Tuesday, 4 May 2021
Volume 751
Sitting date: 4 May 2021
TUESDAY, 4 MAY 2021
TUESDAY, 4 MAY 2021
The Speaker took the Chair at 2 p.m.
Karakia/Prayers
Karakia/Prayers
Hon JENNY SALESA (Assistant Speaker): Ke tau lotu. ‘E ‘Otua Māfimafi, kuo mau taa‘i mālie ‘i ho‘o ‘ofá mo e ngaahi tāpuaki hono kotoa. ‘Oku tuku homau lotó ka mau hū atu ke ke malu‘i ange mu‘a ‘a e Kuiní, mo tataki ange ‘emau fua fatongia ‘i he Fale Aleá ‘aki ‘a e poto Faka-e-‘Otua, ‘ofa pea mo e ‘ulungaanga malū, ko e ‘uhí ko e mo‘ui mo e melino ‘a e fonuá. ‘Oku mau kole atu ‘a e ngaahi me‘á ni hono kotoa ‘i he huafa ho ‘aló pē ‘e taha ko Sīsū Kalaisi ka ko homau fakamo‘uí, ‘Emeni.
Petitions, Papers, Select Committee Reports, and Introduction of Bills
SPEAKER: Petitions have been delivered to the Clerk for presentation.
CLERK:
Petition of Sarah-Jane Cairns requesting that the House amend the law to specify a requirement that children born alive after an abortion be provided immediately with appropriate medical care
petition of Ravi Sabrol requesting that the House urge Immigration New Zealand to only change immigration policies after 5 years, to help keep migrants eligible for further working visas or residency permits, to put upcoming changes on hold, and relax rules for migrants who are onshore and offshore
petition of Rylee Hays requesting that the House urge the Government to allocate more funding towards hospitals, mental health facilities, and counselling services
petition of Belen Macchiavello requesting that the House urge the Government to allow migrants with current New Zealand visas who are stuck offshore to either re-enter the country, or extend their visas
petition of Oliver Manton requesting that the House urge the Government to extend all current active supplementary seasonal employment visas by another year
petition of Abhijit Mallik requesting that the House urge the Government to offer permanent residence to work visa holders presently in New Zealand
petition of Ben Leigh requesting that the House urge the Government to review the minimum legal age for obtaining a firearms licence.
SPEAKER: Those petitions stand referred to the Petitions Committee.
Ministers have delivered papers.
CLERK:
Animal Control Products, Report to Shareholders for the Six Months Ended 31 December 2020
Drug Free Sport New Zealand, Annual Plan to 30 June 2021, and Statement of Performance Expectations, Revised April 2021
Report of the Attorney-General on the Supplementary Order Paper on the Land Transport (Drug Driving) Amendment Bill
Education Payroll, Statement of Performance Expectations 2020/21.
SPEAKER: I present the 2021/22 Draft Annual Plan of the Controller and Auditor-General. Those papers are published under the authority of the House.
Select committee reports have been delivered for presentation.
CLERK:
Report of the Education and Workforce Committee on the Immigration (COVID19 Response) Amendment Bill
report of the Environment Committee on the petition of Conrad House and 1,055 others
reports of the Finance and Expenditure Committee on:
the New Zealand Superannuation and Retirement Income (Fair Residency) Amendment Bill
the petition of Nicola Millar
the petition of Sean Davis
report of the Foreign Affairs, Defence and Trade Committee on the petition of Brian Webb
report of the Governance and Administration Committee on the petition of Sreiden Bun
reports of the Justice Committee on:
the Electoral (Integrity Repeal) Amendment Bill
the Rights for Victims of Insane Offenders Bill, and petitions of Wendy Hamer.
SPEAKER: Those reports are set down for consideration.
The Clerk has been informed of the introduction of bills.
CLERK:
Education and Training Amendment Bill, introduction
Regional Comprehensive Economic Partnership Legislation Bill, introduction.
SPEAKER: Those bills are set down for first reading.
Oral Questions
Questions to Ministers
Question No. 1—Housing (Public Housing)
1. CHLÖE SWARBRICK (Green—Auckland Central) to the Associate Minister of Housing (Public Housing): Are there effective rules in place to ensure people who rent can find an affordable home; if not, what advice has the Government requested on potential new rules to ensure affordable rentals?
Hon Dr MEGAN WOODS (Minister of Housing) on behalf of the Associate Minister of Housing (Public Housing): Yes, although I acknowledge that there are some people who are having difficulty finding an affordable rental property to call home during the housing crisis that has built up over the last decade. This Government has made a number of changes to support renters to find affordable accommodation and to improve their security and rights in their homes. These changes include limiting rent increases to once a year, banning rental bidding, banning letting fees, the introduction of the healthy homes standard, the removal of no-cause termination, increasing accommodation supplement rates for the first time since 2005, and allowing renters to request rent reduction through the Tenancy Tribunal if they think their rents are too high. We will continue to monitor the rental market closely.
Chlöe Swarbrick: Is that system working, however, to make renting affordable for people, with rents rising by 50 percent since 2010 but wages only rising by 20 percent?
Hon Dr MEGAN WOODS: On behalf of the Associate Minister, as I said in my answer to the primary, Ministers will continue to monitor the rental market. We have looked closely at the empirical evidence of what we’ve seen over the last 12 months. So for the year to March 2021, we saw a 1.6 percent increase in rents across the country, although we do acknowledge that some of that time was the period of time when rents couldn’t be put up. So, adjusted, it’s probably more like a 2 to 5 percent increase across the country. We are monitoring that situation.
Chlöe Swarbrick: Does she accept that the current system simply allows rents to continue increasing to whatever landlords want to charge?
Hon Dr MEGAN WOODS: On behalf of the Associate Minister, one of the reasons we do monitor rents closely is to build that empirical base—for example, when we made a number of the changes that I outlined in my primary answer, such as limiting rent increases to once a year and banning letting fees, there was a lot of narrative from a number of interest groups that rents were going to go sky-high. We have monitored that and we have seen that that has not been the case. We saw a 1.6 percent increase in rents last year, adjusted, as I said, around 2 to 5 percent.
Brooke van Velden: Has the Government also received advice that introducing rent controls could reduce supply, quality of housing, and lead to discrimination of tenants?
Hon Dr MEGAN WOODS: On behalf of the Associate Minister, the member would have seen the advice that we proactively released last year that showed that there was advice that did look at rent controls. One of the things that I do note is that even between our own agencies—for example, the Ministry of Housing and Urban Development and Treasury—there is a difference of opinion around degrees of impact as well.
Chlöe Swarbrick: Is it fair that tenants have to prove rent is unreasonable through the Tenancy Tribunal, or should we just have better rules to set affordable rents in the first place?
Hon Dr MEGAN WOODS: On behalf of the Associate Minister, as I’ve told the member, we are continuing to monitor those rents closely. We have looked at the most appropriate datasets, whether that be the Tenancy Tribunal, rent/bond data, or whether that be the Stats New Zealand dataset that we look at, and we will continue to keep a watch on those numbers.
Chlöe Swarbrick: Would the Labour Government follow the example set by, for example, the Labour Party mayor of London and work to introduce fair rules to ensure reasonable rents?
Hon Dr MEGAN WOODS: On behalf of the Associate Minister, I went through, in the answer to the primary question, a range of measures that we have already taken as a Government to ensure that we do have the ability for those New Zealanders who rent their homes to have a warm, dry place that they can feel secure in, and part of that is ensuring that rents don’t spiral out of control. We have no plans for rent controls or indexation. We are continuing to monitor the situation.
Chlöe Swarbrick: Then, how much more unaffordable would rents have to get for the 1.4 million New Zealanders in rental properties before the Government takes action?
Hon Dr MEGAN WOODS: On behalf of the Associate Minister, as we said, one of the reasons we are monitoring so carefully what is happening to rents across the country, but also in particular geographic locations, is because there was a lot of speculation from a range of interest groups around how sky-high rents would go when we did things like introduce the banning of letting fees, when we did things like limiting the number of rent increases to once a year. But what we have seen is that that has not come to pass—1.6 increase for the year to March 2021, and I think that that is a dataset we will continue to monitor.
Question No. 2—Prime Minister
2. DAVID SEYMOUR (Leader—ACT) to the Prime Minister: Does the Government intend to implement all of its policies?
Rt Hon JACINDA ARDERN (Prime Minister): Yes, especially the Government’s decision to put a greater emphasis on primary healthcare and ensure fairer access to healthcare for all New Zealanders through establishing Health New Zealand, a new Māori health authority, and a new public health agency. The forms will mean that for the first time we’ll have a truly national health system and the kind of treatment people get will not be determined by where they live.
David Seymour: Does she stand by the statement in the New Zealand Government’s submission on the Expert Mechanism on the Rights of Indigenous Peoples, dated March 2021, that “Aotearoa New Zealand is committed to being among the first states to create a plan to implement the Declaration.”; if so, what parts of the He Puapua report will be included in this plan?
Rt Hon JACINDA ARDERN: I’m going to respond to the second half of the member’s question. As we have repeatedly said over the last few days and indeed the last week, He Puapua was a document that was produced by a group of individuals, presented to the Government, but has not gone to a Cabinet, has not gone to a Cabinet committee, is not a Government programme, and nor has it been endorsed by the Government. I’d make a general statement, though, if I may, to the member: the Declaration on the Rights of Indigenous Peoples was signed by the then National Government in 2010. In 2014, four years later, a Cabinet minute records that the then Cabinet, which included the now Leader of the Opposition announced that they would finally set a declaration roadmap to actually implement the Declaration on the Rights of Indigenous Peoples. There was a short stocktake on that implementation and, sadly, nothing further happened. You cannot simply sign up to a document and not do anything about it. We have started a process. It is fair to say it has some way to go.
David Seymour: Can the Prime Minister now answer the first part of my question: does she stand by the statement in the New Zealand Government’s submission on the Expert Mechanism on the Rights of Indigenous Peoples, dated March 2021, that “Aotearoa New Zealand is committed to being among the first states to create a plan to implement the Declaration.”?
Rt Hon JACINDA ARDERN: We’re working on implementing something that we signed up to over a decade ago. The fact that that would make New Zealand amongst the first isn’t because we have an aspiration to be the first; it’s just a sad state of play that currently there aren’t many declaration plans in place. There was a visit, if I recall, not so long ago, where we were implored as a signatory to the declaration to actually start some work on it. I would hope that the member would agree that we do have some obligation to follow through on the signing of it, as National did 10 years ago.
David Seymour: Does the Prime Minister agree with the submission on the Expert Mechanism on the Rights of Indigenous Peoples, dated March 2021, when it says, “Māori wards and Māori health authorities are examples of initiatives which are consistent with the declaration.”, and, if so, what other initiatives from the declaration does the Government have under way?
Rt Hon JACINDA ARDERN: Actually, what I would say is that a Māori health authority is actually consistent with the Treaty of Waitangi and our role as a partner to the Treaty of Waitangi. It also, if I may, is actually in keeping with the principle that I’d hope all New Zealanders would hold, that if something isn’t working, fix it. Our health system is not working for Māori. They are dying younger than other New Zealanders, and so we are fixing it. Now, you can put whatever rationale for that action that you would like on the table. Mine is fairness and equity.
David Seymour: Was she aware that the Minister for Māori Development met with the chair of the Declaration Working Group on 7 April, and, if so, what discussions has she had about this meeting?
Rt Hon JACINDA ARDERN: Yes, I am aware of that, and I would expect, given we received a report from that group, that that’s only in keeping with, really, just courtesy to make sure that we update the group on our intended work programme going forward. The paper—
Hon Judith Collins: Why’s it taken two years?
Rt Hon JACINDA ARDERN: I will not take criticism over the time line, given it’s been 10 years since the National Party signed up to it. To the member’s question, I imagine one of the things discussed would be the next step for us, because, obviously—we’d be the first to admit—there were some delays since that report was received for anything happening, in part: (a), COVID, and (b), the election.
David Seymour: Is the Prime Minister confident the Government’s been acting in an open and transparent manner in relation to the He Puapua report, and, if so, why did the Ombudsman have to become involved in an Official Information Act request to release it?
Rt Hon JACINDA ARDERN: To answer the latter half of the question, the reason that Te Puni Kōkiri made the argument about not releasing the report was because of a concern that it would be misconstrued as Government policy. I rest my case.
David Seymour: Is the Prime Minister saying that her Government cannot release reports taxpayers pay for because the people who pay for it might not properly understand it?
Rt Hon JACINDA ARDERN: Absolutely not.
Hon Judith Collins: If she believes it is a courtesy to update the authors of the report, when did she think she might have the courtesy to update the New Zealand public that have paid for it?
Rt Hon JACINDA ARDERN: At the time that it had been considered by Cabinet. We have, of course, a process of proactive release once a report has been considered by Cabinet. This report was released before it was even considered by Cabinet, a convention multiple Governments across multiple parties have always maintained.
David Seymour: Does the Prime Minister agree with Professor Jack Vowles of Victoria University, who says, “If the government is serious about He Puapua, it will explain its own position more fully, and if it wishes to pursue that agenda, or significant parts of it, it should set up the framework for a further constitutional debate to which all New Zealanders can contribute.”?
Rt Hon JACINDA ARDERN: That was what He Puapua was intended to start, and, I have to say, the groundwork for us being able to have a decent conversation about these issues has not been well established by the debate I have seen from members of this House.
David Seymour: Is it the Government’s position that New Zealand deserves a debate or that the release of its documents should be supressed because poor little taxpayers might misconstrue it?
Rt Hon JACINDA ARDERN: The member is completely mischaracterising my statement—[Interruption]
SPEAKER: Order!
Rt Hon JACINDA ARDERN: Of course our reports that are considered by Cabinet are proactively released, it is part of how we behave as a Government. This report had not been considered by Cabinet. There was no ability, therefore, for us to put formally our positions on the report, thus the argument that was in the absence of that it could be misconstrued as Government policy. And, I have to say, the member has proven that assertion to be completely correct.
Question No. 3—Finance
3. Dr DUNCAN WEBB (Labour—Christchurch Central) to the Minister of Finance: What recent reports has he seen on the New Zealand economy?
Hon GRANT ROBERTSON (Minister of Finance): Last week, ANZ’s business confidence survey was titled “Bouncing back”, and it reported that confidence had jumped six points in April, with firms’ own activity also lifting six points. ANZ said the “solid bounce … indicated that firms are feeling pretty upbeat,”. It also admitted that the robustness of the data was starting to challenge the bank’s own view that the economy would go largely sideways this year. As I said this morning in my pre-Budget speech, the New Zealand economy has proved to be resilient in terms of GDP and unemployment. We are well-positioned relative to the countries we normally compare ourselves to.
Dr Duncan Webb: What other reports has he seen on the New Zealand economy?
Hon GRANT ROBERTSON: The BNZ-Business New Zealand Performance of Manufacturing Index rose strongly, up 9.4 points in March to 63.6, the highest monthly result since the survey began in 2002. The result showed a strong boost in new orders and production, with manufacturers seeing an increase in demand both locally and overseas. Separately, the Performance of Services Index also climbed back into expansion, up 2.7 points in March to 52.4. The improvement was led by an increase in activities in sales and new orders.
Dr Duncan Webb: What reports has he seen on trade and what that shows in terms of economic confidence?
Hon GRANT ROBERTSON: The overseas merchandise trade figures for March show that firms appear more confident in investing more on the back of an improving economic environment. Imports of machinery and plant rose 26 percent to $922 million in March, compared with the same month a year earlier. For the March quarter, imports of machinery and plant rose 11 percent to $2.4 billion. While the economy is continuing to perform ahead of expectations, the global situation remains uncertain, and we can expect volatility in domestic and international data for some time.
Question No. 4—Prime Minister
4. Hon JUDITH COLLINS (Leader of the Opposition) to the Prime Minister: Does she stand by all her Government’s statements and actions?
Rt Hon JACINDA ARDERN (Prime Minister): Yes—in particular, our recent announcement supporting our recovery from COVID-19 that, pending final confirmation by New Zealand’s Director-General of Health and the Cook Islands Secretary of Health, two-way quarantine-free travel will commence between New Zealand and the Cook Islands on 17 May. In addition, recent data from the Tertiary Education Commission shows that our investment in free apprenticeships has led to the number of apprentices increasing by 17.6 percent, compared to 2019. It’s particularly pleasing that the number of Māori and Pacific apprentices grew almost 30 percent last year. There was also a 19.7 percent jump in workers aged 25 to 39 taking the opportunity for a career change, and more than 1,500 additional apprentices aged over 40.
Hon Judith Collins: Does she agree with her health Minister’s proposal to Cabinet that the Māori Health Authority be given “clear approval rights including an ability to exercise a veto in sign-off” over national health plans?
Rt Hon JACINDA ARDERN: Here the intent of what has been designed is the idea of us seeing joint health plans developed between Health New Zealand and the Māori Health Authority. So that is intended to cover off areas where delivery is intended for the general population, but we want to make sure that we’ve got input from the Māori Health Authority, and say, over whether or not that is going to adequately reach Māori communities. Of course, what we want is that not to be consultation, which is what we have now and what hasn’t worked, so we’re seeking joint agreement. We will need to put in place mechanisms if there isn’t agreement on how to resolve those disputes, but this cannot be a situation of mere consultation—which is what we’re designing.
Hon Judith Collins: So which health services are currently not accessed by Māori?
Rt Hon JACINDA ARDERN: Currently, you can see in our data and our stats that anything from screening programmes for, say, bowel screening and, unfortunately, cervical screening is inadequate for Māori, because we are not reaching as many. The number of Māori we are reaching with those screening programmes isn’t the same as what we are reaching for the rest of the population. Now, we have to ask ourselves the question: “What do we need to do differently?” Because, ultimately, it’s resulting in Māori dying younger.
Hon Judith Collins: So when national and regional plans have to first be approved by the Māori Health Authority, how is that not a power of veto over all of the Government health policy and implementation?
Rt Hon JACINDA ARDERN: Because that is the difference between partnership and consultation—you have to have that equal say—and this isn’t something we should be afraid of. We have tried the process of having a consultation style of approach. It hasn’t worked. For Māori, they have worse outcomes for cancer in every cancer, bar melanoma. I’d like to hear the member’s proposal for how we are going to turn around those statistics.
Hon Chris Hipkins: In making the decision to establish the Māori Health Authority, did the Government consider article 23 of the declaration signed up to by the last National Government—[Interruption]
SPEAKER: Order! Order! The member will resume his seat. Who made that comment? The member will withdraw and apologise.
Hon Dr Nick Smith: I apologise.
SPEAKER: Chris Hipkins—start again, please.
Hon CHRIS HIPKINS: Did the Government consider, in making the commitment to establish the Māori Health Authority, article 23 of the declaration signed up to by the last National Government: “indigenous peoples have the right to be actively involved in developing and determining health, housing and other economic and social programmes affecting them and, as far as possible, to administer such programmes through their own institutions.”?
Rt Hon JACINDA ARDERN: You could ask any member of this Government what their rationale for the Māori Health—[Interruption]
SPEAKER: Order! Order!
Rt Hon JACINDA ARDERN: You can ask any member of this Government their rationale for why this change was important. For some, it will be the preventable hospitalisations we see amongst our children, but particularly our Māori and Pacific children. For others, it will be the heavy prevalence of co-morbidities; others, it will be the public health issues around, for instance, the prevalence of smoking amongst our younger rangatahi. Everyone will have a different reason, but what we all agree is the system right now doesn’t work. Surely, as a House, we can concur that we have to do things differently. That is what this Māori Health Authority is all about.
Hon Judith Collins: So isn’t that, in fact, a power of veto because the Māori Health Authority needs to co-sign or approve all national health strategies, and what happens if it decides not to?
Rt Hon JACINDA ARDERN: Again, this is partnership. We have to form agreement on how we are going to roll out health policies that we want to make a tangible difference to the health of Māori communities—now, if the member has another proposal on how to achieve that, I’d very, very much be interested in it, but a lot of thought and work has gone into these proposals and our view is: ultimately, it will make a difference to health and, therefore, it will make a difference to the way that we’re able to allocate our health resources and ultimately save people’s lives and save money.
Hon Judith Collins: If this is actually based on need, as the Prime Minister now seems to be indicating, then why is she not contemplating, say, a Pasifika health authority with a power of veto like she’s giving the Māori Health Authority?
Rt Hon JACINDA ARDERN: I’m not actually going to go down the track of implying here—[Interruption]
SPEAKER: Order! Order! I apologise to the Prime Minister. I know it’s the first day back after the school holidays but I think members—especially on my left but earlier on my right—need to know that they’re back at work now, not just in a playground yelling.
Rt Hon JACINDA ARDERN: The question that I would put to the member is on what basis did the National Government establish Whānau Ora? On what basis did the National Government seek to support kōhanga reo? An acknowledgment, actually, of not only the obligations that we have but that we should be offering services—be they health or education or social services—in partnership with Māori. I don’t think that’s a new concept. It certainly never used to be a new concept for National.
Hon Judith Collins: So why is the Prime Minister so set on having this power of veto for a Māori Health Authority over every other provider and provision of health services in New Zealand?
Rt Hon JACINDA ARDERN: I reject the premise of that question and I have already given an answer.
Question No. 5—COVID-19 Response
5. TANGI UTIKERE (Labour—Palmerston North) to the Minister for COVID-19 Response: Kia orana, Mr Speaker. What recent announcements has the Government made on commencing quarantine-free travel to and from New Zealand?
Hon CHRIS HIPKINS (Minister for COVID-19 Response): Yesterday, our Prime Minister and Prime Minister Brown of the Cook Islands announced that quarantine-free travel between New Zealand and the Cook Islands will commence at 11.59 p.m. on Sunday, 16 May. Long-term residents and critical workers have, of course, been able to travel quarantine-free from the Cook Islands to New Zealand since 21 January, and we’ve been working closely with the Cook Islands to expand this to a wider range of people. Two-way quarantine-free travel is a very significant step for both countries in our COVID-19 recovery, and it’s a direct result of New Zealand’s and the Cook Islands’ success in responding to the pandemic.
Tangi Utikere: What are the benefits of quarantine-free travel with the Cook Islands?
Hon CHRIS HIPKINS: Quarantine-free travel will mean that families can reconnect, commercial arrangements can resume, and some Kiwis can take a much-welcomed winter break, whilst also supporting the Cook Islands’ tourism sector and their recovery. It’s important to remember that many other countries around the world still have bans in place on travel for any holiday purposes. So this is exciting and a much-anticipated development for both New Zealand and the Cook Islands, and, of course, it builds on our existing free-travel arrangement with Australia.
Tangi Utikere: What work will be required in the lead-up to the commencement of quarantine-free travel with the Cook Islands?
Hon CHRIS HIPKINS: A lot of work has already been done, but there are still a few i’s to dot and t’s to cross. Commencement of the bubble will be subject to the normal final checks as we went through with Australia, including making sure that airlines and airports are ready and all of the necessary protocols and frameworks are in place, particularly around how we respond. And we’ll receive final advice from the Director-General of Health here in New Zealand before we go live on the 17th.
Tangi Utikere: What plans will be in place in the event of an outbreak in the Cook Islands?
Hon CHRIS HIPKINS: It is important to note that the response to any COVID-19 incursion between New Zealand and the Cook Islands will be different to that between New Zealand and Australia. The health and safety of people in the Cook Islands has, at all times, been a paramount consideration in New Zealand. If there were an outbreak, we would likely send some of our own health workforce to the Cook Islands to help them manage the effects of that, and we would look to try and reduce any impact—and that may mean bringing people back to New Zealand quite quickly. As in the case with Australia, the bubble does come with a flyer-beware caveat. If there is an outbreak in New Zealand, flights could be paused, and given the size of the social settings in the Cooks, a highly precautionary approach is likely to be taken.
Question No. 6—Health
6. Dr SHANE RETI (Deputy Leader—National) to the Minister of Health: Does he stand by all of his statements and actions related to the proposed Māori Health Authority?
Hon ANDREW LITTLE (Minister of Health): Yes. I especially stand by my statement that “The system has never allowed Māori meaningful control over issues affecting their own communities and has never really acknowledged that what we are doing isn’t working for Māori, and that by giving more control over to Māori communities, we might actually change things for the better.”
Dr Shane Reti: Has he had any communications around aligning the proposed Māori Health Authority with the strategy described in He Puapua; if so, what?
Hon ANDREW LITTLE: I have no knowledge of the content of the report known as He Puapua; I have not seen it. The proposals that the Government announced a couple of weeks ago are based on the information and advice that we have received, including the report of the Health and Disability System Review, and they are about doing what is right for New Zealand today.
Dr Shane Reti: Can he name one Māori health outcome that a Māori health authority will commit to improve in the first year of operation?
Hon ANDREW LITTLE: There are a number that I would expect to improve. So, for example, the feature of our health system that the Health Quality and Safety Commission reported on just a week before we made our announcement two weeks ago was that if you are a young Māori—if you are rangatahi—and you suffer a major trauma, you are three times more likely to die within a month of that trauma than other New Zealanders. And one of the reasons for that is you are less likely, if you are rangatahi, having suffered a major trauma, to get a CT scan. How does that work? I would also expect the Māori Health Authority to address the figure of Māori and Pacific people being twice as likely to die young from conditions that could have been treated had they got treatment at the right time. I would also expect, in the long term, a Māori health authority, through its mahi, to address the fact that life expectancy for Māori is, on average, seven years shorter than for the rest of New Zealand.
Dr Shane Reti: Is it envisaged that in GP consultations, some components of the consultation will be accountable to the Māori Health Authority and some components will be accountable to Health New Zealand (Health NZ)?
Hon ANDREW LITTLE: It’s very sad that the National Party is forced to put up absurd propositions on what is a very serious issue for Māori, but actually for all of New Zealand, and that is the inequity in our health system: inequity of access and inequity of health outcomes. That member well knows, because of the region from which he comes, that there are kaupapa Māori health services that provide health services to Māori and to Pākehā. They don’t distinguish it, and they provide excellent Māori health services as a result.
Dr Shane Reti: Point of order, Mr Speaker—not clear to me that the Minister has addressed the question that I asked about GP consultations.
SPEAKER: I think he’s got there in the end.
Dr Shane Reti: Why has he not proposed a separate Pacific peoples health authority, despite his Cabinet paper stating that health disparities are centred to the reforms, and that Pacific people have the same health disparities as Māori?
Hon ANDREW LITTLE: The member is correct that the same health disparities that Māori suffer apply equally to Pacific people, and that is why part of the proposal is to have a beefed-up Pacific directorate in the revamped Ministry of Health, and specific attention from Health NZ. The difference is, however, that the Crown has obligations under the Treaty of Waitangi, and one of those obligations is to act in partnership, and we are going to act in partnership.
Dr Shane Reti: Then, is the establishment of a Māori health authority with veto powers primarily to address health outcomes for Māori or to comply with the Treaty?
Hon ANDREW LITTLE: It is to do two things: it is to address the obvious and longstanding inequity of access to healthcare and health outcomes for Māori, and it is also to comply with our Treaty obligations. I don’t know why that member and his compadres in the National Party are so concerned that by acting in partnership, somehow Māori have a different set of interests to the rest of New Zealand on this. We all have the same interest in the best possible health outcomes for all New Zealanders, and we are setting up a system to deliver just that.
Question No. 7—Social Development and Employment
7. TERISA NGOBI (Labour—Ōtaki) to the Minister for Social Development and Employment: Fa‘afetai tele, Mr Speaker. What recent announcements has the Minister for social development made about supporting beneficiaries and superannuitants through their winter months?
Hon CARMEL SEPULONI (Minister for Social Development and Employment): Last week, I announced that 1 May would mark the beginning of the Government’s winter energy payment. This means that over 1 million New Zealanders receiving either a main benefit or New Zealand superannuation will get more money each week through the winter energy payment. This year, the winter energy payment runs from 1 May until 1 October, delivering $20.46 per week for single people or $31.82 per week for couples and single people with children.
Terisa Ngobi: Why is the winter energy payment important?
Hon CARMEL SEPULONI: Because winter is coming. We all know that having a warm home is a key part of preventing illness and supporting people’s wellbeing through the winter season. Many New Zealanders struggle with the increased power costs, particularly those on low incomes, and, over the winter months, children and superannuitants are most at risk of being hospitalised due to respiratory illnesses. This payment supports them in covering the cost of energy bills and removes the barrier of costs to heating their homes.
Terisa Ngobi: How can beneficiaries and superannuitants access the winter energy payment?
Hon CARMEL SEPULONI: Anyone getting a main benefit, New Zealand superannuation, or a veterans pension is eligible to receive the winter energy payment. They don’t need to do anything or apply. If they’re eligible, they will get the winter energy payment automatically.
Question No. 8—Transport
8. Hon MICHAEL WOODHOUSE (National) to the Minister of Transport: Does the Government remain committed to all of the projects that comprise the transport portion of the New Zealand Upgrade Programme announced in January 2020; if not, why not?
Hon MICHAEL WOOD (Minister of Transport): Yes, the Government has not made changes to the New Zealand Upgrade Programme and remains committed to delivery of good transport outcomes along all of the routes concerned. Given the scale of the projects concerned and the fact that the programme was announced pre-COVID, a baselining exercise has been done to provide certainty around cost and scope. Ministers are working through the options on how to take the programme forward, and announcements on all the rest of the projects will be made in the near future.
Hon Michael Woodhouse: Why, then, did he last week refuse to commit, to media, to delivering all the projects his Government announced in 2020?
Hon MICHAEL WOOD: That’s not the case. The Government remains committed to those projects. I have simply, in the media, made the comment that the Government remains committed to a sound process to consider the scope and costings of the projects, something that we believe is important, and I’m surprised that the member doesn’t think that’s important, given the shambles of the Transmission Gully project that that lot left for this Government to clean up and bail out—because they didn’t do the groundwork. That’s what we’re doing now.
Hon Michael Woodhouse: Will he publicly disclose the new baseline information he has recently received, and, if so, when?
Hon MICHAEL WOOD: Yes, in due course.
Hon Michael Woodhouse: Will the Mill Road connection from Manukau to Drury South proceed?
Hon MICHAEL WOOD: As I said in my primary answer, the Government remains committed to good transport outcomes and investment across all of the routes concerned in the New Zealand Upgrade Programme. That work is proceeding, and we’ll have further announcements to make in the near future. I note that in the area that the member is talking about, we’re making very good progress with a number of New Zealand Upgrade projects, including State Highway 1 from Papakura to Drury in the Papakura electorate, which I dug the sod on last week.
Chris Bishop: Is the Government committed to the time line and the quantum of funding for the Melling Interchange project, as announced in January 2020?
Hon MICHAEL WOOD: As I said in my primary answer, the Government remains committed to the projects within the New Zealand Upgrade Programme. The member needs to spend a bit less time focusing on speculation on Twitter about these projects, and what the member could do is to engage in some constructive engagement like the elected member for Hutt South has done, who has brought forward to me the importance of that project, and I’ve assured her the project remains an important part of the New Zealand Upgrade Programme and we intend to move forward with its implementation as soon as possible.
Question No. 9—Police
9. NICOLE McKEE (ACT) to the Minister of Police: Does she stand by her statement, “Gang numbers and gang crime will only reduce when police and communities work together to disrupt gang operations and to disrupt their flow of recruits … I welcome the support of all members of this House on this”?
Hon KRIS FAAFOI (Minister of Justice) on behalf of the Minister of Police: Yes.
Nicole McKee: Did the support she was envisaging include members of Parliament attending events hosted by gangs at gang pads, and, if so, how does this help disrupt gang operations?
Hon KRIS FAAFOI: If the member is discussing in her question a recent visit by members of Parliament, I, as the Minister of Police, have no responsibility for those other members of Parliament.
Nicole McKee: Point of order, Mr Speaker.
SPEAKER: Will the member repeat her question.
Nicole McKee: Did the support she was envisaging include members of Parliament attending events hosted by gangs at gang pads, and, if so, how does this help disrupt gang operations?
SPEAKER: Well, the Minister did answer that question.
Nicole McKee: Does she believe that it is helpful for members of Parliament to attend events held at gang pads?
Hon KRIS FAAFOI: On behalf of the Minister of Police, I’m not responsible for those members of Parliament who may or may not have visited gang pads.
David Seymour: Point of order. Surely, the question, which was on notice, related to the Minister’s statement, which did ask members of Parliament to behave in a certain way. Now, to simply say now that she’s not responsible for that behaviour is a dodge. I think questions about the Minister’s view that were on notice should be answered.
SPEAKER: I’m not going to suggest a way around it, which is relatively simple if people thought about it. But in this particular case, the way that the question was asked, where members are acting individually as opposed to in the House, I think the Minister doesn’t have responsibility for their activities as members of Parliament.
Nicole McKee: What place is there for gangs, such as the Mongrel Mob, in New Zealand?
Hon KRIS FAAFOI: On behalf of the Minister of Police, no place, which is why as a Government we have invested $450 million to make sure that our police are resourced to make sure that we do disrupt gang activity.
Question No. 10—Māori Development
10. PAUL EAGLE (Labour—Rongotai) to the Minister for Māori Development: What recent reports has he seen on the state of the Māori economy?
Hon WILLIE JACKSON (Minister for Māori Development): Last week, I spoke at the release of the report Te Ōhanga Māori, with the headline finding from the report being that Māori are making up a much larger part of our economy and, given the young Māori population, and as we rebuild and recover from the impacts of COVID-19, Māori have a significant part to play in the future wellbeing of the New Zealand economy.
Paul Eagle: What are some of the key insights from Te Ōhanga Māori?
Hon WILLIE JACKSON: Aside from the key headline figure that the Māori asset base is near $70 billion, one of the real strengths is our people themselves. The Māori labour-force is growing five times faster than the non-Māori labour-force, which is reflected in the growth of Māori who are self-employed or who are Māori employers. If these rates continue, there will be 4,500 new Māori employers next year and 4,600 more Māori who are self-employed.
Paul Eagle: What other Government initiatives does Te Ōhanga Māori indicate will help grow the Māori economy further?
Hon WILLIE JACKSON: The report identifies that social procurement will support Māori business growth as we recover from the impacts of COVID-19. Māori business and jobs are a priority for this Government, which is why we have set a 5 percent target for Public Service contracts for Māori businesses as an important step not only towards a more inclusive society but to support the growth of Māori business overall.
Christopher Luxon: Will he rule out this Government implementing the He Puapua recommendation to provide increased Māori ownership of the foreshore and seabed?
SPEAKER: Order! Order! That just doesn’t get close to the question within the responsibility of this Minister or anything which flows from it. This is a question on the state of the Māori economy.
Christopher Luxon: Point of order, Mr Speaker.
SPEAKER: Well, the member’s relatively new; so I’ll be a little more liberal with him. Generally, when a ruling’s been made, one doesn’t challenge it, because it sort of results in getting tossed out.
