Tuesday, 16 February 2021

TUESDAY, 16 FEBRUARY 2021

TUESDAY, 16 FEBRUARY 2021

The Speaker took the Chair at 2 p.m.

Prayers.

Petitions, Papers, Select Committee Reports, and Introduction of Bills

Petitions, Papers, Select Committee Reports, and Introduction of Bills

SPEAKER: No petitions have been presented. Ministers have delivered papers.

CLERK:

Determination of a question of privilege arising from the use of official television coverage of the House

Government response to the report of the Regulations Review Committee on its inquiry into parliamentary scrutiny of confirmable instruments

Government response to the report of the Regulations Review Committee on its review of secondary legislation made in response to COVID-19

Government response to the report of the Foreign Affairs, Defence and Trade Committee on its inquiry into New Zealand’s aid in the Pacific 2019-20

Government response to the report of the Social Services and Community Committee on matters related to forced adoptions

Government response to the report of the Primary Production Committee on the petition of Clive Barker

Annual Reports for 2020 of the:

Counties Manukau District Health Board

South Canterbury District Health Board

Waikato District Health Board

Independent Police Conduct Authority

Accreditation Council

Office of the Children’s Commissioner

Statements of performance expectations for 2021:

Office of the Children’s Commissioner

Counties Manukau District Health Board

South Canterbury District Health Board, and

Waikato District Health Board

Statement of strategic intentions 2021-25:

Treasury.

SPEAKER: Those papers are published under the authority of the House. Select committee reports have been delivered for presentation.

CLERK:

Report of the Environment Committee on the petition of Kerry Worsnop

report of the Office of the Ombudsman on the Official Information Act compliance and practice: Department of Conservation

report of the Office of the Ombudsman on the Official Information Act compliance and practice: Ministry for the Environment

reports of the Health Committee on the petitions of Joshua Perry, Judy Killalea, Kim Robinson, and Marion Pilmer

reports of the Māori Affairs Committee on the Local Electoral (Māori Wards and Māori Constituencies) Amendment Bill and on the petition of Toni Boynton

reports of the Transport and Infrastructure Committee on the petitions of Chris Teo-Sherrell, Steffi August, Tim van de Molen, and Tim van de Molen: Safer Community Access for Tamahere, and

report of the Attorney-General on the New Zealand Bill of Rights Act 1990 on the Land Transport (Random Oral Fluid Testing) Amendment Bill.

SPEAKER: The bill is set down for second reading. The reports of the Office of the Ombudsman and Attorney-General are set down for further consideration. The Clerk has been informed of the introduction of a bill.

CLERK: Taxation (COVID-19 Resurgence Support Payments and Other Matters) Bill, introduction.

SPEAKER: That bill is set down for first reading.

Oral Questions

Questions to Ministers

Question No. 1—COVID-19 Response

DEBBIE NGAREWA-PACKER (Co-Leader—Te Paati Māori): Tēnā koe, Mr Speaker. To the Minister Chris Hipkins—will the Minister—

SPEAKER: No. Order! Order! To the Minister for COVID-19 Response.

DEBBIE NGAREWA-PACKER: Thank you. I stand corrected; thank you. Will the Minister for COVID accept that Māori are a population group particularly vulnerable to COVID-19, and, if so, can he confirm that there is a specific vaccine roll-out plan for Māori?

SPEAKER: Order! I am going to get the member to ask the question again as it’s written down on the yellow—if the member goes to the yellow sheet and just reads that bit, other than her own name, that will be accurate.

1. DEBBIE NGAREWA-PACKER (Co-Leader—Te Paati Māori) to the Minister for COVID-19 Response: Does he accept that Māori are a population group particularly vulnerable to COVID-19; if so, can he confirm that there is a specific vaccine roll-out plan for Māori?

Hon CHRIS HIPKINS (Minister for COVID-19 Response): Yes; and yes. We do know that Māori and Pacific people experience a range of poorer health outcomes, that they are at increased risk of exposure to COVID-19 and increased risk of harm if they contract the virus. So like other key stages in our COVID-19 response, we have developed a specific plan for Māori focused on supporting vaccine confidence in particular, and also ensuring that we get good strong uptake amongst our Māori communities.

Debbie Ngarewa-Packer: What specifically is his plan for vaccinations in Māori communities, recognising that Māori have higher vulnerability at early ages than the general population?

Hon CHRIS HIPKINS: I think the first thing to note here is that Māori will be highly represented in the first phase of our vaccine roll-out, which is our most at-risk border workers, where we do have high concentrations of Māori working at the airport and in our managed isolation facilities, so they will be well represented there. As we move to extend beyond that group, our first priority is the whānau, the family, of those border workers, and, again, there’ll be a significant number of Māori whānau within that group. Then, as we continue to expand out from there, we’re working very closely with Māori health providers, because one of the things that we’re very mindful of is we need to ensure that Māori feel confident in receiving the vaccine, and they are more likely to feel confident if we are working and if they’re receiving that vaccine through health providers that they have an existing trusted relationship with.

Debbie Ngarewa-Packer: When will the specific Māori vaccine roll-out plan that you referred to be released to Māori organisations and the public?

Hon CHRIS HIPKINS: The details for the plans for the broader roll-out are being released progressively as we reach each stage in the roll-out. So the first stage of the roll-out is our border workers. We’ve got a detailed plan there which we have shared, and people are aware of what’s happening there. As we move forward, as we receive additional deliveries of vaccines, one of the things that we do need to be able to do is tweak the vaccine roll-out plan, if you like, depending on what we know about the vaccines that are arriving. We’ve got four different vaccines that we’ve bought for New Zealand. We understand more as each day goes along about who those vaccines are the most effective for, and so we need to be able to tweak our detailed implementation plans as that information comes to light, as our Medsafe approvals process shares more information about those vaccines with us and as the delivery schedules for the different vaccines get locked in.

Debbie Ngarewa-Packer: Can you confirm that a million masks have been distributed to the Tāmaki and Taranaki region, and what percentage went to Māori organisations; and will this current lockdown be extended?

Hon CHRIS HIPKINS: With regard to the last part of the question, I can’t give any sort of confirmation around how long the current restrictions might be in place for, but what I can say is that Cabinet is reviewing that regularly and more information flows in on almost an hourly basis at the moment. We will make decisions tomorrow in terms of how long these current restrictions are in place for. In terms of personal protective equipment—so distribution of things like masks—we’ve been working very closely with community providers to make sure that the cost of accessing masks isn’t a barrier for anybody being able to access them and use them.

Debbie Ngarewa-Packer: We have this afternoon heard from Taranaki leaders who have stated they haven’t received any masks; can the Minister please state, as per the question, what percentage of that went to Māori?

Hon CHRIS HIPKINS: I don’t have that information, but I’m very happy to follow that up and see what’s happened there to make sure that all those who need the masks have access to them.

Question No. 2—Prime Minister

2. Hon JUDITH COLLINS (Leader—National) to the Prime Minister: Does she stand by all of her Government’s statements and actions related to the COVID-19 response?

Rt Hon JACINDA ARDERN (Prime Minister): Yes. Despite COVID-19’s global impact, I’d like to note that New Zealanders have enjoyed more freedoms for longer periods of time than nearly any other country in the world, and we’ve never taken for granted how special that was. But with COVID raging outside our borders and new, more transmissible strains emerging, we have to both make continual improvements to strengthen our border and continue to plan and prepare to manage any cases as they may arise in the most effective way possible. That is what we have done in our latest alert level changes.

Hon Judith Collins: At what time did she learn of likely recent community cases of COVID-19 in the Auckland area?

Rt Hon JACINDA ARDERN: It would have been somewhere between 11 and midday—there or thereabouts—on Sunday. At that point, of course, in the early stages of cases, the public health unit work very quickly to try and establish, in the first instance, whether we have a direct link between the border and the cases, because that can give us an indication as to whether or not we have leakage at the border, or whether or not we have a community outbreak, and that determines the kind of response that we’ll need.

Hon Judith Collins: What actions were immediately taken to inform the public, who might have been planning or attending large events?

Rt Hon JACINDA ARDERN: Of course, as I just distinguished, you will recall, for instance, the cases that we had involving recent releases from a managed isolation facility where they then took a trip into the North. That was a situation where once we were able to establish the context of those cases, we made a decision that we believed we could manage through our contact tracing, our isolation regime, and our rigorous testing without moving levels. So we try and establish that very, very quickly. We gave ourselves quite a small time frame. We notified the public, I believe it was at 1.30 p.m., and then gave ourselves a few hours to make that assessment on whether or not we needed to move alert levels, which we did in the evening at 7 p.m.

Hon Judith Collins: So what actions were taken to immediately inform the organisers of large events on Sunday after the Prime Minister was alerted?

Rt Hon JACINDA ARDERN: My understanding is that public health authorities were in contact with those events in Auckland. But again, as I’ve just set out, there were a few hours in which we were not yet clear on what response was going to be required. That was very clear at 7 p.m. You’ll understand that there will be events at any given time when we have to respond where they may be caught right in the middle of us making decisions, where at that point we just have to make decisions around whether or not they proceed because they’ve already begun. In the case of the Big Gay Out, they essentially were already beginning at the time we were making some of these decisions.

Hon Judith Collins: Is the Government considering daily saliva testing for border workers in addition to the current testing regime?

Rt Hon JACINDA ARDERN: Actually, we already are undertaking saliva testing for our most high-risk areas—our most high-risk places being, of course, our facilities where we bring in those who are positive for COVID. So the Jet Park in Auckland is a place where we’re utilising saliva testing and have been for a little while now, and doing the same, of course, in Christchurch and Wellington. The thing that I just wouldn’t mind taking a moment to share with the member: as it’s been explained to me, saliva testing is not as accurate as PCR testing—the nasal swabs—which is why we like to use them, because unlike other countries that like to undertake general surveillance and have a tolerance, we need to pick up an individual case. At the moment, in order to validate the process, we need to have individual saliva tests sitting alongside individual PCR tests, so they can’t be pooled, which means they take the same amount of lab capacity time and, I understand, processing as you would for PCR testing. The other issue is that to validate it to ensure it’s a robust regime, we have to have some positive cases going through it, and because New Zealand has such low levels of COVID, that makes the validation process a little more lengthy. You could, I’m told, skip that, but I’m not sure anyone would want that situation. So, broadly speaking—forgive the long answer—we of course are in favour; we just want to do it in a way that it adds something.

David Seymour: Is the Prime Minister aware that an analysis of 16 different studies into people using saliva testing in Australia, North America, and Europe, published by The Journal of American Medical Associations last month, found that saliva testing is as accurate as PCR testing?

Rt Hon JACINDA ARDERN: I imagine—look, I’m not an expert on the testing regimes. I am, of course, sharing what has been shared with me directly from our health authorities. But I again put in the context here that we are doing this. I imagine that those processes have had validation, so I would imagine we would want to go through the same process to make sure that we can get the same level of rigour with saliva testing as we do with PCR testing.

David Seymour: If the technology works overseas and has been verified by 16 different studies to be as accurate as PCR testing, are we testing saliva testing in New Zealand for ourselves because New Zealanders have different saliva from other countries?

Rt Hon JACINDA ARDERN: The member misunderstands. My point is we have to do a validation process to get it under way here in New Zealand. We don’t have the same level of COVID-19 present in New Zealand, so that makes it a little more difficult. Again, if the member would like a briefing from some of the experts that I rely on, I would be happy to provide it, but I’m not going to do anything that diminishes our regime. But equally, we want to add to it, which is why, again, we are doing saliva testing.

Hon Judith Collins: When the Prime Minister says that “we are doing saliva testing.”, does she mean daily saliva testing, as has been advocated by medical experts in New Zealand?

Rt Hon JACINDA ARDERN: That is my understanding in the facility that I’ve outlined.

Hon Judith Collins: Does the Prime Minister believe that having daily saliva testing voluntary is going to be as effective as having it mandatory?

Rt Hon JACINDA ARDERN: Again, at this point in the validation process, what we need to do is just make sure those who we’re PCR testing we’re saliva testing at the same time. It enables us to make sure that it’s giving us that level of rigour. I don’t rule out that we might do that in the future, but that currently is the advice we’ve been given from experts on how to roll it out.

Hon Judith Collins: Does she agree with Dr Janet Pitman of Rako Science, who said a key advantage of the saliva test “was that high-frequency samples could be taken” and it “could deliver same-day results for swabs”?

Rt Hon JACINDA ARDERN: PCR testing and saliva testing, in terms of processing, I’m told you’re looking at a very similar time frame.

Chris Bishop: No, it’s not right. That’s not right.

Rt Hon JACINDA ARDERN: That’s the first thing. The second thing: I’m told that one of the—I’m glad there is an expert sitting there on saliva testing. Maybe I should bring him into the briefings. The other thing that I’ve been advised, of course, is that it is fair to say that, actually, if you’re doing it daily, then that in a way could compensate for any limitation in the level of accuracy. So I absolutely accept that. But if you are daily undertaking saliva testing across 12,000 people, in order to not reduce down the lab capacity that that would take up, you’d want to do pooled samples. You need to do, as I’m advised—

Chris Bishop: Rako’s private. It’s a private lab.

Rt Hon JACINDA ARDERN: —you need to go through the process we’re going through at the moment in order to get to that position. Again, Mr Bishop, perhaps you’d like to join the briefing with Mr Seymour.

Hon Judith Collins: Does the Government know how many border workers are failing to undertake routine testing?

Rt Hon JACINDA ARDERN: Those who are covered by the order are legally obliged. Their employers are legally obliged to ensure that they are being tested with the frequency set out in the order. They’re also legally required to make sure that they are documenting that testing for their individual employees. The Ministry of Health has the ability, through the aggregate data, to get an insight into whether or not that testing is indeed taking place and to troubleshoot if it’s not, but the obligation sits at an agency or an employer level.

Hon Judith Collins: Point of order. The question was “Does the Government know…” The answer is either yes or no.

Rt Hon JACINDA ARDERN: As I outlined, we are able to see the overall figures of who is being tested at an aggregate level, and if those numbers are not as high as the number of border workforces that are covered by the order, we can then see, at testing sites, where the numbers are below and troubleshoot where that means an employer is not having individuals tested.

SPEAKER: OK. I think I called the member on a point of order and she asked a question, and the question was answered. I won’t count that as one of the supplementaries, but the member has been here long enough to know that she cannot insist on a yes/no answer.

Question No. 3—Finance

3. BARBARA EDMONDS (Labour—Mana) to the Minister of Finance: What financial support is available to businesses when alert levels are raised as a result of a resurgence of COVID-19?

Hon GRANT ROBERTSON (Minister of Finance): The Government stands ready to support businesses affected by any extended alert level increases. We have introduced legislation today to bring in a new resurgence support payment. If alert levels are raised for seven days, firms that experience a 30 percent drop in revenue over a seven-day period will be eligible. The payment would include a core per-business rate of $1,500, plus $400 per employee up to a total of 50 fulltime-equivalents, representing a total cap of $21,500 per firm. This payment recognises that some businesses face one-off costs or impacts to cash flow when we step up an alert level and when they are following our public health advice.

Barbara Edmonds: What other support is available for businesses and workers?

Hon GRANT ROBERTSON: The wage subsidy scheme will also be available nationally when there is a regional or national move to alert levels 3 and 4 for a period of seven days. The scheme, as we know, has been very effective in keeping people in work so far, with more than $14 billion paid out to protect 1.8 million jobs. Other support includes the enhanced loan products through the Business Finance Guarantee scheme and the Small Business Cashflow (Loan) Scheme.

Barbara Edmonds: What financial support is available for workers who need time off while they wait for the results of a COVID test?

Hon GRANT ROBERTSON: The Government recently announced a new short-term absence payment to cover eligible workers needing to stay at home while awaiting a COVID-19 test result. This is a one-off payment of $350 to employers to pay workers who need to stay home while awaiting a test, or while someone who is their dependant is doing so, in accordance with public health advice. The Government is managing the Crown accounts carefully to ensure that there is a buffer in the event of a COVID-19 resurgence, and we are in a solid position to be able to share the burden with businesses if that is needed.

Chris Bishop: What is the reason behind the bill that the Minister has just referred to only being furnished to the Opposition at 10.33 this morning, when it’s due to go through all stages under urgency this afternoon at approximately 3 o’clock?

Hon GRANT ROBERTSON: The bill was provided as soon as it was possible to do so. The bill is a relatively uncomplicated piece of legislation.

Question No. 4—COVID-19 Response

4. Dr SHANE RETI (Deputy Leader—National) to the Minister for COVID-19 Response: Has the Government made daily COVID-19 saliva testing compulsory for border workers; if not, why not?

Hon CHRIS HIPKINS (Minister for COVID-19 Response): No, not at this stage. As the Prime Minister has just outlined, saliva testing is not currently an accredited diagnostic test. It’s currently accredited as a surveillance test, and that is how we are using it. Saliva testing is under way at the Jet Park as a complement to the nasopharyngeal swab, which is our diagnostic test. It’s also been rolled out at the Commodore facility in Christchurch and the Grand Mercure in Wellington. Saliva testing is being progressively rolled out and the numbers will continue to increase over coming weeks.

Dr Shane Reti: How does he respond to Professor Sir David Skegg, who said yesterday in relation to daily saliva testing: “We need to stop dragging our feet and get on to that quickly.”?

Hon CHRIS HIPKINS: I think, as has already been extensively canvassed in this question time, the Government is interested in saliva testing. We will use saliva testing as a complement to, rather than a replacement of, our nasopharyngeal PCR testing. The issue is that at this point it is not accredited to be used in the way that some are suggesting it should be used.

Dr Shane Reti: Why, when the Simpson-Roche report recommended in September last year that saliva testing should be introduced as soon as possible, have we not made it compulsory for all border workers?

Hon CHRIS HIPKINS: As I indicated, it’s not currently accredited to be used for the purposes of diagnostics; it’s only accredited for the use of surveillance. We are using it in that capacity at the moment. We are rolling it out more broadly, but there are still some additional hurdles to go through, including validation of the test results, to give us confidence that we’re not going to miss cases or give people false confidence if they get a negative result when perhaps they shouldn’t.

Dr Shane Reti: Does he agree, then, that a combination of daily saliva tests and regular nasal tests for border workers would increase our chances of detecting coronavirus, and, if not, why not?

Hon CHRIS HIPKINS: Potentially it can add something to our testing regime, and that’s one of the reasons why we are using it in the highest-risk facilities that we have, and we will continue to increase the number of places where we’re using it.

Dr Shane Reti: Do official documents obtained under the Official Information Act show that, in September last year, statements were made that saliva testing could be ready in two months?

Hon CHRIS HIPKINS: The advice that I’ve had over the time that I have been looking at this has been contradictory in terms of when it could be rolled out reliably, and so we’ll continue to follow the science on that one.

Question No. 5—COVID-19 Response

5. GINNY ANDERSEN (Labour—Hutt South) to the Minister for COVID-19 Response: What progress has the Government recently made on vaccines for COVID19?

Hon CHRIS HIPKINS (Minister for COVID-19 Response): Good news, I am very pleased to report back to the House that the first batch of Pfizer COVID-19 vaccines arrived in New Zealand yesterday morning—landing at 9.34 a.m. on Singapore Airlines flight 285 from Belgium via Singapore, for those of us who were following it on flight tracker. Approximately 60,000 doses, or 30,000 courses, have now been delivered. We’ve been working hard behind the scenes to ensure that we’re ready to receive the vaccines as quickly and smoothly as possible, and that has happened. It was expected sometime during quarter one, so it’s good news that it’s here earlier than previously predicted. It’s a significant step forward in our programme, and we’re gearing up to start rolling out our vaccines from Saturday.

Ginny Andersen: What will the roll-out look like, and when will it begin?

Hon CHRIS HIPKINS: From Saturday, we’ll be rolling out the first vaccines to our front-line border workers, those in managed isolation and quarantine—starting in the Auckland region and then expanding to other regions in the coming days. As we’ve signalled, our first priority is our border workers, who we expect to vaccinate within two to three weeks, followed by their household contacts. Healthcare and front-line workers and those most at risk from COVID-19 will then follow, before vaccination of the wider population, which is likely to begin in the second half of the year, in line with when we expect to receive a sufficient number of vaccine doses.

Ginny Andersen: What steps are required before the vaccinations can begin on Saturday?

Hon CHRIS HIPKINS: The first and most important step is making sure that the shipment of vaccines that we have received is in good shape, it’s arrived safely intact, and it’s been kept at the correct temperature for the entire duration of its flight. During the course of the week, the vaccine will be tested for quality assurance—that’s something that both the drug company and Medsafe are involved in. Once those safety checks are complete, doses are then formally released to start the first phase of the vaccination programme. This isn’t necessarily a quick process, but it is important that we get it right; all of the quality control assurances have to be completed before the vaccines will start being used.

Ginny Andersen: Is the Minister satisfied that New Zealand is prepared for the roll-out of the vaccination?

