Tuesday, 11 May 2021

TUESDAY, 11 MAY 2021

TUESDAY, 11 MAY 2021

The Speaker took the Chair at 2 p.m.

karakia/prayers

karakia/prayers

DEPUTY SPEAKER: E te Atua kaha rawa, ka tuku whakamoemiti atu mātou, mō ngā karakia kua waihotia mai ki runga i a mātou. Ka waiho i ō mātou pānga whaiaro katoa ki te taha. Ka mihi mātou ki te Kuīni, me te inoi atu mō te ārahitanga i roto i ō mātou whakaaroarohanga, kia mōhio ai, kia whakaiti ai tā mātou whakahaere i ngā take o te Whare nei, mō te oranga, te maungārongo, me te aroha o Aotearoa. Amene.

[Almighty God, we give thanks for the blessings which have been bestowed on us. Laying aside all personal interests, we acknowledge the Queen, and pray for guidance in our deliberations, that we may conduct the affairs of this House with wisdom and humility, for the welfare, peace, and compassion of New Zealand. Amen.]

Obituaries

Rana Waitai

SPEAKER: Members, I regret to inform the House of the death on 8 May 2021 of Rana Waitai, who represented the Te Puku o Te Whenua electorate from 1996 to 1999. While in Parliament, Mr Waitai acted as chairperson of the Justice and Law Reform Committee and a member of the Māori Affairs Committee. I desire on behalf of this House to express our sense of loss we have sustained and our sympathy with the relatives of the late former member. I now ask members to stand with me and observe a period of silence as a mark of respect for his memory.

Members observed a period of silence.

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

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

SPEAKER: No petitions have been presented.

I present the report of the Controller and Auditor-General entitled Management of the Wage Subsidy Scheme. That paper is published under the authority of the House.

Select committee reports have been delivered for presentation.

CLERK:

Report of the Economic Development, Science and Innovation Committee on the petition of Kamal Badawy

report of the Education and Workforce Committee on the petition of Charlene Whyte

report of the Governance and Administration Committee on the petition of Shane Fisher-Van Der Veen

interim report of the Petitions Committee on petitions related to COVID-19 immigration and border policies.

SPEAKER: The Clerk has been informed of the introduction of bills.

CLERK:

Drug and Substance Checking Legislation Bill (No 2), introduction

Plant Variety Rights Bill, introduction.

SPEAKER: Those bills are set down for first reading.

Amended Answers to Oral Questions

Question No. 7 to Minister, 7 April

Hon ANDREW LITTLE (Minister of Health): I seek leave to make a personal explanation under Standing Order 366 to correct the record in relation to oral question No. 7 on 7 April 2021.

SPEAKER: Is there any objection to that course of action? There appears to be none.

Hon ANDREW LITTLE: On 7 April 2021, I advised the House that all information historically published through the Office of the Director of Mental Health and Addiction Services’ annual report is publicly available. I did that on the basis of advice from the Ministry of Health that this was the case. Ensuring transparency of the performance of the health and disability system through the publication of data and information is very important to me. This includes providing the public with robust, timely, and fit for purpose data about the performance of the mental health and addiction sector. On Friday afternoon last week, I received further advice from the Ministry of Health that at the time of my statement, seven discrete pieces of relevant information were not publicly reported through other avenues. Today is the first opportunity for me to correct the record in the House. I seek leave to table a briefing from the Ministry of Health in which the Director-General of Health advises that information provided to me was not correct, and apologising to me for this.

SPEAKER: Is there any objection to that course of action? There appears to be none. It can be tabled.

Document, by leave, laid on the Table of the House.

Oral Questions

Questions to Ministers

Question No. 1—Prime Minister

1. DAVID SEYMOUR (Leader—ACT) 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 announcements on the weekend to support cancer screening. Budget 2021 will see investment of up to $53 million to complete the design and implementation of a new test which will replace the current smear test for the 1.4 million eligible women aged 25 to 69 years old. The new test will be a simple quick swab that women can eventually choose to do themselves. This will help, we hope, to reduce the barriers to getting screened. In addition, the Government announced support for a new breast-screening system that can proactively identify and enrol eligible women, to reach 271,000 more people who currently aren’t in the programme. These investments continue our work to address some of the country’s longstanding issues and help to reduce the number of people who tragically die from these two diseases.

David Seymour: Does the Prime Minister stand by her various statements that her Government’s COVID response went “hard and early”?

Rt Hon JACINDA ARDERN: Yes.

David Seymour: How, then, would she characterise her Government’s roll-out of the COVID-19 vaccine?

Rt Hon JACINDA ARDERN: In keeping with our strategy of keeping our people well and safe. If you look around the world and compare ourselves to those countries who have had similar strategies or, indeed, similar relative success in terms of both incidence, infection, and, tragically, the loss of life, you’ll see the likes of Australia, New Zealand—from memory, South Korea, Vietnam, sitting at similar rates of vaccination. In part, that is because, yes, we really were at the front of the pack in terms of securing agreements with companies for the delivery of vaccine. However, distribution is a secondary question. And in my view, I think that we should hold our heads up, that whilst we are in a global environment where some are seeing the devastating impacts of COVID, we have taken our rightful place in the delivery of vaccine, because people simply are not dying in New Zealand.

David Seymour: Is the delay because (a) the Government has a working distribution and booking system but no vaccine; (b) vaccine but no way to distribute it; or (c) a little bit of both?

Rt Hon JACINDA ARDERN: All of those are incorrect. In fact, what I would say is we’ve been very deliberate about the fact that our roll-out continues on an upward trajectory in line with the delivery of vaccine that we have certainty around. So we’ve always said we’re working towards a July date for general population roll-out. That sequencing is aligned with when we expect having enough vaccine in the country to start that. We’ve also aligned our roll-out, we hope, with not being in a position of running out—that’s been a risk throughout the roll-out—because one of the issues we face then is if you have a large period with no vaccine to deliver, we have staff sitting idle, vaccination centres sitting idle, and I think none of us want that. So it’s very carefully calibrated and it may be that we run the risk at some point of potentially running out, but we’re working very hard not to have that situation.

David Seymour: Does she stand by her Government’s action of proposing so-called fair pay agreements for any sector where 10 percent of workers want them, instead of the one or two sectors, as her Government long led people to believe over several years?

Rt Hon JACINDA ARDERN: I think, just to put this into context, we do have an expectation that there will be limited ability to negotiate fair pay agreements over multiple sectors. We anticipate we may have three to four. The one or two, if I recall, was at the time of where we were in establishing fair pay agreements in the last term in office. We, of course, will have the limited ability to complete large numbers of them. They will include significant resource from both parties. But examples of where we think these will make a big difference are some of those people that we consider to be the heroes of our COVID response. They are those who often through procurement processes do see a continual race to the bottom: our bus drivers, our security guards, our cleaners—those who have not been necessarily well served by our system to date. And like Australia and many others in the OECD, a system like this is designed to rectify that.

David Seymour: How many fair pay agreements does the Prime Minister believe will be initiated within this parliamentary term, then?

Rt Hon JACINDA ARDERN: Well, of course, whilst I’ve just given the member an expectation of some of the sectors we think it may be likely that they may be instigated, ultimately, it will very much depend on those who meet the criteria—and just to be clear on that again: 1,000 workers or 10 percent of the workers in proposed coverage, or there is a public interest test. But that’s very clear. It has to be low paid, low bargaining power, lack of pay progression, long or unsocial hours, or contractual uncertainty that is uncompensated. So, very clear direction there. It came off the back of a large amount of work, the likes of which was led in the first instance by Jim Bolger. That has involved discussions between the unions and Business New Zealand and will go through another process that will involve consultation. Ultimately, though, we believe a system like this—not too dissimilar to what we see in Australia—will be to the benefit of low-paid workers in New Zealand.

David Seymour: How is it democratic for 10 percent of workers in a sector or occupation to start a process which can only end in the compulsory imposition of a contract on everybody in that sector, even if the majority voted against it twice?

Rt Hon JACINDA ARDERN: Well, actually, the member refers there, rightly, to the ratification process, which does, of course, require a simple majority of both employers and workers voting in favour. So I certainly wouldn’t characterise fair pay agreements in the way the member has, based on that process. The member rightly acknowledges, though, there may be areas in which we have an impasse. And here, I think, an important comparison between us and Australia: Australia’s system right from the outset is an arbitration process of the sort where you are using an independent body; New Zealand’s brings everyone around the table, goes through a bargaining process, and, if you’re unable to get that ratified, then it goes through more of an arbitration-style process. I think that’s right for New Zealand’s context and I think it’s most likely in those circumstances to get us in the right place. The member also mischaracterises fair pay agreements and he makes an assumption that there is generic non-support from employers. There have been queries from employers who wish their industries to be involved, because you’ll find there are some excellent employers who find themselves, for instance—

David Seymour: Point of order. Point of order. I actually didn’t say that about employers; I asked about the workings of the policy in such a circumstance as the majority of people voted against a particular agreement. Now, for the Prime Minister to go on and give a running commentary is well outside Standing Orders, which say that she should only be giving information necessary to answer the question.

SPEAKER: Well, I think the Prime Minister earlier on answered the question and I’ll take notice of the member’s wish to be tighter during questions and answers.

David Seymour: Does the Prime Minister agree with the recommendations of the Department of Conservation’s Options Development Group her Government commissioned, when it said it believes in the “delegation, transfer and devolution of functions and powers within the conservation system to tangata whenua”?

Rt Hon JACINDA ARDERN: I simply have not read the document in full that the member refers to but nor would I expect to at this stage.

David Seymour: Does she think that the delegation, transfer, and devolution of functions and powers within the conservation system to tangata whenua would be of great interest to New Zealanders, and, if so, why was it not in the Speech from the Throne?

Rt Hon JACINDA ARDERN: I would contend that, actually, some of these principles have been contained in the Conservation Act since 1987.

Question No. 2—Finance

2. 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): Securing the economic recovery in New Zealand is being supported by household spending. Today, Statistics New Zealand announced that seasonally adjusted retail card spending rose to $6.1 billion in April, the highest it has been this year, and up 4 percent on the previous month. The gains have been broad-based, led by the hospitality sector, groceries, apparel, and household durables. While there was a large increase on April 2020 levels, when the country was in lockdown, card spending in April was also up on 2019, rising by 6 percent. The durables industry saw the largest increase compared with April 2019, and this industry includes spending on things like furniture, sporting goods, and pharmaceutical products, and shopping in department stores.

Dr Duncan Webb: What other reports has he seen on the New Zealand economy?

Hon GRANT ROBERTSON: The latest global dairy trade auction shows a consolidation of prices for whole-milk powder and skim-milk powder, which rose 0.7 percent and 2 percent respectively. These increases come after the strong gains from earlier in the year and are due to the robust global demand for New Zealand dairy products. This is a positive outlook for farm incomes, those in the regions, and the national economy. Economists are optimistic that the recent strength in prices will persist well into the next season. Nevertheless, the overall index declined 0.7 percent, with butter prices falling 12 percent. This is an important sign that we are still operating in a volatile and uncertain global environment.

Dr Duncan Webb: What other reports has he seen on the health of the primary sector?

Hon GRANT ROBERTSON: The dairy industry is not the only one in the primary sector feeling a little more confident. The monthly ANZ Commodity Price Index shows a number of producers are experiencing better returns due to stronger global demand and higher prices. The commodity price index rose 2.3 percent in April, extending its record high. Other than the dairy sector, the lift was driven by strong prices for beef and lamb, which rose 6.2 percent and 8.3 percent respectively, and the forestry index, that rose 3.5 percent in April to hit an all-time high. Throughout COVID, our exporters have helped lead New Zealand’s recovery. They are operating in a market of considerable volatility.

Question No. 3—Prime Minister

3. Hon JUDITH COLLINS (Leader of the Opposition) to the Prime Minister: Does she stand by all of her Government’s statements and actions?

Rt Hon JACINDA ARDERN (Prime Minister): Yes, in particular our announcement that New Zealand and France will jointly convene a Christchurch Call second anniversary leaders’ summit in May, which will take stock of progress and develop a new shared priority work plan. The Christchurch Call shows a shared commitment by Governments and tech companies to eliminate terrorist and violent extremist content online. It was great to hear on the weekend that the United States will attend this summit. The United States Government’s support for the Call, which they’ve also recently signed up to, recognises the importance of a multi-stakeholder approach to an issue that increasingly transcends borders, ideologies, and nationalities, and the ability of any one group or country to address on their own. I’m proud of the work New Zealand is leading in this space.

Hon Judith Collins: Does she agree with her Minister for Children that Oranga Tamariki removing Māori children from dangerous situations is a breach of the Treaty of Waitangi?

Rt Hon JACINDA ARDERN: My view is that, actually, the debate that we are currently having around Oranga Tamariki and whether or not we have succeeded in protecting children as well as we could have was initially instigated in 2016 by Anne Tolley. I want to recognise that Anne Tolley tried to start a conversation which we are trying to continue and complete. And that is a recognition that I think we are all of one view that we must do better to look after the wellbeing of our children and tamariki in New Zealand, and that includes trying to prevent situations where they are uplifted, and trying to continue their relationships and care within whānau.

Hon Judith Collins: Is it a breach of the Treaty of Waitangi for Oranga Tamariki to uplift a Māori child from a dangerous home?

Rt Hon JACINDA ARDERN: I don’t believe that that will be a fair attribution to the Minister’s comments.

Hon Judith Collins: Well, then, does she agree with her Minister when he was asked, “Can you see how the Tribunal has come to the decision that Oranga Tamariki has broken the Treaty of Waitangi?”, and he replied, “Yeah, absolutely, I agree.”?

Rt Hon JACINDA ARDERN: The Waitangi Tribunal—if I’m summarising what they said in what was a lengthy and helpful contribution to the discussion, it was that we must do better on behalf of tamariki who are in the care of Oranga Tamariki. My offer to the member and to that party would be: how can we work together to improve these circumstances for kids? If their view is that anything that we are currently doing is not about the best interests of children, I would be happy to debate that, but that is not the sense I am getting from these questions.