Christopher Luxon: Thank you for your patience. The He Puapua report, though, was commissioned by his department and it does refer extensively to the Māori economy and to the natural capitals and the resources of New Zealand. Sixty-five percent of our economy is built on the natural capitals of New Zealand. It seems a relevant question around the Māori economy.
SPEAKER: That’s right, and it might well have been if the member had phrased his question well. He might have got there, and it might have been acceptable; he didn’t.
Paul Eagle: Why are reports like Te Ōhanga Māori important?
Hon WILLIE JACKSON: There’s still much to do to continue to build Māori participation in the economy. Reports like Te Ōhanga Māori are critical as we need the good information they provide that enables Government to develop strong policies that focus on whānau thriving and continue to support ways for Māori to be resilient, to be strong, to have prosperity, and, of course, wellbeing.
Question No. 11—Police
11. SIMEON BROWN (National—Pakuranga) to the Minister of Police: What are the measures of success, if any, for Operation Tauwhiro, and is she confident Operation Tauwhiro has been successful in reducing gang violence?
Hon KRIS FAAFOI (Minister of Justice) on behalf of the Minister of Police: The main measures of success include to sustainably reduce the prevalence of violence by gangs and organised crime, particularly that involving the use of firearms, and to remove access to illicit firearms in gangs and organised crime groups, and hold offenders to account. I previously updated the House on the progress police are making under Operation Tauwhiro. In the 10 weeks that it has been operational, they have seized 281 firearms, seized $2.2 million in cash, arrested 319 people, seized just a little under 8 kilograms of meth, and conducted 254 search warrants.
Simeon Brown: Is it a measure of success of Operation Tauwhiro for Ministers of the Crown to be attending and speaking at gang pads?
SPEAKER: Order! The member knows that that’s not a serious question.
Chris Bishop: Point of order, Mr Speaker. That is a serious question. The supplementary question that my colleague asked was in relation to a measure of success for Operation Tauwhiro, and he is asking whether or not engagement by members of Parliament with gangs is a measure of success for the operation. I think it’s a very serious question, particularly in light of what’s happened in recent days.
SPEAKER: Well, I think there are a couple of ways of dealing with that which make it clear, absolutely clear, that the question was ironic—clearly ironic. [Interruption] Order! I’m actually trying to take a relatively liberal approach today; multiple interjections while I’m on my feet doesn’t help. The other obvious point is that Ministers are not responsible for other Ministers.
Simeon Brown: Is she aware of any other Ministers who have met with gangs at gang pads and does she believe this undermines the measures of success of Operation Tauwhiro?
Hon KRIS FAAFOI: I am not.
Simeon Brown: Does she have concerns with Ministers meeting with gangs at gang pads while a major police operation—Operation Tauwhiro—targeting gangs is currently under way?
Hon KRIS FAAFOI: If the member is referring to a visit by MPs in their own party’s capacity, I have no responsibility. [Interruption] You good?
SPEAKER: I’m fine. Both sides settle down.
Simeon Brown: Does she have concerns with Ministers or members of Parliament meeting with gangs at gang pads while a major police operation—Operation Tauwhiro—targeting gangs is currently under way?
Hon KRIS FAAFOI: If the member is referring to the visit recently by MPs who were attending meetings in their capacity as MPs of their own party, I have no responsibility for that.
Question No. 12—Education
12. ANGELA ROBERTS (Labour) to the Associate Minister of Education: What recent announcements has the Government made on expanding the in-school mental health and wellbeing programme?
Hon JAN TINETTI (Associate Minister of Education): Recently, the Government announced that the Mana Ake mental health and wellbeing programme will be rolled out in schools across five new DHB areas in Northland, Counties Manukau, Bay of Plenty, Lakes, and West Coast. This is an established and proven in-school programme that has supported more than 7,000 children across Canterbury and Kaikōura since it began in 2018.
Angela Roberts: What benefits does the Mana Ake programme offer schools and young people?
Hon JAN TINETTI: Mana Ake provides early intervention for mild to moderate mental health and wellbeing needs for children in primary school years 1 to 8. It’s designed to work with young people and families who are experiencing anxiety, grief, bullying, or other mental health challenges before their situation worsens. The Mana Ake programme involves professionals with a range of skills, such as psychologists and counsellors. It’s a collaborative, whole-school approach involving teachers, whānau, and young people to build mental health, understanding, and resilience. We know from the success of the programme in the Canterbury region that equipping our young people as early as we can will improve their overall learning outcomes.
Angela Roberts: What other in-school mental health and wellbeing services have been made available under this Government?
Hon JAN TINETTI: In addition to the thousands of young people supported through Mana Ake, the Government has funded more guidance counsellors in secondary schools; begun work on refreshing the New Zealand curriculum to include tools to develop children’s social and emotional learning; funded 40 new curriculum leads to help guide schools to deliver a high-quality local curriculum supportive of the wellbeing of learners and teachers; funded $3.2 million to expand mental wellbeing services for young Rainbow New Zealanders; and provided free, healthy lunches and period products in schools. All of these initiatives will go a long way in supporting schools and young people to improve mental health and wellbeing. Nothing is a silver bullet, but we know that when we create inclusive and supportive environments that are adjusted to suit communities in different areas, we get better educational and health outcomes for New Zealanders.
Matt Doocey: How can New Zealanders have confidence in the Government’s mental health announcements, when, in July last year, they announced $25 million for mental health and education settings and, 10 months later, not one dollar’s been spent, not one new service—
SPEAKER: Order!
Matt Doocey: —and not one student’s been seen?
SPEAKER: Order! Order! Any of those five questions.
Hon JAN TINETTI: I’m not sure exactly what that member is referring to. Maybe the member is referring to the funding of the $8.94 million over three years for initiatives to support the wellbeing of the education workforce in response to COVID-19. The point of the funding was to ensure that we had the initiatives available to teachers should they need it. I’m aware there have been some delays in allocating the funding, which are for a variety of reasons, but predominantly and ultimately the uptake was voluntary and demand was less than expected. Again, I say that the point of the funding was to ensure that we had the initiatives available to the teachers should they need it.
Matt Doocey: Point of order, Mr Speaker. I wasn’t actually asking about the $8.9 million programme that they’ve failed to roll out. It was the—
SPEAKER: Order! The member will resume his seat.
Urgent Debates Declined
Ihumātao—Findings of the Controller and Auditor-General on Purchase of Land
SPEAKER: I have received letters from Nicola Willis and David Seymour seeking to debate, under Standing Order 399, the findings of the Controller and Auditor-General in relation to the purchase of land at Ihumātao. This is a particular case of recent occurrence for which there is ministerial responsibility. The fact that another parliamentary means of debating the subject of the urgent debate application is a relevant consideration for me to consider in deciding whether to accept an application: Speakers’ ruling 207/1. The annual review debate is set down on the Order Paper for today. I note that the Minister of Finance is due to participate in the debate, which covers the performance and current operations of Government agencies. The subject of the applications can be directly addressed in that debate. The applications are therefore denied.
Bills
Immigration (COVID-19 Response) Amendment Bill
Second Reading
Hon KRIS FAAFOI (Minister of Immigration): I present a legislative statement on the Immigration (COVID-19 Response) Amendment Bill.
SPEAKER: That legislative statement is published under the authority of the House and can be found on the Parliament website.
Hon KRIS FAAFOI: I move, That the Immigration (COVID-19 Response) Amendment Bill be now read a second time.
Can I begin by thanking members of the Education and Workforce Committee for their work on this bill in the abbreviated time frame for submissions. I would also like to thank those who took time and effort to make submissions on this legislation.
This is a bill that will ensure that the Government can continue to respond adequately and appropriately and efficiently to the immediate immigration issues arising from the outbreak of the COVID-19 pandemic. It complements the extensive immigration powers that the Government already has to make and implement policy decisions relating to future visa applications, and also to change the visa conditions for individuals through continuing to enable the Minister of Immigration, if appropriate, to change visa conditions with classes of existing visa holders, and to grant new visas to classes of visa holders.
The select committee, I understand, received 168 submissions from a range of organisations and individuals and heard in person from 43 submitters. I am aware that many submitters shared their concerns—many personal to themselves—that some families are separated on each side of New Zealand’s border and that some temporary visa holders offshore cannot enter New Zealand. I note that the powers in this bill do not manage the border exceptions policy settings which govern who can enter New Zealand and our managed isolation, but I do acknowledge the groups and individuals taking the select committee process as an opportunity to tell their story.
I also note that many submitters addressed the use of the powers for visa holders onshore. Many of those issues did not, however, relate to the use of the powers, and some could be addressed through a range of other policy options that I could consider, such as new Cabinet decisions on policy settings.
I also note in the National Party’s minority view from the select committee that neither I nor officials provided current numbers of temporary visa holders onshore. Can I assure the National Party that that was not by intent. I understand that officials provided them promptly once they were asked for and that they advised the select committee that there are approximately 236,000 individuals holding temporary visas onshore, of whom 23,000 held visitor visas and 182,000 had work rights. Of course, the powers can benefit people offshore, as well—and I note that 5,500 people offshore have had their resident visa travel conditions extended, for example.
The current global pandemic situation continues to evolve, and I think it would be a brave person who would say that we will be back into a 2019 travel environment even in a year or 18 months from now. Most submitters broadly supported the bill and recognised the need for the powers to continue; although I do acknowledge that a significant proportion felt that the powers should be extended for a year only, and one submission suggested that they be extended for only six months.
The legislative statement sets out the safeguards surrounding the exercise of the powers, and we also addressed them when we debated the bill in its first reading. I would like to remind the House again, however, that one very important safeguard is that in making special directions, I must be satisfied that the exercise of the power is reasonably necessary to manage the effects or deal with the consequences of the outbreak of COVID19, measures under enactments to contain or mitigate the outbreak of COVID19 or its effects, or other measures in New Zealand or elsewhere to contain or mitigate the outbreak of COVID-19 or its effects in New Zealand.
This means that the powers are time-limited and would be even if there was no expiry date, and they can only be exercised as long as the pandemic continues to affect New Zealand. I would also remind the House that I must also be satisfied that the exercise would not disadvantage the class or classes of persons to which they relate.
Given the global uncertainty over the progress of the virus and its variants, a further 12-month extension would mean I would have to bring further legislation before the House in 12 months’ time—probably on a longer time frame than this bill—meaning we would be debating it again possibly even later this year. I would prefer to spend the House’s time and my own officials’ time on a more comprehensive review of our legislation, with regard to lessons learnt from this pandemic.
Some submitters proposed that the regulation suspending the ability to apply for certain temporary entry-class visas offshore not be extended. I am sympathetic to the concerns that they raised. However, I note again that this restriction can be lifted earlier in whole or in part, if warranted, and, also, of course, that people who are invited to apply for visas can do so.
A number of submitters also proposed that the special direction powers should be exercised more widely for broader groups of migrants and also that there should be some provisions around the use of the powers, such as issues that I should take into account for notice periods. I would note that the powers are exercised at my absolute discretion and that explicit provisions of that sort could bring that discretion into question. However, I can advise the House that I’ve been broadly taking a number of factors into account when I consider this exercise of a discretion—and, to date, these have included the Government’s policy priorities for the labour market and the economy, the practical measures on managed isolation where applicable, and whether there are other mechanisms for achieving outcomes such as new Cabinet decisions on policy settings or through intervention in individual cases.
Can I acknowledge the concerns made by a number of submitters regarding implementation and communication issues for the use of the powers to date. This has been a year of learning both for the Government and the public sector and we will continue to put those learnings into effect. In particular, my officials are continuing to work to ensure that time frames allow for more proactive communications and for systems updates to occur before the changes have legal effect.
The select committee has recommended, by a majority, that the bill be reported back unamended. I am grateful for the committee’s work considering the bill and the submissions in this compressed time frame.
Finally, I would like to reiterate that the powers contained in this bill are necessary to ensure that we can be flexible and efficient in responding to the impacts of COVID-19 and the immigration system. I commend the bill to the House.
DEPUTY SPEAKER: The question is that the motion be agreed to.
ERICA STANFORD (National—East Coast Bays): Thank you, Mr Speaker. I am pleased to take this first call for the National Party in the second reading of this bill. I had hoped that today the Minister would provide more clear evidence and reasons for the necessity of this bill. Unfortunately, neither his legislative statement nor his speech today provided that, apart from some updated numbers, which is in itself interesting because when we heard the arguments for this bill back in 2020, the underlying need for this bill was the amount of people in this country who are here on temporary visas and who required their visas to be extended or to have their conditions varied. The argument was that there are so many of them in so many different categories, and he broke all those numbers down, and he went even further to say that immigration officials were unable to work at their place of work and so were forced to work from home, but often they couldn’t do that because they weren’t able to take their paperwork home with them. So there were a lot of Immigration New Zealand workers sitting at home unable to work. That was the basis for this bill in the first place.
So coming to the renewal of the sunset clause, we had thought that—and I even foreshadowed it in my first reading speech—those numbers would, in fact, be updated. If this bill was required because there are so many people here who need the conditions of their visas extended and because we’ve got people sitting at home who can’t do the work, those things would be traversed. We didn’t hear it in the first reading speech from the Minister; we didn’t hear it from officials at all. And I know the Minister said it wasn’t his intention, but that was the whole reason for the bill.
It should have been his intention and the intention of the officials to provide that information. And it wasn’t just the National Party that was saying that; the New Zealand Law Society said that, the Auckland District Law Society said that, the Road Transport Forum New Zealand said that. Most of the organisations said there is no given reason for this bill that we can understand to have two years rather than one year. I’d just like to point out that the Minister said that most of the submitters wanted a one-year clause. In fact, every single organisation that submitted on this bill—every single one—said they wanted one year and vehemently opposed two years. One went even as far as saying six months, but every single organisation who submitted on this bill said one year.
Now, I want to start by talking about the process and the time frame. The Minister, in his first sentence, mentioned an abbreviated time frame. When the Government brought this bill a year ago, they gave 10 days’ notice, and we understood why that was the case. We were in an emergency situation, we had no clarity on what was going to happen, there were only 12 submissions, and it was a very short time frame. Given that, we had expected, this time around, there would be a full process. As the Minister said himself, if it’s a one-year sunset clause then the bill would need to start to be thought about in about June, July, August, and then brought before the House towards the end of the year. That didn’t happen for reasons he has failed to explain, especially given the fact that he argued in Cabinet for no sunset clause—yes, no sunset clause. That’s what he wanted—that’s what he actually wanted. His back-up plan was three years. Luckily, his colleagues said, “Look mate, sorry, that’s not happening. We’re going to give you two. On your way, sonny.” But he would’ve given us the exact same time frame of three weeks to deliberate on this bill and hear from submitters for three weeks or no sunset clause. So, actually, this whole process of only giving us three weeks is really not good enough, and there has been no explanation as to why that was the case, and we are left to just ponder and come up with the reason that they actually just forgot. And most submitters said, when they came to committee and when they put their submissions in, that the time frame wasn’t long enough. And I heard from many submitters who didn’t get to have their say at all.
Going back to the two-year sunset clause which I alluded to earlier, the Regulations Review Committee wrote to our committee and said, “You need to ensure that you are satisfied that the two-year extension is appropriate for these powers and you need to seek advice from officials.” And what did we get from officials and what did we get from the Minister? We heard, “The Minister needs to be nimble.”; “It’s a continued need.”; “He wanted three years and no sunset clause, so two years is entirely reasonable.” They said that one year means we’ve got to come back again really soon and undertake a lot of work; it’s really inconvenient. I put it to this House that such a large transfer of power from Immigration New Zealand to the Minister, saying that it’s not convenient to come back in a year really isn’t an excuse when we are giving him so much unbridled power. They also said, “Don’t worry. It has to be COVID-related. So if COVID’s no longer a problem, he can’t use these powers.” Except that COVID is always an excuse. We’ve seen this right across this Government. Everything can be harped back to COVID. And even the Minister, with his long residency queues, has said that it’s because of COVID. Well, actually, those queues have been growing since 2018, but there you have it.
As I said earlier, no reasons were given for this—the reason for this two-year clause. The Auckland District Law Society, in fact, said that this bill is more convenience than necessity, which I think is telling. The Law Society said much the same. The Road Transport Forum said the policy work should have happened, but it hasn’t in the last year. And by the way, by the time the sunset clause expires, the Minister will have had these powers for three years. So many submitters came to us and said, “This is far too long for emergency powers to be given to the Minister, and a one-year time frame is far more appropriate.”
As I said earlier, in 2020 we had all of these figures given to us. In 2021, no numbers, no explanation at all of Immigration New Zealand’s capacity to undertake their work. So we’re none the wiser as for the reasons for this bill. Immigration New Zealand officials are at work, so why can’t they process these applications? What’s going on at Immigration New Zealand that they can’t process things that they would in the normal way? Is it the residency backlog that’s causing such a problem? Is it the fact that the Minister’s closed offshore offices and brought all the processing home? We are none the wiser as to the reason why Immigration New Zealand officials can’t process these in the normal way. Remember back in 2020 they told us that the reason for this was that Immigration New Zealand officials were sitting at home and they couldn’t work. Well, that excuse doesn’t exist anymore, but we were not given any reasons why they couldn’t do their jobs.
The New Zealand Law Society gave a very good submission, and one of the things that they talked about was having a 28-day commencement of special directions. Now, their reasoning for wanting this was different than my reasoning, but, actually, they made a very good point in the fact that they said—and I’ll bring it up because it’s always better to say what they actually said. They said there is “scrutiny by the Regulations Review Committee, and [it is] subject to disallowance”—and we agree with that, but the point that they make is that, “While these measures are commendable, the Law Society noted … on the 2020 bill that such checks only occur after the instrument is made.” And that’s the same in this bill. So those checks only are able to be undertaken once they’re already in force. And so for that reason, the Law Society wants a 28-day commencement of special directions unless there is an emergency or an unusual situation that requires an immediate action, and we agree with that.
But my reason for wanting a 28-day commencement of special directions is quite different, because the way that the Minister has been exercising his powers has been with very, very short notice. He gave five days’ notice to visitor visas, three days’ notice back in July last year to work visa holders, many of whom had bought tickets to go home, and so there is a whole lot of uncertainty and stress and anxiety put on people who are living from extension to extension with a Minister unable to explain why he can’t give a lot more notice to people. A 28-day notice period would lessen the stress, the anxiety, stop people from booking flights—people who are in a very vulnerable situation. And also at the moment, it would give more time for Immigration New Zealand officials to do the administration in the background. Currently, you’ve got people who have an extension, but it reads in their immigration file that, actually, they’re here unlawfully. Their kids can’t go to school, and they lose their jobs. I’ve got kids in my electorate right now who are being told they’re not allowed to come back to school this term because technically they’re unlawful, but they’ve been given the extension. A 28-day notice period would stop that, and we will have a Supplementary Order Paper to that effect.
Most of the submitters said that the conditions today are not the same as they were a year ago, and they will not be the same in a year. The Restaurant Association of New Zealand made that point, as did both the Auckland District Law Society and the New Zealand Law Society. But overarching—in my last few seconds—Immigration New Zealand is in big trouble. They’ve got huge backlogs. The residence queue has been frozen. The time frame for getting a residence is two years. And this is a very convenient way for the Minister to extend visas, not because of COVID but because of the mess that Immigration New Zealand are in. And while we agree that there are some cases in which he will need to exercise these powers, we will be arguing vehemently for a one-year clause that he should have to come back to this Parliament and explain why he needs a further year in that time frame, and we will be exploring this more at committee of the whole House.
MARJA LUBECK (Labour): Thank you, Mr Speaker, and it’s a pleasure to take a call on the Immigration (COVID-19 Response) Amendment Bill. As the chair of the Education and Workforce Committee, I would just like to run the House through the process that this bill has actually gone through. As the Minister already stated, the bill was referred to select committee on 8 April and received 168 submissions from interested groups and individuals and our select committee heard from 43 of those submitters. Many made oral submissions to the committee in person over the recent recess period, as well as over Zoom.
Now, I would also like to acknowledge that the bill is being read with urgency and, as such, obviously, the submission period was shorter than it normally would have been, but I am actually very pleased with the level of engagement that we have seen from the submitters and from the public. I would like to again thank all those 43 people in particular who made the effort to come to Wellington or to join in over Zoom and make submissions.
Now, I would like to touch on a couple of the submissions that particularly stood out to me, and some of them have been selectively referenced by the previous speaker. It’s also worth noting that, in fact, all of the businesses that submitted on this bill—every single one—acknowledged the efforts of Immigration in what have been, obviously, such challenging circumstances. The Auckland District Law Society (ADLS) was quoted by the previous speaker, but what she didn’t mention was that ADLS actually said that “the Bill as drafted has sufficient safeguards in ensuring that the Minister of Immigration is unable to delegate the majority of the special direction powers, and that Parliamentary scrutiny will apply where such powers are exercised”.
So, as it seems that parliamentary scrutiny is such an issue for the Opposition, they’re downplaying—as they did in the first reading—the fact that the powers that the Minister of Immigration receives with this bill are actually disallowable instruments. That means that the House can disallow those powers and it means that the House will have continued scrutiny of these powers. That is one of the continuing safeguards of this bill, which, again, has been downplayed by the Opposition when they talk about that large transfer of power—that there are continuing safeguards within this bill.
Again, the Opposition spoke much about the two-year extension. Now, on balance, as our report says, the majority of our select committee was satisfied with the reasons for the time line and why the powers are time-limited. Even if there were no expiry date in this bill, the powers are still limited, and the Minister has clearly outlined that in his speech, because everything has to be clearly related to COVID-19.
Another thing that really stood out—the previous speaker did mention that many submitters raised general immigration issues that weren’t related to this bill, and we heard many stories about family unification. Now, our select committee wants to thank those submitters for telling their story, and we acknowledge that the decision to close the borders and protect New Zealand communities from COVID-19 caused difficulties and caused heartache for some people. But the work that sees family reunification is continuing, and, just to mention one example, 13,000 people have been granted border exceptions as partners of, dependants of, New Zealand citizens or residents. Over the past year, several border exceptions supporting the reunification of split families have been introduced, and, in fact, that work is continuously happening.
But as the Minister also said in his speech—our select committee report re-emphasised this particular point—the powers in this bill don’t manage the border exceptions policy settings which govern people entering into New Zealand and entering managed isolation and quarantine. Our select committee did note in our report that the Minister of Immigration has recently announced border exceptions that allow for family reunification.
So I would like to finish my short call by thanking everyone involved in this process, particularly regarding the urgency that was put on them—so that’s our select committee clerks, our officials, the Office of the Auditor-General, the Ministry of Business, Innovation and Employment, and members of my select committee for all the additional meetings during recess and all their efforts. Therefore I commend this bill to the House. Thank you, Mr Speaker.
CHRIS BISHOP (National): Thank you, Mr Speaker. I want to make three very important points in my speech, because this is a significant bill and, sadly, the issues being dealt with by the House are so significant, and it’s, I think, sad to see very limited engagement on the substance of the issues by members opposite. It’s, I think, a tragedy that the process that this bill has gone through has been so curtailed.
I think what all members can agree on is that over the last few weeks in particular, there has been a real cognisance of the impacts of COVID-19 on families—and migrant families in particular. What you’ve seen is a couple of things. The first is that the trans-Tasman bubble’s opened, and that has allowed people who have been split apart for many months to be reunited. It has been a wonderful thing, actually, to stand there and watch the people on the news come through the gates at Wellington airport and hug their family that have been split apart because of COVID-19. That bubble’s been fantastic.
But there’s a class of people out there called the split migrant families, who are still separated from their loved ones, who are in the invidious position of part of the family being in New Zealand and part not being in New Zealand because of COVID-19. These are people who were granted visas to come to New Zealand for work: in the case of Cameron Conradie from Hutt Valley High School in Lower Hutt, a maths teacher—a male maths teacher; there’s not many of them in New Zealand—he came to Lower Hutt, and his family sold their house in South Africa. They packaged up their possessions and got themselves ready to move. And then COVID-19 hit. He is in New Zealand and his family are still in South Africa, and, as yet, there is no light on the horizon for him and his family to be reunited.
I think there’s been a real recognition in the last few weeks that COVID-19 has had a demonstrable human impact on people like Mr Conradie and on people like the split migrants who turned up at Parliament in the last sitting period and protested—not in an exuberant, violent way, but in a passionate, to be sure, protest—outside on the forecourt. I believe the Labour Party will look back at that period, and the fact that not a single Labour Party member of Parliament went down to that protest, with disdain and shame in the years to come.
Jamie Strange: We weren’t invited, Chris. There was no invitation given out.
CHRIS BISHOP: Mate, take a look outside or read Facebook. There’s 65 of you guys; the fact that not a single one of you knew that the protest was on—that in itself is an extraordinary admission from Jamie Strange, the member of Parliament for Hamilton East. The fact that they didn’t know it was on—number one, take a look outside; number two, read Facebook, check your email, because—
DEPUTY SPEAKER: Order! Order! Wrong pronoun.
CHRIS BISHOP: If that member was doing his job, he would know that there are hundreds of people in New Zealand affected by this, and they have been very public about it. My colleague Erica Stanford has been questioning the Minister of Immigration about these families for weeks now, and we get told by the Prime Minister that Minister Faafoi is sorting it out. Well, we’ve had some brief solution in relation to the migrant nurses, but not for the wider issue.
The things we are talking about here matter. The process that this bill has gone through is a disgrace. Firstly, there was a shortened amount of time for the select committee. Now, we can accept, back in 2020, the first iteration of this Act being passed very quickly. It wasn’t ideal, but the legislature had to move quickly to respond to a pretty extraordinary set of events, and we can accept that. We could accept a truncated process in the select committee. But it is not acceptable in 2021. Very few people were allowed to submit. The chair of the select committee, Ms Lubeck, just spoke and she said that there were lots of submissions and it was pretty thorough. Well, I would reject that. I wasn’t on the committee but I talked to colleagues who were, and I would reject that. It simply—a few weeks. A few weeks was it, Ms Stanford? A few weeks is not enough time—three weeks, I’m told—not enough time, to properly ventilate the issues. It’s just simply not enough time. And of course, there’s no excuse.
Marja Lubeck: It’s OK to do 90-day trials overnight. It’s OK to do contractor rights away overnight.
CHRIS BISHOP: There seems to be muttering about something unrelated to the bill, but she’s not very happy about the fact that no Labour Party members went to the migrant protest. So I think that’s the real unhappiness. So three weeks is not enough time to ventilate critical issues.
Then the second point is this: it was passed extremely quickly. Again, we look back and say, “2020—OK, sure, you pass something through under urgency. We had to deal with a difficult situation.” But here’s the question for Parliament and that Labour members have to answer: what have they done over the last year? Why did this Act run up right to the end of its time—it’s expiry date—and then, all of a sudden, the Government realises it’s about to expire and we’ve got to extend it? Why did it take so long to realise that? Now, I realise there was an election in the meantime—sure—and I realise that Parliament wasn’t sitting, but this Act was passed in May last year and here we are, again, in May, 2021. There’s plenty of time to pass this piece of legislation and that would have allowed a proper ventilation of the issues, and it would have allowed a proper ventilation of the issues of split migrant families. Their submissions to the committee were ruled out of scope. The reason why they were there is because the Government keeps saying that they will do something about it, but yet they are not.
You know, there are a thousand rooms in managed isolation and quarantine (MIQ) right now—over a thousand rooms vacant—because we’ve opened the bubble and Australians and New Zealanders coming from Australia to New Zealand don’t have to go into quarantine anymore. Last week, there were 1,400 rooms available one night across the country. And for people like Cameron Conradie and his family, and the nurses in Auckland, and the teachers elsewhere, and the engineers and the construction workers, and the split migrant families who have one person here and their family offshore, they look at this and they say, “Well, hang on a minute.” We’ve got a Minister who claims to be solving our problems but isn’t, and we’ve got thousands of rooms or hundreds of rooms available every night in MIQ and they can’t get in. Why won’t the Government move? So that’s why they turned up to the select committee.
We reject this two-year extension of time. This is an untrammelled power grab by the Minister. Two years is not needed. It’s not necessary. It should be one year, no more. The Minister is giving himself absolutely extraordinary powers. And you could argue it was necessary, after the events last year, to have some discretion—some extraordinary discretion—to make changes to visas, but to go for two years smells like a power grab for convenience, not on principle. There is no justification in practice for a two-year extension of these powers. There just simply is not. Ministers can’t muster one. Officials can’t muster one. The only argument in favour of it is mere convenience. But I’m sorry, that is not how we make law in this country. We do not grant Ministers extraordinary powers on the basis that it might be easier for them. Or if we do, we should not do it in that way. Ministers do not need an extra two years—one year, tops, and then come back to the Parliament and if you need another year, put another bill through the Parliament and argue on that basis and justify to the House why that’s needed. But do not accept the two years.
In relation to the 28-day rule that my colleague Ms Stanford has spoken about, we believe that would be an improvement to the legislation. We advanced that as a Supplementary Order Paper (SOP) in Ms Stanford’s name, in good faith. We share the view of the Law Society that this would be appropriate for instruments created by special direction. What we had last year was Ministers issuing directions, giving visa extensions, only a few days before whole classes of visas were due to expire. And again, I recognise the exigency of the circumstances, but there should be no justification for that now, and a 28-day notice rule for special directions would ensure that at least some modicum of notice is given. We need to remember that temporary visa holders, as members opposite will know from their constituency work, are in very vulnerable situations.
This is an important bill. The Government is not allowing Parliament enough time to debate it properly and to debate the issues contained within it. Two years is a power grab that is not needed and therefore we oppose the legislation, unless the SOPs we’ve asked for are granted.
IBRAHIM OMER (Labour): I feel very proud in taking this short call in support of this bill. Chris Bishop, the previous speaker, has just mentioned that none of the 65 Labour Party MPs turned up to the protest. He also said that there were too many of us—65 of us. Yes, there are 65 of us, but none of us was invited to this event, to this protest.
But the other thing I want to mention is that prior to 2017, when I was active in the community, I was active in the union movement. We marched, screaming for migrant workers who were being exploited. We marched to double the quota. We marched and marched and marched. At the time, the National Party was in Government. There were so many of them at that time. There were so many of them—about 50-plus—and we were inviting them to each and every single event. None of them turned up, but, four years later, we don’t blame them for that. Now, they—
Erica Stanford: Sounds like you are.
IBRAHIM OMER: —are playing a blame game, but that’s fine. But if we are invited, Erica, we are going to turn up because we care.
This bill maintains important powers to enable the Government to respond to the COVID-19 outbreak as it may develop over the next two years. The Minister of Immigration has just stated the number of people who have benefited from this legislation. I’m not going to repeat that. I was privileged to be a member of the committee that heard the submissions in the last couple of weeks, and we have heard a lot of the stories—stories from international students, split-family members, but also from the skilled migrants who have been stranded overseas, and they were heartbreaking stories we heard. But this is the reality that COVID-19 has created.
This time last year, when this legislation was introduced, COVID-19 was killing people and it was infecting people, but now, a year on, it’s killing more people and it’s infecting more people. Just in the last 24 hours, there are about 660,000 new infections. There are more than 10,000 dead, just in the last 24 hours, and that is the reality that we’re dealing with.
The migrant workers are always going to be an integral part of our workforce, and we value them—there’s no question about that. They’re going to be part of our recovery plan, but we always have to be vigilant. We have sacrificed so much to stop COVID-19 and to stamp out the virus from our country, but we cannot undo that.
With that, I commend this bill to the House. Thank you.
RICARDO MENÉNDEZ MARCH (Green): Tēnā koe, Mr Speaker. I rise to take a call on the second reading of the Immigration (COVID-19 Response) Amendment Bill. I want to begin by acknowledging that our migrant communities are flourishing, and our Government should act to ensure that they’re able to fully participate in society. History has shown us that during times of economic downturns, or when we face uncertainty, our migrant communities have been one of the groups that have been often scapegoated. We are still seeing the legacy of the dawn raids, where people from our Pacific communities thought to have overstayed their visas were targeted and deported, and that legacy still lives with us today in our broken immigration settings. It also lives in the current scapegoating of our migrant communities for having caused the housing crisis, and inequality in general.
But as the submitters to this bill in our select committee showed us, we don’t have to repeat the mistakes of the past. In times of hardship we can rally together to uphold the wellbeing of all of us, including our migrant communities. Migrant workers have played a critical role in our response to COVID-19. Our communities rallied together to provide kai and look after our elderly. Many sectors who were deemed to be essential rely heavily on migrant workers, whether it’s for supermarkets, the healthcare system, or aged care. And while the pandemic changed everything for all of us, it has created specific challenges in our migrant communities. Families were split by our border restrictions, and temporary visa holders who were in their homelands during the pandemic were stuck, despite having deep connections to communities in Aotearoa New Zealand—many who still rent a property or have cars here that they own.
Our migrant communities understood the need to act swiftly to protect us all from the pandemic, and, in fact, submitters showed support for the initial purpose of this bill, which was to keep us safe. While the bill was initially used to keep us safe, I do believe that the powers of this bill haven’t been used to the full extent to ensure there’s equity within our migrant communities. People from non - visa waiver countries are unable to be reunited with their loved ones still, some having to travel to their homelands in order to do so. Post-study work visa holders and people with temporary visas have been anxious about the uncertainty they face—whether their visas will be renewed or when they will be able to come back to the country. These were the sorts of stories that we heard during our time at select committee. I want to make sure that our speeches are centred in the stories of the people who came to us and spoke about their experiences, not about political point-scoring. Ultimately, the bill needs to be used to uphold the wellbeing of our communities.
As outlined in the select committee’s report, many of our submitters asked that the powers of this bill be used for things like family reunification for border exemptions and visa extensions, as well as visa extensions for people offshore who are unable to travel. People also highlighted the need to grant new visas for those whose temporary visas have expired, and the granting of visas to people unlawfully in New Zealand, as well as implementing a 20-day notice period for the commencement of any special directions, which members of the National Party have spoken to plenty.
I want to particularly acknowledge submissions from the Auckland District Law Society, the Migrant Workers Association, and the Association of New Kiwis Aotearoa, who spoke about pathways to residency and amnesty to overstayers. This is the time to ensure that our migrant communities are able to participate in the recovery from our pandemic. It is a time to ensure that overstayers are not feeling like they have to hide in the shadows and can participate in the public health response, particularly in the stage of immunisation.
The Green Party stands behind the submitters who called for these changes, and this is why we actually launched last week a series of policy points in order to address our broken immigration system, including pathways for residency, a broad amnesty programme for overstayers, decoupling work visas from single employers, requiring immigration to stop visa delays, as well as removing the salary criteria for skilled visas and parent reunification categories, and ensuring our partnership visas are culturally competent.
One of the things that struck me, as we’ve been discussing these issues of immigration, is just how discriminatory our settings still are. For the past few weeks we’ve heard almost on a regular basis the fact that disabled people have been stopped from being able to access residency class visas. We’ve heard how our disabled community has, in fact, been one of the most impacted by current immigration settings, and we know overseas, as well as here, that disabled people are some of the most at risk from the ill effects of COVID-19. So the pandemic and the effects of the pandemic should be a wake-up call for us to act swiftly to hear the needs of our community.
