there are modems floating around out there that need to be redistributed, only when they have been successfully connected would the Ministry of Education then pay for that connection.

ERICA STANFORD (National—East Coast Bays): Thank you, Madam Chair. I wanted to have a chat with the Minister in the Chair, the Hon Chris Hipkins, today about the effect of COVID-19 on the revenue that schools get from international students. It’s of a particular interest to me and my electorate of East Coast Bays, but it will be very relevant to many schools across New Zealand—and certainly in the Auckland region—because of the amount of revenue that they get from those international students. Now, I understand that we didn’t actually get a chance in the Education and Workforce Committee to grill the Minister on this, because there were so many other topics to talk about, but I wanted to bring it to his attention and we ran out of time, so I’ll take that opportunity now.

Just for example, one of the secondary schools in my electorate, a third of their revenue is international students. So you can only imagine their concern at the loss of revenue from this year, but also looking forward to next year, given that there really isn’t any certainty. Not that that’s the Government’s fault, but there is no certainty around when they will be able to get these students back. So there is a great deal of frustration and anxiety, certainly from schools in my electorate—and, I know, across Auckland—who are worried about this.

Now, I know that there was an announcement made yesterday, and I want to talk to the Minister about that particular announcement, because, as far as I understand, from that announcement, there is a $20 million fund that’s been ring-fenced. So I want to—just for the Minister to enlighten us a little bit more on how far he thinks that will go, what percentage of the loss and revenue that he thinks that that will cover, because I’m just looking at my electorate, and I reckon you could almost sink $20 million into—take the North Shore. You could probably sink $20 million into the North Shore, and that would maybe just cover the revenue that we get from international students.

Dan Bidois: Easily.

ERICA STANFORD: Easily, yeah. I mean, I know one of my one of my big schools is $3 million alone. So when we’re looking at $20 million, it doesn’t—from my perspective—seem to be that much, so I’m keen to get an idea from the Minister on what percentage of the total revenue gained from international students that will cover.

Also, if he could just explain to us—because I’m not sure how each school will be worked out on how much income they will get, or revenue they’ll get, from this $20 million—what the calculation will be. Has that already been set? Do the schools already know what amount of money they will get from that $20 million, what sort of certainty they will get, when they will get that information? Because I know that they’re looking ahead to next year and they’re very, very concerned.

I also want to know, what does that cover? What period does that $20 million cover? Is that for this year, or is that to cover next year’s loss of income as well? If the Minister could provide some information around that. I just want to reiterate the anxiety and the concern that schools—certainly in my electorate—have relayed to me about the lack of certainty and lack of revenue streams, certainly for next year around these international students. Thank you.

Hon CHRIS HIPKINS (Minister of Education): If I could just say, to reiterate one of the key messages of this Government, and, actually, of the previous Government, because I had this discussion with the previous Minister when I was sitting about where the member is now, actually. The Government’s position is that we fund our schools sufficiently to deliver the curriculum to New Zealand students. Some schools do raise additional revenue as a form of fund-raising through having international students. It is not the position of the Government that we should have to replace the revenue that they have lost as a result of having fewer international students.

But we do recognise, though, that some schools have got fixed costs around international students. I mean, there’s a transition required there. If you suddenly turn the tap off in terms of international students coming in, schools will still have costs that they need to incur as they manage a transition to having fewer international students. So the $20 million fund that I announced yesterday is a small percentage of the overall revenue that schools would generate from international students. It’s not designed to replace the revenue that’s been lost as a result of COVID-19. It is designed to help the sector adjust to the new reality that they live within. For how long? We don’t know at this point.

In terms of the formula that that funding will be allocated on, it will be allocated based on a formula around the real revenue reduction that schools have experienced as a result of fewer international students being in school, or as a result of international students leaving the country and going back to their home countries as a result of COVID-19. That exact formula is currently being worked through with representatives of schools to make sure that the formula is right. So the exact formula has not been finalised, but the broad approach to it has been finalised, and that’s currently being consulted on with the sector.

NICOLA WILLIS (National): I’ve got a number of more detailed questions for the Minister in the chair, the Hon Chris Hipkins, but before I run through those, I do think it’s important that we take a slight step back. I put to the Minister, when he’s looking at the overall appropriations in this Budget in education, it’s my hope—it’s my expectation—that what he is expecting of his department and of the schools that are operating in New Zealand is that every year they will do a better job than the last in terms of ensuring that New Zealand students are achieving more and are progressing better than they have in the past. So my question that I put to him at the outset is: what is it in this Budget that will actually ensure that more children are achieving at better rates than they have done in previous years? Because surely that is the major measure by which we assess how effective a Budget is. Are children actually going to achieve more in our early learning services and in our schools and our tertiary services in the next year, and what is it about this Budget that means that will be the case?

I want to start with that high-level picture before I then move to some more specific questions, specifically around why there has been a reduction in the “Supporting Parenting” appropriation, down from $26 million in 2019-2020 to $9 million in 2020-2021. Certainly, the parents I speak to tell me that it is their view that the foundation for all future learning is particularly what happens in those first thousand days of life, but is about the strong family settings and the parenting support that is available for young people. That’s also what I get reflected by teachers, which is that, actually, what turns up to the classroom does impact on the achievement they’re then able to progress.

I’m also very interested in the Minister’s predictions about teacher supply in the COVID environment. There are a number of appropriations and initiatives in this Budget which relate to teacher shortages that have been apparent in some geographies—particularly in the early childhood sector. Does the Minister expect these shortages to be better, to be exacerbated, or to be unchanged by the COVID environment, and how might that affect appropriations and the way in which the Government continues its spending?

I’m interested in the area of school infrastructure, because members across this House, like me, will be hearing from schools and communities frequently about the delays they see in new classrooms being built and in new schools being built. We often hear that the Ministry of Education is being slow to move. We do see in this Budget additional appropriation for capital spending on school infrastructure, but it’s one thing to have the appropriation; it’s another thing to have the actual delivery of that building. I want to be very specific with the Minister: does he think that the COVID-related challenges in our construction sector, in which significant proportions of the construction sector are saying that they are expecting to have to cancel projects, to lay people off, will affect the school building programme, and if those effects are predicted in any way, what are they? What can schools expect to see, and are there any initiatives under way to address that?

I’m very interested in the Playcentre and kōhanga reo funding models. These are left very vague in the Estimates. We know on this side of the House that there have been ongoing challenges with the sustainability of the funding models for those two parts of our early childhood sector, and I know from my engagements with Playcentre that they still feel that they haven’t actually progressed a funding model that they can see will work for them for the long term. So I want to know what the Minister’s time line is on landing those funding models and what they might look like.

Then, I’m also interested in the issue of institutes of technology and polytechnic viability, because yesterday when the Minister was asked about the special appropriation for export education, in which additional funds have been appropriated in order to support schools and private training establishments affected by a loss of international students, he was quick to say that universities have good reserves and can take the blow. Well, is it the Minister’s view that institutes of technology and polytechnics also have sufficient reserves to take what may be a significant blow in some regions of our country, where the loss of international students will be affecting bottom lines? Centralisation or no centralisation, we are told that these individual balance sheets still were being maintained. So I’m interested in an answer to that question.

Finally, just to allow the Minister to respond to this quick list of questions, I do have some questions relating to early childhood education, teacher pay, and the way he will be monitoring how that appropriation comes into effect, but I’ll leave him to address those initial questions first.

Hon CHRIS HIPKINS (Minister of Education): There’s certainly a lot in there to address, and I’ll do my best to work my way through that. With regard to student progress, yes, of course we do expect the education system at all levels to be doing a better job and to be striving to do a better job year on year in terms of student progress and student achievement. The single biggest determinant in school of a child’s progress will be the quality of their teacher, and all of the international evidence and all of the evidence here in New Zealand will tell us that, too—doesn’t mean we can ignore the out-of-school factors, but it means in school the biggest impact is the quality of the teacher that they have in front of them.

Of course, the member will be aware that one of the biggest increases in expenditure in this year’s Budget is the increased expenditure to meet the collective agreement negotiations that were finally settled last year. Every Minister of Education will tell you that where there’s a heated negotiation round, it ends up being a very big price tag, because even a modest pay increase for each teacher adds up to a very large amount of money for all teachers. So the increased investment in teachers is one of the things that will have a big impact on student achievement.

With regard to teacher supply, the Government’s been working to increase participation in initial teacher education. Of course, there are long time frames involved here between when someone signs up for an initial teacher education programme to when they actually make it into the classroom. We also know that, again, in an economic downturn when there are fewer employment opportunities, we see participation in those sorts of programmes going up. So I’m feeling optimistic about that. We know that in terms of existing teacher supply, we do have enough teachers in the system now to meet the formulaic entitlement for schools up and down the country. What we don’t have enough teachers necessarily to meet are the additional teachers that schools employ over entitlement, and, of course, the COVID-19 situation does have an impact on that, because in some cases they’ll be paying for those teachers from external revenue sources like international students, and so we may see some reallocation of the existing teaching workforce as a result of those changes. Of course, I do want to acknowledge that for those teachers, there’ll be some bumpy times ahead.

In terms of the education infrastructure, the last Government I think made some good steps in the right direction of providing more capability in the Ministry of Education to help oversee educational infrastructure projects. Up until that time, each school managed their own infrastructure projects, and, if I could say so—and I don’t mean this as a criticism of the individual schools—not very well. You know, that’s because they just don’t have the capability in-house to be able to do that well. Sometimes, they had a great board of trustees by accident who may have managed a good project, but, actually, by and large, the school system is not equipped to manage big infrastructure projects. So having a dedicated team in the ministry is giving us more certainty. We did put more money in during the COVID lockdown to support those businesses who are currently engaged in education infrastructure projects during that lockdown period so that they didn’t go broke while they weren’t able to be on site, so that the works could start again as soon as the lockdown was over—and that has happened—and, of course, we’re continuing to stimulate the economy by bringing forward school infrastructure projects in order to help supply that pipeline of activity for that sector.

Playcentre and kōhanga reo funding—been a vexed issue for a long time. I think we made really good progress on kōhanga reo; I think we’ve got a bit more work to do around playcentres. In terms of polytech viability, polytechs have fewer international students than, say, the universities or private training establishments, other parts of the sector, relative to their overall size, but they won’t be immune from an impact from that. The New Zealand Institute of Skills and Technology (NZIST) is managing the financial situation of each of its subsidiaries very carefully to help them through, and we have put capital injections into the NZIST to help them manage their way through that.

Finally, there, early childhood education teacher pay and how that’s going to be monitored: of course we will be looking to make sure that the pay flows through to increased teacher pay. We can guarantee that in one way, by increasing the minimum attestation rates, which we have done. One of the things that I have asked for further advice on—and more work is happening with the sector on this—is whether it should be just one attestation rate or whether there should be tiers of attestation so that we can monitor and ensure that additional funding for teacher pay goes into paying additional teacher salaries. We haven’t made decisions on that yet, but it is something that we’re exploring with the sector.

CHAIRPERSON (Hon Anne Tolley): So just to advise you, we’ve got about four minutes left, so to get through before we move on to health, keep your questions short.

DAN BIDOIS (National—Northcote): Madam Chair, thank you very much for yielding to me. I wanted to continue to go down the lines of my colleague Erica Stanford to the Minister of Education, the Hon Chris Hipkins, around international students and the role that has, and the significance of this, because, talking to schools, talking to my community, this is a serious issue for many New Zealanders. It’s a $5 billion industry for us and going out there, talking to people in the community, you realise just how significant it is, whether you’re a person that takes homestays, whether you’re a school, whether you’re a food and beverage provider that takes a lot of international students on, it has a significant impact for us as a country.

So the first question I have for the Minister is around the formula that the Minister has outlined that will be used to calculate which schools get what. I understand that, of course, it’s going to be based on the real revenue reduction. The issue that I have with that, Minister, is that there’ll be some schools that have a significant real revenue reduction but have good balance sheets, and yet there’ll be other schools that perhaps have a smaller real revenue reduction, but weaker balance sheet. So I want to know, from the Ministry of Education’s perspective, whether the balance sheet of these schools will be taken into consideration, because, just looking and listening to some of my principals in Northcote, there are some schools where they don’t actually take a lot of international students, but they just don’t have the balance sheet strength to actually absorb some of that downturn, whereas there are other schools that actually have a larger international education impact, but they’ve put a lot away for a rainy day. So I want to get a sense from the Minister on that.

But, I think, just the second part of that is around the clarity for the sector, around what the Government is thinking around when international students will be allowed in to New Zealand. I think that’s the biggest thing that I’m hearing from the sector—the sector needs clarity. I know the Prime Minister may have made some clarifications, “Don’t expect to see something in the next year”, but what I want from the Minister, and what my schools want from the Minister, is to go a step further, to say, under what scenarios will we see international students back in New Zealand, and what will that look like? Will it be international students from particular countries? What are the things that the ministry is considering? So that it gives schools some comfort and some clarity to plan. Whether it’s another year, or another year or two, we want to get a sense from the Minister around that. So there are two areas: the first is the formula and the inequities that may happen because of that; the second is around the sense of clarity that the sector needs and deserves in order to plan for the future.

Hon CHRIS HIPKINS (Minister of Education): Look, very briefly with regard to the first part, I don’t really have a lot to add on the formula yet for how the money will be allocated to schools, other than to say that it is being consulted on with schools at the moment. I do want to just make an observation, though. As Minister of Education, of course, I get a breakdown of schools’ finances each year. Members of Parliament will all get their school’s annual reports. There aren’t many schools in the country that you would describe as having healthy balance sheets. By and large, schools do live a pretty hand-to-mouth existence, year upon year. They don’t have a lot of money sitting in the bank, and so that’s one of the things we’ve been very conscious of.

When will international students be allowed back into the country was the second part of the member’s question. At this point, again, I don’t have a specific time frame for that—for the member, for the schools, or for anybody. I know we’ll get them a specific timetable as soon as we’re able to. There are a variety of scenarios when safe travel zones might emerge between New Zealand and other countries, where it may be that international students can come back from those countries—under those circumstances when we have the capacity in quarantine and managed isolation to be able to support them, when we can expand those arrangements to be able to support them. Of course, we’re actively involved in conversations with the sector about how we might be able to do that. Bearing in mind, though, that the schools sector is a little bit unique, in the sense that other parts of the sector can put people into managed isolation by themselves; the school sector can’t do that, because those young people need to be with a caregiver, if they were to be put into managed isolation. That adds a layer of complexity for the school sector that the rest of the international education sector doesn’t really have.

Health Sector

CHAIRPERSON (Hon Anne Tolley): So we are actually at the end of the time that was agreed for education. The Minister responsible for the next sector, which is health, of course is in the chair. I’m just not sure whether we—we’re going to move on, the whip’s nodding. OK. So we move on to the Vote in the health sector (B.5, Volume 6). The question is that Vote Health stand part of the Schedules.

Louisa Wall (Chairperson of the Health Committee): Tēnā koe, Madam Chair. It is my absolute pleasure, as the chair of the Health Committee, to speak on this Estimates debate for Vote Health. In doing so, can I acknowledge Minister David Clark, who actually presented to us on 24 June, and, obviously, acknowledge that we have a new Minister of Health in the Hon Chris Hipkins.

From that hearing, I do want to highlight some points, but before I do so, I just want to note that my colleague Michael Woodhouse is in the Chamber today, and I know he will be focusing on DHB deficits and also management of DHB assets. My colleague Matt Doocey has got a particular interest in mental health and addiction services, and my colleague Liz Craig will talk about personal protective equipment. Given that I know those other topics will be spoken about, I, really, have three distinct questions for the Minister in the chair, the Hon Chris Hipkins.

They are, really, to outline the overall response to COVID-19. I think there’ve been many initiatives that we, through our Minister of Health and our Ministry of Health, have engaged in to protect New Zealanders as we strive to eliminate COVID-19. So, obviously, the highlighting of those initiatives is incredibly important.

Also, I think it’s pertinent, given there was a disruption to business as usual—and particularly when we went into alert level 4, during the lockdown period—there has been an appropriation of $233 million in investment over three years for planned care to address issues such as waiting lists and waiting times. So the opportunity cost of our response in those initiatives I think it would be incredibly important for the Minister to highlight.

Just finally, from 10 April 2020, we transitioned to managed isolation for 14 days. Before that, those New Zealanders returning home were self-isolating at home. I think it would be good for us to understand that transition period and, in fact, where we are today, and I’d like to know the role of the Director-General of Health. Obviously, Mr Bloomfield’s become somebody that we all have high regard for—so understanding his responsibilities in that process.

It would also be good to understand the importance of our public health services and our public health capacity in the implementation of our elimination strategy.

And then, finally, within our response to COVID-19, it would be really good to know what our contribution to the global effort in the development of a COVID-19 vaccine is. I think we’re all vested in understanding our contribution, because we did go hard and early, but the reality is—

CHAIRPERSON (Hon Anne Tolley): Can I just remind the member that her role as chair of that select committee in the committee of the whole House at this stage is to present a report of the major findings of that committee. The questions are able to be asked, but it’s got to be non-political. When you start to getting into phrases like “we went hard and early”, that are contentious, then the member is, sort of, straying from the role of the chair.

LOUISA WALL: OK. Other than that, everything I’ve highlighted, initially, was in our report. They were the headlines in our report.

CHAIRPERSON (Hon Anne Tolley): You just need to refer to that.

LOUISA WALL: I have. Everything I’ve referred to—other than the “go hard and early”. Obviously, that was my political contribution. But those are my questions to the Minister in the chair, the Hon Chris Hipkins. Thank you.

Dr SHANE RETI (National—Whangarei): Thank you, Madam Chair. It’s a pleasure to speak to this debate and reflect back on the Estimates from 24 June when we had David Clark and the Director-General of Health in front of us. We spent a lot of time discussing the pandemic response—I’m looking at the transcript here. We spent a lot of time talking about testing—testing at the border, asymptomatic testing. I have four or five points across that range which I’d like to raise with the Minister and seek his advice on—and my colleague could be in and out, as is the format for this discussion.

What I want to start with, first of all, is data collection for Māori health under the coronavirus. We talked about data in the Estimates, how dependent we were to know that we were making progress. When we look back at around the time of the Epidemic Response Committee, we had an issue early on with testing for Māori; we couldn’t tell what level of testing was happening out in the regions. It either wasn’t being collected or, more specifically, it was needing to be a tie up between National Health Index (NHI) number and then the actual testing database, and that was complex. I’d like to acknowledge several academics who threw their weight to this discussion and got it moving along. Well and good. So we learnt from that that it is really important that we gather data, particularly around ethnicity, during coronavirus.

The very brief extension that I want to go to, then, is that there was a story that was reported three weeks ago about an overloaded Air New Zealand flight out of Auckland, where 11 people were offloaded, and the comment was made: “My kids pointed this out to me … ‘all of us in here are Māori apart from one lady’ ”. My concerns with that is that maybe Māori were disproportionately offloaded from that flight. Here’s where I come to the ethnicity testing part, because I needed to know if that was correct or not.

So I posed questions to the Minister and asked him how many of the 11 people placed in quarantine—so they got off the flight and got put into quarantine on Saturday, 4 July—were Māori. The reply was that it’s not a requirement that individuals arriving at managed isolation disclose information about their ethnicity. Now, that’s a bit of a challenge. I couldn’t understand that, because I’m pretty sure that everyone going into isolation, as we learnt through the Estimates, has to have an NHI number. If you have an NHI number, you need to report ethnicity. So I thought I’d just double-check that, and, sure enough, on the Ministry of Health site, it says that ethnicity data must be collected during the first interaction with the health agency, must be collected at any time in a certain number of years, and it must be collected if the ethnicity already held is either not stated or not elsewhere classified. So in all those instances, I might have reasonably expected that ethnicity data of these 11 people, as they moved into managed isolation, was recorded.

The first point that we needed to know was did they have NHI numbers, and the Minister kindly replied that, yes, they did. So we know that happened. So my question becomes: why was ethnicity not recorded on these people, and is it routinely recorded for Māori who go into isolation? That then leads to another set of questions, but if the Minister could talk to that or help us with that, that would be useful.

Hon CHRIS HIPKINS (Minister of Health): If I could just run through the variety of issues that have been raised so far, and then I’m sure there’ll be more. In terms of the overall response to COVID-19, it is interesting to reflect on that now. Of course, we learn more as every day goes by around COVID-19, and it’s easy to reflect back to March and assume that we knew everything back in March that we know now. Of course, we have continued to learn more about COVID-19, about the way it is spread, and a whole lot of the things that we didn’t have good information on when we made those early decisions. Of course, we’ve got better information on them now.

In terms of the increased investment in planned care, the Ministry of Health is currently negotiating, with district health boards, plans for that investment to ensure that that money does flow through to increased electives and other planned care to make sure that we’re increasing the overall number but also clearing the backlog that was created by COVID-19.

The couple of questions around the role of the director-general with regard to managed isolation and quarantine facilities: of course, the director-general sets the requirements around who should isolate and for how long. The operational aspects of that now rest under Megan Woods’ delegation as the Minister responsible and Air Commodore Webb, who will answer questions on that.

The role of the public health services, the ongoing role of the public health services in relation to our COVID-19 response: of course, testing and tracing is a vitally important part of our response as a country to keeping COVID-19 out of the country, and the Ministry of Health has oversight of that.

Work on the development of a vaccine: Dr Woods is leading that for the Government as Minister of Research, Science and Innovation. As Minister of Health, I am leading the preparation for when a vaccination is ready. We cannot wait until we actually have a vaccination before figuring out how we would administer the vaccination, because nobody wants to see 5 million vaccinations at the point where we actually get them sitting in a fridge while we figure out how to actually administer them. So that work is already under way now, and I’ve had some early discussions with officials about being ready and making sure that we’re in a position to administer the vaccine when it’s available.

In terms of the data questions that Dr Reti raised, again, I think it would be fair to conclude that things have gotten better as we have gone along, and some of that early data-collection, as I think has been well canvassed, was not as good as it should have been. When I visited the border in Auckland about two weeks ago, I can now tell him that as everyone comes off a plane, before they even leave the airport they go and see someone from Health who finds their NHI, their National Health Index number, so that that’s recorded right from the minute they basically set foot in New Zealand. That will certainly help with the data collection, because that number can then follow them all the way through.

The member raised a concern around the offloading of the Air New Zealand flight. Again, the response to that issue was predominantly managed by Megan Woods and Air Commodore Webb. Of course, it was an operational decision by Air New Zealand. The advice that I’ve had is that Air New Zealand selected which of the passengers were removed from the flight. It wasn’t Health; it was Air New Zealand who selected that, based on the operational requirements of the plane—i.e., making sure the plane was not overloaded. I’m very happy to look into whether we can get an ethnic breakdown of those passengers. Certainly, I now get—and it’s publicly released on the Ministry of Health website—a breakdown of the ethnic testing done every day in New Zealand. And of course, the managed isolation and quarantine facilities are doing testing every day of the people at day three and day 12. So therefore, in order to supply the breakdown, they will have to have an ethnic identifier for those people who are having those tests. So I’m sure that there’ll be data now. That was several weeks ago that that incident happened, but I’m certainly happy to go back and look and see whether we can provide more detailed data for the member.

Dr SHANE RETI (National—Whangarei): Thank you, Madam Chair. Thank you to the Minister for that—that would be very useful. He mentioned that we know more now than we did then around the coronavirus response, meaning several months ago, and that’s probably true, but I would contend that around asymptomatic testing, which came up in Estimates—the Minister said, “Then there’s an element which is asymptomatic testing, which is looking across the whole system,”. And if I look back on 4 March, Minister David Clark stood in the House just over there and said to the House that coronavirus is not transmitted by people who are asymptomatic. How could that be true when expert modelling for the ministry a week earlier had told him that at least 48 percent of positive tests could be asymptomatic?

Then, of course, as the knowledge progressed, in April, we know from written questions that there were then 15 asymptomatic cases and, in my view, played around with the words “pre-symptomatic” and “asymptomatic”. That sort of came to me for a while, which I think just confused everything—that is, “pre-symptomatic” meaning they were on the way to infection; “asymptomatic” meaning never going to get it. Well, that’s playing with words. Then, on 9 June, the ministry took up the programme of testing asymptomatic arrivals completely at the border. So I have some angst that, way back then, way back in March—in fact, two days in a row—the Minister stood in this House and said asymptomatic people cannot catch coronavirus. I just don’t accept that we didn’t know that knowledge there. Does it help us here today? Maybe not, but just to talk to the point where he said we know more now, and so we’re better—we actually knew back then.

I want to talk to one of the points the Minister raised around vaccines. Correctly, in my view, we introduced the flu vaccine earlier this year so that people who developed flu symptoms, one—let me say that again: so that people hopefully didn’t develop the flu that could look like coronavirus, firstly; and secondly, so they didn’t consume hospital resources or primary care resources. That was the correct decision. We deliberately give the flu vaccine at a certain date because the immunity has six months. We brought it forward two weeks. My question to the Minister is—and that was to our vulnerable, high-risk population—is our vulnerable, high-risk population going to run out two weeks early this year while we’re still in flu season? And have we ordered vaccines? Are we planning on doing a second run of flu vaccine to all our high-risk people at the end of this year?

Hon CHRIS HIPKINS (Minister of Health): With regard to the first part of the member’s comments, the advice that I have now, which was similar to the advice that we received at the very early phase of our COVID-19 response, is that, yes, it is possible for asymptomatic people to have COVID-19, but they are much, much less likely to be spreading it to other people. And that remains the advice as of now: the spread is much more likely if someone is showing symptoms than if they are asymptomatic. There are no certainties here, so it is still possible but much, much less likely.

With regard to flu vaccines, one of the challenges that our early vaccination campaign has provided is that we are seeing many, many fewer people presenting with flu-like symptoms at the moment. Of course, that has an impact on our desire to see a good rate of community surveillance testing, because fewer people are presenting with those symptoms in the first place, whereas if we had the typical seasonal rates of infection, there’d be more people being tested for COVID-19. So it creates some interesting challenges. I still think our testing rates are too low, and the member and I have had this conversation before. We’re leaning very heavily on Health to make sure we get those numbers up to a level where we can be confident.

In terms of whether a second vaccination round is planned, no, there is no intention at this point to do a second immunisation round for flu vaccines.

Dr LIZ CRAIG (Labour): Thank you, Madam Chair. One of the things that we discussed in our Estimates hearing was the effectiveness of the response to COVID-19 in our country, and what we talked about was that we are in a fortunate position as a country to be able to pursue the elimination of community transmission. I think a lot of that comes down to the efforts of the team of 5 million but also some really amazing and dedicated health workers—those working on Healthline and in our community-based assessment centres, GP clinics, and hospitals—but also I think it comes down to planning and it comes down to significant investment.

Budget 2020 made some significant investments in our health system, but there’s also been a number of other packages that have been there to assist with the COVID response, and so I’m just thinking about the spending that’s gone into extra personal protective equipment and medical equipment, and, basically, looking at testing and contact tracing and also looking at telemedicine and the way that GPs were able to pivot quite quickly into virtual consultations. I think the other thing is in terms of stepping up some of those community-based assessment centres and also investing in our public health units, which have been under-invested in historically for probably a decade or so, and so being able to put that extra resource in was incredibly important.

But thinking through, again, going through lockdown and what we basically understood, there had been ongoing emergency care provided with our hospitals and also ongoing cancer treatment, but we’ve got a huge backlog now of other elective procedures and surgery, basically, with the DHBs already, coming after a decade of under-investment, and they were then having to step up and deliver a whole backlog of care as well as their routine care. Budget 2020 has put some significant investments into our DHBs, and for us down in Southern DHB, that’s $78 million per year, which is incredibly welcome. But there’s also that extra catch-up funding so that we can catch up on the surgery, on the delayed procedures, etc.

So it would just be good if the Minister could talk a little bit more about how Budget 2020 interfaces with the other investments that have gone into the COVID response and your view of the success of our response to date.

Hon CHRIS HIPKINS (Minister of Health): Of course, I think our response to date has been incredibly successful when you look at the fact that we have no evidence of community transmission in New Zealand as of today. We’re up to about day 80-something of no evidence of community transmission in New Zealand, and I think that’s something that all New Zealanders can be incredibly proud of.

With regard to Dr Craig’s questions around extra investment in things like medicines, equipment, personal protective equipment, contact tracing, and telemedicine, the member may be familiar with the fact that I did make an announcement on additional funding for those things last week. One of the big challenges that Pharmac has faced during this period is that the cost of medicines that it currently funds has increased as a result of the supply chain challenges that are being experienced around the world, and it is a reminder for us in New Zealand that whilst we’re doing all right here, many of the countries that we trade with, including ones we buy medicines from, are still experiencing quite significant restrictions in their ability to undertake commerce, and that’s having an effect on the amount we’re having to pay for those things.

With regard to telemedicine, it’d be fair to say that the response there has been mixed. Yes, we’re putting more money into things like Healthline and other services, and some GP practices have really embraced this. Others seem to think the idea of telemedicine is to ring their patients back, talk to them on the phone, and then tell them they need to come in for an appointment, which kind of defeats the purpose. So there are a variety of different experiences around telemedicine out there, but look, I think our overall response has been a very good one.

Hon MICHAEL WOODHOUSE (National): Thank you, Madam Chair. This would be described, I think, as the “Hotel California” contribution to the health Estimates debate. I’ve checked out, but I never really left!

The reason I am contributing, actually, is that Matt Doocey isn’t able to ask the questions that he has around mental health. So I am going to kick off in that regard. I certainly appreciate the candour with which the Minister has approached his new portfolio and the fresh eyes that he’s brought to it. And it’s in that spirit that I want him to perhaps give a view on how effectively we have spent the mental health funding that was appropriated in Budget 2019, because it started with a big number—$1.9 billion—but that included some pay equity settlements and the normal cost increases. My kindest estimate was around $780 million or $800 million, and then we’ve got a number of $455 million over four years for what was described as front-line mental health services. The problem is that, at the end of April, only $20 million of that had even been committed, much less spent.

Now, admittedly, it was only going to be $48.1 million in the 2019-20 year, but it still suggests to Matt Doocey—and it’s a view that Dr Reti and I share—that this is much slower to get out of the blocks than was anticipated. I would really appreciate almost a commentary rather than a specific answer to that question on whether the Minister, having come in and had a look at that, is satisfied that we’re making sufficient progress to give effect to the recommendations of the Paterson report, which is so fundamental to improving the mental health and wellbeing of New Zealanders.

I’ll just finish on this point: Dr Gluckman made comments at the Epidemic Response Committee, around PTSD in the wake of COVID, that potentially up to 10 percent of people who have suffered job loss or other loss as a consequence of the COVID lockdown could suffer PTSD. So not only were we seeing this bow wave of mental health need; that wave could well get bigger, and obviously we share the Government’s desire to make sure that we can manage the effects of COVID on mental health and mental health more generally. I would like to hear from the Minister on whether or not he feels we’re going far enough fast enough.

Hon CHRIS HIPKINS (Minister of Health): I thank the member, and I will make a reasonably general contribution. It’s an area which I have been looking at. Of course, if the member asks me in any of my portfolios whether we are making fast enough progress, my default answer to that question will always be no, because the machinery of Government never works fast enough for my liking. In every aspect of my ministerial work, I want to see faster progress, and mental health is certainly one of those where there’s a crying need. Can we make faster progress? Yes. Are we making faster progress since the lockdown ended? Yes, we are. Can we move even faster? Yes, I believe we can, and I’ll be leaning very heavily on that.

A couple of issues at play here: the member will be aware that the funding profile of that $400 million - plus that he talks about increases as the years go on, and it was a relatively small investment in the first year. One of the reasons for that is around building capability, particularly building up the workforce capability, and there has been significant progress in committing the funding since the lockdown ended. Things did slow down during the lockdown period, and it did push time frames out by a couple of months, but I am now satisfied that that first-year funding is now, by and large, committed and that actually a significant proportion of the second-year funding has also been committed as we go into the second year of that funding allocation.

I don’t have updated numbers on expenditure against commitments, but I’m certainly happy to get those to the member. But my overall conclusion is: are we moving fast enough? No. Can we do more? Yes.

Hon MICHAEL WOODHOUSE (National): I thank the Minister, the Hon Chris Hipkins. Just by way of follow-up, we were quite exercised in the Estimates discussion around this in the context of the quality of the information that was being provided through, because when Mr Doocey asked the Minister around data around the 40 sites that had been selected for those front-line mental health services as sort of the vanguard for the improvements, members on this side of the House were very disappointed at the lack of detail of the answers—didn’t know where they were, didn’t know how many staff were reemployed, didn’t know how many referrals had been received, and didn’t know when they had started receiving patients.

This goes to a concern that I have about the quality of the information that’s being provided or even collected. So there’s a specific question around mental health but also around health data and health targets more generally. Now, the Government, it would seem to me at least, has been reasonably lukewarm on the previous national health targets that were introduced by the Clark Government in 2007 and committed to their continued collection and then their replacement. Now, that was a commitment made shortly after coming into Government. It hasn’t been achieved, and we haven’t seen any data on any health throughput published on the Ministry of Health website since September 2019—that’s 10 months ago. So that’s the second leg of my question around data.

The third leg is on financial performance. Now, I now see today when I look at the DHB combined financial performance data for the nine months ended March 2020, it’s now on the website—some nearly five months from when that period ended. That’s been the pattern: four to five months it’s taken to get financial performance data online. So I’d like the Minister just to address the question of collection of data on mental health, national health targets and where we’re going with that, and his confidence and comfort level with the degree to which the financial performance data is being recorded and reported in a timely manner.

Hon CHRIS HIPKINS (Minister of Health): Yeah, I think those are all fair questions from the member. With regard to data, it is something that I’ve been looking very closely at. As you can imagine, as a new Minister, one of the first things you want to do with a portfolio is actually get the data so that you can understand what you’re dealing with. So many of those questions that he has just asked are questions that I have asked over the last three weeks as well.

It’s well canvassed, I think, previously that the new Government coming in three years ago didn’t agree with all of the focus on the Better Public Services targets of the previous Government, although they have continued to be reported against in the meantime. So that data is still on the website. My understanding is that the most recent data released for that is imminent. Of the most recent, up-to-date data on that, I know I’ve read something about that in the last couple of weeks. I can’t remember the exact date, but I do understand it’s imminent in terms of the latest release of that data.

I have also recently signed out a report to the Ministry of Health to prepare a report for the Cabinet on what a broader set of measures will look like. I have asked for some more information on some of those, and I will be aiming to progress that as quickly as I can. If I can do that before the election, then I’ll aim to do that. I do think it would be useful to have a broader set of performance measures for the system, not just around financial but actually around what the system is actually delivering in terms of wellbeing and health and wellbeing outcomes. So we’ve done some work—and that work was starting before I became the Minister, and I’m trying to speed it up a bit now—to actually get that better set of outcomes out there, because I think transparency is an important thing.

In terms of DHB performance, I’ve been scrutinising that very closely. I’m sure the member’s going to have lots of questions about DHB financial performance—I can see he’s got a list of dauntingly large highlights on his page there. My overall impression there is there’s been a significant increase in personnel costs across the DHBs, and I’m trying to get underneath that and understand a bit more about what’s driving that. Some DHBs will be faster to return to a break even or even a surplus position than others. I am currently in the process of going through, with the Ministry of Health, a letter to each DHB setting out the Government’s expectations around their pathway back into surplus, because their current financial performance simply isn’t good enough. As I said, some may take a couple of years, and some may be much more quick as a result of the additional investment we’ll be making, but I’m taking some time—I was aiming to sign them out by last week; I have not done that yet. The reason for that is I’m going through each DHB individually to understand a bit more about their individual financial performance, what’s got them to the position that they’re at, and what it’s going to take to get them out of it.

Hon MICHAEL WOODHOUSE (National): Good luck answering that question. It’s one thing I think the Minister and I have in common, which is that degree of interest in the detail. My ministerial staff, when I had that privilege, described me as annoyingly interested—

Hon Shane Jones: Like my good self.

Hon MICHAEL WOODHOUSE: —and I think that was—ha, ha! Hasn’t lost his sense of humour.

I want to just elaborate, firstly, in respect of targets. I don’t actually mind what those targets are or if they are changed. Well, I do mind what they are, but I think if there’s change, that’s fine. The Simpson report, which the Minister will be considering with his Cabinet colleagues at the moment, did talk about population targets. I think that’s an entirely appropriate alternative to the output-based targets that the previous two Governments had. But the important thing is that we have a very clear expectation about what good looks like in the sector, and I don’t believe we have that right now. There’s a sense of drift, and it certainly is manifesting itself in the financial performance, which I want to draw on. The nine-month performance shows a combined deficit of $375 million, which is $61 million more than the previous year—19 percent unfavourable. Now, in that previous year, it was $264 million, and even that was $56 million or 27 percent more than the previous corresponding period.

We have a sector that is now spiralling out of control financially. The previous Minister kept blaming us, the previous Government. That’s fine—it’s not true, but that was his answer to just about everything. I would like to hear from the Minister, now that he has had his feet under the desk for a couple of weeks, what he believes is possible, because the answer he’s just given around the two years back to financial sustainability and break even has been talked about since I started in the health sector in 1995. So I’ve been hearing this for 25 years, and it ain’t happening. In fact, it’s getting worse. That is despite increases in Vote Health that have been above what was previously allocated. Get all political if we like, but the expectation was that deficits would go down, not up, and they’re going dramatically the other way, even when you take out the one-off costs for things like Holidays Act and—what was the IT system?

Dr Shane Reti: National Oracle Solution.

Hon MICHAEL WOODHOUSE: National Oracle Solution. So we have a problem here. My first question is: does the Government actually have a reasonable expectation for DHBs to break even, and, if so, how? Secondly, is it appropriate for those great clinicians and health administrators in the Canterbury DHB to forecast a $180 million deficit this year? Thirdly, will he commit to this information being made available in a more timely manner? Because we’re talking about data that’s now four months old. We’re at the end of the financial year. Can he give the committee a sense of whether or not the projected $643 million, which was the March projection for full-year financials—we won’t be able to go to the exact numbers, but was it achieved? Can we expect bad news? Better news? What’s happening now? Because that’s, essentially, the role of the committee, to assess those financial estimates.

Hon CHRIS HIPKINS (Minister of Health): The member perhaps won’t be surprised but will probably be disappointed to learn that the numbers are worse for the latest quarter than were projected. Of course—

Hon Michael Woodhouse: I’m not surprised, actually.

Hon CHRIS HIPKINS: —they’ll be—yeah, he’s not at all surprised. So not surprised, but hopefully disappointed, like we are. I am, as I said, getting underneath those numbers and trying to understand what’s driving them. Personnel costs have been a big contributor to that. One of the issues that I’m trying to understand a bit more is the safe staffing model implementation, which was going to result in an increase in the number of nurses employed by DHBs. It would appear that it’s resulted in significantly more nurses being employed by DHBs than were first modelled, and so I’m trying to, again, get underneath that and understand that.

In the case of some DHBs—and the member mentioned Canterbury. Depreciation, of course, does play a significant role around Canterbury’s costs, because they have a very, very significant level of capital investment there. Whilst the Government is centrally funding the capital charge, the depreciation component of that still sits with the Canterbury DHB.

There is an intractable dilemma in health. The member mentioned, you know, his challenge back to the 1990s, and that is that the more money we spend on health, the more we need to spend on health. That will be the dilemma for every Government from now into for ever. The more you spend on people, the healthier you keep them, the more they, ultimately, end up costing. So there’s always going to be that challenge in the health system, and any Minister of Health is going to grapple with that. I don’t think our Government’s any different to the previous Government in that regard.

But I do think the final point the member makes around transparency is an important one. As I’ve indicated, I’m going through those numbers at the moment, DHB by DHB. I will be sending a letter to each of those DHBs in the next week or two, setting out my expectations. I have no hesitation in making that information public and being transparent about that. I’d like to get it to them first so that they’ve got a week or two to think about it before I make it public, but then, actually, I do think it is important that it’s made public.

CHAIRPERSON (Hon Ruth Dyson): Before I call the member, could I just ask colleagues in the Chamber to show a little more respect for the members who are seeking the call, because it’s really hard to hear them when other members who have quite loud voices use them.

AGNES LOHENI (National): Thank you, Madam Chair. I’d just like to acknowledge the Minister in the chair, the Hon Chris Hipkins. I’m pleased to be a new member on the Health Committee; I wasn’t a member at the time of these Estimates hearings.

My question, really, to the Minister is—you talked about, I guess, the expectations you’ll have on DHBs. I’ve got a very local issue, of Counties Manukau. Given the significant funding that’s gone into the additional support for DHBs, I’ve been asked to come in and, I guess, provide a pathway in terms of the Nga Hau birthing unit in Māngere, which was opened just over a year ago, to provide a model of care for an area of need. So if you were in Māngere prior to this birthing unit, you would be having your baby either at Middlemore Hospital or at Papakura or Botany Downs, which is still a significant distance for those mothers giving birth there.

So my question, I guess, to the Minister is, in terms of the expectation, in terms of the level of engagement that this birthing is a privately funded birthing unit—and I understand that they have tried to engage with Counties Manukau District Health Board to see a way through into getting some sort of support. At the moment, it doesn’t get a single cent. I would just like to get some clarification from the Minister on, perhaps, whether there is an expectation that there will be a reasonable level of engagement in terms of this model, and could there be a pathway of some sort of part funding or shared funding in this new amount that’s been allocated? Thank you.

Hon CHRIS HIPKINS (Minister of Health): Look, very briefly for the member, I am aware that there are a number of private birthing units popping up around the country. Of course, the Government’s expectation is that district health boards, through their publicly funded facilities, should be supplying the birthing services that is required for local communities. Where they’re not able to do, of course, they can talk to third-party providers, but our first expectation is that DHBs will be providing those services and will have arrangements in place to provide those services.

Dr SHANE RETI (National—Whangarei): Thank you, Madam Chair. I’d like to extend a question that we did raise generally in the Estimates, in the area we were talking about—testing—and it’s an area that I raised last week. It’s around testing at the border, particularly testing in isolation, and the concern that I continue to have that there is some sense of autonomy under duress. I know the Minister’s been concerned about this, because we’ve had some dialogue. I want to approach it from a different angle, because maybe I wasn’t clear from how I did last week, and I’ll talk to some of the notes. It’s like this. We know that the legislation allows four sorts of tests in isolation. It allows you to ask about coronavirus symptoms, listen to the chest, temperature, and to do a swab. OK, we know that that’s what’s allowed.

My question partly, then, is around what is required for informed consent from someone who’s in isolation—more specifically, in writing. It was written to me that informed consent is only required in four situations: the consumer is participating in research; the procedure’s experimental; consumer’s under a general anaesthetic; or the significant risk to adverse effects on the consumer. My question, then, is: which of those criteria does nasal swab testing meet? Because you wrote to me in written questions, saying that that is the only form of written informed consent that occurs with nasal swab testing. So which of those four criteria do nasal swabs meet?

Hon CHRIS HIPKINS (Minister of Health): I’m not entirely sure what the member means. There are a variety of different rules at play here. The rules around nasal swab testing are clearly articulated and are subject to a separate arrangement. In terms of any other tests that might happen in managed isolation or quarantine facilities, of course, they are governed by the same laws and the same professional standards that would apply if someone was being subject to those tests around consent—you know, the same rules around consent—as if someone was being subject to those tests in an outside facility such as going to visit their GP. But, of course, if, as I’ve written to him, the member has any evidence that people are being subjected to tests in a managed isolation or quarantine facility that they have not consented to, then of course I would expect him to, if not supply that to me—he doesn’t have to supply that to me—to supply it to the appropriate people who could investigate it, because that would be a very serious matter.

Dr SHANE RETI (National—Whangarei): Great. So I want an understanding here. I guess my question is: how come there’s written consent for nasal swabs—or for throat swabs, or whatever—but not for blood tests? How do we explain that?

And then, secondly, does he really get the importance here? This is a unique situation. There is a sense of duress, because if you’re not compliant, the duress is that you’ll have another 14 days in isolation. Otherwise, you could say, “Well, how is this different to a prison?” Well, in a prison, you can do a cost-benefit analysis and decide whether to say yes to a test, and there’s really no other consequence. In managed isolation or quarantine, there is a consequence. There’s a punitive sense of duress. Something will happen if you’re not compliant with the behaviour being asked of you. I think that in that environment, great care needs to be taken around consent and that different sense of autonomy. I’m just getting a sense—does the Minister understand it’s a different sense of autonomy in restrictive isolation compared to out in the environment?

Hon CHRIS HIPKINS (Minister of Health): Yes, yes, I absolutely do. One of the differences between blood tests and nasal swabs, of course, is that we expect most people to do nasal swabs, all people to do nasal swabs. They do have the ability, however, to say no to those tests. But, of course, the consequence of that is that we expect everybody to get a clean bill of health before they leave a managed isolation facility. If they are not willing to consent to nasal swabbing, then the period of time that it takes for us to have absolute confidence that they’ve got a clean bill of health will be longer. So that’s ultimately a trade-off that every individual in that circumstance can make for themselves.