Hon Judith Collins: Does she agree with her Minister for Children that families who have, in the eyes of the Government, presented such a danger to their children that the children have had to be removed should now be considered for financial compensation?

Rt Hon JACINDA ARDERN: Again, if the member wishes to have a conversation about improving the lot of children, we are here for that conversation. Let’s get back to the fundamentals here: thousands of children are in State care, uplifts are traumatic, and we must stop children from being in circumstances where they are hurt and abused. The best thing we can do is start from preventing the need for them to be uplifted in the first place. If the member wants to discuss the best way to do that, let’s hear it.

Hon Judith Collins: Does her Government support the Hon Kelvin Davis directing Oranga Tamariki to begin preparing to devolve power and resources to a new Māori Transition Authority?

Rt Hon JACINDA ARDERN: Again, I come back to everything that I have said: if the member thinks that we are doing well at the moment, she has not read any of the statistics about what’s happening to kids. Equally, we have statutory obligations that sit with Oranga Tamariki, and those statutory obligations continue to sit with Oranga Tamariki. What we are discussing—and, actually, a conversation that Anne Tolley rightly started—is whether or not, in working more closely with iwi organisations and whānau who know these families well and the children well, we can do a better job at prevention. Now, I would like to hear how we can continue the discussion that Anne Tolley started, because that is what we are trying to do.

Hon Judith Collins: Does she believe it is acceptable for the Government to remove itself from the protection of all children, regardless of ethnicity, when a New Zealand child is killed by its own family every five weeks?

Rt Hon JACINDA ARDERN: I reject the claim that was made. The member did not listen to my previous answer around the statutory obligations that still exist within Oranga Tamariki. And, secondly, everything we are doing is about the care and wellbeing of children.

Hon Judith Collins: Does she agree with the Treasury document He Ara Waiora that taxation is an expression of Crown authority and, to best reflect the Treaty, should be exercised in partnership, and, if so, what would this look like?

Rt Hon JACINDA ARDERN: If the member would like to put on notice specific documents for discussion, I’d be happy to discuss them.

Hon Kelvin Davis: Does the Prime Minister—[Interruption]

SPEAKER: Order!

Hon Kelvin Davis: Does the Prime Minister agree with the comments made at the Iwi Chairs Forum in Porirua on Friday that when Kāwanatanga and rangatiratanga work together in partnership, we’ll see great things happening?

Rt Hon JACINDA ARDERN: I mean, it’s long been the endeavour of Governments, I would have hoped, to make sure that we’re upholding our obligations as Treaty partners in the work that we do. There are actually some examples that I would have thought the member would have been proud of when they were in Government: the work that, actually, they did with Tūhoe around conservation; Waikato, with the Waikato River Authority; Whānau Ora; kōhanga reo. It seems that in Government there is a commitment to partnership, but in Opposition there is a race to the bottom in terms of politicising a debate that we need to have as a nation.

Hon Judith Collins: What is her response to the draft recommendations of the Department of Conservation that tangata whenua rights and interests in the marine domain still need to be resolved?

Rt Hon JACINDA ARDERN: Again, if the member wants to get into specific details on recommendations from the Department of Conservation, I would defer the member to the Minister or ask her to put on record those specific documents she wishes to discuss.

Chris Bishop: Point of order, Mr Speaker. I understand you just took two supplementary questions off the Opposition during that exchange, Mr Speaker. I’m just wondering what on earth that was for.

SPEAKER: For the raucous laughter when the Hon Kelvin Davis stood to ask a question. Arena Williams—question No. 4. [Interruption] Order! Again!

Question No. 4—COVID-19 Response

4. ARENA WILLIAMS (Labour—Manurewa) to the Minister for COVID-19 Response: What recent announcements has he made on MIQ allocations in relation to supporting economic recovery?

Hon CHRIS HIPKINS (Minister for COVID-19 Response): Yesterday, the Government announced that, over the next 10 months, thousands of skilled and critical workers will be allocated spaces in our managed isolation facilities. To help provide a boost to key sectors, about 500 managed isolation and quarantine (MIQ) rooms will be made available every fortnight for this purpose. To date, we’ve already been consistently averaging more than 10 percent of MIQ spaces set aside for economic purposes per month. That was something that the Labour Party promised at the election.

Arena Williams: Who will this announcement apply to?

Hon CHRIS HIPKINS: Of the 500 MIQ rooms to be made available fortnightly, we have agreed to allocated spaces for the following groups: around 300 Recognised Seasonal Employer scheme workers every month, from June, with a total of 2,400 arriving by next March; 300 specialist construction workers between June and October; 400 international students for arrival in June, out of the thousand previously announced for the start of semester two; and a hundred refugees every six weeks from July. This is, of course, in addition to those who can enter MIQ through the regular booking system.

Arena Williams: How will this announcement support economic recovery?

Hon CHRIS HIPKINS: This announcement helps some critical sectors in New Zealand get access to the workers they need. It comes off the back of world-leading quarantine-free travel arrangements between Australia and New Zealand and the Cook Islands, and part of our plans to reconnect New Zealand to the world. All of these milestones show momentum that we’re building; seizing opportunities created through New Zealand’s collective response to COVID-19 and the work of our team of 5 million.

Arena Williams: What about spaces in MIQ for Kiwis looking to return home?

Hon CHRIS HIPKINS: One of the things that we have balanced very carefully is the need—

Chris Bishop: What about migrants just trying to move here?

Hon CHRIS HIPKINS: If the member wants to ask a question, he’s allowed to. In making—[Interruption]

SPEAKER: Order! Order! Order! I mean, I’m probably stating the self-evident. Well, it’s not helped from that case—continue.

Hon CHRIS HIPKINS: —this decision, the Government has carefully balanced the need to bring in additional skilled workers, with the need to ensure that New Zealanders have a pathway to return home. At the moment, we have around 20,000 rooms, over the next three months, available to book through the managed isolation system. Now is a good time for New Zealanders to return home. There is space available. And I would also add a word of caution that it’s possible that there will be increased demand later in the year. So for those New Zealanders who are looking to come home, now is good.

Question No. 5—Finance

5. Hon MICHAEL WOODHOUSE (National) to the Minister of Finance: Does the Government intend to restrict new spending in Budget 2021 to the operating allowance of $10.5 billion and capital allowance of $7.8 billion over the four-year period, as set out in the Budget Policy Statement 2021; if not, what are the new operating and capital allowances for Budget 2021?

Hon GRANT ROBERTSON (Minister of Finance): As I said yesterday, our better-than-expected economic recovery does provide us with more options. There is a bit more space in our operating and capital allowances to support the recovery, but this will be balanced against keeping a lid on debt and allowing us to start reducing debt from the middle of the decade, as outlined in the Budget Policy Statement. This approach is in line with what we said at the time of the Budget Policy Statement—and I quote—“The allowances are subject to change, as economic and fiscal forecasts are updated for both the New Zealand economy and the global economy.” In answer to the second part of the question, the member has to wait just nine more sleeps, not counting his afternoon naps.

Hon Michael Woodhouse: Does he agree it is important to keep the legacy of debt our children and grandchildren will struggle to repay as low as possible?

Hon GRANT ROBERTSON: I think the record of this Government shows that, prior to COVID-19, we had managed to continue on what previous Governments did of keeping New Zealanders’ debt low relative to other countries. That has continued. Debt remains very low relative to other countries, and we will continue to keep a balance on investing in our future, which involves both the investments we make to build public services but also in keeping debt under control.

Hon Michael Woodhouse: So why does he think a marginal improvement in Crown accounts is a reason to increase spending in money the Government doesn’t have, when we’re still on track to be over $100 billion more in debt than projected before COVID?

Hon GRANT ROBERTSON: As I’ve said in my first answer, this is all about striking the right balance between investing in the things that New Zealand needs to do now, the things that many of the member’s colleagues raise in this House around issues like housing or around issues like climate change or around issues like child wellbeing. They all require investment. What is important is keeping a balance to make sure that we do that alongside keeping a lid on debt.

Hon Michael Woodhouse: Does the Minister regret the 10,000 new bureaucrats hired during the Government’s pre-COVID recruitment binge now that they have to freeze their pay?

Hon GRANT ROBERTSON: I reject the latter part of that member’s question, and, in answer to the former part of it, I pick up what the Minister for the Public Service said in the House the other day. The people he’s talking about are the people who’ve been keeping us safe at the border, the people who keep us healthy, the people who educate our children. I’m sorry the member doesn’t think that those things are important, but on this side of the House, we do.

Hon Michael Woodhouse: Why can the Government fork out more than $100 million for private media organisations but has to recommend that teachers, nurses, police, and the defence force get a pay freeze?

Hon GRANT ROBERTSON: Again, I reject the second part of the member’s question, and I well recall in the last term the enormous pay increases we gave to teachers and nurses because the previous National Government had failed to back them.

Question No. 6—Police

6. GINNY ANDERSEN (Labour—Hutt South) to the Minister of Police: What recent announcements has she made regarding combating organised crime?

Hon POTO WILLIAMS (Minister of Police): [Uses sign language] Thank you, Mr Speaker. This morning, alongside the Minister of Justice, I announced a range of new tools to aid police in their fight against organised crime. The Government will make it illegal for high-risk people to own firearms by introducing the firearms prohibition orders (FPO). FPOs will protect the public from harm by prohibiting high-risk people from accessing, being around, or using firearms. Breaching these conditions of a firearms prohibition order will be a criminal offence. Alongside this, the Criminal Proceeds (Recovery) Act will be amended to introduce a new power-enabling seizure of assets of those associated with organised crime where the person’s known legitimate income is likely to have been insufficient to acquire the asset. This Government is taking meaningful action to make sure that we keep our communities safe.

Ginny Andersen: Who will be targeted by the Government’s firearms prohibition orders regime?

Hon POTO WILLIAMS: It’s no secret that gun crime is an increasing concern in our communities, and we need to take further action to make sure that New Zealanders and their families are kept safe. FPOs will protect the public from harm by prohibiting high-risk people from accessing, being around, or using firearms. High-risk people include those who commit serious firearms offences, serious violence offences, an offence of participating in an organised criminal group, and terrorism-related offences.

Ginny Andersen: How will amendments made to the Criminal Proceeds (Recovery) Act further disrupt organised crime?

Hon POTO WILLIAMS: Police are hitting gangs where it hurts—their pockets. The new organised crime power will help prevent those involved in organised crime from benefiting from crime and remove the primary reason for organised crime to exist—profit. Police have recently undertaken Operation Cartwright / Chanute in Dunedin, which has resulted in the arrest of four people for various drug offences, and seized $115,000 in cash and eight firearms, and restrained an estimated $4.8 million in illicitly gained assets. Operation Oats in Whangārei has resulted in two arrests for drug activity and restrained an estimated $1 million in illicitly gained assets. Operation Bronco in Flat Bush has seized 6 kilograms of ephedrine, 2,260 grams of methamphetamine, and $1.07 million in cash.

David Seymour: When announcing her policy, was the Minister aware that the ACT Party had announced and advocated a near-identical policy for six months before she announced it?

Hon POTO WILLIAMS: I thank the ACT member for that question and welcome his support of this particular piece of legislation.

David Seymour: Point of order. The question was about the Minister’s awareness. She didn’t address that. She just thanked us for support, which we haven’t even given yet because we haven’t seen the detail.

SPEAKER: I think it was implicit in the reply that she was aware of what the member was talking about. [Interruption] I will remind the member he can’t require a yes/no answer—longstanding Speakers’ rulings.

David Seymour: Point of order.

SPEAKER: A new point of order?

David Seymour: Well, no, Mr Speaker, I just seek, for the benefit of the people at home—when you say that it was implicit, are you saying that it sounded like she was saying yes or no?

SPEAKER: I’m not going to answer for the Minister.

Simeon Brown: Does she agree with the Police Association, who have said that firearm prohibition orders without search powers are useless, and, if so, will the Government’s legislation include warrantless search powers?

Hon POTO WILLIAMS: No, we won’t. But what I do want to say to this House is that the member’s bill didn’t include these either.

Rawiri Waititi: What is the Minister going to do about the recent incident in Taupō where police violently used excessive force in arresting a 14-year-old Māori child, digging their knee into the child’s neck?

SPEAKER: Order! That’s not an area for which there’s ministerial responsibility.

Debbie Ngarewa-Packer: Supplementary—

Rawiri Waititi: Point of order.

SPEAKER: Well, which one?

Rawiri Waititi: Point of order.

SPEAKER: Sorry, it’s just—your colleague was standing up as well. Rawiri Waititi.

Rawiri Waititi: Age before beauty. Anyway, this is entirely her responsibility. No? She’s the Minister of Police.

SPEAKER: Yes, and the Minister of Police does not have responsibility for operational matters. Debbie—

Chris Bishop: Point of order, Mr Speaker.

SPEAKER: Well—sorry. I’ve just got a slight reluctance here when a certain member’s been going for the call on a number of occasions. Debbie Ngarewa-Packer.

Debbie Ngarewa-Packer: Kia ora. Supplementary—

SPEAKER: Oh, sorry—sorry. I didn’t realise it was a supplementary. A point of order.

Chris Bishop: Well, that may well be the case, Mr Speaker, in relation to operational matters. That is for the Minister to say. I have previously been a police spokesperson in this House and have asked dozens of questions around live police—well, not live operations but operations in the past that the Minister is clearly responsible for. So it’s for the Minister to say whether or not something’s an operational matter and she declines to comment; not for you, Mr Speaker.

SPEAKER: Well, it may well be that the member has asked those questions or has made comments in those areas or has seen them, but it has been the long-term decisions of Speakers in this House that the Minister’s actions and stuff that she has done are her responsibility—

Chris Bishop: Point of order.

SPEAKER: Well, am I allowed to finish or not?

Chris Bishop: I thought you had, sorry.

SPEAKER: There has been a longstanding approach in this House whereby Ministers are asked about Government policies, their actions, and their resourcing. Their views on whether a matter should be taken further, especially where there is a possibility of prosecution, has been long ruled out in this area, and I’ll see if I can find the relative—

Hon Simon Bridges: He won’t.

SPEAKER: Who said that?

Hon Simon Bridges: I did.