Hon CHRIS HIPKINS: Yes, although I do want to note that this will be the largest ever immunisation programme that New Zealand has undertaken, and we will be trying to do it in a very short space of time. Our teams have been preparing for that for many months. They’ve carried out dry runs to ensure that they are ready; further practice runs are being undertaken this week, and that covers all aspects of the programme, from distribution, the use of technology to record all of the relevant details through the immunisation register—all of those things are being tested. A number of vaccinators have already received their required training; further people are being trained specifically on the Pfizer vaccine this week. So I want to thank all those who have been involved in that process for what has been a very, very tireless effort.

Question No. 6—COVID-19 Response

6. CHRIS BISHOP (National) to the Minister for COVID-19 Response: Was the laundry worker at LSG Sky Chefs, who contracted COVID-19, required to get a regular COVID-19 test, and how many people handling objects associated with the border are not required to get a COVID-19 test on a regular basis?

Hon CHRIS HIPKINS (Minister for COVID-19 Response): No. People covered by mandatory testing: that’s done on the basis of their risk of being exposed to COVID-19. Handling laundry off aeroplanes with gloves and other infection and prevention and control measures is currently deemed to be low risk, but as a result of recent developments we are reviewing that again. I would point out to the member that there are tens if not hundreds of thousands of people who handle objects associated with the border, or that have come across the border, on a daily basis.

Chris Bishop: Why was the public health order mandating regular testing at the border not broad enough to encompass the sort of role this particular person was engaged in?

Hon CHRIS HIPKINS: As I indicated, the compulsory testing order is based on a risk assessment. The risk assessment here are those who are likely to come into contact with people who have COVID-19, or things like baggage, for example, where there is a higher degree of risk. Laundry has not been regarded as a high-risk area up to this point, but that is something that we’ve got our teams having another look at now.

Chris Bishop: Why are baggage handlers subject to compulsory testing but people who are handling objects like napkins and laundry that have come off flights not subject to an order?

Hon CHRIS HIPKINS: Up until now, surfaces like napkins, towels, duvets, and pillows have not been regarded as at high risk of surface transmission—fomite transmission—whereas some baggage is regarded as a higher risk of transmission. That is one of the things that we’re having another look at now.

Rt Hon Jacinda Ardern: Can the Minister confirm that the order also bases a judgment based on those employees who’re required to be airside and they’re more likely to be in contact with those who are transiting or travelling through international borders?

Hon CHRIS HIPKINS: Yes, I can confirm that.

Chris Bishop: What actions have been taken, if any, following the Simpson-Roche report comment from September, “Much time has been spent by the Ministry of Health defining groups of workers required to be tested, with little knowledge of the work environments”?

Hon CHRIS HIPKINS: There’s been extensive work between the Ministry of Health and all of our border agencies to understand who those most at risk are and to make sure that they are being tested regularly. Now, when there are new developments either in New Zealand or internationally, we do build on our body of knowledge around that. Up until 48 hours ago, laundry off flights was not regarded as a high risk or anything other than a very low risk area. We are now having a very close look at whether that should continue to be the case.

Chris Bishop: Just with reference to what the Minister said before, is he really saying that baggage handling is more high risk than napkins and laundry from flights?

Hon CHRIS HIPKINS: As I’ve indicated before, the advice that we’ve received in terms of the risk is that laundry was deemed to be a low probability, a low source of fomite transmission. That’s something, again, that we are looking very closely at. I do want to draw a distinction between those who move airside versus those who work on the New Zealand side of the border. They don’t come into contact with people who have potentially got COVID-19. They do wear personal protective equipment in their work environment. And I also want to point out that we’re still in the investigation process for how these three people got COVID-19 in the first place. It’s very easy for everyone to be an expert without sufficient information to determine how they got it. At this point, we don’t know how these three people got COVID-19.

Chris Bishop: Is he satisfied with the checking and auditing done by the Ministry of Health of private companies with border-facing staff to ensure testing is taking place if mandated by public health orders?

Hon CHRIS HIPKINS: Broadly speaking, yes, we’ve had that reviewed. We did set up a panel to go in and review that, and he’s just quoted from the report that they gave us. We continue to look at that. We’ll continue to check that periodically to make sure that the testing that’s required to be happening is actually happening.

Question No. 7—Prime Minister

7. DAVID SEYMOUR (Leader—ACT) to the Prime Minister: Does she stand by her statement regarding raising COVID-19 alert levels, “Three days will give us time to gather further information, undertake large scale testing, and establish if there has been wider community transmission”; if so, does she believe the alert levels will be able to be reduced at the end of these three days?

Rt Hon JACINDA ARDERN (Prime Minister): I stand by my statement. We took a decision to change alert levels quickly for 72 hours, in line with our rapid response plan established in July last year, to allow us to establish, if we’re able, a probable or likely source and whether there was any wider community transmission. We know it’s important to get on top of the virus early, and acting quickly to control the virus is essential to our response. Cabinet will review these settings tomorrow in line with our rapid response plan, taking into account all of the information we have to hand at the time.

David Seymour: How many close and casual contacts have been identified of the three new community COVID-19 cases?

Rt Hon JACINDA ARDERN: As of the latest update that I have in front of me, for what we refer to as case A we have 36 close contacts, 14 of which we have our negative results already through, and we’re awaiting the remainder. Of the casual contacts, 1,669—remembering we have the school involved there, and so those are casual plus contacts. We already have reported against those: 277 have already come through, and, of course, the remainder are pending—keeping in mind we had 15,000 swabs taken yesterday. Case B: the close contact results have already come through, those have been reported; there were only five of those. Of the casual plus contacts, the ones that we’re slightly less worried about, of course, we’ve already have six negative there, and we’re awaiting the final 46 results there as well.

David Seymour: By what time does the Prime Minister expect the remaining test results of close and casual contacts to be reported?

Rt Hon JACINDA ARDERN: As I’ve said, we’ve had roughly 15,000 swabs taken. At 1 o’clock today, Dr Bloomfield and the Minister of Health gave an update on the results we have to date. We, of course, tend to get some of that information coming through those labs in the morning and then we report them, and so I expect on a cycle we hope to have as many of those as possible to be able to give us confidence. Again, ARPHS—the Auckland Regional Public Health Service—have rightly prioritised close contacts, and then they work through the casual contacts, but we’ll be reporting on them again tomorrow.

David Seymour: Will the Government require negative tests on all currently identified close and casual contacts before changing alert levels?

Rt Hon JACINDA ARDERN: We take the information in its totality. We’re very interested in what the close contacts tell us, so those worksite contacts in particular, even though in some cases they’ve been considered casual plus. We are very interested to know that, of course, two passengers who were travelling in a vehicle for a long time, they’ve already come back negative. We’re interested in what sewage testing tells us; we expect those results through tomorrow as well. We already have results from 10 February that tell us nothing was picked up. Then, of course, we’ll want to see how many of the casual contacts we have through. So we take it in the round. There’ll sometimes be legitimate reasons why we may struggle, out of 1,600 people, to find maybe one or two, so we’re not always absolute, but we take in a round as much information as we can.

David Seymour: Conversely, what would the Government have to see to extend the current alert levels beyond the initially promised three days?

Rt Hon JACINDA ARDERN: A good question from the member. One of the things that we’re always looking out for, if we for instance ever have a case—as we did in the August outbreak—that comes up through our community testing stations that we have not proactively asked to be tested and that we cannot immediately link, that is cause for concern. That means that we have to find time and the ability to epidemiologically link how they came to be infected. If we can’t do that, that is a sign of community outbreak. So those are some of the things that make the wider surveillance testing across Auckland really important.

David Seymour: Can the public take from the Prime Minister’s answers that if the overwhelming majority of current tests of close and casual contacts come back negative over the next day and a half, and there are no unexpected positive cases, as the Prime Minister just outlined, then alert levels will go back at least to level 2, if not to level 1, after the initial three-day period, i.e., this Wednesday?

Rt Hon JACINDA ARDERN: Those would all be really positive outcomes, if that were to be what we find over the next 24 hours. Actually, I think, just as this House, all New Zealanders have got really good at looking for the things that would concern us and the things that don’t concern us, and so they’ll be looking at exactly the same data and information that we will be. You’ll already know that if we have enough confidence, we won’t necessarily raise alert levels, and, equally, if we have enough confidence, we’ll be willing to lower them. But I don’t want to predetermine that decision until we get those results tomorrow and we have that Cabinet discussion.

Question No. 8—Social Development and Employment

8. IBRAHIM OMER (Labour) to the Minister for Social Development and Employment: What recent announcements has the Government made about supporting more New Zealanders into work?

Hon GRANT ROBERTSON (Deputy Prime Minister) on behalf of the Minister for Social Development and Employment: This morning, I announced that the Government will be lifting abatement thresholds from 1 April 2021. This means that people getting a benefit will be able to keep a greater proportion of their earnings as they can work more hours before their benefit is affected. This announcement is about backing people and families to get ahead as part of our response to COVID-19.

Ibrahim Omer: How many people will benefit from lifting abatement thresholds?

Hon GRANT ROBERTSON: On behalf of the Minister, today’s adjustment means that around 82,900 low-income people and families will be better off by $18 a week on average. Of that figure, 29,500 individuals and families who currently receive a working-age benefit would be on average $29 a week better off. We’re making it more worthwhile for these people to work and improving the financial incentives to work part-time. This adjustment is steady progress towards growing people’s incomes and wages, particularly for low-income people. The changes announced this morning sit at the core of making our welfare system fairer.

Ibrahim Omer: Why have the Government prioritised lifting abatement thresholds?

Hon GRANT ROBERTSON: On behalf of the Minister, there has not been an adjustment to income abatement thresholds as substantive as this in over two decades. This has meant that as wages went up over time, people were working fewer and fewer hours before their benefit was reduced. Today’s adjustments mean people can work more, earn more, and keep more of what they get. This gives people more incentive to work while they’re receiving a benefit, which will go a long way to supporting New Zealand’s labour market and our economic recovery. This also delivers on an election commitment made by the Labour Party to back people and their families to get ahead.

Question No. 9—COVID-19 Response

9. TEANAU TUIONO (Green) to the Minister for COVID-19 Response: Are all Government employees and contractors in managed isolation and quarantine facilities and at the border being paid at least the living wage?

Hon CHRIS HIPKINS (Minister for COVID-19 Response): Staff who work in the facilities from the New Zealand Police, the New Zealand Defence Force, Aviation Security Service or AVSEC, and Health are covered by the living wage. Security contractors on new contracts are receiving a living wage. All Immigration New Zealand staff and contractors employed at the border are paid at least the living wage, and that includes Customs staff employed at the border. Hotel staff at managed isolation facilities are either employed directly or contracted by the hotel companies that operate the facilities. I’ve been advised that 10 of the 32 facilities pay the living wage, and I welcome the recent announcement by Accor, who run nine managed isolation and quarantine facilities, that they will be paying their staff the living wage. In addition, I’m aware that the Jet Park quarantine facility in Auckland pays their staff the living wage and are looking to extend that to Jet Park Hamilton staff shortly. Worker pay is being discussed as part of our commercial negotiations with the hotel companies.

Teanau Tuiono: Will the Government also encourage the private sector to pay managed isolation and quarantine (MIQ) and border workers the living wage, and, if so, how?

Hon CHRIS HIPKINS: As I indicated, yes, the living wage and worker pay is being discussed as part of the commercial negotiations around the renewal of contracts for our managed isolation and quarantine facilities.

Teanau Tuiono: Does he think all the working people who will be prioritised for vaccines in recognition of the personal risk they are taking just to do their jobs should be paid the living wage?

Hon CHRIS HIPKINS: Certainly, the Government is very supportive of the living wage. We have been working very hard to ensure that all those employed by the State, by the Government, are paid the living wage. It gets more difficult as we move out beyond the people who are in our immediate employ to contracted workforces, but we are working very hard across Government around Government procurement policy to ensure that the living wage is extended as far and wide as possible as quickly as possible.

Teanau Tuiono: Does he think the essential workers who keep our COVID-19 response going by stacking supermarket shelves, caring for our elderly people, and driving buses deserve a living wage?

Hon CHRIS HIPKINS: I think all New Zealanders deserve a living wage, although I am not necessarily responsible for what supermarkets pay to their employees, but I’d certainly encourage all employers to be good employers.

Teanau Tuiono: Has he encouraged the Minister for Workplace Relations and Safety to prioritise ongoing fair pay for MIQ, border, and other essential workers by introducing fair pay agreements?

Hon CHRIS HIPKINS: Fair pay agreements are something that I am very supportive of. It is the Labour Party policy; we are in discussions about that. I’ve also been having conversations with the Minister for the Public Service about ensuring that we do our bit as an employer—as a good employer—in making sure that we are treating our employees well.

Question No. 10—Health

10. PAUL EAGLE (Labour—Rongotai) to the Minister of Health: What recent announcements has the Government made on funding rainbow youth mental health supports?

Hon ANDREW LITTLE (Minister of Health): Over the weekend, the Prime Minister and I announced that for the first time, the Government will provide targeted and nationwide funding to services that provide mental health support to rainbow young people. This announcement fulfils a manifesto commitment to allocate $4 million specifically targeted to rainbow mental wellbeing initiatives aimed at young people. There has not previously been ongoing and nationwide targeted support to organisations operating in this area.

Paul Eagle: What types of support will this funding provide to the rainbow community?

Hon ANDREW LITTLE: Funding of $3.2 million will, for the first time, directly fund the expansion of mental wellbeing services currently available for young rainbow New Zealanders. The remaining $800,000 will be allocated to topping up the existing Rainbow Wellbeing Legacy Fund, which will increase the annual allocation of that fund by $200,000 a year so it can support more initiatives and more organisations.

Paul Eagle: Why is additional funding for mental health for the rainbow community important?

Hon ANDREW LITTLE: Members of our rainbow communities are at greater risk of social marginalisation and of discrimination, and are more likely to experience harm associated with bullying and harassment than the general population. As a result, members of our rainbow communities have poorer physical and mental health and addiction outcomes and are at greater risk of suicide.

Matt Doocey: Can the Minister confirm if the welcomed $4 million for mental health support in our rainbow communities is part of the $455 million that was announced for front-line mental health services almost two years ago as Budget 2019?

Hon ANDREW LITTLE: I can confirm that this money is part of the $455 million package announced in 2019.

Question No. 11—COVID-19 Response

11. CHRIS BISHOP (National) to the Minister for COVID-19 Response: Can he confirm reports that the Ministry of Health was unaware high-risk Air New Zealand crew were staying in a hotel in the Auckland CBD, and that they only found out when it was reported in the media?

Hon CHRIS HIPKINS (Minister for COVID-19 Response): Hello again. I can confirm that Air New Zealand and health authorities have been working closely together for some months to strengthen the arrangements around isolating Air New Zealand workers, and part of those conversations were preparing for the facility in which they isolate to be relocated. That was part of a commercial negotiation between Air New Zealand and the hotel companies. I’ve been advised that that shift happened faster than the health officials had been anticipating, and Air New Zealand had not informed them of the exact timing that that shift would happen, though it was being anticipated. The health officials worked very quickly and closely with Air New Zealand to make sure that there was no risk to public health caused by that shift, and as a result I’m very satisfied that the arrangements around isolating workers—isolating Air New Zealand air crew—continue to strengthen.

Chris Bishop: Why, when he’s just stated that officials had been working very closely with Air New Zealand, did the Ministry of Health not know that Air New Zealand crew were in the Auckland CBD?

Hon CHRIS HIPKINS: We were aware that the facility that Air New Zealand had been using, the hotel that Air New Zealand had been using, to isolate their workers—that hotel no longer wished to provide that service, and so they were negotiating with a number of other hotels. As I indicated, those negotiations concluded a little more quickly than the health officials had been anticipating.

Chris Bishop: Does he agree with Professor Michael Baker that international air crew are one of the weakest points of our border, and, if so, what is the Government doing about that?

Hon CHRIS HIPKINS: No, I don’t actually agree with that. This is something that I’ve been looking very closely at quite a lot over the last few months. We now have all of our layover crew—so crews from other airlines who come into New Zealand; they do their layovers in our managed isolation facilities. In terms of Air New Zealand crew, we work very closely with Air New Zealand to make sure there is as low a risk as possible there. It depends, of course, on what roles people have. So flight crew who basically go into the cockpit, they stay in the cockpit and they don’t come into contact with passengers. There’s a different risk profile for them than there is for those who are interacting with passengers—so the cabin crew, for example. We work really closely with Air New Zealand around things like personal protective equipment, around regular testing, and I do want to acknowledge, actually, for those working for Air New Zealand on these international routes—who are performing a very important, critical service for New Zealand—that they are being tested more frequently than just about anyone else in the world at this point. Some of them are having nasopharyngeal swabs taken more than once a day, depending on the routes that they are flying, so they are absolutely doing their bit to keep New Zealand safe.

Chris Bishop: What action did he take as Minister when he found out that Air New Zealand staff were being able to run through the Auckland CBD, as was reported in the media a week or so ago?

Hon CHRIS HIPKINS: As I indicated, these conversations have been ongoing about the shift from one hotel facility to another, and how we’d make sure that any shift is in keeping with the public health protection measures that we would expect. So the new facility that they are in—which is not the interim facility that they were in temporarily—has private gym arrangements for the staff. They’ve emptied out some rooms; they’ve put some gym equipment in them so that they can get their daily exercise—which is something we should encourage—without having to go out into the public.

Chris Bishop: Point of order, Mr Speaker. The question was about what actions the Minister took once he found out about that information, and that didn’t address that at all.

SPEAKER: Well, I think we heard that he had discussions with them.

Question No. 12—Transport

12. KIERAN McANULTY (Labour—Wairarapa) to the Minister of Transport: How is the Government keeping critical airfreight and exports flowing?

Hon MICHAEL WOOD (Minister of Transport): As part of the COVID-19 aviation support package, our Government’s International Airfreight Capacity scheme is making sure we’re keeping airfreight and exports flowing, including critical personal protective equipment and COVID test kits. The Government has agreed to extend the International Airfreight Capacity scheme until the end of April 2021. The extension gives businesses that rely on airfreight an airline certainty while the Government reviews its support for international air connectivity during the economic recovery.

Kieran McAnulty: How is the scheme supporting the economic recovery?

Hon MICHAEL WOOD: The scheme means we can keep getting time-critical freight like medicines into New Zealand and enable our exporters to get their goods to international markets. It has helped airfreight return to 90 percent of pre-COVID levels, and has supported 5,544 flights in and out of New Zealand carrying over 100,000 tonnes of airfreight. Having these international flights continuing also means we can keep bringing Kiwis home and get critical workers into New Zealand to support our economic recovery.

Kieran McAnulty: Why is this scheme currently necessary?

Hon MICHAEL WOOD: Normally, airlines rely on a mix of passenger and airfreight revenue to make international flights viable. [Interruption]

SPEAKER: Order! The member knows—he hasn’t been a whip for a long time, but—he’s not allowed to do that.

Hon MICHAEL WOOD: Around about 80 percent of air freight tends to sit in the holds of planes underneath passengers. Unfortunately, the pandemic has almost completely eliminated revenue from international passenger services. That’s why we have agreed to provide targeted funding for international airfreight flights to make sure they can run. The Government is still reviewing New Zealand’s critical air transport requirements for the future to ensure appropriate levels of air connectivity are maintained and the Government is getting value for money. I expect to make further announcements on next steps in the coming weeks.

Urgent Debates

COVID-19—Alert Levels

SPEAKER: I have received a letter from David Seymour seeking to debate under Standing Order 399 the decision of Cabinet to raise the COVID-19 alert levels to level 3 in Auckland and to level 2 across the rest of the country for a period of three days. This is a particular case of recent occurrence for which there is ministerial responsibility. The matter is an important one that warrants the immediate attention of the House. Therefore, I call on David Seymour to move that the House takes note of a matter of urgent public importance.

DAVID SEYMOUR (Leader—ACT): I move, That the House take note of a matter of urgent public importance.

There are countries in the world that are more isolated than New Zealand. There are countries in the world that have a more spread-out and younger population than New Zealand. There are countries in the world that have a more civil society and a higher standard of living and healthcare. But there is no country on Earth that went into the COVID-19 pandemic of 2020 and now 2021—no country that entered this saga with the suite of natural advantages that New Zealand enjoys. And it’s important to start any debate on our current circumstances by acknowledging those facts.

We have had, in the run-up to this outbreak and this restriction on New Zealanders’ freedoms, a Government that has been high on self-congratulation. Even while the city of Auckland was locked down in level 3, the rest of the country operating at level 2, the Government triumphantly announced that it had just landed enough vaccine for 30,000 people. That’s enough for 0.6 percent of the team of 5 million. That is the kind of activity that we get from this Government. No matter how bad the facts are, the comms, the spin, and the self-congratulation is available in—I think the word they like to use is an abundance. The alternative was continuous improvement. And continuous improvement, adding to our great natural advantages opposing COVID-19, adding real sophistication to our defences, our technology, and our policies—that could have saved some great costs. And we need to acknowledge what those costs are to New Zealanders, particularly in my home city of Auckland, but actually every New Zealander who is integrated into the New Zealand economy.