Dr SHANE RETI (National—Whangarei): I want to come to extend from what my colleague the Hon Michael Woodhouse was speaking about regarding some of the DHB financials, and talk about Capital and Coast District Health Board, which more recently have announced their financials, which are significantly different to what was announced earlier in the year. We did touch base on Christchurch, specifically, in the Estimates, and a number of the other DHBs. This is one that more recently has shown a significant variance to what was projected. I also note the comment that the DHB must also pay $10 million in payroll breaches made by the Government. Is that holiday pay, or what is being meant there by “payroll breach”? Can the Minister explain that, please?

Hon CHRIS HIPKINS (Minister of Health): Yeah, look, I don’t have the particular piece of paper in front of me that the member has in front of him, but I would say it is highly likely to be payroll breaches. These payroll breaches have accumulated over a period of time. Resolving issues around the Holidays Act is something that we’re grappling with across Government. It’s clear that for a period of time, well before we even became the Government, many public sector agencies—and private sector agencies too, I dare say—have not been paying people in compliance with the Holidays Act. Sizing and scoping that problem and finding a way out of it is a very complex process, and the Government, across the board, is engaged in that process at the moment.

Dr SHANE RETI (National—Whangarei): Thank you. On 9 June, the policy for the border was that people would be coronavirus tested around day three and day 12, and this was discussed in Estimates as well. I want to ask the Minister in the chair, the Hon Chris Hipkins—because I still don’t understand—why day three testing is not compulsory. Particularly if we look at the majority of cases from 9 June that have been positive, they’ve all been day three positive. The majority of positive cases have tested positive at day three. We may have different numbers, but I checked this last week, and that’s how I see it, but I’m prepared to hear a different explanation.

So the day three test would seem to be absolutely critical, and yet the argument that I’m hearing is “Oh, don’t worry; they’re having a day 12 test.” If you have a day three test and you’re positive—like the people in Hamilton not last weekend but the weekend before—what happens is that you escalate, if you’re in managed isolation, to a higher level of security in full quarantine. That’s very clear as to why you’d do that: because if you’re positive, you don’t want to be mixing and mingling with others in the managed isolation facility. If we don’t test by compulsion on day three, how will we know that? Surely we’ve got a huge risk of day three people who aren’t being tested, who may be positive, who are then infecting others in the managed isolation facility. How hard can it be to make day three compulsory just like it is for day 12?

Hon CHRIS HIPKINS (Minister of Health): I think the member, perhaps, based on the previous discussion we had, might be misusing the word “compulsory”. Actually, the vast majority of people do have tests on day three, and there are a significant number of cases—and there have been cases of those ones and twos that we’re getting in recent days—where people have tested negative on day three and positive on day 12, which highlights the importance of the day 12 test, because we are picking up people who—if we just went on a day three test and then said, “You’re still not showing symptoms. You can leave on day 14.”, we wouldn’t be picking up some of those positive cases. In some cases, they’ve been asymptomatic for the entirety of their stay, tested negative on day three and positive on day 12, and if we did not do that testing on day 12, we wouldn’t pick that up. I think that that is very, very important.

Now, of course we want everybody to do both tests. The consequence of not doing tests is that you’ll ultimately end up being in those facilities for longer than you might need to be.

Dr SHANE RETI (National—Whangarei): Thank you. The Minister’s talked about those who were negative at day three and then positive at day 12, maybe the false positives. He wrote to me when I asked that question—what is the rate of false positives—and the reply to me was 30 percent. That’s a big number. It’s not your fault or anyone’s fault, but it’s still a big number—one in three who test and say “I’m negative; I’m fine.” but in fact may be positive. What plans does the Minister have to address that? How do we look at the impact of that? What do we do about that other than sequential testing of some duration?

Hon CHRIS HIPKINS (Minister of Health): Sequential testing is the best answer at the moment. There is no foolproof solution here. Obviously, a lot of work is going on in New Zealand and around the world on testing regimes and on how we can get faster testing results, testing results that don’t require being taken off to a lab—more instant test results. The advice that I’ve received so far is that the rapid tests results are even less reliable than the polymerise chain reaction (PCR) tests. Those tests that we’re getting at the moment are quite reliable. They’re the most reliable that we’ve been able to identify so far. Of course, we’re keeping an eye on what the testing solutions are that might be available here and around the world. Where good solutions emerge, of course, we’ll aim to be fast adopters of them. But at the moment, one of the best things we can do is test more frequently in order to eliminate false positives.

I do just want to highlight this because, actually, it’s come up just in the last 48 hours again with the case that’s in the media today about the person who left New Zealand and arrived in South Korea, where they got a positive result there. That was from a rapid test, and those rapid tests are internationally recognised as being less reliable than the PCR tests. We have been in this boat once before with someone who left New Zealand, arrived in Singapore, and got a false positive off a rapid test when they arrived, and the PCR test highlighted them to be negative, which is one of the reasons why if we see any people leaving New Zealand and getting a positive where they arrive, we ask automatically for a PCR test to be taken, because that means that they’re being tested at an equivalent level to what the test would be if they were in New Zealand, and that gives us better data, thus far. It will be interesting to see what the case in South Korea highlights in the next 48 hours if we can get a PCR test done there. But the only other case that I’m aware of, it highlighted that it had been a false positive that they received in the rapid test.

Dr SHANE RETI (National—Whangarei): Is there any position, then, for exit testing from New Zealand, whether or not this comes up positive from South Korea? Is there any work being done—modelling, any thinking—around exit testing, bearing in mind we do that for Samoa already? You have to have a medical certificate within three days showing you are PCR negative to go to Samoa—so it’s not new, this precedent. But is there any work being done towards that being rolled out more fully as we depart, as an exit test?

Hon CHRIS HIPKINS (Minister of Health): Yeah, one of things that we will be looking at, of course, is we look at the overall border arrangements that we have in place, as we talk about things like safe zones, where we may be opening up the border to isolation-free travel for some areas such as, potentially, some parts of the Pacific, Realm countries, and so on—very active consideration about whether or not testing should be part of that conversation. I think the last thing anybody in New Zealand wants is to see us spreading something into the Pacific. We have a bad history in New Zealand and Australia of doing that in the past, and I don’t think anyone wants to see that repeated. So, of course, we’ll have conversations about testing, and that would include a conversation about exit testing as well. In terms of the conversation about broader exit testing, at this point, no, we don’t have plans in that space for countries where someone is leaving New Zealand with no intention to return. However, I’d never say never.

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

Ayes 63

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

Noes 56

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

Vote Health agreed to.

Economic Development and Infrastructure Sector

CHAIRPERSON (Hon Ruth Dyson): Members, I understand that responsible Ministers are available to speak to the Votes in the economic development and infrastructure sector volume (B.5, Volume 1). The question is that Vote Building and Construction, Vote Business, Science and Innovation, and Vote Transport stand part of the Schedules.

TIM VAN DE MOLEN (Third Whip—National): I raise a point of order, Madam Chairperson. I understood we were going on to the State services, finance, and Government administration sector at this point.

CHAIRPERSON (Hon Ruth Dyson): Well, you have a different understanding to the schedule I have. Let’s get it resolved so that we’re all on the same page.

Tim van de Molen: All right, sure. Madam Chair.

CHAIRPERSON (Hon Ruth Dyson): So, you are speaking to what?

Tim van de Molen: Oh, I’ll have a crack at building and construction.

CHAIRPERSON (Hon Ruth Dyson): Economic development and infrastructure? Normally the chair of the committee is called first and the chair—

Jonathan Young: Madam Chair.

CHAIRPERSON (Hon Ruth Dyson): —now is seeking a call.

JONATHAN YOUNG (Chairperson of the Economic Development, Science and Innovation Committee): Thank you, Madam Chair. Look, can I say thank you to the members of the Economic Development, Science and Innovation Committee, who, I understand from the record of our clerks, undertook an arduous series of hearings with Ministers. In fact, when we look at the number of portfolios that the committee covered, it is commerce and consumer affairs; communications; economic development; energy and resources; infrastructure; regional economic development; research, science, and innovation; and tourism. And, particularly, I think, in the current context of the New Zealand economy and the challenges we face with responding to the pandemic, each one of these portfolio areas is very pertinent to addressing the continual issues that New Zealanders are facing.

So, look, we did have a very significant number of Ministers come our way, and the committee did spend a considerable amount of time being able to question them on the appropriations that they were responsible for. In fact, if you do have our report before you, it’s some 39 pages long. So you can see just how incredibly challenging it was to get through all of this and, of course, to come now to this time where we can address these issues in the committee. Can I say, also, that the officials that supported the select committee also worked very, very hard. Look, we covered lots of very important areas. We looked at the responsible lending legislation; we looked at a KiwiSaver review; we looked at the Commerce Commission—the funding and the merger laws that they are looking at, and particularly the challenges they have as they have done market studies and continue to look at doing that.

We looked at the Financial Markets Authority, and the fact that this entity is very important to the health and robustness of our financial sector. They are under increasing pressure as they take on a wider remit and, of course, the funding of that entity was raised by the committee. We looked at subjects such as Air New Zealand credits, and we know that’s an issue that is of current conversation. Our national airline, of course, is working with customers right throughout the country. We looked at communications, the benefits of 5G, that’s going to come into our country and economy. The reality is that all of us during that particular five weeks where we were in lockdown, and many businesses and people across the country, would not have been able to continue their work without connectivity. So that was something, certainly, that we were very keen to review.

We also covered some of the challenges that particular entities, like New Zealand Post, face and we saw that many of the challenges that they have—you would expect, actually, that people being at home during that period of time would be writing lots of letters, but, in fact, they were sending lots of emails. So New Zealand Post had the challenge of a diminishing revenue flow, and how the Government was going to support that. In fact, the previous Government faced the same challenge as well, and we know that this is an ongoing issue.

We continued to look at COVID-19 border restrictions, the America’s Cup—and those issues that were pertinent at the time—and we trust that we will be able to see a magnificent regatta, hopefully, next year. We looked at energy and resources and the appropriations that are occurring there, and we noted that the decommissioning of the Tui oil field is a responsibility that’s come back on to the Government, regretfully. We talked about, particularly, the opportunity that we hope the Government would offer Taranaki businesses and engineering and service sectors to be able to participate in quite extensive work. And it was good to hear the Minister of Energy and Resources say that that is the intention of the Government, to allow as much work to occur in Taranaki as possible. Thank you, Madam Chair.

TĀMATI COFFEY (Labour—Waiariki): Thank you, Madam Chair. It has been my pleasure to serve on the Economic Development, Science and Innovation Committee for the last few years and, more specifically, in recent times, just looking at some of the Estimates and the appropriations that have gone to those different parts of our very largely mandated committee. Can I note that, obviously, in this post-COVID world that we are in, we face some pretty uncertain times. We had a very strong health response, and that’s what’s gone and led to the position we are in now, but it’s going to take an economic response to be able to deal with the unemployment and the uncertainty that is all around New Zealand at the moment. Our team of 5 million helped to achieve that, and, actually, it’s great to see that the Government in Budget 2020 has backed New Zealanders to be able to provide jobs in lots of different areas across the board to cushion the blow for the whole country.

When we talked about infrastructure on our committee, we were just noting that the massive amount of investment that has gone into infrastructure all across New Zealand is quite unprecedented, with the Provincial Growth Fund, with the New Zealand Upgrade Programme, and also with the $3 billion investment into infrastructure as part of the COVID relief fund. That has all been welcome, not least the allocation for connectivity with some of our marae in really remote parts of New Zealand. All of that fits under the general heading of “Infrastructure”, and on our committee, we heard from the Minister and the officials about that kind of investment.

When it came to the sciences, we had the conversation with the Minister about where we could increase opportunities for Māori in science, noting that only 2 percent of the science workforce are, in fact, Māori. We have a long way to go to be able to try and address that imbalance—that very obvious imbalance—but part of what makes me happy is the fact that we have allocated $33 million to expand Vision Mātauranga. That’s a capability fund to strengthen the relationships between Māori and, obviously, our sciences as well.

It would be remiss of me as the member for the Waiariki to not mention the investment into tourism that we have had, and part of that conversation was a really welcome sector recovery fund of $400 million, all up, to try and hang on to some of those really strategic assets that we have within our tourism assets all across New Zealand. To date, we’ve had a couple of those announcements: one in the Waitomo and one in Kaikōura. Both of them are really, really crucial to our tourism landscape, and I know that our folks back home in Rotorua are looking forward to some announcements there, as well.

Can I also note that we had conversations about the $10 million which was directed straight into Māori in tourism, of which we’ve got a very strong leader at the helm of that with Pania Tyson-Nathan, who has been doing work with stakeholders that work in Māori tourism around New Zealand. They’ve got their allocation of $10 million to be able to help encourage the work that they do.

Part of Budget 2020 is also looking towards the future of tourism, and we have the task force co-chair that was announced, the Hon Steve Chadwick, who’s been put at the helm of that to help reimagine what the future of tourism is going to look like. So there’s a collaboration going on between the Ministry of Business, Innovation and Employment, Tourism New Zealand, and the sector as well, where they’re looking to reimagine what tourism is going to look like in New Zealand. We know that the borders will open—we know that—but we need to make sure that when they do open, we’ve got an environmental policy and a sustainability policy that absolutely enhances the offerings that we have in the tourism industry.

We have worked hard on our COVID-19 health response. Our economic development is going to play a huge part in our recovery from this, and that’s why we’re committed to working together and, obviously, investing in some of those Māori-led solutions to restart and also to repair our communities. I was pleased, every time we had a Minister in the seat, to talk about the many opportunities that have presented themselves and that are in the report.

Dr DEBORAH RUSSELL (Labour—New Lynn): Madam Chair, thank you for the opportunity to speak in this debate. I have a particular image I wish to plant in the mind of the Minister for Economic Development in the hope that he will respond to it and I promise it’s a pleasant one. As we went through the COVID crisis, we became increasingly aware that a strong health response was a strong economic response, that keeping New Zealanders safe, keeping our borders safe, and eliminating the virus gave us the best opportunity for recovery because then our economy could get going again. Of course, we are now making moves to help our economy to recover. But there are two particular areas that I wish to direct the Minister’s attention to that I’d like to hear a little bit more about. Let me, Minister, give you the image that has been in my mind for quite some time since early in the lockdown.

Early in the lockdown flights were leaving New Zealand—people, tourists trying to get home. Lufthansa flew one of the last flights out of the country and as it flew out it did a big loop right over Auckland, a big farewell loop to say goodbye. In some ways, it was, for me, quite a heartbreaking moment, the thought that the world was leaving us. How were we to stay in the world? So to me, that was a critical worry as to how we were going to keep in contact with the world. We are an exporting nation. We rely on exports. We rely on trade. We rely on those critical aviation and freight and transport links to keep us going and if we cannot keep those going, we become very closed in. Sure, we can feed ourselves but we need the world as well to thrive. So as part of our critical response, we needed to put money into maintaining those transport links and I’d like to hear more about exactly the process that was gone through in deciding how to keep our critical transport links and our supply chains going and why it was so important as part of our response to COVID-19 in Budget 2020.

But going from that image of the farewell flight and how we maintained our links, and going down to something much more local. Minister, you and I both come from West Auckland, the most beautiful part of the country, of course—[Interruption] The most beautiful part of the country. Recently, there have been a couple of transport announcements in West Auckland and they are just absolutely marvellous. So as part of this economic development, infrastructure, and transport debate, I want to understand those transport links and, in particular, it is the focus on getting people moving, getting public transport going, getting alternative modes of transport going.

As a West Aucklander, we suffer from congestion on the motorways. We suffer from a lack of linked-up cycleways. We suffer from a variety of, I guess, ways in which we just can’t move around our city freely. But building those transport links has been important, not just for the sake of transport but also for creating jobs, creating employment, and keeping our economy moving.

So there are a couple of brilliant projects that have been announced down our way as part of the response to COVID-19, as part of the infrastructure funding that’s coming through in response to COVID-19—in particular, the Whau walkway, which I think is a brilliant announcement, but also the north-western busway. I’d like to hear more about why those busways are so important to us—partly for the reasons of transport, but also, critically importantly, for the reasons of keeping people in employment and keeping giving people jobs and helping our economy to get moving again. It’s all part of the economic development we need to engage in.

I think, Minister, what it speaks to is the need for a joined-up response across the various areas of Government, from economic development to infrastructure, to transport, to all the areas for which we are responsible. So tell us about that, Minister—how all those things make a difference to us as we reinforce our health response to COVID-19 with an excellent economic response, an economic response that will, in the long term, serve us well as we respond, recover, and rebuild.

Hon PHIL TWYFORD (Minister of Transport): Thank you, Madam Chair. I will make some comments about aviation and the strenuous efforts that the Government undertook in the months following the COVID outbreak to protect the country’s supply chains and ensure that our aviation system continued to function.

It was very clear that aviation was going to be one of the first and the worst affected. In fact, we saw during March, really, the global aviation system shutting down in large part, and, for an isolated country like New Zealand that relies on our global connectivity through aviation, this posed a really serious threat. So one of the first measures the Government took was to put in place a $600 million aviation support package. That included capital injections into the likes of airways to ensure that our civil aviation network kept operating; six-months’ relief from paying passenger-based levies—a bit hard to generate your revenue when you haven’t got any passengers coming through your airports and flying. We put in place a $10 million freight capacity scheme, and that, to my mind, was one of the really successful early initiatives in the COVID time. I want to acknowledge New Zealand Trade and Enterprise, our export agency, who worked on the ground with their customers who rely on aviation to get sensitive and high value exports to their markets, and they worked very hard with the Ministry of Transport to put in place that short-term scheme which kept a number of flights operating, getting high-value exports to market but also essential items like medical supplies coming into the country when we were in the midst of a pretty severe lockdown. That work has continued and $320 million was put towards funding the international airfreight capacity scheme—so a much bigger programme organised by the Ministry of Transport.

It involved six airlines, Air New Zealand and several of the internationals, flying into New Zealand on scheduled services, and the real merit of the scheme was, I think, that it was market led, if you like. It was supporting the airlines by topping up individual routes to ensure that each flight was commercially viable. What we discovered early on was that 80 percent of the freight pre-COVID that had been coming into New Zealand was coming in the belly hold of passenger aircraft. So, effectively, air passenger services had been subsidising our vital airfreight routes. So the country’s gone into lockdown. There were almost zero people coming across the border in those early weeks. This approach of topping up these particular freight routes ensured that we were connected to the likes of Los Angeles, Shanghai, Sydney, Melbourne, the Gulf and kept New Zealand’s vital air freight supply lines open.

Let me say a couple of other things in relation to public transport. With only essential industries working in lockdown level 4 and some still major restrictions under level 3, and significant and understandable public concern about close social contact, there was very little demand for public transport in our major cities. So the economics of providing public transport more or less collapsed, given, as members will know, 50 percent of the cost of public transport is funded through the fare box, through the tickets, the fares that we pay to use the trains and the buses and the ferries. So the New Zealand Transport Agency, Waka Kotahi, had to step up to make sure the public transport services continued, because how else would essential workers get to and from work.

So a pretty significant sum of money, in the region of $100 million, was spent by Waka Kotahi over the last six months. Ensuring that our public transport services could continue, at a time when local government are also suffering a hit to their revenues because of COVID, really needed the Government to step up and make sure that public transport continued. I’m pleased to say that we’ve seen, in fact, somewhat faster than a number of other countries around the world, public transport demand has returned in our major cities.

CHRIS BISHOP (National—Hutt South): Madam Chair, oh, thank you very much. A question to the Minister of Transport about the National Land Transport Fund—in particular, the hole in the fund that’s been created not through any fault of the Minister, unlike everything else in transport, but through COVID-19 and the lack of people driving on the roads, and what effect that will have on the National Land Transport Fund. I think the Minister, in the Economic Development, Science and Infrastructure Committee, told us that some work had been done on the quantum of the hole in the fund as a result of a lack of fuel tax revenue. So I was wondering if he could update the committee on how large that quantum is. I think he said in the select committee that he would have some figures soon, so I’m looking forward to what that is, and, secondly, what the Government intends to do about that gap in the National Land Transport Fund.

Hon PHIL TWYFORD (Minister of Transport): The member is quite correct that the COVID economic shock and the effects of the lockdown have for a period of a few months put a big dent in vehicle kilometres travelled, which is how we talk about the level of road travel activity. While driving levels have bounced back in recent times—almost to normal, actually—those few months really took their toll on the revenues that supply the National Land Transport Fund, that is road-user charges (RUC) for diesel vehicles, and the fuel excise duty (FED), of course, that we pay at the pump.

In addition to that, we’ve seen some other costs that Waka Kotahi has had to pick up. In my earlier contribution, I mentioned public transport. Local government without Waka Kotahi stepping up would simply not have been able to continue ensuring that public transport was running, and they had to step into the breach. Some of those costs will continue, actually, for the next few months.

In addition to that, a third extra impost in that is that during the lockdown a number of big construction projects weren’t able to operate in spite of, actually, pretty successful efforts by the Transport Agency through advanced payments to some of the contractors, which enabled them to keep their workforce on—they were genuinely fearful of losing a lot of their workforce during those weeks. And remember, at the time we had no idea how long the disruption to the economy was going to continue for that time.

So those three things—the public transport costs, the additional costs to some of the big infrastructure jobs, and also falling revenues from FED and RUC—have meant that there is a very significant pressure on the National Land Transport Fund. I want to reassure the member that the Government will be protecting the fund. We’re going to strenuous efforts now to put in place a number of different kinds of infrastructure projects to stimulate the economy and boost jobs. The last thing we want to do is see our core transport infrastructure programme falter. So I’m not able to give the member details today on exactly how big the hole is and what the Government’s doing to fill that hole, but I want to reassure him that we will be making that information available publicly before long.

CHRIS BISHOP (National—Hutt South): Thank you, Mr Chair. I thank the Minister of Transport for that answer. I encourage the Minister to update the committee in due course on that. I think it is a matter of public interest. I acknowledge that the Government’s been working through that impact and figuring out exactly where the money will come from to fill that hole. I acknowledge the Government’s commitment to protect the fund, but I think it would be in the public interest for an announcement on that to be made sooner rather than later.

Just as a follow-up, I’ve got a series of questions which are designed to be useful and elucidate some information for the committee. The Government policy statement—a draft was released pre-COVID, I think; quite some time before COVID, actually. I understand that is being finalised. I know that there are a large number of people out there interested in exactly what that new Government policy statement will say, so I was wondering if the Minister could update the committee on when he expects to finalise that and release it publicly.

Hon PHIL TWYFORD (Minister of Transport): Thank you to the member for that question. For those of you who are listening to this debate who aren’t transport geeks, the Government policy statement (GPS) is, essentially, our transport budget. It’s the Government’s high level statement of policy direction for the land transport system. That includes rail and coastal shipping and other things as well. It’s the chance for the Government to set out its policy direction, and also set a budget for transport for Waka Kotahi. We do that through a number of different activity classes, and we set upper and lower spending limits for the likes of walking and cycling, rail, coastal shipping, State highways, State highway maintenance, local roads, local road maintenance, and a few other things.

It’s a critical input into the transport system, because it’s what allows councils who are major players, funders of parts of the transport system, and the whole of the transport industry into many sectors. It allows people to know the direction, the priorities, and how much money is available. What we do is we set the GPS on a three-year cycle that is roughly aligned with the parliamentary cycle and has a 10-year horizon. So we are about to release, very shortly, the final GPS. The draft form has been out now for a number of months, consulted widely. We’ve considered the feedback, weighed it all up, and we’ll have the final GPS to release shortly.

But I will say that I think we’ve aimed to sharpen and clarify some of the policy direction. You’ll see a continuation of our Government’s commitment to a balanced transport policy that tries to allow every mode of transport—whether it’s road, rail, public transport, walking, and cycling—to play to its strength and realise its potential. A big commitment to better transport options in our cities, making our cities livable through walking and cycling investment, trying to provide more choices through public transport, rail, and other forms of rapid transit, so that some people in our cities will choose to leave their cars at home, allowing the roads to move more freely for people who have to drive.

You’ll see a big commitment to an efficient and sustainable freight supply chain for the whole country. That’s a whole new piece of work, actually, that really hasn’t been attempted before, but it’s about bringing together our investment in road, rail, port reform, freight hubs, looking at the import and export supply chain and how we can make it more environmentally sustainable, reducing carbon emissions, and more efficient, to drive down costs and grow prosperity.

The other really big thing in the GPS is a commitment to net zero carbon by 2050. So decarbonising the transport system is arguably one of the biggest challenges that we face in front of us over the next 20 to 30 years. We’ll be getting cracking on that under the new GPS.

CHRIS BISHOP (National—Hutt South): Thank you, Mr Chair. Can I ask the Minister about the East-West Link project in Auckland, which is one of the 12 projects that were re-evaluated following the new Government policy statement from February 2018, I believe it was, and 11 of those projects have gone through their formal re-evaluations and they’ve been published on the website. To varying degrees they’ve been either adopted as part of the National Land Transport Programme or they haven’t been, but the East-West Link project is noticeable by its absence; it’s not clear what’s going on there.

I note the Minister’s comments from, I think it was, December 2017, soon after becoming the Minister that the project was something that the Government realised, basically—I’m paraphrasing the words of the Minister here, but words to the effect of—has to be done in that part of Auckland. It’s a heavy industrial part of Auckland and a major employment centre. The Government was interested in a solution there. We’re now, sort of, 2½, nearly three, years on. There’s a real lack of clarity about exactly what is going to happen there. I acknowledge the Minister’s comments publicly in the past that it’s a very expensive project—no one doubts that. But, equally, I put it to the committee that there’s also a recognition, I would hope, across the House that a solution is required in that fast growing part of Auckland with major congestion problems. So I’d just ask the Minister for an update on exactly what’s going on there and what the Government’s intentions are.

Hon PHIL TWYFORD (Minister of Transport): We’ve had quite a lot of debate in this Chamber about the East-West Link over the last few years. I think where we can agree is that it’s a vital freight corridor for Auckland, it suffers a high level of congestion, and there’s a problem that needs to be solved there. We’ve had the view in Government and in Opposition before that the megaproject approach had really got out of control. It was too big, too expensive, and simply couldn’t be justified. So, under the new policy settings in the Government policy statement that’s been in place for the last three years, Waka Kotahi have been looking at what kind of solutions they could find, and they’ve really been working hard to try to see what kind of interventions might fix the problems there. The fundamental problem in my view is the freight corridor, but there are a whole lot of other issues that complicate that in the area.

I think it’s fair to say that Waka Kotahi—notwithstanding their very significant capability in dealing with these issues—have struggled to find a solution that doesn’t cost an arm and a leg. I have encouraged them, they’ve come back to me, and then I’ve asked them to go away and do more work on it, and they’re continuing to do that. I’ve asked them to look at whether or not pricing could be a solution there that could potentially be part of the solution—effectively, congestion charging. I’ve also asked them to look at whether there are other demand management tools like freight booking systems that also might ease the congestion and make it easier for freight to move along that corridor. So the problem’s not solved yet. I recognise that something does need to be done there.

The only other thing I would say to the member is that that part of Auckland, which is currently used to a very high degree for the transit and the storage of containers, is also not immune to rapidly changing land values in Auckland as the city grows and attracts more economic growth and the land from the centre of Auckland moving outwards is becoming more expensive. I’m not sure that in, let’s say, 15, 20 years’ time that land will be used for stacking containers. Also, while we consider the future location of the Port of Auckland, until the idea of a port of Manukau is eliminated—and I want to make it clear, I’m not advocating a port of Manukau, but it is at least one option among several that’s worth serious consideration—you wouldn’t want to invest $1.5 billion in a megaproject on that location until you had far more certainty about its future land use.

CHRIS BISHOP (National—Hutt South): Thank you, Mr Chair, and thank you, Minister of Transport, for that answer. There’s a wee nugget that I suspect people may be interested in, which is the question of price and pricing and demand management, which I think people would cautiously acknowledge is something that needs to happen, and we look forward to hearing more about that in due course. I want to ask the Minister about the third and fourth main line in Auckland. I acknowledge the Government’s commitment through the New Zealand Upgrade Programme to starting work on the third main, and I just ask the Minister whether or not consideration was given to doing the third and fourth at the same time. There’s quite a lot of support, certainly from my experience in Auckland in particular, for futureproofing that line. You won’t find many people who disagree that we desperately need the third main now, and probably within five to 10 years we’ll need the fourth—so whether or not consideration was given to that and whether or not the Government would look at expediting doing the fourth at the same time as they do the third. My understanding from reading the business case from, I think, two or three years ago is that there are—I think the phrase used was “cost synergies”—to doing the fourth at the same time as doing the third, and certainly if you did that it’d have the National Party’s support.

Hon PHIL TWYFORD (Minister of Transport): Thank you, Mr Chairman. I really appreciate the member’s question about the fourth main. In my view, the building of the third main, an additional and third rail line running in both directions along the southern corridor between Quay Park downtown and Wiri in the south—key industrial and logistics district in Auckland’s southern suburbs—to my mind, is probably the most important transport project right now in Auckland because of the sheer congestion on the network between freight and commuter traffic. That’s why when we put together the New Zealand Upgrade Programme that we announced in January, building the third main was the sitter to be included in that $6.8 billion programme.

The member raises a really good question about the fourth main. We weren’t able to contemplate bringing it into the programme at that time, but he raises a really good question, and it’s something that I’m willing for us to give serious consideration to, to go away and think about it. Part of the reason for it is that much of Auckland’s growth for the next 30 to 50 years is going to happen in the southern suburbs. It’s already happening—huge growth pressures. The big problem that we’ve got is the southern motorway is a bottleneck. It’s not realistic to think, you know, in the next 30 years we can build 28 motorway lanes, because where will those cars go when they get into the city? We have to actually achieve mode shift. We’ve got to build rapid transit, including boosting the capacity of the heavy rail network and, I think, serving the growth that happens in Auckland’s southern suburbs through high-frequency, electric, modern commuter rail, out to Pukekohe, as we’re doing through the electrification right now, and then I would like to see it go further into Tuakau, Pōkeno, and really open up rail-led urban development in that southern corridor. That’s the way we can support high quality growth without killing people by jamming up the southern motorway 24 hours a day. So I appreciate the member’s suggestion.

CHRIS BISHOP (National—Hutt South): Well, following on from that—and thank you to the Minister for that answer, and, as I say, I do urge the Government to do the fourth main at the same time as doing the third. I think the business case I referred to earlier—I think I’m right in saying that the benefit-cost ratio was actually higher if you did both the third and fourth at the same time. In the grand scheme of things, it’s not actually that much money given the benefits that it would accrue to the transport system in Auckland.

Genuine question for the Minister around the expansion of the heavy rail network in Auckland and why the decision has been made over the last three or four years to focus on light rail as, I suppose, the solution for congestion in Auckland and transit in Auckland, and why, given that there’s been such heavy investment, quite rightly, into the Auckland rail network through the City Rail Link (CRL)—many billions—I think the budget’s now $4.5 billion or so. Why, given the heavy investment into the CRL but also the electrification over the last 10 to 12 years, which has driven very strong patronage growth on the Auckland rail network currently and in the past few years, has the decision been made to move to an alternative mode of public transport in Auckland which is, frankly, a mode that is not that known to New Zealanders? I mean, many New Zealanders will have gone to Melbourne and other countries and seen trams and light rail in other countries, but it’s not something that we have a great familiarity with in New Zealand, both from an engineering point of view and from a public familiarity with.

So just a genuine question to the Minister as to why the decision has been made to move away from the expansion of the heavy rail network—I’m thinking, for example, of lines such as rail to the airport, the heavy rail to the airport from Puhinui or down from Onehunga to the airport, and particularly in light of the fact that that was the Auckland rail plan for the better part of 40 to 50 years, going back to the De Leuw Cather report of the 1970s, “Robbie’s Rapid Rail”. There’s probably a reason why that tongue twister didn’t quite catch on.

Hon Scott Simpson: Try it again—say it again.

CHRIS BISHOP: Robbie’s Rapid Rail—there, I did it. You know, going back to those days and, indeed, all the way through until the Auckland plan of 2012. So just a general question as to why the Government is particularly interested, and to relate it back to the Estimates, the Estimates do contain money for rapid transit and light rail—so just a question to the Minister about that. Thank you.

Hon PHIL TWYFORD (Minister of Transport): This is a very, very good discussion, so I appreciate the member raising that issue. The first point I want to make is that the core of the policy—the foundation, really—is about rapid transit, and that lies at the heart of our Government’s policy around how we build successful cities. Successful cities need a very high level of mobility. If workers can’t get to their jobs, if firms can’t get access to their workforce, their customers, or their suppliers, productivity falls. So we have to deliver a high level of mobility. As cities get bigger and more densely populated, that becomes more and more challenging. What we have to do in our cities—Auckland, and let’s say at least the other four high-growth centres, the big imperative is that we have to move more people with fewer vehicles. That’s why rapid transit is important.

Why do we talk about rapid transit? Because it embraces a range of different modes from heavy rail, light rail, busways that are running on dedicated grade separated tracks, and, essentially, it’s high-frequency transport that is not competing directly with traffic. That’s the working definition. So rapid transit is the thing that’s important, not necessarily the mode, and then the idea is you make decisions about mode depending on the trade-offs between frequency cost and the terrain that you’re moving through.

So Auckland already has a Rapid Transit Network. It’s made up of the heavy rail network, which has been remarkably successful in terms of the number of public transport journeys growing over the last decade since the big investments and upgrades that started to be made in the Clark years and carried on through the last National Government. So there’s a lot to celebrate with the success of rail in Auckland. We also have the Northern Busway, which is rapid transit as well, which is a massive success story. It’s taken more than three lanes of traffic off the Harbour Bridge every morning, and it’s a great demonstration of how rapid transit, alongside motorways and roads, provides that dynamic flexibility that eases congestion.

So our view is that the big challenge in Auckland—as well as, actually, in Wellington and the likes of Tauranga, Hamilton, and Christchurch—is to build rapid transit networks. In Auckland, we think that the new lines that need to be built are city centre out to Māngere and the airport, connecting the two biggest concentrations of jobs in the country. The purpose of that line is fundamentally not about getting people to catch a plane; it’s about providing modern, convenient rapid transit for people who need to commute for work or for education or community. There are other lines. From Auckland out to the high-growth corridor in the north-west is also important. The south-east—airport, Manukau, out to Botany, and up into the south-east—also one of the poorest areas for public transport in the city. And, of course, an additional is a crossing that includes rapid transit and follows a rapid transit corridor up through the North Shore and up into the northern suburbs. In our view, building that network is the priority, really, for the next 20 to 30 years of transport investment in Auckland.

Why light rail? The answer is simply that, when you’re building a rapid transit network across an already built-up city, light rail offers you far more flexibility than heavy rail does to move through heavily populated areas. Light rail includes a range of different possibilities in itself. You can have a surface-running streetcar model of light rail, that many people will be familiar with from Melbourne, right through to the light metro option, which you can see in so many cities around the world like Paris, London, New York, and others. So there are a number of different options. Light metro tends to have a completely segregated corridor so that it’s not in the street competing with pedestrians and other traffic, and that enables it to go faster. But that segregation then entails a higher level of engineering, which could be going under, being elevated, or in some kind of separated or fenced corridor down the middle of the road, for example.

So it’s been our view—and, really, building on the work that Auckland Transport and the other transport agencies did under the last National Government, looking at that corridor from the city centre out to Mangere—that really agreed that that corridor was of urgent importance; that bus congestion on the isthmus was becoming a major problem, and that has continued to be the case; and that light rail was the optimum mode for that. Since then, as the member knows, we’ve done a lot of work on that route, looking at finance and governance options, as well as whether or not it would be a streetcar model or a light metro option.

I would finally say that it’s been our view that the light metro option offers significant benefits because it enables you to move more people at speed. If we want to build a rapid transit network that can offer an option that rivals people riding in their private car on the motorway to get from one side of the city to the other, speed and journey time become critically important. And the faster the journey is, actually, the higher the amenity benefits, the more urban development that you’re going to get around the stations, and the greater mode shift you’re going to achieve, and the greater use by people of the system.

Hon JULIE ANNE GENTER (Associate Minister of Transport): Tēnā koe, Mr Chair. Tēnā koutou e Te Whare. I rise in this debate to take a short call to speak to the Government’s plans on road safety and the priority of road safety in the transport budget in the Estimates. I just briefly wanted to talk about why it was important in 2017, the very end of the year in which we came into office—

Chris Bishop: I raise a point of order, Mr Chairperson. We have the Minister of Transport in the chair here. This is the Estimates, which is a time for members of Parliament to ask questions of the Minister about the Estimates before us. It’s not the chance for Associate Ministers to stand up and make speeches about the Government’s plans for road safety. We’ve got an associate spokesperson seeking the call. We’ve had a very constructive last 40 minutes or so of debate, and I think the Minister is quite out of line.

CHAIRPERSON (Adrian Rurawhe): My ruling is that the Green Party has an allocated time and any Green member of Parliament may utilise that time the same way that any other member can.

Chris Bishop: Speaking to that—

CHAIRPERSON (Adrian Rurawhe): No, no, no. If you’ve got a new point of order, absolutely. I’ve made a ruling, OK? So if you’ve got a new point of order, absolutely make it, but if it’s relitigating my decision, no, don’t do that.

Chris Bishop: I raise a point of order, Mr Chairperson. It’s just simply to make the point that—

CHAIRPERSON (Adrian Rurawhe): No. If you’ve got a new point of order, please make it, but if you’re—[Interruption] I’m on my feet. If you’re just making a point about the ruling I’ve just made, that’s a serious issue, which will be dealt with.

Hon JULIE ANNE GENTER: The Green Party transport policy is very much focused on a sustainable transport system, and part of that includes looking at safety in our transport system and ensuring that we do not accept loss of life or serious injuries as a necessary consequence of getting around the country. In 2017, when we came into office, 378 people—we came in, obviously, at the very end of 2017, but in that year—lost their lives on our roads, and 2,864 were seriously injured. That’s what led to the Government putting serious, significant priority on road safety, and that was reflected in our Government policy statement on land transport and in our funding. Since that time, in the space of two years, this Government has invested nearly half a billion in targeted safety upgrades, improving over 2,500 kilometres of State highways. But, in the next year, the New Zealand Transport Agency will spend that much on targeted safety upgrades. So, in total, we will have spent a billion dollars.

These aren’t big, flashy projects. They’re things like fixing the layout of roads that communities have known are dangerous for years. They’re putting in place crash barriers, whether that’s on the side or median barriers, near gullies and other high-risk spots. It’s those basic improvements to the places where people are currently driving and more likely to be killed or seriously injured. On State highways, we’ve completed 12 significant projects, 12 are in construction, and 26 are in planning. On local roads, 15 significant projects are complete, 40 are in construction, and 21 are in planning. We immediately increased funding for road police by $100 million after it had been cut by the previous Government, and that increase will be reflected in the future, as we see our next Government policy statement being rolled out. We were already starting to see the benefits even pre - COVID-19. Now, obviously the COVID-19 shutdown led to a serious reduction in vehicle kilometres travelled for a few months and a serious reduction in loss of life on our roads, which is great, but that of course will not be sustained unless we continue to invest in enforcement, in maintenance, and in improving the safety of our roads with these kinds of cost-effective improvements.

I just want to put it in context, because sometimes we hear from the Opposition party why we aren’t building roads of national significance when only one person has died on those. Just to put it in context, in the last decade the completed roads of national significance only improved 212 kilometres of our State highway network. That is 2 percent of an 11,000 kilometre State highway network. So, if we went by that logic and it took 10 years to improve 2 percent of our State highway network—which, by the way, is only where 50 percent of the fatal crashes are happening—it would take us 500 years to improve the State highway network to the point where we’d actually be preventing death and serious injury. So that is not a realistic option, and yet we have seen overseas comparable countries, like Norway, make a significant difference, substantially reduce death and serious injuries on their roads—roads that are similar to New Zealand. They are windy, they are mountainous, they have a small population spread over a large country, and they have been able to drastically reduce deaths and serious injuries.

This Government has made it a priority. We have taken action. We’re already starting to see the benefits of that, and we will continue to see the benefits of that—a robust and evidence-based policy, unlike the National Party implemented during their 10 years, when we saw a catastrophic increase in deaths and serious injuries on our roads from 2013 to 2017.

Hon POTO WILLIAMS (Minister for the Community and Voluntary Sector): Thank you, Mr Chairman. Thank you very much. I’m a member of the Economic Development, Science and Innovation Committee, ably chaired by Jonathan Young—and I thank you very much for the collegiality we have within our select committee. We’ve done some interesting work, we’ve asked for some interesting briefings, and I think a lot of the work we’ve done has contributed to our overall knowledge of the importance of economic development in terms of recovery.

When we’re thinking about recovery from COVID, for example, we can’t really go past the infrastructure spending that this Government has put into place. Part of that is the additional $3 billion for infrastructure spending. I want to focus on a very small proportion of that and the importance of taking a slightly different approach. In my home patch of Christchurch East, I have a suburb that was particularly devastated by the impacts of the earthquakes nearly 10 years ago. I have to say that I have a very parochial and particular group of people who are very clear about what they see as important in terms of recovery from the earthquakes. What we’ve been able to secure in this term of Government is actually a different way of doing things, where we see infrastructure as not just the build of physical infrastructure—it’s not just about the $400 million that’s going into supporting schools, for example; it’s not just about the rebuilds of hospitals and the like—but it’s also about social infrastructure.

What I want to talk about is an announcement that we made today about a collective group of community facilities in the suburb of New Brighton and how we have, through the COVID-19 response fund, been able to support nine initiatives in a collective to be funded. Now, why that’s important is that my area had been triply disadvantaged: of course devastated during the earthquakes, difficult to rebuild, and there was a piece of legislation—the Greater Christchurch Regeneration Act—which should have supported the rebuild of my part of town. However, the specificity around New Brighton was removed when the bill itself was going through select committee in the previous Government. So New Brighton, which is a very special and significant and iconic community in Christchurch, which could have had specific legislation put—that was removed.

But what we have been able to do with the $3 billion build fund is allocate $7 million to New Brighton. What that does for those nine community groups is staggering. The Eastern Community Sport and Recreation, for example, has 1,500 children which turn up on a Friday for sports, and part of the build is going to be able to finish off this multi-sports canopy which they will be able to use as an all-weather sports facility, particularly for netball. Also as part of our social infrastructure, we’ve got a refurbishment of the New Brighton football club. Now, these things don’t sound big to us across the Chamber, but for my community they are big. Completing the builds of the South New Brighton and the New Brighton surf club; Guardians of Rāwhiti, which will actually build a butterfly garden; the bridge hub South Brighton, which is a community and performance space, which will happen in New Brighton; and Waka Ama—what we are able to do is secure the Waka Ama site to make sure that the gear that our paddlers use is able to be secured, we are able to fence it, and we are able to put lighting there.

These are small but very significant pieces of work and they came together as a collective of community groups. They put in a bid to the infrastructure project and they were successful. It just goes to show that there is more to this Government than just the big announcements that that side of the House keeps telling us to announce, that, actually, the small, the niche, the bijou projects actually can have a potentially great impact.

CHAIRPERSON (Adrian Rurawhe): Members, before I call the next member, I just say that we now have the Minister of Tourism in the chair, if there are any questions around tourism as part of this sector. We have the Hon Shane Jones ready to come to the chair on regional economic development, as well.

TIM VAN DE MOLEN (Third Whip—National): I raise a point of order, Mr Chairperson. Thank you, Mr Chair. Earlier, and through the previous committee stages operating under the new rules, which is short contributions in question and answer - type style, we’ve been repeatedly pulled up on this side of the Chamber for not adhering to that format. Just with the last two contributions, we’ve had a full five-minute speech with no questions to the Minister at all, and for the last one it wasn’t even in relation to the Minister of Tourism, who was in the chair. So I’m just seeking your guidance on how we work through that, given the expectation being placed on us to be short with our calls and to ask questions to engage with the Minister.

CHAIRPERSON (Adrian Rurawhe): It’s entirely up to members. It’s the members’ time and each party has an allocated amount of time. It is certainly encouraged, exactly how the member has characterised the new way of carrying out these debates, as an interaction between the Minister and a member on specific issues. But it does not mean that that member cannot stand and make a five-minute contribution—particularly those who are chairs—giving an overview of the reports that they’ve submitted to the House.

TIM VAN DE MOLEN (National—Waikato): Thank you, Mr Chair. Look, I’ll ask a couple of questions, then, of the Minister of Tourism to make sure his time is utilised. Now, I could have asked this—and I had hoped to ask this—of the Minister of Transport, but there is crossover between the two, so I think it’s pertinent, still, for this Minister to be able to address it. It’s in relation to the aviation sector and around the international flights currently. Obviously, there are very few coming into the country, and we understand now that Air New Zealand have had to put a halt on incoming international flights because of the lack of capacity in our quarantine facilities.