SPEAKER: Right—the member who’s just about to leave the Chamber.

Hon Simon Bridges: I’m being asked to leave the Chamber, am I, Mr Speaker?

SPEAKER: Yes, you are.

Hon Simon Bridges withdrew from the Chamber.

SPEAKER: Speaker’s ruling 169/2 is probably a good place to look.

Chris Bishop: Point of order, Mr Speaker.

SPEAKER: A further point of order.

Chris Bishop: Look, we are going to get into difficulty here, because Ministers are responsible for the actions of their departments. To take an analogy, for example, if I asked Minister Hipkins around the actions or statements made by Dr Bloomfield as the Director-General of Health, that would clearly be—I think we would all agree in the House—within the scope of questions that would be allowed to be asked and answered in question time. Likewise, the actions of—to take Corrections, for example—the chief executive of the Department of Corrections, in response to activities undertaken by corrections officers or prison management, for example, I think, would clearly be within scope as well. So is it your position, Mr Speaker, that the actions of officials or the actions of public sector agencies that the Minister doesn’t have operational responsibility for but has responsibility to the House for are not able to be asked questions about, because that would be, I think, quite a stretch and, really, I think we would have quite some difficulty with that in the Opposition.

SPEAKER: The answer to the member’s question is no.

Rawiri Waititi: I ask the Minister: what is her view, as Minister, of the recent action of police in Taupō?

Hon POTO WILLIAMS: There’s no doubt that that case is very distressing for all concerned. I believe it’s a matter of investigation with the Independent Police Conduct Authority—it may have already been determined—and that is the appropriate place. What I can comment on, though, is the work that the police are doing to recognise the disproportionate arrest rates for Māori and Pacific, and I support the work that they are doing to look at how they speak to and stop people, and how they make their charging decisions. I think that speaks to a broader programme of work that the police are undertaking to ensure that we do everything we can to reduce the rates of arrest for Māori and Pacific.

Debbie Ngarewa-Packer: What is the Minister doing to address the fact that the police pull guns on Māori children 3.8 times more than any other ethnicity nationally, and 16 times more in Whanganui—100 percent being Māori?

Hon POTO WILLIAMS: I just want to reiterate that I applaud the work that the police are doing to understand how it is that we have got these disproportionate rates against Māori and Pacific. At the end of the day, we are talking about our whānau and our people. I support the police in looking at how they stop and speak to individuals, and their charging decisions, as part of the broader piece of work that they are doing in terms of institutional and other unconscious bias. This is work that is difficult, but the police are owning up to the fact that there have been decisions and conduct in the past that has not been helpful in this situation, and I support that they are looking at this work.

Question No. 7—Workplace Relations and Safety

7. Hon SCOTT SIMPSON (National—Coromandel) to the Minister for Workplace Relations and Safety: What is his response to Treasury’s advice that implementing a Fair Pay Agreements regime will have uncertain implications for productivity, and that there is “minimal empirical evidence for the problem or policy response” it seeks to address?

Hon MICHAEL WOOD (Minister for Workplace Relations and Safety): Sector level bargaining, of which fair pay agreements are a kind, are recommended by the OECD and are commonplace in many advanced, prosperous economies like Australia, Singapore, and large parts of Europe, many of whom have a stronger productivity record than New Zealand does. In answer to the second part of the member’s question, I would encourage the member to read the report put out by the Rt Hon Sir Jim Bolger and the—

SPEAKER: Order! Order! He’s certainly not a knight.

Hon MICHAEL WOOD: Yes, thank you, Mr Speaker—the Rt Hon Jim Bolger, who produced, along with a range of others, a Fair Pay Agreement Working Group report, which shows that while New Zealand has experienced economic growth and productivity growth over the last 30 years, the share of that going to people—working people—has declined over that period. This is the graph reproduced from that working group report. That is the fundamental problem that we are trying to resolve. After 30 years of a trickle-down model that has failed to deliver for working people and that has not produced the improved productivity performance that was promised, we say that it’s time for a new approach. It’s time to stop the race to the bottom.

Hon Scott Simpson: What is his response to Treasury’s advice that fair pay agreements may make substantial changes to the economy and risk widespread negative effects on employment?

Hon MICHAEL WOOD: In respect of making changes to the economy, this Government is a Government which does propose to make changes which benefit those people who are currently being left behind. After the year of COVID, in which we have been reminded of the value of the cleaners, the bus drivers, the supermarket checkout workers—people who have to exist at barely over a minimum wage—we believe it is time to make a change so that those people’s terms and conditions are not driven down by competitive processes. We quite happily stand up and say that we support that change. The other side of the House may be happy with it, but we’re not.

Hon Scott Simpson: Does he consider that Treasury’s concerns about there being minimal empirical evidence for implementing a fair pay agreements regime could possibly relate to his plans that would allow just 10 percent of workers in a sector being able to force the other 90 percent into the regime?

Hon MICHAEL WOOD: I don’t think those two points are related at all.

Hon Scott Simpson: Does he consider that Treasury’s concern about there being minimal empirical evidence for implementing a fair pay agreement regime could relate to his plans that would see a small business in Invercargill having the same conditions imposed on them as a major employer based in the Auckland CBD, just because they’re operating in the same sector?

Hon MICHAEL WOOD: I’d make two points in response to the member’s question. The first is that I believe that Governments which are elected on manifestos, that have a mandate to govern, need to listen to the advice that is given by officials and to carefully consider it, but also to listen to the advice and views that come through from a range of stakeholders, and to hold faith with the commitments they made when they were elected. So members on that side of the House might think that it’s a good way to govern—to just go along with whatever the officials tell you. We actually bring a range of wider considerations into the mix. Secondly, I would encourage the member to actually read the policy which has been put out. He might be too busy at the moment reading Simon Bridges’ biography—

SPEAKER: Order! Order! The member will resume his seat.

Question No. 8—Tourism

SPEAKER: Before we go to this question, I will warn members that the Minister has been in touch with me to indicate that this answer is longer than I would generally consider desirable.

8. RACHEL BROOKING (Labour) to the Minister of Tourism: What is the Government doing to support the recovery of tourism communities?

Hon STUART NASH (Minister of Tourism): Thank you, Mr Speaker. Last week, I announced the Support, Recovery and Re-set Plan for the tourism communities, to support the social and economic recovery of tourism communities after the impacts of COVID-19 and rebuild tourism on a more sustainable foundation. There were 12 key points in the Tourism Communities Plan. Half are focused on the most vulnerable South Island regions—Fiordland, South Westland, Queenstown Lakes, Mackenzie District, and Kaikōura. The remaining six are nationwide initiatives.

Support for the five South Island communities will address: (1), mental health and social wellbeing support and training; (2) grants for businesses to get expert advice on planning and decision making in response to COVID-19—$5,000 per business; (3) grants to help businesses implement these plans and advice—that’s $5,000 per business; (4) a $49 million kick-start fund so that businesses that have gone into hibernation or suspended operations can receive grants to help them reopen and resume trading once international visitors return; (5) a reset to the Queenstown/Wanaka regional economy, with a $20 million fund to attract private sector investment to diversify and develop alternative industries; and, finally, (6) $15 million to enable the Milford Sound Opportunities Project to move to its next phase. Transformation is needed to protect Milford Sound and create a more sustainable and high-quality visitor experience.

Rachel Brooking: What are the nationwide initiatives in the recovery plan?

Hon STUART NASH: This Tourism Communities Plan also offers wide support for the industry as a whole. It is an opportunity for Government, councils, iwi, businesses, and tourism operators and communities to work together and reset the industry on a more sustainable model for the future. There are six additional components to the plan to address longer-term challenges nationwide.

The first is regional tourism organisations to receive a new round of grant funding of $26 million to coordinate, promote, and market tourism activities in their regions. Two, $14 million to existing loans to inbound tour operators (ITOs) from the 2020 tourism recovery package will be converted to grants. That means 26 ITOs will receive up to $500,000 each. Three, further investment in Māori tourism businesses. The details will be announced by the Minister for Māori Development later this month. Four, $10 million for the Department of Conservation to extend the fee waiver for around a thousand operators on conservation land who pay a tourism concession free. Five, $16.5 million for local councils to be able to apply for another round in the Tourism Infrastructure Fund. And, finally, $10 million for the development of a new tourism industry transformation plan, which will see the Government work in partnership with tourism businesses and the tourism workforce, councils, iwi, and researchers and independent advisers. It will build on recent work by the Parliamentary Commissioner for the Environment, Tourism Futures Taskforce, and Climate Change Commission, among others, to lift industry standards and transform to a more sustainable model.

Rachel Brooking: What feedback has he received on the Tourism Communities Plan?

Hon STUART NASH: A lot of positive feedback. Queenstown Mayor Jim Boult said the announcement would “ ‘turbocharge’ the work done to date on diversifying the economy and ‘move us to another level’ ”. And Destination Kaikōura manager, Louise Frend, said, “On behalf of Kaikoura it’s up to me to express heartfelt thanks for this very targeted support.”

Chris Bishop: Point of order, Mr Speaker. Usually when Ministers are allowed to take a bit of extra time to answer a question, they’re in relation to very technical or complicated primary questions. I don’t think anyone could reasonably say that question No. 8 on the sheet today is a technical or complicated question. Instead, we’ve just been subjected to about a three- or four-minute speech from the Minister. Mr Speaker, you’ve made it pretty clear your views about that sort of behaviour in this House.

Question No. 9—Public Service

9. JAN LOGIE (Green) to the Minister for the Public Service: How is restricting the wage increases of nurses, teachers, and border workers who earn between $60,000 and $100,000 in order to “control the public wage bill” going to “reduce inequality”?

Hon CHRIS HIPKINS (Minister for the Public Service): I reject the premise of the member’s question. Let me restate what I said in my media statement last Wednesday: “We want to see those on lower wages be the focus of any increases in pay. This is about prioritising spending. The policy will also help protect jobs by taking financial pressure off the public wage bill. It will not impact the work we are doing within the Public Service to close gender and ethnic pay gaps. The public service is doing a good job implementing the Government’s COVID-19 response, and we ask that they lead the way in supporting the Government as we ensure [that] our spending is targeted to where it is needed [the] most.”

Jan Logie: Then, why does the recently issued Public Service pay guide say, “The default position is that there are to be no increases” and that “salary increases [should] remain low averaged across all staff.” and that “executives in the Public Service should ensure that pay increases do not occur” unless they meet a narrow set of principles?

Hon CHRIS HIPKINS: I think the member, rather than selectively quoting particular pieces of the guidance, needs to read the guidance in its totality. What the Government is endeavouring to achieve is to stop the significant growth in the gap between those lowest paid and those who are higher paid. Across-the-board percentage increases, which we have seen in the last three years, have increased the gap between the lowest paid and the highest paid, and that is unsustainable.

Jan Logie: Why does he keep playing off low-income workers who earn under $60,000 against other essential workers like nurses, teachers, or border workers, who have also been working their guts out for relatively modest incomes?

Hon CHRIS HIPKINS: Again, I reject the premise of the member’s question. I don’t believe that that is what the Government is doing. What the Government is saying is if we continue to provide across-the-board pay increases that see the majority of the money going to people on the highest salaries, the inequality in the public sector will continue to increase, and that is not something that this Government wants to see continue.

Jan Logie: Is he aware that in May 2018, 70 percent of nurses and midwives were already employed on the top pay band, with no further progression possible, as was stated in the 2018 New Zealand Nurses Organisation submission to the independent panel to resolve the DHB multi-employer collective agreement negotiations?

Hon CHRIS HIPKINS: Our awareness of the fact that many nurses and teachers sit at the top of their current pay scale is reflected in the fact that over five years, this Government has injected an extra $4.2 billion into pay settlements with those workforces. What the Government is saying is it’s time for those at the bottom end of the salary scale, who are not reflected in the settlements reached with those workforces, to get a bit of a break.

Jan Logie: Will he revise the recently released Public Service pay guide document so that those earning over $60,000 can also bargain in good-faith for the pay increases they surely deserve after a really tough year?

Hon CHRIS HIPKINS: Nothing in the guidance stops bargaining in good-faith.

Question No. 10—Health

10. TERISA NGOBI (Labour—Ōtaki) to the Associate Minister of Health: What recent announcements has she made about improving cancer screening programmes for women?

Hon Dr AYESHA VERRALL (Associate Minister of Health): Budget 2021 focuses on securing our recovery while making investments that improve the lives of New Zealanders. This year’s Budget will deliver a better cervical-screening test and a major upgrade of the breast cancer screening system that will save lives. These initiatives build on our last three Budgets, where we have made significant investments in health, including delivering the biggest funding boost to maternity care in a decade.

Terisa Ngobi: How will the new cervical-screening test increase the number of wāhine who get screened for cervical cancer?

Hon Dr AYESHA VERRALL: The persistent inequalities around cervical cancer has been one of the longstanding issues in women’s health. Our investment of up to $53 million to complete the design and implement a new test for human papilloma virus—or HPV; the cause of 99 percent of cervical cancers—will make a real difference. The new test, which will replace the current cervical smear test for the 1.4 million eligible women aged 25 to 69 years old, is a simple and quick swab that women will eventually be able to choose to do for themselves. This will help reduce the barriers to getting screened. Modelling predicts that the move to HPV screening will prevent about 400 additional cervical cancers over 17 years and will save about 138 additional lives. Around a third of the cases prevented and lives saved will be wāhine Māori.

Terisa Ngobi: What are the changes to the breast-screening programme?

Hon Dr AYESHA VERRALL: The Government is committed to improving the health outcomes for our hard-to-reach communities. The existing breast cancer screening programme operates as an opt-in model, where women choose to enrol for screening by calling their GP or an 0800 number. This relies on women knowing that they are eligible for free breast screening and making an appointment themselves. The new technology funded through Budget 2021 will better equip the programme to reach the 271,000 women who are currently eligible to access breast screening but are not currently screened. With more Māori and Pacific women dying from breast cancer compared to non-Māori, non-Pacific women, the new system will allow BreastScreen Aotearoa to identify and target groups of women who may not currently be part of the programme.