We have people who have run their businesses through the first lockdown of last April, who were shocked and disappointed but rolled up their sleeves and got through the second lockdown of August, and they said, “We can’t take another one. We’ve used up our reserves of capital in every sense of the word. If they do it to us again, if our Valentine’s Day meals get cancelled, then this hospo business is on the ropes and potentially going broke.”—leaving jobs, and leaving sometimes lifetime dreams of people who built those companies destitute. That is the cost economically, but it’s not just that. We know people who are scheduled to have healthcare who have seen what previous lockdowns meant—for example, after the first lockdown there were 400 women in New Zealand, statistically, who did not know they had breast cancer. We could make similar arguments for prostate cancer. We can make similar arguments about people who were separated from seeing their first child born, or, worse, separated from their partner miscarrying, because lockdowns have enormous effects on human welfare other than the effects of COVID-19.

Then there’s education. I just presented awards to the International Baccalaureate scholars this weekend. What an extraordinary group of children who managed to make it through with stoicism even though they were studying right up to the last moment without knowing if their examinations would go ahead. These are the costs that New Zealanders face when there is a lockdown. But actually, the facts are it is necessary to have one if the rest of the Government’s defences are as weak as what we have at the moment.

The problem is that instead of continuous improvement, we have sat still. A sitting duck, praying for luck while the Government congratulated itself for months on end.

Hon Grant Robertson: Absolute nonsense.

DAVID SEYMOUR: And somebody who doubts that—I hear “Absolute nonsense” from Grant Robertson. Well, Grant Robertson might like to stand up and take a call and perhaps he could explain. Of the complaints that were found in the Simpson-Roche report, how many of them are actually being fixed? Because as far as anybody can tell, nothing has changed. And here’s the other problem with this Government’s response: New Zealanders don’t mind being treated like adults. You know, we can handle adversity so long as the facts are put before us and we can choose for ourselves. But what did this Government do with the Simpson-Roche report? Did it put it out and accept: we have made some mistakes and we are going to get better and we want all of you, team of 5 million, to feel like and be treated like adults so that we can actually do this better together. Is that what they did? Does anybody know? I can tell you what happened. Actually, they released the Simpson-Roche report, the damning report that said every stakeholder found it difficult to work with the Ministry of Health, that said there was confusion and inconsistent rules at the border, the report that said almost nothing was going right after the initial battle for eradication of COVID. That report was released on 18 December. It was released on a Friday afternoon before Christmas. Why? They’d had it since 28 September, and they waited almost two months till 18 December. The cynicism of dumping a critically important report about this country’s defences against COVID-19 is breathtaking. It should’ve been released.

Well, the good news is that there is a better way. This country can maintain elimination. New Zealanders can be safe from COVID-19. New Zealanders can continue to look after their economic and healthcare and educational welfare as we battle this disease if only the Government changes up the way it operates. And what the ACT Party has said is that, first of all, when someone else is doing better than you round the world, what we should do is ask why that is and what can we learn from them. And the numbers are simple. Taiwan has had 12 times fewer deaths per capita than New Zealand, despite being an island 150 kilometres off the coast of China where it all started, despite people living on top of each other—23 million people on an island about the size of the North Island—despite all that, they’ve had 12 times fewer deaths than us. And the ACT Party’s been saying since last August that New Zealand should be looking to adopt five principles from Taiwan so that we can maintain elimination, get our way of life back, and have no more lockdowns.

And the first one comes from the simple observation that how you organise is how you execute. The Ministry of Health has some fine people and a very charismatic leader, but the facts are they are a policy shop completely unable to organise the response to a pandemic. In order to respond to a pandemic, many things have to be done. Clear rules of the game have to be made, new technologies have to be evaluated and adopted, logistics have to be carried out to get personal protective equipment (PPE) to the right place at the right time—and wasn’t that a fiasco—far out, what a fiasco we had with PPE during the lockdown. The Ministry of Health is singularly unable to do that. Last August, ACT came out and said we should follow Taiwan’s example—that they learnt from fighting severe acute respiratory syndrome in 2009 by the way—and actually have an epidemic response unit that is multidisciplinary, public and private sector. Little did ACT know that only a few weeks later, the Simpson-Roche report would come out and make exactly the same recommendation. But what has happened with this Government’s organisation? Nothing. We have been a sitting duck praying for luck, unwilling or unable to improve and sophisticate our defences against this virus so that people can get on with protecting their lives, their healthcare, their education, and their livelihoods with no more lockdowns while keeping eradication.

After having an epidemic response unit, the second thing we said is the Government should be a referee, not a player in the game. This Government obsessively tries to do everything itself. It is unwilling to step back and make clear rules of the game in order that the private sector can get on with it. We saw examples of this during the first lockdown. The Government failed to even make the law so the lockdown was legal—

SPEAKER: Order! I’m just going to interrupt the member now, sort of less for the member but more to make the point that I’ll be making to members afterwards. This is a debate about a specific matter of public importance, and that was a decision that the Government’s made, and that is to be the focus of the debate, and the member is to tie his responses or his speech back into that. And it’s a signal to other members that this is not a general debate about COVID.

DAVID SEYMOUR: Well, thank you, Mr Speaker, and I’m sure you’ll appreciate that I was using examples that form a theme in this Government’s response before tying them to a more recent example.

The Government failed to make the rules correctly for the first lockdown. The separation between butchers, bakers, and greengrocers on the one hand and dairies and supermarkets on the other side never made sense, but it also never made sense to be testing some but not other people who were exposed to risk at the border, and that appears, based on the evidence we have right now, to be very much the reason that we are in our current difficulty putting those costs on to New Zealanders. So we said, we have to get the Government focused on being a good rule maker, rather than trying to do everything itself.

And the third thing we said is that those rules should be related to risk. Again, if the Government was to ask itself what risks are being taken, people working at the border—whether they’re airside or just work in a room that airside people come and go from—would’ve been an obvious example of somebody to test if the Government was making its policies proportional to risk, but they didn’t, and here we are. Once again, the Government has spent a huge amount of effort quarantining everybody—people from Western Australia and Samoa, where there’s been no COVID for months and months and months; I think WA may have had one case in the last seven months. Those people were quarantined, were in greater danger of catching it than being saved by it by being put in quarantine. And yet, because they tried to quarantine everybody, they haven’t been able to focus on the real risks, and here we are.

But we also said, number four, that we need to have a technology-driven response; the Government needs to augment its response with better technology. And haven’t we heard that over the last 48 hours, with the Government’s reluctance to use saliva testing. The Government that says it follows the science is seriously trying to conduct an experiment which could only be to see if New Zealanders’ spit is different from spit of people in other countries, because it can’t be what the Prime Minister said at question time. She tried to argue that it’s different in New Zealand because we don’t have the same concentration of COVID so saliva surveillance testing won’t work. Well, she should tell that to New South Wales or Singapore or Taiwan where they use it. It doesn’t seem to be a problem there. If we’re serious about following the science, we need to stop blindly accepting the advice in Cabinet of the Ministry of Health and actually look to the evidence, because the evidence is saliva testing around the world is just as accurate as putting things up people’s nostrils, which they don’t particularly enjoy.

The final principle that we advanced was that there should be a commitment to continuous improvement. Never rest, always look for ways to strengthen our defence so that we can do better. The fact is that it’s very difficult to see—and I hope the members can get up and explain it but I don’t think they will—what is different in New Zealand’s fundamental response or defence against COVID-19 than, say, six months ago. It’s very difficult to see what of the Simpson-Roche report has seriously been implemented that would have prevented this outbreak. It would seem that nothing has.

So I think it’s important that the House take note of this matter of urgent public importance. The costs to education, healthcare, and livelihoods of New Zealanders are severe, and they have occurred against a backdrop where the New Zealand Government had the easiest job fighting COVID-19 of any Government in the world and yet has managed to let it through, now for a third time. And we need to demand better, not to beat up on the Government or criticise them but to adopt a culture of getting better so that New Zealanders do not have to suffer from the horror of COVID or the cost of the restrictions designed to prevent it. Thank you, Mr Speaker.

Hon CHRIS HIPKINS (Minister for COVID-19 Response): On Saturday morning, early on Saturday morning, I received one of those phone calls which I dread, a phone call from the Director-General of Health to say that another COVID-19 case had been identified in the New Zealand community. These phone calls don’t come all that often to me, and it is a mark of New Zealand’s success, but in fact one case in the community would trigger a series of events that we have seen in the last sort of 48 to 72 hours. Other places around the world, they’ve lost count of the number of cases that they are dealing with on a daily basis. We are very fortunate in our team of 5 million to be in the position that we are in, and every New Zealander deserves credit for that.

Whenever a new community case comes to light, as we saw over the weekend, we do need to take stock. We need to take time to thoroughly investigate that particular case. Now, there are two parallel work streams that happen here, two parallel priorities. The first is to identify everybody that could be at risk because of that case. That is the first and foremost priority. Stamp it out, make sure it’s not spreading, so identify that person’s close contacts, make sure they are tested, make sure they are isolating. And our systems in that regard have improved exponentially. They continue to strengthen every day, and we’ve seen that in the fact that we have dealt with a number of cases where we’ve not needed to escalate alert levels. Our system is continuously improving. So that’s the first priority.

The second priority is to identify how the person could have contracted COVID-19 in the first place, and we have to do those two things in parallel. We can’t do it neatly, one after the other. The case investigation process looks at both of those things, because it’s important that we understand how the person got it, first of all, to identify what the risk associated with that is, and then, second of all, to try and make sure that a similar group of cases can’t happen again in the future.

What we’ve seen throughout our COVID-19 response is that we do have a system focused on continuous improvement, a system that is focused on learning from our experiences. What you’ll see in our system and what New Zealanders will see in our system is that where a weakness is identified, we fix that weakness and we don’t see a repeat of what we have seen in the past. That is a sign of a system that’s learning and a system that is improving.

COVID-19 and the challenge that it poses for us is unprecedented in New Zealand’s history. It’s unprecedented globally. We have had one of the most successful responses in the world. We’ve had one of the lowest number of cases per capita of COVID-19 in the world. We’ve had one of the highest rates of testing per capita in the world. We’ve had one of the lowest mortality rates from COVID-19 in the world. These are things that New Zealanders can be proud of. But the Government, contrary to what you might have just heard, has never celebrated victory in our response to COVID-19. We have always been aware that we must remain vigilant, that COVID-19 is going to be with us for some time, and that we need to continue looking for every weakness in our system and every opportunity that we have to improve what we’re doing, and that is exactly what we have continued to do.

Throughout the time that I have been involved in this, I’ve heard a lot of different suggested responses to what we should be doing—we should close the border completely, depending on who you listen to on any particular given day. Never mind the fact that that would send all of our exporters to the wall, that our health system would grind to a halt because medical supplies would stop coming into the country—

David Seymour: Who suggested that? Name one.

Hon CHRIS HIPKINS: —and the carnage that would cause—some of the epidemiologists who are quoted by the members opposite have argued exactly that—and it would do untold damage to New Zealand. Then, on the other hand, the next day we’ll get a claim from the Opposition saying we’re being too restrictive, we’re not moving fast enough to open up to the rest of the world, we’re not moving fast enough on the trans-Tasman bubble, and why weren’t we opening up to China more quickly. It wasn’t that long ago that they were arguing that.

Our Government has taken a very precautionary approach to our COVID-19 response and we will continue to do that. We do want to see our economy continue to move. Our economy is doing better than most around the world and it is our response to COVID-19 that has allowed us to have those economic conditions. And again, all New Zealanders can be proud of that.

When we do see a positive case in our community with a link to the border, I hear the word or the phrase “a failure at the border”. I want to just take a moment to reflect on what that means for the people who get out of bed every day and go to work at our border to keep New Zealand safe. I’m talking about the people who greet people when they come off the planes and do their health assessment as they come off the plane. I’m talking about the people who work in our managed isolation facilities, who provide care for those people, who have done nothing wrong. The only thing that they have done is want to come home to New Zealand. They’ve done nothing wrong. They’re not criminals. They’re not in our managed isolation facilities for punishment. They are there because they’re playing their part as members of the team of 5 million and keeping the rest of the country safe.

When I hear the language of “failure at the border”, that is a direct attack on the people who are working at the border to keep New Zealand safe. One of our challenges we’ve got at the border is increasingly people don’t want to work there. One of the biggest areas of risk we’ve got at the border is that people are giving up working at the border, and that is actually a risk to public health. [Interruption] And the ongoing attacks on them, not just from the members opposite, but from some epidemiologists who should know better, is actually increasing the risk to New Zealand’s public health.

The people who work at our border are our national heroes. They deserve nothing but our thanks for the sacrifice that they are making for New Zealand. As I mentioned in question time today, those people working on Air New Zealand flights, who are vital—who are vital—to keeping our country moving, they make sure that our medical supplies get to New Zealand. They make sure that our exports are reaching the rest of the world. They make sure that New Zealanders who need to return home can return home. Some of them are being tested so often they’re being tested more than once a day. They’re being tested more than once a day because they may be tested before they leave and they may be tested when they arrive at the next place and they may be tested before they leave that place as well. Again, I want to take my hat off and say thank you to them for the sacrifice that they are making to keep all New Zealanders safe.

To come back to the issue at hand, the cases that we are investigating at the moment, it is too soon to jump to conclusions about what has happened here, too soon to be drawing conclusions about where there may be weakness in the system. We do not know that it might have come from the laundry. That is a possibility. It’s one of those things that’s being investigated. A lot of people, a lot of experts, will say that’s highly unlikely. But the reality is every potential scenario we’re looking at with regard to these three cases falls into the highly unlikely category. So we can do everything we can to keep New Zealanders safe. We can try very hard to eliminate all risk. There is no such thing as eliminating every risk of COVID-19. It’s a tricky virus. It finds a way and we have seen that repeatedly, but we have done very well in New Zealand. Our success is obvious, but it is not over and it won’t be over for some time. We’re gearing up to roll out vaccines. That’s going to take some time. And as we roll out the vaccines, the risk will still be with us and we still need to be willing to respond when we need to.

What we’ve seen from New Zealanders in the last 48 hours, again, is that New Zealanders are willing to play their part in the team of 5 million, and I thank New Zealanders. I want to thank those small businesses who have been affected by the decision that we as a Government have had to take to move Auckland back to alert level 3 and the rest of the country back to alert level 2. I want to acknowledge that that is creating hardship for some people and for some businesses. And I want to acknowledge that we are also doing as much as we can as a Government to support New Zealanders through the challenges that COVID-19 has created.

What you’ll see in our response is a system where we are constantly improving. We’re constantly looking to eliminate risk—reduce risk, I should say. I can’t say eliminate risk; there is no such thing as eliminating risk when it comes to COVID-19, but reduce risk as much as possible. And you see that in the fact that our system is always changing. We are always doing new things. You see that in day zero, day one testing. People are being tested as soon as they arrive, despite the fact that when we set it up, the day three and day 12 tests were regarded as the gold standard. We’ve improved that further by introducing the day one, day zero test.

We’ve also introduced pre-departure testing, something that wasn’t feasible when it was first mooted but is now feasible, and it’s been added to our overall response. We do regular audits of our infection prevention and control in our managed isolation facilities at our border to identify where there may be further risk and make sure we’re taking additional measures to minimise that risk as much as possible. You see that in the changes to personal protective equipment requirements, the use of N95 masks instead of surgical masks for those who are coming into contact with people who have come across the border. All of those things are continuing to improve. You see that in saliva testing. Saliva testing—it is not, as David Seymour suggested, that we are reluctant to do it; it is that we want to make sure when we do it that the science is right and that we’re going to get valid test results from that, and that is what we are continuing to do.

As I’ve indicated, we have developed our systems to the point where we’re able to respond to cases without alert level escalation, but we can never eliminate the possibility that something that’s highly unlikely can happen. That has happened with the cold store cases that we dealt with in August last year, and it has happened in these cases here. There is no likely known identified source of transmission at this point, so we continue to investigate to see if we can identify what that was. Bearing in mind that in the August case, we were not able to identify conclusively how COVID-19 made it to that cold store, which then caused the restrictions that we had, and we may not be able to find to the point of any kind of certainty what has happened here. But what we can do at this point, and why we need the lockdown, is we’ve got to eliminate the risk of it having been out there spreading in the community. That is what widespread testing is all about. That is what these restrictions are all about. We have done this before. The team of 5 million has risen to the challenge before and it is doing so again. There are no easy options here. If there were, we would have done them by now. We are always looking for how we can improve our response. We make changes where they are sensible to do so, where the science and the evidence backs them up.

CHRIS BISHOP (National): Thank you very much, Mr Speaker. I want to make two prefatory points in my contribution before I move to the specific case we’re talking about. The first is that I want to acknowledge that the Government has done a good job generally in responding to COVID-19, and we should be proud of that as a country. To use the language of the Prime Minister, the team of 5 million has done a good job and we need to acknowledge that. But we can do better, and it is not sacrilegious or treasonous to point that out. In fact, it is in the public interest to try and seek a better response from Government. That’s the reason we have a democracy and that’s the reason we live in a society governed by the rule of law.

The second point I want to make is that the Government’s response to the most recent community case in Auckland that we found out about on the weekend—and the Minister opened his remarks by talking about getting a call from Dr Bloomfield on Saturday. I think he meant Sunday. I—

Hon Chris Hipkins: I did mean Sunday.

CHRIS BISHOP: Good, he’s clarified that. There was some alarm over on this side of the bench, so it’s good that the Minister has clarified he meant Sunday.

The Government’s response to that, we think, was the right decision. With a real absence of information, and acknowledging that Governments and officials are always dealing with imperfect information when it comes to these situations, the decision to adopt a cautionary approach—or I think some people have called it a precautionary approach—is the right thing to do, because unlike the case of the Northland example, where the person who had left managed isolation and quarantine (MIQ) had not spread COVID, in this situation the person at the centre of it, or the person we think is at the centre of it—the laundry worker at LSG Sky Chefs, if, indeed, she is case zero—had infected the husband and her daughter. So in those situations, we have a spreader and some travel that the person had undertaken, and, of course, as it transpires, a more transmissible variant of COVID. So we think it was the right thing to do.

We will continue, in the Opposition, to ask questions about the Government’s broader response to COVID, and the reason we will continue to do that is because we have an obligation to New Zealanders to ask the tough questions, alongside the media, about the response of the Government. The consequence for New Zealanders of Government failure or Government omission or Government lack of oversight is very real, and we have an obligation to try and improve public policy in New Zealand. So it’s not about being political and it’s not about necessarily going after the Government for the sake of it; it’s actually about trying to improve things for all New Zealanders. A good response does not mean it cannot be better and a response that is good does not mean it cannot be great, and that’s ultimately what we are interested in on this side of the House.

I want to echo the remarks of the Minister in saying thank you to all of our hard-working staff at the border and in MIQ, and all of the nurses out there, some of whom are working around the clock—as we discovered a couple of weeks ago—to do all the polymerase chain reaction testing in our MIQ facilities and out in their community. I do want to echo the words of the Minister and say thank you sincerely on behalf of New Zealand for all of that hard work. They are literally at the front line, doing the heavy lifting on behalf of New Zealanders to make sure we stay COVID-free.

I do want to talk about the most recent outbreak in the context of our border incidents more generally. It was very interesting to hear the Minister talk about “public health experts who should know better”. Wasn’t that an interesting phrase, because one of the things the Government has been very keen to do has been to rely on public health experts, and we now have a member of the House—Dr Verrall—who was one of the experts relied on by the Government in the initial months. She provided expert testimony to the Epidemic Response Committee in a very good report, which has been—well, at least the Government says it has been implemented fully, which is the Verrall report, as it’s become known. It was very interesting, I thought, to hear the Minister then get very worked up, actually, about public health experts who should know better, and I wonder if he will have cause to reflect on that remark. I suspect the reason he is worked up about it is because for the first time in a while, public health experts are saying things the Government should be doing that they are not doing, and they are pointing out things that are uncomfortable for the Government.

To give you an example, the paper by Dr Grout and Professors Baker and Wilson published four days ago on the Otago University website to do with border control failures is not a particularly great read for Government Ministers, because the professors there outline that since we have implemented the MIQ facilities, we’ve had 10 border control failures—they say nine in MIQ and one at the port—and five what they call MIQ facility failures. The Minister likes to—well, he doesn’t like to, but the Minister disputes the language, but there have been incidents at the border out of MIQ, and they make a series of suggestions for how the border can be improved. In fact, there’s 12 of them in the paper, and one of the things that we want to be doing on this side of the House over the coming weeks and months is just exploring in a very methodical and comprehensive way what things the Government will be advancing and adopting and what things they won’t be, and we want to know the reasons for that.

One of the things they recommend is mandatory daily saliva testing, for example. This is not something that the National Party’s just invented as an idea; this is something that public health experts Professors Baker and Wilson and Sir David Skegg have said for quite some time now. Again, it’s not a new thing; this is something they’ve been saying for months now. In fact, it’s in the Brian Roche - Heather Simpson report, which the Government got in September—it was finally released in December, but they got it in September. They said it should be introduced as soon as possible—ASAP—and it’s something that happens in New South Wales and in lots of other countries. We think, on this side of the House, it makes sense to do it. The argument’s pretty simple, which is that it’s less invasive, because you’re not shoving a thing up your nose, and it’s quicker and it would mean that you could scale up very quickly and do much more testing than you’re currently doing. At the moment, in the case of the most recent case, these workers are subject to fortnightly testing. If you could do daily testing, that would mean better identification of risk at the border and better identification of cases.