So I’m just keen to get a sense from the Minister as to whether he’s had any discussions around the impact on our aviation sector—Air New Zealand, specifically, in this case—if we’re not able to provide consistency around what that scheduling might look like, but then also, flying on from that, around the back loading of freight from the horticultural sector. Obviously, that’s coming up to peak picking season soon, and the cost of freight back loading is significantly higher now—so whether there’s been any discussions between him from the tourism perspective and the Minister of Transport in terms of linking a better solution or more costly approach. That aspect would be my first question, and then one to follow.

Hon KELVIN DAVIS (Minister of Tourism): Thank you, Mr Chair. Well, it’s a pity the member Tim van de Molen didn’t ask those questions of the Minister responsible for aviation and transport. What I can say, though, is that aviation received some $600 million post-COVID. We’ve got to make sure that the air routes are maintained and that airlines retain the ability to fly between destinations, and also $900 million in loans was given to Air New Zealand. But in terms of the wider questions he asked, it’s difficult for me to answer as they do fall into the purview of the Minister of Transport, whose time in the chair has ended.

TIM VAN DE MOLEN (National—Waikato): I appreciate that. I just would have expected there would be some collaboration between the Ministers across portfolios that clearly intertwine, but if that’s not the case, then that’s fine. I would happily have asked that of the Minister of Transport if the Green Minister hadn’t jumped up and done a self-appreciation speech for five minutes.

Moving on to the next point, though, which is in relation to the proposed international airport tariffs. With his tourism portfolio, I’d be really interested to understand what conversations the Minister of Tourism might have had. Given that Christchurch Airport is 25 percent owned by the Crown and their purchase of land down in Tarras for a new international airport, can the Minister give us some insight into the conversations he’s had or the discussions he’s had? How aware was he of that potential purchase, and where does he see that sitting from a tourism perspective, in terms of contributing to the economy, if we’re putting an international airport in that location?

Hon KELVIN DAVIS (Minister of Tourism): Well, again, the member Tim van de Molen is asking questions that I don’t have responsibility for. My responsibilities as the Minister of Tourism are to make sure the tourism settings are such that tourism can continue and that tourism businesses can continue, bearing in mind that the definition of tourism businesses is fairly wide ranging. But he’s really asking questions that come under the purview of another Minister, although we do have conversations all the time, and—

Tim van de Molen: No idea, no conversation, no input, no thoughts, no judgment, no work.

Hon KELVIN DAVIS: Well, if the member would like to listen, I did say that we do have conversations all the time. But in terms of conversations around what he’s actually asking, the Minister of Transport is the person that he should have been asking the questions to.

JONATHAN YOUNG (New Plymouth—National): Mr Chair, thank you. The Minister of Tourism came in for the Economic Development, Science and Innovation Committee and talked about the $400 million COVID response fund, which will be used to fund the Tourism Transitions Programme, protecting tourism assets, etc. I just want to ask the Minister, and it’s coming more to light that there are travel agencies around the country that are working very hard to retrieve prepayments for overseas travel, whether that’s flights, accommodation, or cruises. These travel agencies have virtually no income, yet they are involved in retrieving what I understand to be several billion dollars’ worth of prepayments for New Zealanders. I just wonder, in order to support these businesses, what consideration the Minister is making, or has made, regarding this Tourism Transitions Programme, because these businesses are acting in the best interest and benefit of New Zealanders yet they have no income. If they were to collapse right across the country, then it’s quite possible New Zealanders will not be able to retrieve those prepayments. Often, those prepayments are made to companies overseas.

Hon KELVIN DAVIS (Minister of Tourism): Exactly—my role is to look after the visitors who arrive in New Zealand and make sure that their experience is the best it can possibly be. What the member is asking is what happens to New Zealanders who are looking to travel overseas and, again, I’m not responsible for—

Tim van de Molen: Does the Minister do anything?

Hon KELVIN DAVIS: —visitors who are going overseas. Now, the member asked the question “Is the Minister responsible for anything?” Well, the answer is, yes, of course. I’m responsible for visitors to New Zealand and the New Zealand tourism system. So what the member’s saying is that they expect me to be responsible for tourism internationally, tourism overseas. Well, I’m not responsible for those—

Tim van de Molen: I just thought you might have an interest in the wider tourism industry and have some insights—

Hon KELVIN DAVIS: Here we go again. Rather than actually asking questions that were relevant to the Estimates, asking questions about what happened in Estimates, they’re raising issues that are the responsibility of other Ministers and asking me to make comment on what happens internationally. So if the members really want to ask about Estimates and about what comes under the purview of the Minister of Tourism, I’m more than happy to talk about it.

For example, before COVID hit, we had inherited a number of issues from the previous Government. One of the biggest issues was that the previous Government were really quite good at marketing us as a destination, but not very good at managing us as a destination. And what that meant is that we had a number of communities who, because of the lack of infrastructure from the previous Government, were under pressure from visitors and were in danger of losing our social licence as a destination, and in communities. So our first thing that we did was address that, and our Responsible Camping Working Group actually started to address the issues of over-tourism in various communities. Now, I can take the example of Queenstown, where the mayor emailed me earlier this year to say that, previous to us, in years prior, he had received something like five to 10 complaints a day over the December and January period, and this year he had received one complaint in total over that period. That’s just to demonstrate the work that we had done to address the issues that we inherited.

Secondly, there was a lack of sustainable funding for the tourism industry to address those issues. So we introduced the international visitor levy last year, and we started to collect money on the international visitor levy—some $55 million in a couple of months. We also had a very successful year of tourism with China last year, and at the start of this year the Chinese visitor numbers were starting to pick up. Of course, everything ended when it came to COVID, and our numbers, instead of climbing, of course fell off a cliff. So the Government’s response to that was to put in place a broad-based response, where businesses were able to access the wage subsidy, and tourism businesses accessed $1.75 billion from the wage subsidy scheme. We also had the Small Business Cashflow (Loan) Scheme; we had other various tax measures.

During the course of the lockdown I engaged online via the regional tourism organisations (RTOs). We had numerous online meetings. I met with close to 5,000 people in the tourism industry and asked them what needed to happen. What they wanted was a continuation of the wage subsidy. They wanted investment in the RTOs so that there could be regional marketing. They also wanted support to pivot to the domestic market, because everybody knows that there’s going to be very little international—there’s going to be no international visitors over a number of months ahead of us.

So that’s exactly what we did. We implemented the Tourism Recovery Fund, some $400 million, and we split that into two parts: the Tourism Transitions Programme was to help businesses pivot to the domestic market, to help them to hibernate—if that’s what they needed—or to look at other options. The second part of the Tourism Recovery Fund was the Strategic Tourism Assets Protection Programme, where businesses who had an international or national reputation were supported. They had to be responsible for drawing visitors to a particular area and have significant spillover effects. And that’s coming. In a very short while we’ll be—[Bell rung] Just quickly, Mr Chair. In the very next short while we’ll be making announcements around the Strategic Tourism Assets Protection Programme.

Hon Jacqui Dean: Everything he knows is coming out!

Hon KELVIN DAVIS: Now, the member over there says everything she knows, and as the Rt Hon Winston Peters said, “We could give her two minutes and she could tell us everything she knows as well.”

So we’ve done a lot in terms of supporting tourism businesses through this COVID period. We know that the trans-Tasman bubble is going to take more time than what we hoped. People had hoped sooner rather than later; it looks like it’s going to be later rather than sooner. But I look forward to some of the questions from the other side related to the tourism portfolio, related to the Estimates. Thank you.

JONATHAN YOUNG (New Plymouth—National): The Minister said that he wouldn’t answer my question because I was referring to outbound tourism, but I’d like to ask the Minister, because these travel agencies right throughout the country are also agents for inbound tourism and they are conduits and brokers for the tourism industries that we have. As I explained in my first question, in terms of the transition fund, in terms of offering advice or support to tourism-based companies, what response is the Minister anticipating that he can make, or the Government can make, to ensure that, especially past the wage subsidy programme, when they will still need to operate—what sort of support will the Government offer?

Hon KELVIN DAVIS (Minister of Tourism): In terms of inbound tourism operators, we do have an announcement in the next few days, so I suggest that the member waits for that. In terms of the outbound operators, again they are businesses that look after visitors who are going internationally. So I am not responsible for international visitation overseas.

MAUREEN PUGH (National): Thank you, Mr Chair. I can see that my colleague Jonathan Young was having trouble getting an answer to his question about the support for the travel agents in New Zealand, so I’ll have another go at that. I’m just wondering if the Minister in the chair is aware that the travel industry supports 5,000 jobs across New Zealand. There are 500 tenancies that they occupy across the country, 660 small to medium sized enterprises, and 500-plus sole traders. They are the only organisations that are on the ground with travellers who are seeking to get the refunds and the credits from cancelled flights, but they are also an industry that is getting no income from the work that they are doing; they’re doing it out of the goodness of their heart. The wage subsidy is keeping them afloat at the moment, but it is not covering their overheads. They are looking for targeted support from the Government. They have written directly and copied you in, Minister, and they are asking, please can this Government target some support to their industry to keep them afloat, because there is going to be a day when we will need them back in work.

Hon KELVIN DAVIS (Minister of Tourism): What was the question?

MAUREEN PUGH (National): So my question, in case there’s any confusion, is: what support can the Minister provide to the travel agencies across New Zealand that they are going to be given targeted support?

Hon KELVIN DAVIS (Minister of Tourism): Well, in terms of targeted support, there’s obviously not enough money in the Tourism Recovery Fund to pay the outbound tourism operators. One of the members there said that it is close to $1 billion. Now, the Opposition, I think, if they’re saying that they will fund $1 billion to the outbound tourism operators, then what they’re basically saying is—well, what I would have to ask them is, where are they going to find that money? Because they’ve already got an $80 billion hole in all their promises that they’re promising to New Zealand. So, Mr Speaker—

Hon Todd McClay: Mr Chair.

Hon KELVIN DAVIS: Mr Chair, yes; thank you very much. The Opposition continue to ask questions around a part of New Zealand’s small business network. What they really need to do is make sure that—

Tim van de Molen: Oh, so because they’re small businesses, the Minister won’t talk to them?

Hon KELVIN DAVIS: Well, the small business Minister is also responsible for them, but, quite frankly, we cannot afford the $1 billion that they’re saying it will cost to bail out the overseas tourism operators.

MAUREEN PUGH (National): Thank you, Mr Chair. Just to follow on from that question that I’ve just asked, and picking up on what the Minister has said, because there is clearly not enough money. I just wonder if the Minister can advise us, then, how the Government picks the winners in the tourism industry for Government support. There have been some very big allocations made—and I mention bungy jumping and whale watching, because these tourism and travel agents would very much like to know what criteria they need to meet in order to qualify for targeted support, as these other industries have.

Hon KELVIN DAVIS (Minister of Tourism): Well, I’ve already covered over the criteria that the businesses need to meet. They need to have a national or international reputation, and they need to be significant for drawing visitors to a particular region. There needs to be significant spillover effects. A lot of the questions that they’re asking, actually, are around commerce; they’re not around tourism. They fall under the purview of other Ministers. What we’re talking about under tourism is the support for tourism businesses here in New Zealand. As I said earlier in my contribution, I’ve already outlined the criteria.

Hon TODD McCLAY (National—Rotorua): Thank you, Mr Chair. If I could ask the Minister of Tourism: if he’s saying to the committee, based on the questions that have been asked of the Budget, the Estimates, that he’s not responsible for small tourism businesses, because that’s for the Minister for Small Business, and he’s not responsible for large tourism businesses, because I suppose that’s the “Minister for large businesses”, exactly what tourism businesses does he believe he is responsible for?

Could I, secondly, ask him: in as far as the $400 million that came through the Budget to help tourism businesses—large businesses and small businesses, one assumes—why has he not been able to answer in this Chamber or in the committee to the number of jobs that are estimated to have been lost, and therefore, with the $400 million to the tourism sector—doesn’t feel like it’s targeted or focused—how many of those jobs will be saved?

I do remember the Minister has said in this Chamber it’s very hard to know what a job is in tourism, and, therefore, there haven’t been any estimates. Can he tell the committee why it is that Treasury released advice that went to him saying that 92,000 jobs would be lost in the tourism sector, yet he wasn’t able to come to the select committee or stand up in the House and remember that advice? The $400 million that the Government has allocated to itself to spend so far on what, to the tourism sector, feels like, or seems like, businesses that will get the best media coverage when the Prime Minister announces the funding is $400 million from the taxpayer. There are more than 400,000 people directly or indirectly employed in the tourism sector; 92,000 of them, Treasury says, are likely to lose their jobs. Can the Minister tell the committee today: of the $400 million that’s been allocated to tourism—to tourism, not to small businesses Minister, not to the large business Minister, but to the tourism sector under him and his portfolio—how many of those 92,000 jobs will be saved?

Hon KELVIN DAVIS (Minister of Tourism): Let me say that the $400 million is going to make a better difference than the paltry $100 million that the Opposition was offering—$25 million a year for four years. In terms of the number of jobs, we’ve always said that we won’t be able to save every business and every job, and that goes not just for tourism. We have had 743 tourism businesses access the tourism transitions. The number of jobs that have been saved because of that are difficult to estimate because we know that not every job can be saved. But what we are doing is helping to save a number of businesses as well. We’ll be making, as I’ve said, announcements in the not too distant future about other businesses that will be receiving support from the stat fund, and, again, it’s difficult to announce or estimate exactly how many jobs will be saved through that support, because businesses have to make those decisions. We still don’t know when the borders will open, and what we’re doing is trying to give businesses the best chance to survive and see through until the international visitors do come. But let me say that our $400 million in the here and now is a lot better than the $25 million a year for four years that the Opposition announced as the tourism policy, and that had all the bounce of a rock.

Hon TODD McCLAY (National—Rotorua): Thank you, Mr Chair. Perhaps I wasn’t clear enough earlier. Treasury has estimated that 92,000 New Zealanders will lose their jobs in the tourism sector as a result of COVID-19. You, Minister, have gone to your colleagues and asked for $400 million to support tourism. I’m asking you directly what advice you sought or received of the 92,000 New Zealanders that Treasury have forecast will be made unemployed in the tourism sector. How many will be saved as a result of the $400 million? If the answer is “I didn’t ask.” or “They didn’t tell me.”, then the tourism sector deserves to know that. But, Minister, for $400 million to be committed to be spent and for you to say it’s hard to know how many jobs will be saved, which is the same as saying, “I don’t know.”, frankly, is not good enough for the tourism sector—those 92,000 people who are to be made unemployed—and it’s not good enough for the taxpayer.

Hon KELVIN DAVIS (Minister of Tourism): The circumstances have changed quite rapidly from the time when we announced that fund—the $400 million fund—through to now. For example, we were hoping that we’d be able to tide many businesses over until the trans-Tasman bubble was able to be opened. We were hoping that it would be in a matter of months from May. Obviously, that has now changed. Circumstances worldwide have changed. If the member hasn’t been watching the news, he will see that Australia, which were looking like they were getting COVID under control and were hopeful for the trans-Tasman bubble—that, of course, has now blown out with the hundreds and hundreds of cases that we’re seeing in Melbourne and in Victoria. Things are changing, so it is difficult to estimate just how many jobs will be saved. But the reality is that our $400 million is a lot better than their $25 million a year for four years that actually did nothing.

Hon TODD McCLAY (National—Rotorua): Well, to the Minister, can I ask him: does he not think, for the 92,000 people that Treasury have said will lose their jobs, that his hope is just, frankly, not good enough? What you’ve said, Minister, is between when the $400 million was agreed by Cabinet to today, lots of things have changed. Well, of course lots of things have changed. My question to you though, Minister, was not “Is it difficult to estimate today because your hopes for the tourism sector haven’t worked out?” My question was: when you got the $400 million to spend in the tourism sector, what advice did you ask for and seek as to how many of the 92,000 jobs would be saved? If the answer is, Minister, you didn’t ask, then say so, and the tourism sector will understand what that means.

It’s not good enough, frankly, to stand up here in the committee and say, “Well, it’s hard to know today because a few things have changed.” If you’re going to spend $400 million in the tourism sector to save businesses and to save jobs, is it too much to expect that you ask what the best way is to save these jobs and how many jobs will be saved, because, Minister, you didn’t remember that Treasury had forecast 92,000 jobs would be lost?

Hon KELVIN DAVIS (Minister of Tourism): We actually asked the tourism sector itself what they wanted, and what we have done is created a programme—

CHAIRPERSON (Adrian Rurawhe): I’m sorry to interrupt the Minister, but it’s come time for me to leave the Chair for the dinner break.

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

CHAIRPERSON (Hon Anne Tolley): OK, colleagues. When we suspended for the dinner break we were debating the Votes in the economic development and infrastructure sector volume (B.5, Volume 1), as part of the consideration of the Appropriation (2020/21 Estimates) Bill. The Hon Kelvin Davis has the call, and he has four minutes 30 seconds remaining, should he so desire.

I understand that the Minister for Regional Economic Development is joining us. Is he going to take any speakers or do you want me to move on with the Vote?

Hon MICHAEL WOODHOUSE (National): I feel I should tell a joke or talk about a funny thing happening on the way to the House! But, look, it’s a pleasure to talk about regional economic development and economic development more generally, because it’s such an important part of, firstly, the COVID issues, but also matters relating to the important role that the Government can play in making sure that our regions thrive economically, socially, and culturally. I have three questions for the Minister that I’m sure the Minister in the chair, the Hon Kris Faafoi, will diligently jot down and inform the Minister of Regional Economic Development—when he gets here—that these are vital questions.

CHAIRPERSON (Hon Anne Tolley): You can’t say that—you can’t say that.

Hon MICHAEL WOODHOUSE: So I shall pause for effect before I give the Minister the opportunity to answer these questions. The first question is one borne out of ignorance and it—

Dr Duncan Webb: Ha!

Hon MICHAEL WOODHOUSE: Well, as the new spokesperson for regional economic development—it’s not an admission members of Parliament make that often. I’m careful not to make the same mistakes—rather, not the same mistakes, but fall into the same trap that those wanting to quiz Kelvin Davis before the dinner break did, where every single question was answered with “That’s not my responsibility.”

So my first question is actually about the relationship between the Provincial Growth Fund (PGF) and the recently announced COVID-19 Response and Recovery Fund and whether or not the Minister in the chair actually has responsibility for the $3 billion or at least an input into it, because we’ve seen a number of announcements made recently that relate to the COVID recovery fund but look very much in all respects like the announcements that we’ve seen out of the PGF. So that’s the first question.

The second question relates to—and I refer the Minister to the plethora of Provincial Growth Fund announcements as articulated in the dashboards that are available online—the region that is dear to my heart and that is the Otago region. The question is the title of funding for the Accident Compensation Corporation, where the recipient is indeed ACC and the sum of $12,503,650 has been announced for whatever project that ACC is the beneficiary of, and that seems a reasonably odd announcement to me—in fact, I haven’t seen an announcement of it.

And the third question I have, in my opening bat, is concerning media that was reported by RNZ last week around plans to announce a roughly $100 million recovery package for Southland in the wake of the imminent closure of the Tīwai Point aluminium smelter and attributing the New Zealand First Party with “scuppering the announcement at the 11th hour”. Now, as members know, and certainly Sarah Dowie, the MP for Invercargill, knows how important the aluminium smelter is to the economy of Southland. The imminent closure, if that indeed happens, will be devastating for that region—and this revelation rubs, I think, salt in the wounds of Southlanders who are very badly affected by this pending news. So I would like to know whether or not the reports were accurate and, if not, or either way, what the Government does have planned for that region in the wake of what will be probably the largest economic detriment to hit any province in a couple of generations. So there’s three questions to kick off with.

Hon SHANE JONES (Minister for Regional Economic Development): I’d like to thank the honourable member for those three questions, and if I can start with his request for information about the connection between the Provincial Growth Fund administrative arm and shovel ready. I won’t delve into which projects have not been yet announced. That lies with a broader number of Ministers than myself and the advice that we’re taking from the Crown Infrastructure Partners, ably led by Mark Binns. But I would like to say that the public information does provide the answer.

Where it is appropriate for the Provincial Growth Fund network to handle shovel-ready announcements that are under $20 million and have been through either the process of the Crown Infrastructure Partners or have also been double checked by the Provincial Growth Fund, then that is the crossover. There will be some cases where additional due diligence has to be undertaken. That’s just to assure the public that, where a party perhaps is not of local government character or another public entity, with this level of pūtea the officials are burrowing into who the counter parties are and whether or not everything that they’ve identified stacks up. This is something that has already been carried out in earlier years during the life of the Provincial Growth Fund.

On the question of $100 million and whether there was some scuttling, I presume is what the former Minister is asking, on the part of the party that I belong to, our party belongs to the coalition Government, and the coalition Government has actually mandated me to make significant announcements in the area of Murihiku, the Southland area, not the least of which is a handsome allocation of pūtea for flood resilience and stop work and catchment investments. So to suggest, number one, that our Government is not willing to put dough in to cushion the uncertainty felt within the economy I think is not only unfair but it’s incorrect.

On the point as to the $100 million, I won’t comment on scuttlebutt that may or may not be floating around Radio New Zealand. When Cabinet and the relevant Ministers who may be delegated to make decisions arrive at those decisions, then the position of the Government is announced. I think that the future of the smelter will be an item of considerable politicking, as we get closer to the election. I think the committee should bear in mind that the current owners have identified a 14-month period at which they will have exercised an option to—well, they’ve exercised their power to haere rā, to leave, but they will have a tremendous fiscal obligation upon them. I did read some reports that the door was fiscally still ajar—I think I’m being reasonably accurate in attributing those remarks to the CEO.

In respect of what personal authority I might have, I’m part of a group led by the Minister of Finance, and that group reports regularly to the Cabinet committee known as Economic Development, and any decisions that have been announced by myself or other colleagues are within the mandate provided by the Cabinet to roll out the $2.6 billion of announcements, some being kept back to deal with the inevitable cost overruns and other administrative challenges that we’ve learnt, to our cost, in the Provincial Growth Fund, often do come to pass in the administration of such a large sum of money.

Hon MICHAEL WOODHOUSE (National): I thank the Minister for Infrastructure for something of an answer to that question. I think I heard him say that, yes, while it is a separate fund, it’s all part of the same Cabinet and the COVID response and recovery fund is all part of the broader economic development for our regions.

I didn’t hear an answer to the question of why the Government sees fit to be giving—ACC, which has an investment portfolio approaching and exceeding $35 billion, needs $12.5 million for a project in Otago, and I’m still none the wiser about what the issue is there. But what that does speak to, I think, is a propensity for the Government to hoover up as many projects as possible, including shovel-ready projects that would have happened anyway. And one of the patterns that we’re seeing in the dashboards right across the country is that these projects for roading, for fibre connections, for local body infrastructure would have come to pass either with central or local government funding. And what we see is that the Minister gets an opportunity to cut a ribbon or otherwise make an announcement.

So another question—there was an article recently about the Olympic pool for the Hawke’s Bay aquatic centre, and it was announced actually by the Minister’s colleagues the Hon Grant Robertson and the Hon Stuart Nash. I am fascinated at why an Olympic pool is 51.5 metres long, and people with memories long enough will remember that fantastic documentary comedy written and starring John Clarke—the late, great John Clarke—which was called The Games. It had a fantastic sketch around the 100 metres track at the Sydney Olympic stadium being about 100 metres. So I would love for the Minister to be able to elucidate the House as to why an Olympic pool, which in any other part of the world is 50 metres long, is in Napier going to be 51.5 metres long.

While we’re on the subject of pools, I note also that the Gisborne Herald on 14 July reports $40 million for a pool upgrade in Gisborne.

Hon David Parker: It’s a stretch target.

Hon MICHAEL WOODHOUSE: A stretch target—very good. Well, I’ll tell you what, there won’t be any world records broken at the Napier Olympic pool at 51.5 metres. So it’s all down to hundredths of seconds and I don’t think that’s going to help in the least. But the Gisborne pool upgrade is $40 million. Now, I think that’s a fantastic asset for the good people of Gisborne to have, but I think about the community pools that I have been aware of around the country in places like Mosgiel, which is spending a much more modest sum to get a thoroughly decent asset for that community. And I’m just at a loss to know how on earth we can be spending $40 million on the Gisborne pool, which raises the broader question about value for money.

Now, this side of the House understands the need to stimulate regional economies with smart job-creating assets, but I am far less convinced that there is enough scrutiny by the Provincial Development Unit and the Government more generally and whether they are more interested in cutting ribbons than they are about ensuring that they’re getting value for the taxpayers’ investment in these things because, frankly, you could probably hold the Olympics between Poverty Bay and Hawke’s Bay with the two Olympic-sized pools and aquatic centres that they’re going to be building for the great—[Interruption] Well, that’s right. There’ll be no world records broken, Mr Smith. That’s quite right. But I do want the Minister to assure the committee, as he failed to do, actually, in the Estimates review appearance before the committee that, actually, the sufficient scrutiny is under way to ensure that the taxpayer is indeed getting value for money.

Hon SHANE JONES (Minister for Regional Economic Development): I actually embrace this approach that Ministers should be required to address and, hopefully, answer the questions. Now, I have just been assisted by, arguably since Geoffrey Palmer, the brightest lawyer—oh no, I see David Parker, I apologise. I apologise. Dr Webb is the honourable member who has pointed out to me that, in actual fact, the reason a pool is slightly longer than 50 metres is to account for the pads at each end so that the highly athletic, well-trained knuckles, fingers, and other parts of the anatomy are not damaged as they seek to achieve Mark Spitz - like gold status for New Zealand swimmers. So I have to acknowledge that the chairman of the Environment Committee has a tremendous future ahead of him, given that he’s capable of teaching me.

Secondly, look, I know that we have to tolerate these tawdry remarks that the jobs of New Zealanders are being channelled through the political aspirations of the parties that comprise the Government. That is wrong. That devalues our fellow Kiwis. What the Ministers of the Cabinet are doing in taking an appropriate period of time to tick off the various projects is not only to assure this House but to assure the public that this $2.6 billion worth of pūtea goes through a process, especially where we’re dealing with applicants who are not local government. We have a level of expectation that local government in receipt of Crown pūtea will actually not squander it.

Actually, on the point where the honourable member asks about the issues pertaining to three waters and other infrastructure projects, he is absolutely correct. By and large, those projects have been steered to the pot of funding under the administration or the stewardship of the finance Minister and the Minister of Local Government, the Hon Nanaia Mahuta.

But let me come back to that modest area that I have some influence over. The aquatic centre, the Gisborne applications—they reflect people legitimately proceeding into the corridor, otherwise known as the Crown infrastructure process, aided by the Provincial Growth Fund process. It’s not unreasonable that people should have expectations that if they put forward a project that’s going to lead to jobs, it’s going to endow—endow—a region with one of the three following infrastructure outcomes: grey infrastructure, which on this side of the House we tend to regard as bridges and roads, perhaps wharves; green infrastructure, which deals with flood resilience, and there’s well over $200 million, I’d say to the honourable member, that’s available there; and wellbeing infrastructure. Wellbeing infrastructure is akin to community infrastructure, and it’s not the corporate, glittery end of town; it’s those relatively modest projects that have been brought to our attention and promoted by community groups acting in association with local government.

I had the rare pleasure of making an announcement in that regard conveniently in the township of Kaitāia yesterday, and if I can give the honourable member an indication—a sum of $7 million dedicated to Te Hiku enhancement. That project originated with a community group acting in collaboration with the Far North District Council, led by a former parliamentarian the Hon John Carter, a fine Northlander, who from time to time does raise the ire of the ratepayers, but that’s what happens in the North—your good works don’t go unpunished.

MAUREEN PUGH (National): Thank you very much, Madam Chair—thank you very much. I’d like to follow on the line of questioning around the Provincial Growth Fund. As we are all aware, in every one of the electorates there are literally billions of dollars being allocated to projects. I recall when the Minister was speaking to the select committee in the Estimates hearings, he mentioned to us that he was surprised at the number of projects that were not able to proceed because they were not consented. It did come as a surprise to me, because projects that sit in a planning stage do not usually get to the consenting stage unless funding is assured, because it’s quite an expensive and time-consuming process to get those consents.

So when the Minister has allocated those funds to those projects pre-COVID, then those projects were working their way through the process; come COVID, the Minister felt he had to reprioritise some of that money. So that money was clawed back. Now, we have heard since COVID, especially from the Prime Minister, that it’s all about jobs, jobs, jobs, but all we’ve seen is it’s all about announcements, announcements, announcements. What I would like to know from the Minister in the chair is: with the very short time frame now ahead of us and all of the funding that’s been allocated to projects across this country that are still not consented and will be unlikely to be consented before the election, are we likely to see, yet again, a reprioritisation of that money?

Also a question to the Minister: how is the Minister going to ensure that contracts will be in place to lock in that funding to those individual projects prior to the election? The concern that I have is that all we are getting is re-announcing the churn of the same money around and around different projects in this country, and it seems likely to me that unless a contract is signed that commits that money legally to all of those projects—those councils and individuals and businesses—then we are unlikely to see it actually realised into a project. Thank you, Minister.

Hon SHANE JONES (Minister for Regional Economic Development): Actually, the honourable member, the list member for Tai Poutini, raises a very good point, which is why no one was more enthusiastic than my good self for the sterling work undertaken and the product delivered by the Hon David Parker in terms of the fast-track process for the Resource Management Act (RMA).

Now, look, I don’t want to delve into why former regimes never delivered; I just want to focus on the fact that there’s now an opportunity for certain projects that may be in receipt of pūtea from the Provincial Growth Fund to be referred to the Minister. Now, let me name one—let me name one. We have an entity called the Tai Tokerau Water Trust. Now, that was formed—and I will come back to Te Tai Poutini in a very succinct fashion—and that trust promoted the first water storage dam near Kaikohe. It was included in Schedule 2 of the legislation and voted for by the other side of the House in a shared fit of illumination. Now, that shows that where there may be projects that are ensnared in unnecessarily long RMA processes, the applicants have the ability to make an application to the Environmental Protection Authority, which will then refer the matter to the Minister for the Environment. Now, I don’t want to comment on who may or may not still be standing after the election; that, properly, in my view, is not the business of this type of debate.

Secondly, in terms of does it mean if there’s a change of Government or different personalities holding a warrant to be Crown Ministers, no single Parliament can bind the next Parliament. That’s the nature of our democracy; that’s the nature of our Westminster-based constitution. But I’m absolutely confident that in the event that a similar group of politicians hold the benches of Treasury, they will want to continue to roll out the kaupapa of endowing our regions with overdue infrastructure, injecting Crown capital into enterprises that lead to jobs that have a transformational impact in certain sectors, and also enhance productivity.

You only have to look at the announcement that I have just celebrated, along with the Hon Damien O’Connor, for the pūtea that’s been given to the Mānuka Trust. Mānuka is an incredibly valuable indigenous species, belonging uniquely to New Zealand. There is a fear that overseas interests are trying to capitalise and gulp down the profits associated with the products that come from that mānuka that rightfully belong here. The Provincial Growth Fund has made an allocation to help transform that industry—which is in the Tai Poutini as well, not only up in the Tai Rāwhiti—so that the science can deliver better opportunities as to what are the goods and services that can be gained from further investing in mānuka. So any suggestion that we’re not prepared to address the outstanding issues of RMA consents I do believe is incorrect.

Secondly, whilst I can’t speculate as to what will happen in October, November, December, these decisions have been made, and we are harrying the officials to ensure that the contractual obligations are entered into as soon as possible. But as you know, they act in a slightly independent fashion, and they have to work at a pace where they feel they can credibly give that advice that the green button is all 100 percent.

MAUREEN PUGH (National): Can I just ask the Minister in the chair, the Hon Shane Jones, then, to confirm that all of the projects that have been approved through the Provincial Growth Fund (PGF) will get committed funding assured or a contract signed that will ensure that the project that has been approved by the PGF will be going ahead before the 2020 election.

Hon SHANE JONES (Minister for Regional Economic Development): So, obviously, there are two sides to any contract. We’ve learnt as a consequence of the COVID reset that some of the applicants were working on what we call in Kaitāia “the slow-coach type”; whereas I am akin to the figure out of American folklore:

Along came Jones

Fast-talking

Slow-walking

So I don’t want anyone to feel that their contracts cannot be entered into. The sluggishness is no longer with the Crown; it’s with the other parties.

This politician, I can assure you, working with the other three Ministers—we are insistent that velocity is the flavour of the day, but, most importantly, we have to assure that we’re not entering into a space where Crown funding may be at danger. The other side of the Chamber should expect nothing less.

MAUREEN PUGH (National): Can I just follow on from another topic that came up during the Estimates hearing, and that was the Minister’s commitment to providing the information about the full-time equivalents that have been created so far. As we all know, the Provincial Growth Fund is designed to increase the productivity potential in the regions, and so it would be very reassuring, I’m sure, for us all to know that the money that has been invested thus far has created some really impressive figures, in terms of full-time equivalents, for the investment to date. Does the Minister have that information at hand? Will he share it with the House, please?

Hon SHANE JONES (Minister for Regional Economic Development): I rather suspect my time is drawing to an end, but what a great point for me to contribute to. Officials are continuing to do their analysis, and they are uncovering a treasure trove of positive statistics as to how many jobs have been created as a consequence of this highly celebrated OECD-leading initiative. Once the officials have briefed the finance Minister, myself, the Minister of Economic Development, and the Hon David Parker, then a point in time will be identified where this information can be shared, but it would be unwise for us to share this information in the absence of robust advice from the officials. But, rest assured, over the next eight weeks, it’ll be well and truly aired all over Aotearoa.

Hon DAMIEN O’CONNOR (Minister of Agriculture): Thank you, Madam Chair, and if I can just take the opportunity, I guess, to acknowledge the Minister in the chair there, the Hon Shane Jones, and the great work he’s done. But in regard to the discussion that we’ve just seen from across the committee, if the Provincial Growth Fund is to allocate funding—you know, quite a lot of funding—to an organisation, or, say, a council, that hasn’t always had a good track record of financial management, perhaps the Minister might like to answer: is the process of oversight of the spending of all of that money robust? Indeed, what are his expectations of what that organisation might have to meet if it hasn’t had a good track record in the past?

Hon SHANE JONES (Minister for Regional Economic Development): Far be it from me to identify any delinquent councils, but they are numerous in some parts of Aotearoa. But if I could say this: the system operates on the basis of Senior Regional Officials (SROs). SROs are trustworthy senior civil servants, and they engage with the recipients. Where the recipient may be a council that has struggled with the delivery of infrastructure or the delivery of other wellbeing outcomes, the SROs are totally empowered to manage the pace at which the pūtea is allocated, to ensure that the outcomes the Government believes that it ought to be achieving in a collaborative fashion are actually delivered upon. They are called Senior Regional Officials. They report to Mr Robert Pigou, who is the director of the Provincial Growth Fund Unit. He is a member, to the best of my knowledge, of the top team comprising the executive leadership group, led by the CEO of the Ministry of Business, Innovation and Employment, and that lady’s name is Carolyn Tremain.

BRETT HUDSON (National): Madam Chair, I think we might have just about one minute left.

CHAIRPERSON (Hon Anne Tolley): One minute.

BRETT HUDSON: So the Minister has said that most of these contracts, certainly since COVID, may not even be entered into but won’t be commenced before the election. He’s also said that one Parliament can’t bind another. So how is it that the public can have any confidence that the announcements they’ve been hearing and will continue to hear aren’t simply announcements to get those governing members re-elected?

Hon SHANE JONES (Minister for Regional Economic Development): The answer is very simple: I can see the future.

CHAIRPERSON (Hon Anne Tolley): OK, thank you—thank you, Minister. I think we’re moving to broadcasting, communications, digital media, commerce, and consumer affairs. I welcome the Minister to the chair.

BRETT HUDSON (National): Thank you, Madam Chair. Well, it’s great to see you again, Minister Faafoi—a simple question for you. We’ll start off with market studies, I think, because I noticed that that’s gone up by a bit in the Estimates. They’re getting a bit of extra cash.

I want to know, Minister, what is the Minister’s commitment to value for money for public expenditure, and the example I would give is the most recent—in fact, the only—market study completed to date. When we got a progress update from the Commerce Commission, they estimated that about $1.2 million at that stage had been expended by them in the work on the study. They couldn’t estimate, but it might be fair to say that something similar will have been expended by those private sector organisations that were caught up in the study, and at the end of it, not a single new idea emerged. What came forward in their report was the same things that the Ministry of Business, Innovation and Employment had uncovered at least two or three years earlier in their report.

So, Minister, what commitment do you have to value for money for public expenditure? How will you ensure, should you return in the position you are in post-election, that future market studies will not simply expend taxpayer money to tell us things that we already know the answer to?

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): I thank the member for his question and, to answer it directly, we place a lot of value on value for public expenditure. I believe the appropriation for the Commerce Commission to undertake a market study was $1.5 million per annum, so if I am to believe the number that the member has used in the House, they will have come in under budget. But I will have to double-check that number if, in fact, that was—

Brett Hudson: That was a progress number.

Hon KRIS FAAFOI: —the number that the Commerce Commission did expend. Off the top of my head, Mr Hudson, I believe it may have been a little bit more than that.

But if I look at the function of a market study, which is a new function for the Commerce Commission, I disagree with the member who posed the question about the effectiveness of a response to that market study. He would know that a piece of legislation is traversing the legislative process at the moment in order to ensure that consumers and businesses here in New Zealand have transparency and that we see more competition in the retail fuel market.

If I think about when we set out on a mission to have the legislation for a market study, and, about a year and a half after that point, when we initiated the first market study, I’m quite proud to say that on this side of the House, in what has seemed to be a very quick three years, we’ve (a) been able to initiate and (b) been able to pass that legislation to have a market study and to have a piece of legislation to have an enduring solution to a problem that most motorists around the country have found, or have always wondered why they were paying so much for their petrol. As the member will know, the Commerce Commission did find that people were paying above what they thought was a fair price for their petrol, and it should have been at a competitive level.

So when I think about the value for money that we’ve got from the Commerce Commission market study, the Government’s response to that, and what that will mean to the savings that will come about because of the increased transparency in the structure of the fuel market and also in terms of the increased competition that we will see around the country, I see more players in the fuel market. I think a lot of New Zealanders, once they see changes of the prices at the petrol bowser, will think it’s extremely effective expenditure for the savings that they will make for their families from running their cars on a weekly basis.

I’m very proud that we were able to get that piece of legislation in to instigate market studies, and I would like to commend the Commerce Commission for its thorough work. We’re one for one so far, and watch this space for what other markets we think need looking at in the best interests of consumers.

BRETT HUDSON (National): Well, thank you, Minister, for that very long and comprehensive response, but it missed the key point. So what specifically, Minister, did the Commerce Commission find after expending somewhere between $1.2 million and $1.5 million of taxpayer money? What specifically did they find in terms of recommended actions that was not already found in the Ministry of Business, Innovation and Employment report which was available to the Minister before he instructed them to expend that amount of taxpayer money?

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): I think we’re going to continue to have a disagreement about what was known before retail fuel market study and post. The difference between the information that the member is relying on is that it was done by the Ministry of Business, Innovation and Employment without their full ability to get the information from those players in the retail fuel market to the granularity that they needed to understand exactly what was going on. The member’s leader, when she was the Minister for Energy and Resources, was actually quite frustrated that she could not get to the bottom of, and the officials could not get to the bottom of, the understanding of why fuel prices were at the level that they were, and failed to do anything about it in the nine years in which they were in Government.

That’s why I stand here, again, quite proud that not only did we initiate the legislation and pass the legislation which enabled the Commerce Commission to undertake those market studies—and, to be frank, the Opposition wasn’t happy about that—but we are able to get the granularity and therefore have the legislative response that the Hon Dr Megan Woods is taking through the House to ensure that there is more transparency in the market, to ensure that there is going to be increased competition in the market. If the Opposition has a problem with that, which will mean that increased competition will see more competitiveness in what people pay at the pump, I’d like to see them go and campaign on that.

ANDREW BAYLY (National—Hunua): Thank you, Madam Chair. Continuing that line of questioning from my honourable colleague Brett Hudson, the cost that’s been incurred in undertaking this one particular study, I’d be quite interested to hear from the Minister in the chair, the Hon Kris Faafoi, (a) what was budgeted for the study, and, secondly, in terms of the breakdown of the sum that was incurred, to what extent that relied on internal Commerce Commission resources and to what extent were external contractors involved. Obviously, the intent of that question is to understand to what extent the Commerce Commission has the capability to undertake these types of studies. So that’s the first question; I’ll come back with some more. But I’d just be interested in the Minister’s input.

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): Thank you, Madam Chair. When we came into Government, the previous Government had appropriated, I believe, $1.5 million for the Commerce Commission to undertake a market study. So, in broad terms, they was the constraints in which the Commerce Commission was asked to undertake a market study.

I believe, if my memory serves me correctly, in the very early stages of Government, when we asked a question of “OK, the appropriation is $1.5 million, how many market studies could you potentially do with that?”, I think the answer was that you could do one substantial market study or a couple of medium-sized market studies. Again, it is an off the top of my head recollection; the Commerce Commission may have expended a little more than $1.5 million that was appropriated for market studies within their budget, but I would hasten to remind members that this was the first time that the Commerce Commission undertook this function. It wasn’t as if they were starting from a position where they had the resources, the experience, and the ability to do this off the bat. So there was a fair degree of ramping up the processes, ramping up the resources, and ramping up the person power within the Commerce Commission to undertake this work. So if—

Andrew Bayly: And the extent of external consultants?

Hon KRIS FAAFOI: I can get the answer to that, but I understand that there was quite a lot of external help in order to be able to do this market study in the time frame which is provided under legislation, which is 12 months. If the member gives me a chance, then I can get that to him. But, as I say, the appropriation at the beginning of the term was $1.5 million.

ANDREW BAYLY (National—Hunua): So just continuing along that vein—so just to help the Minister, I think the Minister probably may have forgotten, but he’s actually increased the funding for the Commerce Commission, but to what extent has the increase in the funding for undertaking these market studies been increased for the forthcoming financial year?

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): Thank you. No reminder needed from the member; I was referring to the amount of money that was appropriated initially, which was $1.5 million. My understanding is that, given the experience of the first market study, the increase to the appropriation for further market studies per annum is a little over $2.4 million.

ANDREW BAYLY (National—Hunua): OK. So, on that basis, that would mean that we’re going to do one major market study and one medium-sized market study to get to our $2.4 million budget. So under the new rules for the Commerce Commission, they have the power to initiate these types of reviews. Clearly, they’ll have the money available—$ million. To what extent are you satisfied that we won’t be undertaking unnecessary market studies, because they’re incredibly disruptive to the businesses that are investigated, and how do we not stop the process of the Commerce Commission just deciding to spend the money and just, basically, working through a low-order priority until they’ve used up the money in the budget?

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): First of all, I guess, in terms of the member’s first question, it depends on which markets we potentially undertake a market study in, whether it be a relatively simple exercise or something of a size of the retail fuel markets, which has already been undertaken.

I have every confidence in the leadership of the Commerce Commission that they wouldn’t undertake the kind of behaviour that the member is talking about—a very astute organisation, they know the constraints of the appropriation put to them, and there is a public interest test both within the Government-initiated market study and also the Commerce Commission market study that would have to pass not just the public sniff test but also the political sniff test in terms of the legislation.

So, again, if the member doesn’t have confidence in the Commerce Commission in doing that, I would like to send a message to him that I do.

ANDREW BAYLY (National—Hunua): Does the Minister actually have a hit list of potential targets that he may wish to influence the Commerce Commission to pursue?

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): I wouldn’t use that language. I think it’s a pretty serious and big call to initiate a market study on a sector. It would only be done if we thought that consumers were feeling the sharp effects of a lack of competition. So I wouldn’t use the language that the member has used. Of course, a number of my colleagues have outlined a number of sectors that they believe that some sunlight might be useful for and to ensure that consumers are benefiting from a competitive market, and if and when we’re ready to make an announcement, we’ll let the public know.

BRETT HUDSON (National): So, Minister, are you saying that you haven’t decided yet? Here we are a couple of months into this financial year. The appropriation runs through until the end of June next year. It took the Commerce Commission some time to go through the market study. Are you saying that no decision has yet been made as to what study or studies will be undertaken for the money that’s been appropriated for the coming year or the current year?

Hon KRIS FAAFOI (Minister of Commerce and Consumer Affairs): No, I’m not saying that; that’s the member’s words. What I’m saying is a number of options have been put to me about sectors that could potentially use some sunlight, and as I say, when we’re ready, we’ll make an announcement.

Vote Building and Construction, Vote Business, Science and Innovation, and Vote Transport agreed to.