Question No. 11—Public Service

11. Hon MARK MITCHELL (National—Whangaparāoa) to the Minister for the Public Service: Does he stand by all of his statements and actions in relation to public sector pay?

Hon CHRIS HIPKINS (Minister for the Public Service): In general, yes. However, I do regret that details of the new pay guidance for Public Service agencies has been inaccurately characterised as a pay freeze. It is not.

Hon Mark Mitchell: Will he consider backing down, changing, or amending the decision in relation to public sector pay restraints?

Hon CHRIS HIPKINS: The member clearly wasn’t listening to the answers I already gave to my colleague from the Green Party: no.

Hon Mark Mitchell: Why not?

Hon CHRIS HIPKINS: Because this Government is unashamedly wanting to ensure that pay increases are targeted at those on the lowest incomes.

Hon Mark Mitchell: Does the Minister think it’s fair to restrain for three years the pay of a teacher or nurse earning $60,000?

Hon CHRIS HIPKINS: Again, I reject that that’s what the guidance does.

Question No. 12—Rural Communities

12. MARK CAMERON (ACT) to the Minister for Rural Communities: What concerns, if any, have been raised with him about the impacts of Government policies on rural communities?

Hon DAMIEN O’CONNOR (Minister for Rural Communities): As I get out around my electorate and the wider country, there is never a shortage of opinions on many issues, and I listen to what is top of mind for many of those communities. There are issues like water, bank closures, live exports, climate policy, and afforestation. I’m honoured to be in Parliament here with a large number of Labour MPs who are passionate advocates for rural communities, as well, and they pass on to me the issues as raised with them, on a regular basis.

Mark Cameron: Does he still believe that the Government’s freshwater reforms will need to be “tweaked” to better accommodate regional differences, and, if so, what further actions will be taken?

Hon DAMIEN O’CONNOR: Yes, I do, and we have indeed tweaked them; we’ve just parked them for 12 months to work through the issues to ensure that when they are implemented—and the goals of better, cleaner water across New Zealand, I think, are ones that every New Zealander aspires to—that we can give effect to the right outcomes in each of the regions. The regions will have different challenges; we acknowledge that.

Mark Cameron: Is he concerned at the findings of Tailrisk Economics, who concluded that the Government’s freshwater reforms will cost the country $3.2 billion?

Hon DAMIEN O’CONNOR: No, I don’t agree with that at all. And what I will say is that, actually, “Brand New Zealand” is worth a huge amount across the world. And as I regularly speak to trade Ministers from across the world, they acknowledge two things. Firstly is our progress and, I guess, our achievements in COVID—that’s the first thing. The second thing is that they aspire to be like us when it comes to animal protein production in our faming systems. And, of course, that’s built off the back of a reputation for good environmental management, good labour management, and good animal welfare management. It’s up to us to make sure we adhere to those high standards.

Mark Cameron: How does he respond to Federated Farmers, who stated, in relation to the managed isolation policy, that they were “deeply disappointed the government’s exception announcement today shows it could not find a way to bring 500 desperately needed skilled dairy employees into the country.”?

Hon DAMIEN O’CONNOR: Look, I’m happy to speak on that. The dairy industry is our biggest industry in this country. It is important that we have people working in that sector. I’d like to quote Andrew Hoggard, the president of Federated Farmers, who said that, actually, farmers now have to realise that people should work probably on maximum about 50 hours a week, and get two days off. That’s what he said because that is what is needed to provide fair labour conditions to attract people. I’d also like to go on to say that, actually, the Ministry for Primary Industries, the Government, and taxpayers committed $900,000 to a campaign called GoDairy, which was to attract people into the dairy industry last year. And, in November last year, the dairy industry decided to pull out of that campaign because it was after spring. It’s a reminder to them that, actually, we need enduring, well-meaning, and well-focused campaigns to attract people into dairy. Simply knocking on the door of Government and saying, “We need $500 now, but not later” is a big challenge, when my colleague is trying to manage limited space in managed isolation and quarantine facilities.

SPEAKER: I declare the House in committee for further consideration of the Appropriation (2019/20 Confirmation and Validation) Bill.

Annual Review Debate

In Committee

Debate resumed from 4 May on the Appropriation (2019/20 Confirmation and Validation) Bill.

CHAIRPERSON (Adrian Rurawhe): Kāti rā, tēnā tātou.

[If I may, greetings all.]

The House is in committee for further consideration of 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 by select committees. There are five hours 11 minutes remaining in this debate. New Zealand Labour has two hours 58 minutes remaining, New Zealand National has one hour 20 minutes remaining, the Green Party of Aotearoa New Zealand has 34 minutes remaining, the ACT Party has 25 minutes remaining, and Te Paati Māori has eight minutes remaining.

Members will recall that Standing Orders 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 Transport, the Minister for Social Development and Employment, the Minister for Economic and Regional Development and of Tourism, the Minister of Housing and the Minister of Energy and Resources, the Minister of Immigration, the Minister of Corrections, the Minister for Māori Development, and the Minister of Police will be available today. Each debate will be led off by the chairperson or another member of the select committee that considered annual reviews most closely related to the Minister’s portfolios. At the conclusion of the debate, questions will be put noting the committee reports on annual reviews and on provisions of the Appropriation (2019/20 Confirmation and Validation) Bill. There is no amendment or debate on these questions.

When the committee was last considering the bill, the question was 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. Dr Duncan Webb had the call, should he wish—nope. OK. We have the Hon Michael Wood in the chair.

Transport

GREG O’CONNOR (Chairperson of the Transport and Infrastructure Committee): Thank you, Mr Chair, and I rise as the chairman of the hard-working Transport and Infrastructure Committee. I also acknowledge the Minister in the chair, Minister Wood, who recently scored nine out of 10 on a review of Ministers, and I’d like to think that’s something of a reflection of the collegiality and the hard work of the committee, and I acknowledge my committee members here in the Chamber today.

The entities we examined were Air New Zealand; Airways Corporation of New Zealand; Civil Aviation Authority of New Zealand; KiwiRail Holdings Ltd, who appeared with the New Zealand Railways Corporation; the Ministry of Transport; Waka Kotahi New Zealand Transport Agency; and Meridian Energy Ltd. Really, the story of our reviews this year was COVID, and I go to the first entity we examined, which was Air New Zealand, probably one of the entities that was most affected by COVID, although, bearing in mind this is a backward-looking review; that only went through part of the period in review—part of the period affected by COVID—but it was significant and certainly was showing up in the accounts of all the entities we examined.

I guess, even when the entity arrived, Greg Foran, the recently appointed chief executive, the thing he did point out was that they had reduced their executive team from nine to six members, again, reflecting that. I do note that on our committee we had the ex-CEO of Air New Zealand and I’m sure—I won’t speak for him but he was very pleased that he was on our side of the table, not sitting at the end being examined, given the state of the airline and given the effect of COVID on it. Of course, Air New Zealand’s operating expenses declined by 12 percent but that was reflected by a loss—instead of 2019-20, $4.8 billion, the revenue has reduced to $1.2 billion, a 59 percent decrease—and, of course, for the other entities we were then to examine, that was reflected right through. But just some of the effects on Air New Zealand, they, of course, required a $900 million standby loan facility, but they also received $113 million in wage subsidies. So again, Air New Zealand, as the first entity that we did examine, certainly set the scene. They had to reduce staff by 30 percent, which is approximately 4,000 people, at a cost of $140 million in redundancies.

Given the time restraints, I’ll go on. We also examined the Airways Corporation. Again, their income was similarly affected because they derive their income from the airline activity, as do the Civil Aviation Authority of New Zealand. The only thing with civil aviation, of course, is that some of their members, we did hear, were able to be transferred to take part in managed isolation. Moving through to the Ministry of Transport, one of the main things that came out of that was the effect on the supply chains, in particular, and we heard that the inter-agency supply chain group was brought together to address these issues. We also examined KiwiRail and KiwiRail Holdings and KiwiRail’s corporation, and I should, of course, mention at this stage the then chairman, Brian Corban, who’s now recently deceased, and we acknowledge his passing here in the House today.

Just in the time left to me, we did also examine Waka Kotahi and Meridian Energy, but I think, just for the Minister in the chair, I’d just like to leave him with a couple of questions, given what we did here. Could he elaborate, please: what Government measures did the Minister think made the difference in keeping our transport system up and running and our supply chains moving, given what I’ve spoken about and what we heard as a committee about the effect of COVID? Also, just perhaps he could talk about how the Government investment in the transport sector can aid our economic recovery? What evidence is there of such investment over the last year? I look forward to the Minister answering some of these queries.

Hon MICHAEL WOODHOUSE (National): Thank you, Mr Chair. I want to commence my questions to the Minister in respect of the New Zealand Upgrade Programme, which was announced during the annual review period in January last year, $12 billion – odd of which $6.8 billion, I think, was of transport and $5.8 billion of roading projects. There’s been some recent publicity that there is equivocation now on the degree of commitment to that, and this, I guess, is the opportunity for the Minister to clear that up. There is concern—and the Minister has acknowledged—the baseline estimates that informed that announcement may now need to be revised, and there was equivocation when the Minister was asked about what that meant for those projects and whether any of them would be delayed past the Government’s original time frame or cancelled altogether.

Now, the Prime Minister, when she joined the Minister of Transport in this announcement, was very clear that the upgrade was spades in the ground within a year. I accept that that’s not going to be possible for all of the projects—and, indeed, there are spades in the ground on some of them—but there are some really, really big projects that I think could be at risk, and I think it behoves the Minister to give the House and the committee sort of an articulation of where that risk might be, recognising that he can’t breach any budget constraints.

Hon MICHAEL WOOD (Minister of Transport): I thank the members for their questions and I’ll come to some responses to those in a moment. Just at the outset, can I thank the select committee for its work on the annual reviews this year, acknowledge officials who participated in that process as well, and, actually, most importantly, acknowledge the women and men who work across our transport agencies and have had an extremely tough year. I mean, everyone has, across this country, as we’ve dealt with COVID, but the impact and the disruption within our transport systems has been absolutely immense, and often it’s been very fast policy and operational work from people within transport that has ensured that critical supply chains, critical public transport, and other things within our transport system have kept functioning as we’ve dealt with the massive disruption of COVID-19.

You look at sectors like maritime and civil aviation, for example. Their revenue streams dropped off almost completely as a result of border shut downs. So Government and those agencies have had to work together very, very closely, and at all times there has been total professionalism from the people involved in the sector, both public and private, to make sure that we keep New Zealand moving, and it’s appropriate to acknowledge that.

The other acknowledgment I’ll make before touching on these questions is just to echo the chair of the select committee, Greg O’Connor, in his comments about Brian Corban, our chair of KiwiRail, who unfortunately died within the week, who has a long record of service and had, I think, done an incredible job of overseeing that State-owned enterprise and its transformation to a resilient and reliable provider of rail over the last three years.

Mr O’Connor asked a couple of questions, the first related to the point I just made around our supply chain. He asked about some of the measures that the Government has undertaken to ensure that our supply chain does keep moving and has kept moving over this challenging period. Probably the key measure that I’d identify there has been the work that we’ve done in aviation. The International Air Freight Capacity scheme, now called the Maintaining International Air Connectivity scheme, has been absolutely central to it. I’ll acknowledge the previous Minister, the Hon Phil Twyford, who worked with the sector through the Ministry of Transport to get this scheme up and going last year. Investment of over $300 million, recognising that 80 percent to 90 percent of New Zealand’s airfreight usually goes in the belly hold beneath passengers—Mr Luxon’s aware of these dynamics—and that capacity dropped off when the international air passenger market was killed off in about March of last year. So there needed to be some intervention immediately to make sure that critical imports and exports did continue to flow.

We’ve recently announced a renewal of that scheme, an updating of its objectives, to make sure that it’s appropriate, and that has, I think, been a really critical part of ensuring that those supply chains continue to go—particularly things like pharmaceuticals, time-critical exports of seafood, fresh produce, for example, that you can’t put on ships, that has been getting in and out of our country and has been maintaining a very, very high level of our aviation imports and exports.

Mr O’Connor also asked, more generally, about the kind of measures that we can be putting in place to aid the economic recovery. This is critical. This goes a little bit to Mr Woodhouse’s question as well. While the New Zealand Upgrade Programme (NZUP) was announced before COVID-19 reared its ugly head, transport and the infrastructure spend more generally does have a really important part to play in the economic recovery. So we currently have around about 800 people working on NZUP programmes around the country at the moment. Those are good jobs, which are providing income to families and communities, supporting economic activity in regions that might have had job losses because of the impact of the pandemic, and we’ll continue to make those investments as we go along. I can think of individual projects—for example, like the Third Main in Auckland, employing around about 200 people on a critical project that will improve rail in Auckland—but we’re also stimulating the economy, keeping people in work.

Mr Woodhouse moved on to ask more specifically about the New Zealand Upgrade Programme, and he is correct in identifying that we are working through a baselining exercise as a part of the programme. I think that’s very appropriate. This is a very significant programme. It’s a $6.8 billion package of investments, and I think it is very important as we move through some of them—and some of the individual projects within that are extremely large; we’re talking many hundreds of millions of dollars in some cases—as we begin to get a clearer understanding of the issues, the scope, the geotechnical work, all of those sorts of things, that we just reassure ourselves that we’re managing the costs, that there’s clear understanding between the delivery agencies and the Government about the fundamental scope of what we are trying to achieve.

So that’s a process that we’re working through now. I think it’s a robust process. I think it’s a prudent process for us to work through, but I do note—and this is very, very important—that that hasn’t stymied the progress of the programme overall. We currently have 13 of those projects under way. There will be further announcements coming out pretty soon that will add to that list as well.

Hon Michael Woodhouse: When?

Hon MICHAEL WOOD: The member will just have to wait but I can assure him it won’t be too far to wait—but 13 projects already under way. So there is a significant amount of work—

Hon Michael Woodhouse: And they were the easy ones.

Hon MICHAEL WOOD: —employing 800 people at the moment. I just do make the point to the members who are asking those questions that we do have a recent example of a project in Transmission Gully where we’ve had to, sort of, tidy things up at the back-end because the initial work on the scoping, the geotech, making sure that budgets were aligned to the job that we were actually delivering wasn’t done at the front-end. I think it’s much better that we work through that process clearly now, and then we can give absolute clarity about the timings of those projects. But I remain very confined that we have excellent delivery. And we will be delivering on all of those core works that were identified in the programme.