The submitters were really clear that the issue wasn’t so much with the bill itself but how the power is being used, and the Green Party is making it clear that we are providing support at the second reading but with the call for the Minister to address the issues addressed by submitters, as well as to look into some of the broader structural issues that our immigration system faces. Many of these were discussed during our select committee stage. Some of these may not be able to be addressed by the nature of this bill, but we do believe we cannot be waiting for a Productivity Commission inquiry to start acting on some of these key issues, such as Immigration New Zealand being run as a business, relying on visa fees in order to sustain itself. Issues around visa processing delays ultimately have been a political action to lower residency and immigration numbers, and it has caused ill and damage to our migrant communities who are facing anxiety.
Ultimately, the stories that we heard at select committee speak of an immigration system that’s been broken due to the inaction by successive Governments to ensure that our wellbeing is put at the forefront. The issues of migrants being able to be reunited with families is not new. In fact, prior to the pandemic, we heard many stories of what low-income families faced when it came to being able to be reunited with families. Successive Governments have actually closed the family reunification category. The previous Government changed the sibling category and they restricted the ability for migrants to participate in the education system.
So the Minister will need to look beyond the powers granted by this bill to address our broken immigration system, and the Green Party offers our support to work productively with the Government to ensure that our submitters’ voices do not go to waste, and that our Minister acts responsibly to address people who are offshore who actually poured their hearts out to the committee, speaking of the lived experience. We must centre these voices to ensure that our migrant communities are not disproportionately affected as we look into the recovery of our pandemic. Kia ora.
Dr JAMES McDOWALL (ACT): Thank you, Mr Speaker. On the first reading of this bill, the ACT Party took a principled stance in opposing this bill—the only party to do so—and our stance remains unchanged. It’s not about one year or two years; the issues are much bigger than that. Of course, it’s unlikely that we could’ve changed our minds, since it’s been so little time since that first reading, though, admittedly, more time than has been afforded to the many other pieces of legislation that have passed under urgency this year without consideration for their obvious consequences. New Zealanders can consider themselves, perhaps, lucky that the Government has shown at least a token appreciation for democratic lawmaking with this bill. However, frankly, the outcome will be the same as if we had a select committee or if we didn’t have one.
Outside of the select committee, I’m sure many members of this House have heard of migrants’ personal stories via e-mail, phone calls, social media, or in person at electorate offices. There’s also—good news—going to be another demonstration very shortly outside Parliament, and I hope at least one Government member makes the effort to attend this time. So consider this your invitation.
During the select committee, members heard about the unending misery caused by loved ones not being able to reunite with their families for over a year and, in some cases, many years. The most recent announcement on family reunification offered a glimmer of hope, but the reality soon became very clear: few migrants qualified despite ongoing managed isolation and quarantine (MIQ) capacity, which has been spoken about, let alone the ability to scale up MIQ.
They’ve also heard about international students who have been begging to come back in, in huge debt, and schools and universities would like to see them back here as well. Many workers are in the same situation: some migrants here already have visas but with expiry dates looming and uncertainty around whether or not they’re going to get an extension under the powers that have been granted.
There is never any proper communication or transparency from Immigration New Zealand, no effort to improve on their processes. I’m not even going to delve into the delays in processing residency applications, though I’ll note that the skilled migrant category just increased to 90 percent completed by 24 months, and it’s only going to get worse.
The attitude of the Government in introducing last-minute legislation as an excuse to have a shortened select committee process is very much in line with the Minister’s long-established approach of being disinterested and disengaged with migrants and with stakeholders. We’ve got the annual immigration law conference coming up in Auckland, and normally the Minister of Immigration is the keynote speaker. It’s been like that year after year, but I’m afraid there’s no such luck this year, it seems.
We’ve heard the call for a formal inquiry, and it seems we’re back to the blame game around housing and infrastructure, with the Government trying to distract from the real failures. We’re also back to pipe dreams around meeting skills shortages without relying on migration; blaming sectors for a supposed lack of training despite businesses trying their best for years to engage a local workforce. We’ve also heard time and again about the need for an immigration reset while the opportunity presents itself in this COVID environment. And I’m not opposed to that. We absolutely have that opportunity, but that work should have started this time last year, and by now we should have a pretty good idea of what a shiny new immigration system looks like and a time line of when we might see that, but all we hear is a desire to clamp down on the system rather than solve existing problems.
We’ve also had the Productivity Commission give their unfortunate view of what immigration should look like, including the suggestion that the Recognised Seasonal Employer scheme somehow hampers technological innovation, including automation and local employment. The thing about automation, though, is that it actually reduces the need for workers in any event, whether local or from overseas—but that’s a sad analysis for another day.
We support the recommendations of the National Party for improving this bill. However, regardless, the ACT Party will not be supporting it. Thank you.
ANGELA ROBERTS (Labour): I’d also like to thank everyone who made the effort to make submissions to the Education and Workforce Committee. There were some really painful stories that were brought—often out of scope, but I appreciate that people were taking the opportunity to have their voices heard. But what I do need to bring to the attention of this House is some of the feedback we got from industries who were very appreciative of the opportunity to engage in a situation that is still in a constant state of flux. We had industries who came to select committee and they told us about the useful processes of engagement and the problem solving that happened over the last 12 months and will continue to be able to happen when this legislation passes.
The New Zealand Winegrowers, you’ll be pleased to hear, Mr Smith, talked about the extension of dates and removal of conditions from holders of working holiday visas, so they remained legally in New Zealand and were able to work in any industry for any employer, which has enabled those visa holders to help bring in the 2021 vintage. They talked about the extension of the Recognised Seasonal Employer (RSE) scheme visa time frames for those workers who were in New Zealand and either were unable to return home or wished to remain in New Zealand to continue to work to support their families. Horticulture New Zealand also talked about the continuing issuing of extensions. Why they support it: it provides much-needed workers for industry and ensures that people stranded in New Zealand can work and earn their cost of living. And, of course, the Meat Industry Association of New Zealand is grateful to the Government for the visa extensions and for the delay to the introduction of the stand-down period.
It is industry who supports this bill. They are happy for the ability to engage with the Minister, to respond nimbly and appropriately. It has been tough, but this law is necessary and it will pass with our support.
Hon MICHAEL WOODHOUSE (National): The member who just resumed her seat left out five very important words about the submissions that the committee heard by business, and that are these: “One year, not two.” They were very clear that their support was not for the sort of powers that the Minister wants to grant himself for two years. They were unanimous that one year was any amount, and therefore members who agree with those submitters should be supporting Erica Stanford’s Supplementary Order Paper at the committee of the whole House.
Now, the Immigration Act 2009 gives the Minister of Immigration extraordinary powers, unmatched in any form of Government or the public sector in New Zealand. The Minister is basically granted the power to allow people to come or not come, or stay or leave, at his or her discretion, setting out the plethora—the myriad—of immigration instructions that are required for Immigration New Zealand to operate. But even then, the Act enables the Minister to make a decision, to say yes or no to a visa application, regardless of those immigration instructions, and not give reasons for why the Minister is making those decisions.
Now that is unprecedented in any part of Government. One couldn’t imagine the Minister for ACC, for example, saying, “Well, that claimant has a claim on the boundaries of accident or non-accident, but I’m going to direct ACC to grant cover and to pay the entitlements to which that person would then be eligible.” Doesn’t happen. In fact, there is a very strong separation between the ministerial, the governance, and the operating side of almost every part of Government—but not so immigration. So in the light of the significant powers that the Minister of Immigration is granted through the Immigration Act 2009, the Minister wants more power. In 2020, in the middle of a pandemic, when the country was locked down, when people were stuck either offshore or onshore—non-New Zealanders—and could not have their visa applications processed because Immigration New Zealand itself wasn’t able to function in the way that they did, that law was appropriate. Not so much now.
Indeed, I have a huge regard for the people who work for Immigration New Zealand and it pains me to see the confusion and the disarray and the lack of ministerial leadership that is currently the case with Immigration New Zealand. Because they don’t know whether they’re the decision makers or the Minister’s the decision maker, or the grounds of what decisions are being made—and fewer decisions are being made. Put aside the principle of whether or not this bill is necessary to continue, and look at the reality of the quantum of the work that is being embarked on by Immigration New Zealand. Now, in four visa categories only, in the full 2019-20 year, a year that was affected for at least seven or eight weeks by COVID—maybe more, maybe 12 weeks—they nevertheless in those four key categories of resident, student, visitor, and work visas, processed nearly 700 visas. They made 700,000, rather, decisions. This year, they are on track to make, in those same four categories—wait for it—just 269,000 decisions. So more than 400,000 fewer decisions are going to be made by Immigration New Zealand this year than last year.
Now, as far as I can tell, there hasn’t been a material reduction, if at all, in the number of staff that work in Immigration New Zealand, and so why on earth should we be giving these powers to the Minister? Now, one of the reasons the Minister has the discretion that he or she has under the Immigration Act is because every application is different. We’re guided by those instructions, but nevertheless there is a chime to exercise a discretion and say, actually, despite the instructions this is the right thing to do, and the Minister and delegated decision makers at Immigration New Zealand can do that. Only they’re not doing it now. It doesn’t matter that those individual decisions for an applicant might warrant an examination by an Immigration New Zealand staff member or the Minister. Whole classes of visa decisions are going to be made.
Now, the National Party does hold its nose and agree to a limited extension to those powers, but two years is far too long. This House should be supporting a shorter time for those powers.
DEPUTY SPEAKER: I call Dr Duncan Webb, five minutes.
Dr DUNCAN WEBB (Labour—Christchurch Central): Kia ora e te Mana Whakawā. I stand and rise in light of fact that the Māori Party chooses not to speak on this bill, which I do find surprising, seeing they had a commitment to scrutinise every bill in this House but they seem not to be doing it with this one. But really, other than that, I commend this bill to the House.
Dr ANAE NERU LEAVASA (Labour—Takanini): Thank you, Mr Speaker. I rise to take a very brief call on this bill, the Immigration (COVID-19 Response) Amendment Bill. I wasn’t privileged enough to be on the select committee to hear the submissions—the 168 submissions and those 43 submitters who were heard, either face to face or on Zoom. I acknowledge their submissions and, after reading the report, have seen that they’ve made some key themes there. I commend this bill to the House because of its safety for our whānau.
STUART SMITH (National—Kaikōura): Thank you, Mr Speaker. Unlike many who have spoken, I actually was on the Education and Workforce Committee when the legislation went through last year.
Hon Member: It’s your fault.
STUART SMITH: Well, it partly was my fault, I guess, because we voted for it, but, actually, at that time, it was the right thing to do. We had to do something, and we brought this law in, or this Act in, and now we’re back to give it another extension, and, unfortunately, we have a Minister who doesn’t seem to do anything quickly except for wanting to do the legislative process quickly. Unfortunately, he had plenty of time to get this bill before the House to have an adequate process of consideration through a select committee, and he did not choose to use that. We’ve seen the track record of the Minister in action when these special directions are being made by leaving it too long.
I want to take the time to talk about the time I spent down in Central Otago last year with a group of Recognised Seasonal Employer workers whose work had run out. Their visa conditions didn’t allow them to go to Marlborough, where the work was, and they were there almost literally starving. They didn’t have access to money. They didn’t have access to food. They didn’t have access to warm clothes in a Central Otago winter. All it took was one special direction that was done at the stroke of a pen, but the Minister didn’t get around to it until extremely late, after a period when they had been weeks without work. It is totally unsatisfactory. We have to wonder what the Minister is doing.
Now, we’ve seen this—and a number of my colleagues mentioned before the very short 28-day period that we want to have as a minimum notice of those special directions, but what we have seen in the last year is virtually no time for people to plan. Children, as my colleague Erica Stanford said, were notable to go to school because they were there illegally, effectively, because they no longer had an adequate visa. So we need these powers, but these powers have to be used correctly. They have to be used in a timely manner. We have to have a Minister that’s actually doing the job, and I have really serious questions about this Minister’s actual focus on this job and getting on with it.
We didn’t have the numbers, as my colleague mentioned. A year ago, we had all the numbers of how many people’s visas were outstanding and how many were to be processed. We asked, through the select committee this time, for those numbers. We expected to have those numbers. It would have helped us with our consideration of the bill. I would imagine it would take probably 10 or 15 seconds to get those numbers, if that was desired to be done. It wasn’t—until after the select committee had finished its deliberations. Then we get the numbers about how many visas are outstanding. As we heard the Hon Michael Woodhouse talk about before, actually, there’s been 400,000 less visas going to be processed than last year, so that’s just outrageous. What’s going on?
In addition to that, we’ve got this programme, ADEPT, which is an electronic processing programme for visas, which will take a huge labour requirement out of that processing of visas. That’s being tested now. That will be available and up and running within a year. So how does that square with a two-year sunset clause in this bill? It doesn’t make sense.
Look, we know COVID’s being used as an excuse for everything these days. But “Henry VIII” powers given to a Minister when they’re not needed is outrageous. My colleague Chris Bishop gave an excellent speech, but I told him as he left the House he made one major mistake in his speech, because he said, “This is not how we make laws in this country.” Well, he’s wrong. We do. We are making them now. This Government has a track record of doing this, and it’s outrageous. It’s an overreach, and we’re seeing it around the world, I guess, so they haven’t got this on their own, but the Government’s taking the opportunity under COVID to reach for more power. And do you think they’ll let it go? I don’t. I don’t think they will. They are trying to advance their powers further and further, and particularly in this case, when it’s totally not needed.
When the Regulations Review Committee recommends that we recognise the importance of a justification for the powers that this bill is giving to the Minister, that’s a real red flag for everyone who’s a legislator, and the fact that it’s being completely ignored by the other side really does tell a story—a story that’s not a very nice story, actually. We have a real responsibility as legislators to do the right thing. Even when we don’t agree with a bill, when we’re working in select committee, it’s our job to make sure the bill comes out of that select committee in as good a state as it possibly can be. We all work hard across the House on these sorts of things. On members’ bills, we sometimes don’t agree with them. We hold our nose. We do the right thing, try to get it in the right shape.
We support this bill to the point of a one-year extension, a sunset clause of one year, but we won’t support it otherwise. I think the members on the other side are only doing what they’re told. But, actually, when you have a good think about this, there are some things in your political career that you’ll look back on and say, “Oh, we shouldn’t really have done that.” Well, this is one of them. I think that those members on the other side should think that. Most of them are new members, so they’re getting some real black marks on their career right from the start, and I think they should really think long and hard about that.
So, as I said, we have support for this to a point. We are holding our nose to a certain extent about it. But we’re doing it only on the understanding that this has a sunset clause of one year, as in Erica Stanford’s Supplementary Order Paper, which will come before the committee of the whole House. We’ll have a lot more to say about it then. So it’s with that that I commend, with my nose held quite firmly. Thank you.
SARAH PALLETT (Labour—Ilam): Thank you, Mr Speaker. I rise in support of the Immigration (COVID-19 Response) Amendment Bill, which helps to support the Government’s strategy to eliminate COVID-19 from our communities. It is an important bill because it enables the Government to respond to a COVID-19 outbreak as it may develop over the next two years. We know that we can’t predict the path of this virus, and we need these powers to continue. I think it’s important for us to realise that we can use these powers only if they are tied to COVID-19 or the effects of the response to COVID19, and that they can be used only to benefit or, at a minimum, not disadvantage visa holders. I commend the work of the select committee and in particular its chair, Marja Lubeck, for handling this with grace. I commend this bill to the House.
A party vote was called for on the question, That the Immigration (COVID-19 Response) Amendment Bill be now read a second time.
Ayes 110
New Zealand Labour 65; New Zealand National 33; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.
Noes 10
ACT New Zealand 10.
Motion agreed to.
Bill read a second time.
Annual Review Debate
In Committee
CHAIRPERSON (Hon Jenny Salesa): The House is in committee on the Appropriation (2019/20 Confirmation and Validation) Bill. This is the debate on the financial position of the Government and the annual reviews of departments, Offices of Parliament, Crown entities, public organisations, and State enterprises, as reported on by select committees. The time allocated for this debate is 10 hours.
In accordance with a determination of the Business Committee, Standing Order 356(2) and (3) have been set aside, so there will be no sector-specific debates. All annual reviews are available for debate but only specific Ministers will be available each day to respond. The Government has indicated that the Minister of Finance and Minister for Infrastructure; the Minister of Agriculture and Minister for Land Information; the Minister for the Environment and Minister for Oceans and Fisheries; the Minister of Health; the Speaker; and the Minister of Education will be available today.
The time this debate has been allocated to parties is on a proportional basis. New Zealand Labour has five hours 25 minutes, New Zealand National has two hours 45 minutes, the Green Party of Aotearoa New Zealand has 50 minutes, ACT New Zealand has 50 minutes, and Te Paati Māori has 10 minutes.
As determined by the Business Committee, each debate will be led off by the chairperson or another member of the committee that considered annual reviews most closely related to the Minister’s portfolios.
A motion to report progress on a bill must be moved on a call not a point of order. When a member moves to report progress in this annual review debate, the presiding officer will call on that member first when the debate resumes. This is a similar process to that followed in other debates when they are adjourned.
At the conclusion of the debate, questions will be put noting the committee reports on annual reviews and on the provisions of the Appropriation (2019/20 Confirmation and Validation) Bill. There is no amendment or debate on these questions.
The question is that the report of the Finance and Expenditure Committee on the annual financial statements of the Government for 2019/2020 financial year be noted.
Finance
Dr DUNCAN WEBB (Chairperson of the Finance and Expenditure Committee): Thank you, Madam Chair, and I must say it is a real pleasure to stand in this somewhat new procedure and after that very lengthy and eloquent introduction. The annual review process, I think, in the Finance and Expenditure Committee went very well. I do think that the various departments and Ministers had a very good opportunity and were thoroughly questioned by members of both the Government party and other parties around the House, as, in fact, the finance sector annual review shows—a compendious document of some 54 pages, which I must say must meet some kind of record for an annual review document. But I think it’s really useful for members of the public to be able to read the reviews of all of those departments and entities together. I do think you can’t really understand, necessarily, for example, the Treasury review unless you’re reading at the same time the Reserve Bank review, because those two things are so closely connected. I did think that those two reviews being heard close together by the same committee was really useful.
Obviously, there was a lot of questioning around the COVID response roll-out, and I would expect Minister Robertson to perhaps address some of those things in the course of this debate. I do think there was a general consensus over the high speed, high trust model which was used by Treasury, particularly around the wage subsidy. Obviously, there’s ongoing post hoc examination of that process, and, given the speed at which things were moving, it did appear that Government generally—Government entities—had to learn new ways of making decisions. Treasury was very forthcoming that it couldn’t fall back on a comprehensive cost-benefit analysis that would take months to complete when things were happening daily and weekly. So the implementation there of that wage subsidy in a matter of weeks, on that high-trust model, along with, I think, the transparency—the fact that the recipients of all of those wage subsidies were available to be seen by all—the media, and this is, of course, an important part of what goes on in Government, scrutinised that information and some entities were, essentially, shamed into fronting up. I think that was a really good aspect of that which came out of annual reviews.
And, of course, the flip side of that and that decision-making process—I think it’s really important always to ask the “what if” question, and I’d invite the Minister to do that: to say, “If we hadn’t done it that way, how would we have done it? What kind of chilling effect would there have been on business activity, and employment in particular?” Of course, we do know that the Government borrowed a large sum of money over the course, and that that borrowing has not yet ended, and that there may be instances—we don’t know what the future holds—where further funds may need to be borrowed to ensure that we have a strong and resilient, well-functioning economy into the future. That, of course, was a focus of discussion, and the Minister may well want to comment on that.
I do note that when we came to discuss the Reserve Bank—and Treasury, to an extent, as well—house prices were a focus. Of course, this Government has a stated objective of sustained moderation in house prices. I note that the annual reviews were held before the Government’s housing announcements, and of course there wasn’t anything in the annual reviews which prefaced that, but it was very clear that the levers there—the demand-side aspects of that were touched on as important; the tax framework was touched on as important. For completion, the Minister may want to fill out that.
I also just want to note the role that the IRD played in the COVID response, as well, and also the fact that their business transformation project that they’ve been undergoing for many years put them in a position where they were able to respond—where they had the technical infrastructure to do that. Having said that, they were challenged on the outcomes of business transformation—whether it was on time, whether it was delivering, whether it was on budget, and also, importantly, the impact on the workforce and how that is being handled, and I think it’s quite appropriate that that happened. But, look, very good annual reviews, ones that the Opposition participated in well. Thank you, Madam Chair.
Hon GRANT ROBERTSON (Minister of Finance): Thank you very much, Madam Chair. I thank the chair of the Finance and Expenditure Committee, Dr Duncan Webb, for both that fulsome report back and also for the questions he thought I might like to address—and I’ll endeavour to do as much of that as I possibly can.
Obviously, as the member has stated, this is a new process for us all. It’s a little bit different from the other committee stage process we’ve been doing most recently, where it’s the question-and-answer thing; people are able to either do that or give some form of speech—it’s up to them. In this first intervention, I plan to just make a few general comments about where we are in terms of the economy, with respect to the annual review, and, as I say, pick up any questions as they go through the process.
I think the very first thing to say is that when we came to do the annual review debate, we were in possession then of the Half Year Economic and Fiscal Update. And when we took the time to compare that to where the Treasury thought we would be when they produced the pre-election fiscal update, only a matter of three or four months beforehand, the differences were already stark. And that goes to illustrate the point that we are living through an environment of uncertainty and volatility at the moment.
COVID-19 is the most significant economic shock of my lifetime and, indeed, I think, of most other people’s in this House. It is one that has had an enormous impact in every part of the world and in every part of the economy. However, the extent of that impact in New Zealand has been less than was forecast. And that comes down to the hard work of New Zealand businesses and workers, supported by the Government.
The chair of the select committee mentioned the wage subsidy scheme. I do just want to put on record—he was very kind to some Treasury officials who did work very hard in producing the wage subsidy scheme—the appreciation of the Government to, particularly, the staff of the Ministry of Social Development who were the people who made sure that applications were turned around rapidly. I do recall in the election campaign in Featherston—just to mention the electorate of Wairarapa for the benefit of the Government’s senior whip—a person pulling up in a ute, jumping out, coming over to me, shaking my hand, and saying, “You saved my business.” What he actually meant was that the wage subsidy scheme had saved his business, because he had lost all of his orders all in the space of about 24 hours, was looking to lay people off, and was given the confidence and the cash flow to be able to get through. That was the point of the wage subsidy scheme.
This period of time that the annual review covers marks the most extraordinary period for the Government’s finances that I can recall. We were in a position where we needed to borrow a significant amount of money to ensure we protected the lives and livelihoods of New Zealanders, and we did it. I do not resile from that position. There were no costless decisions in COVID-19. The decisions we took were to ensure that we did not have the loss of lives, that we did not have the loss of businesses. We took that decision. And on behalf of taxpayers, we did use the fact that the country had saved for a rainy day. That rainy day arrived, and I’m very proud of what we did.
In the period of time that followed on from that, we were told that we could expect unemployment to get anywhere between 13 percent and 26 percent—at about exactly this time last year, I was being told that. That did not occur. Again, I believe that is, in part, because we moved and acted so swiftly. When I look at other countries around the world, we find ourselves with unemployment at about 4.9 percent, new numbers out this week; Australia, the equivalent, about 5.6 percent; and the OECD average, well over 6 percent. One of the reasons, I believe, for that is because we got our support out quickly. It meant that people didn’t take precipitous decisions, and so that has certainly stood us in good stead.
On the more traditional ratings, ways in which we manage the economy, around GDP, New Zealand certainly experienced a sharp dip that we expected in the June quarter, but then a very, very large rise in the September quarter, and a flattening out in the December quarter. When we look at that overall and compare ourselves quarter to quarter, December 2019 to December 2020, New Zealand’s drop was one of the lowest of the countries that we compare ourselves to—lower than Australia, lower than the US, and lower than the UK.
And on top of all of that, we’ve had external validation of this from the ratings agencies. So we had Standard & Poor’s, who gave New Zealand the first ratings upgrade from the pandemic’s outset, also the first for New Zealand since 2003, up to AA3. And we had Moody’s reinforce New Zealand’s A3 rating, based on the robustness of both our fiscal position and the way in which our public policy position has rolled out.
So in this period of time, I’m very proud of the response that has been undertaken.
Hon MICHAEL WOODHOUSE (National): Thank you, Madam Chair. Dr Duncan Webb didn’t need to give the Minister of Finance a pat on the back. The Minister did it all by himself. I’m only being partly flippant. I think he does deserve some kudos for his management through a difficult period. But my role isn’t to pat the Minister on the back; it’s to scrutinise his performance and the financial performance of the Crown accounts, which I will do.
I want to quote, firstly, before asking two or three questions of the Minister, from page 11 of the Budget Policy Statement 2021, and I’m going to go back and relate it to 2019-20, which is pretty much where we’re at, although I realise it’s a random walk across two or three years. It says at the top of that page: “We went into COVID-19 in a strong position, with net core Crown debt below 20% of GDP and running surpluses.” Well, it left three words out of that sentence, because it was “and running surpluses into the ground”.
Now, the Minister mentions the Half Year Economic and Fiscal Update (HYEFU), and I’m going to mention two. The first one is HYEFU 2016, which projected an out-year financial total Crown operating balance before gains and losses for 2020 to be $6.8 billion, and for 2021, $8.5 billion. Now, by December 2019, well before the effects of COVID, we were projecting for 2020 a loss—no surplus of $6.8 billion, but a loss of $0.9 billion; a nearly $8 billion turnaround in financial performance under this Government—and projecting in the following year a skittish $0.1 billion surplus, compared with what the previous Government was forecasting of $8.5 billion. That’s a $15 billion turnaround projected in two financial years that had nothing to do with COVID. Now, my question to the Minister is: is my mathematics correct, because they are directly out of the documents that he himself has just quoted?
Now, the second question, and my analysis of the quality of the spending—yes, to the Minister, we needed to spend a lot of money to keep the economy going, and the National Party supported that. But I want to look at both the quantity and the visibility and the transparency of the spending around COVID.
So, firstly, in respect of transparency, what we have been trying to do is clearly identify the spending that was related to COVID and that resulted from the pandemic from the structural spending that has been simultaneously incurred by this Government. I’m talking about jobseeker support increases. I’m talking about winter energy payments and a number of things that are not necessarily COVID-related, or at least certainly not time-bound, because the things that we’ve got to spend on matters to do with, for example, COVID testing, border controls, wage subsidies, of course—they’re all time-bound. Much of the spending that we have seen incurred by this Government, as evidenced by HYEFU and the Budget Policy Statement, is locked in in perpetuity. We’ve been trying to distinguish between the two and we can’t, and I think, from a transparency perspective, that’s really important. I’d like the Minister to comment on how we are able to discern the quantity of the Government’s spending.
Thirdly, I want to talk about the quality of the Government’s spending, because the Auditor-General was very critical, I think, of—gently critical—understanding the context of the amount of spending related to COVID as part of COVID recovery and response: $50 billion allocated. It was a slush fund—that’s understood—but—
Hon Grant Robertson: Ha!
Hon MICHAEL WOODHOUSE: Well, it was. The Minister didn’t have it appropriated to various votes. He had a great big bucket of money and he asked the Parliament to come to this place and he came here and said, “Trust us. We’ll do the right thing.”, and Parliament said, “Yeah, OK.” It was a slush fund, and now we know that the Auditor-General has been quite critical of the quality of the analysis about the value for money on that.
Now, I accept that last year, there was a time when that was a problem. But the Office of the Auditor-General basically said that they were “unable to readily … determine how much expenditure the Government has even decided to approve for the Covid-19 response”. They said, “It is difficult, if not impossible, to get from [existing reporting] an overall picture of how much … funding has been allocated and how much has been incurred on various initiatives to date. … There is a public interest in information that lets people see how public money is being spent.”, and the Minister, on behalf of the Prime Minister, in this House on 11 February said that he was working with Treasury on how to respond to the Auditor-General’s comments. I think it would be really helpful if we could get an update of progress on that matter.
Hon GRANT ROBERTSON (Minister of Finance): Thank you, Madam Chair, and I appreciate, actually, the opportunity, for the latter of the member’s two questions, to respond and talk through what we are doing in that space. Just to ensure, though, for the first part of his comments: on 29 February 2020, which was the most up-to-date set of Government financial statements that we had to prior to COVID—that was the statements for the eight months to that date—we had net core Crown debt at 19.2 percent of GDP, and we had the operating balance before gains and losses showing a surplus of $1.4 billion. So I do just want to indicate to the member that we were, as a country, in a strong position going into COVID-19. I am on the record as having said a number of times that we can look back over successive Governments to credit people for the way in which we were disciplined in our spending, the way in which we managed to keep New Zealand’s accounts in such a way that we were able to respond, but I just think it’s important to have that most up-to-date data.
In terms of the member’s second question, I do think this is a really interesting area of debate, and one where we’re very happily working with the Auditor-General on this. The issue that the Auditor-General is, essentially, raising is one about the way in which the Public Finance Act (PFA) works in terms of expenditure by Government agencies. So the annual review debate, of which we are now part, is the opportunity for Parliament to work its way through the expenditure of each Government agency via its appropriation or appropriations. That is where you get down into the detailed analysis of a particular programme or a particular project. That is exactly the system created by our Public Finance Act—arguably the system that the Auditor-General has oversight of as well. What Treasury does is get the aggregate of the spending of those Government agencies and work out whether they are spending against the appropriation at the correct level. They do not play the role, or have not, certainly in the way in which the Public Finance Act is set up, of going through project by project. That is, quite simply, what was set up when the Public Finance Act was passed in 1989. So Treasury’s job is not the one that the member is asking it to perform.
Having said that, when we have such a significant amount of money—$50 billion being spent—in a time of crisis, where there’s a great deal of urgency, where imperfect information is available, it is, I do believe, incumbent on us as a Government to be able to do more than we are required to do under the PFA. But I want to make absolutely clear, in response to the comments made by the member, that the Auditor-General has not expressed concern about where the money was appropriated properly or expressed concern about whether the Public Finance Act obligations have been met. Far from it, in fact; they have concluded and agreed that that is right. But what we have been doing is working with Treasury to source more information from individual Government agencies so that we are in a stronger position to be able to say how much of the money that has been allocated has actually been spent outside of the normal financial review process. The issue the member is partly frustrated by here is, of course, that the financial review process goes for financial years, and so it stops at 30 June 2020, when, in fact, a large amount of the expenditure is now in the financial year which we will review at a later date in this House.
All of this goes to point out that the process here is the one that we have under law. We’re now working with the Auditor-General about what additional information can be provided, and Treasury will be seeking to publish that additional information in the very near future.
Hon JULIE ANNE GENTER (Green): Tēnā koe, Madam Chair, thank you. Tēnā koutou e te Whare. I just wanted to raise a couple of issues. I thank the Minister for his speech and presentation, and acknowledge the members of the Finance and Expenditure Committee.
I’m interested in a couple of issues that were brought up in the reviews and which no doubt have already slightly been canvassed by other members of the House, and will no doubt be further canvassed. One is around levels of Government debt and the approach to investment. So, obviously, there’s been a strong focus on keeping levels of debt low or “prudent”, although prudent is variable depending on your perspective. What I wanted to call to the attention of the House is that there’s been quite a change in the mainstream economic orthodoxy between the 1980s and 90s—when was perhaps when some of these people last studied economics—and now, where we have the International Monetary Fund (IMF), the president of the European Central Bank, and the chief Treasurer of the United States, Janet Yellen, all of them showing particular leadership calling for more progressive taxation, more Government spending on health, education, climate change, and public infrastructure. So that’s the new US Treasury Secretary, Janet Yellen, who was former governor of the Reserve Bank; the IMF managing director, Kristalina Georgieva; and European Central Bank President and former head of the OECD, Christine Lagarde. So there’s clearly been a very different perspective on what is good for economies and it is no longer the perspective that corporate tax cuts, low taxes for the wealthy, low levels of Government spending on core public services is a good thing—it’s actually a bad thing. I invite members of the National Party to come into the 21st century when it comes to the economy. The challenges of climate change, a global pandemic, increasing inequality, all require us to rethink some of that economic orthodoxy.
My question for the Minister is, firstly: is he concerned that there is a risk that we’re overly focused on reducing debt in Government spending at a time when we actually should be borrowing and investing in critical infrastructure and services? My second question—and this comes a bit to the Public Finance Act and some of the international standards of accounting—is: does he see there to be any potential risk with some of the conventions around standards of accounting where, in an economic sense, there’s really no difference between capital expenditure and operating expenditure, but in an accounting sense, they are treated differently? However, international accounting standards were really designed and developed for private organisations and the way that they account for their fiscal position, which is quite different to a national Government and a national economy.
One of my concerns is that we have a separate approach, where we have a capital allowance and an operating allowance, and it doesn’t allow us necessarily to invest in the services which are operating expenses, which would actually create more jobs and more value for the economy and for the benefit of the New Zealand public. Yet we can quite easily justify concrete, tarmac, or a building, which has its own depreciation, and does create jobs but not in such a direct sense as, say, employing early childhood educators would. We can do the economic analysis that says that the return on investment for early childhood education is far higher than return on investment for a road, but somehow—are the Government’s hands tied, is there something that the Government is looking at that would allow us to better invest in people? Because that does bring real economic value to New Zealand.
Hon GRANT ROBERTSON (Minister of Finance): I’m very conscious of the fact that the Labour Party does have limited time here as well, so I’m not going to be able to respond to every single statement that’s made by a member. But I do think the member Julie Anne Genter, who’s just resumed her seat, is raising some very interesting issues around public finances. We don’t get many opportunities to talk about the detail of the Public Finance Act, much to my chagrin; we should be talking about it more often.
I would like to respond to the points that the member has made, firstly, around the amount of money that we do allocate to services like health and education and the importance of us investing in those in a way that supports not only our long-term economic goals but the broader wellbeing goals that we’ve got. I very strongly support that. That’s the reason why this Government, over its successive Budgets, has increased our spending in that area, and has devoted more time to it.
It’s actually what lies behind the wellbeing approach, which is to say that more narrow measures of economic success are not necessarily going to deliver the overall outcomes that society wants. So, therefore, it’s important to have all of those matters considered within what we’re doing. It’s not that we don’t focus on the importance of generating wealth and prosperity, but we care about what happens with that, how it’s shared, how communities are strengthened by it, and what it does to the environment.
So I say to the member, yes, I absolutely get that. I’ve had two opportunities to talk to Janet Yellen in the last few weeks. I’m particularly interested in, for example, her proposals around supporting the OECD’s—around corporate taxation. That’s been a long-term project at the OECD that has not progressed—
Andrew Bayly: Are you going to put it up?