Education and Workforce Sector (relating to immigration, workplace relations and safety, and employment)

CHAIRPERSON (Hon Anne Tolley): Members, I understand the responsible Ministers are available to speak to the remaining Votes in the education and workforce sector volume (B.5, Volume 2). Again, the question is that Vote Education, Vote Education Review Office, Vote Labour Market, Vote Pike River Re-entry, and Vote Tertiary Education stand part of the Schedules.

Dr PARMJEET PARMAR (National): Thank you, Madam Chair. It’s a real pleasure to take this call as the chair of the Education and Workforce Committee and to summarise the evidence. In this part, we are focusing on the 2020-21 Estimates for Vote Labour Market. It includes ACC appropriations—that’s what we are focusing on—ACC appropriations, immigration appropriations, and workplace relations and safety appropriations. This is because we have already dealt with the education component earlier.

So the select committee had the opportunity to have the Minister before the committee. At that time it was the Hon Iain Lees-Galloway, and the Minister was in charge of all three portfolios—that is, workplace relations and safety, immigration, and ACC. The total appropriations, as noted by the select committee for 2020-2021, are just under $2.39 billion.

In ACC appropriations, if I quickly look through those appropriations, they include appropriations for claims on the Non-Earners’ Account and for claims by non-earners on the Treatment Injury Account. This is to cover the estimated cost of injury prevention, claim processing, assessment, payment services and case management, public health, acute services, medical services, elective healthcare, and contracted services. Appropriations also include appropriation for claims on the Non-Earners’ Account to cover the cost of income maintenance, independence allowance, and other compensation payments. It includes an appropriation for claims by non-earners—

CHAIRPERSON (Hon Anne Tolley): Can I just interrupt the member. As the select committee chair, you don’t have to make another speech in this part, because you’ve already spoken in the first part. You’re most welcome to continue, but you don’t have to do another speech.

Dr PARMJEET PARMAR: Thank you. That time I just covered education.

CHAIRPERSON (Hon Anne Tolley): I know, but your time is counting out of your party’s—

Dr PARMJEET PARMAR: Yes—yes. I understand. So that means I can ask questions in this?

CHAIRPERSON (Hon Anne Tolley): Absolutely.

Dr PARMJEET PARMAR: Yes—thank you. So—yes, we will move on to questions. Thank you for that clarification, so I don’t have to summarise the report. The question that I have for the Minister is that I’m receiving a huge amount of correspondence—this is in regard to immigration—for people that are stuck overseas. I’m talking about people that are partners or spouses of New Zealand residents and citizens. So these people have the right to be here with their partner or spouse who is a New Zealand citizen or New Zealand resident. These people, some of them have gone overseas before lockdown. They got married in that country. They came back hoping that their partner or spouse would be able to join them here after their application is processed, but because of lockdown that person has not been able to come and join their partner or spouse here in New Zealand.

There are a lot of families in that kind of stress, and I would like to know from the Minister what his stance is on these people that are stuck overseas. I’m talking specifically about spouses and partners of New Zealand residents and citizens, because we have allowed New Zealand residents and citizens to come here but their spouses and partners, because they got married just before lockdown, are in a different country. They are not residents or citizens here yet, but their application needs to be processed. These people are already here. They cannot go back and join their partner or spouse back home, but they want their partner or spouse to come here and join them here, because this is the place they have chosen to live together. So it will be good to have some clarification on the plan that the Minister has to bring in these people that are stuck overseas. This is creating a lot of stress amongst a lot of people that are here that were hoping that their husband or wife will be able to join them as soon as they come back here and as soon as their application process will go through. Thank you, Madam Chair.

Hon KRIS FAAFOI (Minister of Immigration): Can I thank the member for her question. The Government, obviously, understands that it’s a difficult time for the group of people that she has discussed in her contribution, but I think the starting point has to be that our border is our first and best line of defence in order to keep the COVID-19 virus out of our communities. As the member would appreciate, as well as the cohort that she is talking about, there are also groups such as temporary visa holders who are ordinarily resident here in New Zealand, who are also finding it difficult to come to New Zealand, but our borders are closed for a reason.

In amongst managing all of that is the management of the quarantine centres being undertaken by the Hon Dr Megan Woods as Minister of Housing. So while we are aware and understand the difficult circumstances that some of these cohorts of people who would like to come back to New Zealand to be repatriated, reunified with their families, we also have to understand (a) that the border is, essentially, closed, with a number of exemptions and exceptions. Obviously, for New Zealand residents and New Zealand citizens, coming back is fine, but it will take some time for us to work and stage through every visa category in order for us to think about how we might plan getting some of those people who have either got partners here in New Zealand, or who might ordinarily live in New Zealand, back into the country.

My understanding is if someone were to be in that situation, they would be able to travel back to New Zealand if they were travelling with their partners. Also, my understanding is that if they are not travelling with their partners, they are unable to re-enter the country. But, again, I will go back to my starting position, that the border, again—and we’re seeing, obviously, some sensitivities around it—is the best weapon, and especially the weapon that New Zealanders most want to see as secure to keep us safe from COVID-19.

DAN BIDOIS (National—Northcote): It’s a privilege and a pleasure to rise in this Estimates debate. I want to change the focus today to WorkSafe, because as we know in New Zealand, we have an issue with workplace fatalities and workplace health and safety incidents, on the rise under this Government, and we heard from the previous Minister in select committee around what—

CHAIRPERSON (Hon Anne Tolley): Sorry, sorry—sorry to interrupt the member. We are still on immigration.

DAN BIDOIS: Oh, Madam Chair, I’ve jumped the gun there—there we go.

GOLRIZ GHAHRAMAN (Green): Thank you, Madam Chair. It is a pleasure to rise to speak, actually, on immigration, and, in particular, on this line item that may have gone unnoticed by many but is incredibly important, profoundly important to those that it affects. That is the line item in the last Budget that affected the reunification of refugee families. It is a Green Party win that came out of our confidence and supply agreement with the Government. It affects the lives of refugee families that were separated from one another, often with the immediate family left behind in precarious situations, facing persecution, and facing war for years at a time. What we did in the review of the family reunification policy was not only to double the numbers of family members who would be reunified with their refugee family members here in New Zealand, but, for the very first time in the history of this policy, there is funding to support the reunification of refugee families. At a time in global politics when we see refugee families forcibly separated at various borders and children caged, New Zealand gets to stand as a counterpoint to the politics of prejudice.

We put in $21 million in the last Budget, in a time of pandemic. I couldn’t be more proud that we actually stood for the rights of people most downtrodden at a time where there is another crisis also facing the globe, which is the displacement of people, and it has been recognised by experts, by the United Nations, by anyone who can count, as being the biggest displacement crisis since World War II. So people fleeing persecution based on their race, based on their religion, based on their political beliefs, and those fleeing war are now displaced at such enormous numbers as to, per capita, be rivalling the crisis that the world faced when European Jewry had to flee World War II Europe.

New Zealand gets to stand for reunifying these families. We know that it’s, in fact, good for New Zealand when we stand for the rights of all of our communities, minority and marginalised communities included, and those who are just resettling here as new Kiwis. We know that within a couple of months of having their immediate family members being able to join them, refugees who are here alone will dispense with accessing mental health care, and so that’s incredibly profound. We know that each one of us has learnt what it feels like to be disconnected from our immediate family under the COVID-19 lockdown; and that’s what people are facing. You know, people are facing separation when their loved ones are ill, when there are birthdays, when there are family events, and when people pass away. We are putting resource into reunifying those family members so that that stress and that trauma, at least, can end for them.

So that is an incredible win. It is a historic win, and it will mean something to 300 more new Kiwis every year. They will remember that, and it will change their lives. I do hope that, having learnt with COVID-19 that the wellbeing of each of us is interconnected and inextricably linked to the wellbeing of us all, we will start to look at the prejudices in our systems and to address them when it comes to migrants.

The other aspect of our immigration policy that we do need to address is the parent category visa. We do need to acknowledge that there shouldn’t be a price tag attached to people being reunified with their immediate family member, their parents. Grandparents take care of children. That means that migrants can return to work, the families can function better, and that shouldn’t be a right that’s open only to those who can afford it.

The other thing that we are yet to address as a Government, and that the Green Party will continue to advocate for, is that migrant workers who are usually resident here, who are filling essential skill gaps, whether it’s in the regions, whether it’s in highly skilled jobs, whether it’s workers that we don’t quite even pay enough, will have access to the emergency benefit when things like the COVID-19 pandemic hit, because leaving anyone out is not really good for any of us. It is a weakness for us also. So standing for wellbeing I do celebrate the win for refugee families to be reunified. I hope that we continue to do that work for equality in our next Labour-Green Government.

CHAIRPERSON (Hon Anne Tolley): I’ll just remind the member that this is no longer an opportunity for five-minute speeches that range right across areas that aren’t even related to the Estimates. This is an opportunity for question and answers of the Minister on the Estimates for 2020-21.

STUART SMITH (National—Kaikōura): I raise a point of order, Madam Chairperson. I think the Green member has taken up most of the Opposition’s opportunity to ask questions of the Minister, so I seek leave for more time for the Opposition spokesperson at least to have a say on immigration.

CHAIRPERSON (Hon Anne Tolley): Yeah, it is unfortunate. That’s one of the reasons why five-minute speeches are not desirable in the process, but it’s entirely up to the Minister in the chair, if he’s willing to take a couple of questions.

Hon KRIS FAAFOI (Minister of Immigration): I know you directed the Green member to be a little more tight with her speech, but I just wanted to point to and acknowledge the Green Party member and just to give some details in terms of the Estimates, in terms of the changes in the appropriations, essentially, for the issues that she was talking about. In terms of family reunification, we’re seeing an increase of just a little over $7 million over the next three years in order to increase the capacity of that particular system from 300 to 600 families.

Just very quickly, while we’re at it, in terms of increased expenditure—there is now close to $3 million per annum to extend the pilot for the Community Organisation Refugee Sponsorship, which was something which up until recently was, obviously, a pilot, but now we’re also able to extend that funding. That is where community organisations are able to sponsor refugees over and above the quota in order to look after them and make sure that they land safely here in New Zealand. I think that, in the area of refugees, it is another good development within this Budget.

STUART SMITH (National—Kaikōura): Thank you, Madam Chair. Congratulations, Minister Faafoi, on your new role; let’s hope you do a good job—better than the other one. Now, the latest data I’ve got is 3 July, but up until then 161 employer applications for critical workers—none had been approved, not one. Now, we are in the most dire economic times that we are going to experience in living memory, and may even exceed what occurred in the 1930s. So part of that recovery is going to be an economic recovery. We need our businesses to be able to recover, yet critical workers are not able to get into this country—

Hon Tracey Martin: Employ New Zealanders.

STUART SMITH: —and those—well, they can’t employ New Zealanders, actually.

Hon Tracey Martin: Then train them.

STUART SMITH: Well, I can give you an example, if the member is interested. There’s a construction company called Rebartec; they have some new equipment that’s come into New Zealand. They cannot assemble this equipment without the manufacturer’s expertise coming into New Zealand—two people come from Australia. They have not been given an exception to come into the country. That means 10 jobs gone—10 jobs. There are numerous examples of companies that all add up to hundreds of jobs. More importantly, giving businesses the confidence to invest to help our recovery out of this deep hole we’re in—it’s absolutely essential that we get these people in. Now, we’re not talking about bringing someone in to do a job that a Kiwi can be trained to do. There just simply aren’t Kiwis to do it.

So my question to the Minister is: what are you going to do about it? What are you going to do to help our economic recovery and get these critical workers in here? They’re not applying to fill a role that someone else in New Zealand can do, because they can’t. There’s been very good applications go forward being dismissed by Immigration New Zealand and it’s quite shameful. So what are you going to do about it, Minister?

Hon KRIS FAAFOI (Minister of Immigration): Can I thank the member for his questions, but not necessarily all his comments. Can I correct him, because I believe he may have said that no applications had been approved in terms of critical workers yet, and I’ll give him the numbers for that soon.

In terms of decisions for essential workers, which was pre - 18 June, Immigration New Zealand received 248 expressions of interest before 18 June. I can tell the member that 90 of those were approved, 123 were declined, and 35 are still on hand pending to be closed out. Post 18 June, when it became the critical workers regime, I can inform the member that 488 expressions of interest have been received to date, of which 64 have been approved, 159 have been declined, and a further 265 applications or expressions of interest are on hand.

The member asked an oral question, I think, late last week in terms of what the Government is going to do to deal with these requests from businesses around critical workers. The first and fundamental thing that the Government will do is make sure that we continue to make the right calls at the right time to keep our country safe. That, unfortunately, has put our communities and businesses and sectors in difficult positions. But I believe that the team of 5 million are still willing to go through some of those difficult decisions and those difficult times to ensure that what we see happening around the world, where COVID is growing and not slowing, doesn’t happen here in New Zealand.

The criteria for critical workers is now set out, and, as I said to the member last week, if he is aware of any sectors that do have real shortages, then I would suggest instead of blowing wind in this House he instruct those sectors to do a couple of things: find out the information and the criteria in order to try and bring these people through, but also work with them to change with the immediate times. That is, to make sure that if they do find themselves in a position where they do have shortages of labour, they do everything they possibly can to ensure that a New Zealander who can do that job fills that position.

The other thing that they should do is work with the Government or with others in the sector to start innovating around how they find skilled work or how they start training New Zealanders to do that work. I know it is difficult for sectors who have traditionally relied on migrant workers to fill a number of positions in a time when the border is closed, but the border is closed for a good reason, and that is to keep our country at the position where it is now, where our economy can function as close as possible to as normally as it can, and our community can function as close to normal as it can. And I would stress to the members to my left that that is a very privileged position in the world that we hold, and we have to start thinking outside the square to ensure that our economy can take benefit of the situation that we’re in.

Erica Stanford: Madam Chairperson?

CHAIRPERSON (Hon Anne Tolley): Is this still on immigration?

Brett Hudson: No, we’re going to move on.

Erica Stanford: Sorry—sitting down.

Hon Kris Faafoi: OK.

CHAIRPERSON (Hon Anne Tolley): OK. Thank you, Minister. Thank you. We move now to workplace relations.

Dan Bidois: Here we go—I’m ready.

CHAIRPERSON (Hon Anne Tolley): Thank you.

DAN BIDOIS (National—Northcote): I do want to take this moment to congratulate the Minister in the chair, Andrew Little, on his elevation to workplace relations. I want to start out this discussion—and I know the Minister wasn’t in select committee for this, but the former Minister we had in the select committee, and really good discussion around workplace deaths and workplace incidents, the record in the last few years, and what it’s going to take to actually get this improved. I think in the last couple of months there have been quite a few cases, in the media as well—reported in the media—around the way WorkSafe conducts its investigations. The Minister may be aware of the Gavin Jones report of last year. That was an independent report conducted by WorkSafe into the way it conducts its investigations, and that report found a significant amount of failings with WorkSafe in the way it handles investigations, a lack of staff, a poor culture, a lack of processes, a lack of training, a lack of focus, and outdated methods.

Michael Wood: We’re not here to talk about the National caucus.

DAN BIDOIS: Ha, ha! Good on ya, Michael Wood. So my question is really in particular around the public nature of this. In the last few months, we’ve had a number of cases, and particular members of the public that have come out criticising WorkSafe and the way it conducts investigations, in particular in the last couple of days an investigation into the crash that killed two children. There were significant concerns around the way WorkSafe conducted its investigations. So there’s a deep public dissatisfaction with the way WorkSafe is acting in this area.

So I want to hear the Minister’s perspective on the report. What has been done since 2019? I know that this is an Estimates debate, so the key thing here is: how can you convince the public and therefore this House that the actions of your ministry and WorkSafe will in any way improve public confidence in the way WorkSafe conducts its investigations? That’s my question to the Minister, and I yield to have him answer this question.

Hon ANDREW LITTLE (Minister for Workplace Relations and Safety): Thank you to the member who posed the question, and I have to say, having been in the job now for a matter of a few days, I’m not right across the Gavin Jones report, what it had recommended. But what I can say, in the briefings I’ve had with WorkSafe to date, and my own interaction with them and knowledge of them, is that they do have a couple of critical functions they have to perform.

One is, obviously, investigating the notified accidents—and, particularly, serious harm accidents and fatalities—when they receive those notifications. They have to be thoroughgoing investigations, they have to gather evidence, and they have to make a judgment call about whether a prosecution is warranted. And just in the way elsewhere in the justice system has to operate, they have to work out levels of fault and culpability and distinguish those things that are, largely, the product of accident or oversight, as opposed to recklessness and abject carelessness, which will attract, if not a prosecution, a severe penalty. The other function they have to do is to work with employers or businesses, and, indeed, whole industries—through their improvement notification sort of processes, through educated processes—to lift the level of health and safety performance. So they’ve got to be able to do both. It’s not quite carrot and stick; it’s sort of big stick and small stick, I suppose, that they have to use to make that change.

Are we making improvements? The indication is that our health and safety performance nationwide has plateaued. If you look at fatalities in the last two financial years, workplace fatalities are pretty much the same—82 or 83. In the figures for the year ending 30 June 2020, the fatalities on Whakaari / White Island were counted as workplace fatalities, because it was adventure tourism, and that counted. So that inflated that level of workplace fatality. But, nevertheless, we are still pretty high, you know. I remember being very concerned when our workplace fatalities were running at roughly one a week. Well, we’re well ahead of that. So we have work to do.

There is no question that good workplace health and safety is a matter of workplace culture, and it needs leaders, not just in management but in the workforce as well. In order to achieve that, it requires a positive relationship between management and the workforce generally, and then it needs to allow leaders within each of those sides of the bargaining equation, if you like, to step up and provide leadership on health and safety. Somebody needs to say to the worker who has a poor health and safety habit, “Uh-uh, you ain’t doing that here.” And it’s not always the manager who’s the best person to do that. The most powerful and influential voice in the workforce, when it comes to behaviour change to achieve an improved health and safety culture, is your peers in the workplace—fellow workers. I think WorkSafe gets that. They’re working with both management and unions and workers generally to achieve that level of culture change. That’s what will achieve real change and ongoing improvement in workplace health and safety.

DAN BIDOIS (National—Northcote): Thank you to the Minister for Workplace Relations and Safety for that explanation. Look, even if you take out the White Island tragedy, the numbers that we’ve been supplied by your ministry have indicated that it is—I mean, you’ve said “plateaued”, but it’s actually still an increase year on year. But, that aside, what I want to know is—in your Estimates—in the next year how things will look different. So let me just take a step back.

We’ve had the Gavin Jones report last year that was published as an independent report from WorkSafe. That report found a number of failings with the way WorkSafe conducts its investigations. Then, fast-forwarding a year, you’ve had, I would say, at least six or seven public cases in the media that have been reported where members of the public have had a lack of confidence in your agency’s ability to conduct its investigations. So I think it is a reasonable question to be here in the Chamber tonight and to simply ask: what is it specifically that your ministry is going to be doing differently in the next year in order to supply the public with greater confidence that the way WorkSafe conducts its investigations will, in fact, lead to better health and safety outcomes?

So I know, absolutely, you have provided a good kind of framework around the carrot and stick. That’s great, that’s fantastic. But what is going to be different from year to year—well, this year versus last year—to help see a measurable improvement in health and safety? And I’d just like to end in saying that nobody wants to have their workers, or their loved ones, go to work and not come home safe at night. So this is a genuine question I have for the Minister, and I would really appreciate a more robust answer. Thank you.

Hon ANDREW LITTLE (Minister for Workplace Relations and Safety): Thank you again to the member Dan Bidois. I don’t think that anybody would suggest anything other than his questions are motivated by a genuine wish and concern to see improvement in the area that we all know, I think, and understand needs to improve. So I accept that. Let’s bear in mind that, at the moment, WorkSafe receives roughly 15,000 notifications of harm incidents in the workplace. Some of those are more serious than others, obviously, and there will be fatalities within that as well. All of those have to be triaged and considered, and considered for levels of investigation of varying degrees of depth.

WorkSafe mounts nearly 600 prosecutions a year; they have, roughly, as I understand it, about a 94 percent success rate. So they are certainly striving to achieve calling those to account who cause harm. A 94 percent success rate suggests to me that they are taking cases that have a reasonably high probability of success. Achieving at a lower proportion suggests to me that they are picking some of the harder cases, as well, but I’ll leave that at that point. In the short time I’ve been Minister, and having had briefings about their systems, I know that they are on a continuous improvement process in terms of their triaging of their processes, in terms of trying to make the optimal decisions on resource allocation to get investigations going.

The case that the member’s referred to now in his last two questions, that has hit the headlines in the last couple of days, was a road traffic accident. So there was a police investigation. It was a dreadful, dreadful tragedy for that family where they lost two young boys, and I’ve met the family, as, indeed, his colleague David Bennett has as well. Following the police investigation and a prosecution and subsequent conviction and sentencing, WorkSafe conducted their investigation. They applied four investigators to that investigation. Having investigated it, they drew their conclusions against the Solicitor-General’s guidelines of prosecution that they are bound by; they made the determination not to proceed with a prosecution. When they had the opportunity to review that after the coroner’s inquest concluded that there was arguably a breach of the Health and Safety at Work Act, WorkSafe then reviewed it but still drew the conclusion that a prosecution wasn’t warranted.

Now, I think, in those circumstances, if that situation arose, my expectation would be that WorkSafe would have sent the matter off for external review, not just done an internal reconsideration as they appear to have done. That’s the way you’ve got rigour in WorkSafe’s system. So, while I’m the Minister, I’ll be certainly looking to see that their systems are not just about getting good systems on paper, and people complying with them, but looking at opportunities to improve their level of performance and delivery. External sort of benchmarking, external review, is a very important way of achieving best possible performance, and I will certainly be continuing to encourage them to do that.

MARJA LUBECK (Labour): Thank you, Mr Chair, for the opportunity to take a call in this Estimates debate. We’ve heard several times in the debate, of course, already that a strong health response was also an opportunity to provide for a very strong economic response, and that is a little bit of what I want to mention here; in particular, of course, our biggest and our earliest response to the crisis, which was the wage subsidy scheme. We are protecting jobs, with almost $11 billion in wage subsidies that we have already paid out to 1.6 million workers. That also includes our migrant workforce—there was a mention of that before. People that are here on temporary work visas had the ability to have their jobs protected, because, of course, their employers were able to apply for the wage subsidy. So it’s cushioning the blow of that impact of COVID and keeping people in jobs that gives us that real opportunity to kickstart the economy again.

That actually brings me to a question for the Minister. When we’re talking about kickstarting the economy, Minister, I wondered if you could tell us about the Treasury forecasting when it comes to unemployment levels in relation to the pre-COVID levels that we saw—so what the Treasury is telling us that we could expect as a result of that strong and hard response. Pre-COVID, we, of course, had those record low unemployment levels because of the programme of action that our Government was carrying out. Now, in workplace relations we have had some significant improvements when we’re looking at, recently, the improved provisions for parental leave, now having six months’ paid leave for new parents; lifting the minimum wage to $18.90, well on our way to $20 by 2021, and that will benefit more than 200,000 workers.

We’ve seen during the COVID-19 lockdown that it was some of our lowest-paid New Zealanders at the front line of our essential work that kept us going all through that crisis period, and so we’re hugely grateful to our supermarket workers, our cleaners, our security guards, our rubbish collectors for doing that amazing work that they’ve done over that same period. At the same time, COVID-19 has reminded us that health and safety is important, so that we are ensuring that people remain safe in their work. It has been mentioned before, and we have done a lot of work in helping New Zealanders keep safe.

Now, our next question to the Minister has been—[Interruption] Of course, it has been a very difficult time for anyone concerned about job security and for anyone losing their job. So my question to the Minister: why was it important in our Government response to COVID-19 to actually increase capacity in our programmes to make it easier for people to train and retrain and upskill coming out of COVID?

So then to just finish off, and I won’t take my full five-minute call because it’s rarking up the Opposition a little bit, hearing all of that good stuff that has gone on, on this side of the House. I will just finish by saying that Budget 2020 starts off rebuilding us together and continuing work to address the long-term challenges that we see facing this country. Thank you, Mr Chair.

Hon ANDREW LITTLE (Minister for Workplace Relations and Safety): There’s a couple of questions there. I just want to go back to a statement I made earlier which was incorrect. I said there were roughly 600 prosecutions; there weren’t. In the last financial year, there were 446 targeted engagements. The number of prosecutions was actually 59 and 55 were disposed of with a 94 percent success rate, so my apologies to the committee for getting that wrong.

The questions asked by the member who’s just resumed her seat, Marja Lubeck—she asked about Treasury’s forecasts for unemployment. It is true that at the beginning of the pandemic, and certainly at the beginning of the lockdown, Treasury’s forecast for unemployment was significant. It was up around 16 percent. Those forecasts have been modified ever since and the latest forecast was considerably lower than that. I don’t have the precise figure in front of me except to say that those forecasts are constantly under review, and the Pre-election Economic and Fiscal Update will be out in a matter of weeks, and that will have the latest and most reliable forecast for that. So I think we should look at that. What I think is very clear, however, is that the economic data is showing that the recovery for New Zealand has been happening a lot more quickly than anticipated and a lot better comparably than other countries around the world, and we can be thankful for that.

The second question related to further or additional investments in capacity and programmes, particularly active labour market programmes, job assistance and retraining, and what have you. And, yes, that has been absolutely vital. We knew that as a consequence of lockdown, in order to keep New Zealand safe—every New Zealander safe—some businesses would struggle, some businesses would have to shed labour, and some businesses might even have to close completely. We could anticipate that that was going to happen. What we needed to be sure was that the programmes were in place to pick people up who needed assistance and help in the labour market to be redeployed, to be reallocated as quickly as possible, and, where additional skills and training were needed, where they could get access to those sorts of programmes. And that’s what we’ve been doing.

Fortunately, because we are a very prescient Government—we have been a very prescient Government and a far-sighted Government, I think I would say objectively—we’d already started a range of programmes, including the Reform of Vocational Education, or RoVE, as it has become known. That had already meant that we were embarking on measures to improve accessibility to programmes and, of course, we’d already commenced an investment programme, particularly around infrastructure so that a level of economic impetus was already being prepared for before we even contemplated issues like lockdown in response to the pandemic.

DENISE LEE (National—Maungakiekie): Thank you very much, Mr Chair. I appreciate the call. In the select committee report on this particular Vote, sneakily right down the end, is progress of the Equal Pay Amendment Bill. So I’d like to ask the Minister for Workplace Relations and Safety, given that there was an extraordinary—and it’s reported in the report—13-month delay from when we reported back from the select committee to the House for the second and third readings for this particular bill, and the Supplementary Order Paper (SOP) that the Government tabled, which was rather large and lengthy, and was referred to by several Ministers that it was important and was aligning aspects of the Employment Relations Act to the Equal Pay Amendment Bill—given that 13-month delay, does he regard the content of the SOP—did that warrant the 13-month delay? That’s my first question.

The second question is in regards to the $1 million that the 2019 Budget set aside to implement the framework for pay equity for the new bargaining scheme. Could it be available—will it be available—for what I’d call a claim navigation assistance scheme? The reason I ask for that is that you may get a scenario where there is a multi-employer and a multi-union claim, a large claim, that gets quite complex. What support regime will there be? Could that particular appropriation of $1 million be set aside to give support to businesses who may find themselves in a large multi-employer claim but, as a business, are not a large business? What assistance is going to be available for them to navigate what could be quite a complex scheme, and has that been addressed by the Government in this particular round of Estimates?

Hon ANDREW LITTLE (Minister for Workplace Relations and Safety): Thank you, Mr Chairman, and thank you to the member who has resumed her seat, Denise Lee. In relation to the first question, about the Equal Pay Amendment Bill—was the 13-month delay warranted or justified—I think, bearing in mind that part of that delay was because of COVID-19, and the reality is that lawmaking stopped for a period of some weeks, yes, it was warranted. When the bill was reported back from the Education and Workforce Committee, it was apparent that there were issues that the Government, with the benefit of its advice, thought could be improved, could be made better. And, indeed, the social partners had come to the Government and said, “Actually, there are some things in there that we think could be dealt with better. We’ve got some ideas about how that can be done in a better sort of way.” So the Supplementary Order Paper reflected that, and that came back. Now it has been, fortunately, debated and concluded.

I think the whole objective of the exercise was to make sure that the scheme that is available now for workers and workforces to achieve pay equity is a much more accessible scheme—not the convoluted sort of process that has been around up to now and, indeed, contemplated in previous proposals for legislative change. So it might have taken a little longer, and some people may have felt a little frustrated about that, but the reality is, I think, everybody agrees now—reflected in a unanimous vote in the House—that we have a law now that I think will go a long way, much more quickly, to improving pay equity outcomes for New Zealand workers.

On the second question, which is about the scheme, I’d just point out to the member that $750,000 is available for implementation of the scheme this year—$250,000 was spent last year in preparation for it. So it is expected that assistance and advice will be required for participants as they go through the process to achieve and negotiate pay equity. That support and assistance will be—

CHAIRPERSON (Adrian Rurawhe): Members, that concludes the part on workplace relations. We now move to employment, if there’s any questions.

Hon KRIS FAAFOI (Minister of Immigration): I seek leave to correct a response that I gave during the immigration Estimates.

CHAIRPERSON (Adrian Rurawhe): Leave is sought for that purpose. Is there any objection? There appears to be none.

Hon KRIS FAAFOI: In response to a question from Dr Parmjeet Parmar, I would like to clarify that response in terms of partnership visas. Partners of New Zealand citizens and residents are able to travel by themselves to New Zealand if they hold the appropriate partnership visa. This also accrues to dependent children of citizens and residents if the children have a dependent child visa. That corrects the answer that I gave during the Estimates to the question from Dr Parmjeet Parmar.

Vote Education, Vote Education Review Office, Vote Labour Market, Vote Pike River Re-entry, and Vote Tertiary Education agreed to.

Environment Sector

CHAIRPERSON (Adrian Rurawhe): Members, I understand the responsible Ministers are available to speak to the Votes in the environment sector. Again, the question is that Vote Conservation, Vote Environment, and Vote Parliamentary Commissioner for the Environment stand part of the Schedules.

Dr DUNCAN WEBB (Chairperson of the Environment Committee): Tēnā koe, Mr Chairman. Look, first of all, I just want to start on a sombre note. It arose in our Estimates hearings that Dr Edward Hearnshaw, who had provided advice to the Environment Committee, tragically died in the Ruahine Forest Park. He was an economist who provided us very useful advice on climate change. I just wanted to take this moment to record that and record the sadness of his passing. He worked with the Parliamentary Commissioner for the Environment.

The Estimates were, as always, a useful insight into the operations of both conservation and environment. Conservation provoked particular interest, given the COVID circumstances. One of the points that came up was the loss of income from the conservation and tourism levy, and also the issue of concession fees. At that time, there had been some media attention around concession fees and the fact that, obviously, concession operators didn’t have the income, in some cases, to meet them—and I note for the record that that has now been addressed by the Minister, giving considerable relaxation and forgiveness of those fees.

Other things that were of particular interest—and I know some other members will touch on other matters, but the whitebait regulations and the progression of that was of considerable interest as well, along with the forever relevant and pertinent Himalayan tahr situation, and that matter has been addressed by the court. It was very good to see the Minister of Conservation, the Hon Eugenie Sage, committed to the preservation of our fragile alpine environments.

In respect of the environment Vote, there are a number of matters that stood out there, as well. Really, the headline issue there is the freshwater initiatives, and that has, obviously, seen considerable progress under this Minister, and also the Minister was questioned and may want to touch on the cost-benefit analysis of those freshwater initiatives and the fact that the cost-benefit analysis made it clear that it was a net gain to embark on this, particularly due to positive health effects, cleaner water, and less water-borne disease, and also some other things that weren’t taken into account, such as the clean, green brand of New Zealand that is going to be enhanced through this—so, arguably, the costs are lesser and the benefits are even greater, again.

Obviously, the National Policy Statement for Freshwater Management was a key matter and those issues of winter grazing and also nitrogen levels. There was some discussion around the amount of nitrogen, whether the balance had been struck at 190 kilograms of nitrogen per hectare, per year, whether that was the right amount—the general sense seems to be that it is. It’s fair to say that whilst some croppers thought it should be greater, there was an equally large body of opinion that suggested that, in fact, it was too great, indeed.

The other thing that the Minister may want to talk about is the progress of resource management legislation. Obviously, there has been some work in this space throughout the course of this Parliament. Some discussion in the select committee existed around the progress of the inquiry into the Resource Management Act and where that’s at, and, indeed, some discussion around what the shape of that might be like, as well as the COVID-19 Recovery (Fast-track Consenting) Bill with those 11 projects which have been—or greater than 11 now—fast tracked.

Also relevant, of course, was the headliner of climate change, the fact that the Climate Change Response Act and the emissions trading scheme is well in place, and the regulations now, which will be actually implementing those, will be coming. I’m interested to know any movement there.

There was some discussion around the Green Investment Fund, another fund which, rightly, was pointed out that it has taken a while to get the money into the public sphere, but it was good to see the Wellington announcement come out in respect of greening the port, making Wellington port carbon neutral.

So, overall, very useful. All of the Ministers came to the party, answered very fulsomely the questions put from both sides of the table. There was also just some discussion around climate change adaptation and how that will be addressed, what kind of legislative instruments will be part of, perhaps, the next Parliament, and what the Minister’s thinking is around there.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Mr Chair. I think the select committee chair has accurately and fulsomely summed up the Estimates hearings. One Minister we didn’t hear from was the Associate Minister for the Environment. She did, however, come and brief us subsequently on her delegated responsibilities for waste and waste minimisation, which we certainly appreciated, and it was a good opportunity to hear from the Associate Minister. So thank you very much for having done that, Minister.

One of the questions that I don’t think was properly answered at the Estimates hearing by the Minister sitting in the chair relates to a commitment, a very clear and concise commitment, in the Speech from the Throne. And when quizzed about it at the select committee, I don’t think the Minister gave it an adequate answer. So I’m hoping that he will be able to give a more fulsome and detailed analysis tonight. I quote from the Speech from the Throne, where it says, amongst other things, “Commercial users who profit from bottling water and exporting it overseas will pay a royalty.” Clearly, that hasn’t happened. There has been no implementation of such a royalty, and I’m hoping the Minister can now give us a more detailed explanation than he was able to do at select committee.

Hon DAVID PARKER (Minister for the Environment): I’m happy to essentially say what I said at select committee, which is that concerns about exported water in bottles, which is amongst the most pristine water in our country, don’t really relate to environmental effects. The quantities are small, and the effects on the environment are less adverse than many other abstractions of water for other uses. But the concerns for New Zealanders really relate to whether it’s fair that that water should be exported overseas without any financial return to New Zealanders with the use of that water. I explained to the committee that there are pros and cons in proceeding with a levy on bottled water without looking at wider issues relating to water, including whether you might create problems in the Crown Māori relationship dealing with that particular aspect of water allocation in advance of others.

Hon SCOTT SIMPSON (National—Coromandel): Thank you, Mr Chair. Sadly, that was no more fulsome in terms of an explanation than the Minister did give at select committee. So I guess we’ll keep asking questions about that in other forums.

Another issue that arose at the select committee was a discussion around elite soils and urban development and the decision that the Minister has taken to make some changes in regard to that. When it was put to the Minister in the select committee that there had been a commitment to remove the Auckland urban boundary, the report from the select committee says, “The Minister did not accept that suggestion, but said the Government was ‘relaxing it’.”

Now, since that hearing, I’ve had an opportunity to go back again and check very carefully the exact wording that was in the Speech from the Throne, and the Speech from the Throne says: “This Government will remove the Auckland urban growth boundary.” It’s emphatic; there is no hint of anything other than that being a firm and very committed promise. And I want to know from the Minister why his Government hasn’t taken any steps to remove the Auckland urban growth boundary as promised in the Speech from the Throne.

MICHAEL WOOD (Senior Whip—Labour): I raise a point of order, Mr Chairperson. My point of order is that this is a debate about the Estimates of Appropriations. I’m not sure that policy issues such as the urban growth boundary do relate to the Estimates hearings.

CHAIRPERSON (Adrian Rurawhe): It’s a debating point.

Hon DAVID PARKER (Minister for the Environment): Mr Chairman, I’m happy to respond briefly. We have just promulgated a change to the National Policy Statement on Urban Development Capacity, which does have the effect of relaxing that urban boundary in respect of planned changes that will be necessary for councils facing high rates of population growth. It both encourages good urban form by encouraging the natural intensification that will occur but for strict plan rules preventing it and also in respect of planning for growth. Growing centres will require councils to consider whether they’ve got their zone boundaries correct.

ERICA STANFORD (National—East Coast Bays): Thank you, Mr Chair. I want to change the topic slightly to climate change, if that’s all right with the Minister. This Government came into office with the self-imposed title of being the greenest Government ever. And we all have noted that our emissions have continued to rise during this Government’s term of office. Now, the transport sector is the fastest growing source of our emissions and yet here we are in a perfectly placed country with 85 percent renewable energy to tackle that low-hanging fruit when it comes to the uptake of electric vehicles (EVs).

Now, in 2016, the Minister will well know that the National Government put in place some very practical steps to increase the uptake. We removed the road user charges and we had a target of doubling the EV fleet every year. The first year, 2016 to 2017, it was a 143 percent uptake—an increase. In this Government’s term it’s increased between 2017 and 2018 by 50 percent, and then in 2018 to 2019 by 25 percent. So the increase in uptake is dramatically decreasing. This is despite the Government’s policies of 100 percent Government fleet of EVs by 2025, the clean car standard, the “feebate”, which was a poorly thought out highly punitive policy.

My questions to this Minister are: via the Estimates what has this Government done in terms of the Government fleet? So how many electric vehicles are in the Government fleet and why has that promise not been met? How many EVs are in New Zealand now and why has the uptake slowed so dramatically? What policies has this Government implemented and what have they spent to increase the uptake of electric vehicles? And would the Minister actually agree that, in terms of practical steps to increase the uptake of EVs and reduce our emissions, this Government has failed to offer any solutions to increase uptake of electric vehicles in New Zealand, despite their hand-wringing and their claims of a climate crisis and this climate change being the nuclear-free moment?

Hon DAVID PARKER (Minister for the Environment): Government procurement sits within the portfolio of economic development, climate change emissions within the climate change Minister’s remit, and transport fleets with the transport Minister’s remit, and I’m none of those. I’m the Minister for the Environment.

Hon SCOTT SIMPSON (National—Coromandel): Notwithstanding the very excellent questions posed by my colleague the member for East Coast Bays, Erica Stanford, the Minister in the chair is responsible for this package of Estimate’s debates, which does include climate change. There was some discussion at the select committee about the relative merits of at some future point separating climate change responsibilities, in terms of Cabinet responsibility, away from this environment package. So the Minister should be in a position to answer questions relating to the climate change portion of this Estimates debate and this appropriation hearing.

It’s on that note that I want to ask a question about the Green Investment Fund. At the time we had the hearing, some 560 days after the formation of the Green Investment Fund, there had been not one single investment made. There had been lots of international travel, there had been the setting up of a lavish and well decorated and furnished building and office facility in central Wellington, and there had been a lavish, grand, cocktail party—an opening—but no single investments. And then the very day after, I think it was, that the select committee heard from the climate change Minister, a modest announcement was made of a $15 million investment to CentrePort in Wellington. And my question to the Minister in the chair is why did it take the Green Investment Fund so long to make even a modest investment? And why was it that CentrePort was the chosen recipient of the funding when the Ports of Auckland has essentially done exactly the same thing but using their own funding stream? Here we have a situation where the Wellington port company, or CentrePort, is the beneficiary and the recipient of Government largesse and an investment from the Green Investment Fund but other ports around the country essentially decarbonising their operations have not been so privileged to receive that kind of investment funding, and they’re doing it off their own bat. I’m keen to know why.

Hon DAVID PARKER (Minister for the Environment): Mr Chairman, the Minister for Climate Change, James Shaw, I think, told the committee, and I can confirm, that the experience of creating other green investment funds around the world is that it does take some two years to set up the institution and make the commercial arrangements necessary to begin making investments. As the member who has just taken his chair, the Hon Scott Simpson, has recorded, since the select committee met the first investments have been approved.

In terms of transformative investments that are being advanced in coming years, I was with the Minister for Energy and Resources on Sunday when we announced a feasibility study into a project to consider creating a giant battery in Lake Onslow, taking water from the Clutha River, pumping it up into an enlarged Lake Onslow, and releasing it back through a hydro generation facility, and thereby creating both dry year reserve and reserve against the intermittency, which would help decarbonise New Zealand’s electricity, reduce reliance on Huntly, which produces our most expensive electricity, and would also lead to a future, many billions of dollars over the years, of investment in intermittent renewables, which are likely to be the key to the decarbonisation of New Zealand’s economy more broadly, including in industrial heat and transport. That feasibility study will look at alternatives, but I think could make a huge difference to the energy and environmental future of our country.

Hon SCOTT SIMPSON (National—Coromandel): Just sort of following on from matters generally relating to climate change, the Budget documents indicate that in the preceding financial year, a sum of over $400 million was received by the Government in terms of the emissions trading scheme (ETS) contributions that went into the consolidated fund. That was at a point when the carbon price was kept at $25 dollars, and since the changes that this Government has introduced to the ETS have been promulgated, a carbon price today, I think I had a look, was in excess of $33 a tonne. So the funding stream that will eventually find its way into the Government consolidated fund is going to grow and even more so, potentially, when the trigger point that will get the cost containment reserve triggered is likely to occur if carbon gets to $50 dollars a tonne. What I’m keen to know from the Minister is: what’s his view about how that money should be invested? Should it be hypothecated, should it go into the consolidated fund, or should it be ring fenced, in his view, for other items that relate specifically to carbon emission reduction?

Hon DAVID PARKER (Minister for the Environment): Those decisions are for a future Government. We haven’t taken those decisions. From the point of view of Treasury, the remission of or exercising the emitter’s right to use the fixed-price option and pay the Government, who then takes on the emissions liability—from the point of view of Treasury, there’s a future liability for the Crown to take responsibility for those emissions that were previously the responsibility for the emitter. So Treasury would disagree that all that money should be remitted on emission reducing projects. But those issues will need to be considered in the future.

ERICA STANFORD (National—East Coast Bays): Thank you, Mr Chair. I would like to chat with the Minister for the Environment for a while, if he doesn’t mind, about the waste sector. We did get a briefing from the Associate Minister Eugenie Sage this year, which was almost as good as having her in for Estimates, but that’s all right.

I wanted to chat with the Minister about the problem with plastics in this country—well, the problem that we have with waste in terms of the lack of overseas markets that we have to get rid of that anymore, because of the fact that there are countries who have closed their doors to taking our waste; the fact that it was, and is, still being stockpiled in this country and, in fact, for the most part now, those plastics are being sent to landfill, because of the inability to recycle them here.

Again, with the Government’s claim of being the greenest Government ever, I was keen to hear what the plans are for onshore recycling in this country, and what the Government have done in their aim to get rid of some of the plastics in New Zealand rather than sending them to landfill, and, specifically, whether or not the Minister in the chair believes that we should be investigating a waste-to-energy option. I know that the Associate Minister is vehemently opposed to waste-to-energy, but I’m keen to know whether or not this Minister believes that there should be some investment, and thorough investigations, into the technology that’s available these days, and whether or not the New Zealand landscape would suit a waste-to-energy scheme.

Hon DAVID PARKER (Minister for the Environment): I think that it’s true that most New Zealanders now realise that New Zealand hasn’t done a particularly good job of taking responsibility for our own waste streams. Until very recently, we used to send it overseas. Quite often, it was poorly sorted, and the waste streams were degraded, with either glass being mixed in with plastic or paper, or different grades of plastic being mixed together. As a consequence, various overseas countries—in my opinion, wisely—have closed their borders to those sorts of low-quality waste streams, which has had the effect of forcing developed countries—like New Zealand, Australia, and various other countries—to take responsibility for dealing with their own waste streams, and we’re in the process of trying to advance plans to do that.

The Associate Minister, Eugenie Sage, has already made significant steps during this three-year term—including banning single-use plastic bags—and has advanced various other projects to advance better dealing with waste, and she has more announcements planned soon in that regard. It’s also notable that some of the options being explored are being funded by the Provincial Growth Fund.

There’s also decisions being taken to, over time, increase the waste levy—which has not moved for a long time—to create an additional pool of money for both central and local government to use to better manage those waste streams. I would be quite hopeful that in the future, in the years to come, we’re actually going to do a lot better in that regard. I know that Minister Sage, as well as myself, have inspected some of the facilities overseas, in order to get an idea as to how much better things can be done than is currently the case in New Zealand.

Erica Stanford: Waste-to-energy?

Hon DAVID PARKER: If I could, just in respect to the waste-to-energy, there may be some small residue at the end of that that it is wise to use for energy. But the better course is to reuse as much of it as possible, rather than draw more oil out of the ground, convert it into plastic, and send it into the air with climate change effects.