Hon JULIE ANNE GENTER (Green): Tēnā koe, Mr Chair. Thank you very much, Minister, for your speech, and I just want to acknowledge the other members of the Transport and Infrastructure Committee.

I just wanted to raise a couple of things that came up at the annual review. Firstly, climate change and how it’s absolutely imperative that we make significant reductions in carbon emissions from transport over the next decade. That will mean a very, very different approach to infrastructure investment than what we had been planning in the past. Secondly, cost overruns on State highway projects. We discussed at the select committee how about 17 State highway projects had resulted in $1.1 billion of additional funding needing to go towards those projects. Those were all projects that were commenced under the last National Government. The consequence of those cost overruns in the State highways programme has been that there’s been a reduction in the funding available for sustainable transport options like active transport in our cities, public transport investment, and rail. And so that brings me, Minister, to this graph which was produced by the Infrastructure Commission. Maybe you’ve seen the briefing to the incoming Minister. I’ll just hold it above the captions so that people can see it at home.

What this shows is Waka Kotahi New Zealand Transport Agency’s forward capital commitments going back as far as 2015, going out to 2028. The red line is existing commitments for road. The vast majority of that will be within the new State highways or State highway improvements activity class. Then you see, from 2019, there was a big increase from the New Zealand upgrade. So, over time, there was no actual reduction in the committed funding for State highways. Unlike what the National Party was saying at the time, it was still very considerable. And now we’ve added on a few more billion for State highways. There’s a tiny green line here, a little sliver, and a tiny blue line, which indicates capital forward committed funding for rail.

Now, what concerns me about this graph is that about 90 percent of the funding has been committed, and it’s huge sums of money already, irrespective of any cost overruns that might happen in the future for State highways. And while I know people at home might be thinking, “Well, we have to use cars to get around, so we need improvements to our State highways.”, unfortunately, these few projects are extremely expensive. They don’t do anything to help most people get from home to work or wherever else they need to go. And the opportunity cost of these projects is we’re not significantly investing in public transport and rapid transit in rail to help people get around our towns and cities and around our country without having to rely on a car. So this seems to directly contradict all the evidence and advice that the Government’s been receiving.

I was at a transportation conference yesterday. Minister, you gave a great speech there. All the experts at that conference were saying that, to respond to climate change, we need to completely reverse investment in infrastructure to actually make it easier for people to get around without having to rely on a car. That means that 90 percent of the new CAPEX investment should be going into alternatives, not to really marginal improvements to State highways already in urban areas, where we know it will actually just result in more traffic and more car dependence.

So I’m interested to know, Minister, how are we going to change the pipeline to one that’s actually going to meet our requirements for a modern, efficient transportation system that reduces carbon emissions?

CHRIS BISHOP (National): Thank you very much, Mr Chair—just a couple of very quick comments and a couple of questions. The first is in relation to the New Zealand Upgrade Programme. The Minister now says that it’s very prudent we sit back—it’s a very large project; $6.8 billion—and we need to do baselining, which is, just as an aside, a verb that I hope does not catch on. I forget the precise grammatical term, or the syntactical term—whatever it is when you turn a noun into a verb. The Public Service love it, but I hope it does not catch on. It’s like “learnings”—anyway!

So we’re doing some “baselining”. What I would like to know is why that was not done in the first place, and why the Minister did not heed the warnings of Treasury when putting together the New Zealand Upgrade Programme in the first place, because he was told by Treasury, and I’ve seen the official advice to him that said, “There is a danger of cost overruns and we are worried that too much is being packed into the programme.” Right at the very last minute, a single item, which is the Wellington rail upgrades, was added—right at the very last minute—which is, maybe, a $300 million programme, which took the package right up to the limit of $6.8 billion. And, actually, the Minister was told to allow some contingency inside the programme, and that was not done. So I want to know why that was not done. Because all of these problems were foreseeable. In fact, Treasury told him that these problems may come down the line, and it was totally foreseeable that here we are in May 2021 worried about cost overruns—first point.

Second point is in relation to the Melling and the Ōtaki to North Levin projects. Will the Minister commit to at least $258 million being spent on the Melling Interchange programme, and will he commit to the project starting in 2022, as was promised throughout the entirety of 2020? Third question: will he commit to at least $817 million being spent on the Ōtaki to North Levin four-laning, which is one of the most dangerous sections of State highway in New Zealand? His own data shows that 135 deaths and serious injuries will be prevented over five years from the four-laning of that road. Will he commit to that project starting, as intended, in 2025?

Hon MICHAEL WOOD (Minister of Transport): I’ll just respond to two quite different contributions from the members in the debate just there. The first was the Hon Julie Anne Genter, and I thank her for her ongoing consistency of advocacy around the importance of transitioning our transport system to be a carbon-neutral transport system. It is one of the biggest challenges that we face as we try and move towards a pathway of net zero by 2050. The facts that have been put in front of us by the independent climate commission are pretty stark. The transport sector produces 47 percent of New Zealand’s carbon dioxide emissions and, regrettably, the trajectory in transport over the last 30 years has pretty much been the worst of any sectors. Emissions have increased by around about 90 percent when other sectors have had small increases or small decreases over that sector. That speaks to us having to really look at this sector in a very, very different way, and to some extend it goes to the debate that’s been playing out in questions that I’ve been fielding today.

I think what is enormously positive, in response to the member’s question, is that, from 1 July this year, we have a new Government policy statement on transport which is coming into play. Of course, this debate relates to the 2019-20 review, but, of course, that was developed during that period—and the member herself had a role in that—and it puts front and centre that one of the objectives of Government policy in transport is to focus on reducing our emissions. So here we have a policy framework in which Waka Kotahi will be explicitly tasked with developing up a transport network that takes heed of that particular direction from the Government. So I think that’s going to put us in a much better place than we have been in the past.

The member asked about cost overruns in the sector, particularly in relation to roading projects. This has been an ongoing feature of our transport system over a number of years. The member is correct in identifying a number of recent roading projects that we have experienced that with. Transmission Gully is one. The roads of national significance programme was originally costed at around about $10 billion, and it cost $12.5 billion. These projects have a long history of that. We are particularly experiencing that pressure now, as are other parts of the infrastructure sector. Some of it’s to do with increased costs to the sector because of the strong economic performance here in New Zealand but also, notably, in Australia, where often we’re competing for labour, materials, and that kind of thing. Some of it is additional costs around property acquisition, which is an important part of many of these projects. Obviously, that very significant lift that we’ve had in property costs—particularly in metro areas—in recent times has had an impact there as well, and that is something that we’re looking into.

But there is another part of it, and I go back to the member’s very striking and appropriately sized graph. Yes, there is a significant roading spend there. Part of that is on new State highway build. A part of it, I assume, is the maintenance spend, which is mixed in—

Hon Julie Anne Genter: No, it’s just capital.

Hon MICHAEL WOOD: In fact, that’s just the new road. The same issue applies to the maintenance spend as well, and one of the things that we’re experiencing there is that, actually, a lot of the good things that successive Governments have been building in—higher environmental standards, better safety standards—as well as the additional costs that we’re experiencing mean that, effectively, every 100 metres that we’re looking to build or maintain is costing us more. I think it is a real question for us, as Government and for the agency, and there’s some work that we have planned there to be delving into that, because we need to manage the cost as well as we can.

The member noted on the graph that the relative rail investment there is small. Of course, we have recently produced the New Zealand Rail Plan, which, for the very, very first time, sets us on the path to having a 10-year, strategic view of what the kind of investment should be in rail to build a resilient and reliable network. So it’s my expectation that, across the National Land Transport Fund and across Crown funding, we will see appropriate levels of investment going into rail. There’s also the significant progress that has been made—I note the member would like to see more—in terms of a good uplift in terms of our walking and cycling infrastructure. Again, we’re experiencing cost pressures there and, effectively, getting less delivered for the money that we might have thought three years ago. So that’s an area that will be of continued focus.

I can assure the member that I continue to work very closely with Waka Kotahi to ensure that we do have our funding applied that is within the funding bands for different categories. That is a mechanism that we have in place. We don’t have a mechanism whereby the Minister or the Government of the day pinpoints a particular number. We identify a range in the Government policy statement, and I’m very clear in my guidance to Waka Kotahi that they need to work with that, and I convey my sense of ambition in terms of active modes in public transport for them to be meeting those as well.

Mr Bishop asked a range of questions around the New Zealand Upgrade Programme baselining process, and I do note that that baselining process itself does fall a little bit outside the annual review process that’s in question, but I do like to be open and engaging, so I’ll indulge him on this occasion. Again, I’d just comment that I think this is an appropriate—[Interruption] No, the baselining process has occurred in the first part of 2021; so it is outside the 2019-20 annual review period. I think that’s just important to note, but I’m answering the question anyway.

I think it is an appropriate process for us to work through the nature of these significant infrastructure projects—not just these ones, but any—which tends to be that the true costs aren’t fully understood until significant design work is done, until geotechnical work is fully understood, and until matters of scope are carefully worked through with the professionals that we bring in and with the local communities that we work with. It’s only once those matters have been worked through that we tend to get to really, really accurate figures around costs, and I don’t think that’s unique to the New Zealand Upgrade Programme as well. Again, I’ll point the member back to previous examples that we have had of these significant transport projects where we’ve had those kinds of cost escalations; so I think a good baselining exercise helps us to get there.

In terms of how we intend to move forward with that programme, again, I repeat my comment that the Government remains committed to really good transport outcomes for the communities that we have identified within the programme. We’ve a lot of work that’s under way. There will be further announcements in the very near future, but I think it is appropriate and prudent that we work through the baselining exercise with the agencies so that, when we’ve done that, we can give absolute certainty to the communities that I know the member does want to see good transport outcomes for.

I do note that he was somewhat critical in his comments that those improvements to the Wellington rail network were included in the programme. I mean that, to me, was really important. It was about trying to have a more balanced portfolio of investments—

Chris Bishop: I agree.

Hon MICHAEL WOOD: Well, the member didn’t seem to be agreeing in his questioning. So we’re moving forward with that as well.

I think what the member does also need to be aware of is that in the estimates that the Government received at the beginning, they were priced at P50; so they’re reasonable estimates of cost that we were given as Government to inform that decision making. P50, for members who aren’t so familiar, means that, on average, we could expect the costs to fall above or below a little bit about 50 percent of the time. That was a reasonable basis for the decision making that occurred there, but the baselining is what we now do to get a really clear appreciation of the costs.

SIMON COURT (ACT): Thank you, Mr Chair—thank you for giving me this call this afternoon—and thank you, Minister, for coming to the Chamber today to answer some of the questions about this really, really important portfolio. We agree that there is a need for better public transport in New Zealand. Our road network is at capacity, or beyond capacity, in many towns and cities and in those vital connections between regions.

Now, this road network, which is managed by the transport agency Waka Kotahi, is already at capacity in Auckland. There are new suburbs in the north, the west, and the south of the city, which, unfortunately, despite having existing public transport services, like buses, are limited by two-lane road connections to new subdivisions built on land zoned for medium density and high density, and, yet, there are no new roading connections to these areas in the north, the north-west, the west, and the south of Auckland. Tradies, freight, and workers commuting from home to work, dropping the kids to school, are already suffering terrible delays—sometimes an hour. An hour and 20 minutes, it took me to travel from West Auckland to Papakura on Friday afternoon, alone. What this tells us is that, despite the need for housing and our acknowledgment that we need to grow up as well as out, there is no current capacity for growth.

I’ll give you an example. A few years ago, when I was a civil engineer managing projects in Auckland, we could have banked on four to five round trips a day between the CBD and the quarries and other suppliers that we relied on for building materials, to get to our project sites. Most recently, my colleagues in the industry tell me they’re banking on three loads a day, and sometimes only achieving two. So that is resulting in a huge loss of productivity to the manufacturing and the construction sector—and that’s above and beyond the congestion experienced by workers and families getting their kids to and from school and to and from places of work. It is definitely a priority to expand the existing transport network. That is why I would ask the Minister to consider delivering better public transport now—delivering free-flowing networks now.

So, when it comes to the light rail system that was put up under the previous Government, debated at length, and is now being brought back for consideration, with another steering group set up to develop a business case, can I ask the Minister to explain: what is the problem that the Government is trying to solve with light rail in Auckland? Is there a stronger or better case that light rail is actually a better option than increasing road capacity to free up roads from congestion and deliver better public transport through express buses and wheels on roads?

CHRISTOPHER LUXON (National—Botany): I just wanted to ask the Minister some questions about the second harbour crossing, in particular. Obviously, back in February, his colleague Minister Parker talked about, you know, it was a problem, the second crossing, it had to be fixed, but not for tomorrow. And then, obviously, the Minister received advice at the end of last year saying that further structural strengthening of the bridge isn’t possible. So, I guess, the question is: what is the real state of that asset? How does he think about that? What is the pace and urgency around getting a second harbour crossing under? And, if there are restrictions going forward, what, fundamentally, would be the effects on our supply chain and how would we manage that going forward? So I’m just interested in your views around this.

I’ve got a couple of others on the second harbour crossing, if you’d sooner I’d do it all in one go for you? The second thing is really around—so the first thing is around, sort of, urgency, priority of the asset, and strategic conditions—the business case. I noted in the announcement that you made with Mayor Goff, around the $31 billion Auckland Transport Alignment Project (ATAP) investment, that there is money in there, but, essentially, I think it’s about $80 million, from memory, just for business case and a bit of land acquisition. I guess the question also is that, you know, the business case has been in development, when you look at those ATAP documents, for the last two years, and how much longer do you think it will take to complete the business case for that?

And, I guess, the third question I really wanted to ask around it was: I note, in that investment package that you announced with Mayor Goff, there still is, you know, the SkyPath project funded in there, I think, to the tune of $240 million sitting in ATAP. But it does make the comment, and we have had comments about its being beleaguered by technical problems and significant complex and engineering issues around that. So the question around SkyPath is: is it happening or not happening? And if it is happening, why is it so, when we’ve got a bridge that’s structurally challenged currently? Why would we persist with doing that?