Now, the Government says that the testing’s not as accurate—well, that’s disputed, for starters. Actually, there is evidence that the tests are just as accurate as the pharyngeal swabs. But even if it’s the case—in fact, the Prime Minister admitted this this afternoon in question time—that they’re not as accurate, by the repetition of the tests and by virtue of the fact that you are doing it daily, of course you can be more accurate and pick things up more quickly. So we want to see saliva testing, and we’re going to continue to push home that point.

Let’s talk about this most recent case. There are, I think, real questions as to why laundry workers, in particular, are not included in the public health order, and it’s good to hear that the Government is looking at that. It doesn’t make a lot of sense, we think, to have baggage handlers included in the public health order so that they have to do the fortnightly tests, but not to have laundry workers who come into contact with napkins, cutlery, and blankets that have been used on flights. The Government’s argument is that there is a distinction between airside workers and non-airside workers, and I’m not sure that really holds, because baggage handlers—yes, they work airside, but they do not come into contact with passengers. People who work in laundries, who may not be airside, but who work in and around the airport—if they are dealing with things like blankets and napkins, clearly, they come into contact with passengers, albeit indirectly. So there is a real question there around the risk calculus that the Government has concluded around the breadth of the public health order and the testing. We want to dig into that, and it’s good to hear that the Government is looking at that point.

So, to summarise, the Government has done a good job and they should be congratulated, but that does not mean they can’t be better. Our job in Opposition is to make them better, and we’re going to continue to push home on things like saliva testing and ask more questions about this most recent case. We owe it to this Parliament but, most importantly, we owe it to New Zealanders to ask the tough questions to make this Government response better. Thank you.

Hon JULIE ANNE GENTER (Green): Tēnā koe, Mr Speaker, tēnā koutou e te Whare. Really excellent speech from Chris Bishop, I really agreed—particularly in the beginning of the speech—with his recognition that New Zealand’s Government had done an exceptionally good job in responding to COVID-19, and acknowledging that is the role of everyone in Parliament, and the media: to raise questions in a reasonable way to ensure that we have the best possible response. The Green Party agrees with, and supports, the Labour Government’s decision to move into level 3 in Auckland and level 2 for the rest of the country on Sunday, following the news that there were new community cases. So with respect to this very specific issue that’s come up in Auckland, we agree with what the Government has done. I think that they have been very responsive on many issues, and, actually, on the issue of saliva testing—I think we’re all in agreement that we should be responding to and using whatever the science says is going to be the most effective to enable identification of COVID-19 early and cost-effectively.

Listening to the Prime Minister’s answers in question time, I was absolutely convinced that she is on top of the detail, to an incredible degree, and I have absolute confidence in her, and in our senior public health officials, that they will move as quickly as possible to adopt any new technology or approaches that are going to help us. And so I don’t doubt that saliva testing will be a thing, if it is the right thing to do. I was quite surprised at the vehemence of David Seymour’s speech criticising the Government. It’s a bit surprising to hear that, especially when I would say, by any objective measure, New Zealand is amongst the top four countries in terms of effectiveness and COVID-19 response. The Lowy Institute, based in Australia, recently put out a report at the end of January: out of 100 countries, New Zealand was ranked number one for COVID-19 response. Of course, that report also acknowledged that no country was perfect and that the top countries, including Taiwan, Vietnam, Thailand, Cyprus, and New Zealand, all had different approaches; no single approach was best, or that much better, than the others.

Everybody is in a new situation and dealing with it to the best of their ability. And, like other members before me, I will just right now thank and congratulate all of those front-line workers at the border, those essential workers who got us through lockdowns, and all the different public servants who’ve been involved in trying to bring together an emergency response, which has been unprecedented in the time, certainly, that I’ve been in Parliament. And really, I can’t think of another example in my life of a country having to come to grips with something so quickly.

I guess the thing that confuses me most about some of the criticism, even accepting that Opposition members have to raise questions, is a little bit the tone of indignance that comes, sometimes, from members in Opposition, but in particularly Mr Seymour’s speech—in part because ACT and National, I think, in some ways, might be struggling philosophically with how they respond to an issue like COVID-19. Because if your party’s political philosophy is really against the idea of Government and wants to reduce taxes, particularly for the wealthy; push up the private sector; reduce Government; slash the public service—it’s funny how Opposition members are groaning as I say this, but, I mean, the last National Government came in with an explicit goal of reducing the size of the Public Service, and put a cap on the number of public servants, slashed the size of the Ministry of Health, against advice from Treasury and the Productivity Commission, that, in fact, it’s worthwhile—

Chris Bishop: I raise a point of order, Mr Speaker. Look, I don’t want to interrupt the member, but the focus of the debate is on the most recent border outbreak—the most recent community case in Auckland, and the Government response to it. We’re straying well away from that by getting into the political philosophy of the National Party.

DEPUTY SPEAKER: Yeah—

Hon JULIE ANNE GENTER: Speaking to the point of order, Mr Speaker, I think that in order to respond to the speeches that came before mine, I guess these points are relevant. In fact, our ability to respond to COVID-19 is directly related to our previous investments in the Public Service.

DEPUTY SPEAKER: This is a fairly narrow debate. I’m taking on board what Chris Bishop has said, but I’m sitting here listening where you are almost five minutes into a 10-minute speech. I would expect, in at least the next five minutes, you’ll take those points that you’ve made and make them relevant to the motion on the table.

Hon JULIE ANNE GENTER: Thank you. It’s just difficult to take seriously David Seymour’s, criticism of the Ministry of Health when he was part of a National-Act Government that actually oversaw a huge reduction in the number of public servants, the disestablishment of the Public Health Commission, absolute just slashing of any investment in public health in order to be able to fund tax cuts for the wealthy.

Hon Gerry Brownlee: I raise a point of order, Mr Speaker. Mr Speaker, you have invited the member to come back to the point of the bill. Going back four years, five years in time, and then ignoring the three years that she was a Minister inside a Government that did absolutely nothing to prepare New Zealand for the epidemic or the pandemic that we are now facing suggests to me that you might be a little more harsh on her coming back to the point.

DEPUTY SPEAKER: No, no, no. Come to the point of the debate on the motion, please.

Hon JULIE ANNE GENTER: An epidemic like COVID-19 perfectly demonstrates why we have Government, why we need investment in the Public Service. It was incredibly difficult in a short period of time to have the capacity to respond to this when there hadn’t been investment over those nine years. And because of these two parties, constant campaigns against any bill, any approach to make the tax system fair and raise the revenue we need for public services and infrastructure, it’s just difficult to take it seriously. On the one hand, they’re complaining the Ministry of Health isn’t good enough, or the border isn’t good enough; on the other hand, they’re arguing that the private sector should be brought in to sort it out. I can say that, in the United States, where my parents live, the private sector was brought in for personal protective equipment and it was an absolute disaster. So, yeah, I know that members on the right will be struggling for relevance in the world now, particularly as climate change becomes a bigger issue, but our ability to respond to COVID-19 together requires a recognition that we are not just individuals out there in competition with one another. We are a team of 5 million working together, and in doing so we have been incredibly effective.

It’s more than just the response to the illness; it is the response to the economic shock when there has to be a lockdown. The lockdowns have been incredibly effective. Our very, very strict approach to lockdowns is the reason we have spent so much time completely free to live our lives normally in 2020 and the beginning of 2021. There aren’t many countries in the world where we would be able to understand if there is fomite transmission, so that brings me to this particular case. Again, like the previous case, where in every other country, including Vietnam and Taiwan, that have done a good job, there have been resurgences and domestic outbreaks—most recently in Taiwan—and we would be one of the few countries, alongside Taiwan and Vietnam, who would even be aware if there is the possibility of fomite transmission. Because, in any other country, the spread of COVID-19 is so broad that people are not even tracing the origins of any given case anymore. So it will be interesting, and I am watching with interest to see what the origins of this particular case were.

But I have to say, above all, I do have every confidence that this Government is doing the best that they can with the limitations that were in place, given how particularly run down our public health teams and capability were. There’s no question that the damning reports—that this Government’s been very open about, about our lack of capacity—goes right back to that last National Government, which Act was a part of, their ideological desire to slash the Public Service. And I think that New Zealanders are recognising it, and it was very clear in the election result who they have confidence in.

Hon GRANT ROBERTSON (Minister of Finance): Can I begin my contribution by echoing comments made by a number of other members and thank those who work both at our border, keeping New Zealanders safe, but also the bevy of officials who spring into action when we do have an outbreak or a resurgence like this. As I came into work on Sunday I noticed that Mr Bishop was at the gym, which is excellent for him. That had been my plan, obviously, but upon coming in here on Sunday, I saw the faces of the people that I have seen a few times over the last year or so in here, in their weekend, making sure that we had all of the plans in place to be able to lift the alert levels, as we did on Sunday evening. Those people are working extraordinary hours. They are genuine servants of the New Zealand public, and I want to lay on the record today my admiration for them and the fact that they have kept this up and kept up their role as part of New Zealand’s ability to limit the impact of COVID in such an extraordinary way, alongside the terrific border workforce that we have.

The decision to lift our alert levels on Sunday evening was taken in accordance with the plans that we developed over the course of the last year. The situation distinguishes itself from a couple of cases that we had towards the end of last year, and I think in the context of the member’s motion for an urgent debate, it’s important to explore that a little, because I think it helps explain exactly why we did do what we did. When we think about the cases that we saw last year, all of them we were quickly able to identify at least the location of the source—that being a managed isolation and quarantine facility or, in the case of the Defence Force worker, a particular event. That allowed us to have a great deal of confidence about the fact that our very robust systems of testing and contact tracing could manage the situation.

When we came to the decision that we faced on Sunday, we faced a very high level of uncertainty, and the advice that we were receiving from the public health experts in those meetings and in those discussions was that because we had a high level of uncertainty and we were dealing with and working in a world with the so-called UK and South African variants, it also heightened the level of uncertainty and the level of risk because those variants are more transmissible. And so, in the face of that, the responsible action, the action that New Zealanders would expect of us, was to lift the alert levels in the way that we did.

These are not decisions taken lightly. We debate them. We look at the public health advice that we are getting. We weigh it against the consequences of, for example, asking people in Auckland to stay home, asking businesses not to operate, restricting the operations of businesses in other parts of New Zealand by moving to level 2 for those. We have developed a great deal of knowledge of this over the last period of time. For example, the question of balancing the economic consequences with putting in place these kinds of restrictions and the health benefits of that, and the economic benefits of that, is something we come to learn. We stand by the view that the very best economic response to COVID-19 is a strong public health response, and that has been borne out in the results for New Zealand. In the September quarter we actually had higher rates of economic activity than we did before COVID and the Bank of New Zealand’s economists tell us that there were only three other economies in the world who could claim that—China, Taiwan, and Ireland. So we are right there in terms of our economic response because our public health response is strong. And the short-term pain that is felt in alert level increases such as those that we’re going through at the moment is well and truly eclipsed by the economic benefits that we have, by the fact that we have had a long period of time through our summer where New Zealanders have not only had the opportunity to enjoy summer but we have seen strong economic activity across a range of sectors, from construction through to retail. We know that the best economic response is the kind of swift and decisive public health response we saw on Sunday.

When we take these decisions, that is what we bear in mind. I did note that in the speech of the mover of the motion, he did try to make those comparisons as to whether or not we could do better. Of course, as Mr Bishop has said, we must continuously improve our response. This is not something that countries and the world have had a lot of experience with. Yes, severe acute respiratory syndrome gave some good lessons for people, but mainly the world has had to work on this as we go. We’ve said before, there is no playbook. So of course we will make improvements as we go. But I do think it’s worth dwelling just for a moment, in response to the mover’s words, to say that on most indices New Zealand is there in the top three or four countries. If I may just take two, briefly. The Bloomberg index, which looks at mainly the health response, from testing and so on through to cases and fatalities and access to vaccines and so on, New Zealand is number one. [Interruption] The Bloomberg index. It could be renamed that, Mr Bishop. And there’s the Lowy Institute’s work, which is actually fascinating for those who want to spend some time analysing it. It not only looks at the health responses; it also looks at the economic responses, and then weights them by region—this being one of Mr Seymour’s common criticisms about the fact that we were in the fortunate position of being at the tail end of the first cases for a country to get. So there’s weightings within that—and guess what? In that one, New Zealand rates at number one, ahead of Vietnam and Taiwan. And, actually, while we’re on Taiwan, it’s a country that’s done a remarkable job, an economy that’s done a remarkable job, of its response. They have had outbreaks through December and January and into February, so every economy in the world, every country in the world, has to respond to the fact that this virus is a tricky virus and one where there will be outbreaks. So, yes, of course we can always do better, and we must always do better. But as a country we can be extremely proud of the way in which we have dealt with this, and that is recognised around the world.

Returning briefly to a couple of points made in the debate about the specific set of circumstances, the problem we have at the moment is identifying what is case zero. Mr Bishop alluded to this. So, yes, there is somebody who works in a laundry that launders material that comes off flights. People such as myself will go, “Well, there you go.” We will hear from Dr Verrall later in the debate, and I’m sure she will be able to work through some of the concerns and issues that people have raised about things like fomite transmission. While that remains a possibility and an investigating point for us, we do have to accept that it is people-to-people contact that is the primary way in which this is transmitted, and that, Mr Bishop, is why there is such a focus in the advice we have had on air-side. Because even if a person is a baggage handler, they are in the air-side, they are in the space in which there are people who are coming in and transiting and so forth through the country. That is not to dismiss the question of fomite transmission, and we’ve spent a lot of time talking about it and it is being investigated. But I just make the point that the public health advice remains that it is people-to-people transmission that is the most likely and the most risky situation. Hence why those rules have been made the way they are. But as part of our continuous improvement process, we’re now looking at whether or not a facility such as a laundry does need to be looked at. So we constantly look to evolve what we’re doing.

The decision to lift alert levels that was taken on Sunday was a precautionary position—absolutely. We’ve had a great couple of days in terms of the fact we don’t have any more community cases so far. We have had a huge number of tests that are being processed right now as we speak, and as we move into tomorrow we’ll be able to use that information to be able to decide whether or not we can come down from the alert levels we are in. But we are doing that out of an abundance of caution and in the spirit of, and in line with, how we have dealt with this in the past year and the plans that we have. It is vitally important that New Zealanders have confidence that we will stick to our plan. It is very easy to change your mind constantly about whether you want the borders open or whether you want the borders closed and whether or not New Zealanders have done enough. We will keep working on it. We will keep improving it, but we will also stick to our plan, and in sticking to our plan we have taken a precautionary approach here. I thank New Zealanders for their fortitude. I thank New Zealanders for going along with the alert level framework. We will stick with them and will make sure that New Zealanders stay safe from COVID-19.

DEPUTY SPEAKER: This is a split call. I call Dr Shane Reti—five minutes.

Dr SHANE RETI (Deputy Leader—National): Thank you, Mr Speaker. It’s a pleasure to speak to this debate today and to add to the dialogue. I too want to thank our workforce who are helping us with this, right from border to the laboratory. I guess I want to continue that theme of how we can do better. Are we an efficient learning community, so that with each outbreak we do better? I want to talk to two aspects that will help us address that.

First of all, I want to talk in this recent outbreak around the roadblocks at the Northland boundary. So what we know is that on midnight Sunday, the roadblock at the Northland boundary for this, the Auckland outbreak, was at Mangawhai and at the bottom of the Brynderwyns, just before the Maungatūroto turn-off. This was perplexing to many people who found out later on Monday that that’s where the purported Auckland boundary was going to be, albeit at least 20 kilometres north of where previous boundaries had been and where the Auckland region actually finishes. But at midnight Sunday, that’s where the boundary was. It seemed like they understood that this was an error at 6 p.m. on the Monday, through a full business day, and the roadblocks were taken back to Te Hana. But the consequences of that full day of a roadblock fundamentally in the wrong place are quite substantial. Two significant communities affected are Mangawhai and Kaiwaka. There are significant schools—Otamatea High School—around Kaiwaka, who had a surprise on Monday morning. I understand 90 percent of Mangawhai businesses were closed.

So if I come back and put this into a learning framework, what did we expect to happen with an alert level, what actually happened, and what will we do differently? Well, what we expected to happen when we went into alert level 3 was what happened with every other alert level 3—that is, the boundary was at Te Hana. That makes sense. We understand that. People on either side of the boundary could prepare. That’s what we expected to happen. What actually happened was the boundary was pushed 20 kilometres further north to the bottom of the Brynderwyns.

So what did we then learn from this? Well, we need to be much more efficient in collaborating and determining in advance what the roadblock boundaries will be for each alert level. There’s no epiphany to this. What’s especially disappointing was that Kaipara mayor Jason Smith is telling us that as part of the Northland Mayoral Forum, they wrote to central government last year saying, “If we go into alert levels, let’s be very clear with our boundaries. Let’s make sure that everyone knows what’s happening so there’s no confusion.”, and yet, clearly there was. So a learning environment here and we didn’t learn from it. What is the request? The request is that the boundary at alert level 3 and 4 be Te Hana. Done. It’s a really simple piece of policy.

I think the second thing I want to emphasise is around saliva testing. Remember, we called for this in the Northland outbreak two weeks ago. Here we are discussing it today. Clearly it works. I’ve got no question with that. Arguably, the sensitivity may be less: some of the enzymes in the mouth can degrade the virus; you get less viral load in saliva. It’s actually quite tricky in the laboratory as well, and it doesn’t do well with dilution. There’s other issues actually getting it as well: you’re not allowed to eat, chew, or smoke, for 30 minutes beforehand. So yes, I understand all of that, but what I heard from across the House today was that it’s an infrastructure problem. Yes, we can’t pool samples—I get that—but this is, sort of, news to us, where we’re relatively happy to throw money around, and suddenly we’re hearing an infrastructure hurdle which we hadn’t heard before.

I think that really needs to be looked at, because we’re making the case here that it works and that we knew back in September, in fact, that it was going to be effective. I’m reading here from Official Information Act documents: “Saliva testing can be used for screening in certain populations, such as border workers who require regular testing.” So the question of daily-ness—if you want to call it that—wouldn’t seem to be in question. Also—and I raised it with the Minister—testing saliva is approximately as sensitive as and less invasive than nasopharyngeal swabs. I understand there’s some conjecture around that, and other medical experts will offer a view into that. But what we were told on 10 August is “Saliva testing as a routine option for surveillance testing is well over a month away.” OK, then maybe in October—that was in August. Let’s go a month away: “No, it’s still coming in September.”, and in October we were hearing it may be at least two months away. It just seemed to get away on us. Now, I understand part of that, because on around about 10 August was around about the Americold coronavirus case, so I understand a little bit how that stretched out, but not why we’re so late.

My final point is I just want to take a statement, if you like, around what Minister Robertson was saying around not being distracted by fomites. What I’m observing is the hat that suits is the hat that’s worn. Let’s remember the proposition is that for the Americold case, the fomite was the lift button. That’s the explanation, and yet here we are being told today, “Well, we don’t know if it’s the laundry worker. Fomites aren’t quite what they’re made out to be.” It seems to me that you wear the right hat when you want to.

Anyway, I come back to the main point of this dialogue: one good discussion around roadblock boundaries, have that set for if—heaven forbid—we get another outbreak, and let’s move saliva testing. Thank you.

DEBBIE NGAREWA-PACKER (Co-Leader—Te Paati Māori): Tēnā koe, Mr Speaker. Kia ora. First of all, Te Paati Māori would like to commend the Government for the work that they’ve done in our COVID response. We went fast, we went hard, and certainly we see in Aotearoa that it’s in a better position than a lot of other countries.

We decided as Te Paati Māori to not attend Waitangi Day, actually, to protect our community. We could see that it’s important for those in our takiwā, those in our rohe, to understand and to see that they are not an option for Auckland holidaymakers. So we’ve been really mindful, through the levels, of our vulnerabilities, of our Māori health inequities, and the fact that we are 10 to 15 years, often, out of health issues in comparison with our Pākehā whānau.

We’ve experienced also the devastation of past epidemics, so when it comes to levels, we are unapologetically conservative, protecting our w’akapapa. And, yes, the team of 5 million has worked very well; we also would like to remind that the team of tangata w’enua have worked shoulder to shoulder. We’ve worked within Whānau Ora, our iwi, our hapū, our iwi checkpoints, food, testing—it’s what we do as Te Tiriti partners to manaaki and protect all within our w’enua. So we commend the levels.

However, there’s been confusion with the levels, in particular this last one. We think and we see level 3 because we have a UK strain that’s come through Auckland. We can understand the rest of the decision for Aotearoa to be in level 2. We don’t understand why there’s level 2 in Taranaki when we have the UK strain that has been visiting our district. I guess one of the things that we can see—and today we’ve seen also comments from Ngāti Rangi, their concern as a small town, and that it actually wants to emphasise that if we have those who have carried community risks and COVID strains into our towns, then we deserve and should be locked down and treated with the same levels of respect. So we do raise some concerns of the inconsistency.