Hon GRANT ROBERTSON: —and having the US behind it is an exciting development. For the members who are starting to interject on my left, it’s interesting to note that the United States is now going to have the same corporate tax rate as New Zealand, which is an interesting development, isn’t it, Mr Bayly. So I think that’s a really interesting area for us to continue to pursue.
On the second point that the member made around the future of the Public Finance Act, I would say this: the Public Finance Act has given New Zealand a number of very useful things. One of those is the transparency that it gives us around what happens in our accounting, subject to the points that we were discussing before. The other is that it does impose some disciplines upon Governments, and I do think that is useful.
What we can do in any given situation, though, is react to it. So, for example, the Government’s long-term fiscal objective is to stabilise debt and then begin to reduce it from the middle of the 2020s onwards, as financial conditions permit. We have to acknowledge that we are in a period of time in which we do need to be spending more. We do need to be borrowing more in order to do that. So the Act does give us that level of flexibility.
Where I think the member has a very good point is around the way in which we think about, for example, capital expenditure. One of my frustrations on becoming the Minister of Finance was the fact that because we are using those public accounting standards, the moment that we decided, for example, to invest in some aeroplanes for the Defence Force, which I recall some discussions with the member about that in the past—even though we were not actually incurring that expenditure for two or three or four years, the moment we made the decision, that then took up that year’s capital allowance. That was not a particularly useful approach. So we invented multi-year capital allowances that are four-year allowances that give us a lot more scope to be able to look at the way that we invest.
The member is correct to say that the definitions of capital and operating expenditure for a Government are not as delineated as they might be in some other areas. And one of the defining elements of what is capital expenditure is in fact that the Government continues to hold and own that asset, essentially in perpetuity. I get what the member is saying as to whether or not that is actually an adequate definition of what capital expenditure is.
We are in the process of a reform programme for the Public Finance Act. I would love to talk a little bit more about what that looks like and I’ll have the opportunity to do that when we bring legislation before the House in the future.
DAVID SEYMOUR (Leader—ACT): Thank you, Madam Chair, and hello to the Minister of Finance. I’d just like to ask about the part of the report that refers to the Guardians of New Zealand Superannuation divesting from Israeli banks. It reports on a decision that the New Zealand Superannuation Fund would not invest in Israeli banks on the basis that they were somehow subsidising settlements in the Middle East. Now, I represent the Epsom electorate. We have a lot of Jewish people—probably the largest Jewish community of any electorate in New Zealand—and it’s puzzling for them to see that this is a country where Air New Zealand fixes turbines for the Saudis; where, as it turns out, we have multiple exports of, at best, dual-use technologies, frequently signed off by the New Zealand Government, to all sorts of nasty people; and where, as we know, we have 28 percent of New Zealand’s exports going to a country governed by the Communist Party of China, a Government that is part of much focus in current diplomacy, and perhaps a debate from this House.
Now, people might ask why it is that the Guardians of New Zealand Superannuation have seen so fit, in a world filled with conflict, to pick on Israeli banks because they’re entangled in one of the most long-running and complex conflicts in the world—which, by the way, they didn’t choose. I think that people in the Epsom electorate, and actually people in the Jewish community up and down New Zealand, and, indeed, many New Zealanders, would like to know what the Minister of the Crown thinks about the guardians choosing to make that divestment when there are so many others that arguably the New Zealand Government should be making.
More generally, I would ask the Minister, what is the plan for COVID recovery in terms of scrutiny of Government finances? The report is very clear that during the COVID period there was such will to get cash out the door that there just wasn’t time to scrutinise the quality of spending of taxpayer money. And we don’t entirely begrudge the Government of that. Some aspects of the response were supported by all parties in this House, and actually were done very well, or at least as well as could be done under the circumstances, such as the wage subsidy scheme. That’s all very well—some of it, at least—but the real question is, what is the Government’s commitment to returning to cost-benefit analysis and getting sound value for money now that we’re back to business as usual? Will the Government and will the Minister of Finance draw a line under that COVID period and say he is back to committing to sound cost-benefit analysis and quality of the expenditure of taxpayer money? That is something I think New Zealanders would want to hear from him, and perhaps beyond him saying of course he would like to do it, he could explain what steps he’s taken since we’ve got out of lockdowns—we hope—in order to restore proper cost-benefit analysis to spending taxpayer money, as was abandoned during the depths of the COVID period.
Finally, as the report notes, a large amount of debt has been taken on—a stupendous amount. People will use different figures. I notice the Minister yesterday used IMF figures, which show a very kind view of New Zealand’s debt to GDP ratio. I think the correct figures to use are the forecast of where we will be at the end of this forecast period, and that is much higher—close to 50 percent of GDP. Now, the Minister, in his speech, has said, “Doesn’t matter. Interest rates are low; debt servicing costs have actually got lower, in spite of”—he’s wrinkling his nose. This is from his speech he gave yesterday. The Minister said, “Don’t worry about debt; interest rates are low. We’re actually paying less to service debt than we were previously.” Now, if the Minister wants to get up and say he is worried about debt, perhaps he’d like to tell the committee and the public what sort of commitments he has as Minister of Finance to reduce debt. What is his plan for debt reduction?
It can’t be enough just to say, “Oh, well, interest rates are low”, because, as many commentators are saying, you know, United States Treasury bond rates have flicked up; inflation appears to be rearing its head again. So long as we have conventional monetary policy responses, that means that interest rates are going to rise, the cost of debt servicing is going to rise, and the borrowing that happened through the COVID period will have serious impacts on future generations. That is something I am sure people would like to hear from the Minister about.
Hon GRANT ROBERTSON (Minister of Finance): In the interest of time, I will keep this brief. In terms of the first point that the member raised around the decision by the Guardians of New Zealand Superannuation to make any divestment and, in particular, the question of the divestment from the Israeli banks, that is their decision. It is an independent, operational decision; it is not my place to have an opinion about that, in my role as the Minister of Finance. In fact, that member would be the first person who would be on his feet criticising the Government if the Government interfered in an investment decision of the super fund. I could actually see David Seymour. I can picture him getting up and saying to me, “There he is, interfering in an operational decision! What does that member know about investments that the New Zealand super fund should make?” So that member might just like to reflect on that.
I, along with everybody else in this House, have a great deal, I think, of admiration for the way in which the New Zealand Superannuation Fund has managed that money on behalf of New Zealanders. But the Act that the Government has, then, means that I do not have a role in those individual investments, and I did not have a role in any way, shape, or form in the divestment decision that they made.
On the second point that the member raised, around the quality of spending, we just addressed this matter at some length with Mr Woodhouse earlier. I reject the premise of the member’s question around whether or not we actually did put in place good quality controls around how we were doing that spending. Yes, we moved swiftly. Everything was appropriated. Everything is going back through the annual review process. We continue through the Budget process to have a rigorous analysis process. It’s broader than the traditional cost-benefit analysis process the member might prefer, but it’s one that provides us with confidence about the quality of the spending that we do. We continue that and we will continue that into the future.
On the third point, around the question of debt, I invite the member to take another look at the International Monetary Fund (IMF) numbers that I used in the speech this morning. We use those because they are the comparable numbers. We, around the world, have slightly different definitions of debt, net core Crown debt, and so on. The IMF have their definition, so, therefore, it is one we can use that is comparable. And, actually, it does look out until the end of the forecast period.
Of course, as I said in the speech this morning, it is our plan to reduce debt, but we are not going to do that in the way the member would prefer, which would be austerity measures that would undermine the recovery that we’ve had, that would undermine the public services that New Zealanders rely upon. So, yes, we will take a balanced approach that sees debt come down, but, clearly, when you have a one-in-100-year shock, we had to borrow the money that we did to support New Zealanders through it. It has left the health of New Zealanders and the health of our economy in a much stronger position, and over time that debt will reduce. But we’re not going to do it in a way that compromises the wellbeing of our people.
ANDREW BAYLY (National—Port Waikato): Thank you, Madam Chair. First of all, I just want to pick up on the first point the Minister of Finance made, and talk very saltily about how good our GDP growth was. I’d just remind the Minister that our GDP growth was actually minus 2.9 percent for the year to December 2020. That compares with Australia which is 2.5 percent, and then that compares with Ireland that was 2.5 percent. So we’re actually nearly 5 percent off the best in the world, and we actually currently sit at 13th in the OECD in terms of OECD performance. Which means that I’m not so sure that that is a wonderful outcome, because every other country in the world suffered the issue of COVID.
I just want to pick up on this issue around debt, and more concerning the ongoing deficits that this country is going to run. It’s interesting that every time this issue is raised—and I just heard how the Minister responded to my ACT colleague, that it’s fine that we spend the money during the COVID lockdown up to now and for the last 12 months—and I don’t think many people would disagree with most of the elements of that spending—but right now, we’re in a situation where the game has changed. The Minister has highlighted to us all through his patsy questions today in the House, from the chair of the Finance and Expenditure Committee, how wonderful the economy is going right now, and I’m sure he will take every opportunity to portray himself as the saviour of New Zealand. If that is the case, the issue, then, becomes how do we bring our costs and also our debt down, over time?
So as my good colleague here, Michael Woodhouse, noted before, the Auditor-General does have concerns and he was quite public, and we did question him at the last Finance and Expenditure Committee meeting about the quality of the spend, but more importantly, what value it is delivering and how that is reported. His principal concern was the lack of transparency. I think that one of the biggest issues we’ve got right now is COVID is an excuse for everything. COVID is an excuse that we can spend money like billy-o and continue to spend it without the transparency that New Zealanders require. And certainly we’ve been trying to disaggregate the figures between how much has been spent on COVID-related issues and how much is baked in from the higher levels of Government spend, often referred to as fiscal drag, which is increases and costs of Government servants, all that sort of stuff: the 10,000 extra Government servants that we have at the moment—those types of examples.
So to the question around the operating deficits. We’re projected, under the current arrangements, to be $85 billion total combined deficits, which we won’t clear until 2027. Are we going to see a reduction of those? I hope we will, Minister, because if the economy is that strong, the first question is: how do you stop those losses going forward, as a Government? If we were a private household or if we were a business, a bank would have put us under.
The other thing about it is you say you want to stabilise debt. The first opportunity to find some savings—and you commented in your speech today that you found a billion dollars’ worth of savings. Rather than say we are going to not spend the extra $10 billion we’ve got sitting in a—using my honourable colleague’s term—slush fund, and rather than spend it, and you talked about spending it this morning, why don’t you save it? Because, at the moment, every day we borrow $110 million. We borrowed $110 million yesterday and we’re borrowing $110 million tomorrow. So the issue is, at what stage do you stop spending and calling it COVID-related expenditure? Because as we heard today, that situation is—and you will continue to crow and I will continue to pick you up on this. If it’s as good as you say it is, you do not need to be running deficits.
I’d have to ask you about a couple of the programmes that you put in place during the lockdown. The first was the Business Finance Guarantee Scheme. It had a budget of a half a billion for it. The very day that you introduced it, the British Government—which is where you replicated its scheme; you nicked it from the UK government—you were announcing it in this House and the UK Government was actually eliminating it as a strategy, because they knew it was a waste of time. That scheme is still open until 30 June 2021. Why don’t you stop that scheme?
The other one, of course, is the very large Small Business Cashflow (Loan) Scheme. That runs until 31 December 2023. Now, I understand where businesses need to be supported, like tourism. Why don’t you start to focus you money into areas and industries that really need our help, rather than just keep blowing it on wide-ranging initiatives? Let’s focus on businesses that are really in trouble.
GREG O’CONNOR (Labour—Ōhāriu): Madam Chair, just before I provide the Minister with a question, I’d just like to take this moment to acknowledge the passing of Brian Corban, the chair of KiwiRail, who, in your capacity as infrastructure Minister, I know you will have had a considerable amount to do with him. In my role as chair of the Transport and Infrastructure Committee, he was before us this year. So the House should acknowledge that passing.
Minister, I’d just like to ask—we’ve sat through the House and we’ve heard honourable members across there building a picture of an economy in some sort of peril, to the extent that, I think, Mr Bayly used the words “the bank would put us under.” The question I’d like to ask is: how does this reconcile with the views of the rating agencies, who, presumably, are using and looking at the same set of facts as are available to those members opposite, and certainly available to you? So my question is: how would you reconcile those differences in attitudes and findings?
Hon GRANT ROBERTSON (Minister of Finance): Just before I answer the member’s question and, indeed, pick up some of Mr Bayly’s comments, I do want to take the opportunity he’s offered to reflect on the extraordinary contribution of Brian Corban to public life in New Zealand. He’s chaired a number of the major State-owned enterprises and entities that we have seen, including Radio New Zealand, for an example, and most recently in KiwiRail. Brian was an absolute gentleman, someone I’m sure people on both sides of the House have had a lot of contact with, and we greatly mourn his passing most recently.
In terms of the questions that the members asked, I mean, “I do find it difficult to reconcile” is the short answer to the member’s question, because one of the reasons we tend to look at these external bodies, like Standard and Poor’s, like Moody’s, like the Fitch Ratings agencies, is that they are objective. They don’t have any particular axe to grind one way or the other when it comes to what’s happening in the economy. And what they have seen is a picture of a country that, like all countries around the world, is being tested by COVID-19. And what they have said is that our systems of Government, the robustness of our finances, the robustness of our policies, stands up to that. And while, like any Government in the world, they will look and they will find areas where we could improve, or things that we could do that we might want to change, overall their assessment is that this country—and I want to be careful to stress this, as I did in my opening contribution. This is a tribute to the businesses and workers of New Zealand. That’s who got us through this in COVID. They were supported by a Government that acted swiftly and decisively, but it is a tribute to those people, and we are very proud of all New Zealanders in the role that they played. So from our perspective, the economy is doing well.
What I think—and this brings together Mr Bayly and Mr O’Connor’s comments and questions. What I think we’ve got to be aware of is we are performing better—far better, in fact—against forecast. But bear in mind that the forecast was a very, very dark situation for New Zealand. And so we’ve got to be a little bit careful about making sure that we’re aware that we’re coming back from there. We’re still not back to where we were and we won’t be for some time. Also, the volatility of the COVID-19 situation does go on, Mr Bayly. COVID’s not finished, and we only need to watch the news every single night to see that. Nor is the economic impact of COVID yet finished as countries around the world, the Government support starts to come off, and that’s places like the UK where they’ve kept their equivalent of wage subsidy, the furlough scheme, going and going and going. As those supports do inevitably start to dissipate in countries around the world, that will have a flow-on effect on the global economy, let alone the uncertainty of the immediate health impacts. So COVID is not over.
In terms of the last comment that the member made around the business finance guarantee scheme and the Small Business Cashflow (Loan) Scheme, I think it’s a reasonably extraordinary idea that, having written up a contract with the trading banks of New Zealand, I’d just walk in and tear it up and say it’s all over. I don’t think that’s a particularly good way to run our relationship with those banks. As it happens, the business finance guarantee scheme, as we have talked about in this House before, didn’t perform in the way that we had hoped at the beginning. I don’t think the settings were quite right. So we went back and we changed those settings. That’s what a Government that responds and listens does, particularly when you’re acting swiftly in a crisis. What we’ve seen in this calendar year, in 2021, a little outside of the period that we’re covering in the annual review here, is actually that the uptake of that scheme has increased significantly as businesses, having come out from the immediate impacts of the level 4, level 3 shutdowns in New Zealand have now been more prepared to borrow, more prepared to take on debt, and banks—particularly a couple of the banks—have really pushed out into that market and done that lending, and I think that’s a good thing because it helps those businesses continue to thrive.
In terms of the Small Business Cashflow (Loan) Scheme and the extension of that, I have to say that on that score, bear in mind, they’re loans. So, while albeit at a discounted interest rate, they’re still loans. Those small businesses are the very businesses that, unfortunately, find it harder to get access to capital, to be able to get banks to take on their innovations, their new ideas. So, actually, that scheme’s been a roaring success. Right around New Zealand we’ve seen businesses, particularly those microbusinesses, able to take up that financing, and I think that’s done a lot of good for keeping people in employment and keeping those businesses going.
ANDREW BAYLY (National—Port Waikato): Thank you, Madam Chair. I just wanted to take a moment to acknowledge Brian Corban and I also just—I wasn’t going to do this, but my mother passed away on the weekend, so just for a little moment, I’d just like to acknowledge her.
So just continuing on with that debate with the business guarantee scheme, Minister, I’d say to you that the reason why it failed and the British actually pulled out of it—because people don’t really understand the reason why, and I think you’ve been a little bit careful with what you’ve said—is that the scheme requires the bank to put the business into receivership, and whilst there is an 80 percent guarantee from the Government, the bank has to make the running. So no bank wants to be seen to be putting companies into receivership, and that’s why the scheme failed in the UK and that’s why you’ve had an incredibly low take-up in New Zealand, because banks have been naturally very cautious in terms of wanting to be putting companies under, which is exactly the point.
The issue around the cash-flow scheme—Minister, again, I’d just say to you: it goes until 2023. I think the issue that we are facing as a nation is that we have got through most of it, and I accept what you’re saying, we need to be prepared for an ongoing issue with COVID, but principally the economy is going pretty well. I would urge you, as the Minister, to be thinking about how you target money now towards those sectors and industries that really need it. We’ve got places down the West Coast who are going to see people leaving those places because they haven’t got a job. That will mean there won’t be volunteers who will want to volunteer for fire brigades or anything like that. That is the essential thing. The reason I highlight this—and also Queenstown; Rotorua, which I was in just very recently, who are really suffering; those are areas and places that I urge you to start thinking about how you do that.
The reason I am raising this is that Australia, for instance, has taken quite a defining view: they stopped most of their schemes at the end of March. New Zealand is unusual, given that they were very similar to Australia—island nation and their economies and trade are relatively on the same level, even keel—and yet they have taken the decision to stop, re-pause, and then redirect; you haven’t taken that. That is why I’m concerned about the level of the continued operating spend that we are going to see coming through.
The other issue I just wanted to touch on, in your capacity as Minister for Infrastructure, is the question around the delivery of that. I note, slightly with some alarm, that you are going to set up this unit within the Department of Prime Minister and Cabinet, and I hope that this is going to lead to a better outcome than what has been achieved to date, and we’re all well aware of a lack of delivery of many projects in Government, but particularly the infrastructure spend.
I note that back in July last year, you announced, to great fanfare, $5 billion worth of infrastructure, a mixture of shovel-ready projects and also the Primary Growth Partnership projects. Already, we’ve had a scaling down of those jobs—they are significant. My question is: where have the billion dollars’ worth of savings come from? Have they come because you are not delivering the infrastructure projects? Or have they come from other projects or other initiatives? Because if it is not coming from the infrastructure delivery, that is really a difficult issue and a bad issue that the Government should have actually been doing over the last 12 months, but hasn’t.
I have to question, now, with the construction agency so flat out and busy, whether, in fact, the original intent, actually, now has passed—the timing has passed—and whether, in fact, you should be looking at different measures. Again, I’m suggesting you need to be much more targeted.
The last thing I want to touch on is off-balance-sheet funding. So the Housing New Zealand subsidiary of Kāinga Ora has a $7 billion off-balance-sheet funding arrangement; I know it hasn’t spent all of it. It would be very interesting to see what extent it has taken that off-balance-sheet funding, and also the situation with the New Zealand Transport Agency—again, a large infrastructure provider. Because we know and we’ve heard today that a number of those projects may be delayed—whilst there seems to have been a commitment that they’ll still be on the table; I sincerely hope they do continue. But if they are being delayed, then it would be useful to understand what level of off-balance-sheet funding you are looking at and whether, in fact, you are going to increase that over time and certainly in the next Budget.
CHLÖE SWARBRICK (Green—Auckland Central): Madam Chair. So, at the Finance and Expenditure Committee, throughout these annual review processes we heard from—as has been well-elucidated by other speakers—the likes of the Reserve Bank and the Treasury, and the Minister himself. For those who are at home paying attention to this debate in the Chamber today, it makes a bit of sense to outline the difference between monetary and fiscal policy. So monetary policy is the stuff that the central bank does in New Zealand, that is the Reserve Bank of New Zealand, and when it comes to fiscal policy that is, of course, the responsibility of the Government of the day.
Now, all of this is important when we consider the annual review of 2020, because COVID-19 delivered us an annual review that was like no other. As the Minister himself has recognised, it is a one-in-100-year kind of event. I want to recognise, as in fact was put on the table throughout that annual review process with the Treasury and the Minister, that the Government here did intervene, the Government here did a number of things that we were told for so long by subsequent Governments were impossible, economically or politically or otherwise, in the form of housing the homeless or providing flexible working arrangements for parents or people with disabilities, offering a rent freeze, and also the likes of the wage subsidy. You also saw the Reserve Bank of New Zealand fulfilling its mandate, as outlined in legislation, to ensure financial sustainability and that secondary function—which was put into law by virtue of changes made by the last term of this Labour-led Government with the support of the Greens and, then at that point in time, New Zealand First—for maximum sustainable employment.
I put it to the Governor of the Reserve Bank, Adrian Orr, whether he thought that he had achieved—and the Reserve Bank of New Zealand had achieved—those two aims. He outlined that they had. I then put to him that, whilst going about achieving those aims by virtue of a policy known as unconventional monetary policy—that is, to wash the market with as much cheap lending as possible—that had unintentionally led to an exacerbation of inequality. At the point in time that we were having these annual reviews, we had Official Information Act documents coming in from the likes of Stuff’s Thomas Coughlan, which demonstrated that, in fact, this is something that the Reserve Bank and the Treasury was well aware could exacerbate wealth inequality, and particularly in this country. Nowhere, perhaps, is that more prevalent than in the housing crisis. In fact, as we ended up seeing played out throughout 2020, house prices increased by 25 percent.
I guess the question that I have for the Minister—noting that subsequent to these annual reviews we have started to see some forms of intervention being announced, most notably the suite of tax changes. But in the context of wealth inequality in Aotearoa New Zealand, that sees the top 10 percent of this country owning 59 percent of the wealth and the bottom half owning just 2 percent of the wealth—and how we know that that wealth inequality can serve to compound itself, but we have the added context that 2/3rds of wealth in this country is held in housing. We have now Labour Government Ministers, formerly Opposition MPs on the record saying things such as, and I quote or paraphrase, that our economy was at that point in time—they saw, “A housing transaction with a few other bits tacked on the side”. I ask the Minister whether there is any envisioned other forms of fiscal policy intervention that he sees as necessary to ensure that we move away from this continued entrenching and exacerbation of wealth inequality in this country.
Again, I want to acknowledge that there has been some movement on this, but as the Minister, I’m sure, will be aware of—and his colleagues that I know are familiar with the works of the likes of Thomas Piketty, the French economist—there is still so much to do. In terms of the rhetoric, to build back better, is the Minister not only considering, obviously, building those great projects but also contemplating how we can have greater distribution of wealth, and particularly the wealth that is produced in this country?
NICOLA WILLIS (National): I wish to raise the issue of unappropriated expenditure—in fact, unlawful expenditure; in the words of the Auditor-General, the role of the New Zealand Treasury and Ministers’ attitudes to using taxpayer funds without the authority of Parliament—and in doing so I want to note that the matter I am speaking about relates to expenditure that occurred this year, but I am raising it in this debate at the direction of the Speaker, who said that this was the appropriate forum in which to raise these matters.
My issue is one which I want to use the words of the Auditor-General, to make it very clear to members and those listening that this is not me as an Opposition MP reaching a conclusion; this is the conclusion of the Office of the Auditor-General of New Zealand. What the Auditor-General has said about the $29.9 million payment for land at Ihumātao, which the Government made this year, was that the ministry did not seek the correct approvals; that the expenditure was incurred without appropriation, without authority to use imprest supply; and that for those reasons the payment is unlawful until validated by Parliament.
I want to go back to the time line that led to this, because I think there are some important questions which the Minister of Finance should address. What we know is that on 14 December last year, the Treasury advised the Minister explicitly that they believed it would not be appropriate to use the Land for Housing Programme appropriation to resolve the dispute at Ihumātao. Their words were incredibly clear. They said that they believed that they couldn’t recommend that because there was a risk that it would not fit within the appropriation scope, that the proposal was at odds with the intent of the Land for Housing Programme, its operating model, and scope of related appropriations.
But despite that warning from the Treasury—which could not have been clearer—on 20 December, the Minister of Finance, together with the Minister of Housing, announced to the New Zealand public that they would be signing a cheque to buy the land at Ihumātao. They were explicit. They said they would be using the Land for Housing Programme to write that cheque. So my first question to the Minister is: why did he allow the New Zealand public to be misled about this when the Treasury had already been very clear the week prior that that would not be an appropriate use of those funds?
The next step in the time line is that on 3 February, officials—and we only know this because the Auditor-General investigated this and has put these facts on the public record. I want to be very clear that at no stage has the Minister brought these facts to the House proactively; we had to wait for the Auditor-General to investigate. But on 3 February, officials advised that the only way that Ministers would be allowed to sign that cheque was if they created a new and specific appropriation for Ihumātao. On 9 February, Ministers agreed to this.
Now, this is important because the conceit that the Minister of Finance had with the New Zealand public and that he had maintained throughout was that the land at Ihumātao, the purchase of it, was nothing special. It was just buying land for housing, much as the Government did with KiwiBuild—that no additional funds would be used, that no precedent was being set, that there was nothing particular about this. What this time line shows us is that that was demonstrably false and that the Minister knew it, because his officials had advised him that he would have to sign off on a specific new appropriation. And my question is: at the point of signing off on that specific new appropriation, why didn’t the Minister, or the Minister of Housing, come clean with the New Zealand public about that?
We then know that what occurred was that there were major errors from the New Zealand Treasury, because when Ministers go and sign cheques on behalf of the New Zealand public, there are actually legal processes which require them to get imprest supply from the Parliament. In this case, approval was not sought, and that is what the Auditor-General lays out. But despite Treasury speaking to the Auditor-General about this on 12 March, here in this Parliament, on 17 March, the Minister of Housing, Minister Woods, maintained the fiction that the Land for Housing Programme would be used for Ihumātao, even though she knew a specific new appropriation had had to be created.
We have since been told by TVNZ that Ministers have alerted them that this has been rectified as part of the March appropriations. My question to the Minister is: what exactly has happened and what was meant by that? Was it his office or Minister Woods’ office who advised Maiki Sherman of that, and would we expect in future that the Government will continue to use unappropriated and unlawful expenditure in the way they did at Ihumātao?
Hon GRANT ROBERTSON (Minister of Finance): Just before I respond to Nicola Willis’ questions there, I just want to acknowledge the contribution by Chlöe Swarbrick and I do think that I don’t have enough time today to go into all of the issues that she’s raised. But, clearly, on this side of the House, the future of the New Zealand economy has to be one that is based on sustainability, on productivity improvements, on inclusion, and not on speculation in the housing market and not on requiring the population to simply grow in order to do that as well. We understand that. That’s a long-term transition for the economy, and that reduction of inequality is very significant and important to us.
Also, for Mr Bayly, again, not really enough time to go into it, but the question of moving towards more targeted spending is clearly where all countries in the world are going. I understand the point he’s making. We actually withdrew our equivalent of the main Australian support with the wage subsidy scheme at an equivalent time. We have other schemes, like the Small Business Cashflow (Loan) Scheme, that had carried on, where we see a greater and longer-term benefit there beyond COVID. But I actually think the relative withdrawal of support is quite similar. In terms of targeting the industries, Minister Nash has already outlined in the speech he gave earlier in the year the way in which we’re going to continue to support the tourism industry. We do the same with international education. We understand the importance of that.
In response to the comments from Nicola Willis, I do think it’s very important to understand what the Auditor-General said, and I too am quoting from the Auditor-General, in his letter to Nicola Willis. I quote: “To summarise, the concern that you raised (that the Government unlawfully used the KiwiBuild Housing appropriation to authorise the land purchase) did not eventuate.” So that actually was what the Auditor-General said—that that concern did not eventuate. The concern that the Auditor-General had, and that the member has moved on to, is the question of whether or not, in the decision and in the creation of the appropriation that took place on the time line that the member has outlined, two important clauses from the Ministry of Housing and Urban Development were put in place that would acknowledge that imprest supply would be the source of that funding. The Ministry of Housing and Urban Development failed to put those two clauses in the paper, and so for the period of time from 17 February, when that was signed off, until 17 March, when the normal regular March baseline update was done, there was an unappropriated expenditure.
As we say, far from ideal—far from ideal, but not uncommon. Seventy-one times in the last five years of the previous National Government—71 times. So, yes, there was a technical fault there—we accept that—as there were 71 times under the previous National Government in its final five years. In fact, this is so common, we have a whole process for it that goes through Parliament where we validate that particular expenditure. The Government—
Nicola Willis: Dodgy deal, sneaking it through.
Hon GRANT ROBERTSON: Ha! Well, only dodgy, Nicola Willis, if 71 times it was dodgy when the National Party did it.
What I can say about the overall traction at Ihumātao is that the Government did make a pragmatic decision in the best interests of all New Zealanders to find a resolution and a solution there. It will involve housing. It will—[A member stumbles] Mr Goldsmith, nice to see you. It will involve housing, but it will be done in a way that is sensitive to the mana whenua, that understands the importance of the area to the people of Auckland. It is a challenging and difficult issue, but it’s one that I believe the Government is on the right path on.
Agriculture and Land Information
CHAIRPERSON (Hon Jacqui Dean): We turn now to the financial review for agriculture and land information—Hon Damien O’Connor in the chair.
STEPH LEWIS (Deputy Chairperson of the Primary Production Committee): Thank you, Madam Chair. It is my pleasure, as the deputy chair of the Primary Production Committee, to speak to the primary sector annual review report, and I want to start by acknowledging the work from members across the House on this report. I’d also like to thank the Ministry for Primary Industries—MPI—for making available their senior leadership team to answer the committee members’ questions. That was incredibly helpful, as we were able to drill in to some detail on a wide variety of topics. I just want to thank Land Information New Zealand and Landcorp Farming Ltd—Pāmu—for coming in and answering the committee’s questions, and the Minister for being available, as well.
I just want to acknowledge at this point that the backdrop to our annual review hearings was, of course, the COVID-19 global pandemic, and while some of our primary industries fared well or better than expected, others were more affected by the COVID-19 restrictions that we saw last year. It’s also worth noting that as a result of funds from the COVID-19 Response and Recovery Fund, the ministry was able to fund initiatives from the primary sector, including retraining programmes for workers who had lost their jobs as a result of the global pandemic—for them to be able to retrain and move into primary sector work. There were also initiatives in pest control, food waste, and support for rural communities and animal welfare. I’m sure that during the course of this debate, the Minister will share more about the Government’s support for the primary sector and primary sector exporters throughout the global pandemic.
Mycoplasma bovis was also a focus of our committee. The committee heard that of the 260 herds identified in New Zealand with the disease present, 251 of those herds have now been cleared of M. bovis. The ministry advised that since the eradication programme began in 2018, over $180 million has been paid out in compensation. The ministry’s work to contain the disease is continuing through increased surveillance and tracking activities, and the National Animal Identification and Tracing system is a key part of this. The committee was pleased to hear that significant efforts have been made to eradicate M. bovis, but ongoing challenges are faced.
The committee was also very keen to discuss primary sector workforce needs, and in July 2020, we heard that the ministry launched the Opportunity Grows Here campaign to attract workers into the primary sector industries. The campaign’s focus is on providing job transition and promoting positive working conditions. There are challenges to meet workforce demands due to ongoing border closures, but the Recognised Seasonal Employer scheme has definitely helped, and there’s further work under way, we understand, to encourage more Kiwis to consider the primary industries as a viable career option.
Also of interest to the committee was Fit for a Better World—Accelerating our economic potential, a road map that seeks to support the recovery from COVID-19 and address some of the longstanding issues that the sector has faced. Forestry and wood-processing, and aquaculture were given as two examples of where the primary sector can grow its export value in the next 10 years. Water reforms, mānuka honey, and Pāmu’s conversion of some farms to organics, and the impact that that’s had on the improving of their farming practices, were also topics that were canvassed during the hearings.
As you can see, the Primary Production Committee had some robust conversations, resulting in a very thorough annual review report. Thank you.
MARK CAMERON (ACT): Thank you, Madam Chair, for the opportunity to question the Minister through the annual review process. We were assured that this Government would be transformational, the problems that it addressed would be fixed and altered—a change for a better New Zealand. Why hasn’t this happened in rural New Zealand? Child poverty is worse, better educational standards are falling, and remedying housing issues in rural New Zealand couldn’t be any worse under this Government.
The rural sector has seen a plethora of shoddy lawmaking. Freshwater reforms? Well, far out! What a fiasco. Part of the National Policy Statement for Freshwater has asserted sweeping changes for rural activities. What does that mean to a farmer? I am one and I don’t understand it. Notwithstanding that the intentions are honourable, the asserted methodologies are asinine and vacuous.
Let’s take the sowing dates, if I can discuss that with the Minister. The Minister and I have discussed this at length. Still no answers are forthcoming. If you don’t have your crops sown by a certain date, a farmer would have to go through a Resource Management Act review process. This is under the suggested frameworks that may be adopted. Forcing farmers to plant crops by either 1 October or November in some areas of New Zealand is idiotic or fantastical, to say the least.
This is, unfortunately, the kind of Government and its understanding of rural New Zealand going forward. To force the issue that this is not acknowledging regional activity, regional rainfall, soil, and soil aggregate farming methodologies just shows that this Government is totally out of touch. And I challenge the Minister to make good with some of his previous assertions. Sadly, it’s a one-size-fits-all way of looking at regulations. It totally fails the common-sense sniff test. If you’re a farmer—and I challenge anyone in this building who isn’t farming, to make good with any of these assertions, and I guarantee there’s probably few or no one in the building that is actively farming.
It doesn’t allow for regional acknowledgment of erosion, regional farming activity, soil aggregate, and rainfall, notwithstanding the areas around New Zealand that are zone indicative. Did anyone actually tell the ministry and the Minister that you can’t get heavy machines on farm paddocks in most places in New Zealand in the latter part of winter and/or spring? Doesn’t seem to listen. Under the Minister’s advice, these crops would absolutely fail if these methodologies were enforced.
I challenged the Minister and the ministry to make good with the common-sense claim that, as we farmers know, no crop in the winter scenario would ever germinate in under 11 degrees. Now, I’m not even sure if the Minister is aware of that, but at that time of the year most of Southland is under snow. So I’d like to see how that would work. I think this Government’s completely out of touch with the regional activity at a regional level. Government’s just got bloated and it simply needs to be handed back to council to rectify these problems.
Coupled with the extra costs—who’s going to pay for this? The simple reality is if this generic comes in at a central government level, those costs are going to be deferred to council and those will ultimately be shared by ratepayers. Is the Minister going to make good on asserting what sort of costs and revenue earnings the local councils will have to uptake and the farmers will lose by revenue earnings at the farm gate? Does this Government know? Does the Minister know? I’d like to challenge him on those figures. And if he doesn’t have them, why doesn’t he have them, because rural New Zealand is at complete odds with what this Minister and the ministry is trying to assert.