So, really, questions around urgency, questions around the business case, and questions around SkyPath.

Hon MICHAEL WOOD (Minister of Transport): Thanks to both Mr Court and Mr Luxon for their questions. I do want to acknowledge Mr Court—I don’t think we’ve ever had an ACT member stand up in the House and say, “I want more public transport now.” So, Mr Court, I salute you, and I agree with you on that front.

Look, this is a really important point, because, going to those questions around urban growth, the only way that we stop Auckland and our other significant, growing metro areas from choking on their own growth is through investment in high-quality, rapid public transport that moves large numbers of people around those metro areas quickly and efficiently. We simply cannot do it just by building roads, and for the member, who’s an engineer, it’s a question of spatial efficiency in areas in which there are significant constraints on the land that we have to use. There’s no way you can build another motorway down the middle of the Auckland isthmus—even if that didn’t induce demand and make the problem worse, but imagine it didn’t. We need to move large numbers of people very efficiently, very reliably, and very frequently, and that is the benefit that investment in high-quality rapid transit, of the kind that we’re talking about in respect of light rail, delivers—potentially, 300 to 400 people per unit every 10 minutes.

If I can give the member a live example of the kind of difference that we’re talking about between the spatial efficiency of the private motor vehicle and public transport, I had the pleasure last week of pressing the start button on “Dame Whina Cooper”, the tunnel-boring machine that’s creating the central rail link through the middle of Auckland. Now, that project, when it is completed, will bring the equivalent of 16 lanes of motor vehicle traffic in and out of the central city every single day.

Chris Bishop: Great project.

Hon MICHAEL WOOD: It is a great project, and I’m pleased that we have widespread agreement about that. But that just speaks to the massive efficiency benefits, the massive decongestion benefits, that we get out of serious investment in public transport. The truth is that over 50 years in Auckland and other metro areas, across a range of Governments, we haven’t put the investment into those modes that we should’ve, and that’s why we face the challenges that we face today. So, for our Government, those ongoing improvements will happen.

But I would say to the member that it is happening now. A couple of weeks ago, I was very pleased to open up the improvements to State Highway 20B, which is creating a dedicated transit corridor for buses to travel between the Puhinui interchange on the southern rail line and Auckland Airport—buses shuttling back and forth there, giving people a public transport option every 15 minutes or so. Next month, we’ll be opening up that Puhinui interchange, which will bring together bus and train services in that part of South Auckland, with further investment in the Auckland Transport Alignment Project (ATAP) going into extending it out towards Mr Luxon’s electorate out in Botany; we’re starting to do the futureproofing for that work. Over the course of the last year, we’ve opened at least one new station on the Northern Busway up at the Hibiscus Coast—that was late last year—to extend the benefits of the Northern Busway up to North Auckland.

So there is significant investment going into that public transport across Auckland. The Third Main line, a New Zealand upgrade project being delivered at this time—employing 200 people, as I said. The key benefit of that is that it will give us the capacity, it’ll free up that congested Southern Line, where, currently, commuter and freight trains are competing for this space. So that investment is going in now, and we’re starting to see the benefits flowing through. The good news I’ve got for Mr Court, and everyone, in fact, is when we put these investments in, people do use them: 50 percent of the journeys across the Auckland Harbour Bridge at peak are from people who use the Northern Busway, because it’s a public transport service that moves people efficiently, and we’re going to be building more of that under ATAP and in the years ahead.

Moving on to Mr Luxon’s questions, which primarily focused around the second harbour crossing and the state of the Auckland Harbour Bridge: look, the confidence that I want to give members—and it’s really, really important to say this, because I think that there was in some of the media and commentary a few months ago some statements made that might’ve caused people in Auckland concern and alarm—the Auckland Harbour Bridge, with appropriate maintenance, which we will always provide it with, is a very durable asset that has an almost limitless lifespan. So I just want to give people absolute assurance and confidence with that. There are few pieces of transport infrastructure in Auckland or New Zealand that are more strategic than that. I have made sure that I am well informed by Waka Kotahi about its current state, about its maintenance plans, and I’ve received that assurance from the agency. So we continue to put real focus on making sure that there’s an appropriate maintenance regime in place.

What we did hear from Waka Kotahi around the time of the annual review process is that the bridge has reached a point of its lifespan where it is difficult, effectively, to add additional weight to the structure. So we understand that, we work within that; we’re able to maintain the asset within those parameters. It does, as Mr Luxon gets into, raise questions then in terms of what the options are for us in terms of creating a great walking and cycling connection across the Waitematā. This is a real priority for our Government. We have got an investment of over $300 million within the New Zealand Upgrade Programme there. We want to see Aucklanders with the ability to safely walk or cycle across the harbour in the middle of the city. I think it will be massive in terms of the mode shift, giving people the opportunities to get on their bike or walk to commute to work. It’ll be a fantastic tourist asset as well. What I’ve just outlined does create challenges in the previous plans that have been put forward in terms of attaching a structure to the bridge. So what we are doing now is working through the options in terms of what that means, what the other alternatives are to make sure that we create that connection for Aucklanders. Again, that’s something that I hope to be able to speak to with a bit more specificity in the coming months.

There were a couple of other questions from Mr Luxon in respect of the harbour crossing. We have got our money allocated in ATAP, as he pointed out. He asked about the business case process. So the indicative business case was released towards the end of last year. We’re working closely with Auckland Council and Auckland Transport around that as well. It is my expectation that—well, work is carrying on at the moment—there’ll be further development of that in the course of this year. The business case work identifies that, in the first instance, what we look to do is make interim improvements to the North Shore busway to increase capacity to support more people to get across the bridge quickly and efficiently, and that then, secondly, we look to build up the business case around a second crossing, which will be public transport focused. That, within ATAP, is scheduled as a project for the 2030s, and we think that is appropriate timing given the amount of work that needs to go into this and given our understanding about the flows of traffic and the way that we can manage the current asset.

CHRIS BISHOP (National): Just very briefly, Mr Chair, I want to ask the Minister about his comments in relation to the baselining process, and in relation to the contingency. The information that I have received says that in the original $6.8 billion programme for the New Zealand upgrade, there was a $46 million only contingency—I’m referring to emails between the Ministry of Transport and Treasury here. I make it a $46 million contingency, and we’ve got $6.8 billion in total. On 14 January, there’s a “the Minister has just asked for additional Wellington rail infrastructure package”, so the contingency is “pretty much gone”. And on 23 January, bearing in mind that the package was announced five days later, the attached shows that a further $47 million worth of projects have been added to the Canterbury package by Minister Twyford’s office”. The contingency across the package is now just $47 million. Why did the Government allow just $47 million in a $6.8 billion programme, and why are we now expected to believe—why do we now think it’s reasonable for us to tolerate a baselining process when the Government should have done that when they put the package together in the first place?

Hon MICHAEL WOOD (Minister of Transport): The member simply speaks to the tensions and trade-offs that occur within any significant infrastructure package. I mean, the member, in his comments earlier, sort of went back and forth a bit in terms of the Wellington rail package, and he’s confirmed that in fact he is in favour of it. That is something that is being delivered as a result of the New Zealand upgrade package. You face choices, within a large package like this, between what you allocate between projects, between what you allocate between contingencies, based on the information that you have at the time.

As the member will be aware, while I’m responsible for it, I wasn’t the Minister at the time, so I’m unable to give a detailed account of those discussions and how they played out at the time. But I stand by the fact that as a result of that package, we’re delivering fantastic upgrades to the Wellington rail network, which is going to improve the commuter performance. I stand by the comment I made earlier that we remain committed to investment in all of those key routes to improve the transport outcomes for New Zealanders.

CHRISTOPHER LUXON (National—Botany): My question now is around ports, and particularly the Port of Auckland, because I think, irrespective of the global challenges we’re seeing on the supply chain side around the world, there’s no doubt that we’ve got pretty significant issues at the Port of Auckland, and we’re seeing it with respect to automation, projects not hitting capacity, and we’ve got serious safety issues there. We’ve got freight costs that are two to four times and now exporters/importers being hit with more uniform charges as they’re containering from Tauranga to Auckland. And we’ve obviously got ships anchored outside of ports, and that’s manifesting itself where businesses are actually importing goods that they need for manufacturing, and they’re having to carry a lot of inventory. Likewise, they hold a lot of finished stock inventory, and inventory is cash in a business, so it’s impacting on cash flows really very strongly. It’s also leading to the loss of some export customers for some businesses I’ve been talking to as well, and I’m sure the Minister has as well.

So, I guess, I have two questions. Can he tell us what’s happening with the Port of Auckland, and where it’s really going? And a broader question: what is the strategic view around ports and what programme of work does he have under way to think about a ports strategy across the country?

Hon MICHAEL WOOD (Minister of Transport): I thank Mr Luxon for those questions. New Zealand is experiencing some of the downstream effects of the economic dislocation created by COVID at the moment. Ports all around the world are experiencing significant disruption and delays. The most recent numbers I saw, which were, admittedly, about a month ago, showed that the index of port reliability in the Asia-Pacific region was at about 13 percent. In other words, vessels are arriving at port around the time we would expect them to about 13 percent of the time, and this has led to significant backlogs, shortages, and supply chain challenges all around the world, and we are obviously not immune to that. In fact, in some respects, we are more exposed to it than many other countries because of our geographical location.

So we’re having to work through that, and I do want to acknowledge here the work the Ministry of Transport have been doing. They’ve been playing a really critical role in trying to bring together ports and other players across the supply chain to make sure that information is being shared as much as possible, to make sure that we have as much alignment as possible, and to make sure that we look at the kind of mitigations that might be able to be put in place to smooth things over. We cannot fix that fundamental international problem in terms of choked-up international shipping lines, but we can try and make sure that people are working together as closely as possible here. That takes some work given that, at the moment, if you look across our supply chains, we have ports who are by statute required to act commercially and, in effect, be in competition with one another, and you have commercial relationships with other players in the supply chain. So it isn’t necessarily an extant overarching strategy that requires them to work together from a sort of “New Zealand Inc.” perspective around these things. But I think everyone’s been working with as much good faith as possible.

Some of things we’ve done, for example, have been to work really closely with KiwiRail to make sure that they lift their capacity as much as possible. They’ve recently upped further the service they’re providing to the Port of Tauranga, for example, to get more of those containers moved off the docks at the Port of Tauranga. This does bring to light the broader issues around the supply chain. So our policy, as expressed at the last election, which I intend to move forward with, is to be developing a proper freight strategy for our country. I think the challenges we’ve faced over the last year revealed that we need that. We need that particularly in the upper North Island, where there are a range of questions around ports and how the supply chain works together. But more broadly, we need to build up a supply chain that is more resilient than the one we have at the moment, and I’m confident that piece of work will help us to get there.

MATT DOOCEY (Senior Whip—National): Point of order, Mr Chair. It was agreed this theme would finish at 3.50 p.m.

CHAIRPERSON (Adrian Rurawhe): I was told 50 minutes, which is another five minutes. It’s up to the members of the committee. If you no longer want to speak, then just stop speaking.

SIMON COURT (ACT): Very briefly, to the Minister, thank you for describing the utopia of public transport opportunities, initiatives, and what’s been delivered in other parts of Auckland. The express busway to the North Shore—as an engineer, many years ago, I was involved in delivering one of those stations, so I understand how important it has become to the people of the North Shore, how they’ve come to grow to rely on it, but also that it is at capacity. Again, in South Auckland, the connection of Puhinui, from heavy rail to the airport, shows you what you can do when you take a flexible approach—with a limited amount of budget and having some limited targets, how much functionality and what a great level of service you can offer.

So it must be salt in the wounds for the people of the west of Auckland and the north-west, who still rely on roads last upgraded in the 1980s—from Westgate in Auckland to Kūmeu, Huapai, Helensville, where hundreds of thousands of people are scheduled to build homes and live—and already sitting in heavily congested roads on weekdays and even weekends, where freight moving between industrial areas, commercial areas, and other parts of the country is held up for 20, 30, 40 additional minutes at peak time. There’s also severe constraints on freight movement and people movement during the day. So my question to the Minister is—firstly, thank you for what your Government, Auckland Transport, and previous Governments have delivered to Auckland. But the missing part is, what is going to be delivered for the people of the west and the north-west of Auckland, who feel short-changed? Thank you.

Hon MICHAEL WOOD (Minister of Transport): The member is correct in identifying the north-west as a significant growth area. Ministers, across portfolios, are working together closely to make sure that we’re aligning our urban development, housing, transport strategy, and investments in the coming years to meet the change the member identifies, which, really, is a failure of planning over a good 20 years or so now. I can give the member some comfort: there is significant roading investment which is planned around Waimauku and Brigham Creek, which is currently working its way through the consenting process. But the long-term story has to be getting high quality public transport up to that part of the world. There is work that’s under way there now to get interim busway improvements up to Westgate. That work is rolling out as part of our COVID response funding, and we’ll make progress on that by next year. I want to see us looking as hard as we can to get progress as quickly as we can to be extending high-quality public transport outcomes up to the communities in Kūmeu. That’s something I’ve been asking questions of Auckland Transport and Waka Kotahi.

Social Development and Employment

CHAIRPERSON (Adrian Rurawhe): We now come to the debate on social services and employment, and I welcome the Hon Carmel Sepuloni to the chair. This will be led off by the chair of the Social Services and Community Committee.

ANGIE WARREN-CLARK (Chairperson of the Social Services and Community Committee): Thank you, Mr Chair. It’s my pleasure as the chair of the Social Services and Community Committee to commence the debate for this portion of the annual review 2019/20. The Social Services and Community Committee covers a large range of areas: social development; social housing; income support; women, children, young people; the disability sector; seniors; Pacific peoples; ethnic communities; art, culture, and heritage; sports and recreation; broadcasting; and the voluntary sector. Our consideration was grouped into sectors, and reports we’ve written combine most sectors. We invited and had participation by a large number of Ministers, creating a thorough review process. I want to thank the Ministers for their participation in the review process. Select committee scrutiny is a foundation of our democracy and the accountability of the executive. I also thank the Office of the Auditor-General; officials from the many ministries; our Parliamentary Service staff for organising these logistics and their report writing; and, finally, to all the members who make up our select committee, and those members who sub on also.