We also are concerned with the way that the levels have been relayed this particular time around in how the Ministry of Health has created its dispatching. So we’ve seen and read in letters from the Ministry of Health that there’ll be a million masks distributed to Tāmaki-makau-rau and to Taranaki, yet when we speak to every Māori health provider, they haven’t heard anything. When we speak to our largest Māori health provider, Whānau Ora, that has six Māori primary health organisations, they haven’t been contacted as well. So we do want to remind that during these levels, tangata w’enua were extremely proactive and, in fact, led the charge, in amongst the team of 5 million, to protect our nation.

We also implore that during these levels we remain calm and we give a really good sense of leadership. But one of the things we do have to ask is if we have one part of our nation in level 3 and another part where the same strain has visited, what happens if this transmission is found in Taranaki? What is it that we’re doing when we have parts of our nation in level 2?

So I think from Te Paati Māori’s perspective, our role is obviously to bring to light tangata w’enua issues, who, as levels—we’ve often said amongst ourselves, amongst our whānau on the ground, “Live or think level 3, and then we get to be able to stay in level 2.” So we’ve always been, as I emphasise, particularly conservative about our levels. We’ve seen the determination of tangata w’enua towards the success of what this nation has achieved. We saw us amending our tangihanga. We saw us step up in COVID responses. And largely we make up the front-row workers who continue, day to day, to do the amazing job that they’re doing to protect our nation.

So it’s a concern, as we talk about, as we move into the newest part of how we’re asserting our levels in Aotearoa. We implore that we have consistency. We implore that if we’re going to have community transmissions down from one part of the motu into another, we actually apply the same levels. We also want to make sure, as tangata w’enua, that we’re considered and are part of the consistent response and we’re included and factored when levels are being made.

Times are unprecedented for us as a nation but they’re not unprecedented for us as tangata w’enua, who need and have to make sure that the health response factors in our inequities and it factors in the needs that we have. So we do actually ask that we continue to do a review and that the levels are continuously adjusted to consider us as whānau and, most importantly, to consider us as your tangata w’enua. Kia ora rā.

DEPUTY SPEAKER: I call the Hon Aupito William Sio—five minutes.

Hon AUPITO WILLIAM SIO (Minister for Pacific Peoples): Mr Speaker, thank you for the opportunity to rise and to confirm my support for the Government’s decision on Sunday to move Auckland to alert level 3 and the rest of New Zealand to alert level 2. Like—I think it may have been following my senior colleague—Mr Chris Hipkins, I was in Dunedin with the Pacific community, celebrating the inaugural Moana Nui Festival, when I received a call from the secretary of Pacific Peoples alerting me to the cases in Auckland, I was with the EFKS Church in Dunedin, Mr Woodhouse, with colleague Ingrid Leary.

I didn’t eat lunch, probably, that day. It was because of the alertness, because it was Auckland—my home town—there was a sense of worry. And so I made contact with staff and, too, received briefings from the Pacific team of the Ministry of Health; made contact with our Prime Minister; and, when she’d made the announcement at Sunday at 7 p.m., I was able to convey the same messages, using the Samoan language, across the country on a Pacific Media Network Samoan programme.

That was important because we needed to convey confidence to the community, because there was a certain amount of uncertainty around this. But I want to say, with the greatest respect to this House, that the fact that we were able to pick up these cases and the fact that we were able to move quickly with the support and significant advice from our officials meant that, to a large extent, our system is robust enough to be able to keep us safe. But I do agree with Mr Bishop that it is important for this House to continue questioning the Government’s response, and to be looking collectively at ways of improving that response. In many ways, we forget that the world is experiencing a crisis on this COVID-19, that the Pacific region is experiencing a crisis, and we forget that we’ve got a crisis because we’re able to move with a certain degree of confidence throughout this country.

So I note that today there were six questions, all to the Minister for COVID-19 Response. I believe he’s responded to each and every one of those questions in full, but I also want to say to my Opposition colleagues: there is a certain degree of care—a duty of care—that we have to take on board, because this is about protecting lives. And what’s motivated this Government is the recognition that we have certain people—cohort populations, particularly our managed quarantine staff, who work day in, day out to protect this nation, but then we also have to recognise that we have significant cohorts of vulnerable communities with comorbidities. This is not—I know the New Zealand Herald once asked me, “What was the ethnicity of this family?” And I said, “It’s not about ethnicities; it’s about our common enemy, the virus.” And we have to recognise that whilst this emanated from South Auckland, these individuals have family connections not only throughout Auckland but across other parts of New Zealand.

I’m sad that today the Ministry of Health has confirmed that we’ve recorded a sad death of a COVID-19 patient at the North Shore Hospital—it is COVID-19 related. And so I’m just saying we’ve just got to be mindful in how we question, absolutely, the freedom of the Opposition to how they frame those questions.

When I listen to Mr Seymour’s debate, I often think—somebody said to me some time ago, “If it wasn’t Labour that was in Government, imagine the numbers of deaths and infections if it was somebody who advocated for the freedom of movement and the opening of borders.”, as he has done so. I have said often to the Pacific communities, there is a fundamental principle by which I’ve asked the Pacific communities to operate under, and that is based on the saying: “E se‘e fua Ulufanuasese‘e ma le loto tetele, ae se‘e ma le fa‘aeteete.”—in essence: “While we might surf the ocean waters with a great deal of confidence, we always have to be mindful of the demons of the ocean or the sharks.” And so, thank you for that.

Hon MICHAEL WOODHOUSE (National): I was particularly interested in the comments of the Minister for COVID-19 Response early in his speech, where he quite rightly said that we have done very well, but then he followed it up with something like, “The success is not obvious”. I’m not quite sure what he was referring to, because I think the success, at least in elimination, over time is obvious, and we have been doing very well. But if the only goal is COVID-19 elimination at any cost, and the only measure of the success of that goal is how much money we spend and how many deaths and serious harm we save, then that might be the case. But what is actually not obvious are the other costs, the non-financial costs, every time we raise alert levels. We saw this last year, particularly in the Epidemic Response Committee, heard compelling testimony from people who were not able to farewell a loved one who passed, or to celebrate a wedding, or to be there with the mother in her labour and delivery, and they were heartbreaking stories, and we’re back at them. We’re back at that level where, at least in Auckland, significant costs are being incurred. There are other financial costs that don’t fall on the Crown, of course. We might be saving lives but tens of thousands of livelihoods are at risk and will be lost as a consequence of further rises in alert level, such as the one we have this week.

And then, of course, there’s the non-COVID health effects, the mental health strain as a consequence of all of those things that are going on. The non-COVID health effects, what Dr Chris Jackson said last year were the non-COVID cancer casualties that were estimated in the last lockdown at potentially 400 premature deaths due to delays in screening and in treatment. We have to bear in mind those costs also, and we have to expect from the Government that if they are to pursue an elimination strategy—something that not every country is doing—then they better damn well get it right every day, every way. I make no apologies for the fact that the Opposition has, for 11 months now, more than that, held the Government’s feet to the flames, praising when it’s due but criticising when it’s due. Because that is the role of the Opposition, and I have no doubt that as a consequence of that we have made things faster, and often better, but there does still appear to be a leaden-footed response in some areas.

A lot of those areas are in the area of technology. Mr Seymour talked about saliva testing, as did Mr Bishop, and that is but one of a number of technologies that could be being deployed by this Government, that not only could be being deployed but that have been known to health officials for months. I had people approaching me from overseas with excellent ideas for technologies that could keep New Zealanders safer and freer, but because they were from somewhere else, somewhere outside of the realm that a certain number of officials deemed to be accurate—

David Seymour: Got to be tested here!

Hon MICHAEL WOODHOUSE: That’s right, Mr Seymour. They were reluctant to try them, and I find that disappointing. Because we have to get it right every day, but the COVID virus only has to slip through once in a while for all of the efforts that New Zealanders have gone to to be successful. And it’s not like they’ve got it right every day—frankly, nobody should expect that—but there have been some failures that cannot be excused by the sorts of responses that we would expect—by the standards that we would expect—certainly by now. And there are questions about why some border workers are mandatorily tested regularly and some aren’t. There are questions about vaccine roll-out, what being at the front of the queue actually means. The vaccine is going to be so important because we will move from elimination; COVID will be endemic. At some point a Government, probably this Government, will have to take the tough decision to say, “COVID is endemic on this planet and we need to take different steps”, but in the meantime, while we pursue an elimination strategy, the Government has got to get it right, because the country is running out of patience with alert level rises.

Hon Dr AYESHA VERRALL (Minister for Food Safety): I’m pleased to be able to contribute to this debate, because it is my honest opinion that New Zealand is the safest place on earth when it comes to COVID-19. We have achieved this through a deliberate strategy of going hard and early, and in relation to the discussion about the recent move to alert level 3 in Auckland and level 2 elsewhere in the country, the Government has been safe, proactive, and evidence-based in its measures.

I received the information about this new case on Sunday, and let me share some of the thoughts that went through my mind that explain our move to alert level 3. The most important thing to understand is that the germ does not just spread by being in the same general area as the person; being in a workplace that is connected through its business to the airport is not enough to say you have a plausible link to international cases. Instead, we have to be able to establish the mode of transmission. The worker who was ill was a laundry worker. As Professor Baker has said in the media recently, there has not been a single documented case of transmission through the laundry. It may appear a plausible theory now, but that is the state of the science. So one cannot immediately make the conclusion that that case was linked to the border and therefore it shouldn’t prompt consideration of alternative hypotheses.

The other thing that was unusual about this case was that the onset of the daughter’s symptoms—referred to as case A—and the mother’s symptoms were at about the same time. They were only separated by one day. This suggested that they could potentially be part of the same generation of transmission and infected by someone else, not necessarily from the mother’s workplace. Therefore, there were a number of things that didn’t hang together about these cases, and the decision was made to move to alert level 3 in Auckland and elsewhere.

I just want to reflect on the words of the previous speaker, the Hon Michael Woodhouse, about non - COVID-related casualties of the elimination strategy. These weigh heavily on my mind too, but I would like to remind the House that there is no country in the world that is not having the collateral consequences of COVID. Try getting your cancer care in a UK hospital right now. It’s a disaster. By pursuing an elimination strategy, we are able to make sure our health system is able to run as well as it can, given the global situation. We have the most chance of catching up on cancer waiting lists, for example, than compared to places where there is an ongoing pandemic, where immune-compromised people feel scared to enter their hospitals.

Let’s talk a little bit more about the case investigation, because this has been an object raised by the Opposition. Case investigations are dynamic situations. They are done under high pressure, and I want to commend the work of the Auckland Regional Public Health Service and the national contact tracing staff for their contributions to this. What we require of our case investigations is that they work through an ordered set of hypotheses about how cases might have arisen. Of course, one of these started with the investigation into the LSG Sky Chefs workplace. As I said before, it is not enough just to suggest that because this workplace is at the airport, it is linked to the border. We instead need to find a plausible link between our case and an international traveller with COVID or a suspected international traveller with COVID. Let’s remember: this is a workplace where there is routine testing.

So the first possibility is that a person, undetected through that routine testing, might have been a case and came into contact with the case we have discovered. To cover off this hypothesis, we are re-testing that workplace and, of course, going over the records of previous testing. The next question is: could transmission come from an object that this worker was in contact with? As has been said, this is not recorded in the scientific literature, yet, none the less, we are considering this possibility, because we want to take all the opportunities to improve our systems that we can. We know from the scientific literature that COVID can be recovered from surfaces up to seven days after it is deposited there, and it can be found to be living—that is, still capable of reinfecting other people. However, this is much harder to do in practice, and it is much harder to recover COVID from textiles, so the possibility of assessing whether this happened in the laundry is not really feasible.

One of the unsatisfying things about these types of case investigations is when it comes to hypothesising non - person-to-person transmission—so transmission in an indirect route through the environment or through fomites—we don’t find a smoking gun. I’ve been on many investigations of infection prevention and control in my previous job, and one of the things that a sensible infection prevention and control report will often do is list these hypotheses in a structured way and then identify ways in which the most plausible of them can be prevented in the future. Unfortunately, the problem in finding proof of transmission through these non-conventional or atypical means is also present in the scientific literature.

I don’t imagine there are many places around the world where public health units have the time to go out and do the detailed case investigations that we are doing in New Zealand. We might well discover things that other countries haven’t experienced because they are not testing the laundry, for example, for COVID. None the less, we are covering off all these possibilities, looking into fomite transmission, and we are also covering off the more likely transmission of human-to-human transmission in the workplace by re-testing the workplace. We have also looked at the whole-genome sequence of the isolate in the three cases that we have identified and seeking to find a match in any New Zealand case. As that hasn’t been found, we’re now searching international databases to confirm there is no match.

The other hypothesis is that the family could have been infected through community transmission, and, of course, that is the most worrying scenario. For that reason, we’ve gone through the whole-genome sequence, specifically of every case in the managed isolation and quarantine (MIQ) facilities, to check for a match. We are also doing widespread community testing in Auckland and also testing sewage.

In this debate, members have raised the matter of continuous improvement in the COVID response, particularly in the area of technology. I want to touch, in my time remaining, on a few areas where technology has led to significant improvements in our COVID-19 response—firstly, in the realm of whole-genome sequencing. During this last case, this has allowed us to identify the so-called UK variant—or B.1.1.7. It has also enabled us to exclude the link to other cases in MIQ. This has been a huge development that I know members of the infectious diseases community have wanted for a long time, and it’s excellent that it was able to be brought forward as part of the COVID response. I’m aware the workers in our whole-genome sequencing laboratories often work through the night to make sure we can find out if we have a link to a known case or if it is a case of unrecognised community transmission.

We are also implementing sewage testing. Over the summer, the Institute of Environmental Science and Research Ltd tested the sensitivity of the sewage test, and now it’s being used as part of this outbreak and the Northland outbreak. It is probably sensitive enough to detect a handful of cases. We think it’s probably not sensitive enough to detect a single case. Through repeated use, we could probably confidently exclude community transmission. Performing sewage testing is not a glamourous role. After a machine has collected the sewage over a period of 24 hours with periodic collections, it then needs to be concentrated in the laboratory. I’m very grateful for the workers who have undertaken this work to make sure that we have this new tool that is not dependent on human behaviour as is polymerase chain reaction testing.

We also have implemented new technology in our National Contact Tracing Solution as a result of my report that identified fragmented information technology systems throughout our public health system. A system that linked cases and their contacts and passed all of the contacts through a clinical pathway of management for contacts has been implemented. We also have digital contact tracing, using both Bluetooth and QR code scanning. Finally, we are implementing saliva testing. That is already under way for people at the Jet Park, and I understand it’s being rolled out across other laboratories in the coming weeks.

There will be more developments in our response as we get to the vaccine roll-out. I’m very proud of the work done by our border workers to keep us all safe, and pleased that they will be the first to be offered this vaccine that will keep them safe and our community safe. We have done well by going hard and early through this global pandemic, and as a result, we are one of the freest societies and economies in the world.

The debate having concluded, the motion lapsed.

Urgency

Urgency

Hon CHRIS HIPKINS (Leader of the House): I move, That urgency be accorded the passing through all stages of the Taxation (COVID-19 Resurgence Support Payments and Other Matters) Bill.

This bill amends the COVID-19 resurgence support scheme, which aims to limit the economic and social impacts of the health restrictions put in place as a result of our COVID-19 response. It does so by providing financial support to businesses in the event of alert level escalations following further outbreaks of COVID-19 in the community. I think it would be reasonably obvious to members around the House why the Government believes that this bill should be subject to urgency. At this point, we do not know when we may need to trigger this particular piece of legislation, but it does seem a very sensible time to be putting it through the House in all stages under urgency so that it is available should it be required.

DEPUTY SPEAKER: The question is that the motion be agreed to.

Motion agreed to.

Bills

Taxation (COVID-19 Resurgence Support Payments and Other Matters) Bill

First Reading

Hon GRANT ROBERTSON (Minister of Finance) on behalf of the Minister of Revenue: I present a legislative statement on the Taxation (COVID-19 Resurgence Support Payments and Other Matters) Bill.

DEPUTY SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.

Hon GRANT ROBERTSON: I move, That the Taxation (COVID-19 Resurgence Support Payments and Other Matters) Bill be now read a first time.

All New Zealanders will know that the resurgence of COVID-19 in our country is a real and constant threat, and the recent community cases in Auckland highlight this risk. Every day we are reminded that some countries are having further waves of the virus, and no one wants to see this take hold in New Zealand. So far, we have kept COVID-19 at bay, by and large, by carefully managing our isolation and quarantine arrangements—as well as every single New Zealander doing their bit by following public health guidelines: scanning using the COVID-19 tracer app, hand-washing, wearing masks, physical distancing when required, staying home if they’re sick, and getting tested, and I thank all New Zealanders for that.

As a country, we have done well with our response to COVID-19, and, in fact, we are regarded among the world’s leading countries in terms of that response. We have also seen a strong economic response and a rebound in the New Zealand economy, including the unemployment rate being at 4.9 percent for the last quarter, and also the recovery we’ve seen in GDP. All of this is good news, but we cannot be complacent. Our aim remains to keep New Zealanders safe from COVID-19, and that includes protecting jobs and livelihoods as well as strengthening the economy.

This bill proposes to put in place support for affected businesses in the case that there is a resurgence of COVID-19. Late last year, I announced the Government’s package to support businesses and individuals in the event of a change in alert levels. In that December statement we talked about this proposed resurgence support payment for businesses, and today we are delivering on that. This is a one-off payment in the form of a grant to help eligible businesses directly affected when there is a move to alert level 2 or above for a week or more. It will particularly help sectors like hospitality and events. During the last round of restrictions that we had, there were calls from the business community for a payment that was not directly linked to wages: something that could deal with fixed costs, something that could deal with more immediate needs that get created. That is what this payment is designed to do. It will provide certainty to businesses and workers, because they will know that it will be triggered if we go into a higher alert level, alert level 2 or above, for more than seven days. It is available to anyone in New Zealand in the event of that occurring.

The payment comprises a base amount of $1,500 per applicant—per firm—plus $400 per fulltime-equivalent (FTE) employee, up to a cap of 50 FTEs. Although the payment is capped at 50 FTEs, businesses with more than 50 FTEs can still apply. The amount an applicant may receive under the scheme is further capped by the amount that their revenue has declined. The amount an applicant may receive, therefore, will be the lower amount, calculating using either the formula $1,500 per firm plus $400 per FTE or four times the amount their revenue has declined, as declared by the applicant in their application. That is because very small firms could disproportionately benefit if we simply applied the formula that is in this legislation.

The scheme may be activated when there is an increase in alert levels and it will be available to businesses each time we do a new activation. The scheme is not restricted to a particular region, even in the event of regional increases in alert levels, because we have learnt that the New Zealand economy is truly interconnected. For example, I received correspondence when we did the alert level increase for Auckland to level 3 from a tourism operator in Nelson, saying that they had been impacted by the fact that people couldn’t travel to Nelson. So making this a nationwide scheme is the most responsible thing that we can do.

The payment will be paid by the Government to businesses that have a revenue drop of 30 percent or more. This will be calculated by comparing a seven-day period at alert level 2 or higher with the typical weekly revenue in the six weeks before the move from alert level 1. In addition, applicants must have been in business for at least six months. Our small and medium enterprises, our sole traders, will be the main beneficiaries of this scheme, as reflected in the payment cap. They are the businesses who are likely to be less resilient to these moves than our larger businesses, who hopefully will have had resources to cope with the shift in alert levels.

Inland Revenue will make the payments under this scheme, and I’m very grateful to Inland Revenue for taking on another scheme, along with the Small Business Cashflow (Loan) Scheme. The Ministry of Social Development continues, obviously, to be the people who run the wage subsidy scheme. I also want to make clear that this works with the wage subsidy scheme. That continues, so if we go to alert level 3 or alert level 4 for seven days, the wage subsidy scheme kicks in. That continues to be tied to people staying in work. It is a scheme designed to promote the attachment of people to their workplaces. That wage subsidy scheme continues; this scheme is to deal with those fixed-cost issues that arise.

I’m sure during the debate we will get into some more details about the scheme and the costs of it and so on, but I want to reiterate: this is a contribution from the Government to support businesses in the face of a lift in alert levels. We have to share the burden of this, and I recognise that for many businesses, even the three days that we are now spending in elevated alert levels are putting pressure on them. As a Government, we have to strike a balance with providing support along with making sure that we fulfil our obligations to New Zealand taxpayers. We believe we’ve got that balance about right here, with a seven-day trigger for the scheme to start.

I also want to make one thing very clear that’s spread around—one of those pieces of fake news that occasionally spreads around. The clock has started ticking for the seven days. It started ticking at midnight when we brought in the restrictions; we don’t start once we get to the three days. So a seven-day period is already under way, if we need to go there.

Just finally, the bill also makes another change that’s needed to come into force before 1 April, and that is an increase to the minimum family tax credit threshold to reflect the increases to benefit abatement thresholds. The minimum family tax credit tops up the incomes of working families to an amount that is more than they could potentially receive on a benefit. Therefore, when benefit rates and thresholds are increased, the tax credit is adjusted to ensure working families continue to be better off in work and receiving the minimum family tax credit rather than remaining on the benefit. The bill proposes an increase to the minimum family tax credit threshold from $29,432 per year after tax to $30,576 per year after tax, a $22 increase in weekly income. The increased minimum family tax credit threshold will apply, as I said, from 1 October 2021.