Hon NATHAN GUY (National—Ōtaki): Thank you very much. I want to acknowledge the Minister in the chair, David Parker. I think the discussion so far has been very fruitful. I’ve got a few questions around elite soils and also the national policy statement (NPS) for fresh water. I’m interested in two aspects: where the elite soil processes up to in terms of protecting those soils into the future, and that dovetails nicely into the NPS for fresh water, where, effectively, there’s been a carve-out for the likes of Pukekohe and Horowhenua growers and a few others, I think, possibly around the country.

So my first question is: how did the Minister get to that point, I guess, so slowly? Was it to do with COVID, where everyone realised that, suddenly, producing food in this country was essential and if the Government did go hard on particularly nitrogen levels, DIN levels—dissolved inorganic nitrogen levels—then that would mean that there wouldn’t be any leafy greens. In particular, my patch around Levin, they produce about 30 percent of the leafy greens across New Zealand, and I know Pukekohe also has a larger amount that’s produced up there. So I guess the first question is around the elite soils. Where is that process up to? The Minister’s talked a lot about that.

Second question is: why didn’t the Minister, if he was going to make the decision that he has made, not allow the discussion document to run and cause a whole lot of anxiety and angst amongst horticulture growers, and rule that out at the start? I know that he has made the decision. He’s been up in my patch recently, and I commend him for doing that—meeting with iwi, growers, the council, and the like. I’m interested a bit more in how he foresees the future of Lake Horowhenua, starting and maintaining the momentum that we created under the National Government with several pools of funding to try and start the process of cleaning up Lake Horowhenua—what the Minister’s views are on that going forward into the future. Both of those aspects—or, actually, the three of them are all aligned: the elite soils around Lake Horowhenua, the carve-out for the NPS fresh water around the nitrogen levels, and Government support—working constructively with our local government, the Horowhenua District Council and also the Horizons Regional Council.

It’s interesting. Another point that dovetails into that as well is the One Plan, because 60 growers, as I understand it at the moment, in the Horizons region, which is a very large region—almost up to Whanganui, across to the coast, on the East Coast at Ākitio, down to south of Levin; so it is a massive area. So we’ve got 60 growers currently, as I understand it, who are unable to get a resource consent and meet the nitrogen levels under the One Plan. So there are four questions there that I would appreciate the Minister addressing. Thank you.

Hon DAVID PARKER (Minister for the Environment): I’ll do my best to answer those questions. In respect of the point about the NPS on elite soils, the reason for that is if you’re going to rely less on hard urban boundaries for reasons of wanting to have competitive land markets, you do create a risk that you will have subdivisional pressure or additional subdivisional pressure on soils that are better kept for future vegetable production. So the view that we took was that they need to be better protected through a national policy statement, which we have under development.

Hon Nathan Guy: What’s your timing on that, Minister?

Hon DAVID PARKER: Well, it won’t be delivered before the election, but it will be delivered either by us or the next Government. If it isn’t us—if we were unlucky enough not to be elected—that would fall to the next Government to finish off. In respect of how you do it, you actually do need to get down to quite a granular level and actually look at it on maps, and we’re in the process of doing that.

In respect of the vegetable production issues relating to nitrate toxicity, after consultation, we did decide that it was not feasible to have a nitrate toxicity level of 2.4, which is what the national policy statement requires for nitrate toxicity as proposed to be updated. The current standard’s 6.9—2.4 is entirely appropriate for just about the whole of the country, but it’s unachievable in both Horowhenua and the Pukekohe region. The main stream that leads into Lake Horowhenua, or the river, currently has a nitrate toxicity level of over 10—I think it’s 10.

Hon Nathan Guy: The Arawata.

Hon DAVID PARKER: The Arawata Stream—thank you. Modelling that we did—because we did some very intensive modelling in this—showed that even if there was, I think it was, a 40 percent decrease in the area of vegetables and a 40 percent decrease in the area of dairying within that catchment, there would still only be a decrease in nitrate concentrations in that stream of about 30 percent—i.e., it would be at around 6.9, which is what the old target was, but nowhere close to the 2.4 proposed.

That left Government with a choice of pretending we could get there—we’re not into pretence—completely closing down all vegetable production and dairying in the region, and even then it’s unclear that you’d have got to 2.4. The third choice would’ve been to have a higher standard than 2.4 for the whole of the country—you wouldn’t have needed exceptions, but you’d have had an inappropriately lax level for the whole of the country to deal with those discrete problems in Pukekohe and Horowhenua—or to have some other regime for Horowhenua and Pukekohe.

Now, it’s a matter of some concern to two iwi groups within Horowhenua that there could be an exception to their area, and I understand their concern in that for far too long they’ve had to put up with Lake Horowhenua effectively being a dumping ground for pollutants from that catchment that they’ve had to put up with ruining their lake. So we’re determined to improve things in Lake Horowhenua, and we are considering whether our revised proposal to have a complete exemption for ever to the nitrate toxicity level is appropriate or whether there should be some narrower form of interim exemption which none the less sustains vegetable production, which, of course, we need for human health. There aren’t that many places that we can grow those leafy greens that we all need to have a healthy diet at an affordable price, particularly in winter.

CHAIRPERSON (Adrian Rurawhe): I understand there’s a new Minister coming to the Table for conservation.

Hon JACQUI DEAN (National—Waitaki): Thank you, Mr Chair. I have several lines of questioning for the Minister. I first want to acknowledge the work that the Hon Eugenie Sage has been doing in the conservation space and also to acknowledge with gratitude the way in which the Minister is open to engaging with myself, particularly over local issues. It is appreciated.

My first line of questioning is around the Jobs for Nature programme, which was announced and discussed at the Estimates for Vote Conservation—just noting that there was an allocation to the Department of Conservation (DOC) of $200 million to go through to 2022-23. That was establishing the Jobs for Nature fund and for DOC to partner with councils and tourism businesses, iwi, hapū, and communities to provide temporary nature-based jobs. Now, we know that those jobs will be for a period of up to three years. I am interested in not the nature of the jobs, because the Minister set out those—so it was planting, weed control, wetland restoration, that sort of thing. What I’m interested in is the fact that there is $200 million allocated. I would like to know, and have an update on, the percentage of that allocation which is going to different organisations by way of overheads, which—I am interested in—would include things like training fees. Will there be new equipment necessary to be purchased? Will there be additional support for a workforce which, essentially, has gone from, for example, baristas to wetland restoration?

Given the nature of these jobs which are temporary, for a period, what is the average period that the Minister is expecting people to stay in those jobs? Is it until tourism picks up enough again in Fiordland, for example, or in Queenstown or in Rotorua, for example, so that those baristas go back into the hospitality industry? What then? Is there another round of training? Is there another round of uniforms and kit? I would like the Minister to update us on the percentage of that $200 million which goes into all of those overheads versus the percentage which goes into shovels in the ground.

Hon EUGENIE SAGE (Minister of Conservation): Thank you, Mr Chair. Thank you for the question. The Department of Conservation was allocated $200 million, as part of the Budget, for Jobs for Nature. That is part of a much wider Government programme of $1.3 billion involving the Department of Conservation, Land Information New Zealand, the Ministry for the Environment, and the Ministry for Primary Industries. Those four agencies are working together in order to deliver 11,000 jobs across Aotearoa.

In terms of the programme within the department, which has been renamed Kaimahi for Nature to separate it out from the more general Jobs for Nature, those jobs, as the member noted, are expected to be temporary. Some of the jobs will be provided by businesses themselves, and in the Queenstown area, for example, some of the tourism businesses’ staff are being employed on track cutting and the like. In South Westland, a number of former employees of tourism businesses in Franz Josef and Fox Glacier are out doing work like upgrading and maintaining the tracks.

So, where they’re working for the department, they’re generally using the equipment that the department provides. There is on-the-job training for others who are employed by contractors. It has enabled some forestry contractors to increase the number of staff that they employ. They provide on-the-job training. And, of course, there is also the $1.6 billion which Government has made available for apprenticeships and trade and other training. So there is the ability to integrate with that.

The department, for its part of Jobs for Nature, is working with other agencies for regional alliances, working alongside regional councils, hapū and iwi, and community organisations to prioritise the types of jobs which should be delivered in the regions and to enable people to fit into those structures as well, so they can also provide training.

In terms of the average period, the funding only started on 1 July. There have been some dozens of jobs provided already. If the member would like to put down a question for written answer, we can provide the detail about the average period, but it is expected that people will move through these jobs and go back into more permanent employment when tourism picks up or when other areas of the economy improve.

Hon JACQUI DEAN (National—Waitaki): With regards to concession fees for tourism operators, there was an announcement very shortly after the Estimates examination around—and some confusion which surrounded that, because the Prime Minister appeared to announce that concessionaires didn’t have to worry about paying any fees. Yet when the detail emerged, the situation was quite different, and concessionaires started to get accounts coming through the mail fairly soon after the announcement, which seemed, from this side of the Chamber, to be a very unfortunate situation, and quite undermining for the Minister, where she, I would understand, was taking a slightly more pragmatic view. Yet the Prime Minister of the day announced something quite different.

So leaving that embarrassment aside, could the Minister outline to the Chamber—we understand that concession fees can include fixed annual management and monitoring fees, as well as the activity fee, which, of course, we understand is calculated as a percentage of revenue. There is not much revenue, so those fees are very little or nothing. But could the Minister outline to me the nature of the fees that are continuing to be charged to concessionaires throughout this period?

Hon EUGENIE SAGE (Minister of Conservation): Mr Chair, thank you. So there was no embarrassment here. What the Prime Minister announced is what is happening. The member will be aware that in some areas, as in her electorate, in Aoraki/Mount Cook National Park, the Department of Conservation acts as the local authority. It collects the rubbish in the area. Similarly, at Whakapapa in Tongariro National Park, the department provides waste-water systems. So those fees do continue, because as when ratepayers pay rates, they’re paying for those services that are provided, similarly here, those fees continue.

Concession fees have been waived, but, as the member also knows, under the Public Finance Act, it is incumbent on the department to send out invoices. The department couldn’t simply decide not to charge for fees that were due to it. So with the waiving from 1 March through to the end of the financial year, the department is recognising that there is significant pressure on concessionaires. It’s providing this cash-flow benefit by waiving the concession fees. Initially, some operators, because of the cash-flow pressures, were seeking to have their activity fees pre-COVID waived as well.

ERICA STANFORD (National—East Coast Bays): Thank you, Mr Chair. In 2014, the Government of the time, as the Minister will know, established a marine reserve—39 percent of the territorial sea around the Campbell Islands to protect marine species and their habitat. Now, obviously the Minister’s well aware that this legislation required an independent review within five years to consider whether or not the remaining 61 percent should be included in that reserve as well. Now, in February the recommendation by the consultant was clearly that the Minister should extend that marine reserve, and the decision was due in March—so the decision took a while to come through; it wasn’t until June.

The questions I have for the Minister are: why was the decision delayed? What was the reason for the decision against the consultant’s clear recommendations? How much influence did the fishing industry have on this? Did the Minister herself want to protect the remaining 61 percent, and why didn’t she? And is this indicative of a wider problem in terms of a lack of progress with any other marine reserves in her term, for example, the Kermadecs? I’ll leave it at that just for now. I’ve got more questions relating to a slightly different topic, but if the Minister would like to speak to those questions, that would be appreciated.

Hon EUGENIE SAGE (Minister of Conservation): Mr Chair, thank you. So certainly the legislation did provide for an independent review, and that review did recommend that the reserve be extended to—the independent review, there was a decision that had to be made by myself and the Minister of Fisheries. Ngāi Tahu raised some concerns, and the Minister of Fisheries, in response to those concerns, did not agree to the extension, so it did not proceed. That has been stated publicly, so it should have been known.

In terms of the influence of the fishing industry: in the marine space, the fishing industry is obviously a significant stakeholder. We have, working with the Minister of Fisheries, significantly strengthened the threat management plan for Hector’s and Māui dolphins; are in the process of expanding marine mammal sanctuaries, improving the protections so that those sanctuaries are not Clayton’s sanctuaries, as they were under the former Government; and to ban seabed mining and seismic surveys, except for current interests in those sanctuaries. I reject the assertion that we’re not making progress on marine protection.

The south-east marine protected areas are out for public consultation until early August. That was interrupted by COVID. That is implementing the recommendations of the collaborative group. In the Hauraki Gulf, this Government has moved—myself and the Minister of Fisheries—to establish a ministerial advisory committee to provide advice on the recommendations that came out of Tai Timu Tai Pari, the Hauraki Gulf sea change plan. Those recommendations are expected shortly, so looking forward to them. So there is certainly progress in terms of marine mammal sanctuaries, the South-east Otago, and work being done in terms of policy work that’s needed to reform our marine protected areas legislation. There is a programme of work that is well under way.

ERICA STANFORD (National—East Coast Bays): Thank you, Mr Chair. Leading on from that, it seems that the answer from the Minister in the chair, the Hon Eugenie Sage, is indicating that there has been some real to-ing and fro-ing between her and the Minister of Fisheries, and it seems that the Minister of Fisheries has won out, because we haven’t had any new marine reserves in three years. But I guess the way that leads into my next question is that we’ve got 15,000, I think it is—if I remember correctly—seabirds dying every year, and I want to know what the Minister’s opinion is on cameras on fishing boats, because I think that—

Hon Scott Simpson: She used to like them.

ERICA STANFORD: She used to like them—that’s true, Mr Simpson. She used to like them. She used to advocate for them, but in the three years, we’ve seen hardly any additional cameras on fishing boats, and our seabirds—especially some of those that are very threatened—continue to perish. It would be helpful for the Minister to explain to us: is it the same to-ing and fro-ing with the Minister of Fisheries and the fishing interests with certain parties in her governing arrangements that are pushing back against having cameras on fishing boats to protect our seabirds?

Hon EUGENIE SAGE (Minister of Conservation): The member should be aware of the revision of the National Plan of Action—Seabirds 2020. There is a new vision statement in that document about working to reduce to zero the bycatch of seabirds, because too many seabirds are dying in fishing nets. This Government has also, through Budget 2018 and the significant increase in funding for biodiversity, enabled Te Papa Atawhai to employ fisheries liaison officers, who work with the masters of individual fishing vessels to ensure that they have got in place the tori lines and the other measures to reduce seabird bycatch—so that is individualised working with fisheries vessels.

So the work on the national plan of action on seabirds was done with the Minister of Fisheries. We worked together on issues of mutual interest, and we have significantly strengthened that plan and have a goal of working towards the zero bycatch of seabirds.

Vote Conservation, Vote Environment, and Vote Parliamentary Commissioner for the Environment agreed to.

External Sector

CHAIRPERSON (Adrian Rurawhe): Members, I understand the responsible Ministers are available to speak to the Votes in the external sector. Therefore, the question is that Vote Customs, Vote Defence, Vote Defence Force, and Vote Foreign Affairs stand part of the Schedules.

Simon O’Connor (Chairperson of the Foreign Affairs, Defence and Trade Committee): Thank you very much. I understand as the Chair I have to be slightly—

Erica Stanford: Thank you very much!

SIMON O’CONNOR: “Thank you very much!” Yeah, I’ve never really been any good at mimicking. I have to be relatively neutral, so this is going to be—I’m sorry, Minister—somewhat familiar, but also boring at the start, but also very important.

If I could, though—on behalf, as far as I can, of the Foreign Affairs, Defence and Trade Committee—I thank all those officials, civil servants, and, obviously, those who serve for what they are doing. If I’m going through in order, I’m very conscious of the work that the Ministry of Foreign Affairs and Trade (MFAT) has been doing, particularly around the COVID crisis. I think, too, it would be fair to say, for those members of the committee, great work providing us advice. It always goes without saying, but it must be said to our defence forces and to those in the Ministry of Defence: for the service that they give the Realm, we are grateful as well—as too to those in Customs. Things are—we could debate whether it’s quieter or not for them; let’s just say different. But we’re very grateful for the work that they do at the border.

It won’t surprise you that when we looked at the Vote for foreign affairs, a big amount of focus was in and around COVID. There was a lot of interest from the committee on how that was being managed and, in particular, how New Zealanders were able to come home and what assistance MFAT was providing to our friends and allies and others around the world to get their people repatriated. We were grateful to see and understand now, Minister, that particularly in the diplomatic core, they are able to travel. They always were, around New Zealand, but they can now, if you will, refresh their missions. But I will signal it was an element that was beginning to come up in the committee, and the Minister may want to address it later around diplomats and their families—they’ve been isolated from their families for a long time, particularly when you’re thinking of their sons and daughters and so forth—of whether MFAT’s looking into that.

There were, obviously, discussions on the committee around the various free-trade agreements, particularly around the EU and the United Kingdom, and, of course, a lot of questions were being raised around Hong Kong. Again, members during the debate might bring up the specifics of that, but the committee, at the time, was very, very interested about how New Zealand was approaching the laws imposed by the communist party of China on Hong Kong, and perhaps it will be commentary later, that I can’t do now, of just how the Government’s reacting with that. And I’ll signal too to the Minister: the Asia-Pacific Economic Cooperation loomed large.

Defence: obviously, a lot of focus was on the new assets that were purchased. I’ve been happy and on the record, even as a member of Her Majesty’s loyal Opposition, to acknowledge that the Government has funded a new fleet of P-8s. We’re going to be purchasing the C130Js. I’m really pleased to see the Bushmasters bought. The Minister will recall, if I allow the indulgence, us driving one in Kabul, as one does. There’s the sentence you possibly weren’t expecting tonight: “when I was driving in Kabul”. Obviously, you’ve had the Polaris purchased and, obviously, the frigate upgrade. But probably the biggest debating point in the defence area—or discussion point; always discussions on the committee of foreign affairs—was around the defence estate. I think there’s a general acceptance that it’s rundown, and I think all sides of the House in that committee were interested in how that would be better engaged.

Customs was the final area that we touched on as a committee—or the final one that I will address. A big element was, really, just questioning money. Customs does a great job, but the committee had noted there were no extra funds being given to Customs. That was seen as perhaps—I can’t speak for all the committee, but there was a line of questioning of the oddity that post-COVID, with the border as, if you will, our first line of defence, there didn’t appear to be any extra money, or, necessarily, planning. But the committee was very pleased, once we moved away from COVID, to see the continued work to try and address the drugs coming into the country but I think, really importantly, the sexual exploitation of children. I know that’s been a focus of the Government, or Governments, and the ministry, so that was seen as exceptionally positive.

So I thought it was robust as a committee, but we always work, I think, relatively collegially, so I acknowledge all those members as well. Thank you.

SIMON O’CONNOR (National—Tāmaki): Well, Mr Chair. I will switch then to the political realm, now that I have finished my role as chair. I will switch to defence as a courtesy to the Minister. There are probably two things. To the extent he can, updating us around the frigate upgrade timings would be welcome. I don’t think he’s probably able to talk about capabilities. We don’t want to breach anything there, but if there are any indications. And it probably is that challenge, if he wanted to address it: what is going to happen with the defence estate? It’s completely understandable—opprobrium, if you will, could be thrown at the past, but I’m a great man for looking into the future. So I’d like to know what that Minister’s going to do. And if he could assure the committee around whether there’s still any planned closures of bases or merging—anything that he might care to discuss in these final minutes.

Hon RON MARK (Minister of Defence): Thank you, Mr Chairman, and can I thank the chair of the Foreign Affairs, Defence and Trade Committee for that good round-up in both the foreign affairs and the defence conversations during the Estimates.

Coming straight to the point: the frigate systems upgrade. As the House knows, that project was kicked off as one of the first projects we undertook as the new incoming Government—around $640 million, I think, off the top of my head. That project has clearly, like a number of things, fallen victim to the COVID pandemic. There have been issues both in Victoria, in the port, with the company that operates the port, and with Lockheed Martin in terms of their ability under the COVID situation to progress work there. It’d be fair to say that we’re realistic and anticipated that there would be challenges. The project is behind schedule. I was very hopeful that we might see Te Kaha in all her glory sale into New Zealand in September. But at this point in time, the latest brief I can give the committee, Mr Chairman, is that we’ll probably not see the first frigate in New Zealand until February, and then Te Mana will follow in about 12 months after that—nine to 12 months after that.

I would say, from my visit to Canada and my inspection of both frigates that were in dock at the time, that the project has been a massive undertaking, a very complex undertaking, and, without going into details other than to say the frigate systems upgrade is aimed at improving the defensive and offensive capabilities of those two ships and extending their life out. I am fully confident from all of the briefings I’ve had that we will achieve that aim and that the Government of the day will receive back into service two highly capable frigates, which will service out till—I think we’re planning 2035, is the extension we’re looking for there.

In terms of the defence real estate—and I would share the honourable member’s desire not to get in and rotary hoe that paddock too much. The past is the past. Suffice to say, we’re sitting on about $2.1 billion worth of deferred maintenance and outstanding work. This is going to be a challenge not just to this Government but any future Government in cleaning that up.

In terms of the bases, the question around bases, I do not see any change to the current layout. Of course, Devonport is a live question and a live debate. I would simply say that we did initiate the first principles review of the defence real estate, prompted by a number of questions, challenges that the last Government faced, when people kept trying to take possession of Whenuapai, something that the former Prime Minister resisted; hence, we still have Whenuapai. We are facing challenges constantly from encroachment of housing, from people wishing to interdict the operations. This cannot be allowed to continue. So we’ve taken some very firm steps, and locking down and making sure that we do what we are able to, to continue to operate the defence forces, and, secondly, to look forward to the future to 2070 and try and get an eye and a picture on what sort of a footprint we need, in order that we are able to maintain the defence forces and give them surety and security of tenure.

SIMON O’CONNOR (National—Tāmaki): A quick question: you talk about interdiction. It turned my mind, Minister, to, obviously, what happened around the Spratly Islands very recently, with the squadron of Australian—

CHAIRPERSON (Adrian Rurawhe): I’m sorry to interrupt the member. It has come time for me to leave the Chair. The committee is suspended until 9 a.m. in the morning.

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

TUESDAY, 28 JULY 2020

(continued on Wednesday, 29 July 2020)

Estimates Debate

In Committee

Debate resumed on the Appropriation (2020/21 Estimates) Bill.

External Sector (continued)

CHAIRPERSON (Hon Ruth Dyson): Members, when we suspended last night, the committee was considering Vote Defence in the external sector.

CHRIS PENK (National—Helensville): Thank you, Madam Chair. May I begin my contribution by acknowledging, as I understand that others on this side of the Chamber and the Minister himself, the Hon Ron Mark, did last night, our women and men of the New Zealand Defence Force. We pay tribute to them for the service that they provide and, indeed, we thank them for it.

I’d like to ask a series of questions of the Minister who is currently available, the Hon Shane Jones. Perhaps a good place to start would be the situation in relation to various acquisitions that have been made over the last three years and, to the extent that’s within scope of the debate, any future plans that the Government might have in the works. Of course, it’s in the nature of defence, of large items of military hardware, and the strategic nature of such planning that we do need to be forward-focused. So perhaps I can start with the senior service, the Royal New Zealand Navy, and invite the Minister to provide an update on various upgrades, of course, to the frigates, but also the new ship that—or vessels in general, actually—he can provide on the horizon in terms of what we are expecting to take delivery of, commission, and so forth.

Hon SHANE JONES (Minister of Forestry): In a very confident but potentially lame vein, I shall channel the real Minister. Thank you for those questions. One particular point that the honourable member Chris Penk raises is the concept of what are the future investments. I will go straight to what has proved to be a challenging issue, which is the rundown of our defence estate in the sense of the need to commit up to $400 million more money in creating more robustness and fit for purpose actual defence estate. A sum of $156 million across three Budgets has been dedicated. The business cases—which would be discoverable through the Official Information Act process—of up to $400 million worth of infrastructure works at Ōhākea have been approved, and the overall capital funding for defence regeneration has increased from $1.7 billion under the previous Government to $2.1 billion out to 2030. Should the member desire to get more information about that, I shall share with him where the links are.

In relation to the management of the process with these huge multibillion-dollar acquisitions, I think it’s fair to say that of all the Government departments—and I don’t have a great deal to do with the administrators of the defence department, but they have gone through an incredibly rigorous process of upgrading their ability to secure assets, manage assets, over the life of that said asset, and, in fact, they’re a bit of a star in my view in terms of broader infrastructure. We need look no further than the delivery of the Manawanui or, more importantly, the purchase of the five new Super Hercules to replace our ageing Hercs. These are not trifling sums of money and we should, in the House, have confidence that they now have a very robust system for handling this type of acquisition and these sums of money. Sadly, we cannot say that about every other part of the estate.

CHRIS PENK (National—Helensville): I thank the Minister for the answer. I would like to return to the subject of the real estate, the defence estate, in terms of bases. Obviously, we need to consider that question from the point of view of strategic location and, of course, as it relates to other trends and factors within the population of New Zealand and a number of things that interact with the requirements for our people to want to serve and to be able to serve. I give an example of the fact that, often, the spouse or partner of a serving defence person would have requirements in terms of their own work or life situation. Of course, a family may have children who have particular needs around schooling or other things that are appropriate to them being in a particular location and not the other.

So I do want to acknowledge the broader context that sits around the defence estate—and the location of bases, more particularly—but what I would like to know from the Minister, with that disclaimer, is the Government’s thinking around the RNZAF Base Auckland, which is at Whenuapai. I ask that partly because I’m interested as a patriotic New Zealander to know that our Royal New Zealand Air Force personnel will be able to remain in that excellent location but also, by way of disclosure and disclaimer, as the member of Parliament for the Helensville electorate, in which that base is located. So any assurances that the Minister can give about the Government’s commitment to the retention of that base on an ongoing basis would be appreciated.

Hon SHANE JONES (Minister of Forestry): Apparently, the new system is that whoever is in the chair actually has to make a credible attempt to answer the question. So I have been chided by one of your colleagues for, uncharacteristically, being vague.

I just want to talk first about the naval base. Yes, there have been some discussions as to the future location of the naval base. No, Cabinet has not signed off on a new location for the naval base. Similarly, the Minister of Defence, the Hon Ron Mark, has actually stood up to be counted in a bout of nimby litigation related to the operations of Whenuapai. That’s a matter of public record.

But if I can just carry on a little bit more about the naval base, whilst there have been attempts right back to the days of the Hon John Banks, when he was the member for Whangārei, to relocate so-said base to Northland, that question is being considered within a broader discussion and analysis as to what is the optimum shape and form of our defence estate in the future. I’m not trying to obfuscate; that work is happening as we speak. Naturally, hailing from the North, I see great virtues in a northern drift, but that is not the position of the advice at this stage from the civil servants, and neither is it Cabinet’s position.

The only other thing I would say is that there probably would be some military or naval usefulness in the event where, at some point in time, we are able to upgrade the dry dock facility which is currently located in Devonport as a part of the broader naval estate there. The member would be aware that one of the areas that has been focused on for that level of investment is Whangārei, but it is a huge amount of capital—well over a quarter of a billion dollars—so it is not a decision that can be entered lightly into.

LOUISA WALL (Labour—Manurewa): Tēnā koe, Madam Chair. Tēnā koutou katoa. The emphasis for me in this morning’s Estimates debate—and I know the Minister in the chair, the Hon Shane Jones, will be able to answer this question—is actually the emphasis from the Minister of Defence about attrition rates for the New Zealand Defence Force. There have been rates such as those in armed combat specialty of 26.8 percent, those who are part of the infantry at 33.7 percent, and for gunners it’s 20.8 percent, and this is coupled with some research that’s come out of Otago University about one in three members of our Defence Force suffering PTSD—post-traumatic stress disorder.

I guess my question to the Minister in the chair is: what does he think about that revelation? It’s shame that because of his service, Minister Mark, in his reference to PTSD being a phenomenon that a lot of men aren’t happy to talk about—but what does he see as the responsibility of the New Zealand Defence Force to make sure that those members of the Defence Force who are experiencing these symptoms have the support that they need to stay within the Defence Force, because it seems on average now people are exiting within two years in those particular vocations?

Hon SHANE JONES (Minister of Forestry): Yes, thank you for that remark from the honourable member Louisa Wall. Can I direct your attention to page 3 of the actual report from the Foreign Affairs, Defence and Trade Committee, where the Minister of Defence clearly states that not only does he share the concern, in particular, about the strength of the infantry units, but, if you look further down, the actual day-to-day leader, the Chief of Defence Force, also says that whilst a host of these issues have not been addressed, they have every confidence, with the huge amount of money that has been allocated via last several Budgets, that that money is not only to attract new trades—and it’s got the upstanding issue of dealing with gender issues within the military force, which is, obviously, a matter of topicality in the media as we stand and sit here today. But on the question of is there enough resources to address those personnel concerns, especially those who may not have received the right type of attention or resources to retain people in the military, given that prior to COVID there was lots of poaching, I am advised that, in fact, certain displaced pilots from Air New Zealand are now lining up to see if they can actually transfer into the Air Force and be a part of the military. So I think, post-COVID, we’re going to see a drift of people with skills in highly sought-after positions in the defence community.

CHRIS PENK (National—Helensville): Thank you. I previously asked the Minister in the chair, the Hon Shane Jones, about Royal New Zealand Navy ships and got an answer about the defence estate. I’ve then asked a question about the defence estate and had an answer about the naval base more particularly. So I feel I’m engaged somewhat in a game of verbal whack-a-mole with the Minister. I feel as though, to get the answer to my next question, I perhaps should ask something entirely unrelated.

But, nevertheless, I did want to follow up on the comments that the Minister made, and I thank him for his honesty, perhaps coming from a personal northern perspective, in relation to the naval base. Just to be clear then, Minister, please: is the Government considering moving the naval base from Devonport to Whangārei or some other northern clime?

Hon SHANE JONES (Minister of Forestry): Please listen very carefully: the Government acts when Cabinet arrives at a conclusion. Our Cabinet has not concluded, because the defence estate review has not been finished, as to what and where and in what proportion personnel currently located at Devonport would be moved anywhere. Until such time Cabinet decides to do that—and Cabinet has not decided to do that—then Auckland will enjoy the ongoing presence of all the ratings, the officers, and their wives.

CHRIS PENK (National—Helensville): Thank you. I enjoyed the Minister’s use of the word “enjoy” in that answer.

My further question to the Minister around the defence estate is if he can give some assurance—and I acknowledge previous statements made by the Minister, and, indeed, he alluded to them, in passing, himself a few minutes ago—about the relationship between housing pressure in the vicinity of bases and the operation of the bases themselves. Is there some assurance that he can give this committee that the strategic needs of the military establishments that are already in place will not be undermined by the threat of housing encroachment?

Hon SHANE JONES (Minister of Forestry): OK, the honourable member Chris Penk raises, really, the point as to is there a long-term future for the current Whenuapai air force base. I say again: our Cabinet has no agenda to relocate that base to Kaikohe or anywhere else—perish the thought. There is a long strip, I am told, that was developed in the days of the Hon Peeni Henare’s grandfather by the Americans—I’m hoping the Minister of Finance is listening. It’s an incredibly long, robust strip of land which is capable of landing very big, dangerous, loud—and I’m not talking about the people—aircraft. But I can assure the member there’s no Cabinet position in that regard.

Secondly, I say to the member on the other side of the House that Whenuapai has been there for a long time. You know that there was a group who availed themselves of their rights through the Resource Management Act to, I guess, litigate against the operations. Minister Ron Mark represented the Crown through his various officials. So, subject to operating within the confines of the law, Cabinet has no agenda to relocate or frustrate the operations of the base at Whenuapai.

BARBARA KURIGER (Senior Whip—National): I raise a point of order, Madam Chairperson. Are we now moving on to foreign affairs?

CHAIRPERSON (Hon Ruth Dyson): That’s right. We just slide into it. It’s still within the same Vote.

Hon SIMON BRIDGES (National—Tauranga): I want to ask the Minister some questions on China - New Zealand relations and, in particular, the situation in Hong Kong to start with. Can I start by just making some introductory preface remarks, really. I think, at this incredibly important time in international affairs—I know people can always say that, but it seems to me that this year, with COVID and with what is happening internationally between the US and China, we’re at a level of seriousness, uncertainty, and danger, frankly, and we haven’t been for some time. People talk about a second Cold War. That may or may not be overdoing it, but it does give you a sense of where things are at.

So I want to start, as I say, with Hong Kong, with the national security law—[Minister Robertson takes the chair] Oh, good golly—it’s sort of bad to worse. Well, I want some real answers, Madam Chair—I want some real answers. Let me get on here—

CHAIRPERSON (Hon Ruth Dyson): Well, try some real questions, Mr Bridges.

Hon SIMON BRIDGES: I’m going to—I’m going to. I want to say, firstly, thank you for what has happened with the suspension of the extradition treaty, but why did it take so long, when the Five Eyes partners, literally almost every one of them—many, many weeks ago, actually—were in this position and were condemning what happened in Hong Kong? We were at the level of concern, and so is Five Eyes. Now, some have said “Four Eyes and a Blink”—is that where we’re at?

Why don’t I wrap up all of these questions, so the Minister can have a good go at it? That is a question about why it took so long.

Is the Government considering a safe haven visa for Hong Kong; if not, why not? Does he accept that it is the right thing to do as a democracy who believes in the rule of law and human rights? Does he also accept that it is very good indeed in terms of bringing valuable skills from Hong Kong to New Zealand, as we need them? I think all parties in this Parliament try and have more of an innovation nation that does well in tech and the like, or is it the case that the Government’s position on immigration, and certainly parties within the Government and their position on immigration, is getting in the way of doing the right thing and the smart thing when it comes to a safe haven visa?

Hon GRANT ROBERTSON (Minister of Finance): I thank the member the Hon Simon Bridges for his questions, although I do wonder exactly how they relate to the Estimates in Vote Foreign Affairs, but I’m happy to answer them to the extent that I can. In question of the timing—in fact, overall in response to the first two questions—I think it’s very important that New Zealand maintains its independent foreign policy. Yes, we work closely with our Five Eyes partners on a number of areas, but we are not necessarily all going to put the same statement out about any given issue. New Zealand will take its position on the basis of our interests and the interests of the people of New Zealand. So we took the time that was required to develop a position that we were comfortable with across Government, and we articulated that.

The member can take a look—they had a number of other foreign policy areas both in this Government and in the last Government, and indeed in Governments before that, where New Zealand has taken its time to articulate a position. We were very clear in the position that was articulated yesterday that the extradition treaty is suspended and that New Zealand is not prepared to go along with that, given the current regime in Hong Kong and the laws that they have passed. That is a strong position. It is a clear position. It has, as the member will have noticed, garnered the same reaction as the other four Five Eyes partners’ announcements, so it doesn’t distinguish us from them in that way.

In terms of the member’s questions around safe haven visas, I am not aware of any plan to do that from the New Zealand Government. We do have, as the member is well aware, a number of visa categories and skills categories that are available for people to apply for. We welcome people with the kinds of skills that New Zealand needs to make sure that our economy is as productive and as sustainable as it can be, and that’s my suggestion there—that where there is a possibility for people to do that and they want to come here, those visa categories are available for them.

Hon SIMON BRIDGES (National—Tauranga): Following on—thank you, Madam Chair—in relation to China and New Zealand, I want to understand the Government’s position when it comes to managing the relationship with China, which is so critical. We all know in this House that it is our number one trading partner by far—it’s certainly number one. Actually, now it’s a situation where we, in fact, have a trade imbalance, if you want to put it that way. We sell more in goods and services to China than the other way, yet the world is becoming increasingly concerned with a more assertive China, whether it’s the issues of Hong Kong, which we’ve addressed, or others besides.

The latest Economist magazine has a heading this week of “Trade without trust”, and is that the Government’s position now going forward? What are we doing about Huawei, when Britain has just—as I read the headlines—banned Huawei coming in and doing the work that it was once welcomed in to do? In the South China Sea, is it our position that the activity of China there is sometime unlawful, as is the United States’ position—

Michael Wood: Point of order.

CHAIRPERSON (Hon Ruth Dyson): I think I can anticipate your point of order, and I was just—

Hon SIMON BRIDGES: Well, I can do it one by one, or I can do it like this, and I thought this was better.

CHAIRPERSON (Hon Ruth Dyson): It’s better if you don’t interrupt me—could you please sit down. I gave the member a lot of leeway in his first contribution because he’s a very senior member. He hasn’t participated in this new process of debate in recent times, but that isn’t the primary point of my interruption. It is that the member is required to speak to the appropriations, rather than to very interesting and very important foreign affairs topics. That’s for a different debate. So if the member could move to the appropriations, and it doesn’t matter if the member wants to bundle two or three questions—that’s entirely appropriate. They should be questions. The Minister is expected to respond, but they should be questions about the appropriations, not about foreign affairs policy.

Hon SIMON BRIDGES: I raise a point of order, Madam Chairperson. Appropriations are in relation to the future projections and activities of the Ministry of Foreign Affairs and Trade (MFAT) and the Minister of Foreign Affairs. I’d make the point that what I’m asking is precisely within the ambit of what is allowable within this committee.

CHAIRPERSON (Hon Ruth Dyson): That’s not a point of order. That’s arguing with the Chair.

Hon SIMON BRIDGES: So in terms of those appropriations, after the very fair questions, I’m asking the Minister in the chair, the Hon Grant Robertson, on behalf of the Minister of Foreign Affairs, what’s his position on these things in this appropriations debate and committee stage, where does he see the relationship, and how will he be instructing MFAT to act?

Hon GRANT ROBERTSON (Minister of Finance): In terms of the appropriations, obviously, the Ministry of Foreign Affairs and Trade is funded and resourced to manage all of our bilateral relationships, and obviously the bilateral relationship with China is a critically important one. The point that I would make to the member is that there appears to be somewhat of a contradiction in his two lines of questioning, with the first seemingly asking us to go harder and quicker around the issue of Hong Kong, but then expressing a degree of concern about the impact on the relationship with China.

But in that regard, the Government’s position, I believe, is probably fairly similar to that of the member’s party and the previous Government. We recognise the importance of the relationship with China. What we want is a relationship of maturity and mutual respect, and that means that there will be issues from time to time where we disagree. That is the same with every country that we have—it includes the kind of relationship we have with Australia. We don’t always agree, but we will take the opportunity from time to time to air that. But, for the most part, those relationships remain strong. The trading relationships remain particularly strong.

With regard to the position of Huawei, I just reiterate to the member that New Zealand has taken the position, again, across Governments that we have a legislative authority—the Telecommunications (Interception Capability and Security) Act—when it comes to how we manage what happens when it comes to our communications systems. With that, it is, in fact, blind to any particular country. It is merely a system where we take into account New Zealand’s national security needs, alongside our communications needs.

There have been—and it’s in the public arena—various conversations with partners such as Spark, who were working with Huawei. They decided not to continue with that. That is entirely their right and a commercial decision, but that is bound by legislation and it is not about any particular country.

Hon SIMON BRIDGES (National—Tauranga): Thank you, Madam Chair. In terms of the appropriations and the investment of the Minister of Foreign Affairs and the Ministry of Foreign Affairs and Trade into the future, of course, we know—

Michael Wood: Just add that on the front.

Hon SIMON BRIDGES: Yeah, that’s right, and then I’ll move on to whatever I want—you’re right. We know, of course, that we cannot at this time travel and that in fact our foreign affairs ministry is severely constrained, as is the Minister. How many Zoom calls is the Minister doing? Has he been meeting virtually with his counterparts in the likes of Japan, India, South Korea, and Indonesia? I note Scott Morrison and the Australian Department of Foreign Affairs and Trade has been incredibly proactive in this regard, with some 39 Zooms alone from the Prime Minister. Is it important at this time that we do that, rather than, dare I say it, have a sleepier approach, where we sort of sit back and gradually announce things, like we did yesterday on an extradition treaty?

Hon GRANT ROBERTSON (Minister of Finance): Well, I am aware that the Minister of Foreign Affairs is an inveterate user of Zoom and a person who is regularly aware of the ability to take himself off mute—you know, that’s never an issue. So, yes, I am aware that the Minister of Foreign Affairs, throughout the period of both the lockdown and since then, has been in very regular contact with partner countries all around the world. I’m also aware that the Prime Minister is, similarly, in very regular contact with her colleagues around the world, and I also know that the Minister of Finance has been part of calls around the economic aspects of the recovery of COVID19 with the finance Ministers or Treasurers of the Five Eyes countries. We’ve had two of those calls, and I know that there are more planned, so, yes, there is a great deal of use of technology in this era.

Given the time for this debate will soon expire, I just want to put on record the Government’s thanks to the diplomats and staff of the Ministry of Foreign Affairs and Trade, who, under very stressful circumstances, have continued to represent New Zealand admirably, both in-country and also here in New Zealand.

Hon SIMON BRIDGES (National—Tauranga): At a time when resources are critical and you’ll be considering where to put those, is the Government considering what relationships it prioritises, and, if so, what are those relationships? Where is the work in the United States that the Minister of Foreign Affairs has been so keen on when it comes to free trade as part of a wider geopolitical strategy? Are we moving into doing more work with the likes of the Quadrilateral Security Dialogue—that is, Australia, Japan, India, and the United States—as we now, more than ever, need closer relationships to navigate pretty choppy and difficult waters?

Hon GRANT ROBERTSON (Minister of Finance): I think the member makes the point himself—given the number of countries he covered in that intervention—that the most important thing is that New Zealand retains a wide range of relationships. Actually, diversity in our export markets is one of the challenges that this Government took on when we came into office. We can’t afford to put all our eggs in one basket when it comes to both trade relationships and, indeed, diplomatic relationships. So, yes, I’m certainly aware that the Minister of Foreign Affairs has continued to have a dialogue and relationships with those in the American administration to try and advance our interests there.

Obviously, off the back of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, there have been significant advances in the number of other countries—particularly Japan, which the member mentions—and so we have to continue to maintain those relationships right around the world. I’d also make the point that New Zealanders are not only well served by the Ministry of Foreign Affairs and Trade but also particularly well served by our New Zealand Trade and Enterprise (NZTE) staff in country. One of the pieces of feedback the Minister of Finance has had over the past few months is the fact that exporters who now can’t visit the markets that they are trading into are delighted by the support that they’re receiving from NZTE staff in country. So all of the relationships that the member has highlighted are important.

When it comes to India, I think every country in the world would like to be able to form some kind of free-trade agreement with India—their Regional Comprehensive Economic Partnership. We have tried our best, along with many other countries, to do that. For now, India chooses not to be a part of that agreement, but we continue to try to develop that relationship.

Hon SIMON BRIDGES (National—Tauranga): As we continue on the theme of investment in this appropriations debate, I’d be interested in the investment into Britain and, in particular, what we are doing in relation to the expiration of visas there. I note they will expire on 31 July, putting, I think, some Kiwis in that country in a very invidious position, particularly given it’s very difficult to come back here and we do not realistically have the resources—if I listened to other Ministers in the Government—to do all of the quarantining that could possibly be required. Is the Government working on that, and will we see an answer before 31 July on that critical issue of visas for Kiwis in the United Kingdom?

Hon GRANT ROBERTSON (Minister of Finance): I think that issue around visas is probably a little outside of this debate. What I would say to the member is that, obviously, we are very conscious of the fact that many New Zealanders in many different countries around the world have been facing issues to do with the visas in the countries that they’re currently in. They have a right to return to New Zealand—there is no question about that. The member will just have to wait a little bit longer to hear how the Government wants to manage some of those movements, but in terms of the visas themselves and the country, individuals will have been dealing with that. If they are unable to stay in the UK, they are entitled to return to New Zealand.

Hon SIMON BRIDGES (National—Tauranga): I know there’s also investment going into the relationship with South Korea. I note the Prime Minister—having mentioned Zoom—has a call with the President of South Korea, and I know that is something that in the appropriations is being worked through and thought about very closely. Does the Government have a position—and will the Prime Minister be raising the issue of a Korean diplomat and an alleged sexual assault, so that there is pressure brought to bear on that issue and justice will be seen to be done and done here in New Zealand?

MICHAEL WOOD (Senior Whip—Labour): I raise a point of order, Madam Chairperson. Matters raised in this question and every other question from the member relate to foreign policy and security policy matters and are not remotely related to the Estimates of the appropriations. The member simply putting the word “appropriations” in at the beginning of the question doesn’t change that fact, and I argue that the questions are not relevant to this debate and actually are getting to the point of creating disorder in the House because they make a mockery of this debate.

Hon GRANT ROBERTSON (Minister of Finance): Thank you, Madam Chair. With respect to the specific case, the member will be aware that this Government—as, indeed, his Government and any other party in this House—would be appalled by the allegations that we have heard. We would not stand for those, and we will be pursuing those through every means possible.

In terms of the Prime Minister’s call, I think it will be clear that the Prime Minister would need to answer that question. But I am of course aware that the call has happened.

Vote Foreign Affairs and Trade, Vote Official Development Assistance, Vote Defence, Vote Defence Force, Vote Veterans’ Affairs - Defence Force, and Vote Customs agreed to.