The ratepayers and the farmers want to know how to operate. The council wants to know how to operate. We’re sick and tired of generic policy-making out of central Wellington that does not understand on-farm regional activity. Thank you.
Hon DAMIEN O’CONNOR (Minister of Agriculture): Thank you, Madam Chair, and I’m happy to answer questions. It’s very hard to answer, or respond to, a statement, but I’ll try. Firstly, I would like to take the opportunity to acknowledge the incredible work, and the previous member there, Mark Cameron, as a farmer, is in a group of people in this country that has done an incredible amount to commit to work their way through COVID, alongside the good people at the Ministry for Primary Industries (MPI), to a point where we saw a marginal drop of 1 percent in the net export revenue from our primary sectors—an incredible achievement through the COVID year. And next year, because of that good work working with Government people, MPI people, and others—Land Information New Zealand as well—across the primary sectors, we have a forecast increase of revenue of 3.6 percent, the envy of many countries around the world. And so I’d just like to put that on record.
In response to the statement around water quality, this Government put some ideas. It made a commitment to improve water quality. We worked together to put out some draft proposals that we accept were wrong, and we have put them to one side. We’re now working through with all the agencies across the primary sectors to ensure that we come up with a pragmatic set of proposals that will give us, on the ground, changes that will improve water quality, which is what we need in some particular areas—not all across the country. The one size fits all was that bottom line that we as a Government and as the nation have to have. We have to have a bottom line, but we hope that the vast majority of farmers and people who own the land actually will be better than that. I’m sure they will. Many are actually far better in terms of their farm management already. But we have to work through a process. We’ve got 12 months to do that, and I’m saying to farmers, let’s work together. Let’s step up and show the wider public that—as we have in export earnings—we can achieve an amazing amount for our country.
Hon DAVID BENNETT (National): Thank you, Madam Chair. So, Minister, you said they were draft proposals. Were they designed as a draft, those regulations that came out last year, then?
Hon DAMIEN O’CONNOR (Minister of Agriculture): No. Some of those were proposals that, as I say, they were, with the best of intent, a way of putting in line a bottom line. The planting dates need to be worked through—issues like tagging. So the slope maps and the maps that were put out there were clearly mistakes, and we are working through to rectify that. I don’t think that we would ever claim perfection. We’ve acknowledged that mistakes were made. But the intent of what we want—and that is better water quality for all New Zealanders—is one we’re still determined to achieve.
Hon DAVID BENNETT (National): OK then. So the 190 kilograms, is that going to be reviewed or not?
Hon DAMIEN O’CONNOR (Minister of Agriculture): No, that won’t be. And in terms of nitrogen applied, I’ve had extensive conversations and discussions with farmers across there, and the vast majority of them say, “Actually, 190 is OK. We can live with that.” And where beyond that is being used anywhere in this country, you are probably wasting money and you are probably not making the best utilisation of your land or your stock or the grass that you grow.
Hon DAVID BENNETT (National): Is the nitrate type acidity rate going to stay as it is?
Hon DAMIEN O’CONNOR (Minister of Agriculture): Those issues have been worked through. In fact, we will still aim to achieve those target figures of the nitrate toxicity. As I say, we don’t have a dissolved inorganic nitrogen figure in there. It is a complex area, but those bottom lines will still be there. In terms of how we get there, those are the things that we are discussing.
Hon DAVID BENNETT (National): So is that a yes, that the 95 percent is retained? [Interruption] The 95 percent nitrate toxicity rate will be retained?
Hon Damien O’Connor: The 95?
Hon DAVID BENNETT: Percent toxicity rate.
Hon DAMIEN O’CONNOR (Minister of Agriculture): The target figures that we put out there for nitrate toxicity will remain in place.
Hon DAVID BENNETT (National): Cool. Have you done any analysis of what that’s going to mean for mid-Canterbury and the number of hectares that will go out of dairying?
Hon DAMIEN O’CONNOR (Minister of Agriculture): There has been some analysis done by the Ministry for the Environment (MfE), some by the Ministry for Primary Industries (MPI), but I don’t necessarily accept the figures that have been bandied around. I think the innovative approach that most farmers take in this country means they will adapt, and is already what we are seeing, and the underlying assumption that if you irrigate land it will go into dairy is, in my view, a faulty one. And we are already seeing other high-value land uses across the Canterbury Plains in terms of seed production, making good utilisation of that water.
Hon DAVID BENNETT (National): Yeah, so with that, what are those projected numbers, that are existing dairy, that would go out of dairy under those rates? If you say you’ve got MfE and MPI, can I have both of those numbers in hectares, please?
Hon DAMIEN O’CONNOR (Minister of Agriculture): Look, I can’t recall. I’m happy to get, for the member, the figures in terms of what areas may adjust. If I can go to, I guess, a more recent report in terms of direction of travel for agriculture, and that is to the Climate Commission’s report, in terms of our target for emissions reduction, they were talking about a 15 percent possible reduction in stocking rates, which has alarmed some farmers because they think that someone is going to come in and impose that on them; they will not. What the commission has said is that with existing technology, if we are to reach those targets, we might end up seeing a reduction as farmers opt to do different things. But what they have said is that production, they think, will remain the same.
I think a very good example of what people thought would never be achieved would have been a halving of the number of sheep that, effectively, occurred from 1985 to now, but retaining the same volume of production from those sheep. So the same kind of innovation, I am sure and confident, will occur across the livestock sector from whatever sector it is.
PENNY SIMMONDS (National—Invercargill): After the Minister’s decision to delay the intensive winter grazing regulations for a year, what are the criteria or standards for intensive winter grazing that farmers must meet to satisfy the Minister that he doesn’t have to impose regulations?
Hon DAMIEN O’CONNOR (Minister of Agriculture): We have under way consultation on farm freshwater management plans. So each farm will be expected to have in place a freshwater management plan that gives an indication of the high-risk areas, the stocking rates, and assurance that nitrate flowing from that farm or that property in that management system will reduce over time. That’s what we hope to achieve from that, and we’re trying to incorporate those freshwater management plans into integrated farm plans, which are not a set template; it’s a concept where farmers will roll into one plan their obligations around health and safety, around biosecurity—M. bovis being a challenge for all of us now that wasn’t there—animal welfare standards that are expected by all those people who buy our projects, freshwater management and soil protection, biodiversity, and, of course, labour management on a farming operation. All of those things are legal requirements. Some of them need to be laid out in terms of definition, and those are ones around freshwater biodiversity yet to be clearly defined. But, if you run a farming operation, ultimately, be it the regional council, be it the processing company that buys your stock, or the customer in the market that wants to consume your products and check the production system used, they’ll all want reassurance that you’ve done it in the right way.
PENNY SIMMONDS (National—Invercargill): So what modelling has been done on the economic impact of the environmental policies on farm viability and the ability to accelerate the economic potential of agriculture?
Hon DAMIEN O’CONNOR (Minister of Agriculture): As I stated before, there has been some economic modelling done, which I don’t necessarily accept. The economic potential of agriculture is unlimited, in my view. As we move from volume to value, or to values, I think that what we produce from this country by way of pure, safe nutrition that, through innovation, can be turned into recipes for individuals in terms of their nutrient needs—I believe the sky is the limit. Because if we, through the ethical methods of production and assurances through farm plans and certification—I think that people will be actively seeking to buy products from our country, just as we’ve seen with mānuka honey, where, perhaps, the prices in some markets might be seen as ridiculous by New Zealanders but actually they’re seen as reasonable by the very customers who purchase it. That’s the space that we need to move into as a food-producing and fibre-producing nation.
TEANAU TUIONO (Green): Thank you, Madam Chair. I wanted to touch on some of the issues that have come out of the organics bill. But I also wanted to thank everybody that has been helping and supporting the passage of the bill through the House. Because we know that, hopefully, it will create certainty for people locally and overseas who want to buy organic Kiwi products.
We know that people around the country and the world want their food to be produced in environmentally friendly ways. They want to know that when they put dinner on the table for their kids and families, it has been produced sustainably, helping to create a greener future for current and future generations. A part of that is understanding that clear and trusted national organic standards will help us produce food and other products more sustainably.
I think it’s really important that we do ensure that we have the voices of the growers and the producers and the people who have made this their lives, that understand that when we live holistically with the land it’s not just about the economic benefits but it’s also about how we engage and work holistically with the environment.
But I have two questions, which kind of fall underneath that. We know that when we transition from one regime to the next—and I understand that’s what I see is happening—what support policies will be put in place to ensure that the organic system, the organic sector, will be carried from this regime to the next? And also, has the Minister also thought about advocating for a preferential procurement of locally produced organic products to help grow the organic sector?
Attached to that, I have a related question, and that’s since 1 December 2020, the Ministry for Primary Industries (MPI) have been calling for proposals for projects that would research regenerative farming practices. On the website, it says that projects could be under way by mid-2020. So I’d like some clarity around what’s happening with that, how many proposals have been received, the dates and how many have been funded so far, and what else is the Government doing to understand the value of regenerative farming for Aotearoa New Zealand? Thank you.
Hon DAMIEN O’CONNOR (Minister of Agriculture): Kia ora. Look, I’ll attempt to answer a few of those questions incorporated in there.
Firstly, is Government considering direct support for local purchase of organics? No, we’re not. In fact, we believe that the market and the demand for it is building to the point where, actually, production is the challenge, and that’s indeed where the organics bill comes in. We need to give the consumers, who often pay a little more for organic products, an assurance that, indeed, the product is what it says it is, and it’s been produced in an organic way, with credibility. We’ve had in place in New Zealand, through a couple of agencies like BioGro and Demeter, a couple of certification systems that have been deeming products to be organic if the growers meet the standards. We’ve seen growth in that area to the point where exports of organics is a significant part of that sector. We’ve negotiated with each country an assurance that says that when we sell products off-shore that are claiming to be organics they are. Some of those countries have accepted that standard, but it’s been a country-by-country negotiation.
What a number in the organic sector have said is that, actually, we need a national standard that we can go to any market around the world and say, “This is certified by our Government, by our country, as organic, and you can trust it.”—because Government-to-Government certification is usually the most credible.
So we’ve worked through a piece of legislation, we’ve worked through draft regulations that are currently out for discussion, and the concern seems to be around the cost, which is a legitimate one. We don’t want to add any further cost, but ultimately we do want to, as Government, be able to say to whoever buys organic products from New Zealand that these are truly organic in the production system used. So it comes down to should we contract that out to a non-Government agency to say it’s organic, or should we keep it with the Ministry for Primary Industries (MPI) or New Zealand Food Safety to say it’s organic?
Ultimately, a Government agency backed by us, through legislation, through regulation, is the safest way and the most secure way through to market. We’ve accepted some of the arguments and some of the points raised in select committee, but ultimately I believe, and Government will believe, that certification by MPI or New Zealand Food Safety is the best way to grow the organic sector.
Hon DAVID BENNETT (National): When will farmers in the Southland region know what criteria they have to meet so that you are satisfied and your colleague is satisfied that the modular process will have done an effective job at creating the environmental outcomes that you desire to avoid the implementation of the freshwater rules next year? Secondly, what is the anticipated cost on local councils—regional councils particularly—of implementing those very programmes?
Hon DAMIEN O’CONNOR (Minister of Agriculture): I don’t have a set date for that, other than to say that if we can, through winter grazing practice this season, show that there’s real improvement for not only water quality but for animal welfare standards—and that’s the law around that. We have, two years ago, of course, raised this issue, been through an independent process, and given some clear guidelines about animal welfare standards for winter grazing. If we do the right thing there, I’m sure water standards will improve.
In terms of the cost, and if we were to go to a consenting process—that is, if you were seeking, as proposed, to plant in places that were steeper than we’d talked about or that may have ended up being in a high-risk situation close to a river, then the cost of that consenting process is something we can’t estimate, but it might be significant depending on the regional council. I’m trying to avoid that process, if we, as a farming sector, can prove that what we put in a farm plan will be adhered to and does make progress with freshwater quality and with animal welfare standards.
Hon DAVID BENNETT (National): So what’s the definition of real progress?
Hon DAMIEN O’CONNOR (Minister of Agriculture): I think it will actually be a somewhat subjective assessment this year. That is, I think if we see images of water pollution and if we see images of ill-cared-for animals, then the public will expect that we do more to bring those farmers into line, and other farmers will expect us to have regulations to bring them into line.
Hon DAVID BENNETT (National): So if your test is images—and it’s fairly easy for anyone to take a photo in Southland in the winter of any stock in a winter grazing environment and picture it in a way that may be seen as negative—so if visual images are going to be your test, what is the standard that you will consider to have breached what the public rules will be around that?
Hon DAMIEN O’CONNOR (Minister of Agriculture): We are working with the regional council, Environment Southland, down there, in terms of Southland. All other regional councils will be partly responsible as well, as will the Ministry for Primary Industries (MPI) through inspectors for animal welfare. We’ve been clear, we’ve been upfront and, actually, most people are reasonable and they understand what is unreasonable. So, you know, the councils with MPI will be working through that process in a fair way, but it will be a reasonable way and will conclude, I guess, at the end of winter as to whether we indeed have made progress, which I hope we have.
Environment and Ocean and Fisheries
CHAIRPERSON (Hon Jacqui Dean): We turn now to the financial review for environment and oceans and fisheries. The Hon David Parker is in the chair. Before I take the committee chair, can I just remind the House that the financial review, as, indeed, the Estimates, works most effectively when it is conducted as a Q and A session of the Minister. The smaller parties may find that taking a five-minute call in the context of a half-hour debate really does eat up that party’s time, which is proportional to the House.
Hon SCOTT SIMPSON (National—Coromandel): Point of order, Madam Chairperson. The process so far this afternoon has run not according to the timetable that was, as far as I’m aware, agreed by the Business Committee, and what I’m seeking at this stage is—because we are running significantly behind time and this is an important questioning period—that the Minister give us an assurance that he’ll be available after the dinner break to conclude this session.
KIERAN McANULTY (Chief Whip—Labour): Speaking to the point of order, I just wanted to reassure the committee that we are actually on time. We started this slightly late and, Madam Chair, you’ve done a very good job of making sure we do keep to time.
CHAIRPERSON (Hon Jacqui Dean): OK, thank you for that. Just to add to that, the comment I’ve previously made—and I’ll keep this short, because this is using the House’s time, but so did the point of order—is that this session is now designed to be a Q and A. That seems to be the most effective way of holding the Minister to account. Five-minute speeches do not directly hold the Minister to account. So I’ll leave that up to the members, and that’s all I can do.
Hon EUGENIE SAGE (Chairperson of the Environment Committee): E te Māngai o te Whare, tēnā koe. Thank you. Speaking to the annual review of the environment sector 2019/20, which is at pages 284 to 317, volume 1 of the reports of select committees. As chair of the Environment Committee, in speaking to the annual review of the environment sector, including Te Papa Atawhai, the Department of Conservation (DOC); Manatū Mō Te Taiao, Ministry for the Environment; Predator Free New Zealand, I am really conscious that we are missing the energetic presence of the Hon Kiritapu Allan and wish her well in her fourth week of cancer treatment and in her recovery, and hope that we see her back in this House very soon.
Can I also acknowledge the other members of the hard-working and thoughtful Environment Committee, and the range of searching questions that they asked of agencies, and I acknowledge the work of staff in those agencies, both in fulfilling their statutory functions and in answering some hundreds of questions.
So with the Climate Commission, the first annual report of the Climate Commission—because it was only established independently, separately, in December 2019—it has done a lot of work over the last year to establish itself, to build up the infrastructure for an organisation that has quite ranging technical capabilities, was one of the things we heard. The data that goes to the Climate Commission and that it considers is quite critical. So the select committee spent some time examining the modelling data that the commission used to base its draft report, and we are continuing with that work subsequent to the annual review.
We heard of the quite extensive community engagement that the Climate Commission has engaged in, partly as a result of COVID, and moving its consultation with stakeholders online, and some 2,000 people have attended the webinars that the commission has held on its draft report, and there have been thousands of submissions as a result. So I think the committee was very interested in that quite extensive community engagement.
Turning to conservation, there’s been a substantial increase in the Department of Conservation’s budget—5 percent in 2019/20 compared to the previous year, and also the department has received $502 million as part of the Jobs for Nature package. So that is something that the committee has looked at in depth and will continue to.
In terms of highlights through the last year, one of them was the partnership with Ngati Porou and Te Whānau a Apanui in doing massive predator control in the forests of the Raukūmara Range. The committee was also interested in the fact that the department’s procurement systems and practices aren’t fit for purpose and need upgrading, and the department in the last financial year started work on implementing a $62 million five-year corporate services work programme. There’s been some improvements in terms of digital strategy improvements in the way capital projects are managed, but we recognise the need to continually improve there.
A couple of the other highlights in the last year that the department brought to our attention was the release of Te Mana o te Taiao, the Aotearoa New Zealand Biodiversity Strategy; the achievement in the Tiakina Ngā Manu project; aerial control of predators over nearly a million hectares to improve the chances for our native plants and wildlife; the work of Zero Invasive Predators in the Whataroa and Perth valleys, and getting rid of possums and stoats; DOC’s five-year climate adaption plan, because, of course, the department is increasingly affected by intense weather events, and they saw that during the year with a weather bomb in Southland, which affected more than 78 tracks and led to the temporary closure of the route Burnham-Milford.
The committee also heard from the Environmental Protection Authority (EPA) and it was, in terms of its presentation, highlighting the increasing pressures that the authority is under as its functions increase—functions like the work under the COVID-19 Recovery (Fast-track Consenting) Act—and the work that it is doing on chemical mapping across Aotearoa being affected by COVID, because its chief scientist redirected his work to COVID. One of EPA’s highlights is the Mātauranga Framework, that it has developed.
Then the Ministry for the Environment, its work in implementing the recommendations of the Randerson review. The committee asked questions about whether the ministry has capacity to do that, because of the wide scale of the Resource Management Act reform, and was reassured by the ministry noting that its staffing had increased and it was confident that it could do that over the two-year time frame.
Other highlights were the expansion of the waste disposal levy and a long list in the committee’s support on climate change.
Hon SCOTT SIMPSON (National—Coromandel): The elephant in the room in terms of this review has been the Government’s response to the Randerson report. And my question to the Minister is that after initially having told the public in this Parliament that his Natural and Built Environments Act (NBEA) exposure draft would be released in March of this year and then subsequently in April, and now we’re into May—can the Minister update Parliament on when this exposure draft will be complete, and if he still expects the NBEA to be introduced this year and then passed by the end of 2022?
Hon DAVID PARKER (Minister for the Environment): I’m not sure that’s strictly a matter for the annual review, because it’s this year rather than last year.
Hon SCOTT SIMPSON (National—Coromandel): The point is that the Government’s response to the Randerson committee was covered extensively during the select committee’s review and, therefore, it absolutely falls in scope. So if he can’t tell us when his exposure draft will eventually find its way to the select committee, can he tell us when he expects that his Strategic Planning Act will be passed?
Hon DAVID PARKER (Minister for the Environment): Well, I can. I was just making the point on what this debate’s meant to be about. In respect of the Natural and Built Environments Act, my recollection is that we were never aiming to have it in select committee by March. We were aiming for May; it’s probably going to be June. And the reason for that is that we’ve decided that the scope of what we want to put to the select committee is going to include a little bit more of further consideration of what we’re doing to put together the regional level plans. What’s happening is that the number of plans is going to jump down from over 100 to about 14, and the mechanisms of doing that were not fully worked through in the Randerson report. We did consider leaving the exposure draft blank in respect of those particular provisions but, on reflection, thought that it was better to work up some of that detail before we put it to the select committee inquiry, which is why we’re taking another month to do that properly.
Hon SCOTT SIMPSON (National—Coromandel): So if that timetable is now in place, then it seems unlikely that the draft exposure will be presented to the select committee until June. The likelihood of it being eventually passed through this House in this sitting term is heroic. What, then, will that mean in terms of actual implementation for planning changes to councils who may then take another several years to actually implement legislative changes?
Hon DAVID PARKER (Minister for the Environment): Well, for a start, the member’s wrong if he doesn’t think we’ll still be passing the replacement legislation during this term of Parliament. I’m still expecting both the Natural and Built Environments Act and the Strategic Planning Act to be passed during the term of this Parliament, and we’re on track to do so.
In respect of what happens in the meantime, the law is the law. I hear people saying that they should just take a deep breath and wait until the law changes before they do anything. It’s actually one of the reasons why we didn’t immediately embark upon the Resource Management Act (RMA) reform. It was that we needed to get cracking on water quality, on issues relating to climate, and also on development opportunities for housing, which we’ve done using existing instruments under the RMA. We’ve updated the National Policy Statement on Urban Development, and the councils are required to make more room for house-building opportunities both through intensification and, where necessary, at the margins of growing urban areas, and that work’s flowing through.
We, of course, have already promulgated a real increase in the standards that we expect of those who are using land and are causing harm to waterways. I heard the Hon Mr Bennett asking questions about that. In reality, what we inherited was a situation where twice as many rivers were degrading in New Zealand as were improving year by year, according to the macroinvertebrate index, which is probably the most accurate measure of aquatic health. So in advance of changes to the RMA, we thought it was necessary to make changes to cause those problems to be brought under control. And I’m happy to answer questions about that, because, in fact, that did happen during the year under annual review.
Hon SCOTT SIMPSON (National—Coromandel): The committee, at review, spent quite a bit of time investigating and prosecuting questions relating to the Government’s Jobs for Nature programme, and I’m keen to know from the Minister what the methodology is that the ministry uses to determine how many new jobs have been created and what the criteria is for determining whether a job is a job.
Hon DAVID PARKER (Minister for the Environment): Again, that information’s already publicly available, but, essentially, we measure the number of people who are in employment at any one time and we report on that. We also measure the total number of full-time equivalent jobs for a year based on a number of hours of employment. That information is also available on a website and is updated regularly.
SIMON COURT (ACT): So in light of the Minister’s assertion that the reforms to the Resource Management Act will be brought to select committee, with all of their attendant problems to be solved before new regulation is passed, the Minister is surely aware that one of his previous reforms or attempts at regulation of water quality, the National Environmental Standards for Freshwater, has included a series of prohibitions and bans on activities that mean that certain activities like earthworks and quarries and clean fill disposal sites which rely on being able to get an earthworks permit in order to clear vegetation, carry out their physical works, and then reinstate that land to a much higher standard, with planting, with constructed wetlands, and with indigenous biodiversity that flourishes as a result—that Minister must be aware that the National Environmental Standards for Freshwater included the term “prohibited” when it comes to describing activities that disturb a wetland.
So for that very reason, there are a number of existing quarries which, this construction season, have not been able to develop their land, to access the hard rock that’s absolutely vital to deliver roading and infrastructure for housing, and a number of affected businesses and industry organisations—the Aggregate & Quarry Association and others—have written to the Minister, we understand, asking “Please, Minister, will you consider changing the wording in this flawed regulation so that we can access the land that we own, the land that is already well understood will be used for quarrying and other intensive activities, and where, yes, there may well be some type of grasses or some kind of area where water ponds, but that it was always envisaged that that land be modified as part of their development activities?”
So will the Minister care to tell us when his ministry and his office will respond to all of those submitters who have been afraid to bring their concerns out in public but who have sent him letters and who have asked me “Would the ACT Party follow this up?” Would he explain to the committee exactly when his ministry and his office will come back and explain when they will remove the word “prohibited” from the National Environmental Standards for Freshwater that stops legitimate activities, like quarries and like resource extraction, from going ahead? It is affecting infrastructure delivery. It is introducing massive additional cost variations on to public and private infrastructure and construction projects, and these organisations have been promised for months and months and months that his office and his ministry, the Ministry for the Environment, will address it, and they have not had an answer. So Minister, will you please explain it?
Hon DAVID PARKER (Minister for the Environment): Thank you for that contribution. The member does raise a fair point. The background to this issue is that, quite sadly, New Zealand’s wetlands have largely been lost, even including wetlands that are within national parks. New Zealand lost 90 percent of our wetlands quite a while ago. That’s sad, but even sadder still is that in the last decade, of the remaining 10 percent, we lost about a 20th. So we as a Government decided that we needed to introduce strict rules to stop the further loss of wetlands, and our intention was to stop the major loss around agricultural areas, which is probably where most of the loss has been. We wanted to make it harder to lose wetlands to subdivisional activities, and we came up with a rule that, as the member has quite rightly said, included a prohibited activity from nixing other wetlands generally.
It’s fair of the quarry industry and the landfill industry to say we might have gone a bit far. They’ve come to Government—
Hon Paul Goldsmith: That’s why it’s expensive to build houses and get concrete and everything like that.
Hon DAVID PARKER: Well, I’m not actually accepting that there’s a current problem, but if we don’t fix the problem, we will cause a future problem, because they do need to consent more areas for expansion of their existing quarries. Many of the quarries already have consents to expand into areas that they need to go next, but I think they are correct that we’ve gone too far in the prohibited activity status in respect of some of those activities, and we’ve said that to them. We’ve said it in public meetings, and they’re not scared to express their viewpoints. They’ve said it in meetings to me personally, and I’ve said that we will address that matter this year. If the member wants to know why it is that some of these regulations we made are imperfect, in my opinion it’s partly because we, in respect of environmental regulation, make it far too hard to both make and change environmental regulation. If there were easy ways to fix mistakes both in terms of environmental degradation and environmental—and fixing imperfections in regulation, we would already have done it. But it’s an unfortunate reality that it’s much harder to make environmental regulation than it is virtually any other area of regulation across Government. Whether it’s health and safety rules or public health regulations or animal welfare regulations, those regulations are all less process-bound than the making of—
CHAIRPERSON (Hon Jacqui Dean): Getting a bit wide.
Hon DAVID PARKER: Well, this is actually the reason why we’ve got a problem here, and the longer-term fix to actually being able to, with more alacrity, fix these problems actually lies in the Resource Management Act reform that the Hon Scott Simpson referred to, because through that process we should, I think, be setting up something like a standing committee in order to more quickly remedy issues such as the one the member has raised.
TIM VAN DE MOLEN (National—Waikato): Thank you, Madam Chair. Just in relation to that Resource Management Act (RMA) then, and moving to the oceans and fisheries space, does the Minister envisage any new aquaculture areas will be consented pre these RMA changes actually passing?
Hon DAVID PARKER (Minister for Oceans and Fisheries): Well, again, that’s not a matter that’s within the period of this annual review.
TIM VAN DE MOLEN (National—Waikato): Well, it does fit, though, within the Government’s aquaculture strategy, which was part of this annual review period. So I would be interested, if the Minister does have an answer, if he could share it with us. But moving along from that, in terms of the aquaculture strategy, I’d be interested to know how many jobs have been created as a result of the implementation of this strategy. How is the Government tracking on actually delivering on their proposal to create 3,000 new jobs in aquaculture?
Hon DAVID PARKER (Minister for Oceans and Fisheries): I don’t have that number. What I can say is that I’m sure that during this term of Government, we’ll be making a lot more progress than that Government did in nine years when things were stuck. The problem that we’ve been dealing with is that the system was actually hamstrung for over a decade under the prior Government. We are working through those issues. We are making progress, but I don’t have that number to hand.
TIM VAN DE MOLEN (National—Waikato): OK. Does he have to hand, then, the contribution economically that has derived from the aquaculture strategy as a result of the implantation of this? No? Righto. OK. Well, if he’s not across aquaculture, that’s fine. Will he rule out granting partial or full ownership of the foreshore and seabed to Māori, as suggested by He Puapua?
Hon DAVID PARKER (Minister for Oceans and Fisheries): Well, that matter doesn’t sit within my ministerial responsibilities.
Simon Court: Point of order, Madam Chair.
Tim van de Molen: Well, for oceans and fisheries it does, actually.
CHAIRPERSON (Hon Jacqui Dean): The member will wait until I call him.
SIMON COURT (ACT): Thank you. I was going to make a point of order, Madam Chair, that I think it’s important that we stick to the purpose of this debate at this committee—
CHAIRPERSON (Hon Jacqui Dean): The member will resume his seat.
RINO TIRIKATENE (Labour—Te Tai Tonga): Thank you, Madam Chair; delighted to contribute to this annual review debate. Also, as a support person for the Minister in the chair, Hon David Parker, and as the Under-Secretary for Oceans and Fisheries, I wanted to pick up on the matters that had just been raised previously. Could the Minister give us an overview? Looking back at the past 12 months, the fact that this is a new portfolio, the combination of oceans and fisheries—the first of its kind in the history of our country—what particular actions is the Minister taking to focus on fisheries issues, particularly around inshore but also looking at the aquaculture industry as well and the particular strategies and measures that he’s undertaking?
Hon DAVID PARKER (Minister for Oceans and Fisheries): One of the issues that we’re considering is how you allocate marine aquaculture space, how you do that in accordance with obligations under Treaty fisheries settlement legislation, and how you do that in a way that minimises environmental risks like biosecurity risks. The ministry, I think, is conducting some very important work about how we should be conceiving of aquaculture areas as discrete biosecurity areas so that, if we have an incursion in one area, they’re actually not ruining the whole of the New Zealand industry. Those would be a couple of examples.
CHAIRPERSON (Hon Jacqui Dean): Members, the time has come for me to leave the Chair for the dinner break. The committee will convene again at 7 p.m.
Sitting suspended from 6 p.m. to 7 p.m.
CHAIRPERSON (Adrian Rurawhe): Ā, kāti rā, tēnā rā tātou katoa. The committee is resumed. Members, when we rose for the dinner break, we were considering the question that the report of the Finance and Expenditure Committee on the annual financial statements of the Government for the 2019/20 financial year be noted.
RINO TIRIKATENE (Labour—Te Tai Tonga): Thank you, Mr Chair. During the previous examination with the Minister of Agriculture, he traversed some questions around water quality, and I’d just like to ask the Minister for the Environment if he could take us through what’s happening and what are his thoughts in relation to water quality.
Hon DAVID PARKER (Minister for the Environment): Thank you, Mr Tirikatene. During the year under review, this was actually the biggest piece of work that the ministry had on. It was against the background of declining water quality, particularly in our rivers. Sadly, the latest data from the Land, Air, Water Aotearoa data series showed that twice as many rivers are degrading in New Zealand as are improving, according to the macroinvertebrate index, and this is a long-term trend that has coincided with increasingly intensive methods of agricultural production. Not all the problems are in rural areas and some of the most serious problems are in urban areas, but the rate of change has been greatest in respect of rural areas. Ninety-nine percent of rivers, by length, are in those rural areas, so we’ve got to address those issues.
So during this period—in September last year—we landed quite a comprehensive package that had three objectives. The first was to halt the decline, the second was to show material improvements within five years, and then clean waterways up to a decent standard over a generation.
There are a number of components to that package. We’ve promulgated an updated national policy statement (NPS) on freshwater management. That had a number of new attributes in it that weren’t previously regulated and has standards to achieve over a generation through plans that are promulgated by regional councils that have to achieve those outcomes, which are, essentially, based on aquatic health. The guiding principle that’s being used here is te mana o te wai, which puts at the primary centre of water regulation the health of the waterway as the first priority; second, human needs—for example, drinking water—and, third, economic uses of the water.
In addition to the national policy statement on freshwater management, we changed the way in which new freshwater management plans are made through amendments to the Resource Management Act. The Resource Management Act now enables freshwater commissioners to involve themselves in that process, and we’ve appointed two, with the leading one of those for the first period being Emeritus Professor Peter Skelton, who’s a former Environment Court judge. So they will be assisting regional councils to make the plan changes that are necessary to give effect to the new national policy statement on freshwater management.
We’ve also required farms over a certain size to have a farm plan, or an environmental component of a farm plan, which enables a farm by farm assessment of what are the critical source areas for erosion, for example. Why is that a problem? Well, we know that in some areas like the Kaipara, we’ve got recent mudbanks that are 2 metres deep. This is the largest harbour in New Zealand and it’s where the majority of snapper on the West Coast of New Zealand spawn, and yet we’ve got such high sediment loads coming into that estuary that we literally have mudbanks of recent origin that are 2 metres deep. We have contributed at central government level $100 million to a restoration package. That money is being matched by local government and farmers in order to bring forward improvements there.
In addition to the national policy statement on freshwater management, we’ve promulgated a national environment standard (NES). Unlike an NPS, which requires plan changes to give effect to what’s required, an NES has immediate effect. That NES puts in place controls on increasing intensification of agriculture. For example, a new conversion to a dairy farm will require a resource consent, so that we can consider whether there is an extra nutrient load that the river can’t sustain and how adverse effects are minimised. It also puts controls on the additional area that can be put into intensive winter grazing.
I’ve talked of the sediment problems that we’ve had up north. Around the South Island, we have got serious problems of degradation of estuaries. We’ve got midland rivers in Southland where 90 percent of the macroinvertebrates are now dead compared with 30 years ago, which means there’s not many fish. The main cause of those problems there is sediment. Those sediment problems are most concentrated at the bottom of rivers. Where we have estuaries, we’ve got estuaries there that are just covered with recent mud that is smothering and killing the shellfish beds.
We’ve got kelp beds out at sea off the coast of Otago and Southland that are not thriving. They are decreasing in mass and, indeed, they’re not just not as thick but also their area has decreased probably by about 50 percent.
So we’ve got many serious problems in our fresh water. This package is meant to overcome them.
Health
MATT DOOCEY (National—Waimakariri): Thank you very much, Mr Chair, and can I just acknowledge the Minister who’s taken the chair, Andrew Little, and thank him for his time tonight. I want to start with mental health. You heard from a range of DHBs who talked about the growing waiting list for child and adolescent mental health services over the last three years. DHB representatives who appeared for their annual reports highlighted that they wanted a system-wide response. They believe the ministry needs to take a leadership policy and investment role. Even the Director-General of Health acknowledged this as a sector-wide issue and has called for a response. What is the Minister’s response to deal with those ballooning wait times for child and adolescent mental health services?
Dr Liz Craig (Chairperson of the Health Committee): Thank you, Mr Chair.
Matt Doocey: Point of order, Mr Chair. I thought this new approach to annual reports was for the caller to ask a succinct question so the Minister would get up and answer.
Hon Chris Hipkins: Mr Chairman, this is a committee stage. It does allow the opportunity for members to make speeches, it allows opportunity for members to ask questions or multiple questions if they wish to. As with other committee stages, Ministers can accumulate a number of questions before they choose to answer them. It does mean that the member should still be able to expect to get an answer to his question.
CHAIRPERSON (Adrian Rurawhe): That was actually my fault, I should have given the call, the first call, to Dr Liz Craig as the chair to make her statement, so I apologise to the committee. We’ll go to Dr Liz Craig to give the speech that should have started this debate, and then if the Minister would like to consider Mr Doocey’s question, he can do that after that.