This debate will cover the subject of social development and employment with the Minister, the Hon Carmel Sepuloni. As part of Budget 2019, we heard that the Government invested $1.3 billion into the Ministry of Social Development (MSD) over four years, having built on the $5.5 billion Families Package. There are approximately 8,000 staff at the MSD, who, in a typical year, provide direct support to between 1 million to 1.5 million New Zealanders and their families. There are approximately 180 offices across New Zealand. We heard main benefits are now indexed to average wage growth, abatement settings were changed, and section 192 of the Social Security Act was repealed.

The Minister told us about the investment into front-line staff and their strong focus on moving people into employment. The ministry spoke about the expansion of work for the staff, due to COVID-19 hardship, to support businesses and workers. Support included rolling out the wage subsidy to protect 1.7 million jobs or incomes; the increased income support package of $2.8 billion, including a $25 increase in base benefits; double winter warmth payment and broadened eligibility for in-work tax credits; removal of stand-down periods; funding in-home childcare for essential workers; an increase in special needs grants; and $27 million for community social services to respond to COVID-19.

We asked about feedback from employers and about investigations regarding wage subsidies. We heard about changes implemented as a result of this feedback. COVID-19 impacts on employment were a focus, but we were also interested in jobseeker support—actual and projected numbers, plus exits; Flexi-wage, including delays to the extension of this programme; He Poutama Rangitahi, He Poutama Taitamariki, support for work, Mana in Mahi programmes—and those numbers were canvassed.

Support for victims and perpetrators of family and sexual violence and the appropriation for community support services—we heard and asked about the Minister’s Whānau Resilience programme. We sought an update on progress on the recommendation of the Welfare Expert Advisory Group. The Auditor-General was satisfied that the information audited fairly represented the ministry’s activities. However, a non-standard audit report was issued due to the effect of COVID-19. The overall assessment remains unchanged and good. Thank you, Mr Chair, we look forward to hearing from the Minister.

Hon CARMEL SEPULONI (Minister for Social Development and Employment): [Uses sign language] Good afternoon. It’s New Zealand Sign Language Week. Can I just start by saying that I won’t speak for long because I do respect the fact that many people in the Chamber will have questions. But I do just want to start with a few opening remarks, and that is that there was significant investment at Budget 2019, 2020, where we invested in some really important things. We indexed benefits to wages, we changed the abatement settings, and we also removed section 192 of the Social Security Act so that sole parents who were unable to name the other parent of the child would not be penalised any further. Those are significant changes in themselves, but, on top of that, we all know that last year we were hit by COVID. My opening statement is just to recognise the work of the Ministry of Social Development (MSD) over the course of that year. The programme that we had in front of us before COVID hit was already immense, but the MSD staff showed their agility and their ability to be able to respond effectively to New Zealanders during a crisis, and for that I am very proud. I’ll stop there and I’ll take questions from the Chamber.

Hon LOUISE UPSTON (National—Taupō): Thank you, Mr Chair. I’ve got a series of questions and I want to start, first of all, with benefit statistics and numbers, but, actually, recognising that for every one of these numbers there is a person, a family, who are struggling to get by, and if they want to be in work and aren’t, it is particularly challenging for them.

So if we look at the time in question, compared back to 2017, we’ve seen job seeker numbers increasing steadily each year, now peaking at just under 200,000. One of the questions to the Minister is: why is she saying that if the unemployment rate is the same as it was four years ago, at 4.7 percent, are there 75,000 more people on job seeker benefit? That is my first question.

The second question is probably the one that concerns me more, though, the fact that there are, again, compared to September 2017, 50,000 more people on job seeker who have been there for more than 12 months. So I want to know why that is. I want to know what has been done by the Ministry of Social Development to mitigate the harm from long-term welfare dependency. As I say, that’s 50,000—it’s a big number—but, actually, for every one of those numbers, there is an individual or a family that is doing it tough.

I’ve got a series of questions on hardship, so I’ll start there.

Hon CARMEL SEPULONI (Minister for Social Development and Employment): I’ll start with the benefit numbers and, also, the unemployment rate. I think it is important to note that the unemployment rate that we currently have is 4.7 percent, but when we were first hit with COVID, Treasury was forecasting that we would experience an 8 percent unemployment rate, and some economists outside of Treasury were predicting up to 10 percent. I think that it is an amazing achievement for us, as a country, that we have managed to keep our unemployment rate as low as it is, despite being hit with a pandemic.

With regards to actual benefit numbers, at its worst, in terms of forecasts for what the benefit numbers would be, we were initially told we could experience benefit numbers of 490,000 New Zealanders. That, as you can imagine, scared all of us, and, I think, was something that was quite frightening for the whole country. We haven’t got there. At the peak so far, we, I think, in January, reached about 390,000. And now, the most recent stats that I’ve seen had us at about 360,000. Now, does that mean that we are in any way relaxed about the fact that we still have New Zealanders on benefit? No, not at all.

But I do want to reflect back and say that one of the things that I came across when I was made the Minister for Social Development and Employment was that, actually, what we had seen over the course of a period of years was the decline in front-line work-focused case management. So much of the front-line focus had shifted towards hardship—this is prior to us getting into Government—and the levels of staffing had not increased, which meant that there was a decline in focus on work focus for the clients that were coming to the Ministry for Social Development (MSD). So one of the measures that we did put in place in 2019 was an increase in front-line work-focused case managers. We saw that begin to pay off immediately. We announced that. That came into place almost straight away. In July 2019, we started to see an increase in exits off benefit into employment, and that has continued. It is not just MSD, but I will acknowledge the staff that have been working at the front line. In the last quarter we’ve actually seen the most number of exits off benefit into employment than what we have seen since 1996, when electronic records started to be kept—so, again, a pretty amazing achievement, given that we are still in the midst of a global pandemic.

The member asked how I reconcile a 4.7 percent unemployment rate with 360,000 people on benefit. And, as she rightly pointed out, that is more than what were on benefit in 2017—much of it due to, as I’ve already said, the pandemic. We do need to keep in mind that the unemployment rate is measured by the household labour force survey, and benefit numbers are benefit numbers—they are an indication of who are on benefit. So sometimes they do seem out of sync. The thing that I take great heart in is that we saw a reduction in the unemployment rate through the household labour force survey, down to 4.7 percent, as well as seeing, over the same period, a reduction in the number of people that were on benefit. We always say and continue to think that there is definitely more to do in this space, but I do recognise that, you know, we are actually doing a relatively good job in supporting people into employment, alongside supporting a large number of New Zealanders into upskilling and training opportunities, into workforces where there is meaningful and sustainable employment, and where, actually, they have the potential to earn relatively good money compared to, perhaps, some of the work that they might have been doing prior to getting the upskilling and training that we have on offer now.

RICARDO MENÉNDEZ MARCH (Green): Kia ora, Madam Chair. It’s a privilege to stand here today to put some questions for the Minister on issues around our welfare system and particularly the interface that our homeless community faces with Work and Income. For the majority of the period that we’re reviewing, I was not a member of Parliament. I was actually at the phone lines working with our homeless community and people on the benefit, helping them access their entitlements at Work and Income.

One of the policies that I’m seeking some comment and answers on is the decision to charge our people in emergency housing 25 percent of their weekly income. I have been really concerned about the decision on this, seeing as I agree with the Ministry of Social Development’s advice around some of the disadvantages of this policy, which risks creating significant hardship on people, and the fact that no evidence has been able to be provided on the fact that not charging 25 percent of people’s income may actually incentivise our homeless community to stay in emergency housing. I don’t believe anyone wants to be in a motel, wants to be in emergency housing, and the people who do have to be in emergency housing, they don’t do it because they want to or they don’t do it because it’s an easy option. They do it because they don’t have access to a home to live in.

So my question is around the decision, and particularly around evidence that the Minister had when making this decision that people were actually staying in emergency housing because it was free of cost, and whether the Minister considers that this system of charging 25 percent of people’s income, who stay in emergency accommodation, ultimately results in a sort of weird, vicious cycle where people are having to go back to Work and Income to get a hardship grant due to this policy.

This sort of hardship could be just avoided by supporting people on the housing waiting list, by supporting them to find alternative accommodation, if that’s what they need, without creating the hardship that this policy has created. I’m interested in the evidence and the rationale behind the decision made by the Minister that this was creating a perverse incentive for people to stay in a motel when the people who are there didn’t cause the housing crisis.

Hon CARMEL SEPULONI (Minister for Social Development and Employment): Thank you to the member for the question, and I acknowledge the work that that member was doing prior to becoming a member of Parliament. We did make the announcement about the co-payment for people that are in emergency accommodation, I think, quite early on last year. I think the intention was actually to bring it into force around mid-year, but because of COVID and the fact that we had quite a lot as an agency going on, that was delayed until November.

That decision came about from conversations mostly with community housing providers, as well as insights from Ministry of Social Development (MSD) staff who were working at the front line with housing, but mostly from the community housing providers themselves, who told us that they were seeing a reluctance in some situations for people to move from emergency housing into transitional or into public housing.

Recognising that with transitional housing and public housing, there was an expectation that people will pay 25 percent of their income towards the accommodation that they are in, then we thought, with those insights that were given to us and the fact that that is the expectation for transitional and for public housing, that for fairness, for consistency, and in light of what we were told, it made sense to introduce the co-payment.

Twenty-five percent, I recognise, for people that are on low incomes, is still money out of their weekly income, and I recognise there are some still that need to access hardship payments in some instances for a number of reasons. Sometimes it’s because of debt. It’s a range of different reasons. MSD is still able to provide hardship payments in those situations and still does. So I understand that that member doesn’t support the decision that we made as a Government, but, as Minister, I stand by that decision and there is no intention to change that policy decision.

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Chair. I want to go back to one of the questions I asked previously that I didn’t get an answer to, and that was the 50,000 additional people on job seeker who have been there for more than 12 months. As we know, the evidence tell us that the longer you’re out of work the harder it is to reconnect. So I do want an answer on that.

I’m also interested in why the Minister thinks, with the number that exited into work this quarter, that’s good news when 50 percent more than that—so 46,000 instead of 32,000—actually were new benefit grants. So it’s actually not going in the right direction.

In terms of comments that she made around the work-focused case management, I’d like to know from the Minister how much time is being spent by front-line staff on managing hardship requests versus active employment support; how many employment engagements each job seeker is now receiving; and, with initiatives like the shovel-ready jobs, where the Government has a focus on creating jobs—they come in at about $220,000 per job—what the Minister believes is the best value for money spending on employment initiatives, and why?

Hon CARMEL SEPULONI (Minister for Social Development and Employment): I think there were about six questions in there, so, if the member can forgive me if I didn’t capture all of them, I will attempt to answer them and then, if I’ve missed anything, she’s absolutely able to stand and re-ask the question.

People on benefit for more than 12 months: I guess, again, reflecting on the past year—and it has been over a year now since we were first hit with the pandemic—we have been in a period where the labour market has been tighter than what we would have anticipated, although I think that the size to date, in terms of vacancies that are being advertised for jobs, is very heartening. I think, at Seek, they’ve had a 22 percent increase last month, and TradeMe was a 50 percent increase—or it could be the other way round. But, regardless, it shows that there is business confidence and that businesses are actually doing much better than anticipated. I will reflect back and just say that I think the wage subsidy had a lot to do with that, given that it supported around 1.8 million jobs and meant that so many businesses were able to continue with that support. So many New Zealanders were able to continue to get paid despite the fact that they couldn’t work, and didn’t end up coming back on benefit. So I think the pandemic may have a role to play given that the labour market over the course of the last year hasn’t necessarily been as strong as what we would have hoped pre-pandemic.

Also, in terms of shovel-ready projects, I will say that there is no doubt that they have had a role to play with respect to the number of jobs that are available to New Zealanders. We’ve seen a large number of New Zealanders pivot away from areas where there was a reduction in employment opportunities—whether that be tourism, retail, hospitality—towards other industries, particularly in construction. And I think, just looking at the Apprenticeship Boost scheme that we started, already 21,000 apprentice accounts have been created, which stands us in good stead moving forward in an area where we had workforce shortages prior to COVID, and in an area, actually, that, when we were going through the global financial crisis, there was a lack of investment. Hence why we ended up with the workforce shortages that we did. We are focused on trying to support New Zealanders into sustainable employment, and so, when we talk about New Zealanders who find themselves on benefit, it is about supporting them into employment but also supporting them into upskilling and training if that is the better option for them and they do need to pivot into areas where there are more jobs available. So I don’t resile from the fact that that’s a good idea, and, actually, I think that’s paying off.

The member also mentioned numbers around those who have come off benefit and gone into work versus those that have gone on benefit. We need to keep in mind that I’m only talking about the numbers of New Zealanders who have gone off benefit into employment. A large number of New Zealanders actually exit benefit for other reasons, whether it’s that their relationship status changes or some other life context changes for them where they no longer need a benefit or are no longer eligible for a benefit. So, on top of the 30,000-plus exits that we saw in the last quarter, there were also thousands of New Zealanders who would have exited benefit for other reasons. So we need to keep that in mind.

To just respond to the point that the member is trying to make, though, which is that she’s trying to say that the number of people exiting benefit is less than those that have come on, well, that doesn’t ring true when you look at the overall numbers, which were, in January, 390,000 and now sit at 360,000. So we have seen an actual reduction of New Zealanders on benefit, and the majority of those have exited off benefit because of employment.

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Chair. I want to come back to the question I asked about value for money on employment initiatives, and I want to know if the Minister thinks that $220,000 for a shovel-ready job is good value for money; and, if not, what is?

I also want to know, around employment initiatives—Government initiatives—and taxpayer spending, how many jobs will be created, have been created; and, if not, why not?

Hon CARMEL SEPULONI (Minister for Social Development and Employment): The premise of the member’s question around $220,000 for a shovel-ready job I would question. So I don’t quite know how to respond to that, given that I’m not quite sure where that figure comes from.