Finance and Government Administration Sector

CHAIRPERSON (Hon Ruth Dyson): Members, I understand that responsible Ministers are available to speak to the Votes in the finance and government administration sector volume (B.5, Volume 5). I also understand that the Speaker will be available, should members wish to respond to any question relating to any of the Votes under his responsibility, and if members would kindly advise the Chair so that I can invite the Speaker to join us, that would be appreciated.

The question is that Vote Audit, Vote Communications Security and Intelligence, Vote Finance, Vote Internal Affairs, Vote Office of the Clerk, Vote Ombudsmen, Vote Parliamentary Service, Vote Prime Minister and Cabinet, Vote Revenue, Vote Security Intelligence, Vote State Services, and Vote Statistics stand part of the Schedules.

Dr DEBORAH RUSSELL (Chairperson of the Finance and Expenditure Committee): Thank you, Madam Chair. We are living in extraordinary times, which requires an extraordinary response. We have had an extraordinary health response in this country, and on the back of that extraordinary health response, which has been so successful, we are now building an economic response to the extraordinary times. That was the story that we heard in the Estimates hearings in the Finance and Expenditure Committee.

We went into lockdown on 25 March, and at that stage, the Government had been engaged in making Budget decisions—making Budget decisions for ordinary times. But in that time, in an extraordinary time, the Government had to move very quickly to make different decisions. It was those different decisions that we examined in the Estimates hearings. We heard about the Budget Economic and Fiscal Update. In terms of the Budget Economic and Fiscal Update, we heard some worrying news that because of COVID-19, there would be a fall in GDP, there would be a rise in unemployment, and there would be a contraction in the economy. At that time, according to the Budget Economic and Fiscal Update when it was printed, unemployment was predicted to rise to 8.3 percent, and perhaps peaking at 9.8 percent in September 2020.

As it turned out, by the time we actually had the hearings—so between the time when the Budget Economic and Fiscal Update was promulgated and we actually spoke to Treasury and to the Minister—we heard, in fact, that we were doing a little bit better than had been feared; that jobseeker benefit numbers weren’t as high as had been forecast; that a peak of 8 percent unemployment might be the most likely scenario; and that, in fact, because of our extraordinary health response, our economic response, economic conditions would now be better.

We heard from the Minister that part of the reason that we were looking better was because our economic response was focused on people; that we were committed to, in a simple word, jobs, jobs, jobs, keeping people in employment, keeping people in touch with employment, and keeping businesses going. So the wage subsidy was used, first of all, to keep people in employment, and it was used as a way of supporting businesses. For small businesses, some of the most difficult bills to meet are the wages, and, following that, other expenses. By helping small businesses to meet their wages expense, we helped them to stay in business.

Some of the programmes we heard about are quite interesting in that they also help people to stay in employment. The school lunch scheme, which we discussed in relation to Flaxmere—it was an example that the Minister gave us—obviously provides healthy food to children in schools, but it also provides an employment opportunity in the regions, an employment opportunity that helps people to stay in contact with their jobs.

We heard that Māori would be disproportionately affected by the virus, by the pandemic, and recognising this concern, the Budget allocated $900 million to Māori economic development in order to ensure that Māori in particular are served by the Budget.

We heard from the Minister of Revenue about the small business loan scheme, a loan scheme the objective of which was to get cash into businesses quickly. It was quite a straightforward and simple scheme; people could access it very quickly. At the time that we heard from the Minister of Revenue, about $1.4 billion had been rolled out for the small business loan scheme. About 85 businesses have accessed it, and about $16,500 per business. The whole objective there was to keep businesses going.

This is an extraordinary Budget, but what it is is a Budget that is supporting people, it is supporting jobs, it is supporting the economy. It is a responsible Budget; it is a focused Budget. Above all, this Budget, and the things that are being done in Vote Finance and Vote Revenue, show that this is a Government that can be trusted with the economy and is trusted with the economy. It is a Government that is doing extraordinarily well because it is focused on people—a responsible, grown-up, mature Budget for extraordinary times. I commend it to the House.

Dr Jian Yang (Chairperson of the Governance and Administration Committee): As chair of the Governance and Administration Committee, I’m here to briefly summarise the main findings of the portfolios under the select committee. Now, the committee has a wide range of portfolios, including Vote Internal Affairs, Vote Statistics, Vote Parliamentary Service, Vote Office of the Clerk, Vote Prime Minister and Cabinet, Vote Ombudsmen, and Vote State Services.

Now, in addition to this, a total of seven Ministers are responsible for appropriations in Vote Internal Affairs. The appropriations for these Votes largely remain steady. Vote Statistics appropriations for 2020-2021 increased by $41.2 million. The increase is mainly to boost funding for the next census, which will take place in 2023. Appropriations for Vote Ombudsmen also increased substantially. The proposed increase of 33 percent reflects the expanding monetary role of the Office of the Ombudsmen.

A common feature for all these Votes is the impact of the COVID-19 pandemic. While the pandemic has had some net impact on the progress of a number of programmes and projects, it has exacerbated digital services in many Votes. The Votes also made various contributions in the Government’s response to the pandemic.

The committee discussed issues of interest in each Vote. In Vote State Services, the committee spent quite some time on the Public Service’s response to COVID-19. We were told that there is an expectation that each agency will review its performance.

In Vote Internal Affairs, the committee discussed a range of issues, including the three waters reform and the fire and emergency levy, which has increased by 40 percent.

In Vote Statistics, the committee discussed the lessons learnt from Census 2018. The five-yearly census is the flagship of New Zealand’s official statistics system. A major problem with the 2018 census was the very poor response rate for Māori, Pasifika, and other populations that were hard to reach online. The Government’s response to this issue is to fund an engagement strategy to work with various stakeholders and fund many more staff in the field. Census 2018 reviewed a number of gaps in the Government’s overall data systems. Examples are data about iwi affiliation and use of Te Reo Māori. We were told that a data investment plan was being developed by the Government data system. Now, it would be good if the Minister could give us the time frame for the plan. The next census is just about three years away, so we should maximise this variable in building up our administratory data.

In Vote Office of the Clerk and Vote Parliamentary Service, the committee was particularly interested in issues relating to the two Votes working together, and also we looked at the Francis review, parliamentary accommodation, and security and other issues.

In Vote Prime Minister and Cabinet, the committee focused on the Department of Prime Minister and Cabinet’s response, or involvement in responding, to the COVID-19 pandemic. The day before our hearing with the department, two new cases of COVID19 were announced—two people who left managed isolation on a compassionate exemption to travel from Auckland to Wellington without being tested for COVID-19. Naturally, we were concerned about this. We were also concerned about other anecdotal evidence of procedures not being followed.

The above is a quick summary of the findings of the Governance and Administration Committee. I’m sure other committee members will make their contributions and ask some questions. Thank you.

Hon PAUL GOLDSMITH (National): Thank you, Madam Chair. So we’re going to start a wide-ranging and detailed debate on the financial policies of this Government and the country and what needs to happen at a time of great peril for New Zealand—

CHAIRPERSON (Hon Ruth Dyson): Or the Estimates.

Hon PAUL GOLDSMITH: Focused on the Estimates. When we look at the Estimates, there are billions and billions of dollars being spent by this Government. Three areas that I want to focus on today: jobs, around debt and tax policy, and in infrastructure.

So we start with jobs. We’ve seen—what are we up to?—$13 billion set aside for wage subsidies in an attempt to tide people over. So the question of the day is: who’s got the best policies to create those jobs to get New Zealanders back to work, at a time when we’re losing more jobs than ever in our history? We’ve got, on the one side, a Government which seems to believe that the best approach to get jobs is for the Government to borrow money and buy them. So we’ve seen various schemes—$1.1 billion to hunt possums and plant flax bushes, build pools in Gisborne, and various other projects.

Now, some of that may be well-justified, but our view is that the primary creator of jobs is actually private sector investment. We trust New Zealanders—owners of businesses large and small around the country—to make the judgment that they’re going to risk their money to hire a new person, to expand their business, to take a chance, to start a new enterprise. The best thing Government can do is create an environment where they feel confident to do that. The recipe for that hasn’t changed particularly—it’s about keeping taxes low, it’s about pushing back the tide of regulation, not adding to it, and not changing the rules all the time and allowing investment to flow. So I’d be interested in getting a sense from the Minister about getting his policies around jobs.

Secondly, in the tax and the debt area, the Budget and the Estimates are proposing that we’ll end up borrowing up to $200 billion over the next four years. To put that into context for people tuning into this debate, we know that New Zealand spends about a billion dollars every year on Pharmac to keep us all alive in terms of cancer drugs and all the pharmaceuticals that we need to survive. In the last four months of the financial year, we were borrowing that sum—a billion dollars—roughly every four days. So $1.6 billion a week is how you got to the $28 billion over the last four months of the financial year. It’d be interesting to know how rapidly we’re borrowing right now and what this Government’s plan is to get on top of that debt. It seems to just be spiralling, and a very gradual approach.

So one of the questions is, now that we know that members of this Government, or supporters of this Government—coalition supporters of this Government—believe that tax is love, and presumably they want more love and they want more tax, we want to have a clear idea where the Government stands on that.

Thirdly, in the area of infrastructure—tens of billions of dollars set aside in this Budget, $12 billion at the start of the year for various infrastructure projects, and there’s been a lot of announcements, a lot of press conferences. Shane Jones has got his high-vis on on a number of occasions. Grant Robertson has got his high-vis on on a number of occasions—he’s put his hard hat—

Rt Hon David Carter: Big jacket.

Hon PAUL GOLDSMITH: Big jacket. Well, yes, it may be large, but I’m not making any comment on that. But they’ve got their high-vis on, they’ve got their helmets on, and they’ve announced a whole lot of stuff. But I go back to the first announcement of an infrastructure project, right back at the start in February 2018, when Shane Jones went along and said, “The first big announcement for infrastructure is going to be the roundabout down the road from my house in Waipapa.”—that was going to be the first thing. When we asked him why all this money was being spent in Northland under the Provincial Growth Fund, he said, “To the victor goes the spoils.” Surprise, surprise, people were a little bit cynical about the nature of that spending. That cynicism has been compounded in the last couple of months when this Government’s announced all these shovel-ready projects are ready to go, but we’re going to dribble them out as it suits the timing of this Government for the photo opportunities and the high-vis. No doubt I’d like to just hear whether Grant Robertson, the Minister of Finance, shares the view that when it comes to announcing infrastructure projects, the moto should be “To the victor goes the spoils, and we will use this in a nakedly political way”, and I’d hope that he would be able to disabuse us of that view.

Hon GRANT ROBERTSON (Minister of Finance): I thank the member for his laser-like focus on the report of the Finance and Expenditure Committee on the Estimates for Vote Finance, Fiscal Strategy Report, and the Budget Economic and Fiscal Update. To answer the member’s questions—and, in fact, I’ll start at the infrastructure point and work my way backwards.

No, I don’t support that particular phrasing from Minister Jones. He would be the first to say that, on occasions, some florid phrases come from him, but I do want to at this time acknowledge his work in the infrastructure space. During this term of Government and funded in this Budget is the Infrastructure Commission, which finally is responding to the requests of the business community to have some certainty via a pipeline of work. Similarly, that is what the infrastructure reference group work that’s funded in the Budget was about. It comes on top of the significant investment in infrastructure, including the New Zealand Upgrade Programme and the $12 billion, adding this $3 billion to it, taking in total, I believe, the expenditure over the five-year period that infrastructure and capital gets funded through the Budget to around $50 billion—so significant investments there in infrastructure. I think the member would concede that for New Zealand, we have an infrastructure deficit, and we do as a country need to do better than we have over many decades. Looking ahead, that’s what this Government has tried to do and continues to do with that investment.

In terms of the question around tax and debt and borrowing, yes, like any Minister of Finance, I would rather not be borrowing the sums of money that we are today, but I think the member will also recognise we are facing a one-in-100-year shock to the New Zealand and global economy, and therefore the response to that needs to be proportionate. New Zealand is in a very, very strong position going into this situation because our levels of public debt are so low and the cost of borrowing in the world is incredibly low. As the member will be aware from other exchanges that we’ve had, in actual fact, as a percentage of GDP, the cost of borrowing for New Zealand is about the same in this financial year than it was in 2016-17, when we were borrowing at a considerably lower rate than we are today.

Hon Michael Woodhouse: How long are the rates locked in for?

Hon GRANT ROBERTSON: So those interest rates are predicted, Mr Woodhouse, by most economists to be low for a relatively long time, putting us in the very strong position to be able to manage that.

When it comes to what we do, though—and, obviously, we, in this Budget Economic and Fiscal Update, have the COVID Response and Recovery Fund, a $50 billion envelope of funding, and the Government’s been very clear that we will spend that as is necessary. We won’t borrow it if we don’t need to. We have said that there is $14 billion left on the table from that $50 billion fund. I note that the member has chosen to be a part of a party that is spending that money now on projects that aren’t actually going to deliver jobs for many years to come. I would say to him that if he is concerned about levels of debt, then he should actually be a little bit more careful and perhaps have a word with one or two of his colleagues around not using that as some kind of slush fund for their projects but seeing it as actually our COVID Response and Recovery Fund.

On the member’s first point around jobs, I don’t think it reflects well on the member to talk about the Jobs for Nature Fund in the way that he does. Actually, right around New Zealand, communities are welcoming the fact that, actually, there is an opportunity to not only create jobs but also do some of the really important work in protecting our waterways, in making sure that we get rid of pests in our environment. The member knows, because I’m sure he’s been down there in the Mackenzie Country and elsewhere, hearing from people about the importance of getting rid of wallabies. Finally, we have, actually, an opportunity now to get down there and do that work, create jobs. As the economist Joseph Stiglitz had put it, this is the kind of policy that’s doing double duty. It’s doing something good for the environment and it is creating jobs—up to 11,000 jobs from that package.

I agree with one thing that the member said, though, and that is that it is a partnership between the private sector, the public sector, local government, iwi, and others all putting our shoulder to the wheel and making sure that we’re working together to create jobs and create the environment where those jobs will happen. This is not going to be an easy time. We know that for many New Zealanders, they are doing it tough. What this Budget does and what the report here shows is the Government is doing everything it can to cushion the blow of a one-in-100-year shock.

Hon PAUL GOLDSMITH (National): Thank you, Madam Chair. When it comes to the question of jobs, the Minister may have noticed that the National Party this morning has been talking about enabling people to have access to their KiwiSaver in emergency times such as this if they’ve lost their jobs or if they’ve been made redundant in order to start a new business, and backing them to create their opportunities and create their businesses, and having a go. I’d be interested to see whether he thinks that’s a good idea or not, or whether it’s just a question of Government borrowing money to create temporary jobs.

Also, I’d be interested to know around the question of light rail, so let’s drill into the detail. I’d just be interested to know, for example, how much the Government has so far spent on that light rail project, because it’s not just the money that’s being spent, because this was announced right at the very start as an absolute priority for the Government. They were going to build light rail down Dominion Road. It was never very clear whether it was going to the airport or not—there was some dispute about that—or whether it was rapid transit or a slow train, and there was dispute about that—

CHAIRPERSON (Hon Ruth Dyson): I’m sorry to interrupt the member. It seems the more senior members are, the less able they are to change their—would you mind sitting down; thank you—habits of previous procedures. The House has agreed for both committee stage and this debate that it’ll be more like a conversation with the Minister, a question and answer time. So that’s the first thing. If you could try and narrow your focus. Don’t aim for five minutes—that’s not a target any more in these debates—but also if the member could speak to the appropriations that we’re discussing, that would be icing on the cake.

Hon PAUL GOLDSMITH: Thank you, Madam Chair, and I would encourage you to stop the Minister from talking for five minutes in answer as well, and then we’d be all square.

So the question I have, then, is how much has been spent so far on the light rail project, because it has been a big distraction in that whole infrastructure space—we’re talking about investment in infrastructure. We’re talking about $12 billion that this Government had set aside for infrastructure at the start of this year—which is in this Budget—and, recognising the context of that, they came in in Government and they cancelled all National’s projects because they didn’t like them, because Julie Anne Genter did not want to give in to the car fascists, Phil Twyford said we’d over-invested in roads, and Shane Jones likes roads but only if they’re in Northland. As a result of that, all those projects were stopped, because those members focused on light rail. Three years later, nothing’s happened with light rail, and so I want to know how much has been spent down that cul-de-sac while nothing else happened. I’d be interested in the Minister’s answer to that query.

Hon GRANT ROBERTSON (Minister of Finance): I’m under instructions to keep my answers very short because we’ve got to share the love, as it were, around in that regard—$1.8 billion was set aside in seed funding for this piece of work. The Minister of Transport would be the appropriate Minister to ask for the exact amount, and I believe that opportunity may or may not have been taken when that Vote came through.

Hon MICHAEL WOODHOUSE (National): Thank you, Madam Chair. I do hope that time permits to ask the Minister some questions around the quality of the spending in Budget 2020, but I want to focus, actually, on the Crown revenue projections. The numbers I’m quoting are from page 38 of the summary document, which the Minister will be familiar with. Now, what’s interesting is that the actual Crown revenue for 2019 was $93.5 billion. Even though the effects of COVID only hit in the last three months of the fiscal year, the forecast for the year just ended is $89.5 billion, and that’s a $4 billion drop, where I think the projections for revenue initially were higher than that. So that’s a really big thump in the Crown revenue projections.

Despite that, and for all that we’ve gone through over the last five months, the forecasts for this financial year that we’ve just started is $87 billion—a drop in Crown revenue of just $2.5 billion. Now, I find that heroic in the extreme, particularly when you then see a forecast for the following year for it to bounce back by $7.5 billion, to $94.6 billion, and up to $104 billion in the year after.

Now, the question is this: were those projections made for Budget 2020 prior to the full effects of COVID-19 on Crown revenue being understood; has the Minister seen a revised projection of Crown revenue, and, if so, what has that done; and, thirdly, because, in my estimation, this could have a significant effect on the operating balance before gains and losses and, therefore, the need for the Government to take action, what would that action be? Would it be to borrow more or would it be to spend less, and how will the Government respond if those several—possibly—tens of billions of dollars of projected revenue do not eventuate?

Hon GRANT ROBERTSON (Minister of Finance): Again, keeping the answers as short as I can, the very short answer to the member Michael Woodhouse’s question is yes. Those projections were largely done before the full effects were understood. Our system of Government is an excellent, transparent, and open one, which means the pre-election fiscal update (PREFU) will provide him with the answer to his last question. My statement about what would occur in terms of the middle of that—and, yes, of course it will have an impact on the operating balance before gains and losses. My statement about what would occur in the middle of that is that, broadly speaking, both the advice from Treasury and also what we’re hearing from outside economists is that the New Zealand economy has done better coming out of lockdown than was expected, but the global economy and projections for the global economy are significantly worse. The net effect of that will bear out in the PREFU, but I think we can all see that as we’ve learnt more about this particular virus and its impact on the global economy, it is the downside scenarios we’re seeing more of, rather than the upside.

Hon MICHAEL WOODHOUSE (National): I thank the Minister. The last question wasn’t exactly answered, although I did think it was implied in his answer, and that is: would the Crown borrow more to close the gap, or would it look at quality of the spending?

In a previous answer to Mr Goldsmith, Mr Robertson has said that the projections are for interest rates to stay low, but that’s not actually how borrowing is done. It’s done on the actual interest rates that the Crown pays over a set period of time, which—I’d be interested to know the duration of the locked-in interest rates that are being obtained. But I would be keen to get the Minister’s sense of whether there is an openness to actually look at the quality of spending and make reductions in what are, effectively, some big, big plans for spending, or whether we’re just going to borrow more.

Hon GRANT ROBERTSON (Minister of Finance): I thank the member Michael Woodhouse. Sorry, I apologise for not having answered that third point, and this, unfortunately, will be the last contribution due to the timings that we have—

Hon Paul Goldsmith: Half an hour—you had half an hour.

Hon GRANT ROBERTSON: No, no. Apparently, I’m told I don’t, so there you go.

Rt Hon David Carter: No, we can have a bit more of you, if you want it—you’re welcome to do it.

Hon GRANT ROBERTSON: A bit more of me, Mr Carter? That’s the first time he’s ever said that. The problem is it will reduce the other calls. But anyway—

Rt Hon David Carter: That doesn’t matter.

Hon GRANT ROBERTSON: Fair enough, fair enough. Look, I’m so popular, Madam Chair, I’m happy to stay.

In answer to the member’s question, it will always be a mix of all of those things. It’s not just a choice to look at value for money; it’s an obligation, and it’s an obligation on any Minister of Finance to assess every single bid that comes through, and then go on assessing it in terms of its implementation. It would certainly be true that as we were going through the COVID Response and Recovery Fund, we’ve had to move swiftly. I think we all agree that a no-regrets approach was the way to do that, but that means there is an even greater obligation to assess whether or not that spending remains value for money.

What I would say is that we remain in a strong position to borrow. There are a variety—and the member will be very well aware of this—of lengths of times of Government bonds as to how they’re issued and how they work in in terms of what the interest rates are on them. So that will continue. We are very mindful of what we are borrowing and very careful about how it is being spent.

Hon Paul Goldsmith: Supplementary—well no, not supplementary—

CHAIRPERSON (Hon Anne Tolley): Can I just take a minute. So, Minister, are you happy to stay on for a bit?

Hon Grant Robertson: I can, but it just takes the time off the other—the agreement that we’ve got.

Hon Paul Goldsmith: The agreement was half an hour with the Minister, so we’re keen to have it.

CHAIRPERSON (Hon Anne Tolley): But he’s been here more than that.

Hon Paul Goldsmith: No, no—not for finance, he hasn’t. He’s been doing foreign affairs and nonsense like that.

KIRITAPU ALLAN (Assistant Whip—Labour): The issue that we have is that these are timed debates, and we’ve got—right now, I’m down to about one hour and 25 minutes, I think, for my allocations for Labour members. We’ve had the Minister of Finance in the seat for 30 minutes. He’s happy to stay, but we’ve still got about seven or eight other Labour Ministers that still need to answer questions. So I’m just in this quandary of having to try to manage efficiently the House time with our Ministers in the chair.

CHAIRPERSON (Hon Anne Tolley): That’s exactly the difficulty with long speeches. That’s what the people in the Chair have been saying all the way through this debate, which is that long speeches, long questions, and long answers actually eat into time. So the Minister’s indicated he’s happy for another five minutes. Let’s make the best use of that, and away we go.

Hon PAUL GOLDSMITH (National): Well, here’s a very short question: can the Minister outline for us some examples of reprioritisation of spending in the last few months and any reductions to existing spending, given the gravity of the time?

Hon GRANT ROBERTSON (Minister of Finance): Well look, obviously, in terms of the time we’ve got, I could come back to the member with a list of the conversations we’ve had with various areas, but perhaps I’ll take one that’s actually in this area here, which is within Vote Finance. Treasury has reprioritised a significant amount of its work, including on things like monetary policy reform, which I think is really significant and important, and has directed that to COVID. So every Government agency and every department takes a look at its spending to see how it can best use it. Right at the moment, there’s more pressure on public services than ever, so, actually, most agencies are looking for further funding to do just what they need to do, let alone any other reprioritising.

Rt Hon DAVID CARTER (National): I just want to—while we’ve still got the Minister—to ask some quite specific questions as a Christchurch member of Parliament, and I’m referring to page 31, 32, etc., around some of the—

Hon Grant Robertson: 31, 32 of what?

Rt Hon DAVID CARTER: Of the appropriations, Volume 5. The Minister may not have time and may not have the information. I accept that. It would be great if he could perhaps send me a memo. I just want an update on the Christchurch projects that he’s responsible for through Vote Finance. So we’ve got the Convention Centre—that’s well under way. I’d like to know when that’s about due to open. I’d also like a breakdown, then, of how much central government money went into it—first, how much money came from the city council—and, equally, an update on the Metro Sports Facility. The land is available. I don’t see much activity there, but, again, I’d be grateful—and, again, the balance between Government money and city council money. Finally, there’s the stadium, which is, equally, one that’s been announced. I haven’t seen a lot of progress and I think, as we enter the campaign, as a Christchurch member of Parliament, I’d like to know an update on those three major projects for Christchurch.

Hon GRANT ROBERTSON (Minister of Finance): I’m happy to do that, and, obviously, I don’t have the specific dollar numbers but I’m happy to get back to the member with those.

In terms of the Convention Centre, all but done. The Convention Centre is a project where obviously the very final stages of it got delayed because of COVID, but, essentially, it finished as a project. In terms of Metro Sports Facility, good ground works are there. Last time I went past it there were a reasonable number of people working on it and that project is advancing. The money is all there; the work is being done.

The stadium is a little different, and the member will be aware that we put in place the acceleration fund that has provided $300 million, of which a large chunk of around $220 million was available for the stadium. That money is there. It is done. It is the other funders who are still working through some of their issues.

Rt Hon David Carter: The council?

Hon GRANT ROBERTSON: Yeah, the council. What we did do was release some funding so that some early site works could be done in advance of the final agreement on the funding. But from our perspective, the money is on the table and ready to go.

LAWRENCE YULE (National—Tukituki): I would wish to discuss with the Minister around the three waters reform. The Minister will be aware of significant expenditure and the significant piece of work. But, effectively, what has happened is the Minister and the Government has announced $761 million towards the three waters.

CHAIRPERSON (Hon Anne Tolley): Oh! You’re now on—

LAWRENCE YULE: Yes. Well, either Minister, but if they want to change—yes, I am on internal affairs.

CHAIRPERSON (Hon Anne Tolley): Internal affairs—right, OK. So we’ll just invite the Minister. This is internal affairs, is it? [Interruption] She’s willing to answer, so—

LAWRENCE YULE: OK. That’s fine. Sorry, Madam Chair, new Minister—my apologies. The issue I wish to ask the Minister about is—the Minister recently announced $761 million towards three waters, and in the appropriations, in the Estimates, on page 174—it’s actually in the Estimates and reports of the committees on the Estimates—the Minister said that the Minister has told us about a water services bill that the Government will be introducing in conversation across the sector about the service delivery arrangements for the three waters systems. We asked the Minister whether the bill will be introduced prior to the election and she said that it was her intention but subject to parliamentary agenda. At a minimum, she said she would like the sector to see what the Government is proposing.

That is exactly where I’m getting to. So $761 million has been announced as a first draft of the water reform money, and my understanding is that the Minister is basically saying “If you want the money, you sign up to my deal.” So what I’d like the Minister to explain to the committee is what is her intention? Because my understanding from the sector is that that is less than clear at this point, in terms of the structure of water delivery.

Hon NANAIA MAHUTA (Minister of Local Government): I’m happy to take a call on this particular issue, knowing that we’ve had two years of conversation around the perilous state of the water infrastructure system across New Zealand, highlighted by the Havelock North campylobacter event that happened in the member’s area. What we did ensure as we had the conversation about the extent of the challenge was the state of the system and the amount of investment that’s required, but also potentially what a reform option could look like if councils, the 67 territorial authorities who deliver water, aggregated their services, created scale, to be able to better ensure greater consistency across the country in the way that they deliver safe, healthy drinking-water and, importantly, the way in which the system can improve freshwater outcomes so that we’ve got clean rivers to swim in, lakes, and oceans.

So part of that conversation, in relation to the question that the member has asked, is what is it going to take for the councils around the country to be able to have a different conversation? Much of the conversation that we’ve had to date has been based on a joint approach to, firstly, stand up a dedicated regulator, which we have passed the legislation for, which is Taumata Arowai. The enabling legislation that determines the roles and functions of Taumata Arowai is the water services bill, which, again—I am hopeful that, at the very minimum, the bill will be able to be tabled in the House, if it hasn’t already been done so.

Then the other part of the conversation is in the service delivery area. This is where the sum of funding, around $761 million, towards the stimulus package and supporting Taumata Arowai has been already announced. Now, that funding is a part of the conversation to help steer councils into the reform programme. It’s an opt-in process. This is the second week of a two-week consultation phase with councils that has been undertaken by a joint steering committee made up of local government representation as well as leaders from the sector to be able to have exactly the conversations I think the member is asking about, which are: will the sector have greater clarity on the reform that’s being proposed? Will they be able to work out the issues and concerns that they have in relation to the nature, scale, role, and function of these multi-regional entities? And will they be able to embark right now on a programme of action to be able to invest in their infrastructure? My answer to all those three questions built into the member’s contribution is yes, they will.

In terms of the $761 million, $50 million will be made available to support the role and function of Taumata Arowai. The rest will be distributed. We have not yet announced how that will happen because we want to hear back from the consultation round about what the concerns are. But when the decision will be made, loosely based on population and geography, I consider that many councils have already made a commitment to a programme of action, so this initial stimulus amount of funding will bring forward, probably in year two and year three, what has already been forecast in the asset management plans. It will be a welcome reprieve for councils who are continuing to struggle with reduced revenue.

I hope that answers the member’s question. It is very—

Rt Hon David Carter: Very long answer.

Hon NANAIA MAHUTA: Well, actually, it was very precise in relation to the range of issues. But I hope that that answers the member’s questions.

LAWRENCE YULE (National—Tukituki): In summary, it didn’t completely answer the question, because what I was wanting to know was—and the response to what the Minister told the select committee. At a minimum, she said she would like the sector to see what the Government is proposing. Now, there’s consultation going on right now. I accept that. But members that I’m talking to say to me that they still don’t know what the Government is proposing in terms of the final structure. Will the Minister be announcing to the Parliament or the people of New Zealand before the election what the final structure is?

Hon NANAIA MAHUTA (Minister of Local Government): Can I just—having confirmed with the Clerk, the bill was tabled yesterday. So there will be access to see the detail of the bill, and that’s really important, and I gave an undertaking at the select committee that that was my intention. I was a little bit ambitious to indicate that we might get to first reading. That’s probably not going to happen, but they will have access to the bill.

ERICA STANFORD (National—East Coast Bays): I’ve got questions for the Minister of Internal Affairs.

CHAIRPERSON (Hon Anne Tolley): For internal affairs? Yes. Thank you very much, Minister Mahuta.

KIRITAPU ALLAN (Assistant Whip—Labour): Madam Chair, it might be just useful if I give an update on time frames, just so the Opposition are aware that New Zealand First has about 20-odd minutes left for their allocation, so if you’re getting truncated answers, that might be the reason.

CHAIRPERSON (Hon Anne Tolley): Each party has to manage its time. So it’s really up to Ministers and individuals asking the questions and whips to keep track of it.

ERICA STANFORD (National—East Coast Bays): I’ll keep it brief. So I would like to talk to the Minister about gambling, in relation to offshore gambling. So when we had the Minister in front of the select committee, we had a long chat about the increase of people who are partaking in offshore gambling, especially during the lockdown—the percentage of new people who were getting into gambling, the people who were spending far more time in gambling.

What I’m keen to know is if the Minister has an update for us on the scale of the problem and the scale of the harm that’s being caused. The reason that I’d like to understand a bit more about that is because I’m keen to also then ask her about the work that is being undertaken at the moment in terms of policy to regulate that market, where we’re at in that work, how far along the track we are, and when that is likely to be introduced. I did note that she said it wouldn’t be introduced in this term of Parliament, but if she’s lucky enough to be back again, how quickly are we likely to see this? Also, just specifically around loot boxes—so not just online gambling but in-game purchases for loot boxes has been something that’s been talked about a lot by the industry, and whether or not that would come into that regulation that she’s potentially working on and whether or not she believes that that has some form of value and is actually creating harm.

Hon TRACEY MARTIN (Minister of Internal Affairs): Inland Revenue reports that around about $42 million in GST is collected from offshore online gambling. My recollection is that there is approximately $200 million being spent by New Zealanders in an unregulated market in an offshore online environment. Loot boxes would require regulation to bring them into the Gambling Act. At the moment, they are not covered in any way, shape, or form. With regard to timing, if I’m back here, as fast as I can do it I’m going to regulate.

ERICA STANFORD (National—East Coast Bays): Last one? OK, the last question I have is: in select committee the Minister said that the New Zealand Lottery Grants Board is considering diverting some money from Lotto, as a COVID-19 fund to help replace some of the funding normally given to communities through charitable trusts. So I’d just like an update on whether that’s happened and how much of that has been granted.

Hon TRACEY MARTIN (Minister of Internal Affairs): In answer to the member’s question, an announcement will be made in the next two days—I believe it’s around about two to three days—on that very item.

CHAIRPERSON (Hon Anne Tolley): Is that the completion? Are we on to revenue now? Yes, thank you very much, Minister Martin. Welcome to the Minister of Revenue, the Hon Stuart Nash.

Hon PAUL GOLDSMITH (National): Thank you, Madam Chair. Obviously, one of the biggest issues in this whole appropriations debate—or two issues, really—is the flow of revenue into the coffers of the Government in order to cope with what is an extraordinary situation. The obvious point to be made is that the flow of revenue is not sufficient to cover the cost of the spending; therefore, we’re in an enormous amount of debt, and then related to that is the impact that it’s having in terms of jobs.

Now, the Minister might have caught up with some suggestions that our party has made this morning in order to make it easier for entrepreneurs to start up. One of the proposals is allowing people who have been made redundant during this crisis to be able—because one of the great concerns is that if you’re suddenly made redundant, and say you’ve got a $100,000 redundancy, which would be a good thing, roughly a third of that goes in tax. So there’s been widespread concern around the impact that that has on people who are facing unemployment afterwards. So our suggestion this morning has been to allow them to have that tax as a credit against a new business setting up, and I’d be very interested to see whether the Minister thinks that’s a good idea and whether that’s something that he would be setting aside money for, or why he hasn’t in the appropriations so far outlined today.

Hon STUART NASH (Minister of Revenue): Thank you, Mr Goldsmith. It’s not a policy that has come across my desk at this point, or a suggestion. I do apologise—I haven’t caught up with this morning’s policy announcement, but, look, I’m keen to take a look at it. I won’t rule it out now, but I’m keen to take a look at it.

Hon PAUL GOLDSMITH (National): Then, secondly, of course, we’ve got a large number of people who are facing unemployment, and the Minister has responsibilities around KiwiSaver and the rules around that, and the Government spends roughly a billion dollars subsidising New Zealanders into that KiwiSaver—$500 a year kick-start payment. Again, a suggestion that’s been made today is to allow people who have lost their jobs to access up to $20,000 of that KiwiSaver fund to start a new business, and I’d be interested in the Minister’s attitude to something like that, recognising the extraordinary times that we’re facing and the possibility that there could be hundreds of thousands of people lost. There’s nearly 400,000 New Zealanders right now on the wage subsidy, which comes to an end in the next few weeks, and there’s a great deal of uncertainty, frankly, as to how many of those will actually lose their jobs. The Minister of Finance has outlined many programmes that the Government will spend borrowed money on to try and create short-term jobs for those people, but we fundamentally believe that it’s entrepreneurialism in New Zealand across the private sector that will generate most of those jobs. So I’d be interested, in terms of that KiwiSaver appropriation and the rules around it—which have hitherto been pretty tight; you can only withdraw it for a first home—whether he is of a mind to entertain that ability for people who have lost their jobs, may have been made redundant, having access as an emergency measure to that sort of money in order to start a business.

CHAIRPERSON (Hon Anne Tolley): I’ll just remind the member that we are actually on the Estimates for 2021. So lots of ideas, but they need to relate to the Estimates.

Hon PAUL GOLDSMITH: Yes, indeed. Thank you.

Hon STUART NASH (Minister of Revenue): Thank you. I’m less enamoured to this idea for two reasons. First of all, Kiwis are able to access their KiwiSaver accounts: one, of course, is first-home buyers, and the second is in extreme hardship, you’re allowed to access KiwiSaver funds to pay bills. KiwiSaver, as we all know, was set up as a retirement scheme, and I think every Kiwi has bought into that. There are contributions both from your employer and your employee. If people are made redundant, they are eligible for the COVID-19 Income Relief Payment programme, which is the same payment they would get on the wage subsidy. So it’s not as if, if they’re made redundant after the wage subsidy, they’re cut loose and that’s the end of that.

What I would say is that there are inherent risks, of course, in starting a new business; there is no doubt about that. In a normal course of, you know, pre-COVID business as usual, there were between 3,000 and 4,000 New Zealand businesses that failed every year. Obviously, in the deep recession we’re in at the moment, that is going to change significantly. We do understand that. My advice—and I suppose, Madam Chair, if you’ll indulge me for one second, I’m speaking here in my role as Minister for Small Business. I do believe what we’ve done is we’ve put a number of processes in place—for example, $40 million of extra money into the regional business partners advice programme, which is up to $5,000 worth of vouchers. I just do think that there are other ways to perhaps raise capital or to retrain if someone has been made redundant and they have a good idea around how to set up a business. For me, it does come down to that risk premium: less risk if someone is buying their first house—of course, there still is risk, but less risk; you could argue no risk at all. In fact, you’re mitigating personal risk if people draw down KiwiSaver funds in times of extreme hardship to pay bills. But I just think that drawing down KiwiSaver funds to start a business presents a level of risk to retirement savings that I, certainly, would feel uncomfortable about.

Hon PAUL GOLDSMITH (National): So I suppose the broader, more philosophical question is, if people are choosing between keeping those funds in, say, a conservative default fund earning not very much and invested offshore, whether or not we should trust New Zealanders to decide whether or not they want to take a very much higher risk, as the Minister has correctly identified, in setting up a business and starting a business—and that every New Zealander has a different view as to what risk they’re willing to take.

Just another question in the revenue space. Government has brought in various rules around the brightline test—the previous Government brought in a two-year brightline test for people buying and selling houses within two years needing to pay tax on the gains, and that’s been extended to five years. There is a very open question as to how effectively that is being policed by Revenue, and I’d be interested to see what resources have been allocated to policing that new part of the tax code and what kind of results we’ve seen in terms of revenue gained and his confidence that that area of law is actually being properly enforced.

Hon STUART NASH (Minister of Revenue): Sure. In terms of the brightline, the extension obviously applies to taxpayers who acquired interest in land on or after 29 March 2018. There’s been about $90.9 million of additional revenue assessed. For the period for 1 July 2019 to 31 May 2020, the Property Compliance Programme has assessed return on investment of about $8.96 to every one dollar spent. The manual review—this will be interesting—of brightline transactions found the final compliance rate for 2016 tax year was about 73 percent. So there is a lot of work to do here, and it’s hard to know whether the role is around education or people are being deliberate in the way that they are structuring their affairs or not paying tax when it is actually due. Inland Revenue has put a lot of resources into non-compliance. Obviously, in the COVID environment, a lot of resource was taken out of business as usual and put towards programmes like the Small Business Cashflow (Loan) Scheme and the wage subsidy scheme, both of which Inland Revenue—well, Inland Revenue obviously manages the Small Business Cashflow (Loan) Scheme, and it worked very closely with social welfare to implement the wage subsidy scheme. But please be assured that Inland Revenue takes compliance very seriously.

As the Minister, one of the things I talk about a lot is the integrity of the tax system, and we need to ensure that the integrity of the tax system is maintained, hence the reason why resource is put into ensuring that New Zealanders do comply. As the member is well aware, the final obligations on ensuring that people pay their tax does rest with the taxpayer, but often the taxpayer does need a little bit of educating in terms of what their actual obligations are.

Hon PAUL GOLDSMITH (National): I’d be interested if the Minister could sort of give some further explanation on that 73 percent compliance that he talked about there on the brightline test, because on the surface of it, it seems very, kind of, reasonably straightforward that if somebody buys a house and sells that house, that within that period—it seems relatively black and white and reasonably easily evidenced and not much room for discussion. So is he happy with that sort of rate, and just how vigorous is his department being in policing that?

The related question is, notwithstanding the crisis that we were facing, we’ve obviously got a real revenue crisis as well, and potentially a debt crisis, and so it is important that Inland Revenue remains focused on doing its basic job, which is collecting money and making sure that it comes in as per the law. So I just want to get a clear sense of, when the Minister says business as usual is being put on hold, just what work is being done, and can you assure New Zealanders that the Inland Revenue remains focused on its core task?

Hon STUART NASH (Minister of Revenue): I can assure the member that Inland Revenue does. In the 2020-21 Budget, over $550 million was set aside for services to customers, including informing the public about their entitlements and obligations. Am I happy with 73 percent? No, I’m not at all. I’m not happy until, in fact, we get 100 percent compliance, if I’m honest. Why aren’t people complying? I actually agree with the member. I actually think it is very clear. It is black and white. But I think what happens—and this is my own personal view—is that people think, “Well, shivers, it’s only one property. I can get away with this.”, and as a consequence they try and get away with it. What they don’t understand is Inland Revenue has Land Information New Zealand data. We now are requiring people to put GST on every transaction. So it is easy for Inland Revenue to match houses bought and houses sold—well, it is easier, I should say, for Inland Revenue to match houses bought and houses sold, which they are doing, and they will continue to do this vigorously and to pursue those who are not following the rules.

As the member mentions, at this point in time, when revenue is dropping and we are in the middle of a 100-year recession, we need to ensure that Kiwis meet their tax obligations. One thing I should mention is that one of the things that Inland Revenue has done during the COVID period, and I think it’s done very well, is say to taxpayers—if a taxpayer is having difficulty meeting their tax obligations due to COVID, then we have been very, very clear to contact Inland Revenue or contact your bookkeeper or your accountant or go online and, for goodness’ sake, enter into an instalment arrangement, and Inland Revenue has the ability to write off use of money interest which would normally accrue on debt that is overdue. So I would just encourage anyone who is struggling with their tax liabilities to please get in touch with Inland Revenue or your accountant or bookkeeper and do not bury your head in the sand.

Rt Hon DAVID CARTER (National): I’ve got a question for the Minister in the chair, the Hon Stuart Nash. I know the conversation so far has been significantly around tax compliance, but I want to take the Minister to page 310 of the appropriation for revenue and seek from him an update on some of the projections that were made around Budget time—a Budget presented in May, probably well and truly finalised late April. If you look at corporate tax revenue, for instance, it was projected to decline by nearly 20 percent in the year 2019-2020. That year’s now closed, so the Minister, I assume, has had his officials in his office telling him whether that decline of 20 percent was accurate.

CHAIRPERSON (Hon Anne Tolley): We’re just having difficulty finding the page. What Volume—

Rt Hon DAVID CARTER: Page 310 of the Budget appropriation. He’ll be on top of his portfolio. He’ll know these figures off by heart because as a revenue Minister he needs to know how much money’s coming in, as he’s acknowledged the 100-year recession. So I want an update on corporate tax revenue to the end of this last financial year, end of June 2020. I want a further comment on the suggested decline in corporate tax revenue in the next financial year, 2021, which was a decline of 10 percent.

Similar questions around GST revenue—it was expected to decline by only 1.7 percent in the 2019-20 year but expected to decline by 4.9 percent in the year that we’re now in. So, again, he’ll have an update, I assume, as to how much it actually did decline in 2019-20 and whether the further projection of 4.9 percent decline is accurate. Then I want to take him to the paragraph between, which says positive revenue growth is forecast to return in the year 2021-2022. It seems to me that in light of the economic situation out there, and the figures I’ve just asked him to comment on in regards to GST, corporate tax—and I haven’t talked about an income tax—it’s very unlikely that Inland Revenue’s revenue source from taxation is going to return to pre-COVID levels in the very near future.

Hon STUART NASH (Minister of Revenue): All I would say to that is the member is well aware that the Government releases a pre-election update and—

Rt Hon David Carter: So the member doesn’t know.

Hon STUART NASH: Well, you will have to wait until that pre-election update is released, and at that point, you will have all the figures that you have asked for.

Vote Prime Minister and Cabinet, Vote Communications Security and Intelligence, Vote Security Intelligence, Vote State Services, Vote Finance, Vote State-Owned Enterprises, Vote Revenue, Vote Ministerial Services, Vote Office of the Clerk, Vote Parliamentary Service, Vote Audit, and Vote Ombudsmen agreed to.

Social Services and Community Sector

CHAIRPERSON (Hon Anne Tolley): Members, I understand that the responsible Ministers are available—thank you, Minister—to speak to the Votes in the social services and community sector (B.5, Volume 10). The question is that Vote Arts, Culture and Heritage; Vote Housing and Urban Development; Vote Oranga Tamariki; Vote Pacific Peoples; Vote Social Development; Vote Sport and Recreation; and Vote Women stand part of the Schedules. Good morning, Minister. I call Gareth Hughes.

Gareth Hughes (Chairperson of the Social Services and Community Committee): Kia ora, Madam Chair. Ngā mihi nui ki a koutou. Kia ora. I rise as the chairperson of the Social Services and Community Committee to kick off this Estimates debate into this sector. Can I first up thank committee members. It’s an absolutely wonderful committee to work on, and I think the four parties’ representatives clearly and strongly articulate their views but do so in a positive and collegial manner. I’ve enjoyed chairing it, and I thank members for surprising me with a vegan cake yesterday to acknowledge my departure.