Matt Doocey: Point of order, Mr Chair. Can I just have some clarity on what the Leader of the House has said. It was my understanding that the caller could engage in direct question and answer and not be interrupted.
CHAIRPERSON (Adrian Rurawhe): Yeah, both are correct.
Hon Member: Oh, great political answer.
CHAIRPERSON (Adrian Rurawhe): Well, it is correct. Both the member and the chair can create that dialogue if it’s appropriate. But what should’ve started this part of the debate is the speech from Dr Liz Craig.
Dr LIZ CRAIG: Thank you, Mr Chair. As Health Committee chair, I’d like to just provide a brief overview of the annual reviews for this year in the health sector and talk through some of the key themes emerging from the reviews that we did.
So our sector comprises a number of entities, and this year we did annual reviews in depth on eight district health boards, along with the Ministry of Health, Pharmac, and the Cancer Control Agency. So some of the DHBs that we reviewed included Counties Manukau, Capital and Coast, Hutt Valley, Waikato, Hawke’s Bay, Canterbury, South Canterbury and Southern DHB.
We started off with the Minister of Health, Andrew Little, appearing before the committee. Some of the discussions that we had included talking about the health and disability sector reforms, the upcoming review of Pharmac, and the Government’s inquiry into mental health and addiction, and some of the implementation that happened there.
Then that was followed by the Ministry of Health, and we had some discussions there around the financial performance of DHBs, strategies to improve Māori and Pacific health, and also COVID-19 vaccines. I think in the discussions we noted a range of things, including that a significant proportion of the DHBs were having deficits, but a large proportion of that was also considered with non-compliance of the Holidays Act, and so the need to set aside some funds for that.
The Minister also spoke about some of the work under way in terms of expanding the mental health workforce, and also just acknowledged some of the workforce shortages, for some, particularly areas like psychologists and psychiatrists, the long pipeline, up to seven years for training. Also just talking about the shortage of mental health specialists, nurses and other specialists, and also people in terms of those skills in talk therapies. So the Minister just outlined a range of workforce developments in that area, including 350 full-time equivalents, providing talk therapies through the access and choice programme in primary care.
We also heard from the Cancer Control Agency. This was our first review with the agency because they were only established in December 2019. Their role is to provide that national leadership in cancer care. Most of the agency’s first year had been around operational issues, developing the operational model vision, and recruiting key staff. But we were also incredibly pleased to hear about the role they’d played during the COVID response the previous year, and in particular developing up some consistent guidelines, so that while some of our screening had not happened during level 3 and level 4, much of the treatment had gone on because of the guidelines that they developed, and that was incredibly positive.
We also heard from Pharmac. Basically the annual review predated the announcement of the terms of reference for the Pharmac review. But what we did discuss was the work that Pharmac had done in relation to the disruption to global manufacturing and supply chain pharmaceuticals, and the work that they’d been doing there to make sure we had a steady supply of pharmaceuticals.
And then finally, looking at some of the key themes emerging from the DHBs that we reviewed. As I mentioned there were a range of DHBs who had deficits, and though many of them had actually then talked about how they were going to come back to break even over the next one to two years, and just looking at the impact of the Holidays Act and plans for addressing that. But also the role of population growth and acute demand increases on their workforce and workflow.
Mental health services was another common theme. A range of DHBs were expanding mental health service delivery or opening new units but also acknowledging increased demand, and particularly for child and adolescent mental health, some of the longer waiting times that we were seeing there. Also, talked to DHBs about COVID-19 vaccine and their plans for roll-out.
So overall, it was a very busy year for the health sector. But also I just want to end by saying thank you very much to those working in the health sector. The incredible response we saw from the sector and those working in it for COVID-19, making sure they responded both to COVID, but keeping business as usual and delivery of care happening during the same period. Thank you.
Hon ANDREW LITTLE (Minister of Health): Thank you, Mr Chair, and I thank the chair of the Health Committee, Dr Liz Craig, for her comments and endorse parts of what she said.
I thank my colleague Matt Doocey for his opening question. The issue of infant, child, and adolescent mental health services is a growing issue for New Zealand, like the rest of the world. There has been a significant increase in demand for services, and that has pushed our waiting times for New Zealand mental health services in the region of between 5 and 7 percent in most cases. So the measures that DHBs are held against for infant, child, and adolescent mental health services are an expectation that 80 percent of people will be referred to specialist services within three weeks, and 95 percent of those referred to services will be seen within eight weeks. Most DHBs are not meeting that target.
As part of the revamped mental health services and the investment that went into services in 2019—that $1.9 billion spending programme over four to five years—a number of investments have been made. We now have specialist, or youth-specific, primary mental health and addiction services in 10 DHB areas now setting up and operating. We’ve recently expanded Mana Ake, which was a programme that started in Canterbury primary schools. It’s now been—or will, from the beginning of next year, be extended to five additional DHB areas and then will be expanded beyond that over time. We’ve expanded the school-based health services to all decile 5 schools; that will assist in alleviating some of the pressure on the DHB-provided mental health services. And, as a result of COVID and the investment in COVID-related services, additional investment went into telehealth or remote services and a number of online programmes that young people can get access to. We know they’ve been well-used, and that has alleviated some pressure too, but it is not a complete answer to the challenge DHBs still have with the waiting times for those particular infant, child, and adolescent mental health services.
SARAH PALLETT (Labour—Ilam): Thank you so much, Mr Chair. What information has the Minister received in regards to the delay in development and publication of the Office of the Director of Mental Health and Addiction Services annual report?
Hon ANDREW LITTLE (Minister of Health): Thank you Mr Chairman. I thank the member for her question. The report of the Office of the Director of Mental Health and Addiction Services was a report that originated from a verbal recommendation from the Auditor-General in roughly 2003; the first report was produced in 2005. There is a statutory role in the ministry, which the Director of Mental Health, and that statutory role, that director, has responsibilities under a number of pieces of legislation, but principally the Mental Health (Compulsory Assessment and Treatment) Act. The Auditor-General of the day considered that it was appropriate for the Director of Mental Health to report on regulatory action taken and statutory powers exercised under the legislation which he or she was then required to exercise powers under. Over time, that report grew and it became a very generalised report, not only on powers exercised and regulatory actions taken but it became a general report on a number of aspects of our mental health services, and the report was often quite late after the reporting period.
When the report came to be prepared for the 2018 year—it typically takes about a year to prepare; it took a little longer than that—it was all but ready to go in 2020 when the pandemic struck, COVID-19 struck, all the efforts of relevant ministry personnel were redirected to the COVID-19 effort and so the report was delayed. At the point of which it was ready for reporting, it was considered that it would be appropriate to combine the 2019 data, so there’d be one report covering 2018 and 2019. That was compiled, and released again late early this year. I think members opposite and others had noted that the report, once published, did not contain the same data and the same breadth of data as had appeared in previous reports. I think the ministry is justifiably open to criticism for changing the content and format of the report without foreshadowing that publicly, and indeed, I might add, without foreshadowing it to the Minister. It is a matter that has been taken up with the ministry.
But in any event, the report has been produced, and much of the content that had appeared in previous reports, but did not appear in the 2018/19 report, is otherwise available through other sources. Recently, for example, the ministry released information related to what is called section 132 deaths, so deaths of people in the care of our mental health services while under a compulsory order. That should have appeared in the 2018/19 report, and it wasn’t there. The ministry has since released that and made a public statement that it is publicly available.
There is another aspect of the data that didn’t appear in the latest report; that is section 95 inquiries. They are inquiries that the Director of Mental Health is empowered to make for a serious incident for somebody under a compulsory order. There hasn’t been an inquiry since 2016, so the data would have simply been a big fat zero, and it was considered by those compiling the most recent report not to report on a zero result, so that didn’t occur.
But in all other respects, the relevant data on the Director of Mental Health’s powers and the exercise of those powers and the regulatory actions taken under relevant legislation, and that legislation is the Mental Health (Compulsory Assessment and Treatment) Act, as I’ve said, but also now the Substance Addiction (Compulsory Assessment and Treatment) Act 2017, a more recent piece of legislation. That report covers actions under those pieces of legislation and is, by and large, correct.
Dr SHANE RETI (National): Thank you, Mr Chair, and I’d like to thank the Minister for joining us tonight and for taking these questions. I have one question arising from the Pharmac and Cancer Control Agency annual review and then a set of questions from the Ministry of Health.
I think the first question from the Cancer Control Agency and from Pharmac is a discussion arising out of processes and decision making from Pharmac. In particular, I’m seeking a response to the challenge that I’m putting to the Minister in those Pharmac decision-making processes to not remove the Pharmac exemption for children receiving cancer medicines in DHBs. It seems to me that it would be cynical to remove an exemption for children with cancer to simply harmonise policy. Why would we want to double down to the lowest common denominator and remove Pharmac medicines from children with cancer when, in fact, maybe we should double up and explore maybe increasing that scope for children who don’t have cancer? So I challenge the Minister to maybe address that and give some thinking as to how he might show some leniency towards that position.
I’d then like to address the annual review from the Ministry of Health, where we talked around a restructuring, and the 30 or so Māori health questions that went to every DHB, and weave those two together into a sequence of questions. The first part would be around the restructuring. I’d ask the Minister: does he have any sense of the cost to disestablish DHBs and establish Health New Zealand? Does he have any idea as to what that might be?
The second point I’d raise is that I have grave concerns for two separate health systems. And I agree with the leader who calls it “separatist” when describing two separate health systems: one with a veto—a Māori health authority—and then, Health New Zealand. Spilling out of that, then, are the questions: what is the cost of setting up a Māori health authority? How much funding will a Māori health authority receive? And I say that in the context of officials who stood on stage last weekend and said that the funding would be “modest”—modest. So I’m wondering if he has a sense as to what funding the Māori Health Authority might receive.
I’m concerned that there will be unhealthy competition between a Māori health authority and Health New Zealand, and I’m looking for some reassurance as to how the Minister might address that. Have they thought of that? Do they see it as a risk, as well? How might that be managed?
I raised a question earlier today, and I’d ask it again because I’m trying to understand how this works. If I’m in my general-practice mode and I have a person coming toward me who is co-commissioned from a Māori health authority and also has some work involving Health New Zealand, how do I manage that? How do I account for it? Is part of the consultation under a Māori health authority commissioning - sort of umbrella, and another part under Health New Zealand? Am I invoicing two? It just alludes me. If he could add some clarity from a general-practice perspective how that would look with a person coming towards you, when there’s co-commissioning from a Māori health authority and still responsibilities under Health New Zealand.
I’m wondering if he could, sort of, confirm if he’d had any discussions or communications about aligning the Māori health authority with He Puapua; not whether he has read the document, I understand that he hasn’t, but I’m interested in any discussion as to how this all aligns with the strategy at He Puapua.
I’d look back and question whether he is familiar with the health restructuring reforms in the late 2000s, under the strategy “meeting the challenge”, where the Ministry of Health had a policy arm and it had a funding arm. I’m wondering if he has taken into account any findings—or learnings, if you like—that might have come from that, that might inform the break-up of the Ministry of Health, because it would be a shame to, sort of, not learn from what was done around about 2009, actually.
I’m interested—and I’m trying to not overwhelm the Minister writing, because I would also be the same—will funding of the health restructuring be in this year’s Budget? Can we anticipate a Budget line?
Second to last question: can he give an example of where the Māori Health Authority can veto national planning of health services. I’m trying to understand this. I understand it is co-signing approval. If he could just give an example as to how that veto might deploy. In what instance might it be used?
And, finally, and it may be a rhetorical question, but I’ll place it anyway to get a view: does he expect consultation between the Māori Health Authority and Health New Zealand to be useful in improving Māori health inequities? Does he expect consultation between the Māori Health Authority and Health New Zealand to be useful in improving Māori health inequities? Thank you, Mr Chair.
Hon ANDREW LITTLE (Minister of Health): I’ll try to take the member’s questions seriatim, and if I’ve forgotten anything, the member will have to remind me in a later call and I may need more than one call to do this. In relation to Pharmac and the recent issue about decision making, particularly in relation to paediatric oncology, I make this point. Pharmac had commenced a review on that issue in 2019. It had seen, and had had drawn to its attention, that even though its decision making and the number of patients it is making decisions about is very small when compared to the whole range of things Pharmac has to deal with, and the budget is comparatively small compared to the now over a billion-dollar budget a year that Pharmac deals with—it nevertheless considered there was an inconsistency in the way it was making decisions about those medications compared to everything else. It didn’t regard it as particularly urgent because of the numbers, but it nevertheless commenced the review; COVID interrupted, and it suspended the review. It then resumed the review once it got notification of an allegation of discrimination that was made to the Human Rights Commission, and the Human Rights Commission commenced an investigation.
As that member will know and would expect, if a Government agency is under investigation for a claimed breach of its statutory duties, it is at the very least morally obliged to act appropriately. In this case, it was to resume its review of its decision-making actions and powers to ensure that they were compliant, or at least not in breach of its obligations under the Human Rights Act. Notwithstanding that the Human Rights Commission has yet to make a finding on that, and I should point that out. No decision has been taken about how Pharmac might treat paediatric oncology in the future, although it appears from its public comments to consider that it feels obliged to try to regularise its decision making.
I would add a couple of riders to that. I have sought assurances and Pharmac has given assurances through officials to me and publicly that any treatment that is currently funded by Pharmac, whether it’s been approved by Pharmac or not, or gone through the exemption process, will continue regardless and will continue to be available now and in the future. So the issue will be about new treatments, and whether or not it changes its process for new treatments is yet to be determined.
But the second point I would make is to the extent that some people are concerned that the time that Pharmac often takes to make a decision can be very lengthy, that is precisely the objective of the review that we’ve commissioned in relation to Pharmac, which is to look at the timeliness and agility of its decision making. I think there is some justified criticism of Pharmac not making decisions in a timely enough way when new technologies are available, and we want to see improvement in that regard. But let’s wait to see what the outcome of that review is before we get too concerned about them.
Moving on to the health and disability reforms, which is the theme of the member’s remaining questions, in particular about the Māori Health Authority, let me go through some of the questions. The cost to disestablish DHBs and establish Health NZ: obviously, when you are in transition from one system to another one, there will be some cost. To date, I think the cost of the transition unit has been a little over $1 million, and there will be additional cost to be incurred as the transition unit gears up to be an implementation unit and goes through the process of transitioning DHBs and parts of the Ministry of Health into Health NZ. There will be a cost to that, and the member will, in two weeks’ and two days’ time, see the Budget, and it will be provided for in the Budget yet to be handed down.
The member asks about two separate health systems, one with a veto. Well, he’s got that wrong. Both parties to the system have a right of veto. What this is about is reaching agreement, and I’m not quite sure why the member refers to it as two separate health systems. There is only one system, but there will be two partners to it, and the member confuses independence with separatism. The member will understand there are plenty of relationships in which there are independent parties who come together, two independent parties who are capable of thinking separately for themselves but joined together in a common ambition, in a common set of principles, and a common endeavour, and a common enterprise as it’s sometimes referred to, who act in partnership. That is what we are doing. That will be the New Zealand health system of the future—a Māori health authority, under which Māori can provide leadership for their people and their issues. Because the reality is, as they and many others have pointed out, the performance of our health system as it is at the moment is leaving Māori woefully behind. That’s not acceptable any more.
Our forebears signed up to the Treaty of Waitangi. It had a very clear principle about partnership, about equality, and that is what we must strive for and we must find vehicles and arrangements to achieve that, and this is what we are trying to do. This is what this is about. It is not two separate systems; it is one system with two partners.
The member asks, “How much funding?” That is yet to be determined. There are future funding issues, largely looking at current funding models. That is the next big chunk of work, and decisions on that will be 12 months or so away.
The member asked about competition between Health NZ and the Māori Health Authority, and I reassure the member there is no competition. This is a system which will require agreement between the Māori Health Authority and Health NZ, because we all enter this on the basis of the Treaty principle of partnership. We all have the same ambitions. We all have the same aspirations about the health of New Zealand and the health of New Zealanders. We are all in this and Māori will provide leadership for their people. Health NZ will be the other part of the system. Those entities will reach agreement for the benefit of the whole system and all our people, and they will make great decisions and they will reach agreement. And that will be the health plan and that will be the basis, too, on which decisions are made.
The member asked, if he is in general practice and he does some work under Health NZ and some under the Māori Health Authority—it does not work that way. So the way a locality planning network operates is that all relevant partners in that area, health providers, iwi, other community representatives—and they will be local body representatives—will come together to work up the health plan for that locality, and that would be the basis of the commissioning decision by the regional branch of Health NZ. Commissioning decisions will be made to ensure good health services are available to all New Zealanders. And whether it’s a kaupapa Māori health provider who is providing health services to a region, as happens now, to Māori, Pākehā and anybody else, that will continue. Nothing will change in that respect. Ngāti Hine health doctors do not sit there thinking, “Oh, how much of a Ngāti Hine are you? How much of tangata tiriti are you?” They don’t make that call now and they won’t in the future.
The member asked about alignment with He Puapua. I have to say, in all my considerations with my colleague Peeni Henare, I have not considered He Puapua. I have not read the document. I do not know what it says and no doubt I will eventually get to have a look at it.
I haven’t considered the health restructuring from the late 2000s or 2009. That was under a different Government of a different hue. But if they restructured in 2009, I mean, let’s look at it now, because it ain’t working. It’s not working for Māori and it’s not working for a lot of the rest of New Zealand either.
Is there going to be funding in the 2021 Budget? Well, that is a question for two weeks’ and two days’ time, and the member will see that then.
Can I conceive of a situation which the Māori Health Authority would exercise a veto? No, because I don’t have to, because the Māori Health Authority and Health NZ will be reaching agreement. That is what the system will require. And they will reach agreement because we all have the same ambition. We want a healthy New Zealand, and we want the populations in New Zealand to be healthy. And we want Māori to exercise their rights under the Treaty, and the Crown to fulfil its obligations under the Treaty, which is to allow for tino rangatiratanga, some leadership, some control, some decision-making rights. That is the direction we’re going.
Do I expect consultation between the Māori Health Authority and Health NZ to be useful to, I think, improve Māori healthcare? Absolutely. Because when you look at the health outcomes for Māori at the moment—shorter life expectancy, the fact that more Māori struggle to get access to healthcare, and those who do get inferior results as a consequence—that’s got to change. And that will change when the brilliant Māori health leaders that I know are right across New Zealand get a chance to exercise some leadership and do great stuff.
DEBBIE NGAREWA-PACKER (Co-Leader—Te Paati Māori): Thank you, Chair, and thank you, Minister Little, for receiving questions. I have limited time so it’s going to come out as a shopping list—not intended.
So a couple of questions. The first thing is, as you know, Māori have the worst outcomes for all cancers other than melanoma. Will the Government commit to immediately funding more accessible cancer screening for Māori, including human papilloma virus self-testing kits and lowering the cancer screening age for Māori by 10 years to reflect the shorter life expectancy?
The next question—Pharmac. The annual review of Pharmac showed that $50 less is being spent per person for Māori than non-Māori. What is the Minister doing to address inequity in Pharmac funding for Māori and to improve Māori access to lifesaving pharmaceuticals?
The third question—mental health. Will the Government adopt He Ara Oranga’s recommendations in suicide reduction and invest in a targeted approach to suicide prevention for Māori?
The fourth, Minister—we are extremely supportive of Te Tiriti - focused Māori Health Authority this Government is taking. You’ve already said it will have legislative powers to act as an independent voice. Will the new Māori Health Authority have budgetary control?
And our final question please, Minister—racism. What will the Minister do to protect Māori from the backlash of racism when establishing the Māori Health Authority and asserting tino rangatiratanga in Aotearoa? Kia ora. Thank you.
Hon ANDREW LITTLE (Minister of Health): Kia ora to Debbie Ngarewa-Packer. Thank you for those rapid-fire questions. I will respond to them as quickly as I can.
Just on the last question: what am I going to do about the potential for a racist backlash? Keep arguing the case. Keep asserting the point. I’m very confident that what Peeni Henare and I have come up with as a vision for New Zealand health—
Hon Aupito William Sio: Change leadership on that side.
Hon ANDREW LITTLE: —is the right thing for New Zealand. We’ve got support from this side of the House and I hear the member expressing support. We have to do this because in the 21st century, 181 years from the Treaty, we start to fulfil the Crown’s obligations, and we can all do that together. So you have my commitment. I’m standing firm and fast alongside my colleague Peeni Henare.
In relation to cancer treatments for Māori, I don’t want to concern the member unduly but we have a Budget coming up and the Budget will lay out specific proposals, whether it’s for the Minister of Health or Pharmac, and there will be measures in relation to that and the member will see what is in there.
In relation to the second question about Pharmac—and the member is absolutely right, Pharmac spends $50 per person less on Māori on average than for other New Zealanders. That is unfair. So that is an issue that Pharmac is now actively addressing in the way it makes its decisions and it’s a fact that I expect the current review to also be considering when it considers its recommendations for future decision making by Pharmac.
The next question about mental health, and particularly suicide reduction for Māori—the member is correct that there is an elevated risk for Māori, particularly for young Māori. That is why part of the suicide prevention and postvention programme is initiated specifically for Māori. So there’s already specific funding gone out to kaupapa Māori services dealing with those dealing with suicide prevention and dealing with the suicide bereaved, and that, obviously, will continue.
Finally, in relation to the Māori Health Authority—what might the budget be? I’ll just reassure the member that that is work that is under way now, because one of the things we have to do is look at current funding models. What has become apparent, and it was referred to in the Health and Disability System Review, is that current funding formulas are too blunt to take account of levels of disadvantage, socio-economic disadvantage, race disadvantage, and other measures that we need to rethink as we put together funding formulas for the future health system.
Dr GAURAV SHARMA (Labour—Hamilton West): Thank you, Mr Chair. Just before, a question was raised from the other side by my colleague Dr Shane Reti, who’s a general practitioner. In my life as a general practitioner, and now in my new life as a member of Parliament, my patients and my constituents have asked about cochlear implants, and I was wondering if the Minister could tell us a little bit about any recent announcements he’s made on cochlear implants.
Hon ANDREW LITTLE (Minister of Health): Thank you, Mr Chair, and thank you to Gaurav Sharma for that question. I think last year we announced additional funding for cochlear implants, which means that we can fund an additional, I think, roughly 60 cochlear implants. I have to say that I had an amazing story relayed to me just a few days ago of a person whose 51-year-old brother, who’s been profoundly deaf, got a cochlear implant recently, and did so because he wanted to hear the sound of his grandchildren. Because of that additional money put in last year, he had the procedure recently, and as you would imagine, it has profoundly changed his life. She was telling me that she’d got a phone call from him the other day saying he was off to the beach so he could listen to the waves—things that we take for granted. So that is the profound impact that is happening. We have a waiting list of, I think, roughly 240 cochlear implants at the moment in New Zealand. We need to work very hard to reduce that, and we will continue to do so, but being able to do that as one-off extra funding appropriations makes a difference, and we will continue to look for opportunities to make that difference for cochlear implants.
SIMON WATTS (National—North Shore): Thank you very much, Mr Chair. Look, I’ve got five primary questions for Minister Little relating to DHB workforce, infrastructure, operating deficits, and holiday pay. First question: during the annual reviews, we consistently talked with DHBs highlighting the lack of workforce, so I’d be interested to hear how many fulltime-equivalent vacancies we had across all the DHBs as at 30 June 2020, and of that, how many were for nurses.
Second question: during the annual reviews, we heard consistently around the infrastructure deficit crisis within the health sector. What I’m interested in is what the estimated capital deficit or investment deficit is over the next 10 years as of 30 June 2020 for all DHBs. My third question: in regards to closing that infrastructure deficit, we’ve obviously got the aspect of dealing with growth. So in addition to that, what is the outlook in terms of the next 10 years from the end of June 2020 for growth and capital investment?
Fourth question: we discussed at length around operating deficits within our DHB environment—basically, where costs are exceeding revenue. Can he articulate what the total deficit was across all DHBs for the year ending 30 June 2020, and does he expect that to be bigger or smaller as we come to the end of this financial year? Lastly, a large portion of those DHB deficits relate to holiday pay provisions. What I’m interested in from the Minister is what DHBs, if any, received a qualified audit opinion in 2019/20 because they could not reliably measure their holiday pay liability. A supplementary to that is: in the annual reviews, we heard from Waikato DHB that they noted that they were instructed to make balance sheet provisions for holiday pay. To your knowledge, were there any DHBs instructed by the Ministry of Health or your officials to make balance sheet provisions for holiday pay? Thank you, Minister.
Hon ANDREW LITTLE (Minister of Health): Thank you, Mr Watts, for those questions. I will get through them as quickly as I can. In relation to the workforce issues that the member refers to, I’m not quite sure what the number of vacancies on a fulltime-equivalent basis is. What I can say is that this is a Government that in the last couple of years alone has added funding for over 3,000 fulltime-equivalent roles within the DHB network alone, and we’ve added on more in previous years to that. We know that there are nurse vacancies. Part of the challenge we’ve got is workforce development, so investing in more training. Creating a new nurse is a multi-year challenge in terms of getting the training, the on-job, and getting up to spec, so that will take some time.
One of the benefits of the health reforms and of Health New Zealand is that they will have a dedicated workforce planning and development mandate. That means that they can do the long-term planning, engage with the training institutions, work up the training programmes, and start to really plan and work out that long-term pipeline of health talent and skills that we need. I think part of the problem has been that under the DHB model it has been way too disaggregated and a bit haphazard and a bit ad hoc, which explains the shortfall in health skills that we have at the moment.
In relation to the infrastructure deficit, I thank the member for the question. He might want to talk to some of his colleagues who’ve been around a little longer, particularly those who were in Government, because there were two years—I think 2015 and 2016—when there was no money spent by the Government of the day on health infrastructure. You look at the graph and it’s just blank in those two years. We have a major catch-up job that we’re doing, which explains why this Government has allocated close to $5 billion in health infrastructure in the time that it has been in Government.
Of course, what we’re discovering is that you can make that decision, but getting the planning and the design and getting construction under way takes a bit of time, as well. So there is a programme. I think the four northern DHBs have done a plan—I think their infrastructure deficit just over the next 10 years is something like $10 billion. So this is what we’re talking about, and when you’re rebuilding almost an entire hospital in Dunedin, which is a nearly $1.5 billion building project, you start to see the scale of the problem that we are fixing—that we are fixing.
How to deal with growth, as well—the member raises an interesting point, and I think one of the challenges we see, and one of the things I expect to see out of the health reforms, is that stuff that is currently done in hospital—some treatments that are currently done in hospitals—we need to be finding ways to push out into community settings. There are some types of chemotherapy that don’t need to be done in a hospital setting—could be pushed out into a properly equipped and staffed community setting. More opportunities to do that, so that we focus our hospitals on the serious end of healthcare that’s needed, and those things that people don’t have to travel hours and hours for that can be done close to where they live and to their communities—we want to find opportunities to do that. So I think the member might expect, over the next few years, to see a slight reorientation of the capital works programme to move away from just the big, grand hospital campus renewal stuff to other facilities in a more community-oriented sort of basis.
In terms of deficits, the total deficit at 30 June 2020 was just over a billion dollars. That did include Holidays Act accrual, as well as some COVID spending, and, indeed, there are deficits being recorded for the DHBs at the moment that still incorporate those two elements. It will be bigger this year, but the DHBs will be supported in terms of meeting their Holidays Act liabilities, and they will also be supported to meet their additional COVID-19 response costs.
Dr ANAE NERU LEAVASA (Labour—Takanini): Thank you, Mr Chair. Thank you to the Minister for his many answers, especially with the health reforms with the Māori Health Authority, which we are excited about, where the collaboration will be more focused on equity rather than competition, as well, with the provider level. My question to the Minister is: what details were announced in relation to Pharmac this year?
Hon ANDREW LITTLE (Minister of Health): I thank the member for the question. Pharmac, as many people have seen, has been a very good model for medicines procurement. It does all the procurement for all our DHBs. It now procures over a billion dollars a year in medicines for New Zealanders. Those medicines are provided to—I think the last figure I saw was 3.7 million New Zealanders; a lot of New Zealanders getting a lot of medicines. But there have been, I think, justified criticisms about the speed with which Pharmac sometimes makes its decisions, particularly with new medical technologies. So we have commissioned a review of Pharmac and its decision making. Pharmac is required to work within the budget that it gives. That is what it says in its statute: that it must work within its budget. That budget is set independently of Pharmac, as you would expect. It is the Government of the day that sets the Pharmac budget, but Pharmac has to work within it and make the best decisions that it can.
If I just talk tangentially for a moment about cancer treatments, this Government set up the Cancer Control Agency because we were concerned, like many New Zealanders, that there was inconsistency in diagnosis times and inconsistency in treatments of cancers, depending on where you lived in New Zealand. So the Cancer Control Agency is now there to provide leadership and monitoring and to drive some consistency in cancer diagnosis and treatment. One of the reports they are currently preparing is a report on cancer treatments available in New Zealand, and to compare that to countries we like to compare ourselves to, like Australia, the UK, and Canada—all countries with significant public health systems. I think that would be a useful starting point on the debate about cancer treatments we should be having, including those we don’t currently have, and that, I think, will inform future decisions by Pharmac. But we need to make sure that Pharmac is set up in a way and equipped to be able to respond agilely and quickly where new technology becomes available and make good purchasing decisions at that time.
PENNY SIMMONDS (National—Invercargill): Thank you, Mr Chairman. In the review process, we heard of concerns around the equity of care for disabled persons, our elderly, and mothers and babies, and I have five questions for the Minister relating to these concerns.
Firstly, does the Minister consider the daily payment rates for disability respite carers of $76 a day for 24-hour care, equating to $3.16 per hour, as appropriate?
Secondly, how many day centres for people with disabilities were closed by disability service providers throughout New Zealand in the 2019/2020 financial year?
Is the Minister aware of the 15 percent gap identified by the Disabled Persons Assembly (New Zealand) between the funding of day services to disability service providers and the cost of provision of services for people with disabilities by the service providers?
In the 2019/2020 financial year, what was the range, in points scored across the DHBs, which enabled a hip-joint replacement, and does he consider it appropriate for a score of 50 points in the Canterbury DHB area enabling hip-joint replacement surgery while a person in Invercargill must reach a score of 70 points?
And, finally, does the Minister believe there is any correlation between length of stay in hospital after birth, and mother or baby’s readmission within the first 1,000 days of a baby’s life?
Hon ANDREW LITTLE (Minister of Health): In relation to the daily payment rate and whether or not it is appropriate, I think we all want to make sure that the support given to caregivers, whether they’re family or not, is appropriate and is fair and, I might say, is consistent across funding streams. And that is a big piece of policy work that needs to take place.
In relation to how many day centres for disabled have been closed in the year under review, I cannot answer that question. I do not know.
In relation to the 15 percent gap between funding of day services and the cost of services, I appreciate the member providing that figure to me. I think that and the previous earlier question about the daily payment cover the point that the Health and Disability System Review didn’t, sort of, get to but which we have committed to, which is we actually need to unpick disability support services and funding arrangements and remove it from the health focus, because it is not just a health focus, there are other social supports that are relevant to them. And we need to have and explore a regime, the Government’s regime, that I think is respectful of the full breadth and all dimensions of the needs of the disabled community, and that kind of covers off the points that the member has been raising.
I’m glad the member has drawn attention to the points system in different DHBs—for example in relation to hip-joint replacement—because it wasn’t something that was addressed by the previous Government. It is one of the postcode lottery issues that infects our current health system. And it is precisely because of that sort of thing that a unified, coherent, consistent health system under a Health NZ with a nationwide mandate can actually start to seriously address—we can actually put in place some common standards of diagnosis and treatment across all hospitals, regardless of where you are. And, actually, we can manage patients’ treatment through a hospital network, not going to say, “Well, if you can’t get it at that hospital that’s part of some DHB, you’re going to struggle to get it somewhere else.” ACC actually provides an interesting model, because they are a funder of healthcare, they can pick and choose where across the public health system they can get procedures done, and they do that. Well, you know, if it’s good enough for somebody who’s suffered an injury by accident, and they’ve got a financial backer who can pick and choose where they get their treatment so it’s faster than somebody who is getting treatment that is not by reason of injury by accident, actually, Health NZ can provide an answer to that problem.
Finally, the correlation between the length of stay in hospital of a new mum and readmission, I don’t know the research on that—and I’m sure my colleague Dr Ayesha Verrall, who covers this area, would be fully familiar with the statistics in it. But it wouldn’t surprise me if the point that the member is making is correct.
Dr TRACEY McLELLAN (Labour—Banks Peninsula): Thank you, Mr Chair, and thank you to the Minister in the chair, Andrew Little. Look, I just want to go back. We kind of started this process talking about mental health, and youth mental health in particular, and I wondered if the Minister could talk a little bit further about specific announcements that have been made in regard to youth mental health just over the last year.
Hon ANDREW LITTLE (Minister of Health): One of the objectives of the Government’s response to He Ara Oranga and the $1.9 billion package we announced in Budget 2019 is not just to provide more services, which we are currently doing, and growing them for those with mild to moderate health conditions, but to have specific packages for young people. So we have funded now in 10 DHB areas specific youth mental health services, mainly in the form of youth one-stop shops, because we know that for a lot of young people who need support and assistance through mental health challenges—actually, there is an environment in which that works best, where they’re getting attention not only to the mental health issues but to other health issues and other social issues that they might have, as well. So we’ve put a lot more funding into that.
We’ve also added funding to the school programmes for health, not only social workers in school but in some cases nurses in schools, so that that healthcare and support is available at that age and at that stage in school. As well as that, we’ve also got specific and targeted funding for young Māori and for Rainbow youth as well, targeted funding for those areas. We’ve put $1 million into Youthline—Youthline, never had public funding before; it’s having public funding, and that will be continuous—and we have supported the availability of online mental health services through a number of different apps, which are being well used by young people.
Speaker
CHAIRPERSON (Hon Jacqui Dean): Members, we turn now to the annual review debate for the Speaker.
BARBARA KURIGER (Chairperson of the Governance and Administration Committee): Thank you, Madam Chair. As the chair of the Governance and Administration Committee, I just wanted to set the scene for the annual reviews that we’ve just had. I acknowledge the committee. I would particularly like to acknowledge Nicola Grigg, who spent as much time being subbed out as she has joining us as we replace various spokespeople for the entities that we did the annual reviews for.
Just for the information of the public who are listening tonight, we had a number of entities. We had the Public Service Commission. We had the Department of the Prime Minister and Cabinet; the Department of Internal Affairs; Stats New Zealand; Fire and Emergency New Zealand; National Emergency Management Agency (NEMA), who do the national emergency; the Office of Film and Literature Classification; the Office of the Ombudsman; the Office of the Clerk; and the office of Parliamentary Service.