This is an important piece of legislation; I hope it will be supported around the House. It is another sign of this House’s support for New Zealanders as we deal with COVID19, just as we have as a House in the past in bringing through the wage subsidy scheme, the Small Business Cashflow (Loan) Scheme, and other forms of support. We do so in the knowledge that New Zealanders are sacrificing a great deal as we deal with COVID19. We need to support one another to get through this. The minimum family tax credit threshold is also a sign that we want to support people to stay in work, as well, and it is timely to pass it in order that is in place by the 1 April deadline.

DEPUTY SPEAKER: The question is that the motion be agreed to.

Hon MICHAEL WOODHOUSE (National): Thank you, Mr Speaker. One of the criticisms last year of the Government was that it was somewhat tin-eared to the concerns of business about the non-staffing cost impacts of the COVID lockdown. The Government’s response, which was fair enough, was to say, “Well, we poured billions of dollars into the wage subsidy.” The difficulty with that for business was that the wage subsidy treated employers, effectively, as pass-through agents between the Government and the employees in order to sustain jobs, and that worked. But it would be wrong to say that that was a support for the business itself, for all of the non-staff impacts and costs that were incurred.

Many businesses did go to the wall. Some survived by the skin of their teeth, and they will be pretty damn terrified, I think, at the prospect of an extended level 3 lockdown. It’s bad enough just for three days. So it’s good that the Government has responded by acknowledging that actually even in the short-term alert level rises that we’re experiencing this week, there are costs on business and they seek to address that and support businesses through this time.

There are two matters, though, I think, that make it difficult for the Opposition to dive deeply into the details of this bill. One is the fact that we received all of the documentation at about 10.30 this morning, so a prudent, sort of diligent analysis of where we’re going with this is difficult. I say that without judgment, because I’ve been there before and we are in unusual times. The second part of this is that almost all of the details that the Minister of Revenue has discussed in his press release and in his first reading speech are about matters that aren’t in the bill.

The bill is actually blindingly simple in that it creates, effectively, a regulating-making power in certain circumstances. Actually, one needs to go to the legislative statement or the regulatory impact statement to understand what the Government’s intentions are in that regard—or whatever it’s called. So, look, that’s not a criticism either, except that, effectively, what the Government is doing is giving itself the power to pay anything in these circumstances, if the Order in Council is passed and the instructions are given to the Inland Revenue Department.

Now, I don’t expect that they would, and perhaps they would say that they are giving themselves something of some flexibility, but there’s no doubt that this is a quite extraordinary bill, and it’s not how taxation bills are normally done. We’ve got primary legislation to say who would be an overseas donee, for goodness’ sake, and yet we are giving this tremendous ability to move or not move in certain circumstances by Order in Council. Yes, it’s an instrument, it’s a—what’s it called? A particular instrument that the House will have some influence over?

Chris Bishop: A confirmable instrument.

Hon MICHAEL WOODHOUSE: Thank you. A confirmable instrument, thank you, Mr Bishop. But I don’t know that under normal circumstances this would be considered good legislation.

Now, for all of that—and I should say now—the National Party will be supporting this bill, and unless there are some great revelations of terror, that will be for all stages, but we will have a number of questions about how the Government intends to manage this. And we also have some concerns actually about the framework not being mindful of the lessons that should have been learnt out of the wage subsidy, and I want to touch on two of these.

So last year, there was criticism, including by us and the business community, that the initial framework for the wage subsidy targeted small and medium businesses. But there were just as many thousands of jobs, if not more, that were at risk of being lost to big business, inside big business. So, rightly, in my view, Government extended the scope of the wage subsidy to include all businesses. Then it actually joined criticism of some of those businesses for the fact that they actually did better than they thought they were going to. They weren’t bound to repay the wage subsidy, but there was some kind of public shaming exercise into which some larger businesses actually paid money back.

Now, I said at the time that that was a function of a lack of detail that could be forgiven, and I criticised the Minister. I said if he wanted to find somebody to blame for that, he should look in the mirror, and that was true but perhaps a bit harsh given the speed with which the wage subsidy had to be stood up. There is no such excuse this time, and, actually, this time the opposite has happened. We are arbitrarily restricting this to businesses with 50 staff or fewer. That is the definition of a small to medium sized enterprise, 50 staff or fewer. So large businesses who may nevertheless be struggling with a lockdown of seven days or more at level 2 aren’t eligible.

Now, the other difficulty I have with this framework is that the criticism of the wage subsidy was that it wasn’t timed with the revenue cycle. Actually, one of the reasons some of those businesses did better and others didn’t was depending on the nature of their work. So for goods industries, orders were just not filled for a period of time and then they rebounded very strongly when those orders were filled. Service industries, on the other hand, particularly tourism and hospitality, would never get back the lost business caused by the lockdown, and that’s what we have now, only it’s a much more acute calculus where a 30 percent reduction in revenue in one week gets compared with the six weeks prior. Now, that’s a very, very sharp calculation.

Now, the week after next, Briscoes—well, we won’t actually call it Briscoes; the $2 Shop in the next suburb may well rebound quite quickly from that and, indeed, their cash flow needs were probably significantly lower than potentially the restaurant that employs 30 staff and will never get that revenue back. So we support this, but we think it could have been more targeted. It’s kind of one of those broad brushes that could have been forgiven last time we did this—yeah, last year—but, actually, a lot more thought could have gone into the way in which the calculus for genuine loss as a consequence of a short-term lockdown could have been made.

I see the Minister nodding and I want to pursue this conversation, because, actually, while I kind of mildly criticise the fact that we’re giving a secondary power, an Order in Council power, maybe there is an opportunity to get a bit more nuanced in the calculation, because we’ve already spent an eye-watering amount of money. Perhaps the difference between the left and the right is the difference between a universalism approach versus a targeted approach. National is unashamedly wanting the taxpayers’ funds to be targeted at those who most need it, whether it’s for jobseeker supports or business supports of this nature, and this doesn’t do that, according to my reading of it.

The other thing I have a question about is the inter-relationship between a level 2 lockdown, seven days or more, and levels 3 and 4 for several days more, because the grant is a one-off for one event, but there’s nothing to suggest that an alert level 2 period could be several weeks. Now, it may be unlikely, but it’s not implausible. What could happen, and this is where it gets tricky for the regions, is a level 3 or 4 lockdown could be pursued for six weeks in Auckland, for example, whereas the rest of the country might be at level 2.

Now, the restrictions on Aucklanders travelling could have a significant impact on the people of the Coromandel or Queenstown or others. I sense the Minister may have a response in his second reading speech on this, because my understanding, and I’m very open for another member to correct me on this or for the Minister at second reading, is that we could have a one-off grant to a business in level 2, but an ongoing wage subsidy for businesses in level 3 and 4—

Hon Grant Robertson: You can get that no matter where you are. So if Auckland’s in level 3 or 4, anyone can get it.

Hon MICHAEL WOODHOUSE: Ah, OK. Well, I may have misread that in the press release, so I do appreciate the Minister clarifying that, and I hope Hansard staff have caught it.

Hon Grant Robertson: We’ll come back to it.

Hon MICHAEL WOODHOUSE: We can come back to that. I think that’s somewhat reassuring because there did appear to be a sort of a gap in my understanding.

Look, with all of that, I do have concerns about the targeting, and I want to make sure that companies that are legitimately entitled to claim the grant are then not criticised, or even penalised by the IRD, if indeed they rebound a bit stronger than they might have foreseen when they applied for it. But with that, I look forward to the continued discussion on it and I commend the bill.

Hon Dr DAVID CLARK (Minister of Commerce and Consumer Affairs): I do want to acknowledge the Opposition member and his constructive engagement with this bill, and, of course, welcome the support of the National Party for the measures that we are taking. The uncertainty that COVID can bring to the business environment is something we are trying to counter here as best we can, because the consistent feedback that we have heard from the business community is that certainty about support measures that will apply at future alert levels and when escalations occur is absolutely critical for ongoing investment and hiring activity. We in the Labour Party want to ensure that the employment statistics, the kind that we’ve seen today, where wages have risen quite dramatically in our official statistics for the period prior to COVID, and where, overall, household earnings are rising—that’s something we want to see continue, because we recognise that when New Zealand prospers, including our wage earners, including our businesses, and across the spectrum, people can continue to enjoy the lifestyles that come with that. Of course, the business confidence is a part of that picture, and the certainty around the operating environment is critical to that.

Now, the Minister of Finance, who introduced the bill, has spoken to the categories—who will be able to access this payment. Businesses will need to declare a drop of 30 percent or more in income over a seven-day period as a result of an increase from alert level 1 to alert level 2 or higher to receive the payment, which, as has been said, is a $1,500 payment plus $400 per fulltime-equivalent (FTE), up to a total of 50 FTEs, or four times the experienced revenue drop over a seven-day period. That’s the formula. Of course, businesses will have to have been in business for at least six months in order for them to be able to qualify under the order for those payments.

But I think, as we’ve seen demonstrated in the debate that’s happened to date—the fact that there will be support for this measure around the House, as has been indicated—it is not a particularly complex bill, but it is one that’s likely to be widely welcomed. I am very happy to support this bill from this side of the House.

CHRIS BISHOP (National): Thank you very much, Mr Speaker, and I endorse the comments of my erstwhile colleague Mr Woodhouse, who led off for National in this debate. We welcome this bill coming before the House.

Just before I make a couple of comments about the substance of the bill, I do just want to throw a brickbat in the Government’s direction around the very poor process that led to this. It is, frankly, unacceptable to have a bill given to the Opposition, introduced under urgency at 10.30—I just want to make that very clear. It is not appropriate or acceptable for an Opposition to get the finer details of a legislative proposal five hours before the bill is due to be debated in the House. The Leader of the House is normally, actually, pretty good about these matters, and it’s really regrettable that, in this particular case—and the Leader of the House also happens to be the Minister for COVID-19 Response—he was not able to furnish the Opposition with a copy of the bill in advance. He also, I think, knows that 10.30 is the time the Opposition begins its caucus meeting, which we do on a weekly basis when Parliament is sitting for anywhere between an hour and three hours. He knows that the Opposition would have been in caucus at that time, thus further limiting the amount of time that the Opposition had to scrutinise and consider the bill.

It’s particularly, I have to say, pernicious that that happened at a time—or, bearing in mind that the bill is going through all stages today. Now, we’re going to facilitate that passage this afternoon. We are happy to pass it under urgency. But, in the spirit of good faith that, I think, Government should endeavour to support when it comes to urgent matters, it would have been, I think, much more preferable for the Opposition to have been given a copy of the bill in advance so we could have had some engagement on it.

That said, I’ll leave my condemnation there, but I do want to make that clear. We do support the bill and we support the measures in it. And, as Mr Woodhouse said, the actual bill itself is a framework bill—

Hon Dr David Clark: It’s a good bill.

CHRIS BISHOP: Well, David Clark says it’s a good bill—yep, it is a good bill—but it’s a framework bill. The substance actually comes through the Orders in Council. Part 1, which is the amendments to the Tax Administration Act 1994, and, indeed, Part 2, which is the amendments to the Income Tax Act, allow, essentially, authorisation for Ministers, through Order in Council, to make payments. And, of course, that is all triggered by the alert levels.

Look, we have heard on this side of the House—as members of the Government clearly have as well—that business has struggled, I think, as all New Zealanders have, with alert levels going up and then going down. Of course, that does have an impact on people’s livelihoods, and it does have an impact on business planning and certainty, and, of course, cash flow as well. As the regulatory impact statement to the bill notes, the impact of alert level changes is uneven across particular industries. Hospitality, for example, is particularly more affected at level 3 than 2. So we accept the unevenness and we accept, essentially, the fundamental policy rationale.

Look, there will be questions around why 30 percent, why seven days; why not 14 days? There will be questions around some of the particular specifics in the bill—all of which, I suspect, we will want to get into later in the debate. But, fundamentally, we support the passage of the bill and we’re looking forward to the further discussion. Thanks.

BARBARA EDMONDS (Labour—Mana): I rise in support of the Taxation (COVID-19 Resurgence Support Payments and Other Matters) Bill. I want to echo the sentiments of previous Ministers before me and previous speakers. Like the wage subsidy, the Small Business Cashflow (Loan) Scheme, and recently announced short-term absence payment, this policy is another tool in the Government’s kit to help businesses during what is an uncertain and, certainly, an anxious time. So I acknowledge the support of this bill from across the House and thank you for your facilitation of this bill through the House.

The purpose of this payment is to ensure businesses remain viable, keep people employed, and recognise the fixed costs associated with escalating alert levels. Through the explanatory note of the bill, this new grant aims to limit the economic and social impacts of public health restrictions. Previous speakers have spoken to how to qualify for these payments, so I’ll focus my contribution to the draft legislation itself—and that is to note that this is a smartly drafted bill. It balances certainty by inserting a legislative framework or parameters so that IRD can actually administer the payment but at the same time provides flexibility around who is eligible, when they’re eligible, what they’re entitled to, how you can apply, and so forth, as set out in clause 5 of the bill.

The beauty is that this is all activated by Order in Council so that this legislation is futureproofed because pandemics are unpredictable. It means, as a Government we can respond quickly and provide certainty around the nature of Government support in the event of resurgence. So it gives me great pleasure to commend this bill to the House.

Hon JULIE ANNE GENTER (Green): Tēnā koe, Madam Speaker, tēnā koutou e te Whare. The Green Party will be supporting the Taxation (COVID-19 Resurgence Support Payments and Other Matters) Bill. As the Minister outlined, the point of this bill is to put in place some longer-term ability for there to be support for businesses when there is the inevitable move into different alert levels, and we think that the resurgence support payments for business are very reasonable, make a lot of sense, make it easy for those that could be vulnerable to having fixed costs and struggling with reduced revenues. We particularly like the fact that it can be applied for by any business in any part of the country, not just where they’re in a higher alert level.

One point of difference I suppose we do have is with the minimum family tax credit. What’s proposed in this bill makes perfect sense. It’s great that they’re implementing that particular recommendation from the Welfare Working Group to make it possible for people to get into work without having their pay significantly reduced. However, the overall approach is one that is insufficient to address poverty and systemic child poverty in this country. The Green Party would prefer something different to the minimum family tax credit. We think it’s discriminatory, because it only applies to families that have at least one person working and earning wages or a salary. That means that families that are entirely reliant on a benefit, or those who might be in a self-employed household, don’t benefit from this particular tax credit, and there is the possibility of overhauling this even more and creating a kind of family tax credit that is available to all those whatever their source of income, whether it’s wages and salaries, whether it is a benefit, and whether it is that they are self-employed.

I think that one thing the COVID-19 response has shown us is that we are all in this together, and some of the ideology of the 1980s and 1990s—which is still very much alive in the party to my right—was wrong, and that actually slashing State support for people isn’t better for the economy, isn’t better for us as a society; it just means that we have people who are trapped in long-term cycles of poverty that end up costing all of us. All the evidence shows that the best way to end child poverty in this country will be to raise benefits and to make sure that that financial support that we’re sending out to people isn’t just to those who happen to be in paid work at any given time but to all of us, as human beings, who have a right to live in dignity, and that, as a society, we are all better off if we provide that support to everyone, particularly children. That will enable them to achieve more in their lives and enrich our society more, rather than growing up struggling in poverty, which ends up costing us an enormous amount of the lifetime of that child.

So the Green Party is supporting the bill. We’ll continue to advocate for a further and faster approach to welfare overhauls so that we can end child poverty in this country, and that is something that will benefit all of us.

DAVID SEYMOUR (Leader—ACT): I rise on behalf of ACT in support of this Taxation (COVID-19 Resurgence Support Payments and Other Matters) Bill because the ACT Party believes that there are some instances when the Government acts as the insurer of last resort, when people are befallen by circumstances that they can’t avoid and they can’t prepare for in any other way. This is one of those circumstances where people who have a business, try to employ people, and are trying to keep their job and a business recognise that they’re not going to be able to have any income this week, and they actually need some other way to keep going. I’ve had constituents text me and say, “Look, there’s going to be no relief for the loss of work I have even just within the seven days. How am I supposed to pay my rent?” That’s the reality that people face when the Government locks down, and to have some form of relief for businesses that are trying to employ people while they can’t practically operate, I think is an important thing to have.

The second reason why we support this legislation is that not only is the Government acting as an insurer of last resort; actually, it’s the Government’s action that has caused the injury to those firms. The ultimate cause is the virus COVID-19, but the immediate cause of the injury to those firms is the Government’s restrictions on them being able to legally operate the way they were set up to do. So this is a situation where the Government is the insurer of last resort and where the Government is actually the one that has injured the company. And it is right that if we want people to stay home and save lives, as the refrain goes, for the betterment of the wider public, then those who lose more than 30 percent of their revenue over seven days, businesses in trouble as a result of that sacrifice, should actually be compensated with the wider funds raised by taxpayers in general. So that’s all well and good. We support it because this is something useful that the Government can do from time to time.

But I have to say, I find it absolutely extraordinary that a tax bill has been dropped on Opposition parties with about six hours’ notice. People at home may expect us to take our duty of making law seriously. Why? Because people know they’re expected to follow the laws, especially tax laws, and this is a tax bill. I think it’s only reasonable if people are expected to follow the laws made in this Parliament, then we should take some care in the way that we make them. That’s the basic deal—we take care in the way that we make laws, and in return people take care to follow them. That is really the essence of our civilised society where everybody respects the law. And when there are differences we don’t fight each other; we look at what’s written down in the statutes made by this Parliament. That’s a good way for a country to be, but it requires us in this Parliament to do our bit, and in this case the Government has not done its bit.

Now, I know people say, “Well, sometimes it’s necessary to make laws rapidly because if laws aren’t made in time, they won’t be able to achieve the objective.” That’s kind of the case here—kind of not. Let me explain that. It is true that if this law is not made this week, it won’t be there in time for businesses if the lockdown extends into another week, and we hope it doesn’t. So that’s true. But it’s also true that we wouldn’t need to be in urgency had we started earlier, and that’s what I find extraordinary. This Government loves to say that it has been carefully mending the roof for rainy day and hasn’t been resting on its laurels or congratulating itself—that it’s been hardening our defences and preparing a resurgence plan so New Zealanders would be ready for the entirely predictable circumstance that COVID-19, and particularly new variants of it from the UK and South Africa, might actually escape and there would be another need to have restrictive lockdowns, and that would impact businesses.

That sequence of events—very predictable. The Government claims to have been preparing a resurgence plan so that we would be ready for this circumstance. So all of a sudden we find ourselves in a position where we need to have preparations in place for the economic survival, the livelihoods, and the wellbeing of people trying to pay their rent, and yet they hadn’t thought about this—not over the six months nearly since the August lockdown, and not during the 102 days of COVID freedom we had between the April lockdown and the August lockdown, and not even during those lockdowns, which might have focused the mind of the Government. They hadn’t thought that maybe this would be a good idea. They claim to have done the preparations but they hadn’t put this law in place, and now we are rushing a tax bill, under urgency, against all the conventions of this Parliament that lead to people respecting the laws this House makes, because despite its rhetoric the Government wasn’t ready.

There’s a second part to this legislation—am I’m almost talking myself out of ACT supporting it? Once upon a time, when it was a bit easier to make caucus decisions, we might have changed direction at this point. This legislation also requires the Government to pay more for Working for Families. Why is that? Because during the first lockdown, inexplicably the Government decided to raise benefits by $25 an hour. Now, I’m not commenting on—[Interruption] By $25 dollars a week, someone corrected me. I tell you what, Mr Robertson, it’s very easy to be generous with other people’s money, as you well know. The issue is that they had, potentially, a policy to raise benefits, and maybe they should—maybe they should’ve debated it. But they did it under the cover of lockdown, and that was completely wrong. That was knee-jerk legislation. That was exploiting the situation. People on benefits did not need a pay increase during lockdown. People who didn’t have to go to work and were actually given taxpayer money to stay home were some of the least affected people by the lockdown.

Of course, because they made that change under a rushed urgency during a lockdown, they actually discovered they made it less attractive to work. You see, because benefit levels increase, Working for Families became comparatively less attractive, and the Government thought, “Oh, oh, we’ve actually once again kicked people who get up, get out of bed, and go to work while their neighbours sleep their lives away on a benefit.” Now they’re having to make another change, under urgency, to try and correct the mistake last time they tried to rush a law though. This is a real problem, and I mean this sincerely to the Labour Party members.

The people in the Labour Party, I find, are generally good sorts who come here to make New Zealand a better place. But one of the things—[Interruption] David Bennett disagrees but he’s always had a black, dark heart, David Bennett. The fact of the matter is, he should join in this moment of kindness. But the fact of the matter is, I don’t think that, in their heart of hearts, people on the Labour benches, when they look back at the way their Government has used urgency and at some of the policy-making that’s gone on, will be able to look themselves in the mirror and be proud of the way they have used urgency in this House. The contribution they’ve made to the culture of this House and the way they’ve used urgency has been a very negative contribution, and I think future Governments are going to have to think very hard about how they fix that. One of the things that is important, that everyone in this House agrees on, is that if we want people to follow the laws we make, we have to actually be a bit conscientious in the way we make them.