Estimates questions, hearings, consideration, and deliberation of reports all are a significant time investment by this committee. We scrutinise the largest share of Government spending, with superannuation, benefits, housing, and other forms of social support which are so important to our society. The Estimates we reviewed were social development; housing; urban development; Oranga Tamariki; arts, culture, and heritage; Pacific peoples; women; sport and rec; Estimates for appropriations within Vote State Services, supporting implementation of a social wellbeing approach; and Estimates within Vote Internal Affairs that are the responsibility of the Minister for the Community and Voluntary Sector and the Minister for Ethnic Communities.

Can I just also take the opportunity to thank the Ministers, their officials, and the excellent Office of the Controller and Auditor-General’s advisers, as well as the select committee staff.

Within Vote Social Development, the appropriation proposed in the main Estimates for Vote Social Development totalled just under $34 billion. Of that, 89 percent is for benefits and related expenses. A major point of discussion, as no one would be surprised to hear, was the response to COVID-19 and, in particular, the wage subsidy scheme, which has seen billions paid out to support Kiwis in work. As we see in other countries, when people have difficulties with their job or have lost their job, and the public health challenges that arise when they’re forced to go into some unsafe environments, I think is a good example of how fortunate we are in New Zealand to have had such a successful scheme. Members questioned the Minister around timing for main benefits, which rose by $25 a week from 1 April 2020 as part of the Government’s COVID-19 economic response package. We also heard that Budget 2020 allocates $250 million over four years for an additional 807 full-time equivalent staff to support the ministry in their work for COVID-19 in the response.

Carmel Sepuloni is also the Minister for Disability Issues and is responsible for the appropriation in Vote Social Development promoting positive outcomes for disabled people. Again, COVID-19 was a major focus for the committee, with our discussion along improving the distribution of funding and uptake of support for Māori and accessible housing options.

The Minister for Seniors, the Hon Tracey Martin, is responsible for two appropriations within Vote Social Development. In November 2019, the Minister launched the Better Later Life—He Oranga Kaumātua 2019 to 2034 strategy, replacing the previous New Zealand Positive Ageing Strategy.

The Minister for Youth, the Hon Peeni Henare, is responsible for the appropriation in partnering for youth development, and we questioned him on youth unemployment. We heard of He Poutama Taitamariki as a joint pilot project with the Ministry of Social Development. It seeks to improve employment outcomes for over 750 young people—and I’d note 82 percent Māori, 46 percent female, in Northland, which we found incredibly promising.

In this short contribution, I won’t have time to cover each of the Votes that we scrutinised, but I would like to acknowledge my colleague the Hon Julie Anne Genter, the Minister for Women. We heard the ministry has developed an action plan to support the Government’s target of having women make up 50 percent of State sector boards by 2021. We heard that this year it’s reached, in fact, 49 percent. We also heard that the ministry is now collecting data on the ethnicity of those boards for the first time. We also heard of work to address the gender pay gap and supply period products in high schools.

Vote Arts, Culture and Heritage is administered by the Ministry for Culture and Heritage, and the Prime Minister is the responsible Minister. For our Estimates hearing, we met with the Associate Minister, the Hon Grant Robertson, and the Minister of Broadcasting, Communications and Digital Media, the Hon Kris Faafoi, who’s responsible for one appropriation under this Vote. Again, COVID-19 was a major focus, and we asked questions around the $304 million response and recovery fund foundational package, $50 million media support fund, Creative New Zealand’s $29 million emergency response package to buffer and support the arts, as well as other significant investments in Māori and Pasifika arts.

I want to thank all members involved with this important governance role the select committee plays in scrutinising Government spending at a time of global pandemic and economic challenge. I’m proud of the “team of 5 million” approach our country has taken and the public spending we’ve all contributed towards to supporting Kiwis to get through COVID-19. Kia ora koutou.

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Chair. I want to start my line of questioning around the wage subsidy scheme, and in particular the wage subsidy extension. I have a series of questions—actually, some raised initially by the union—around the number of businesses supported by the wage subsidy extension, and the proportion of the workers that are getting the 100 percent pay, 80 percent, or just the wage subsidy level of $585 a week, and what work has been done with those employers to ensure those that are paying the minimum are looking at how they can pay their employees the proper rate.

Also interested to know, in terms of the modelling around the economic impact of the wage subsidy extension, how many jobs have been saved. We’ve heard on lots of occasions that the wage subsidy is all around saving jobs, so I’m interested in the data that the Minister has used, and we’ve heard in the Estimates and the appropriations in terms of exactly how many jobs have been saved by the wage subsidy extension.

My third question on the wage subsidy extension is: does she support the decision that there will be no further wage subsidy extensions?

Hon Carmel Sepuloni: I’ll let a couple run, if that’s OK?

Hon LOUISE UPSTON: If she’s not ready, I’ll keep going. So, obviously, the wage subsidy—I’ll just fill in some time until the Ministers are ready; maybe you give me a nod when you’re ready to go—I think we’re up to $13 billion that’s been spent on the wage subsidy, and the Minister’s been quite proud of the fact that 1.7 million jobs have been covered by that. I’m sure I’ve got the figures right, but maybe you can correct me when you do want to answer.

So the wage subsidy extension and the fact that the Prime Minister has said there will be no further wage subsidies extended—I want particularly to know what analysis has been done on the impact on industries that cannot operate given the borders continue to be shut, specifically in tourism and travel agents.

Hon CARMEL SEPULONI (Minister for Social Development): Sorry, just with regards to some of the questions that you’ve asked, the honourable member Louise Upston, just over $13 billion has been paid out in total for the wage subsidy in its entirety. Of that, just under $2 billion has been paid out for the wage subsidy extension. The difference in the criteria between the original wage subsidy and then the extension was that originally we said that people had to be able to demonstrate a 30 percent drop, and then we shifted that to 40 percent.

In terms of how many jobs have been saved, well, overall for the wage subsidy, we have subsidised around 1.7 million jobs—that includes the extended period. Our intention was always to support businesses as best we could to be able to keep them operating and, obviously, keep people employed, but we’ve never shied away from the fact that there still will be some job losses. It would just be impossible for us to determine exactly what that number of job losses might be.

I think it’s interesting to note that we did do a survey on those employers who received the wage subsidy in May, and at that time, around about 90,000 employers responded. At that time, only 6 percent of them said that they still anticipated needing to make staff redundant. To put that in perspective, though, many of those that replied were small businesses, and actually the larger businesses were more inclined to think that they may still need to lay off staff at the end of receiving the wage subsidy. So it is heartening that it was such a low number, but, obviously, the Government is watching this space very, very carefully.

The COVID job loss temporary relief payment was put in place to support those who, because of COVID, have lost jobs—obviously, a shock to their household budget and their household circumstances; obviously, during a time where the labour market is not as robust. So, as a way of alleviating the shock to the many families that may lose jobs because of COVID, we put in place the job loss cover as well, and that runs, basically, up till the end of October. If anyone loses a job between 1 March and 31 October, they will be eligible to apply for the temporary job loss cover.

I do need to reiterate that it’s not the first time that we have put a wage subsidy of this nature, or even the temporary job loss cover support, in place. We have done that before, and namely we did that following the Canterbury earthquakes. However, clearly, this is on a much larger scale, given that there have been nationwide impacts of COVID—obviously global as well—and we are not alone. Unfortunately, across the world, what we’re seeing is the economic impacts of this unprecedented health event and the impacts that it’s been having on business and job losses internationally. So we wanted to soften the blow and to put measures in place that would be able to support businesses to continue, and the wage subsidy has been successful at doing that. And now we watch this space very carefully as we move forward.

I do want to also acknowledge, with respect to the wage subsidy, that the Ministry of Social Development moved incredibly quickly, at a pace that I think is admirable. You know, within two days of announcing, they were already able to pay out. In comparable countries, for instance, like Australia, they were able to announce in March, but they weren’t able to start paying out until May. There were criteria put in place that made the process as uncomplicated as possible, because we knew that there was no time to waste with regards to injecting support into these businesses to retain their staff. And if we hadn’t acted in haste, I’ve been told by numerous businesses that they may have made decisions which would have included making staff redundant, and so I do give my respects to the Ministry of Social Development for the job they’ve done here.

CHAIRPERSON (Hon Anne Tolley): I just remind everybody, Minister and members, that this is not the old way of making five-minute speeches; this is a question and answer session that is time-limited. So just a reminder to everyone to help the whips, who are trying to manage it.

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Chair. Of the three questions that I have asked, two of them haven’t been addressed at all, so I’m going to ask that one again. On the wage subsidy extension, which the Minister has said has been a $2 billion cost, I specifically asked—because the intention of this scheme was to keep people in jobs; it was to financially support businesses to pay their employees—what proportion are getting 100 percent of their wages? What percent are getting 80 percent? And how many are getting only the $585 a week?

I also want to know, if the Minister can’t answer the job losses, in terms of the projected fiscal estimate schemes already at $2 billion, what was the estimated estimate? And what is the expected reduction in benefit costs as a result of the extended wage subsidy being in place?

Hon CARMEL SEPULONI (Minister for Social Development): I’ll answer some of those questions. Some of them I’m not quite understanding, sorry. I heard the member say she wanted to know what the estimated estimate was; I wasn’t sure what she was talking about.

So the original wage subsidy was estimated, I think, from memory, to be around $12 billion to $15 billion, and the extension was—

Hon Louise Upston: Just the extension.

Hon CARMEL SEPULONI: If the member will wait until I answer her question, the extension was estimated, from memory, to be around $3.2 billion, and, to date, as I mentioned earlier, we have on the extension so far spent just under $2 billion. So I think it’s around $1.9 billion on the wage subsidy extension.

I think she also wanted to know how many jobs had been subsidised through the extension of the wage subsidy, rather than the $1.7 million overall. That would be, for the extension, 436,922, which is the latest information that I have. In terms of those that may have lost jobs despite having received the extension, I don’t have that information on me. However, what I do know is that between around about, I think, 20 March and the end of June, we’ve seen an increase of around, I think, 52,000 on main benefits, most of which were jobseeker benefit recipients. So those are the numbers that have come on benefit during this COVID period.

Also, with that, we did see recently, too, that Treasury initially had quite a high forecast for unemployment. They have slightly reduced that in anticipation of the fact that it may not get that high, but we have to wait for the Pre-election Economic and Fiscal Update before we have a real understanding of what that looks like. They have also, I think, stated that it could take longer, despite the fact that the peak of unemployment may not reach to the same extent. I do need to note that alongside doing this, though, we have been very conscious of the fact that we need to put an investment into employment, upskilling and training, job creation, and support for people to get into work. And, actually, as Gareth Hughes mentioned earlier, around $250 million will go towards supporting something like an additional 900 new staff members, many of whom will be working at the front line with respect to not just income support but also work support. I mention that because we have to prepare ourselves. We have to be prepared for job losses that may come about because of COVID.

Hon LOUISE UPSTON (National—Taupō): I’ve got lots of questions, so I’ll keep them briefer, with the hope that we get more answers. Is it anticipated that those on paid parental leave would be invited to apply for the wage subsidy extension? The second is: how many businesses have been written to, offering them the wage subsidy extension, and, if they haven’t applied for it, wouldn’t that be assumed that they didn’t require it?

Hon CARMEL SEPULONI (Minister for Social Development): You can’t blame the wage subsidy and paid parental leave at the same time. That rule applied with the original wage subsidy and also now with the extension. In terms of whether we wrote to people to inform them of the fact that we were going to have a wage subsidy extension, I’m not sure if we did. However, in saying that, the feedback that I’ve received from businesses, from chambers, from people across the country—self-employed people who have accessed the wage subsidy—is that it has been a non-complex process and the information has been available. We certainly haven’t had a lack of people applying, given that 1.7 million jobs have been covered by the wage subsidy. So I think that, really, the knowledge out there across New Zealand, across businesses, for how they access the wage subsidy has been pretty good. I’d be surprised if there were any businesses that weren’t aware of the wage subsidy and how they would access that.

Hon LOUISE UPSTON (National—Taupō): How many fraud investigations are currently under way with regard to the wage subsidy, and how many prosecutions are under way?

Hon CARMEL SEPULONI (Minister for Social Development): Last I checked, I think there were just over 500 investigations that have been put forward—54 have been resolved and about just over half of the investigations were currently in action. So some still to start; no prosecutions as of yet. I do need to point out, actually, that where there have been refunds from businesses because, for whatever reason, they haven’t ended up qualifying for the wage subsidy, actually, by and large, it’s been employer initiated. So I think around just under 14,000 refunds have been requested, but of the 14,000, just over 13,000 were initiated by the employer and the remaining were initiated by the Ministry of Social Development.

So, by and large, New Zealand companies, New Zealand businesses, have been very honest in this process. Where there have been concerns raised, we have started investigations, or we will be starting investigations, but some of them require quite robust conversations to get the details sorted. Many just didn’t anticipate that they would do as well as what they did. They thought that they would experience the 30 percent or the 40 percent loss and then they didn’t. Then it’s just been an honest conversation and then, where necessary, employers mostly have returned the money without having to be asked but because they initiated that refund.

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Chair. One of the recent pieces of information about the wage subsidy is that banks are declining loans for people who are in jobs supported by the wage subsidy. So I’m interested to know in terms of the number, the additional number, of people that the Minister in the chair, the Hon Carmel Sepuloni, is expecting on benefit—210,000 at the moment on unemployment benefits—what specific job creation initiatives and new employment initiatives have delivered the most people on unemployment benefit into jobs in the last three months?

Hon CARMEL SEPULONI (Minister for Social Development): Well, if I talk about exits off benefit into work, clearly April and May were not the best months, particularly given the level 4 lockdown period and the fact that many people could not work unless they were working in essential workforces. But what is interesting is that in June we had more exits off benefit into work this year than we had in June last year. I think, off the top of my head, it was around 7,000 to 7,500 exits off benefit into work. In the same month last year—so in June last year—it was around 5,240, and so that is an increase. With the demand increasing in terms of more people coming on benefit, we do want to see increases in exits. But it’s not so far—you know, we haven’t necessarily been able to keep up to the same extent.

I do need to acknowledge as well that there are many New Zealanders returning from overseas who have lost jobs overseas, who have come back and then are also needing to seek out employment, and in the interim, whilst they find employment, some of them are also having to access the support of the Ministry of Social Development (MSD). As New Zealanders, of course, they should be doing that if they are experiencing financial hardship without jobs and without income.

With regard to the different initiatives, there are multiple initiatives going on across Government, in fact, to address the challenges that we face because of COVID. We’ve set up a new ministerial group called the Education, Employment, and Training Ministers’ Group, where we are coordinating across Government agencies to ensure that we’ve got oversight of what initiatives are being rolled out across the country, across regions to ensure that they are being rolled out in collaboration with local government, with industry partners, with our union friends as well. So there are a range of things happening.

Just to mention a couple—I announced a few weeks back, just during the recess, with Mayor Phil Goff in Auckland the extension of Ngā Puna Pūkenga programme, which was piloted last year, which was successful. It started initially with 60 jobs that Auckland Council would be able to work with their contractors to be able to offer to particular groups who are often disadvantaged in the labour market, like Māori and Pacific young people, people with disabilities, and people who may have been on benefit for a long time. We took that pilot from a 60-person pilot to actually 700 places. So that’s just one initiative. You know, there’s also another initiative that MSD has set up with the mayoral task force to try and get more jobs out in the regions so that the different regions can access up to half a million dollars to support their job creation initiatives that they know are well suited to their regional areas. Those are just a couple.

I could go on. There are all the infrastructure projects. We’ve been very focused on initiatives that are shovel-ready and that is because, you know, as we’ve said on multiple occasions, we are all about keeping New Zealand moving.

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Chair. I want to turn my attention to the COVID income relief payment. When we had the Estimates hearing, we were unable to scrutinise this to the extent we wanted because it was in the $20 billion—it hadn’t been broken down at that point. So the original consideration is that it would be $570 million and I want to know if that is still the anticipated spend on the COVID income relief payment and whether the suggestion that another 30,000 people are being approached to claim that benefit is correct. I wonder if they haven’t claimed it because those who are eligible are in a family situation where they have an income of up to $2,000 a week already coming in and, potentially, a redundancy payment of $30,000.

Hon CARMEL SEPULONI (Minister for Social Development): Yes, so to date—I mean, these are the most recent figures—as at 17 July, I think there are about 18,500 people receiving the temporary income relief payment. The 30,000 that the member talked about that have been contacted with respect to this payment are those that have come on benefits since the 1 March. So, of course, you know, I think it’s important that the ministry is making those on benefit aware of what supports they might be eligible for. The COVID payment may be something that they are able to transfer to, and we want to make sure that we are putting that information out so that, down the track, people aren’t in a position where they just didn’t know that that support was available.

I want to say there’s a lot going on and so it is important that we keep communicating what is available because, given everything that’s out there, you know, people could easily miss things. So that’s one of the answers to the questions—so, yeah, 18,500 as of 17 July. There probably haven’t been as many people that have picked it up as we thought that there would be. One of the reasons that I’ve been given for that is—two of the reasons, actually: one is that the economy is not faring as badly as what some of the original forecasts were predicting. And then, secondly, is that at the time that we announced the temporary income relief job loss cover—at the time we announced that—we hadn’t taken into consideration or made decisions about wage subsidy extension and so, therefore, there may have been some people that would otherwise have fallen out of work being eligible for the COVID job loss cover but, because we did the extension of the wage subsidy, they’d been able to maintain their place of employment and they’ve been retained by their employer.

So those are two of the reasons why I’ve had it put to me that we haven’t had the pick-up that we may have expected. But, on top of that, I think it’s important for us to focus on also continuing to raise awareness and making sure New Zealanders know what supports are available during this time.

Hon ALFRED NGARO (National): Madam Chair, I take it that this is both social development and disability issues, under that—so I can ask questions of the Minister?

CHAIRPERSON (Hon Ruth Dyson): That’s correct.

Hon ALFRED NGARO: Thank you. So, to the Minister, in particular just around the disability issues, we see under the Estimates there was over $500 million that was allocated in the Budget towards the health and disability sector. The questions I want to ask are twofold. What is the Government doing to increase access to services for the estimated additional 25 percent of people who are eligible for disability services but not currently using any of them that’s been predicted by the sector? The second one: has any work been done on the impact of COVID on people with disabilities, or are any additional initiatives under consideration?

Hon CARMEL SEPULONI (Minister for Disability Issues): Thank you. I’ll try to answer all those questions. Hopefully I got them down. So the 25 percent of those that have a disability that may be eligible for health supports and may not be accessing them is an interesting point for the member to raise. This has really been highlighted through the Enabling Good Lives work through the Mana Whaikaha programme through the prototype in MidCentral. It’s really part of the system’s transformation consideration that we have at the moment that so many people have accessed these programmes and it’s been found that they have not been seeking out support they may be eligible for through the health system. It is an ongoing concern, and we get more and more intel from the Enabling Good Lives - Mana Whaikaha initiatives as we go. That’s part of what will inform systems transformation. So hence why we have the two demonstrations and then we have the prototype. So I can’t respond entirely to that. I think that’s a work in progress for us.

The member also raised the impact of COVID. The Office for Disability Issues did do a survey—was it us or the Disabled People’s Organisations (DPOs) that did it? Yeah, we did do it—during COVID on people that were disabled, and we got some really good feedback. Mostly people felt that that they were safe. Mostly people had what they needed. But, of course, there were still a few that raised issues about access to medication and food, and also what came up during that period was access to data and information. The DPOs raised with us that they had been part of an all-of-Government programme to ensure that all communications were accessible for disabled people. So, yes, it was great that that was put into place; however, there were issues around pace and how quickly information could be changed into different accessible formats and how quickly that could be put up in places where disabled people themselves could access it. There were issues around where that accessible information was put once it was available, sometimes being, kind of, three levels deep on the COVID website. So those are all learnings that I think we can take from the COVID experience.

Then, as we move forward, there will continue to be issues because of the anticipated job losses through COVID, issues around employment for disabled people that were pre-existing issues that are going to be heightened in a tight labour market. So that’s another thing to keep an eye on. In saying that, I have said on multiple occasions that in the next few weeks we will be in a position to actually launch our first ever Disability Employment Action Plan, which is timely given the context that we’re currently in.

JAN LOGIE (Green): Thank you, Madam Chair, and as per advice, I’d like to take this call substantively laying out the Green Party’s perspective on the Estimates for 2020 and finishing with a question to the Minister.

So the Estimates, I guess, reflect where we’re at, at the end of three years, in terms of the Green Party’s confidence and supply agreement with the Labour Party, which was to overhaul the welfare system, ensure access to entitlements, remove excessive sanctions, and review Working for Families so that everyone has a standard of living, an income that enables them to live in dignity and participate in their communities, and lifts children and their families out of poverty. That was our goal for this term as a Government.

And at the end of three years, we’ve seen the introduction of the Best Start payment; changes to the family tax credit; increase in the accommodation supplement; the winter energy payment; the first across-the-board increase in main benefits, to my knowledge, since the 1990s, of $25; indexation; a slight increase around abatement rates; and finally, finally, getting rid of that truly repugnant policy that punished women, and children primarily, for not naming the father of the child. In this Budget, we also see more of the provision around food in schools and financial mentoring and support for people to be able to consolidate loans so that they are able to manage their debt better. We heard today a plan to end the discriminatory policy that forced parents receiving income support back into work when their child turned one.

The increase I really want to particularly point to as truly significant is the increase in main benefits and the fact that every party here, I understand, having supported this and committed not to overturning that is a sea change for us as a country. But I am still left with the question: have these changes ensured that everyone has a standard of living that enables them to participate in their communities? Has it lifted children and people out of poverty? And are people in the communities saying that it feels as if there’s been an overhaul?

From the Green Party perspective, the answer is clearly no. We’ve been seeing increasing queues outside food banks. There were 596,000 hardship payments made in the March quarter. The latest Budget child poverty data showed the rates of low incomes and material hardship hadn’t declined in any statistically significant measure over that year and that, in fact, 4,000 more children were living in material hardship compared to 2017-18. I think about 40 percent of Work and Income staff time is spent on helping people to access support or loans for the essentials that their basic benefits just don’t cover, and more and more money is going into funding community organisations to feed people who don’t have incomes large enough to be able to feed themselves and their families.

While yesterday I was really stoked to be at the Government announcement of increased financial mentoring support and loan consolidation initiatives out in Porirua, it was really shocking to hear that in the last year, just one budget advice service in Porirua had supported people with $2 million worth of debt in my community. They’d taken over $600,000 of debt off those families, but that pressure is unimaginable. And what they told me afterwards is that 60 percent of that debt is to Government, because our policy settings around income are just too low and that they’re really concerned that Government is spending more money compensating for the fact that we haven’t given people enough to be able to support themselves.

The still profound inadequacies of our social safety net are locking people out of being able to contribute, and I’d really love to hear from the Minister her view on how far we’ve come and what the next steps are in terms of ensuring that everyone has the ability to participate and thrive in this country, and that we take advantage of this opportunity now to reset to a country without these levels of inequality.

Hon JACQUI DEAN (National—Waitaki): Thank you, that was very kind of you, Madam Chair.

CHAIRPERSON (Hon Ruth Dyson): Anticipation.

Hon JACQUI DEAN: I have several questions for the Hon Megan Woods throughout this Estimates examination. The first is around Progressive Home Ownership, which was an initiative signalled in the Budget and announced a couple of days ago, where a number of families will be assisted to buy their own homes by partnering with some existing housing trusts. So in the announcement that the Minister made under phase 1 was working with established housing providers—one in Queenstown, one in Auckland—partnering with these providers, with the aim of, in the first instance, helping 100 low to medium income families into homeownership.

So my first question for the Minister is: how long does she say that it will take for 100 families or individuals to be assisted into houses through the New Zealand Housing Foundation and the Queenstown Lakes Community Housing Trust?

CHAIRPERSON (Hon Ruth Dyson): Other members wanting to take a call? The Hon Jacqui Dean.

Hon JACQUI DEAN (National—Waitaki): Oh, thank you. So I was expecting an answer to that, but I’m very happy to wait.

CHAIRPERSON (Hon Ruth Dyson): As we’ve discussed before, the Ministers are expected to answer a question but not required to immediately after the question being put.

Hon JACQUI DEAN: Thank you, and I’m very happy to keep note of the questions that I’ve asked and the answers that I will then get. So then, following on from that question, is the criteria for those people who are being assisted into homeownership-style housing the same as for the New Zealand Housing Foundation and the Queenstown Lakes Community Housing Trust? So is the criteria that she has set out the same for both of those two trusts?

Hon Dr MEGAN WOODS (Minister of Housing): I’ll just answer those two questions very quickly. As to how long for the first tranche of families—the 100 families that were otherwise locked out of homeownership, who are going to get the chance of it through this Government initiative—they will be moving into their property at the end of October or the beginning of November of this year, so weeks away. It is our anticipation that all 100 families will have completed their journey through Progressive Home Ownership, of this first hundred in the 2020-21 year, so in pretty short order. In terms of the criteria that are being used for these two providers, the answer is yes.

Hon JACQUI DEAN (National—Waitaki): Thank you for that answer, Minister. So those houses that the people assisted through this scheme are being moved into—those houses must, effectively, be either ready to move into now or very close to being ready to move into in the next few weeks, I’m assuming. And my question is that the Minister, when she made her announcement, was aware that those housing trusts had housing, effectively, ready to go when the Minister made that announcement. So they weren’t new housing as a result of this programme; they were really business as usual with the housing trusts.

Hon ALFRED NGARO (National): I just want to ask another couple of questions to the Minister in the chair, Megan Woods. In looking at the Estimates report that’s come out of the Social Services and Community Committee, one of the areas of that report, on page 8, talks about improving housing outcomes for Māori, and in particular, I would add to that part of the conversation, having been part of that conversation, to Pasifika. Yet when I read on page 191 of the Estimates of Appropriations, and if I look down at the top of page 191, “Non-Departmental Output Expenses”, what I’m seeing here is that for Pasifika there’s only $630,000 that’s allocated to it. When I look further down to “He Kūkū Ki Te Kāinga - Increasing Māori Housing Supply”, again we’re seeing a limited amount of funding towards that, as well as, when we’re thinking about “Increasing Māori Housing Provider Capability”, there’s only a million dollars there. So I’m trying to balance up—and if the Minister can answer the question—to the words of the intent. What I’m not seeing is the resources and the funding to actually increase both the capability and the supply of housing outcomes for Māori and, in particular—I’ll add that, too—for Pasifika.

I’ll add another question to that, in that regards, because one of the areas was around community housing providers (CHPs), and if you look over the page, on page 192, what it also reflects is that again there is a decrease in funding in regards to CHPs, to community housing groups that are there providing their service. On the other hand, then, to the Minister, in regards to the CHP, the third sector, what is the Minister’s intent? If the intent is to provide greater outcomes, more public housing, and social housing outcomes, I’m not seeing it from the rhetoric of the comments made by the Minister in the select committee to the actual funds that are allocated. They don’t seem to match. So, if the Minister can have a response to that, I think that’ll be helpful, not only for the committee but also for the public.

Hon JACQUI DEAN (National—Waitaki): Thank you. To the Minister, a couple of questions. I’m still on the Minister’s Progressive Home Ownership programme and fund, which we hear will ultimately help between 1,500 and 4,000 New Zealand families to buy their own homes. My first question is: why the difference between 1,500 and 4,000? What underlines the work which can lead to the Minister presenting two vastly different goals in front of the House, and is this a taste of a KiwiBuild? Is it going to roll out a bit like KiwiBuild, where the Government vastly over promised and substantially undelivered? And, just on that, could I have an update from the Minister on how many KiwiBuild homes have been constructed to date?

Hon ALFRED NGARO (National): So we’re stacking up all the questions? All right. Again, I will point the Minister to page 7 of the select committee report, which talked about working with community housing providers. In the Minister’s comments, she talked about that 70 percent of that housing provision would come from Kāinga Ora, 30 percent would come from the community housing providers. At the moment, we have 16,000 applicants—Minister’s words—currently waiting for social housing. Again, I put it to the Minister, so these are comments in regards to the CHPs, the community housing providers, that are out there, and I’m sure they’d be interested to hear the responses from the Minister in regards to her intent.

Further on in the report, the Minister acknowledged that community housing providers are seeking to do more and that discussions are occurring about what that would look like. Could the Minister give us an indication of what that would look like moving forward? Is it an increase from the 70 percent Kāinga Ora, 30 percent of housing provision to meet the demand of 16,000 current applicants waiting for housing? What does that look like in the Minister’s mind? In the allocation of the Estimates, how does that reflect in the appropriations of that resource?

Hon JACQUI DEAN (National—Waitaki): Thank you, Madam Chair. I’m very happy for the Minister to answer my questions. I understand we are having a conversation here. And in light of the fact I now have three unanswered questions and my colleague Alfred Ngaro also has several, I am very happy for the Minister to begin to answer those questions. I am, as my colleague is as well, taking a note of the questions that have been asked, and I do hope the Minister will find the time to begin to address some of those questions.

I also have some questions around the progressive ownership programme. I would like to know that—in phase 1 there were two housing trusts selected to be utilised into this project. One operates in Queenstown; the other operates in Auckland. The assistance methods, from what I can see, are going to be different for each housing trust. So I’d like the Minister to lay out to the committee what is the funding assistance method for families to get into progressive ownership homes in Queenstown and what is the method for that to happen in Auckland. Also, are the criteria different for those families between what is being offered in Queenstown and what is being offered in Auckland?

Hon Dr MEGAN WOODS (Minister of Housing): Happy to take a call. Thank you. As I think you’ve seen my approach is, I’ve let a number of these very small questions build up before I give an answer.

In answer to the member’s question around whether or not the Progressive Home Ownership scheme was business as usual, I would say this is far from business as usual. If we look around the number of families across the entirety of times that Governments have worked with community housing providers (CHPs) and indeed community housing providers have engaged in progressive homeownership schemes over a period spanning more than a decade, we have seen 1,000 New Zealanders helped into homeownership through progressive homeownership over a very long, long period of time. What this Government is talking about is a $400 million fund, which is as far from business as usual as you could get. It is a game-changer. We’re talking about helping a set of families—somewhere between 1,500 and 4,000—into homeownership through this. So we can see, in terms of the quantum, that that is entirely different.

As for why there is the spread—the member Jacqui Dean asked why it was there was this spread—the spread is because, the answer is, it depends on what income level the family is at that you make the intervention. There are some families that we are hoping to help into homeownership that may be earning as low as $50,000 a year, for whom homeownership is simply not an option if it were not for an intervention like our Progressive Home Ownership scheme. But you will also see, if you look through the materials, the upper income level for assistance into progressive homeownership is $130,000. This will be a much lighter touch scheme and could well be one of the direct provisions through Kāinga Ora that was discussed last Friday when the materials were released. So the continuum around the level of support that families need varies from family to family, and the amount of wraparound support that needs to be put there.

The member Alfred Ngaro asked about what the divide between the CHPs and Kāinga Ora is likely to be in terms of the provision of the 8,000 additional public and transitional houses that were announced in this Budget. Of course, I think what it is important to remember in an approach this Government has taken, that differs somewhat from what has happened in the past, is we haven’t just announced a number or a quantum of State houses to be built; what we announced in the Budget was actually the Income Related Rent Subsidy (IRRS) that is fully funded for that period of time. So you’ll see in the Estimates that there is $570 million appropriated for appraised IRRS.

What will happen, of course, in terms of the building of those houses, is that Kāinga Ora will raise the capital off its own balance sheet to build its share. The split of 70:30 that Alfred Ngaro referred to is, of course, historically what has been the split that we’ve seen in the provision between the community housing sector and Housing New Zealand, or, as it is now, Kāinga Ora. Of course, I do acknowledge that when you’re talking about 30 percent of very little, as we saw prior to 2017, that is a far lower number than 30 percent of a much larger number. So, when we’re talking about what that split will be, that is something that we are still working through, because we would, of course, looking to the future, have to see what capacity was there.

The other question, I think, that was asked that is outstanding is going back to Progressive Home Ownership and asking if this was business as usual, around the families that were moving in in Queenstown. No, these houses were started in early 2020. The families that will be moving in, the first tranche of families, actually, these agencies have been working with in anticipation of this funding, because, of course, this money has been signalled much earlier, and we have been in a very intensive engagement with the community housing providers that are engaged in Progressive Home Ownership ahead of the roll-out. So this is bespoke work that is only happening because this Government is putting such a large investment into Progressive Home Ownership.

Hon JACQUI DEAN (National—Waitaki): There were, in fact, three questions that were unanswered by the Minister in the chair, the Hon Megan Woods, and I know this because I took a note of them on the way through. And so I can assume several things. I can assume that the Minister doesn’t want to answer them, I can assume that the Minister cannot answer them, or I can assume that the Minister’s paperwork is a little informal, which means that the Minister has overlooked to answer them. And in light of the fact that this Estimates examination is a conversation, I am very happy for the Minister to get to her feet and answer each question as it is posed, which will allow perhaps a more efficient process from the Opposition’s point of view, because, after all, this examination is the Opposition’s opportunity to ask questions of the Minister.

So I will go through those questions again and I invite—I am very happy to ask one at a time but I do have several outstanding. I have three outstanding, so I’m very happy to ask one at a time and, hopefully, that will facilitate the Minister. Having already asked those questions several minutes ago, I’m quite sure that will enable the Minister to respond to each question as it is posed. So I did ask how many KiwiBuild houses have been built to date in this term of Government.

Hon Dr MEGAN WOODS (Minister of Housing): Thank you and apologies. I did have that sitting there to answer, and more than happy to answer it. The total number built to date has been 452. That’s an additional 57 this month. Of course, there’s been two months where there haven’t been additions to the KiwiBuild tally—to be expected when construction ceased under COVID restrictions. But also this dashboard is to be released later this afternoon, so this is hot off the press: 278 State houses were also built in this period, and eight community houses, and Kāinga Ora also built 61 market houses.

Hon JACQUI DEAN (National—Waitaki): Just to refresh the committee, what was the original target number for KiwiBuild houses to be constructed in this term of Parliament?

Hon Dr MEGAN WOODS (Minister of Housing): As the member is well aware, in September of last year we did a reset, where actually we did away with the targets that were set. So, in terms of how we’re tracking against the target, the target was as many as we can as quickly as we can, so I think we’re tracking pretty well.

Hon JACQUI DEAN (National—Waitaki): Thank you. Why did the Government give away the target in September last year against the target they set for this term of Government?

Hon Dr MEGAN WOODS (Minister of Housing): Of course, being forward-looking Estimates questions here—but I’m happy to traverse some of the reasons, because I think they are important as to why it was that we did away with the target. What we were seeing was that actually the emphasis around KiwiBuild needing to be around building the right house in the right place wasn’t being fulfilled by the perpetual chasing of a target. What we saw was some perverse outcomes where some homes were built or acquired because there was the pursuit of the target. We as a Government—and what we are indicating in these Estimates that we are here to debate today—are a Government that is committed to ensuring we are helping New Zealanders into affordable homeownership and we need to ensure that we are building the right house in the right place.

The fact that we have sold, over time, over 500 houses to first-home buyers that have been helped into affordable homeownership is a record that actually we can be pretty proud of in one three-year term of Government, when we reflect that the previous Government over nine years helped only 100 people through their special housing areas into affordable homeownership through the provision of specially priced affordable housing. So we will continue to build as many houses as we can as quickly as we can, because I know, when I go around the country and I meet some of the individuals and families who are having this ability for homeownership that they wouldn’t otherwise have been able to have, how much it is transforming their lives.

Hon JACQUI DEAN (National—Waitaki): The Minister didn’t quite answer my question. My question was: what was the number of KiwiBuild houses announced as the target for this Government this term? Madam Chair?

CHAIRPERSON (Hon Ruth Dyson): The Hon Jacqui Dean.

Hon JACQUI DEAN: Oh, thank you. With regards to the homeownership project—and I am sorry the Minister couldn’t provide the committee with the number which was the original target. We’ve heard about the reset, we’ve heard an amount of houses today, but we haven’t heard about the original target. So we’re not getting the complete picture today, but that’s all right. Moving on to the Progressive Home Ownership announcement which the Minister made, I did ask the Minister—this is another question which the Minister had not answered, and it would be good to get an answer now—why were two goals announced as part of the Progressive Home Ownership stage 1?

Hon Dr MEGAN WOODS (Minister of Housing): Sorry, can the member please repeat that question? Was it why were two goals proposed?

Hon JACQUI DEAN (National—Waitaki): The question to the Minister was that in phase 1 of the Progressive Home Ownership initiative announced, there would be between 1,500 and 4,000 houses built, and my question is: why two goals?

Hon Dr MEGAN WOODS (Minister of Housing): Oh, sorry, I did address this in a previous answer that I gave. It’s 1,500 and 4,000, is the spread of families, not houses, and I think that’s really important to remember, that we’re talking about families and groups here, not the construction of houses necessarily. But the spread is such because it depends about the ultimate mix that we work with the sector around. If we choose to help more people who are towards the household income of $50,000, that will require higher levels of support. It will be more intensive. But if we have a larger cohort of people more towards the $130,000, which is the cap, clearly more people will be used. We are working through with the sector. We have made policy decisions as a Government that we want to be making sure that we are working right across that continuum and making sure we are helping substantial numbers of people who are more towards the $50,000 per annum household income end of the spectrum, because this is a group of people who are shut out of homeownership, and without an intervention such as our Government has put in place, they would never get the opportunity at homeownership.

But we also know, working with the sector, that we do require a balanced portfolio of properties across this. This is a 10- to 15-year recyclable fund. We do need to make sure that we’ve got some balance of risk within the portfolio, so we’ve communicated this throughout the time that we’ve been developing the programme—that it is important to have that cross-section of people in there—but it is certainly our Government’s policy objective to be helping people who would otherwise be shut out of homeownership, and that is why there is the spread between 1,500 and 4,000. It’s not two goals; it’s a spread.

Hon JACQUI DEAN (National—Waitaki): Thank you. How will we measure the success of the Government’s new Progressive Home Ownership programme in phase 1 if, on the one hand, the goal is 1,500 New Zealanders assisted into homes and, on the other hand, the goal is 4,000? How is the Minister going to measure the success of the Progressive Home Ownership initiative?

Hon Dr MEGAN WOODS (Minister of Housing): I think there’s some confusion on the part of the member. Phase 1 isn’t 1,500 to 4,000; the entire Progressive Home Ownership system is 1,500 to 4,000. Phase 1, the two initiatives that we launched on Friday and that we talked about in terms of the Auckland scheme and the Queenstown scheme, is 100 families. The way in which we’ll measure it will be quite simple: we’ll count the number of families.

Hon JACQUI DEAN (National—Waitaki): Thank you. So, taking phase 1 out of it, then, how will the Government measure the success of the Progressive Home Ownership fund when the goals are between 1,500 and 4,000 homes?

Hon Dr MEGAN WOODS (Minister of Housing): The same way in which we’ll measure the success of phase 1, in that we will count the number of families who are being helped. What we have said is that this is a fund that will help between 1,500 and 4,000 families into homeownership, and we will track the number of families who are helped into homeownership.

Hon JACQUI DEAN (National—Waitaki): So, in other words, there isn’t a goal. So there isn’t a goal—just to be quite clear, because I think families in New Zealand who are looking to this Progressive Home Ownership scheme are probably looking for some certainty. But I will move back to KiwiBuild. The Minister told us that with regards to the underwritten homes, the Government purchased 186 underwritten homes and has sold a number of them. Can the Minister update us as to how many homes had been sold at the time of the Estimates, and how many of those homes remain unsold one month later?

Hon Dr MEGAN WOODS (Minister of Housing): I’m happy to give an update on that. Actually, I can give you the latest data that will be published this afternoon. To date, 589 KiwiBuild properties have been sold, and 302 remain available to buy.

Hon JACQUI DEAN (National—Waitaki): Thank you. With regards to the Monark development, acknowledging the Minister’s work in that situation, where the Minister noted she was sympathetic to the buyers who haven’t been able to get into the KiwiBuild homes, it must have been awful for those families who should have been in their homes now to face uncertainty and delays for the next two years. The Minister did tell the committee that she is confident that any KiwiBuild apartments that have not been sold or have had their contracts exited would be resold quickly. Can she tell the committee how many of those KiwiBuild apartments have now been sold?

Hon Dr MEGAN WOODS (Minister of Housing): I’m unable to give the member a precise update. If she’s happy to put that in writing, I’ll answer it, as I have many times before. But what I can report is that there was very strong interest in those apartments that the developer was reporting to us.

Hon TIM MACINDOE (National—Hamilton West): Thank you, Madam Chair. I am delighted that we are now going to move on to a period of time to consider answers relating to the Minister for Children and the Minister for Seniors, and happy that that same Minister holds both portfolios. So welcome to the Hon Tracey Martin.

My colleague the Hon Alfred Ngaro was here waiting very patiently and preparing for some time and now has had to ask me just to ask some questions, if I may—first relating to the children’s portfolio, Minister, and, in particular, relating to the impact of COVID-19 on children and, in particular, those who are vulnerable. So I’ve got a few questions that I’ll ask and I’m happy for the Minister either to indicate to me through perhaps a nod if she’d like to answer each one individually or wait until the end. Let’s hope that we can get a good, free flow of ideas going on.

In particular, Minister, I’m looking to hear what analysis has been done to date on the needs of children and young people, in response to the COVID experience, and what issues COVID has identified and where additional support might be needed. The first specific question is, as I say, what initial work has been done and what further research and work is being planned to assist the impact of COVID-19 on children and young people? And what are the insights into their future needs? As I say, I’ve got some other questions. If you’d like to answer now, I’m happy to sit down.

Hon TRACEY MARTIN (Minister for Children): Thank you. Just to let the member know that, under the current structure, I have approximately 19 minutes for the rest of the complete amount of Estimates, so my answers will be somewhat short and to the point, I hope, and make sense.

With regard to analysis by Oranga Tamariki around how our carers and how our children that were in care were managing through the COVID lockdown period, there was constant contact with our carers to make sure that they had what they needed, whether that be—not entertainment—workbooks and so on and so forth for young people to continue to be engaged during the period of time that we were all in lockdown; whether there was a requirement to provide digital devices to some of our families, and some of the children’s whānau was also part of what were the conversations that were taking place with Oranga Tamariki; and making sure that our carers had access to their social workers or the helpline or whatever to manage incidents. During the time of COVID, children were still taken into care and taken into safety, often at the request of the police, where they had to deal with family violence incidents.

Since COVID, as people have transitioned back out—and, unfortunately, I can’t answer for every child in New Zealand—obviously the Ministry of Education has been doing a lot of work around transitioning some of our young people back into education and into other areas of support. But, from an Oranga Tamariki perspective, we have made sure that we have transitioned back our families, tried to get the children that were able to have communication with their whānau and families during the period of lockdown, as consistently as possible, whether that be through a digital device predominantly, because of the bubble situation. My understanding is that the information I’ve had back from the carers and the children, via Oranga Tamariki, is that they felt well supported and that they had the things that they needed.

Hon TIM MACINDOE (National—Hamilton West): I thank the Minister for that answer, and I acknowledge the fact that, yes, we are—well, actually, I want to get on to seniors as well, because that, of course, is my portfolio, but I am just wanting to cover off a couple of crucial things for the Hon Alfred Ngaro. I think, to some extent, actually, with one of the other questions that he asked me to raise, the Minister has just touched on it. But I just ask her, specifically, how has COVID-19 impacted on Oranga Tamariki’s ability to conduct assessments and provide support for children? I know that she alluded to that a moment ago, but maybe she could just give us a little bit more detail. And I’ll hand back to the Hon Alfred Ngaro.

Hon TRACEY MARTIN (Minister for Children): I thank the member. So, again, just very quickly, Oranga Tamariki was somehow ahead of the pack with regard to Government departments and their ability to immediately switch to a digital environment. They had just updated all their digital equipment. They had better resourced their social workers with iPads and so on so that their actual recordkeeping could improve. So what that meant was we were able to switch quite quickly to working from home.

If I recall correctly, the number of assessments being able to be done increased dramatically and the time frame under which they were done became much shorter, and that was because there was the ability to spend time and focus on those. My understanding is that some of the time frames where we had difficulty placing social workers on our 0800 number, on our helpline—like late in the evening, etc., etc., because that is quite a hard shift generally to fill with people who have families of their own—that went away during lockdown because we were able to provide them with a secure space inside their own home to be able to manage and to stay online, for our families and for those who had concerns around children.

I can provide greater detail about the numbers of assessment—I get that on a regular basis through my status meetings—but, with regard to assessment, the numbers increase, they were done under a shorter time frame.