Just a couple of things that I would note is that during the year of COVID-19, a number of those departments, including those here operating in Parliament, found some new ways of operating, because we certainly had to change a lot of our systems. I remember the Department of the Prime Minister and Cabinet talking about how in World War II, it took a whole year to actually set up the systems and processes that would allow the variance in the House to take place. So I actually note that we had to move much more quickly this time.
I will note that Stats are hoping for plenty of improvement in the next census. Fire and Emergency is in transition. I particularly wanted to note NEMA, who are a very brand new organisation, and given that they’re very new themselves, they have undertaken a huge amount of change in an organisation that’s barely set up. So I particularly would like to note them.
Of course, the Clerks and the people who work in the Parliamentary Service are the people we see every day around this building, in the Chamber, and in our select committees and elsewhere. So I just want to thank those who participated and the committee for being part of this process.
KIERAN McANULTY (Labour—Wairarapa): Thank you very much, Madam Chair. I wish to start by acknowledging the chair of the Governance and Administration Committee, Barbara Kuriger. My experience of Barbara is that she is an honest and decent person and she does a very good job as chair of this committee. In 2008, the Minister in the chair, in his role as Speaker, announced an independent review into bullying and harassment at Parliament in 2018. In my view, that was long overdue. It sought to address the long history in this place of bullying and harassment, and it’s my view that the Minister should be commended for that.
The review sought to establish formally whether bullying and harassment had occurred and, if it had, the nature and extent of this towards staff employed or engaged since the 51st Parliament; review how previous complaints had been handled; whether policies, procedures, and related controls are effective, how they compare to best practice in the Health and Safety at Work Act 2015; and whether there are barriers to reporting or making complaints. It sought to assess the culture of Parliament as a place to work, and allow for consideration of other matters brought up in the review.
When the Minister came before the committee, it was revealed that the review made 85 recommendations—85 recommendations—on how to address bullying and harassment in Parliament. That’s extraordinary. But he also advised that 29 had been implemented by the end of 2019/20. A further nine were completed between June and November 2020. We heard that 31 other recommendations are in place or being implemented. Despite this progress, it was acknowledged that more work needed to be done.
During their presentation, one area in which I was pleased to see some progress was around employment relations here at Parliament. The breakdown clause where members of staff could be removed at the discretion of a member of Parliament no longer exists. I think that should be celebrated. When the bill that brought this upon Parliament, the Employment Relations (Triangular Employment) Amendment Bill was discussed in this House, it was disappointing to me, as the member sponsoring the bill, that this bill was not supported across the House. But I hope now, upon reflection, that members will see that all staff, regardless of whether they are in a triangular employment arrangement or a general employment arrangement, should have provisions to the right of a personal grievance. I’m pleased to see that that is the case now for Parliamentary Service employees.
The question I have for the Speaker is in reference to his comment of more work to do. Could he please outline to the House what areas he believes still need work, in terms of addressing bullying and harassment at Parliament, and whether he believes that they will be completed by the end of this year?
CHRIS BISHOP (National): Thank you, Madam Chair. We had a good hearing of the Parliamentary Service annual review, but we canvassed very serious matters to do with the conduct of the Speaker, and I want to ask two particular questions at the start of this exchange to the Minister in charge of Parliamentary Service. In relation to the Francis Review and the publicly reported comments that have led to an ex gratia payment to a former employee of the Parliamentary Service, when did he find out that what he said was wrong, and who told him what he’d said was wrong, and why, thirdly—to start things off—he then told his lawyers to tell the plaintiff that he intended to plead truth in the defamation claim lodged by the plaintiff?
Hon MICHAEL WOODHOUSE (National): Thank you, Madam Chair. I’d like to add to the list of questions that Mr Speaker, the Minister in charge of the Parliamentary Service, could answer, and it relates to information, evidence provided by the Chief Executive of the Parliamentary Service in the second hearing of the Governance and Administration Committee on 10 March. The line of questioning sought to understand what the Speaker knew about the case in question. I asked Mr Gonzalez-Montero, “Between [the time you became the] CEO and the day you decided to reopen the investigation, did you have any conversation with Mr Speaker about the case?” The answer from the chief executive was, “Yeah. I mentioned to the Speaker that there was something happening … that I had become aware of [that] and … I would … be thinking about reopening an investigation. Yes, I did.”
My question to the Minister is: on what date, with the best information available, did that briefing on a no-surprises basis take place? Madam Chair?
CHAIRPERSON (Hon Jacqui Dean): The Hon Michael Woodhouse.
Hon MICHAEL WOODHOUSE (National): It seems that we’re going to be piling up some of the questions. So I’ll add to that, because one of the absolute privileges of this place, and, actually, of any court, is that members are free to express themselves in a manner that protects them more than if they say things outside this House. But that protection comes with a condition, a very serious condition, and that is that the comments that are made to a select committee or this Chamber need to be the truth or, at least, the person’s honest belief in the truth.
I have a problem with what appears to be an inconsistency between comments made by Mr Speaker in the hearing of the Governance and Administration Committee on 16 December regarding the knowledge that the Speaker had of the case before the committee, that of the suspension and subsequent dismissal of an individual who worked in this place. Under questioning by me, where I put to the Speaker that clearly he knew more about the case than he as the Minister in charge of the Parliamentary Service was entitled to know. Mr Speaker rejected that; didn’t really attempt to refute it. But that is in direct conflict with two things, in my view, and an explanation from the Minister would be helpful.
In the three interviews he gave on the morning of the day in which the individual was suspended from Parliament, I think it was 19 May, the Speaker said three times—firstly, to Ms Ferguson on Radio New Zealand, “I want to make it clear that I don’t know that this is an MP, and if it is not an MP, then it will be a Parliamentary Service or Office of the Clerk staff member.”; to Mr Garner, on The AM Show, “I don’t know whether the person is a member or a staffer, a current or former employee.”; and to Mr Campbell on TVNZ Breakfast, in answer to a question, “Do you know enough to be able to tell me whether it’s an MP or a staffer?”, the answer, “No, I don’t.” I find that difficult to reconcile with the information that Mr Gonzalez-Montero gave to the select committee subsequently that he had briefed the Speaker, on a no-surprises basis, about the case in question and that it could be, without doubt, the same case, and, therefore, what the Speaker said to the media was not consistent with the information the select committee got. I think the committee of the whole House is entitled to an explanation about how these two wildly different realties can both be true at the same time.
CHRIS BISHOP (National): Thank you, Madam Chair. I want to add some further questions for the Minister the Rt Hon Trevor Mallard’s consideration and the House’s ventilation of the issues in relation to the court case that didn’t go to trial but that was a live issue throughout most of 2020. We know that these issues and proceedings we are talking about date to May 2019. Later on that year, there was the filing of a statement of claim by the plaintiff to the Speaker, the Minister in charge of Parliamentary Service, and there was an exchange of letters between counsel for both parties—pre-trial skirmishing, I think you would say. I want to ask the Minister, in particular, why his lawyers told the plaintiff that he would defend the case vigorously and why his lawyers said that his reputation would be at the centrepiece of the trial, and I want to know why he did that in the context of what we now know to be true, or what we now accept as the truth, which is that the Minister knew within 24 hours that what he’d said was wrong. It’s worth recalling that’s what we were told in the Governance and Administration Committee hearing in relation to the annual review of the Parliamentary Service: that the Speaker, who came on his own volition to tell us in response to a question from me, knew within 24 hours that he’d made a mistake.
So the question that obviously follows from that is if the Speaker knew he’d made a mistake within 24 hours—a number of questions follow from that. Firstly, why he didn’t apologise straight away and admit that he’d made a mistake—because it’s worth recalling this has ended up costing the taxpayer $340,000, and rising, and we need to know why there wasn’t an immediate admission of wrongdoing. Why, when the plaintiff wrote to him, or his lawyers, and said, “I’d like an apology and a retraction and a commitment to not say it again,” that was not met with immediate acceptance. Again, bearing in mind he knew immediately or nearly immediately he’d made a mistake, why was that not met with acceptance? Why was that rejected?
Not only was that rejected, the defendant in this case, the Minister, wrote and said, “If the case proceeds, I will plead truth,” which, as any defamation experts watching will know, means, actually, at trial, the defendant will lead evidence to prove that what he said—and in relation to this it’s about rape—was correct and true. I say again, let’s bear in mind that the defendant knew within 24 hours. So why, then, was there an exchange of legal letters in which the defendant intended to prove truth, knowing it was wrong? Because that’s the point: knowing it was wrong, there was an exchange of letters in which the defendant said he would prove truth. Why did he say he would do so vigorously, and put the reputation of the plaintiff at trial?
This whole issue turns, I believe, on the timing of the knowledge of wrongdoing by the Speaker. He told us in committee he knew he’d made a mistake within 24 hours, and the question for the Minister is why he then did not clean up the matter immediately, and instead spent 18 months fighting a legal battle that has ended up costing the taxpayer over $340,000—and rising.
Rt Hon TREVOR MALLARD (Speaker): Thank you, Madam Chair. I want to start off this debate, before we get on to some of the issues which are clearly more focused, by thanking David Wilson, the Clerk of the House, and Rafael Gonzalez-Montero for the work that they have done in building organisations that I think serve this place very well. They don’t get credit in the way they should; their teams don’t get credit in the way they should. And I think the way that change has occurred after the election contrasted with the way things happened after the previous election, we were not perfect, but a lot closer to it, and the way that this place was able to operate during the COVID emergency was something which was pretty special and actually world-leading, as far as democratic institutions are concerned. I do want to say thank you to them for that.
I want to say it’s good to be here in this Chamber and have the ability to debate. It takes, I think, someone pretty special to make a totally out-of-order debate during a general debate, someone with a different set of values and a different moral compass, to make a set of allegations in an out-of-order way in a general debate, when the person who is being attacked has no ability to reply. I say it is good to be here and have the ability to discuss these issues.
Chris Bishop: You could have come to the committee.
Rt Hon TREVOR MALLARD: The member says I could have come to the committee. I asked for that committee to come forward—I asked for the committee to come forward. I changed the time of the committee because Mr Bishop wasn’t prepared to come in the morning because he had something more important to do. We changed the time to suit him. We extended the committee—we extended the committee before Christmas. Why did we extend it? Because the National Party asked. We had Pacific speakers around the Pacific waiting on a Zoom call because Mr Bishop wanted the committee to extend. For him to say that I didn’t attend the committee is just untrue—just untrue—and that member, I think, needs to settle down; settle down a little bit, and we’ll get on with it.
I have apologised for a mistake which I made. I shook the man’s hand in September. The paperwork was completed in December. But my mistake doesn’t erase the fact that there were serious allegations from staff members that had to be taken seriously. I have a duty of care to make sure that staff are safe. I believe in taking a victim-centred approach, and I want to be really careful about causing further distress for the three or more women who have suffered serious sexual assaults as a result of working here. I just say that not listening to the general manager when he pleaded for those women, when he told the committee the pressure that they were under—every time this was raised by the Opposition is something which I very much regret.
The Francis Review is something which was very important. It highlighted some culture issues here, and since that time, what we’ve done is have, within this Parliament, a group of people who have worked really hard to make it better. Now, I want to acknowledge the chair of the committee, both chairs, actually—the chair of this committee and the other committee—for the work that they’ve done. I do want to acknowledge the Hon Anne Tolley for the work that she has done, because the work that she has done will make a difference long term.
I want to thank Paula Bennett for the work that she did in championing women who had been sexually assaulted. I didn’t always agree with her, and I don’t think she always got it right, but she was there for those women, and that’s something which I think is very, very important. But some people are working on making this place feel safe, and then there are others.
Chris Bishop: Ha, ha!
Rt Hon TREVOR MALLARD: The member might think that’s funny. The member might think that serious sexual assault and not supporting the victims of it is funny, but I don’t. Mr Bishop, this is not a school debating society; this is something where at least three—
Chris Bishop: Answer the questions.
Rt Hon TREVOR MALLARD: I will answer the questions. I’ve got all night to answer the questions, and I will, but what I’m going to do is lay out some context, and say that his ongoing behaviour has caused distress to a number of women, and he’s been asked to stop and he hasn’t.
I believe the victims—I believe the victims. I believe, in the most important case, the one around which the court has been focused, the second internal investigation done by individuals who were not involved in the first investigation, who are not involved in the culture of cover-up that appears to be supported by members opposite, and I believe the police. Now, people have to make a choice. Do they believe the victim, the results of the independent internal investigation, and the police, or do they believe the person on which Mr Bishop relies? That’s a call to be made. It’s a value judgment—it’s a value judgment—and people have got to make a decision on who they support. But I start by standing with the victims of this.
I want to, as part of this, just make it absolutely clear that the investigation that was done first, under the old Parliamentary Service administration, was a disgrace—it was an absolute disgrace. The woman involved was put back to work with the man who sexually assaulted her. That was the decision of the previous administration. That is the sort of human resources approach that in my opinion belongs in the previous century, and quite a long way back there.
I want to go to some of the questions that members have asked. The member is right. I have indicated to him that I worked out within about 24 hours that there had been an association with an individual for whom it was inappropriate. Now, I do not agree with the characterisation that Mr Bishop has given that particular individual, and my comments, that it ruined a person’s life, that I caused the heartbreak and agony for the complainant. I don’t believe the stuff that he posted on Facebook about destroying a man’s life. That man’s life was destroyed when he sexually assaulted a woman. That’s what did it. And I want to reiterate, I will support the woman and what she said, I will support the investigation that found that he seriously assaulted her, and I will support the police—and I will support the police and their investigation and the results of that.
Going to the questions from Mr Woodhouse, the matter is relatively simple. There are actually, as far as that individual is concerned, two complainants and there are at least three separate incidents involving three separate women, and at least two perpetrators, of serious sexual assault.
CHRIS BISHOP (National): Well, when we look back on this period—a tawdry, sordid period, in this Parliament led by this disgrace of a Speaker—I think we will look back with shame. That 10-minute contribution from the Minister responsible for the Parliamentary Service will be probably the thing that sinks him as the Speaker. Because I do not believe anyone watching the Parliament tonight could look at that display of petulance and contempt and hate for both me and Parliament, actually, and consider that he is appropriate to continue in the role.
Let’s be very clear about what’s just happened here: the Minister responsible for the Parliamentary Service has used privilege to show that the settlement he reached with the plaintiff is not worth the paper it’s written on, because the settlement that was reached last year and released to this Parliament apologises for what he said and the matter is settled. In fact, the Speaker came before—eventually came before—the Governance and Administration Committee and said that he intended to say no more about it. Well, what we now have, in May 2021, is the Speaker turning up at 8 o’clock at night and using privilege, parliamentary privilege—a sacred, a sacrosanct right—in order to re-litigate what happened in May 2019 or before. Let’s just be very clear about that. My challenge to the Minister in charge is say those words outside this Chamber, because what people watching need to know tonight is that he has privilege in this Chamber, and so do I, and we are protected from defamation law by what we say here. But he is not protected on the tiles of Parliament. He is not protected by what he says in the media if he repeats those comments. So my challenge to the Speaker is to go and say those words outside this House. I’m willing to say that he will not do that. And what does that say? Says it all.
So let’s be very clear about what’s happened. The Minister has used privilege to re-litigate what happened. And we’ve got a lot of stuff about, “I believe the police”—and, you know—“I believe the police and I believe the internal investigation and I believe the parliamentary process that we went through.” And he says don’t believe me. Well, all I’m doing is litigating the settlement that he agreed to. There was a settlement, and he told me in select committee that he knew within 24 hours that what he said was wrong. He said that he was going to be here all night and get to the questions that I asked. Well, we look forward to that because they were not addressed. The question of why, when he knew within 24 hours, he did not admit he was wrong and say so, was not addressed. The question of why legal letters went back and forward between the plaintiff and the defendant in which Mr Mallard said he would plead truth and prove that what he said was right about rape, that was not addressed. The question of why he said he would do it vigorously, and put the man’s reputation on the line, that was not addressed either. Those are critical issues because they go to judgment. Leave aside all of the defamatory stuff that the Minister just said in relation to me in particular, most of which was wrong—leave aside all of that—this is a very simple issue. He knew he was wrong but he fought for 18 months, at vast taxpayer expense, to fight it.
The reality is that’s what a bully does; that’s not what a Speaker of the Parliament does, particularly not a Speaker who’s meant to be overseeing Francis Review reforms into improving the culture of Parliament. And how can we have confidence, on this side of the House, in someone who does that at the same time as they’re meant to be improving the conduct of the Parliament? The reality is we can’t and we don’t.
Hon MICHAEL WOODHOUSE (National): For the several months that this saga has been going on, my colleagues and I—in particular, Mr Bishop and I—have been very, very careful not to engage in questioning comments or observations that would have the effect of re-victimising any victim in any of the cases that the Minister has outlined. While that is a fine line to walk, I think we have done that, because no one in this House thought that the Francis Review was not a good idea, however ironic it was that the biggest bully in this place was actually instigating it—that’s right, that being the Speaker—with a long track record, by his own admission, frankly, and one who, as he said in interviews, came into this place when there were still people who had fought in World War II and it was a different time and he acted in a different way, and he saw the error of those ways. I don’t want to do that now, but there are enough lawyers in this place and enough employers who know the importance of process, the right to be heard, and the right for the facts to be put on the table. That is what we have seen has been the failure here, and, frankly, with questions that still haven’t been answered, and a Speaker that said one thing in one forum and said another thing in another. The Minister shakes his head, but he still hasn’t explained to me when he was briefed by Mr Gonzalez-Montero about the case—the very case that I believe he knew was at the heart of the Francis Review. He knew because the chief executive told him.
Now, before the select committee on—oh, and I still want the answer to that date, by the way—16 December, when Mr Mallard came to the committee he said these words: “I want to start today by restating the apology made both personally and in writing to the plaintiff.” He goes on to say, “I apologise for saying the allegation associated with the individual amounted to rape, and that my understanding of the definition of rape at the time was incorrect”, and so on. He talked about the Speaker needing to be above reproach. I agree with that. Then tonight, he reaccuses the individual at the heart of this, that he seriously sexually assaulted a woman. Now, the lawyers can help me out here. What we’ve heard is he was forced to back down over an accusation of rape, but maintains the accusation of a serious sexual assault. That, to me, says that he does not believe the apology he gave either to the plaintiff or to the committee. They were false words.
He talked about the initial investigation being an absolute disgrace, but that was the investigation that enabled both parties to be heard, that brought in the Parliamentary Service legal counsel and the Public Service Association (PSA), and that on the balance of the evidence decided that the case—not that anybody had lied or that something didn’t occur—could not be established. Now, the matter of the fact that two people might have been working in close proximity for several months after the end of their investigation is, I think—well, in the Minister’s words—an absolute disgrace. I think it speaks to something else that, indeed, maybe there was something of a détente, a recognition of a misunderstanding. Who knows? And the Minister can answer if he wishes, he’ll have the chance. But the reality is, the second investigation, on the day this individual was dismissed, was suspended, he was driving to work, hearing about a rapist in the building, having absolutely no idea that reference was being made to him until Mr Gonzalez-Montero picked up the phone and called him into his office and told him to bring a PSA delegate. No interview, no restatement of the facts, no hearing his or her side of the story; out the door straight away. Well, I know which one sounds like an absolute disgrace in terms of process, and it’s not the first one.
So I go back to my initial point: on what date did the Minister get briefed by the chief executive about the individual that we are talking about?
Rt Hon TREVOR MALLARD (Speaker): I apologise to the member for not answering his question, because it’s a—
Chris Bishop: You haven’t answered anything.
Rt Hon TREVOR MALLARD: Sorry?
Chris Bishop: You haven’t answered any question; you’ve just defamed us.
Rt Hon TREVOR MALLARD: Either the member wants to have a serious discussion about a very serious issue, or he just wants to chip. As I indicated, in my opinion, this is something which is very important.
On the question that Mr Woodhouse raised, I was briefed in either late March or early April, in a very limited way, by the chief executive that a female staff member had approached him, that there had been an accusation of serious sexual misconduct, that it was a matter that had been previously investigated, and that he was encouraging the woman to formalise a complaint, and he was putting support around the woman and was encouraging her to go to the police. That was the extent of it then. I think it came up on one further occasion in a 30-second conversation where he indicated that she was waiting for the results of the Francis Review before making a decision as to her progress, and then, on the day following the release of the review, he indicated to me that he had suspended the person and, as the member is aware, that he then instigated the new investigation, which went on, I think, until November, and at the conclusion of that investigation—so, you know, it wasn’t on the spot that he was sacked; it was an investigation—
Hon Michael Woodhouse: No, he was suspended on the spot.
Rt Hon TREVOR MALLARD: He was suspended; he was on full pay through until November, until the—I think he was still general manager—chief executive was satisfied that he had a proper ground for dismissal, and he took that action. Subsequently, when he was—you know, I want to be a little bit careful because there’s still the possibility of—
Hon Michael Woodhouse: Too late for that.
Rt Hon TREVOR MALLARD: Well, no it is not too late, because there is a question still of details around something which may yet be, as the members are aware, an Employment Court case. Now, I will say that, at the moment, there is not one, that, you know, there’s been nothing that has lodged, but the chief executive has made clear to the Governance and Administration Committee, based on the information that he has, from the second, the independent review and the citing of police documents, that he is on absolutely solid grounds, and he will not make a settlement, because he thinks that the message that making a settlement would give would be that it is acceptable to pay money to people who have sexually assaulted their work colleagues. And, you know, those decisions are not mine; they are his—that’s the way that that works. But I say that that is a proper perspective.
Hon MICHAEL WOODHOUSE (National): Thank you, Madam Chair. The advice of the briefing of the Minister in late March or early April is consistent with the time line provided to the committee by the chief executive in his letter dated 17 December. Although, I do note that he didn’t decide to formally reopen the investigation until 13 May. But what we’re asked now to believe is that, having been briefed on what the Speaker himself describes as a serious sexual assault, that he drew no nexus between that information and a subsequent 30-second conversation he’d had with the chief executive. The Francis Review, which highlighted this very fact—that it was an entire coincidence that on the day that he was talking about the Francis Review that he was talking about a rapist being in the building and that the threat had been cleared by that afternoon. That he simply didn’t know that they were one and the same thing—I’m sorry, it frankly fails the sniff test.
That is why I lodged a Privileges Committee complaint on 10 March 2021—addressed by the Deputy Speaker because of the obvious conflict of interest—because of what I believe was the clear inconsistency between the information provided on 16 December to the committee, and subsequent advice on 10 March from the CEO that said he had indeed briefed the Speaker. Both of those things could not have been true and I believe that gave rise to a question of privilege.
I was staggered to note that that was ruled out on a technicality, because apparently there was a belief in the Speaker’s office that I had gone to the media. That was quite wrong. Newstalk ZB speculated—having heard exactly what I had heard—exactly the same thing. Well, I think Mr Soper on Newstalk ZB said, “I wouldn’t be surprised if National were thinking about a Privileges Committee complaint.” Apparently, that was me talking to the media. So on that technicality, a very important question of privilege was ruled out. I find that very, very disappointing, because the House is none the wiser about this, frankly, inconceivable sequence of events.
I have one more question for the Speaker in relation to, apparently, these three complaints that we don’t know anything about, but that I am advised that at least the substantive complaint has been closed by the police. There is no question of charges. The only person talking about serious sexual assault right now, under privilege, is the Speaker himself. But I would ask this: was one of those investigations, as recorded on the file of the individual concerned, dating as far back as 2008?
CHAIRPERSON (Hon Jacqui Dean): Kieran McAnulty.
Rt Hon TREVOR MALLARD (Speaker): Sorry, can I just deal with that right now?
CHAIRPERSON (Hon Jacqui Dean): Rt Hon Trevor Mallard.
Rt Hon TREVOR MALLARD: No.
KIERAN McANULTY (Labour—Wairarapa): Thank you, Madam Chair. What concerns me about this debate is that we appear to have lost sight that there were—that there are—accounts of serious allegations about sexual assault. I’m making no judgment on those; I am talking about the accounts that there have been accusations. When you hear of such accusations, they must be taken seriously, and it is vitally important that we, as parliamentarians, do not use our position to politicise these, to drag them out, and revictimise those who are accusing of sexual assault.
We heard two examples from the previous contributions that concern me greatly. Mr Woodhouse stands up and claims that he has been very careful about what he says; yet we have heard—not just tonight, but at the select committee which led to the report that we’re discussing tonight—that after a complaint of sexual assault, Parliamentary Service placed the complainant and those that they’d complained against back working next to each other. That is disgraceful, and that is the sort of behaviour that the Francis report provided recommendations to change. Mr Woodhouse has the gall to stand here tonight and suggest that that could have been some sort of arrangement, or some sort of misunderstanding. That is the sort of response, that is the sort of language, that revictimises those that are accusing of sexual assault. This is the sort of behaviour that we should all, as parliamentarians, avoid.
If we as a House wish to ask the Minister about conduct that he himself has already apologised for, go for gold. I’m not going to defend that behaviour. He has apologised. He has admitted that it was wrong. But let’s not, in this process, fall into the trap of revictimising these women.
We have heard tonight that there are up to five accusations of sexual harassment in Parliament. They need to be taken seriously. They once were not, and I don’t think—whilst, I repeat, not attempting to defend the decision that the Speaker has now apologised for—that should take away from what is very clear that in his role as Speaker he was attempting to take these very seriously and do what Parliament has not done and actually deal with these as they deserve.
Tim van de Molen: Wairarapa’s coming back to us.
KIERAN McANULTY: So I think that—they can joke, again politicising it. Here I am, making a serious comment about a serious issue, and they joke about what seats they’re going to win at the next election. I say to Mr van de Molen, if you wish to contribute, how about you focus on the debate and stop—
CHAIRPERSON (Hon Jacqui Dean): Order!
KIERAN McANULTY: —trying to politicise this.
CHAIRPERSON (Hon Jacqui Dean): Order! Order! The member will not bring the Speaker into the debate.
KIERAN McANULTY: Oh, you’re right, Madam Chair. I shouldn’t have said “you”, but I stand by everything else I said.
CHAIRPERSON (Hon Jacqui Dean): Kieran McAnulty.
KIERAN McANULTY: Thank you very much. I repeat: again, we saw accusations which I believe were political in nature. Mr Bishop spent a large contribution of his speech making the point that he believes the Minister will not repeat his comments outside the House. I note that the member did not repeat his general debate contribution which attacked the Speaker, outside the House. So let’s not play silly political games and actually focus on the fact here that this report—this annual review—focuses on the fact that Parliamentary Service has come a long way in dealing with bullying and harassment, but, by its own admission, has a long, long way still to go.
CHRIS BISHOP (National): Well, the member who’s just resumed his seat is quite wrong. I have said what I said in Parliament outside the House, and I’m happy to say it again, and the reason I said it outside the House is because it’s based on court documents. Everything I did when I turned up here on 21 March and gave my speech, the famous speech that the Speaker thinks that he’s somehow a hero for allowing in Parliament because I basically attacked the integrity of the Speaker—and I stand behind every word of that. He seems to think he should get some sort of special credit with the public for allowing it. I have said that, and everything in that speech is based on the statement of defence and the statement of claim that I applied to the High Court to get. What those documents show is precisely what I’ve ventilated in this Parliament and said outside the Parliament, and I’m happy to say so again, and I’ll say: the Speaker is a bully. I’ll say it outside Parliament and, if he sues me, I will turn up to court and I will defend it. And guess what! I will plead truth and I will prove it over 20 years of this Speaker’s behaviour in the Parliament. I believe the charge fits in relation to this case.
There are two very simple questions that have not been addressed that we deserve an answer to. The first is: what explains the gap between May and December 2020? Remember, he is on the record telling us he knew he was wrong within 24 hours, but there was no settlement till December. What explains the gap and what explains what happened in the gap, which is legal letters going back and forth, and a claim by Mr Mallard that he would plead truth and he would put the plaintiff’s reputation on trial at the trial? What explains that? We’re yet to hear anything in relation to an answer.
And the second question, and this is very important: did he follow through on the legal letter and plead truth in a statement of defence to the court, and, if so, why? Here’s why that matters. Because if he filed papers with the court, saying that he intended to plead truth, that is contradictory with what we now know to be the case, which is that he told Parliament, or the Governance and Administration Committee, that he knew within 24 hours he was wrong. Both things can’t be true. Either what he told the court is right, which is that he was going to plead truth, or what he told the select committee is right, which is that he knew within 24 hours. Both are appalling. Either he’s misled the court or he’s misled Parliament, neither of which is appropriate for a Speaker.
We need an answer to both questions.
Hon MICHAEL WOODHOUSE (National): Thank you, Madam Chair. I thought I heard the Minister say that, about the serious sexual assaults involving the person who now no longer works here, there were three incidents involving two complainants and two perpetrators. I wonder if perhaps he could address that straight away?
Rt Hon TREVOR MALLARD (Speaker): I’m happy to address that. There were two complainants in relation to that one particular individual. There were three separate cases of serious sexual assault involving at least two, and probably three, perpetrators.
Hon MICHAEL WOODHOUSE (National): OK, thank you. I appreciate the speedy clarification. So there were two complaints against the individual who is the subject of this debate. I am advised—
Rt Hon Trevor Mallard: Two complainants.
Hon MICHAEL WOODHOUSE: Two complainants. Two complaints?
Rt Hon Trevor Mallard: Two complainants.
Hon MICHAEL WOODHOUSE: But not of the same incident.
Rt Hon Trevor Mallard: No.
Hon MICHAEL WOODHOUSE: No. So I think we can deduce from that that two complainants means two complaints. I am advised that the individual concerned has no knowledge of any other complaint except one that took place 13 years ago. Now I want to come to the issue of the separation, ministerially and operationally that, I think, has been significantly clouded by the events of 19 May 2019. Because this is the day on which we are asked to believe that the Speaker, by some amazing coincidence, believes that a serious sexual assault has taken place, and that there is a rapist in the building, ergo RNZ Breakfast, The AM Show, and TVNZ Breakfast, and in the afternoon the threat has been removed, but that we’re also asked to believe that there was no knowledge by the Speaker of the individual who lost his job.
Now, in between those two times, the phone rings, the individual concerned is contacted by the chief executive, asked to attend a meeting in the chief executive’s office at 2 p.m., and to bring a support person. So a Public Service Association representative accompanies this person, a meeting is held, and at 3.10 p.m. on that day, he is ushered out of the building. At 3.30 that day, Mr Speaker holds a press conference to say that the threat has been eliminated. And we’re meant to believe that this is purely a coincidence? Well, I’m sorry, I don’t believe in coincidences like that.
Here’s why it matters: the separation, regardless of the physical proximity of the Minister responsible for the Parliamentary Service to the Parliamentary Service, the actual separation of governance and oversight from the operational aspects of this place are very, very important. There are 1,100 employees of the Parliamentary Service. I was the Minister for Immigration; there are 1,200 employees of Immigration New Zealand. Had there been a similar incident at Stout St, I would have had no knowledge of it. There was no need for me to know, I trust the operational aspect of the Vote to get these things right, and if at a macro there are problems and they are brought to my attention, either by the media or by somebody else, then it may require some intervention. Why was the Minister so deeply immersed in this issue? Well, here’s my theory. He wanted to be the big man. He wanted a scalp. He wanted the Francis Review to have impact, and he knew about these cases and that they had been addressed to the satisfaction at least of one party, clearly not another—but there is another story to that that I don’t think is appropriate for me to embark upon. But Mr Speaker wanted a scalp. He wanted to demonstrate to this place and to the public that he was serious about bullying. Well he’s always been serious about bullying, and he got serious, because there was a rapist and he got rid of him.
And I have it firsthand that the words that were used to describe what happened to this individual was that his career has been ruined, his life has been ruined. And I don’t say that to trivialise any victim of bullying, harassment, sexual assault in this place. But there is a process and a right to a fair go. I’ve heard the Speaker talk about a fair go. Well, if there had been a fair go, and the right outcome was reached, it wouldn’t have got the scalp that Mr Speaker was looking for.
WILLOW-JEAN PRIME (Labour—Northland): Thank you, Madam Chair. I’ve sat through this entire debate this evening, and parts of it have been really difficult to sit here and to listen to. I think what the viewers at home may be seeing and perceiving here is far more weight being put on accusations of bullying of a man, versus a report which identified serious sexual assaults within Parliament and the Speaker who has come forward and said, “I’m going to take this seriously and I’m going to do something about it.” I’ve heard some horrific statements in the House tonight that perhaps there might have been something going on and we don’t know the full story. It really sounds like “She asked for it. Her skirt was too short. She was drunk.” I didn’t like what I heard. [Interruption] You said it. [Interruption] I’m sorry—Madam Chair? [Interruption]
CHAIRPERSON (Hon Jacqui Dean): Order!
Chris Bishop: Point of order—point of order.
CHAIRPERSON (Hon Jacqui Dean): Order! The member Chris Bishop will resume his seat. Now, this is a serious matter—this is a serious matter, and I would ask all members to retain some decorum in this committee.
Chris Bishop: Point of order. She has just said words that are grossly offensive about members of the Opposition, and she needs to withdraw and apologise for those.
CHAIRPERSON (Hon Jacqui Dean): Thank you. The member has taken offence. The member will withdraw and apologise.
Chris Bishop: We did not say that.
WILLOW-JEAN PRIME: I didn’t say you said it.
Chris Bishop: You did.
WILLOW-JEAN PRIME: Madam Chair—
CHAIRPERSON (Hon Jacqui Dean): Order! Chris Bishop will stand, withdraw, and apologise.
Chris Bishop: I withdraw and apologise.
WILLOW-JEAN PRIME: Speaking to the point of order, Madam Chair.
CHAIRPERSON (Hon Jacqui Dean): No, thank you.
WILLOW-JEAN PRIME: You’ve ruled? OK, sure.
CHAIRPERSON (Hon Jacqui Dean): I have ruled. Thank you.
WILLOW-JEAN PRIME: Thank you, Madam Chair.
Hon Michael Woodhouse: Point of order.
CHAIRPERSON (Hon Jacqui Dean): I do hope this is a fresh point of order.
Hon Michael Woodhouse: In so far as a ruling had been made for somebody to withdraw and apologise, it is a fresh point of order.
CHAIRPERSON (Hon Jacqui Dean): Yes, thank you. Thank you very much. I will ask Willow-Jean Prime to stand, withdraw, and apologise.
WILLOW-JEAN PRIME: I withdraw and apologise. Thank you, Madam Chair. What I want to ask the Speaker tonight—in the short amount of time that we have left, because this entire debate has been taken up on one part of the Francis Review—is Mr Speaker, the Minister, alluded to the work that has happened since we received the Francis Review—the work that a group that was cross-party worked on and the steps that have been taken. I want the Speaker to please explain to this committee and to the listeners listening in tonight more detail around what it is that we have done since we received that review, what has been the work of that working group, where we are at with that, and how many of the recommendations we have implemented. Let’s not lose sight of the fact that there are serious things in that report that need to be addressed by Parliament so that we change the culture of this place. Thank you.