We at one point passed the wrong law because they were going so fast they put the wrong law on the Table and we voted for the wrong one. That’s how bad they’ve been, and I would just say to this Government, if they want to talk the talk of being prepared for COVID and having a resurgence plan and all the rest, how about walking the walk and having the legislation ready earlier than 10.33 in the morning? Nevertheless, for the sake of the people who are going to need this legislation, ACT is going to support it, because it is not right that some businesses that are hurting should pay the cost of a Government’s disorganisation.

NICOLA WILLIS (National): In rising in support of this taxation bill, I want to note for the House the broad areas in which we are finding agreement, because that is what National’s support for this bill is prefaced on, and I think it is easily forgotten in the context of these debates, where we, appropriately, as the Opposition, ask questions about the Government’s implementation, where we ask questions about the detail of approaches—to lose sight of the fact that in the bigger picture, there are some core principles which we are agreed on and which underpin a bill of this sort.

So, first of all, this bill is prefaced on the idea that there will be circumstances in New Zealand—and, in fact, we’re in that circumstance right now—where it will be appropriate for the Government to restrict business and social activity in order to protect public health and to reduce pandemic risk and transmission of the COVID-19 virus. It is agreed by all members of this House that it will sometimes be appropriate for the Government to impose alert levels and the conditions that come with them that mean that many businesses in this country will not be able to trade as usual. The reason that we are in agreement about that is that we judge that that is what is necessary to protect public health, to protect the health and livelihoods of New Zealanders. So we’re in agreement on that concept.

The second thing that we have broad agreement on is that we should take steps and that the Government should take steps to mitigate the economic and social impact imposed by lockdown conditions, imposed by the higher restrictions that come with higher alert levels. Those economic and social impacts are both short-term, medium-, and long-term. In the case of businesses, we recognise in particular that the Government is imposing a significant impost, that businesses will incur particular costs because they are unable to get the normal revenue that they would to be able to market or sell to customers in their usual way, to carry out events, to do the things that they would normally be able to do, because they are complying with a legal order that the Government has made. So we recognise that it’s right that there be some compensation for this in these alert level circumstances.

We also are in broad agreement that it is really important, in dealing with this pandemic, that, where possible, we reduce the potential long-term scars to the economy that would occur if we allowed many businesses to fail across New Zealand and, with them, take jobs and livelihoods that could take months and years to recover. So, where possible, we should sustain businesses into the future and take steps to ensure that they can continue.

So all of that is the context in which National supports this bill. I want to draw members’ attention to the fact, however, that there are always very fine judgments to make around the quantum and nature of support that we offer individual businesses in these circumstances, and I’m sure the Minister of Finance and his officials and his Cabinet have grappled with that extensively. So it’s important that I note that this bill does not actually clarify exactly what those judgments are. Instead, what it does is it provides a framework which then allows the Minister to make those judgments in response to the individual circumstance. That is, all this bill does is provide a framework that allows for a scheme, a support scheme, to be activated by the Minister that will authorise the commissioner to pay grants, that can allow the commissioner to note the circumstances in which applicants will be eligible, and that can allow the commissioner to publish information in relation to the scheme.

So in supporting this bill, there is a gesture of faith by members of the Opposition, because what we are giving to the Minister of Finance and his Government is the power to create a scheme within a very broad framework. I note this because it is very important that we here on this side of the House continue to scrutinise carefully the way in which such schemes are designed, how they operate in practice, how they are implemented, and the judgments and basis upon which the value of these schemes is based: the eligibility criteria—those who are eligible and those who are not. Of course, the broader context here is that the Minister of Finance has made it clear what he intends this scheme to be—that this is going to be a scheme available if an alert level is heightened beyond level 2 for seven days or more, that it will be for applicants who have suffered a decline in revenue of 30 percent or more, and that it is capped at $21,000. So we know all of that as we come to this House in support of this bill, but I do want to note that there is the potential under this framework for that particular scheme to be adapted into the future.

I do just want to note one more thing, and that is that one of the things that businesses have told us and that New Zealanders have told us is that their willingness to go hard and to go early and to do the right thing in terms of changing their behaviour, staying at home, not trading, and not sending their kids to school is on the basis that that is the best way to protect each other from COVID-19 and to ensure that we don’t have widespread transmission in our community. What they have also told us, and I’m sure members opposite will agree, is that what they do not want is to be yo-yoing in and out of lockdown, if at all possible. When we look at schemes like that, it is particularly relevant, because schemes like this become incredibly hard to administer and to discuss eligibility for if we’re in lockdown one day, then we’re out of lockdown for a couple of weeks, and then we’re in lockdown again. Because at what point are we then able to judge what a business’ normal revenue is, when they’re bumping up and out of the yo-yoing of levels like that?

So I say that to the House. I know there’s broad agreement on that point, that we do want to avoid this and that New Zealanders join us in that. So National supports this bill. We believe it’s a necessary support to businesses at a time when they are doing the right thing to protect public health, and that it is necessary to mitigate the economic and social impact.

Motion agreed to.

Bill read a first time.

Second Reading

Hon GRANT ROBERTSON (Minister of Finance) on behalf of the Minister of Revenue: I move, That the Taxation (COVID-19 Resurgence Support Payments and Other Matters) Bill be now read a second time.

Can I thank all members of the House for engaging constructively in the first reading debate. I’m going to endeavour in this second reading speech to answer some of the questions that were raised as a precursor to doing so again in the committee stages in some more detail, because I do acknowledge that there’s a number of very relevant and significant points that members have raised and I’ll deal with five that I’ve got written down here, and then any others that we don’t come up with we’ll no doubt have time to deal with in the committee stages.

The first of those is the question on the targeting of a payment such as this. We have gone through the process of how to best do that, and Mr Woodhouse in his contribution raised some of the, I guess, integrity concerns that have been raised as we’ve gone along. And, essentially, we’ve looked at all sorts of ideas for targeting. We’ve looked at targeting sectors. So can we target the hospitality sector, who we all acknowledge are significantly impacted by, for example, a move from level 1 to level 2? Just on Monday morning, people that Mr Woodhouse and myself both know were walking into hospitality businesses to reorganise them to separate out tables, to prepare themselves for table services, to have a single server, to bring in extra staff to be able to do that. That’s one of the very costs that we’re trying to be able to help support through this scheme. But the ability to be able to say, “Well, that’s hospo who’s mostly affected, what about events? What about tourism? What about the suppliers of hospitality businesses?” And the discussion that some of my Cabinet colleagues got very bored with me on last year was: is the petrol station in Wanaka a tourism business? Well, you know, a petrol station in another part of New Zealand might not be considered a tourism business, but quite clearly one in a tourism town is. So these are the issues that we’ve had to grapple with around being able to target by sector or by region.

The one thing we have settled on in this particular payment is size, and that relates to the resilience of a larger business that is able to deal more with a move—particularly from level 1 to level 2. We believe that it’s smaller businesses who are more likely to require the support. In answer to one of Mr Woodhouse’s very specific questions in this regard, a business with more than 50 fulltime-equivalents can still apply for this, but, obviously, it’s capped at the $21,500 and if you are Briscoes or The Warehouse, that’s not really going to be a major contribution to you. But if they can meet the criteria and prove they have had a 30 percent revenue drop as a result of the lift in alert levels, then they would be able to get that money.

The second point that has been raised is the question—and I think it’s a very valid one—around the assessment of the revenue drop. So we’ve gone for a seven-day assessment. When this policy was originally promulgated in December last year, we had 14 days. Again, we were grappling there with the balance between those businesses like hospitality, like retail, where cash flow is the big issue. And if we had gone for a 14-day time period, that would have meant another seven days in which that money was not getting to the business that it needed. We were balancing that against those who would have impacts that might arrive later, and that’s a very difficult and fine balance, and we fell—after discussions with the business community—on the side of seven days, because we think that is really the purpose of this: supporting people because of the alert level rise.

Just want to be absolutely clear: this scheme is available nationwide. So if we move from level 1 to level 2 anywhere, this is available. Similarly, the wage subsidy scheme is available whenever any region in New Zealand goes to level 3 or level 4 for more than seven days. Everyone can get it. And we learnt that from last time. Especially Auckland—so many businesses outside Auckland are reliant on either supplying into Auckland or people from Auckland coming to see them. So just to be absolutely clear: this is a payment that happens when we go from level 1 to wherever we go, be it level 2 or level 3; after seven days, the wage subsidy scheme—level 3 and 4—and available to absolutely everybody.

Fourth point that I wanted to make is around the process of the use of Order in Council. This is essentially an order, as has been stated by some members. This is the way in which the Tax Administration Act works, and so we need to use this system. It’s debatable; people will be able to see what we do. The legislative statement has been tabled, so people can see how we are planning to run it this time, but we also don’t want to lock ourselves in if there is a circumstance change that occurs. And for example, one of those may be that eventually we listen further to feedback and we say maybe we should go back to the 14-day assessment rather than the seven-day assessment. We would be able to do that through the work of the Commissioner of Inland Revenue, rather than having to come back to the House and make an amendment to the bill.

And finally, just to reiterate that this is amidst a suite of support initiatives. In the last term, we introduced the Small Business (Cashflow) Loan Scheme. Over 100,000 New Zealand businesses have taken that scheme up. It has been extremely successful in providing people with the working capital that they need for their business. This adds to it. This is about an immediate need in a resurgence. It sits alongside that scheme, alongside the business finance guarantee scheme that is finally picking up a bit of momentum, and alongside the wage subsidy scheme. In addition, we have the short-term leave payment and the leave subsidy scheme as well to support people if they have to take leave from work in order to be tested or on the basis of public health advice. And then the targeted support for areas like tourism. So it sits within the mix. It’s something we believe provides an important additional element.

My final point in the second reading speech is just to address Mr Seymour’s comment around the increase that we’re making to the family tax credit. Just to be really clear, this does not relate to the $25 per week increase that was done in March last year. This relates to the abatement changes that we’re making that come into force on 1 April. So that’s about people being able to retain more of the money that they earn if they’re on the benefit. So just to clarify for Mr Seymour, it relates to that change. I don’t believe that’ll change Mr Seymour’s view on the matter, but just to make clear which of the changes this relates to. So I thank members for their contribution, I look forward to further discussions in the committee of the House stage, and I commend the bill to the House.

ASSISTANT SPEAKER (Hon Jacqui Dean): The question is that the motion be agreed to.

Hon MICHAEL WOODHOUSE (National): I’m not sure if the Minister of Finance would agree, but the best cheese rolls in the country can be found at the Good Oil in Dunedin—

Hon Grant Robertson: Some of the best.

Hon MICHAEL WOODHOUSE: There are many. It’s a competitive market. Now, the Minister talks about the amount of work that would have been going on in cafes, bars, and restaurants right across the country on Sunday evening, and my daughter, who works at the Good Oil in Nichol’s, in Andersons Bay—a fantastic cafe, and she does a great job, but she was going through the myriad of changes, the sort of here-we-go-again response to that. So there’s a high level of empathy, I think, for the challenges that the Minister laid out.

I’ve been reflecting on the very real challenge that the Minister had in trying to land the policy position on the question of the timing of revenue loss versus permanent revenue loss, and he strikes me as someone who will probably be riffing with his policy staff—it was something that I loved to do. I see the new member for Mana nodding and smiling. She had to survive it for a time. But, actually, you get better answers and you challenge the officials and they need to be able to challenge the Minister back.

Here’s one thing that could have been considered, and it’s probably too late—but maybe not. And that is, the Minister and his officials were, as I was for a while, trying to work out what is the best calculus as I describe—the best formula for being able to say, “OK, this is timing difference and it’s going to be recovered and therefore it shouldn’t be eligible or qualifying, versus a permanent loss of revenue.” The question of what’s a tourism industry and whether it’s a petrol station in Wanaka and so on.

The businesses know that best, and I wonder if the Minister—and he could perhaps touch on this in the committee of the whole House—considered a loan arrangement that could be converted to a grant: a loan at zero interest extended by the Inland Revenue Department that on application by the business, on the basis of the permanent revenue loss, could have been then converted and non-repayable. Now, what that would do is, firstly, it stops the definitional difficulties in the moment of a lockdown, but it does the most important thing and what the policy goal is, and that is to preserve cash flow to the degree possible and to the maximum amount of the grant basis. So I do sort of commend that idea. Maybe he has thrown it around with officials and he could inform us in the committee of the whole. That takes out the question of seven days versus 14 days, because, actually, it is a very precise thing—and I didn’t say that as a criticism, but it does make the definitions more difficult.

The other thing I’d like the Minister to consider when we come to the committee of the whole House is the question of the intention of clause 6 of the bill—and that is section 157 amended. What section 157 does, as I understand it, in the Tax Administration Act, is outline the sorts of repayments that the IRD might be given that need to be offset against loan defaults or arrears. Now, if I read clause 6 correctly, what it is saying is if a small business is eligible for a grant, but that small business is in arrears or default for other tax obligations to the IRD, then the grant would not be paid to the small business but would be offset against the debt already owed to the IRD. Now, I might be reading too much into that clause, but if I have interpreted that, I find that a little concerning, because the very goal is cash flow and that cash flow would be lost if it becomes an offset situation. So I wonder if officials could, by the time we get to the Committee of the whole House, give us an answer to that question. And I look forward to it.

ASSISTANT SPEAKER (Hon Jacqui Dean): I call David Seymour.

DAVID SEYMOUR (Leader—ACT): No one else is willing. I’ve got to earn my salary before dinner break.

Kieran McAnulty: Speak to the bill.

DAVID SEYMOUR: Well, you know, it would be easier if the member would lead by example. He’s telling me to speak to the bill; I haven’t heard him make a contribution so far.

I would like to also just remind this House that expenditures as a result of COVID-19 are real. We have slipped into a world over the past year or so where it almost seems as though money is not real. “A billion dollars is not a lot of money any more.”, I heard somebody say, and it’s no surprise when you’ve got a Reserve Bank that is prepared to, first of all, speculate about going to negative interest rates, where it will actually pay people to borrow money off them. And when that doesn’t quite seem possible, they’ll do what they call large-scale asset purchases, where they effectively buy pieces of paper off the Government in return for newly minted New Zealand dollars. And when that didn’t work, we have the funding for lending programme where the Reserve Bank basically goes along to commercial banks and says, “Would you like some money? Can you lend it to someone? If you can, we’ll give you whatever you want at a very competitive rate.”

These policies have real consequences. One of the consequences of spending or of inflating the money supply the way that the Reserve Bank has over the past year is a huge boost in asset prices. We’re talking equities on the stock market and we’re particularly talking real property. The effects of that have been quite extraordinary—you know, we’ve had a Labour Government preside over a $121,000 increase in the median house price. You know, the Labour Party was formed on the West Coast to stand up for working people against owners, and that Government has watched people who work have to pay another $121,000, at the median, to people who own—throughout their lifetime. That’s what this median price means, and it’s partly a failure to get the supply side of housing more elastic, but, really, it’s a result—in the short run—of monetary policy.

I think it’s worth talking about some of the impacts of paying out money the way this bill proposes, because it can seem like the Government’s handling of COVID-19 doesn’t have financial consequences, that if the Reserve Bank prints enough money, then maybe things will end happily ever after. That is wrong. It is critical that we actually are aware of the price signals that tell us something about our choices, not just in ordinary life—if I buy this, it costs more, or if I buy this I save money, or if I don’t buy something, I save even more—but, actually, for Government policy.

It’s critical that the Government has an impact on its balance sheet, that if it makes a lockdown decision, then it pays a cost on its balance sheet just the way that it has an impact and a cost for people and their households, their livelihoods and their business, their healthcare, their participation in education—it has costs right across the board, and it’s important that the Government actually faces a cost too. With the minor exception, I should add, that the way we’ve been running monetary policy in this country over the last year or so, the connection between the costs of Government actions and the decisions that they make have actually been seriously disconnected.

The real costs, funnily enough, have been paid in inflationary terms by a whole generation of people who have seen property ownership in this country sail away from them. And, even in this environment of cheap money, even with the economy having performed better than forecast, we still see a Government that’s going to go from 20 percent of GDP to 50 percent—or thereabouts—of GDP and net core Crown debt.

Now, just to put that in perspective, that’s about $90 billion of additional money that future taxpayers have to pay back at some point, because there’s no such thing as free money in the long term. Maybe in the short run we have low interest rates, but in the long term New Zealanders know that if they borrow money, then they have to pay it back. And that is one of the impacts of this decision. You know, this is a decision that ACT supports, because we don’t think that businesses should pay the cost of the Government’s policies themselves when the purpose is to benefit everybody. But we should never forget the debt that we’re putting on to future generations and the costs of monetising that debt for those generations who are trying to buy assets like homes.

If we forget what that sounds like or what sort of money that really is, here’s a few ways you could look at it: $90 billion is $90,000 per million people; if you have a household of five people, then this Government has effectively increased debt by $90,000—$18,000 per citizen. That is the effect of the Government’s borrowing over the couple of years of the COVID period. Now, that’s not to say that we shouldn’t have done it. In the case of this policy, it’s the right thing to do. But I think it would be a real failing of this House, that is here with the legal right to raise taxes—no taxation without representation, they like to sell me—if we didn’t talk about the impact that this bill and others through the COVID period have had on young New Zealanders, and will continue to have on young New Zealanders for decades to come.

Eighteen thousand dollars a person, 90 grand for a family of five. That is significant. And I think it’s important that when we make a decision like this—we’re already rushing it under urgency because, we mentioned, the Government wasn’t quite ready despite having six months, nine months of COVID to think about this happening—it would be absolutely remiss not to remember the people that end up paying for these COVID expenditures. So I feel I’ve made my point and I will commend the bill to the House. But, lest we ever forget those young people—many of whom got home from school, if their school wasn’t closed—who are going to remember this oh so clearly as they pay it back over decades to come. Thank you, Madam Speaker.

CHRIS BISHOP (National): Thank you, Madam Speaker. I’ve been reading through the regulatory impact statement of the bill in the last twenty—

Hon Grant Robertson: Unwise course of action.

CHRIS BISHOP: “Unwise”, says the Minister of Finance. Well, that’s slightly worrying, although I suspect his tongue was lodged firmly in his cheek on that one—and, of course, I’d have had a little bit longer to read the regulatory impact statement if I’d got a copy of the bill more than at the start of our National Party caucus meeting. But I’ve said enough about that.

I just want to make a couple of points—and I suspect they are better for the committee stage, but I’ll make them in the second reading speech because we are about to proceed to the committee stage. The first is just around the 30 percent threshold in the bill, and I note page 17 of the regulatory impact statement, which doesn’t go into very much detail about how that was devised but it does say that “Officials looked at zero data on revenue drops experienced by firms month to month throughout 2020, which informed our understanding of the alert level impacts.” That was from zero. And then, alongside “Information on the uptake of various wage subsidies, allowed us to estimate the number of firms facing significant revenue drops at different alert levels and that led to the 30 percent revenue drop test.”

It doesn’t really say how that was devised just beyond “We looked at the data and we got to 30.” It doesn’t give us anything more granular than that. It would be good, I think, to see some data in an anonymised way, of course, in a general way, as to the number of firms that experienced drops of a particular amount and things like that. [Interruption] What’s that?

Hon Grant Robertson: The wage subsidy scheme data will give you some of that.

CHRIS BISHOP: Yeah, well, that’s true. It would be helpful to see it, perhaps, in the regulatory impact statement. So I just make that point that there’s not a huge degree of analysis there and I think that would be good.

The second point is just around the regional targeting and I’ve been pondering as the Minister has been speaking around, you know, whether or not it would have been a better idea to allow for regions that are affected in—like we’re in a moment or, you know, if there was an outbreak somewhere else in the country, you know, down South, heaven forbid, in Dunedin.

David Seymour: Cheese rolls.

CHRIS BISHOP: Yeah, well, Mr Seymour always talks about cheese rolls. I prefer to think of Dunedin as the home of the Dunedin Sound, as the Minister of Finance, I know, will appreciate. But I’ve been pondering the question of regional targeting and I think, on balance, the Government has probably got it right in that it’s very difficult just because of the way businesses work in New Zealand and people coming in from different parts of the country and selling to various different other parts and customers in different parts and workers in different parts. I think would be very difficult and would lead to, you know, real questions on the margins and probably questions from the Opposition around why some people were included and some other people weren’t, and in the spirit of good faith and the bonhomie that is affecting the House at the moment, I strongly suspect that would be the case. So I suspect that is probably the right decision.

Hon Grant Robertson: I’m glad we all joined in that thought process.

CHRIS BISHOP: Oh, well that’s good. The other thing I was intrigued to note in the regulatory impact statement was that Ministers considered the Eat Out to Help Out scheme from the United Kingdom, which is something that various people have put forward. It was really interesting, and I just want to flag now that we will certainly be lodging Official Information Act (OIA) requests around that. I don’t know if you can lodge an OIA request via the House. I suppose I just have.

Hon Grant Robertson: Just tweet it.

CHRIS BISHOP: I could just tweet it. It turns out you can tweet Official Information Act requests. I don’t intend to tweet it. I’ll drop you an email, Mr Robertson.