Hon ALFRED NGARO (National): Thank you, Madam Chair. So, just following on from that line of questioning to the Minister in the chair, the Hon Tracey Martin, is one of the areas that the Minister has talked about in regards to preparation around assessments: can the Minister comment in regard to, I suppose, what’s recently been coming up but relates to the Estimates in regards to the allocation of resource and intent around that assessment where there’s been a number of cases where, at the front line, there have been challenges in regards to those assessments? We’ve had cases that have come before us where the assessments, for instance, have been more online—by teleconference rather than by person to person. I don’t want to delve into the detail, but I’m trying to stay high level. I can hear what the Minister’s saying with the intent. Well, it seems that we’re not quite seeing that as it’s rolling out at the front line, and we’re having a number of cases come up.

Another case, if I could bring it to the Minister’s attention, was just in regards to the youth justice facility, for instance, out in Manurewa, where just recently that’s happened. Again, the intent in the Estimates was about providing a secure place for placements for those in youth residential facilities, and yet what we’re seeing is that that doesn’t seem to be the case. The communities are now starting to ask these questions. So I asked it in Estimates, in respect of the chair, but this seems to be now being challenged in regards to what’s happening on the front line as well.

One last question, which borders on parts of the Minister being involved in, was just around child poverty, and I hope I’m able to ask the Minister that question, because the Minister for Children has some responsibility in regards to supporting that. It’s just that in the child poverty indicators, what we are still seeing is—in regards to children in hardship and benefit-dependent households—more of an increase rather than a decrease in that fact, and yet it’s quite clear in the Estimates that part of the plan and the purpose was to see the reduction. Yet in the 10 key indicators—CPIs: child poverty indicators—what we are seeing too, in particular, around those in child benefit - dependent households, prior to COVID, there still is an increase. So I wonder if the Minister can make some comment to that.

Hon TRACEY MARTIN (Minister for Children): Just to address the two issues first—the member talked about challenges on the front line around assessments—the initial question was with regard to assessments during the COVID period, so that was what I was talking about. With regard to assessments and being challenged on the front line, I’m assuming the member is switching from the number of assessments and how those assessments were done to actually individual assessments that are now being challenged—so were they assessed appropriately? I will not stand here and say that Oranga Tamariki is still not making steps to improve from who they were as Child, Youth and Family. So there are still challenges, and we need to see those challenges come forward. They need to be owned by the agency. They need to be owned by myself and Government, and then actions need to be taken to improve on the social work practices that are on the front line.

Part of what we are also seeing is when social workers who are not of a standard to deliver the protection and care that we expect as a nation for our children need to leave the service of Oranga Tamariki. Part of what we are seeing inside the noises around this particular topic is some of those people having to leave the service of Oranga Tamariki because as social workers their standard is not high enough. It is a journey—still a journey—and the member knows that to be true, but it must be one that shows progress to the New Zealand people. So I take on board his comments around assessment, and I require the agency to own when an assessment has not been appropriate, move in, find out why, and fix it. I still require that of them. They have the resourcing to do so; they need to continue to do so.

With regard to youth justice, the member, I think, is referring to a recent article in the newspaper where two young people broke through a window and escaped out into the general public, though both those young people are now back with us and inside the youth justice system. Quite rightly, the New Zealand public, again, has the right to ask questions. How did this happen? What action is being taken to stop it from happening again? There is an internal investigation happening now inside the youth justice part of Oranga Tamariki to clarify how this came about. It is my expectation that when that has been finished, as much of it that can be made public should be made public, because every part of the re-creation of this agency must be about New Zealanders trusting that they are doing their job, they are not hiding behind privacy or anything else when it comes to accountability about how they are delivering. I would say, however, we don’t put barbed wire fences around our youth justice facilities. So we have this constant tension between incarcerating young people who need to be incarcerated but, at the same time, making sure that we are still keeping hope that these young people have an opportunity to change the path which they are on and be better human beings for New Zealand.

With regard to the last part of the member’s question, I apologise to the member that I’m not going to be able to give a massively in-depth answer to what he asked me about. I’ll go away and endeavour to do that in writing. But I think one of the things that we are going to have to accept as a nation in a post-COVID world is that there are going to be more of our families that, before housing costs and after housing costs, are actually going to be sitting at a level where we, as a Government—whoever is sitting on this side of the House after 19 September—is going to have to address how we better support our families and move forward on what are now targets in legislation to address child poverty inside New Zealand.

CHAIRPERSON (Hon Ruth Dyson): Before I call the member—thank you—can I just say that the member and the Minister probably went well outside the scope of the Estimates, but I thought the question and the answer were both given very respectfully, and allowed them to run, but if we could—that’s my error, but I found it very interesting, and I shouldn’t have allowed myself to have been distracted. So, if the member the Hon Tim Macindoe could return to the Estimates, that would be appreciated.

Hon TIM MACINDOE (National—Hamilton West): Not only could I do that, could I ask the Minister now to take off her hat as children’s Minister and put on the seniors hat. Of course, we have touched on COVID, and COVID was a big discussion during the Estimates hearing for seniors. The reason I think this is so important is, of course, seniors were the group in our community most affected in the most serious ways by COVID. So could I ask the Minister—and we did touch on this in the Estimates hearing—to update us on the issues that related to seniors during lockdown, in access to health services, accessing prescriptions, and, in particular, what I’m interested in knowing is the impact of deferred surgeries and the planning that is now being done, because, obviously, there’s a huge impact on the health system for that. What advice has she now received about the impact on waiting lists of deferred surgeries for seniors? What has she learnt about the further physical and mental suffering and deterioration that seniors have experienced during that period? And what recommendations is she now making to the Minister of Health and the Ministry of Health about how seniors may be cared for better should we, God forbid, find ourselves suffering another pandemic or perhaps going into regional lockdown?

Hon TRACEY MARTIN (Minister for Seniors): Thank you. I thank the member for his question. He will be aware from the Estimates that the Office for Senior Citizens has a very small budget, so, therefore, most of what we do we do on the smell of an oily rag, and we actually do it with a very loud voice.

So, to address some of the questions that the member asked with regard to our seniors during the lockdown period, it became necessary for a member of the Office for Senior Citizens to be placed on the crisis committee to make sure that they were constant, that view of seniors was brought to any decision around what we were doing as a nation to protect all of the 5 million. I think what was wonderful to see out the other side of it, and part of this was actually—and this does go to the Estimates and the budget that is there for the Office for Senior Citizens—the promotion of those NGOs, iwi organisations, Māori organisations who stepped up to deliver services to our seniors to make sure that we had fewer suffering from isolation and loneliness during that time and made sure that they were able to be supported to get food, medicines, and so on and so forth.

With regard to the second part of the member’s question, which is around health services, I have seen a paper recently, and I don’t think the Minister of Health has spoken yet, around the Government’s response to the delay due to COVID of elective surgeries. So I hoped that the Minister of Health would be here. There is obviously a mix of age demographics inside that elective surgery delay—that pool of people who have not been able to gain the surgeries that they might need—but the Minister of Health has, as I say, presented a paper just recently to Cabinet, and I hope that he will be able to inform the member in more detail inside the health Estimates.

Hon TIM MACINDOE (National—Hamilton West): I thank the Minister for those answers. Could I turn now to the issue of a champion for the elderly, which, of course, has been given considerable public weight through the petition from Mark Sainsbury. I note that all three parties in the current coalition and confidence and supply arrangement in Government were committed, coming into office, to the creation of that office; and yet, three years later, Minister, nothing has happened. So I’m wondering whether you could explain why that is and whether, perhaps, that commitment is going to be renewed by the current parties, because it is a matter that is of considerable interest at every Grey Power meeting or event of that type that I attend. It’s the question that I’m asked, and I’m sure she is as well.

Hon TRACEY MARTIN (Minister for Seniors): Minister Salesa actually has responsibility as the Associate Minister of Health and has done some preparatory work around a health commissioner to do with a specific focus on the aged. Unfortunately, as she was working through that piece of work, COVID happened, and so many pieces of work needed to be placed on hold during that period of time. What I can say to the member is I do believe that every party in the current Government is dedicated to having an advocate and representative on behalf of what is going to be one-fifth of our population by 2036. There is a difference of opinion between different parties. And I think Mr Sainsbury’s petition was more around one focused specifically on aged healthcare. Myself, I have already advocated from the Office for Seniors that actually we need to reallocate the $8 million that is set aside for the Financial Capability Commissioner and return that commissioner to being a Retirement Commissioner with responsibility, similar to the Children’s Commissioner, for advocacy and monitoring. So at this stage, unfortunately, due to COVID, we have not been able to progress, but there has been conversation and work done by the Government on that particular issue.

Hon TIM MACINDOE (National—Hamilton West): I thank the Minister, and, in fact, she has, to some extent, anticipated one of my next questions. I would make the point that I think she just referred to one-fifth of the population. In fact, now, about one-quarter of the New Zealand population can expect to live their lives in retirement after the age of 65. So, clearly, this is a very significant group and, as I say, a very significant issue.

Could I just ask her very quickly what her thinking is as to whether or not, if it were to be created, it would be done so as a stand-alone position similar to the Children’s Commissioner or maybe one under the umbrella of the Human Rights Commission, the Office of the Health and Disability Commissioner, the Ministry of Health, and such?

Hon TRACEY MARTIN (Minister for Seniors): I thank the member. I think the fact that there’s going to be 1.2 million New Zealanders over the age of 65 by 2036, in my view, it needs to be a stand-alone commissioner, similar to the Children’s Commissioner, with advocacy rights independent of Government but to Government and also with monitoring rights over retirement villages and rest homes. I believe that the Ombudsman’s recently given powers at the moment around dementia wards is appropriate for the place for that to stay, and I believe that the Financial Capability Commissioner’s role has been superseded by other roles. So, therefore, there is a budget that could be switched across for an independent office similar to the Children’s Commissioner.

Hon TIM MACINDOE (National—Hamilton West): Again, I thank the Minister. We’re both rushing, so I hope the people listening will understand that that’s being forced upon us, but I transfer, now, attention to the issue of elder abuse, which, of course, is one of the great scourges that our seniors live with. That can of course be physical, it can be emotional, or it can be financial—they’re all horrific—and, most disturbingly, it’s often perpetrated by those who should be caring, either as family members or caregivers, for the seniors who are being abused.

So can I ask the Minister for an update as to how this particular problem is being tackled, how much publicity is being given to it—and by “publicity”, I mean how much education is being provided—to try to ensure that everybody who needs to be able to detect it and prevent it is able to do that. What are the trends, and how significant is this particular issue in the Minister’s current order of priorities as the seniors Minister? Sorry, that’s a lot—a big mouthful—but I hope you’ll have a go.

Hon TRACEY MARTIN (Minister for Seniors): I thank the member Tim Macindoe, and he’s right that it’s unfortunate we have a very short period of time for such an incredibly large issue. With regard to elder abuse, from a finance perspective—from an Estimates perspective—there is money that has been set aside. With the joint venture, there has been a greater focus, and a greater amount of money has been set aside to support services that provide a helpline or whatever to those who are experiencing elder abuse or who believe they know of somebody who is experiencing elder abuse. I’m aware that some of our banks and other businesses have actually started to upskill their employees around the recognition of elder abuse.

But I would have to say—and we saw it at the beginning of lockdown—that I think it was particularly interesting the way that seniors were spoken about by some members of the media. For example, it was quite all right to decide that we could lose a number of seniors so that we could keep business going. I think that in an attempt to protect those over the age of 70, we saw some inappropriate comments with regard to how they should go home, stay home, and not be allowed out to get their food. What I’m saying to the member is that while we have invested more through these Estimates through the sexual violence and family violence joint venture work stream—and the Office for Seniors ran recently, again, another media campaign to highlight the issue and get recognition of what elder abuse looks like—we are certainly not there yet, and any future Government will need to invest more.

Hon TIM MACINDOE (National—Hamilton West): I had been hoping to touch on the issue of digital exclusion, which, again, was thrown into sharp perspective by lockdown, but I’m told by the senior whip that there’s only time for one more, so I do want to focus on what I think is a very alarming statistic, and that is the rate of suicide amongst our seniors, and, in particular, I’d just ask the Minister if that’s on her radar. I had, perhaps naively, assumed before I took over this role for the National Party as seniors spokesperson that suicide rates were lower amongst the seniors population than in other demographics, and, in fact, that’s not the case, but they are remarkably comparable. So it is a very distressing subject, but it’s clearly one that the Minister, in collaboration with her colleagues, will, I’m sure, be wanting to work on. I just wonder if she could give us a bit of an indication of the trends in the Government’s work programme in that area, please.

Hon TRACEY MARTIN (Minister for Seniors): I thank the member for raising what is an incredibly important question. Around the mental health money that has been announced by this Government, what we can see is that this Government has acknowledged and financially resourced much greater access to mental health across New Zealand. But the member is right to point out that the impression is when you are over 65—and it’s on many fronts—that you have got a home; that you’ve got superannuation, and so, financially, you’re fine; that there are no challenges; that you’ve got a lovely life; and that you can go and just potter around and do this, that, and the other. That is not the reality for a growing number of seniors. Hence why, as Minister for Seniors, I have made sure that I have sat on as many ministerial groupings as possible to continue to bring that voice to the table. But what I can say to the member is that as part of the mental health money that has been put aside by this Government under these Estimates, seniors need to be seen and will be seen inside that envelope.

Vote Arts, Culture and Heritage, Vote Housing and Urban Development, Vote Oranga Tamariki, Vote Pacific Peoples, Vote Social Development, Vote Sport and Recreation, and Vote Women agreed to.

Justice Sector

CHAIRPERSON (Adrian Rurawhe): Members, I understand that responsible Ministers are available to speak to the Vote in the justice sector. The question is that Vote Attorney-General, Vote Corrections, Vote Courts, Vote Justice, Vote Parliamentary Counsel, Vote Police, and Vote Serious Fraud stand part of the Schedules.

Hon MEKA WHAITIRI (Chairperson of the Justice Committee): Thank you, Mr Chair, and happy to take a call on our Estimates debate for Corrections, Justice, and Police. As the chair of the Justice Committee, can I acknowledge the work of the Ministers that appeared before our Justice Committee. It felt like it was almost like a game of two halves—it was pre-COVID and, obviously, post-COVID. So I want to acknowledge the Ministers and absolutely the officials, corrections officers, and police officers around the country who responded in such a timely and urgent manner, not only to keep our prison population safe but to keep our community safe. I do want to acknowledge the work of the Ministers.

In terms of justice, I want to acknowledge the work that the Minister’s doing, particularly around family violence. It was reported to our Justice Committee that services—of course, the pressures not just during lockdown but in general, the concerns around keeping families safe, and the work of the Minister in this Estimates in terms of increasing budgets for family violence services. I want to acknowledge the work that the Minister is doing in that regard, and also the work that he’s doing for Māori responses around family violence services.

We also heard in select committee the reforms of the Family Court and the $62 million investment from the COVID-19 Response and Recovery Fund, enabling responses, effectively, to decrease backlog, as we understand courts weren’t sitting, so it’s important to acknowledge that. I do want to also drop in here under justice—although we understand that customs itself is a separate portfolio, but their $187 million towards Customs to ensure our borders were safe. So I just want to acknowledge that in terms of the justice portfolio.

In terms of police, we definitely heard—and I want to commend the Minister of Police in the active work of our police officers around the country in responding to COVID. No one had a blueprint, but I do know that police were very responsive to communities, and I want to especially acknowledge the work of iwi through the leadership of the Minister, but also officers throughout the country working actively with communities during COVID and keeping us safe. I want to also highlight the 2,000 prison officers in that portfolio. It will be interesting to hear when the Minister takes the chair around the firearms buy-back that the committee heard about, the plan around addressing organised crime, and looking forward to hearing from the Minister around his presentation to the Justice Committee.

But in the time I’ve got left, I really want to talk about Corrections, because the Minister of Corrections is in the seat, and want to acknowledge the commitment to reducing prison numbers, particularly in the strategy Hōkai Rangi, which the Minister oversees, which is an absolute commitment to reducing our prison numbers. I was fortunate enough to attend the Hawke’s Bay Regional Prison with the Minister just the other day, and to engage directly with inmates, and to hear their own stories of Hōkai Rangi and the services that Corrections engages in with inmates and their whānau—so it’s part of not only Corrections but Whānau Ora—to ensure when our inmates leave our prisons, they don’t return. So I’m really keen for the Minister to touch on Hōkai Rangi, because it is a revolutionary strategy aimed at working with all inmates through a Māori lens. We saw that firsthand engagement directly, like I said, with inmates at the Hawke’s Bay Regional Prison. So I want to commend the Minister for his commitment to reducing our population, for hearing firsthand from inmates the short change that they’re feeling since Hōkai Rangi has come into practice.

So we heard that as the Justice Committee. Of course, questions were asked by members, but all in all the Estimates that were presented in corrections and in police and in justice did send a clear message that we were having Ministers responding to COVID in a timely way, but also ensuring our communities were safe, that our borders were safe, and that the COVID response Budget that we are debating here is responsible for keeping our community and our country safe, but also with an eye to the recovery and the rebuild. Those were some of the contributions that we heard in the Justice Committee, and I’m keen to participate further in this debate. Kia ora.

SIMEON BROWN (National—Pakuranga): Thank you, Mr Chair, for the opportunity to take a call in this debate in regards to the Estimates for Vote Corrections. I do just want to start by acknowledging Corrections for the work that they did during COVID-19 to keep our prisons safe from the virus, and I do acknowledge the effort that they went to—a very challenging time for the staff, the inmates, and also for all parties involved during a pandemic. I know I’m of the view that they’ve done a very good job at doing that. My understanding was there was only one particular person who had the virus and their reason for being in prison was the fact that they weren’t willing to take a test at the border, and that’s why they were put in there until they actually took the test.

I do want to just raise to the committee the issue of the community service sentences, and this was raised during the Estimates with the Minister of Corrections. I’ve asked the Minister a number of questions about this during question time in the House, and the issue was that the Epidemic Preparedness (Epidemic Management—COVID-19—Parole Act 2002 and Sentencing Act 2002) Notice 2020 gave powers to Corrections to, essentially, allow Corrections to provide two options to those who are on community service sentences. One was to remit hours—and we’ve seen over 138,000 hours remitted from community service sentences—or to extend the time frame in which those people could do their time or do the sentence that they were sentenced for for community service. The Minister has backed up the decision to remit hours rather than extend the period by which those hours should be completed within.

Of course, on this side of the House, everyone understands hours couldn’t have been completed during the lockdown, but the question does need to be asked as to why in no single instance—and I ask the Minister to explain to the committee—were community service hours or the time period under which offenders had to complete those community services hours not extended. He’s told the committee—he’s said that he has an expectation that hours will be completed, that sentences will be completed. But under his watch, over 138,000 hours of community service sentences have been remitted for approximately 5,500 people sentenced to a community service sentence. Now, that does not rub up the right way with New Zealanders who did it tough during lockdown, did the right thing, and at the same time people serving these sentences were, essentially, let off a portion of their sentences—a substantial portion of their sentences: up to 48 hours or one-third of their sentence—a significant portion of their sentence.

The question also needs to be asked as to why this continued during level 1. While New Zealanders were going back to work to get their businesses up and running, getting back into work, social distancing requirements were no longer required, bubbles were no longer required, Corrections still remitted hours for a number of offenders. The question needs to be asked and I ask the Minister if he could explain that to the committee.

Hon KELVIN DAVIS (Minister of Corrections): Thank you, Mr Chair, and, first of all, I’d like to join with the member in congratulating Corrections for the way they handled the response to the COVID. He was correct. There was just one person who was in a prison who tested positive for COVID and that person did come from the border. The process, the procedures that Corrections put in place to make sure that all incoming prisoners were kept separate from the rest of the prison population and the use of personal protective equipment by staff, made sure that we didn’t have what we saw in prisons overseas—and that was outbreaks and, in some cases, deaths in prisons. So I’d just like to congratulate all of the corrections officers for the fantastic job they did as a part of the team of 5 million keeping us safe.

I’ll answer the second part of the question around why under level 1 there were some people who didn’t have their—sorry, I’ll just say 37 people had their community work hours remitted under level 1 and that was simply because some organisations took some time to get back up and running once we got into level 1. We also, and I’ve answered it in the House at question time, too, with this, when the member has been asking questions about the hours—extending the hours would have disadvantaged some individuals for something that was outside of their control. It would have created a backlog of hours for community corrections to manage and with the associated health and safety risks, so, quite frankly, it was just in the best interests.

We’ve got to remember that the people who he’s talking about, he’s saying that their sentences—well, look, they were given community hours and over half of those 5,000 people, their community hours were given for traffic offences and not paying fines. We’re not talking here about hardened criminals or people who were in prison. We’re talking about people in the community. Now, they did break the law. There’s no getting around that. But also COVID created conditions outside of their ability to manage and we just think that it was best for Corrections to be able to manage those hours in the way they did.

SIMEON BROWN (National—Pakuranga): I find that answer incredibly enlightening as to the Minister of Correction’s actual approach to sentences and crime, because he makes the excuse that they’re all just on light sentences. I ask the Minister to guarantee to the committee that of those 5,500 none of them were actually convicted for anything more serious than some sort of traffic infringement or a fine because I find that answer to be a little bit inexplicable. And I hope that he can give the committee that assurance that those were the only offences.

Also, I just when to ask the Minister about the contract with the modular build programme with Decmil, which has—we were told at the Estimates hearing $143 million has been spent to date, but there are currently no facilities of that modular build programme or the 900-odd cells currently operational. I ask the Minister to update the committee on the programme. Is it still $143 million? Has that gone up? Is it more? How much money has been spent on that contract so far? And are any of those modular build cells—have they been or are they currently operational? What’s the status of them and what is the status of the work being done to ensure that they do get completed? And the Minister and his officials told the committee that some of the cells were in different states. Some of them simply needed to be, essentially, fitted out; others were in various states of completeness. And I ask the Minister to also explain to the committee what the anticipated cost of completing the modular build programme is going to be for taxpayers, in addition to the $143 million which has so far been spent on the contract.

BRETT HUDSON (National): Well, I’ve got a call on this to a sort of related topic then, as the Minister of Corrections wasn’t that quick to his feet. Having visited Auckland prison last year and had a conversation with corrections officers about the challenges of managing those most dangerous of offenders, if we’re hoping to break a cycle of offenders returning—repeat offending and returning—to prison, then I’m sure the Minister would agree that education would play a very big part in it and, of course, there are all manner of education services available to inmates in that and other prisons. But one of the challenges that we were told about were influences within the prison with so many offenders either arriving with gang affiliations or, if just necessary for their personal survival, forming them very quickly and the pressures that come from within not to participate—not to participate with any of those programmes. As a result, there’s a real risk that the education that would help those offenders to perhaps have other chances and choices once they are released are not being undertaken. So what work, if any, are Corrections planning or is he planning to improve the uptake, particularly in higher maximum security environments, to actually give prisoners the skills and abilities to have other choices when they get released?

Hon CLARE CURRAN (Labour—Dunedin South): I’d just like to take a short call just to ask the Minister of Corrections, given that when he came before the select committee, a core part of the ongoing work of Corrections is based on a strategy which my colleague Meka Whaitiri touched on, which is called Hōkai Rangi, which underpins all of the work that Corrections is doing to work towards the rehabilitation of Māori prisoners in order that they don’t return to prison. But how that actually works and the importance of that as being a deep piece of work that, as I say, underpins all of what Corrections is doing—it might be useful for the Minister to really talk about some of the actual instances where that is actually proving to demonstrate its worth, and, again, because behind that sits a strategy to reduce the number of prisoners and to reduce reoffending.

Hon KELVIN DAVIS (Minister of Corrections): Thank you, Mr Chair. Look, I’ll try and address some of the issues raised by the last three speakers. First of all, I’ll start off with the Hōkai Rangi strategy. Hōkai Rangi was the result of there being no Māori strategy whatsoever for Corrections. So we started to write one, and in the end we realised that the Māori strategy needs to become the whole strategy for Corrections, and forms the basis for the work that we’re doing to try to safely reduce the prison population.

Now, might I say that as of last week, I think the prison population was 9,263—that’s some 1,100 to 1,200 down on what it was when I became the Minister, when it was at 10,400. The prison population continued to go up for the next five or six months, and in March of 2018 it peaked at 10,820. So what we’ve seen from 10,400, when I became the Minister, is a 12 percent reduction in the prison population, and since it peaked in March of 2018, a 15 percent reduction in the prison population.

Now, that’s really important when we look at the question around the modular build. So Decmil weren’t completing the job to the standard and on time as we expected with the modular builds, so that contract was ended. What would have happened is that regardless of who is in Government, whether it was us or the previous Government, those buildings would not have been completed. The prison projections from 2017 said at this very moment that the prison population is expected to be 12,800. There’s no way that the previous Government, if they had allowed that prison population to continue on that trajectory, would have been able to house prisoners. We’re talking about not just double-bunking but triple- and maybe quadruple-bunking. Instead, because we have safely reduced the prison population, we don’t have that pressure on the Government to actually get this done, so we’re able now to take the time to make sure that it is done and it is done properly.

In the next two quarters, we’re expecting a modular build of 244, and in the next quarter, a modular build of 122 beds to come online. We hope that that’s going to happen, but, of course, as you know, in any sort of project, there are delays. We’ve actually got the prison population to the stage where there is enough capacity for us to close down some units and do maintenance on them. We’ve reduced the number of movements around the prison network because there isn’t the pressure to find spaces for prisoners. What we’ve done is actually saved the Government considerable amounts of money.

In terms of the question around gangs, we do have a gang strategy—it’s a five-year strategy aligned to the whole-of-Government action plan on gangs. The aim is to contain the negative influence of gang members in the custodial environment, to disrupt the efforts and capabilities of gang members under our management to organise and commit crime from within prisons and in the community, and to reduce the reoffending rates of gang members and the harm caused by gangs in prisons and the community.

Hōkai Rangi—also alongside of it is our Māori Pathways, and we know many Māori gang members happen to be Māori, and the work that we’re doing in the Māori Pathways, working alongside prisoners, their whānau, hapū, and communities, as well as bringing in folk from Whānau Ora to work alongside—all of that is, in time, going to continue to reduce the prison population safely. Thank you, Mr Chair.

JAMI-LEE ROSS (Botany): My comments are probably best directed to the Minister of Justice, but I understand I can speak about this under this appropriation. I am interested to know what work in the appropriations is being carried out relating to a decision of the Cabinet Social Wellbeing Committee back in March, where the committee agreed in principle to a comprehensive review of national electoral law, subject to reporting back to the committee, around scope and processes for the review and the financial implications. I note, in the Cabinet committee paper, it talked about how resourcing for agencies to deal with issues relating to funding for their activities and reducing or raising awareness of foreign interference risks will be taken into account when determining agency resources. Presumably, that has happened under this particular Estimates of appropriation.

I note that when the Minister was preparing this report, which is a response to the Justice Committee’s inquiry into the general election and foreign interference, that particular inquiry did receive advice from the director-general of intelligence and security. The director-general, in talking about electoral issues and possible areas for Government to consider, when it comes to funding of reviews, indicated that whilst political donations are legally sanctioned as a form of participation in New Zealand politics, the Security Intelligence Service has become concerned when some aspect of the donation is obscured or is channelled in a way that prevents scrutiny of the origin of the donation.

So what I want to ask the Minister, and what I want to raise as an issue, is what work is being done to tackle more fully the issues raised by the Justice Committee, the issues raised by the director-general of intelligence and security, and the issues raised by academics like Canterbury University Professor Anne-Marie Brady, who all are pointing to the fact that we do have significant foreign interference risks in this country and the fact that our political donations regime is not scrutinised enough in the media. I asked the Minister again if he has concerns about these types of donations. In the media was an Inner Mongolia donation: $150,000 that came from a company owned by a non - English-speaking individual, an Inner Mongolian. The $150,000 came to a political party, and, on the surface of that, there’s no real connection with New Zealand money. Journalists looked into it. They found that there were significant connections back to the Chinese Communist Party, and that donation, for all intents and purposes, was a foreign donation, but it slipped through the cracks.

I have before me here 60,000-odd line items of donations that are from the National Party. It was given to me in error. I call it a leak. It’s the type of information that only party secretaries and chief financial officers and auditors tend to see. It’s line-by-line individual information. It’s the very information that people complained about in the inquiry that is not public enough.

Earlier today, I was threatened with injunctive action if I attempted to table this in the Parliament. I think the lawyers making those threats probably should go across to the Victoria University law school and take a paper on the 1688 Bill of Rights, for Parliament and free speech in the Parliament, because if members of Parliament want to speak about information that they’ve been leaked or provided, albeit in error, they’re able to. But I was asked, extremely seriously, not to release this information, because it is—every single line—items of donations from the National Party for the past couple of years.

But what it shows in there, and why I think the Minister needs to tell the committee more about what he’s doing, is that when we have, in documents like this, where you can see—and in here there’s hundreds of thousands of dollars linked to the National Party’s Chinese group. When we have information here where we see donations like the Inner Mongolia donation, where we see backdoor loopholes where foreign money can enter this country by way of a company and then go to a political party and, for all intents and purposes, is foreign donations, are we going to be serious about cleaning this up? There are more investigations out there. Good on them. I accept there are questions I’m having to answer through a system as well.

But there is serious information here. I’m not going to table this. I’ll take the high road. I don’t like threats of legal injunctions. I do have free speech in this Parliament, but I’ll take the high road in this particular case. But when will the Government do more about this issue?

Hon ANDREW LITTLE (Minister of Justice): I know that this is an opportunity for the committee to examine the Estimates and to be debating those in this Chamber. But, nevertheless, the member has raised some serious issues. Let me just see if I can, kind of, rapidly chop through them.

First of all, as a consequence of the Justice Committee’s inquiry into the previous general election, some changes were made to our electoral law, particularly in relation to foreign donations. So we now prohibit foreign donations. We have put in place a number of measures that party general secretaries have to comply with. So, really, the onus is on them.

In terms of the very beginning of that member’s contribution, he referred to the commitments publicly made by myself on behalf of my party, and that is that if we’re in a position to do so following the election, we intend to conduct a ground-up review of our electoral laws, the Electoral Act 1993, with a view to rewriting that law to make it consistent with expectations and obligations that we would expect in the 21st century. I expect that a very early issue that will be dealt with is our donations regime and the transparency regime we have around donations to political parties. So that is a political commitment. It’s not a Government decision, but that is a matter that no doubt will be debated through the election campaign. It will be a question that voters can consider when they’re casting their vote.

On the issue of compliance with the law at the moment, the Electoral Commission has the preliminary role of evaluating complaints about breaches of the law. They set a very low threshold before they refer the matter to the police, and the police can then decide whether they investigate or they refer it to the Serious Fraud Office. It’s not for me or for this House, because of the relationship of comity with other branches of Government, to cut across investigations. I make no comment on any extant investigation.

I do make this comment: that the law as it is at the moment allows donations to be made to political parties. There is a threshold over which donations must be disclosed and reported and then concomitantly, under that threshold, there is no obligation to disclose or report. It would be unfortunate if those making donations below the threshold, on the understanding that there was no obligation to disclose, then had that donation disclosed against the spirit of the legislation. Equally, I think the concern that the member is raising is that there are those who seek to circumvent or to obfuscate the requirements of the legislation and, in effect, defeat the spirit of it that way. Both, in my view, are equally culpable and we shouldn’t allow either to happen. But it’s for that reason, and I think growing public concern about our donations regime and the transparency regime that we currently have in our law, that has driven the need for a proper full ground-up review of our electoral law to see that it meets modern standards.

CHAIRPERSON (Adrian Rurawhe): The member has 54 seconds remaining in this debate, so we’ll count down from—and I’ll call Jami-Lee Ross.

JAMI-LEE ROSS (Botany): Thank you. I thank the Minister of Justice for his contribution. I am curious to know whether the Minister and his Government genuinely believe that $15,000 is reasonable, given the questions that are out there in the public. I want to ask whether he genuinely believes it is right that foreign donors can utilise companies in New Zealand to make donations to political parties. I also will note—and the Minister did make a point around people who have made donations in good faith. Yes, I do have all that information here. Yes, I was threatened earlier this morning with court action. They can’t touch what happens in the Parliament, regardless. But there is significant financial and private information in here. So I won’t go further and attempt to table it or even read it out in another form. But I will say there’s a lot of questions in here, people need to know the truth, and we need to reform our donation regime—[Time expired]

BRETT HUDSON (National): Thank you, Mr Chair. Just a question for the Minister of Justice. Is he considering or undertaking any policy work with the ministry vis-à-vis potential public risks around the proliferation of bizarre conspiracy theories about the creation of the COVID-19 virus or the dangers of 5G wireless technologies?

Hon ANDREW LITTLE (Minister of Justice): Can I just respond to the residual comments made by the member Jami-Lee Ross and say, look, I do share with him the concern about people using companies as a way of defeating the scrutiny that is otherwise provided for in the Electoral Act, and those are issues that ought to be properly examined and debated, and full, thorough public consultation as we go through reviewing the Electoral Act.

To Brett Hudson’s question, I’m probably not wearing the correct hat for the question that he raises, because it does come up in other portfolios of mine, except to say I think we are all concerned in general terms when it comes to general elections, because we know how susceptible or vulnerable they are to manipulation through putting out, as he would describe them, and I agree with him, bizarre conspiracy theories. We saw in the aftermath of the lockdown this sudden rash of arsons against cellphone towers. There are some people who believe in weird things. I heard a radio report this morning about somebody who claims to be an expert on the transmission of vitamins through 5G or Bluetooth, I think, technology. Some people actually believe this stuff.

What is worrying is when there is an organised effort, usually run from offshore, to get these ideas up through social media, because there are some people who, for whatever reason, in their own capacity to believe or incapacity to disbelieve, buy into these sorts of things and can create undue anxiety. So perhaps I can put it this way: I can assure the member that there are quarters of Government where this matter is getting attention.

BRETT HUDSON (National): Thank you, Mr Chair. I’ll move, if we can, to the gang challenges in New Zealand, thinking specifically about areas of policy around dealing with what has been not only a very large increase in gang numbers, which have grown about 34 percent over the last three years, but one that is set against a backdrop of increasing tensions and violence, often involving firearms.

So, very keen to understand what the Ministry of Justice might be looking at in terms of matters of dealing with those that are committing those crimes and how perhaps they should be treated upon conviction. But also, and this might hark back to a degree with what we called the Social Investment Agency, what they’re looking at in terms of helping to prevent people choosing that lifestyle in the first place. This might also have some linkage to a recent police report which warns about the potential for an increased, almost by accident, criminal element resulting from the economic consequences of the COVID-19 response, seeing more people who had never shown, never exhibited, any sort of criminal tendencies or behaviours—through circumstances that they might see as need, potentially seeing that as, for them, maybe the only avenue or an easy avenue in some respects to deal with the straitened circumstances they find themselves in.

But what we have seen in the last couple of years, particularly in the last year, as relates to violence, including violence with firearms, is a worrying trend, a very clear trend, to these increased gang numbers, resulting in more actual violence, principally between gang members and associates but also spilling over to the public environment and placing at risk general members of the public.

So, very keen to hear what the ministry might be thinking of in terms of preventative policies, but also what aspects of current legislation, particularly around maybe sentencing or particular offences, might warrant change to deal with the very real problems that we’re facing.

Hon ANDREW LITTLE (Minister of Justice): Thank you, Mr Chairman. I thank the member for his question, and some of that question might be better directed to my colleague the Minister of Police, who will be taking the chair very, very soon. But can I just say that we share the concerns that the member expresses about the increased number of gang members and the increased gang presence in some communities. We know that a lot of that is driven off the back of the deportees from Australia, some of whom are deported because they have criminal convictions. Many are deported just because they are regarded by Australia as not of good character or somehow compromising—I think the words are “compromising the health of the community of Australia”. But that has been a real factor in the growth of gang members and the numbers of gang members in New Zealand. I agree with him: there has been heightened tension in some communities as a consequence, and it is also true that a lot of that tension is inter-gang tension. But the reality is, once it’s in the community, we cannot underestimate the real risk that innocent parties get caught in the metaphorical crossfire, if indeed not the literal crossfire.

In terms of the ministry, we’ve been working very closely with the police on looking at the recovery of proceeds of crime legislation to make sure that we’re able to intervene early enough. It’s all very well once crimes have been committed by organised criminal elements, but if we know that there are preparatory steps and planning steps where we might intervene earlier, then we would like to be able to do so

In terms of prevention, I think the member is absolutely right: there is a risk through periods of economic uncertainty or economic decline or downturn that those who meet hardship, as a consequence, can be driven into illegal activity. It’s difficult to quantify that in any circumstance, but a core part of the work that the Government across the board is doing—the police and other agencies—is to make sure that we are across those individuals, those households, indeed, those communities where there is a heightened risk of this sort of activity so that we can prevent that where possible.

Really, the most important preventive measure will be the investment the Government makes in incentivising job creation, working with the business community to create the opportunity for them to invest in new business activity and innovations, and those things are going to generate new jobs. We are definitely continuing to do that. We do that through our infrastructure investment plans, through the Provincial Growth Fund, through other initiatives that the Government has embarked on both before the outbreak of the pandemic and since.

CHRIS PENK (National—Helensville): Thank you, Mr Chair. As this Estimates hearing represents something of a wrap-up of the last three years, please indulge me for a moment to acknowledge the other members of the Justice Committee and various officials, some of whom are with us today, as well as the Minister in the chair, the Hon Andrew Little. And I just wish to say that I’ve enjoyed various interactions that we’ve had throughout the three-year term, including and especially—he said, seguing into the topic that he wishes to cover—in relation to courts, which is the portfolio that I hold on my side of the aisle. The Minister in the chair is, of course, the Minister of Justice as well.

But in the courts space, I would like to highlight that I would be grateful for some responses to a number of questions that I’ve got, particularly around reforms that may or may not be possible within the period covered by the Estimates, in particular addressing the considerable backlog of cases that we have in both the civil and criminal realms. I do acknowledge that these are longstanding issues; they’re systemic. So I don’t wish to imply that there is anything particular within the last Estimates period that has brought us to this point, with the exception obviously, of COVID-19 exacerbating existing issues.

But, nevertheless, with all that aside, I do want to ask the Minister: please, can he advise whether he and his ministry are looking at initiatives that would increase safety, time, and cost efficiency in relation to reducing in-person appearances needed in court, some of which were brought to attention, more particularly in relation to public health, during the COVID inquiry—if there’s anything going forward that’s being progressed since we last discussed that subject.

Hon ANDREW LITTLE (Minister for Courts): I thank the member for his questions and, yes, the Government knows there is a backlog of casework, and that’s why recently we announced an additional package to take on more judges, more staff, more prosecuting personnel, and the police, and others so that we can start to chomp through that backlog. We know that with jury trials having been suspended until next week there’ll be a backlog of jury trials to have to pick up. Fortunately, the judge-alone trials have been able to be—or some of have been able to be undertaken—on an accelerated basis.

In terms of anything we’ve learnt from the lockdown period in relation to safety, timeliness, and efficiency of appearances—look, there’s been a lot of use of audio-visual link (AVL) and that will continue, and I expect that will grow. But we also have to be aware of the, if you like, virtually constitutional requirement of the right of a defendant to appear in court physically. I think judges are very alert to that. The New Zealand Bill of Rights Act says that it is a right that defendants have. Judges are making it increasingly clear that they expect it, at the very least, for first appearances that a person appears in court. But there’s always a set of balancing factors to weigh up about what justifies an in-person appearance or an AVL appearance, and we’ll continue a programme of making sure that whatever it is, it enables the judiciary to dispose of their case workload in the most effective and efficient means possible.

CHRIS PENK (National—Helensville): Thank you. Does the Minister have a view on proposals that have been made from various quarters that the courts should be sitting outside the hours that they currently do, both within the ordinary working week at the moment but also, potentially, weekends to clear the backlog?

Hon ANDREW LITTLE (Minister for Courts): I can say that I have a personal view that I think we should be trying to maximise the amount of flexibility by which the courts operate. I mean, it’s not unusual in overseas jurisdictions for there to be night courts, for example. I know our judiciary have experimented with those sorts of initiatives. I think the more we can do to accommodate particularly people in work, who we want to keep in work, because that’s a very important factor in even those who do stray occasionally and offend and cause harm—to get them back on the straight and narrow—that if they’ve got a job they stay in a job, and particularly I think for younger men who’ve got apprenticeships or are in the early stages of their working life; the more we can do to keep them in work, the better chance we have of getting them off some bad habits.

So the more we can ensure that our courts accommodate people’s working lives the better. It has been tried; I’d like to see more of it. I am convinced that we have in our present Chief District Court Judge somebody who is committed to making sure that the courts, to the extent they haven’t before—and it would be wrong to say they haven’t before, but to the extent that they haven’t been able to do more before—see themselves as truly public servants, serving their communities, by making appearances in court an easier thing to do rather than a more difficult thing to do.

CHAIRPERSON (Adrian Rurawhe): I understand the Minister of Police will now come to the Table.

BRETT HUDSON (National): Thank you, Mr Chair. I have several questions for the Minister, if I may, and I’d like to begin with an item of clarification. It was reported several weeks ago by New Zealand Police that they would not be taking in more recruits, I think, for at least until the end of this year, maybe a little bit beyond that. I’d just like the Minister to (1) clarify if that is going to have any impact on the number of recruits trained and graduating prior to the end of this year, or is it simply closing down a pipeline of future intakes? So pretty keen to understand: will there be any fewer recruits or graduation ceremonies for the remainder of this year than was planned before that decision was taken? And to what extent have the appropriations driven that decision? So was there not a sufficient increase in an element of the police appropriation to afford them to continue to the same degree that they had been training?

On a similar vein about the Budget: is the Minister disappointed that the overall increase to the police appropriation is about 3.2 percent? Inflation’s running at 2.5, so if we take into account the very worthy increase in expenditure for road safety, many other items of the police business are either treading water with no increase or, actually, in real terms, are going slightly backwards at least, and to the extent that has an impact on why the integrated service response—while being funded in its current form in two locations for a bit longer, it is not in its full form being rolled out wider. I appreciate the police don’t carry all of that expense, but they are not just participants. I know that certainly in Christchurch they take on a lot of the coordinative aspects, and therefore there is expense involved in that.

Similarly, now we are three years in, mental health nurses in custody suites—National piloted it, this Government took that funding away, but now it’s just coming back as a pilot. Why is the money not there to roll that out broader already? Similarly, co-response: National piloted that; it went away. I understand Wellington police, out of operational budget, are piloting again here locally, so where’s the money in the Budget and why is that not there to expand that now instead of going through another set of pilots, which could be seen as navel-gazing by some?

Hon STUART NASH (Minister of Police): Thank you. There are three questions there I’ll answer quickly. In the last two Budgets there’s been $558 million actually allocated to family harm and sexual violence. Of that, police have received $65 million—so a substantial increase to help fight family harm and sexual violence.

The first point that the member made about the reducing of police numbers: attrition in the police service is running at the moment at about 2.1 percent. Police came to me and said, “Our numbers are way up; what should we do?” And I said, “There is no way we are stopping the training of policemen and policewomen.” So I went to the Minister of Finance, we got more money, training is continuing all the way through, so there is no slowdown in the recruitment of police officers. The second question—I can’t remember what that was.

Brett Hudson: That’s a very good question. What was the second question? It was about—oh, it was the general statement that the total increase is 3.2 percent but inflation’s high.

Hon STUART NASH: Yeah, sure. So a significant amount of money was given to the New Zealand Police service in Budget 2018 and 2019 that is still out there being spent at the moment. So keep in mind the money that we got in 2020 was on top of the money that was already allocated in the previous two years. So we are spending a significant amount of money on the New Zealand Police: 2,200 recruits gone through training college. The member knows the number: 1,253 more police on our front line since we came into Government.

BRETT HUDSON (National): Thank you, Mr Chair. I must get an updated number from the Minister through a written question, because at 1 June it was 1,104. But we like to see—increases are good.

I’m just seguing now into—because of the remaining time that we’re going to have for this—the major concern around the proliferation of not just gang numbers but the escalating tensions and offences being committed, particularly violent offences being committed, particularly those involving firearms. The gangs said last year in the middle of the buy-back that they weren’t going to participate. Police have acknowledged several times in various hearings that they didn’t anticipate that the gangs would. So I would like to know what are they going to do to actually give the police the resources to get out there, proactively get these firearms out of the hands of gang members, not just when they do drug busts, but get out there quickly.

Hon STUART NASH (Minister of Police): Organised crime gang units are being set up around the country. We are dedicating 700 of those 1,800 police to organised crime squads. We are going very, very hard. If you read the media, there’s about a bust once every two weeks at the moment, and we’re taking assets and firearms off gang members in record numbers.

BRETT HUDSON (National): So I thank the Minister for that—

CHAIRPERSON (Adrian Rurawhe): Sorry to interrupt the member, but it has come time for me to report progress.

Debate interrupted.

House resumed.

The Chairperson reported progress on the Appropriation (2020/21 Estimates) Bill.

Report adopted.

The House adjourned at 12.56 p.m. (Wednesday)