CHRIS BISHOP (National): I want to ask the Minister, in the time we have available for this debate, one more time, when will he address the two critical questions I have just asked, which is, what explains the gap between May 2019 and December 2020? Why is there 18 months of legal wrangling and threats and bullying, when he knew within 24 hours he had made a mistake and was wrong? What explains that? We are yet to hear one skerrick about that. And, secondly—and I’ve explained why this is important, already—did he follow through and plead truth in a statement of defence to the court, and, if so, why?
Hon MICHAEL WOODHOUSE (National): I see no movement from the Speaker, so I will add to the questions: what we know is that the taxpayer has stumped up about $338,000 avoidable costs—
Hon Scott Simpson: So far.
Hon MICHAEL WOODHOUSE: —as a consequence of this—so far; quite right, Mr Simpson. I’d like an update. I’ve heard that there has been another $7,000 of legal fees that have been paid. We now know that the $331,000, as it was in December, and the extra $7,000 is not the end of the story, because we have had a revelation that there is a separate legal process under way, which is almost certain to cost the taxpayer more money, and that is—I now know and the chief executive wasn’t prepared to say it, but it is a personal grievance under the Employment Relations Act—that he told the Governance and the Administration Committee, on 10 March, that he was not prepared to settle. In fact, the Minister answered a written question about whether he thought settlement could be achieved before reaching the Employment Court. The one-word answer was “No.” When I asked Mr Gonzalez-Montero, “Why?”, he was quite bullish; he said he would rather lose the case and be right than settle with this fellow. Now, that is, I think, a reflection of a process that is going to lead to a significant sum of money needing to be paid by the taxpayer. It’s not his money, it’s not Mr Speaker’s money, either; it’s the taxpayers’ money.
If the case was so strong, why, two years later, has this not been settled? It hasn’t gone to court, because there is backlog at the Employment Relations Authority and the Employment Court because of COVID—probably not before the second half of this year. But should it go there at all? Any lawyer worth their salt would encourage some kind of mediator settlement.
Or they’re to have this litigated in another court, it is called a criminal court. That is usually where serious sexual assaults get handled. I wish it was. Then, we could hear the evidence rather than a Speaker standing up under privilege and accusing somebody of serious sexual assault, and that is it. If only it were that easy.
I’d like to know how much money we are on the hook for. And given the proximity of the Speaker to his chief executive, and that they seem to be hand in glove, does he believe that the response the select committee was given about a steadfast refusal to settle in the face of a cause of action that seems to have some merit is an appropriate response?
Rt Hon TREVOR MALLARD (Speaker): I’m happy to, I think, reiterate the comments I made on that matter. And I think that the decision of the chief executive not to settle on that question in the Employment Court is one which is appropriate, because to pay money to someone who in the second independent investigation was found to have sexually assaulted someone, who the police investigation found sexually assaulted someone—
Hon Michael Woodhouse: They’re not pressing charges.
Rt Hon TREVOR MALLARD: Order! Sorry, I’m the wrong person.
CHAIRPERSON (Hon Jacqui Dean): Why don’t you let me keep order.
Rt Hon TREVOR MALLARD: Sorry. I should’ve, Madam Chair. The point that I am trying to make is that many of us who know a bit about the way women have been victimised, and the way that things work through the police system, and work through the courts know that a significant proportion of them, especially if they’ve had periods of being victimised over a long period of not being believed privately and publicly by public figures, choose not to expose themselves, choose not to expose themselves to the court process. And there are other cases where the police make a decision that there’s a very real chance of not being successful in a case. I want to say that in two cases that I have been dealing with, there is one of each that fits into that category. While I am always someone who, when a woman is properly supported, will support them going to the police, I will support them through the process. I am not someone who thinks women should be pressured into proceeding with charges, especially when they have been repeatedly—repeatedly—publicly disbelieved by people who are meant to be community leaders.
DAVID SEYMOUR (Leader—ACT): Thank you, Madam Chair. Let me start by saying this is a debate that I would rather this committee was not having, this Parliament was not hosting, and I would much rather not be participating in it. One thing the Minister has said that I think is true is that the existence of this debate does have a revictimising and traumatising effect on people up and down New Zealand and, indeed, associated with this Parliament as their workplace.
Nevertheless, I also believe it would be a mistake to assume that the Speaker is not at least partly culpable for the fact that this debate has continued as long as it has and is necessary. I would further add that because somebody has done something laudable to make the workplace safer and reduce violence and bullying in the workplace, that does not absolve them automatically of other misdeeds. I think those things as preliminary comments need to be said.
There is, in my view, considerable confusion about what the Speaker’s true position is. He has said that on the morning of 22 May 2019 he believed that a rapist was in the building. He’s told the Governance and Administration Committee he knew within 24 hours that that was not true. He’s apparently maintained the position that it was true and done so in legal proceedings for many months afterwards, and, in spite of his apology at the select committee and his settlement and payment to the person who was accused, or at least the taxpayers’ payment, tonight he appears—or at least the Minister appears to have repeated the accusation almost acting as judge, jury, and executioner about what happened in the matter.
Now, I raise this as a point that I believe is extremely important, and I raise it in the context of a really savage attack by a member of this House on a member of the public who was not able to defend themselves just last Parliament. I know that that had some serious effects on that person, and I know that that person had to go to some lengths to have the Speaker enter a correction into the parliamentary record. That was the only way under the Standing Orders that they could be defended.
With that context I ask: is it true that the Minister has used privilege to, effectively, decide on the guilt or innocence of a person, making the judgment under privilege? Because if it is, that raises some quite serious issues for the future of the House. You see, this House has enormous privileges. Nobody in this land has higher privileges than this House. We are able to evade defamation law and do all sorts of things that normal citizens could not get away with at law. But there is a quid pro quo for having those privileges: that we must use them very carefully. If it is true, that the Minister in the chair, who’s also personally the Speaker, is carrying on a precedent started last year that it’s OK to attack people, members of the public, and actually remove the distinction between this House, which makes laws and the courts which interpret them—the comity that is critical to our constitutional arrangements that have evolved over a long period of time—then that, on top of the many other miseries and sagas that have got us to this sad debate, is actually a very important development.
So I would call on the Minister to clarify if that is what he has said tonight, that he is, effectively, using privilege to venture into what is properly the area of jurisdiction of the courts. Now, I’m very aware of all the difficulties with complaints about sexual violence in courts. In fact, this Parliament is trying to change the sexual violence legislation at the moment. But if there is a problem there, it’s not an excuse to use parliamentary privilege to act as a kind of pseudo court, and I think the Minister needs to clear up exactly what he was trying to do there.
Rt Hon Trevor Mallard: I want to thank the—
CHAIRPERSON (Hon Jacqui Dean): The Rt Hon Trevor Mallard.
Rt Hon TREVOR MALLARD (Speaker): Thank you, Madam Chair. I’m, sort of, not used to taking calls. I want to thank the member for his initial comments, because I think early in his comments he summed up the situation pretty well. I did make a serious error, and it’s something that I’ve apologised for, and it has caused distress—unnecessary distress—for a number of people.
I do want to make it clear that I am in no way pretending to be a court. I haven’t actually discussed the case that is at the centre of this, with the woman involved—I’ve had no discussion with her at all. I have had, as I’ve indicated, a couple of brief discussions with the general manager, around which I got the context of it, and I have had discussions with other women about alleged sexual assaults, alleged rapes, which are related to this workplace. But I do want to make it clear, in this case, that I’m not being a judge and jury, but what I am saying is that my default position is to believe what the woman has said.
The next position is that I, when there is an independent, separate, careful five- to six-month investigation into a matter, believe the results of that, and when the police make a decision, I will believe that. Now, that doesn’t make someone criminally guilty, but what it does is give me confidence to support the general manager in his decision. It’s not my decision; it’s his decision. But I will stand behind him when he says that the particular individual is not a fit and proper person to work here.
CHAIRPERSON (Hon Jacqui Dean): There being no further speakers, we move now to the annual review debate for education. The Minister in the chair, Hon Chris Hipkins.
Education
MARJA LUBECK (Chairperson of the Education and Workforce Committee): Thank you, Madam Chair. Just changing the mode a little bit here. As chair of the Education and Workforce Committee, I’m delighted to kick off the annual review debate on the education portfolio. I’m sure there will be many interesting contributions, and I’m looking forward to hearing from the Minister of Education. But first, I’m going to give a brief overview and an outline of the process that our select committee went through for this particular review. The education sector annual review was comprised of seven in-depth annual reviews for different Government entities. They were the Ministry of Education, the Education Review Office, the Tertiary Education Commission, the New Zealand Qualifications Authority, Education Payroll Ltd, Network for Learning Ltd, and Education New Zealand. We conducted a briefing with the Office of the Auditor-General; a hearing with the Minister of Education, the Hon Chris Hipkins; with the chief executive of the education sector entity; and we also asked many written questions of them all. There were some key themes that came out of that deliberation, and that was shown in our annual review report.
One of the main outcomes of our review was the varied level of preparedness for lockdown conditions amongst schools and kura. The Education Review Office report provided a useful outline of the experiences of different schools in responding to the lockdown and how they continue to provide learning resources to their students. The Education Review Office led the work to set up the Home Learning TV / Papa Kāinga TV to support learning at home for those with poor access to online learning. It was actually quite interesting: we heard that, apparently, at the launch they had more viewers than a Super Rugby game, so I would say that’s probably quite a big success.
We heard from the sector about the lessons learnt from lockdown—what worked well and how certain schools responded—and the report also spoke to the benefit we could see if these practices would have been more widely adopted. The Minister noted his concern regarding school attendance rates during last year’s lockdown. A priority for the Government was to set up a means to measure the speed at which attendance rates improved post-lockdown. The Minister took us through how the process is managed, and we had a discussion about what could be done to actually improve the attendance rate at our schools and kura.
In our report, we also asked about the ministry’s measuring of students’ progress, and the Minister spoke to the curriculum-wide approach that the ministry is taking, as opposed to an approach that very narrowly focuses on the content of students’ tests. The Minister also spoke to how teaching professionals will take part in the curriculum changes that occur with a programme that enables teaching professionals to take temporary leave to work on the design of the curriculum changes. The Minister also talked to us about how teachers and school leaders will be supported through the transition and changes to the wider education system to reduce strain on teachers and the capacity of our schools and kura.
The committee also asked the Minister about what is being done to address disparities for Māori and Pacific learners. Work on cultural competency in the education system, and on Māori and Pacific attendance rates as well, is under way, and the Minister explained to us that the Fruit in Schools programme has had a noted improvement in learning outcomes for the students, and it has also gotten students more involved in their learning.
I would like to finish by saying a big thankyou to those working in the education sector for responding to the unprecedented challenges that the COVID-19 pandemic brought and all the challenges that the sector had to work through under very challenging circumstances—running everything, continuing, and responding to the challenges as well. This has been a very robust review, and I’m satisfied that we’ve covered many of the overarching themes that our report brought up.
Talking to the new-style debate and a new-style format as well, I think it’s a real tribute to this new format that we can have a more robust debate on the holistic future of education and the education sector in New Zealand, and, at the same time, that will provide for a stronger level of scrutiny in Parliament. So thank you, Madam Chair.
Hon PAUL GOLDSMITH (National): Thank you, Madam Chair. We all, of course, across this Parliament have a deep concern about our educational outcomes in New Zealand. We acknowledge that the most powerful route out of poverty is through education. We also have a Government that talks a lot about the knowledge economy, our bright future in technology and high-paying jobs, the green economy. And so, you know, the question that’s on a lot of people’s minds—to the Minister—is: how does he think New Zealand is going to prosper in this knowledge economy, in this technology-rich economy of the 21st century, this globally competitive, technology-based economy? How are we going to prosper in that when our maths performance, in particular, is falling off the pace—and it’s one that’s been the case for a while? You know, we started off around fourth in the Programme for International Student Assessment rankings for maths; now we’re 22nd, and it is falling. I acknowledge the work that is proposed and I’m sure the Minister will mention the changes to the NCEA requirements around literacy and numeracy. But I do make the point that the real challenge is also at the primary and intermediate school, so no matter what you do when someone is 15 or 16 is always going to be a struggle.
The related question I have for the Minister is: how do we know if young girls and boys are progressing at school and doing well at primary school and intermediate school in the absence of consistent assessment? Now, the Government decided to throw out national standards. They decided not to try and improve them or perfect them or work with them—discarded them—and so how does the Minister reassure himself and the rest of the country that children are progressing effectively year in, year out and so that will lead to better maths outcomes in the years ahead?
DAVID SEYMOUR (Leader—ACT): Well, thank you very much, Madam Chair. I’d just like to ask the Minister in the chair about school attendance. The Education and Workforce Committee reports on page 6 of its annual review that the Minister told the committee that he would be working with the ministry to improve attendance rates. I just wonder if the Minister could elaborate a bit—or perhaps he did at the committee; our member is away today—for the benefit of people here on two questions: why he thinks there is a decline in attendance.
He said in the House—or he has, at least, alluded in the House to the fact that people go on holidays. I don’t know if there has been an increase in holidays or if there could be some other explanation for increasing levels of attendance. If he can diagnose the reasons why students aren’t attending, then I think it would be easier to have confidence that the work he is doing with the ministry might reduce it.
Hon PAUL GOLDSMITH (National): Well, we’ve given another round of questions. So there has been a lot of discussion today in the House around the Māori Health Authority, and we’ve heard from the Prime Minister that a separate agency is required by the Treaty—or words to that effect. So the broad question I have for the Minister is: what does he believe the Treaty requires in terms of decision making in education? Is there a plan to have a separate Māori education authority or some such establishment?
So it was a very interesting discussion that was launched today, and I hope that, as a country, we will talk about this properly. We heard from the Prime Minister in the House today around the concept of partnership and decision making. Her statement was that consultation with Māori is not good enough and that it has failed in the health area and that the basic principle of partnership is that you have an equal say—those are the words of the Prime Minister in the House today.
I personally struggle with that concept in the sense that through the normal democratic process, under the one person, one vote principle, all New Zealanders, including Māori, elect a Government and on the basis of their manifesto to govern, until they are kicked out, and now we have another suggestion which is to say that the two Treaty partners, that elected Government gets 50 percent of the say, in one way of interpreting, and Māori, whoever speaks for Māori—whether they are elected or appointed or how that is arranged—have an equal say in decision making, which is, if I’m not over interpreting that, a colossal change in our constitutional arrangements.
Most New Zealanders would assume that we are all treated equally under the law and it is one of the things which makes this democracy the great place that it is. And now we’re told that the Treaty requires decision making on an equal basis, 50:50. So there are real implications and questions around democracy in the process, and it is hard to argue that it doesn’t create different types of citizens—well, that is a risk of how that is interpreted.
So the question I have is: in the education framework, what does the Minister see as what the Treaty requires in how decision making is made? We’ve seen a couple of examples recently in the development of curriculum. So in the history curriculum, I noticed the advisory board was 50:50—Māori and everybody else. Is that a deliberate decision and is that a basis of how he intends to make decisions? And, likewise, in the development of the commerce area, I was interested—so I’m interested in decision making around curriculum, but also the broader structures of how the ministry and decision making is organised and what he believes the Treaty requires in terms of how those decisions are made.
Hon CHRIS HIPKINS (Minister of Education): If I just work backwards through the questions that the members have raised so far to date, the member Paul Goldsmith asked some questions around Te Tiriti—what it means in an educational context. One of the things it does mean in an educational context is recognising the way we’ve done things in the past has been wrong: that Māori learners have not just been underserved by our education system; they have been actively discriminated against. It was not that long ago in New Zealand’s history when Māori students were subject to corporal punishment in schools for speaking te reo Māori, and that is the legacy that we all inherit and that we should all be ashamed of and we all have a responsibility to do something about. I have absolutely no qualms in standing up here and acknowledging those things that have happened and saying that they were wrong, saying that they have left a shameful legacy for New Zealand that has resulted in generations of Māori not having access to the same educational opportunities as other students and we should do something about that.
In terms of what the Treaty means in an educational context, I’d encourage the member to read the document that his Government signed New Zealand up to, because it talks about the concepts of partnership. It talks about recognising the right for indigenous people to be involved in making the decisions that affect them. That’s the document that his Government signed New Zealand up to that our Government is now working through a process of figuring out how to give effect to. Perhaps, if he doesn’t know the answers to those, he should think about why his Government signed up to a document that it clearly didn’t seem to understand or value in any way. On this side of the House, we believe that the Treaty is an important document when it comes to education; that partnership with Māori is important when it comes to education; that the days when we had to ask Māori students to pretend to be something else, some other culture, in order to succeed in our education system should well and truly be left behind; and that we do need an education system that responds to their needs.
David Seymour asked some questions about school attendance. One of the things that has been challenging around school attendance is that the measure we rely on predominantly is a very blunt one, and that is the number of students who are attending school in any given term for 90 percent of the half-days. So the way a school term is structured is the number of half-days that a—
David Seymour: There’s other percentage breakdowns.
Hon CHRIS HIPKINS: So the measure is a very blunt measure: the number of half-days—90 percent—that a student is attending school. I’ve been working through trying to understand the trends, because I think it is important that we do understand the trends, and I will certainly prepare a greater breakdown and make sure that that is released.
Looking at what the justification for those is—the ministry will classify in their statistics the different types of absence. There’s a justified and an unjustified absence, and there are justified absences. So we saw an increase in term four last year, for example, in the number of students who were staying home because they were sick; that was probably a good thing. The message got out there: if you’re sick, stay home. That’s what we were telling people to do, and we saw an increase in the number of people doing that. We know that about 1 percent of our students are away during term time because of family holidays; they are classified as an unjustified absence in the classification framework, but some families will have a justification for what they are doing and they would argue that, actually, the kids are getting quite an education out of whatever the experiences are that they are involved in. So I think we need to unpack that data a bit more before we can reach any firm conclusions about that. We have put extra funding into schools through the Urgent Response Fund in order to deal with attendance issues, to make sure they’re re-engaging those kids where truancy is a persistent problem, because those are the students that I’m most concerned about. So there is more work happening in that space.
Just quickly, on maths illiteracy and numeracy—as Paul Goldsmith has mentioned, some of the stats that New Zealand faces at the moment are not good. Typically, the studies that he will be referring to are the likes that Programme for International Student Assessment tend to be surveying and sampling secondary school students. I point out to him that all of those secondary students being sampled are the national standards generation. They went through the vast majority of their schooling at a time when national standards were there. Without national standards, what are our alternatives? More robust statistical sampling is a way of getting good information. We do have those very robust studies available that actually provided genuine national snapshots. National standards didn’t; they weren’t national and they weren’t standard. Different schools were interpreting them differently and the results were not comparable. So the sampling studies that we have are actually more reliable. We have got a big focus on professional development on strategies for how we can improve our literacy and numeracy teaching. Those sorts of things are going to do far more to turn those statistics around than something like national standards, which actually did the opposite.
DAVID SEYMOUR (Leader—ACT): Thank you, Madam Chair. I’d just like to respond to a few of the things the Minister said. First of all, is his rather intemperate response to Paul Goldsmith’s comments. The question that Paul Goldsmith asked seemed to be, you know, should representation and representative bodies that make decisions in New Zealand—this Parliament, councils, school decision-making bodies—be proportional to one person, one vote, or should there be some other proportionality as per the concept of a partnership under the Treaty? I think that’s a legitimate debate that a lot of people would like to have. The way that the Minister tried to somehow make an equivalency with students being hit for speaking Māori many, many, many decades ago, I don’t think really is helpful to the debate, to be quite honest. For context, students were getting corporal punishment for just about everything in that era, and, actually, in that period it was a different time. Many Māori parents actually wanted their kids to learn English instead of Māori. I don’t think it helps to have these kinds of intemperate debates. We need honest conversations that unite New Zealanders behind better ideas, but so much for that.
I am really interested to hear the Minister elaborate further on what he has planned to work on attendance, because his answer was quite helpful. He said “Look, we really have quite a coarse range of analysis, either the student was there or they weren’t. And if they weren’t there, it was either a justified or unjustified absence.” And, as he rightly noted, people might have quite a range of ideas about what are justified absences. So if he could elaborate further on whether he might have a new suite of descriptions for why students are away I think this would be really helpful to know. As someone who grew up in Northland I’m very worried about the attendance rates there. I’m afraid I don’t think they’re as benign as he’d like to hope.
Second of all, he seemed to say that he could only get statistics for how many students attend 90 percent of the time. Well, I’m fairly certain in my various travels, I’ve seen more fine-grained breakdowns than that. And, actually, if the Ministry of Education has the raw data and the committee report it, they now have that digitally reported for 85 percent of schools, then you would think that, actually, the Minister would be able to give many more fine-grained breakdowns. So, I guess, the question is: when will we see a wider range of descriptors for absences, and when will he present more fine-grained breakdowns, you know, 90 percent, how many students attend 80 percent of the time, and how many students attend 70 percent? And you get the picture. So those would be helpful questions.
To return to teaching New Zealand history in schools, I think there is a little bit of disquiet around the three big ideas that the ministry has developed and is currently consulting with. They’re in the committee’s report to the annual review. They say the three big ideas are: “Māori history is the foundational and continuous history of Aotearoa New Zealand; Colonisation and its consequences have been central to our history for the past 200 years and continues to influence all aspects of Aotearoa New Zealand society; and, Aotearoa New Zealand’s history has been shaped by the exercise and effects of power.” Well, that’s an interesting take on history. It seems exceedingly backwards and exceedingly zero-sum, I would describe it. Whereas, for example, technology, if it wasn’t for technological development none of us could have got here, none of us would have anything to export, we wouldn’t be able to get it to market, and wouldn’t be able to communicate with people. Not only is our past inextricably linked with technological development so is the future of our kids.
So this is a history curriculum which has nothing to say about the role that technology, which made our country possible and will continue to make it possible, has played in our history. No doubt there are quite a number of other concepts that might be more useful than the exercise of power and colonisation; interesting concept, but hardly the whole story. And as for the idea that Māori history is the foundational and continuous history of Aotearoa New Zealand, well, actually, if you read Michael King or James Belich, they start long before any people arrived at New Zealand. I think it’s said that a land without people was seeking a people without land. So I’d just like the Minister to explain what he thinks the thinking is behind these three big ideas. Thank you.
Hon PAUL GOLDSMITH (National): Thank you, Madam Chair. Just in relation to the Minister’s answer to my first question, I’ll ask my question again because he didn’t answer it. He just talked a little bit about history and then about the National Party’s history. I want to know what does he believe the Treaty requires in terms of decision making in the educational context, because we’ve heard today what the Prime Minister and the Minister of Health believe it means in decision making in the health context, where there are poor Māori outcomes. There are also poor Māori outcomes in education, and I want a clear answer from him, not an attack on the National Party or on history, just a clear understanding of what his policy is today.
Secondly, on the question of attendance, which we’ve been talking about quite some time, I went to a school a couple of weeks ago, Whitiora School in Hamilton, a school with a roll of over 200-250 students, where the regular attendance was 15 percent in the fourth quarter of last year. Fifteen, not 50—1-5; 15 percent. Only 15 percent of students were meeting the threshold of regular attendance, and it turns out there are nearly 20 schools across the country—17 schools—where fewer than 20 percent of students attend regularly.
In fact, there are even four schools where fewer than 10 percent of students attend regularly. If you look at deciles 1 and 2 schools, fewer than 50 percent—right across the whole deciles 1 and 2—attend regularly. So our attendance rates are a national scandal. My criticism of this Government, because it’s not a new problem, but it has been getting worse—my criticism of the Minister, and I want to hear his response, is that, notwithstanding that, there’s about 18 reviews under way in education and there’s a whole lot of things going on in education, but I don’t see a clear focus on turning that around. The Minister has said in the Chamber many times that the primary responsibility rests with parents—and I agree with him—but is that signal being sent very clearly to parents that their fundamental responsibility is to make sure that their kids are at school, with lunches and properly fed?
Then, secondly, for the schools, what consequences, if any, are there for schools if year in, year out, month in, month out, only 50 percent, or 15 percent, are turning up regularly, and what consequences are there, if any?
Thirdly, when it comes to the attendance services, or the old truancy regime, what’s happening there? We have a very small amount allocated, about $10 million a year, and it is manifestly inadequate to the task, and, yet, this Government decides that, rather than putting more resource into that area and acknowledging there has been a little bit that’s gone in during the COVID crisis, but still relatively little, instead, money is poured into things such as ensuring that my children and children from wealthy families don’t have to pay their NCEA fees, which hardly strikes me as a critical issue. Or they get their first year at university free—a whole lot of universal spending, very poorly targeted, and, yet, the kids aren’t at school. They’re not making any progress because they’re not in school.
The final question I have is: what is so terrible about the children of former students of a school going to the same school as their parents even if they’re out of zone? The proposal is that this is such a terrible thing that we have to finish off. What’s wrong with there being a bit of tradition and families enjoying those traditions?
Then, just the final one to throw at the Minister, we’re throwing out accounting, economics, and business studies at NCEA level 1 in favour of commerce. How are we going to make progress in dealing with financial literacy and all of these other things when we’re throwing them out and replacing them with a subject? The first of the three big ideas for commerce is not anything about double accounting or anything like that. The first big idea says that this is what we’re expecting our commerce students to learn—that society seeks hauora through kaitiakitanga, tauhokohoko, enterprise, and innovation. I’d be interested to know if the Minister can tell us what tauhokohoko is, and just explain what that means and what the context is for the commerce degree. Thank you.
Hon CHRIS HIPKINS (Minister of Education): I’ll rely on the member’s Ngāti Porou heritage to share with us his views on what all of those things mean.
Working backwards through those issues, just briefly: on NCEA level 1, yes, the Government is focused on making sure that level 1 is a foundation-level qualification, as the old School Certificate qualification used to be. What we’ve seen since NCEA was introduced is there has been a greater drive to specialisation earlier on, and, actually, the overwhelming feedback that we’ve had through the NCEA review is people would prefer to see level 1 returned back to broader subject bases, rather than more specialist subjects, with that greater focus. Now, it’s still a very active topic of conversation and consultation is still going on about some of those issues. People will still have their opportunity to have their say on that.
In terms of the zoning, the member wants to know why somebody whose parent went to a school should be given preference over someone whose sibling might be going to a school, because that’s what the current system allows for, and the view of this Government is that, actually, that shouldn’t be a criteria in allowing someone who’s out of zone—potentially, living across on the other side of town—to be given preference over other students to attend the school. If they want to enter the ballot for an out-of-zone place, they can do so, but they should not be bumped up the priority list on the basis that their parents might have attended there 20 or 30 years ago.
In terms of the attendance services, yes, the attendance services are a small part of the equation when it comes to dealing with the attendance challenge that we have, and there’s no question we do have an attendance challenge. The effectiveness of those attendance services has been on the decline, coincidentally, since the last National Government decided to restructure them. So we are looking at how we can improve the quality of the work that the attendance services are doing, and the member can watch this space. We’ll have a bit more to say about that shortly.
In terms of New Zealand history, I would say to David Seymour that there is consultation going on about that at the moment. We do want New Zealanders to engage on what they think the important parts of our history that should be taught are, and, actually, we want that to be a very open and inclusive conversation. The one thing I will say to him, though, is we don’t propose to stop teaching everything else.
Many of the issues that have been raised are: why aren’t we teaching more about economics, why aren’t we teaching more about technology? We’ll still teach those things. We might not necessarily teach them as part of the history curriculum, but there will still be a strong focus on them, and, actually, the last Government, that he was a part of, did some really good and exciting work, I think, around the digital technology curriculum, led by Nikki Kaye. I know the member himself supported that. It was good work, and we need to continue the progress that’s being made in that area.
Finally, he mentioned representation in governance, and whether everybody should get an equal share of representation in governance, which is ironic from the member who has been the champion of a model that takes parent and democratic representation away from school governance, which is the charter school model, because, in fact, there isn’t democratic representation in that model.
In terms of the question from Paul Goldsmith of what does decision making look like in a Treaty context, he asked it as a fairly high-level question, so I’ll give him a fairly high-level answer. It means involving Māori far more in the decision-making process where decisions affect them.
Dr DUNCAN WEBB (Junior Whip—Labour): I move, That the committee report progress on this bill.
Motion agreed to.
House resumed.
CHAIRPERSON (Hon Jenny Salesa): The committee has considered the Appropriation (2019/20 Confirmation and Validation) Bill and reports progress.
ASSISTANT SPEAKER (Hon Jacqui Dean): The question is that the report be adopted. [Interruption] Order! There will be silence when taking a vote. I’ll do it again. The question is that the report be adopted.
Motion agreed to.
Report adopted.
Bills
Financial Market Infrastructures Bill
Third Reading
Debate resumed from 8 April.
Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Speaker. It’s good to finally be here at this third reading of this important Financial Market Infrastructures Bill—a bill which, as you will no doubt recall, is about ensuring that the infrastructure that underlies the financial transactions in New Zealand is well maintained.
One of the main aspects of this bill is to give powers of information gathering, because, as we know, a lot of these transactions go on out of sight. And these settlement transactions and the payment systems, which are absolutely fundamental to how our everyday finances work, we only see what scratches the surface. But underlying it are these very important high-value, high-frequency transactions that are undertaken often by private entities, which provide the services that connect up the banks, including the Reserve Bank. It’s really important that the information is available to understand how strong those entities are and, in particular, whether there are any risks, because the risk of failure in these instances is significant indeed. In fact, if there were a failure of one of these settlement entities, it could be catastrophic. So it’s really important, and this bill does it well, to strike the balance between the ability to gather and use that information, but at the same time protect it, because that information is sensitive at a number of levels, as all financial information is.
Of course, the other thing is that this designates institutions as subject to this regime because, of course, there are varying levels, and this isn’t about the banks themselves. It’s about the clearance entities that underlie them, right down to the providers of hard infrastructure, because we know, in fact, there have been instances—and here we see it simply when we go to the shops and we go to pay for something and the EFTPOS terminal doesn’t work. Now, that might be a local issue, but unbeknownst to many, there have been issues in New Zealand where there has actually been a failure at an infrastructure level. Essentially, the wire was cut, and there’s very fragile infrastructure in there. And when the payment system for the whole of New Zealand falls over, even for an hour it’s bad, but if it happened for any longer than that, it could have very, very significant impacts on our financial institutions. Of course, if the settlement of transactions between banks—if one bank can’t settle its obligations with another bank, then we have a risk of a cataclysmic failure, and that is what this addresses. So it identifies those institutions which are critical to our financial infrastructure, and it enables them to be regulated by this regime.
The other thing it does is that if there is a problem, if there is a crisis, it, essentially, enables a moratorium and enables parties to come in and to take management, to freeze the assets, to settle where settlements are needed. You’ll recall, members, the derivatives bill that we did not so long ago when we recognised the importance of settling derivative transactions, even if there was a financial failure. Now, this is the kind of thing we need to ensure here so that important settlements are made, but that the assets are at the same time protected.
The select committee did look at the bill and made a number of relatively detailed and technical recommendations, but nevertheless important. So confirming, for example, in terms of that moratorium that it doesn’t affect the statutory manager’s obligations to pay claims under FMI rules—the financial market infrastructures rules—just things like that to make sure that the mechanism is there, that it’s working properly, and that if the statutory manager does come in, that it can shepherd the liquidation, if necessary, of that entity, and it can ensure that the market itself, the whole market structure, essentially, doesn’t fall over.
This is a technical bill, but it’s a really important one. It’s one that, you know, the select committee worked really hard on, had some very technical submissions, but were well served by officials. So it’s good to see that this bill is ready to go, ready to have its final third reading. I commend this bill to the House.
SIMON WATTS (National—North Shore): I rise on behalf of National, an MP for North Shore, to talk on the Financial Market Infrastructures Bill, third reading. National supports this bill.
This bill will establish a new regulatory regime for financial market infrastructures (FMIs). It also provides certain FMIs with more legal protections relating to settlement, netting, and also the enforceability of those rules. The bill would also replace the current regime, which is contained in sections 5B and 5C of the Reserve Bank of New Zealand Act 1989. Financial market infrastructures, or FMIs using the acronym, are multilateral systems that provide trading, clearing, settlement, and reporting in relation to payments, securities, derivatives, and other financial transactions, I appreciate it is a mouthful but that is the reality of what it does. It includes payment systems, securities, settlement systems, central security depositories, central counterparties, and trade repositories.
This bill is important, because it creates an approved and properly regulated framework for a safe and efficient financial system. National supports this bill, as I stated. It formalises policy proposals announced by the Reserve Bank in 2015 and 2016, which were endorsed by the then National-led Cabinet. Under the existing regime, the systems and services have very little specific regulation, and this bill is intended to bring New Zealand’s regulatory framework for FMIs in line with what we see is global best practice.
This bill has been well signalled and well consulted on, as we’ve just heard, in terms of some of those improvements, in terms of the regulatory environment and the governing functions around that bill, and this will be a good thing for our financial institutions. The select committee has reflected, resulted, and looked at a number of amendments in regards to this bill, which I think have improved the bill, and amendments that we as a party support.
I guess just to provide a little bit of background and context, in 2015 and 2016, the Reserve Bank released policy proposals relating to an update of the regulatory regime for FMIs, particularly for payment systems, and as I said these proposals were endorsed by the Cabinet of the National Government. The bill came out of this, and has been through—as we just heard—three rounds of public consultation on the proposed framework as a whole, and on the crisis management powers contained in it. I think, overall, as we heard, the National Party support this bill, I think in terms of it’s sensible. I think the point that it will align us with global best practice is a good thing, and I would commend this bill to the House.
GREG O’CONNOR (Labour—Ōhāriu): Madam Speaker, this is one of those pieces of legislation that comes before the House, and those who aren’t imbued in the financial system will look at it with something of horror because it is quite complicated, as my colleague Dr Duncan Webb said. However, in my experience in the fraud squad from many years ago, I got some advice from my detective sergeant. He said, “Don’t get too overwrought when you are confronted with a lot of financial papers in front of you that you have to put together. Simply break them down into something that people will understand.”—in our case, the jury. So that’s how I attack this bill, and when you do look down at it, this bill is simply something that keeps the whole financial system moving.
You might remember back in 2008 when there was the global financial crisis happening. Well, what actually happened there was that the reason the world nearly ground to a halt was the financial system broke down. Each of the banks knew they were sitting on this rubbish, which were called derivatives, which were going to potentially drag them down, but they also knew they had this stuff, and then they knew that the banks that they were doing business with had this stuff as well. So they weren’t going to commit themselves and ensure that they were then going to be subject or vulnerable to this breakdown. So what happened was that it took the American Federal Reserve to step in to lubricate the system. I see you’re on your feet, Madam Speaker, so I’ll take that as a—
ASSISTANT SPEAKER (Hon Jenny Salesa): This debate is interrupted and is set down for resumption next sitting day. The House stands adjourned until 2 p.m. tomorrow.
The House adjourned at 10 p.m.