Hon Grant Robertson: Very kind indeed.

CHRIS BISHOP: Very kind indeed. But I will be interested in the analysis on that. But I think it is probably right that at higher alert levels, subsidising people to leave their house and eat out does run contrary—

Todd Muller: Unless it was the Lower Hutt—

CHRIS BISHOP: Well, I’m always in favour of subsidising Lower Hutt eateries, Mr Muller.

David Seymour: I’ll volunteer for a pilot scheme.

CHRIS BISHOP: Mr Seymour represents an electorate in New Zealand with some of the finest restaurants in the country, so there’s no need to incentivise you, Mr Seymour, to get out and about in the Epsom electorate. But I think it is probably right that incentivising people at those higher alert levels is the wrong thing to do.

The only other point I’d make is that, again, I think it is probably right that the scheme is essentially loaded in favour of small to medium sized enterprises (SMEs) for the reasons that the Minister has outlined previously around the bigger balance sheets that larger companies have, noting, of course, what he says, which is that they’re not ineligible from claiming, it’s just that the support is front-loaded at the smaller end of the scale for SMEs.

Mr Woodhouse has already discussed with the Minister the seven-day versus 14-day issue and, again, I think reading some of the analysis in the regulatory impact statement—

Hon Member: Come on.

CHRIS BISHOP: Well, members are saying “Come on.” I mean I think we are having a genuinely good dialogue between the first and second readings around the bill. I mean this is literally the purpose of Parliament, but if members opposite don’t think so, then that’s—[Interruption] Yeah, that’s right. [Interruption] Ha, ha! I could get involved in talking about the Wairarapa food, Mr McAnulty, but given you represent an electorate I like very much I’ll choose not to. Thank you very much.

Bill read a second time.

ASSISTANT SPEAKER (Hon Jacqui Dean): I declare the House in committee for consideration of the Taxation (COVID-19 Resurgence Support Payments and Other Matters) Bill.

In Committee

Parts 1 and 2 and clauses 1 and 2

CHAIRPERSON (Adrian Rurawhe): Members, the House is in committee on the Taxation (COVID-19 Resurgence Support Payments and Other Matters) Bill. The question is that Part 1 stand part.

Hon MICHAEL WOODHOUSE (National): Point of order, Mr Chair. I seek leave for all parts to be taken as one debate, with the questions put separately at the end of it.

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

Hon MICHAEL WOODHOUSE (National): Thank you, Mr Chair. My committee stage contribution will be very brief, and I think the Minister in the Chair knows the questions that I want to ask, and they are simply these. The question of whether officials did discuss a loan scheme that could be converted into a grant in order that cash flow could be maintained, but that those businesses that genuinely had the sustained loss in revenue as a consequence of an alert level lockdown, was that considered? A supplementary question to that is: could it even now be considered if we amended the definition of the grant as set out in subclause 2 and 3, I think it is, of clause 5?

The second question, which I raised in my second reading speech, was in relation to clause 6. We’re amending section 157 to add the definition of income tax to include an amount payable in relation to the grants. It worries me that may mean that the grant that a business might be eligible for is then offset directly against tax debt already incurred.

CHAIRPERSON (Adrian Rurawhe): Just for the avoidance of doubt, I should have stated earlier that the question is that Parts 1 and 2, and clauses 1 and 2 stand part.

Hon GRANT ROBERTSON (Minister of Finance): Thank you, Mr Chair, and I thank the member, Mr Woodhouse, for those questions. In terms of the loan convertibility issue, we already have the Small Business Cashflow (Loan) Scheme that’s been used by about 100,000 businesses for working capital purposes, and that’s worked well. One of the considerations we had when we were designing this was we did not want to create the barrier of debt when people are taking this even convertible debt, as it were. So we went for the simplest option, which was a grant-based scheme. What I would say to the member, and the dialogue that I’m very happy to continue after this bill passes, is the way in which we can continue to look at what supports are possible.

We’re constantly taking a look at, for example, the Small Business Cashflow (Loan) Scheme, and how we can enhance and tweak that. We’ve made a couple of changes, we’ve extended it out, and we’ve looked at the possibility that if you didn’t drawn your full amount down that you could go back and then draw more down. That is what we believe is the appropriate way to design that scheme. We see this very much as a grant scheme. The specific issue we were talking about before, which is about what happens if the impact is felt later—that I think we’re going to have to see when we do eventually have to implement the scheme. Now, we’re hoping that that is not in the very near future. If it is, that will give us the ability to be able to judge this, and it actually answers the question around the Order in Council process, because it does give us some flexibility to make those changes without having to come back to the House to change the law.

In terms of the member’s other question, I have sought further advice from officials on this matter. This inclusion specifically relates to those who are overpaid or incorrectly paid the amount. So, for example, if your revenue drop actually was 10 percent or 20 percent, not 30 percent, this gives the ability for it to be considered within 157. The officials point out that—in the example the member gave—if you already had a tax debt or something, Inland Revenue has the power to move and try and get that money back from you. This wouldn’t alter that. It’s merely put in there effectively as an integrity measure, as a way of making sure that, if there is an incorrect payment, we have a way of getting it back. The member and I were discussing in the corridors earlier the issues we’ve had, as we’ve gone through the wage subsidy scheme audit process, of actually being able to get money back. We’ve mainly been doing that on a voluntary capacity. What we’re doing here is putting it in here so that, as with the wage subsidy scheme, we’re now in a position to be able to say, if there’s an incorrect or a false filing, we’ve got a way of getting the money back. If you get it properly and you already had a tax debt, you would be included in 157, this is not changing that.

Hon MICHAEL WOODHOUSE (National): OK, just to clarify that, if I may. That means that when it says an amount payable in relation to a grant, it’s talking about an amount payable by the taxpayer, not by the Crown?

DAVID SEYMOUR (Leader—ACT): If I could just ask the Minister to set out what this means in practical terms for businesses, because we’ve all had to come to this very late, and I won’t talk about why that is because it’s already been covered, but from the point of view of an employer or a business owner of any size, they’re eligible to apply for a grant of a $1,500 lump sum and extra $400 per fulltime equivalent (FTE) employee. If this restriction of Auckland being above level 3 and New Zealand being above level 2, but either of those circumstances could qualify for the whole country to be eligible—if these restrictions carry on for seven days, then they can apply for $1,500 plus a $400 per fulltime-equivalent staff member, and that’s a one-off payment that they may be liable to pay back.

Now, there’s a few limits on how much. First of all, if you have more than 50 FTEs, that’s a cap, so you can only claim for 50 times $400, and it doesn’t matter how many staff a business has. Second of all, in order to qualify, the business has to have a 30 percent or more reduction in revenue over the seven days that we’re under restriction, compared with the previous six weeks at level 1—

Hon Grant Robertson: Typical week.

DAVID SEYMOUR: —typical week, over the six weeks prior, it seemed to say—and, what’s more, the claim can’t be more than the reduction in revenue.

I think it’s important for people to understand what this means in practical terms. So if lockdown goes for seven days at level 2 or above anywhere in the country, a business that has a 30 percent or more reduction in revenue this week over a typical week, it can claim $1,500 plus $400 per fulltime equivalent employee. But my question really, for the Minister, is: what does that look like? Is it the case that on Monday, this legislation will be passed, and they’ll be able to fill out the forms with the Inland Revenue Department straight away—is that what happens?

Hon GRANT ROBERTSON (Minister of Finance): So look, the intention, as I understand it, is that this will be available if—and, I mean, bear in mind we’re in the hypothetical. We all hope that we don’t have to do this. But Inland Revenue (IR) inform us that they’ll be able to have this running, I think, next Thursday, so we would reach—it would be a little after. But once we get to the seven-day point in a normal circumstance, people could start making their applications. So we’ve just got a little bit of time to get it up and running from an IR perspective.

More broadly, just in terms of the member’s question, he has articulated it pretty much as it is. It is really important—and this picks up comments by both Mr Bishop and Mr Woodhouse—that we do have a situation in New Zealand where the interdependency of business around the country means that you can spend almost an endless amount of time trying to work out whether you could target by region, or whether you could target by the North Island, in the South Island, and all sorts of things like that. It’s just we’re completely interdependent, especially with Auckland. Obviously, in the situation we’re currently facing, Auckland is in level 3. That, effectively, means that if you’re—as the example I gave either in this debate or in question time—the Nelson tourism operator who contacted me and said, “I’ve had a whole lot of Aucklanders cancel.”, that person feels like they’re in level 3, from an economic perspective, even though the city they reside in is in level 2.

So we made the decision that whichever way you cut it—and Mr Woodhouse was talking about the iterative kind of approach; we did go through that—actually, New Zealand is such an interdependent unit that, yes, you are right. If we have these level restrictions continued through beyond up to the seven-day period, then, yes, all New Zealanders will be eligible for the scheme.

As the member rightly points out, there is a calculation shift for very small businesses, because one of the issues that emerged during the wage subsidy as well was that if we just stuck to the formula, you could have an overpayment, essentially, so therefore we put inside the formula, I think it’s four times the reduction, or the formula, whichever is the least. That then gives you the calculation that people will be able to get. For most businesses of a reasonable size, they will find it will be 50 fulltime-equivalent (FTE) employees, or $21,500.

Again, just my final point in response to Mr Seymour is that for the very large businesses, we toyed with the idea of simply excluding them. But, actually, rather than do that, we thought, well, no, because one of the problems you get is a business that’s got between 50 and 70 FTEs, and then it just starts to become silly to have cut it off completely. As I said in my earlier contribution, I don’t think large multinationals are going to be running around filling in the paperwork for $21,500. The flip side is that an engineering firm that employs 60 FTEs probably will, if they can demonstrate the drop in revenue.

DAVID SEYMOUR (Leader—ACT): Thank you for that clarification. Just on the second part of this bill, the minimum family tax credit increase, I was under the impression that this was in order to create some sort of, I guess, co-linearity with the benefit changes that were made during last April’s lockdown or last March’s lockdown. You’ve said in passing, in your speech, that that was not the reason, that it was actually to do with an adjustment to abatement rates. Can you please explain abatement rates of what exactly, and when were those changes made?

Hon GRANT ROBERTSON (Minister of Finance): I’m disappointed that the member was not glued to question No. 8 in the House today! I believe it might have come immediately after his questions, where he was probably working his way through the outcome of that. But on behalf of the Minister, the Hon Carmel Sepuloni, I reiterated today the announcement the Government has made to lift the abatement rates for those who are on main benefits. What that means is that you can retain a little more of your income before your benefit starts to reduce. As I said today, there hasn’t been a substantive change to those levels for a couple of decades.

When it was originally set all that time ago, it effectively equated to about eight hours’ work at the minimum wage, and at that point, if you worked beyond that, your benefit would start to reduce. Over time, the value of that has eroded, and so we’ve now announced the change which lifts the amount of work you do, again with the basis being about eight hours’ work at the minimum wage. The flow-on consequence of that is that in order to ensure that for a certain—it’s not a very large number of families, but for a certain number of families, in order for it to continue to be worthwhile for them to be in work rather than on a benefit, we have the minimum family tax credit. Now, this has existed since Working for Families was created in the early 2000s. Governments of both sides have tweaked it from time to time as benefit rates have changed. That is the purpose of tonight’s minimum family tax credit increase.

NICOLA WILLIS (National): I just want to dwell on a part of this bill that I know is of significant public interest, and that is subclause 13B relating to the publication of details relating to COVID-19 resurgence support payments. This has been an issue which has been fairly important over the past year as New Zealanders have learnt of those firms who claimed Government support, while also continuing to be extremely profitable, and has been an issue of some debate. So it is right that this bill includes provision for publishing the details of those who are taking these payments in some circumstances.

But I want to point out the restrictions in this bill. I’m hoping the Minister will offer some commentary on the judgments that have been made in defining these criteria, because what this subclause requires is that the commissioner may only publish information about the businesses receiving the support if they meet quite a long list of criteria, and they are that the information is readily available—we would expect that this information would be available—that it’s reasonable and practicable to disclose the information, which is, of course, quite a subjective judgment for the commissioner as to whether or not it is reasonable; that it’s not undesirable to disclose the information, and again there’s some judgment applied there; and that, finally, the disclosure of the information is reasonably necessary for the purposes of the administration of the scheme.

I think that final point’s quite interesting, because what I take from that is that this bill provides for a regime in which New Zealanders won’t learn of who has accessed this support unless businesses themselves come forward, or unless it is the judgment of the commissioner that it’s necessary to publish that information for administrative purposes. That’s how I read this section, but I would appreciate the Minister’s clarification on that point.

Hon GRANT ROBERTSON (Minister of Finance): I thank the member for the question. One of the interesting elements of the wage subsidy scheme was the level of interest in who got it, and when we released the information database it kept crashing because so many New Zealanders were keen to find out who was there, and we learnt all sorts of interesting information. I learnt that the Taxpayers’ Union, for example, had taken the option of getting it, which I found to be an interesting piece of information.

What we are doing here is replicating the ability for people to see that. It is a policy decision that we have taken that names of those companies who take it will be disclosed, with the same caveat that we had around sole traders or two-person businesses, where there are some privacy concerns about that. Other than that, it is our intention that the names will be published.

The information here for the commissioner, I believe, is either the same or similar to what was put in place for the wage subsidy scheme, which is just to prevent any potential abuses or misuses or the commissioner feeling that they are obliged to publish some details that might compromise safety or national security or matters like that. So that’s the sort of desirable point, and the line about disclosure being reasonably necessary for the purposes of the administration of the scheme merely aligns it with the fact that we’ve taken a policy decision that we will do that. So I’m happy to put on the record of the House for the member today that the same level of transparency that we saw for the wage subsidy scheme is enabled through this clause.

Hon MICHAEL WOODHOUSE (National): A very quick final question, and it’s in relation to the exchange between Mr Seymour and the Minister in respect of the increase in the minimum family tax credit. The answers from Mr Robertson appear very normalised—kind of stuff that happens all the time. The previous Government changed the abatement rates, as well, in the minimum tax credits. Except we’re here in urgency, and what I don’t understand is why this bill includes this part and what would have happened otherwise in order to get these changes made in time for 1 April 2021, because it hasn’t fronted up in any of the other taxation or remedial matters bills before the House.

Hon GRANT ROBERTSON (Minister of Finance): Well, what would have been required is a bill before the House to do it, and this is a bill before the House—

Hon Michael Woodhouse: So you would have had to have done it under urgency anyway.

Hon GRANT ROBERTSON: Theoretically, it could have been tacked on to another tax bill, depending on where those are at the moment, and as I am not the Minister of Revenue, I don’t have my finger on the pulse of exactly where each tax bill is. But quite clearly—and I talked about this, I think, in my first reading speech—this is a tax bill; this will enable the 1 April deadline to be met. There is absolutely nothing tricky going on here. This is a logical consequence of the abatement changes. If we believe in the minimum family tax credit, and I respect the fact that there may be members of the House who don’t, but if you do believe in it—i.e., that you should always be better off in work than not—then the minimum family tax credit is actually quite an important lever to be able to achieve that. It doesn’t affect a massive number of families, but it is an important element of making it worthwhile to be in work.

Part 1 agreed to.

Part 2 agreed to.

Clause 1 agreed to.

Clause 2 agreed to.

House resumed.

CHAIRPERSON (Adrian Rurawhe): Madam Speaker, the committee has considered the Taxation (COVID-19 Resurgence Support Payments and Other Matters) Bill and reports it without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

Sittings of the House

Sittings of the House

KIERAN McANULTY (Chief Whip—Labour): Point of order. Thank you, Madam Speaker. After consultation with other parties and assurances that a small number of calls will be taken, I seek leave that we continue the business of the House into the dinner break until the conclusion of the third reading of this bill.

ASSISTANT SPEAKER (Hon Jacqui Dean): I’m just searching for the words. OK. All right. Is there any objection to that course of action? The House is—

Hon Grant Robertson: Madam Speaker?

ASSISTANT SPEAKER (Hon Jacqui Dean): Thank you. Hon Grant Robertson.

Bills

Taxation (COVID-19 Resurgence Support Payments and Other Matters) Bill

Third Reading

Hon GRANT ROBERTSON (Minister of Finance) on behalf of the Minister of Revenue: I move, That the Taxation (COVID-19 Resurgence Support Payments and Other Matters) Bill be now read a third time.

I thank all members of the House for their very constructive contributions during the debate that we have had. We have moved quickly here, but I think that is justified in these circumstances to ensure we give certainty to businesses and workers around New Zealand about what they can expect in the event that we have a COVID resurgence that lasts seven days. The bill that we have debated tonight puts in place a resurgence support payment and the mechanism for that, to ensure that we do provide support for those fixed costs beyond wages that businesses have in the situation where alert levels lift. Obviously, the bill has also increased the minimum family tax credit, too.

I think this is a good piece of legislation. We will continue to work on how we provide support to businesses and may well return to the House in the future on that. I look forward to working with members across the House on the support we can provide, and commend the bill to the House.

ASSISTANT SPEAKER (Hon Jacqui Dean): The question is that the motion be agreed to.

Hon MICHAEL WOODHOUSE (National): Thank you, Madam Speaker. I’m not a fan of urgency, generally. I think it should be used sparingly, and there has been, I think, some creep over the last three and a bit years—COVID notwithstanding—into the use of urgency. But I support this process for this purpose. What I want to do also is commend the Speaker—well, I commend the Speaker, of course, but commend the Minister, actually, for the constructive manner in which he has engaged in the questions and the speedy resolution of those, notwithstanding that I do think that these documents could have come to us a little earlier. There’s a process that officials follow, and I don’t think politics would die in a ditch if we short-cut that sometimes in the interests of fuller or earlier disclosure. But with that very slight rebuke, I do commend the manner in which the House and the Minister has conduct itself over this, which I know will be an important assistance to particularly small business, and I commend it.

DAVID SEYMOUR (Leader—ACT): I rise on behalf of ACT in support of this third reading. As I’ve said in earlier readings, I think Government should be an insurer of last resort, particularly when it’s the Government’s policies that are putting severe costs on some businesses for the wider public good of maintaining our eradication strategy. So we support the underlying principle.

I reiterate comments I made in the first reading that this urgency would not be necessary had the Government been more prepared, and an outbreak such as this could’ve been anticipated. In fact, the Government itself has said it’s been preparing a resurgence plan for months and months and months, and I think it’s a real shame that the Government has chosen to use urgency so casually, because it ultimately erodes the faith New Zealanders have in the laws of this Parliament. We expect them to carefully follow the laws, but they expect us to carefully make the laws, and this is not a good example of that—the way that this has been done.

I’d reiterate my comments about the effect of debt. You know, money is not free. Interest rates may be low, but, in the long term, debts must be repaid. It’s one of the few constants of human history. And the amount of money being borrowed through COVID for the future generations, and the amount of money printed to get through COVID, and the effect that’s had on asset prices, from a generational perspective, hugely important that it would be remiss of us not to recall that.

Finally, I thought it was very useful in the committee stage to get an understanding of what this legislation means in practical terms. We all hope that tomorrow we’ll get the signal—I think it’s 4.30 p.m. we’re expecting to hear—that all the tests have come back negative, the Government’s managed to trace all the casual and close contacts of the case, and we can go back to a more enjoyable level of alert, and none of this will be necessary. But if the alert level stays high for seven days, then it means this legislation will be in place, and by next Thursday, the Minister tells us, the IRD—and good on them—will have very rapidly operationalised so people who’ve lost more than 30 percent of their revenue from their business will be able to apply for up to $21,500 to make up for the loss of business during a seven-day-plus lockdown, and I think understanding what this practically means is a really important outcome of this debate, because previously I don’t think it was that clear. So with those few comments, I commend this bill to the House on behalf of the ACT Party and I wish the Minister and his officials all the best in making it work smoothly and quickly. Thank you.

Hon EUGENIE SAGE (Green): Thank you, Madam Speaker; it will only be a brief call. Just in terms of the issue of urgency, the Green Party is always very hesitant about urgency, as well. But I do note that the bill was developed through consultation over some months with Business New Zealand, the New Zealand Council of Trade Unions, the Auckland chamber of commerce, and Pacific, Māori, and iwi business leaders. And so it has been the need to respond quickly that has been a hallmark of this Government’s approach to COVID, and, as Mr Seymour noted, the fact that this assistance will be available very quickly is what businesses want, because of the huge impacts of the changes in alert levels. So, yes, we are putting this through under urgency, but I have been heartened by the support across the House for ensuring that we do provide that assistance.

I think other speakers have also suggested that perhaps it could be loan assistance, rather than a grant. But I think if you read the regulatory impact assessment, that highlights the waning enthusiasm for debt, for loan-related schemes, and the fact that a grant scheme like this—because of the waning social capital around supporting some of the restrictions in the increased alert levels, a scheme like this, which does provide that assistance quickly, which provides businesses with certainty that they can apply for it, does help bolster the social capital that sees all of us working together as “team Aotearoa New Zealand” to ensure that we minimise the chances of further community transmission.

So the Green Party supports this bill and congratulates the Minister of Revenue and officials for developing the scheme in consultation with key stakeholders to provide really valuable assistance. Kia ora.

Motion agreed to.

Bill read a third time.

The House adjourned at 6.05 p.m.