With regards to the employment initiatives that we have in place, the vast majority of what the Ministry of Social Development (MSD) does is they create the supports. We put the supports in place so that we can support New Zealanders into employment. Alongside that, we form the industry partnerships with different sectors to ensure that where there is an opportunity for job creation, those industries and sectors are supported by MSD’s products and also, then, workforce—because of the clients we have that want to go into work—to be able to fill the positions when those opportunities are created.

So MSD is not necessarily about creating the jobs. They are about working with people so that they are work-ready, so they have the skills, so they get access to the training, and so they get access in some instances to things like licences, whether that be a licence so they can get to work, a forklift licence so they can drive a forklift, or a truck licence, in some instances. So it’s about supporting people to be work-ready, to take up the positions that are there. It’s not about MSD creating the jobs.

RICARDO MENÉNDEZ MARCH (Green): Kia ora, Madam Chair. So I just want to ask a follow-up question to my one on emergency housing and the evidence—or, I guess, anecdotal commentary by transitional housing providers—to justify charging our people who are homeless. I just wanted to ask what feedback was given by transitional housing providers in the context of the fact that Work and Income already puts obligations on our people who are homeless to—each time they want to roll over emergency housing, they have to provide evidence that they’re looking for alternative accommodation, and people in emergency housing don’t have any sort of rights or tenure in general. It’s a very precarious place. So, you know, I would even say that calling it “emergency housing” is not fully accurate, seeing as people don’t have security. So this idea that we’re bringing emergency housing in line with transitional housing by adding a cost makes no sense when the conditions are so different. The Ministry of Social Development in the annual review acknowledge that they don’t proactively verify the suitability of emergency housing; only when a beneficiary has sort of said that there’s concerns, maybe they’ll go back and check. So I guess I’m interested in the evidence provided by transitional housing providers that this policy is justified and is not simply putting our homeless people into more hardship.

Hon CARMEL SEPULONI (Minister for Social Development and Employment): I think it’s very fair to say that no one in this House wants to see anyone in emergency accommodation. The fact that we don’t have the secure, stable housing for New Zealanders that we need at the moment is a reality, given that there’s been an under-investment in housing for generations. So we are in the unenviable position of needing to put people into emergency accommodation, and, perhaps, rather than calling it “emergency housing”, we should just call it “emergency accommodation”. So I take that point from the member.

As I said, these were conversations that were held. It was feedback from the community sector. They themselves were seeing that at some points it was hard to move people from emergency accommodation into transitional public because of this step up from having to pay nothing to then having to pay 25 percent. So it was about being able to support people to move through into more stable accommodation, but also consistency. There is work under way in the emergency housing space that the Minister of homelessness is also involved in. You know, the reality for front-line Ministry of Social Development staff is that it’s not always easy to access emergency housing options, but recognising that where we come across emergency accommodation—sorry, options that are not fit for purpose or deemed by the clients to be unsafe, then we should stop using them. I’ve made that very clear and we’ve actually moved in that direction, and, also, we’ll move in that direction in other parts of the country.

What I will say about Rotorua is that they are different to many parts of the country in that they have many options with regards to motel accommodation, so that shift can occur. In other places, they don’t necessarily have emergency accommodation options or they only have limited emergency accommodation options. So do we need to continue to look at how we can do this better? Yes, but the ideal is that we get to the point where we actually have enough stable and secure housing for New Zealanders, which is why, as a Government, we have committed to building 18,400 new places within four years, and we’re on track to deliver on that.

Hon LOUISE UPSTON (National—Taupō): Thank you, Madam Chair. I want to pick up where the Minister in the chair, Carmel Sepuloni, just left off, with her 18,000 houses in four years’ time, and just look at some of the numbers in terms of the 350,000 households at the end of June last year—it’ll be a lot more than that who were being supported by the accommodation supplement—now the 23,000, on the social housing register. Before we talk about those in the worst circumstances, the 8,500 in motels, of which 4,000 are children—that’s clearly a gap. I want to know, given that emergency housing special needs grants—the eligibility was extended from seven days, because the original intention was that they were used for severe cases for up to seven days. That’s been extended to three weeks. How many people are now staying beyond the three weeks they are eligible for? The longest, when I asked at the annual review, was two years. I want to know what it is now, and I want to know how many properties, how many motels, the Ministry of Social Development (MSD) have stopped using because they are substandard, and what steps MSD is taking so that more families and more children are being prevented from the harm they are exposed to each and every day they stay in these places.

Hon CARMEL SEPULONI (Minister for Social Development and Employment): There were a lot of questions in there from that member, and I know that we’re running out of time, but I will do my best. With regards to those that are in emergency accommodation, the support that is in place, we did move to actually instigate a few different roles so that we can support people better that are in emergency accommodation, navigators being one. Many of the people that are in emergency accommodation need support to access a range of services. It may be out of the scope of what MSD is able to provide, whether that be mental health support, whether that be family violence support, whether that be some other type of health support. So the navigator positions that we instigated and funded are our honest attempt to be able to provide the wraparound support that people need.

With regards to the length of time that people are in emergency accommodation, the majority of people are out within six months. We did extend the grant from one week to three weeks, and that was due to the fact that it was putting undue pressure on families to try and source accommodation in some instances where it was very difficult to source accommodation, because of the lack of supply but also, in some instances, because there are other barriers to them being able to get into more stable and secure accommodation—private rentals, perhaps—things like credit, things like—particularly that, but other things as well that might be a barrier to them being able to get into long-term accommodation. So it made sense to extend it to three weeks so that at least these families and individuals that were in emergency accommodation had time to be able to actually sort out the other things that might be happening in their lives, as well as look fairly and reasonably for accommodation that might be available to them.

There are some outliers that are in emergency accommodation for longer than the six months or less that I said earlier. Usually, those are very complex cases. Those cases existed under the previous National Government as well. Sometimes, it is hard to house people that perhaps have mental health issues, perhaps have drug and addiction problems or other sorts of complex challenges that make it hard to get them into longer-term accommodation. I want to make it clear that not everyone that’s in emergency accommodation has those same challenges. There are some people who have just, for whatever reason—they may have lost their private market rental because it’s been sold and then have actively been looking for accommodation and not been able to find it, and so, therefore, they end up in MSD looking for emergency accommodation for an interim period until they are able to find it. So there are a range of complex cases that we’re dealing with in emergency accommodation.

But the point that I want to end with is that no one wants to see people in emergency accommodation, but until we are able to meet the demand with respect to housing—and we are on track to deliver on our commitment to housing that we set out—people do need to have some sort of accommodation. The reality for us is that we would much rather see people in emergency accommodation, in the likes of motels, than we would want to see them on the streets or living in their cars.

Hon Louise Upston: Madam Chair.

CHAIRPERSON (Hon Jenny Salesa): Time is up for this part of the debate, Hon Louise Upston.

Economic and Regional Development and Tourism

CHAIRPERSON (Hon Jenny Salesa): We move now to economic and regional development and tourism, and I call on the chair of the Economic Development, Science and Innovation Committee, Jamie Strange.

JAMIE STRANGE (Chairperson of the Economic Development, Science and Innovation Committee): Thank you, Madam Chair. I appreciate the opportunity to make a contribution in this debate as the chair of the Economic Development, Science and Innovation Committee. I’d like to acknowledge the other members of the committee from both sides of the House and I look forward to the contributions over the next 30 minutes.

In my speech here today, I’m going to give a little bit of a summary in terms of what we heard as a committee, in terms of the economic development, regional development, and tourism areas. I’ll split my speech into two parts. I’ll first talk about the economic development and regional development, and then I’ll move on to the tourism aspect.

We heard from the Provincial Growth Fund around the $3 billion that has been invested in the regions of New Zealand. The focus of this fund has been around job creation. And when I say the “regions of New Zealand”, it excludes Auckland, Wellington, and Christchurch. But for any other region this fund has been has been available and we’ve seen proposals come to the Provincial Growth Fund or the Provincial Development Unit, which is the Ministry of Business, Innovation and Employment unit from a range of regions around New Zealand. A diverse range of proposals and investments have been made. We heard that these investments have been well received by people living in those regional areas. Like I said before, the key aspect is around job creation, and we have seen a number of jobs created in this area.

On the regional development aspect, we also heard from Crown Infrastructure Partners and particularly we heard in terms of the response to COVID-19, the Infrastructure Reference Group, often called IRG. Now, this group was set up to distribute a $3 billion fund—actually, not to distribute, but basically to call for submissions for this $3 billion fund, and they received 1,924 proposals. Now, that was a total of around $30 billion, which was more than was allocated, so they worked hard to bring those proposals down to a smaller number of projects, around 150 projects, which the Crown Infrastructure Partners then submitted to Ministers, and Ministers decided on some projects which were construction ready. They were often called shovel-ready. And those projects were funded. Again, this has really helped with our recovery from COVID-19.

Nicola Willis: What’s your question?

JAMIE STRANGE: I’m just giving an overview, like I said, as the chair of the committee, but I will have a question; I appreciate your interest. So, just to summarise those two aspects, the Provincial Growth Fund and the Crown Infrastructure Partners have made significant investments into the regions of New Zealand, and that has helped a lot with our recovery from COVID.

The second aspect, before I move into my question, is around the tourism sector. Now, we heard that COVID-19 has had a huge negative impact on the tourism sector. It’s been well canvassed. It wasn’t news to anyone in the committee. The reality is when you close the borders to international tourists, it’s going to have a huge impact, and I acknowledge some of the members in the House here today who are members in regions where they’ve particularly been hit hard.

Basically what Tourism New Zealand did was they pivoted to a campaign called “Do something, New Zealand”. That campaign was based around encouraging New Zealanders to basically be tourists in their own country. Now, this campaign was very successful and the reality is that with the borders closed, there was around $8 billion that’s normally spent overseas by New Zealanders travelling as tourists overseas that was available to be spent here in New Zealand. And that made a significant impact on tourism operators in New Zealand. I do acknowledge that operators which were completely reliant on overseas tourism weren’t able to pivot certainly had a challenging time.

I certainly could go on, but I’ll ask a question of the Minister. So my question is around the tourism sector. My question to the Minister is: how has the Government supported the tourism sector over the past year and what work is it now progressing to promote sustainable tourism into the future? Certainly COVID-19 has given an opportunity for something of a reset around sustainable tourism. So I’ll leave that with the Minister, thank you.

Hon STUART NASH (Minister of Tourism): Thank you very much, Madam Chair. Thank you very much, chair of the select committee, Jamie Strange.

One thing I will say is that when the Prime Minister talks about the team of 5 million, how we’ve done so well, I absolutely acknowledge that there are some members of that team that have done it a lot harder than others—a number of those members of the tourism sector and the hospitality sector. We recognised this very early on, and one of the first things we did is we got a $400 million package out to the sector in order to protect our strategic businesses and the businesses that we thought were pivotal to our international brand and the ones that we wanted to really come back strong when the borders open.

The main fund around that was the Strategic Tourism Assets Protection Programme. A lot of money went out there, but there are others as well. Our regional tourist organisations—these are the organisations embedded in our regions across the country that do a fantastic job of actually marketing our regions to the rest of the country. As the chair of the select committee highlighted, Tourism New Zealand came up with this fantastic—they pivoted, because Tourism New Zealand are actually our global tourist marketers. They’re the ones that go out there and promote the brand and get tourists to come into our country. They don’t have a domestic focus. But what we did is we actually changed the rules, which we had to do, and gave them a domestic focus and funded them to do so. They came up with this fantastic programme, which was “Do something new, New Zealand.” And we all did. I mean, I went down to the West Coast. I hope a whole lot of people went to Hawke’s Bay.

There were actually some regions—Northland, actually, is a classic case. Northland actually did better—fantastic region that it is—last year, if you look at the data, than it did pre-COVID. The reason for that is, well, a couple of things that we recognise is that if it’s in three hours’ drive, Kiwis visit there. Hanmer Springs did incredibly well. Stewart Island did brilliantly. I mean, you talk pre-COVID, how many people went to Stewart Island? Not that many at all. Now everyone knows someone who went down to Stewart Island. And if you didn’t get down to Stewart Island, it might have been because you couldn’t get a room at any of the hotels and the backpackers down there. So it worked really, really well.

But we do acknowledge that the amount of domestic spend did not make up for the loss of international spend. And in Queenstown, for example, in January the domestic spend was 71 percent higher in January this year than it was in January 2000. But due to a lack of international tourists, the overall spend actually dropped by 34 percent. So we recognise that and it’s one of the reasons why we’ve gone very hard to support Queenstown businesses. That was evident in the package we put out under the $400 million package and also the second $200 million package. A lot of that money has gone to places like Queenstown. And certainly Queenstown has been a major benefactor, because we recognised that they had done it hard, but we needed them to survive.

The thing about the trans-Tasman bubble is that we are well aware that it will make a difference. Australian tourists are about 40 percent of New Zealand’s tourists pre-COVID. We always understood that in the first two weeks it would be a lot about people coming over to visit friends and relatives. And we also understood that in the first sort of two weeks, two or three, four weeks, it was always going to be tourists or visitors at a slightly higher risk profile, because we weren’t too sure how this was going to play out if there was a lockdown in either New Zealand or one of the Australian states.

But where this will go really well is if we have a good ski season. So talking to the people of Queenstown—and I’ve been down there four times since I’ve been Minister—it’s looking good, already, isn’t it, mate.

Erica Stanford: They have no staff!

Hon STUART NASH: They had snow there. They had snow there in May. OK, it’s disappeared.

Erica Stanford: No staff, though.

Hon STUART NASH: And that’s a really good point. There’s no staff. So what happened is the Minister of Immigration and I went down—well, I went down. I worked with the Minister of Immigration, and we worked really hard with them to change some of the visa settings there to make sure we could maximise and optimise the opportunity for our international visa holders to actually work in the industry, and ensure that it could be as good as it possibly could be. And as I’ve said, the trans-Tasman bubble—I mean, it’s not going to take revenues back to where they were pre-COVID. We know that. But the thing it will do is it will be the difference for some businesses between surviving and not. We’re expecting a great ski season down there. It’s looking good already. So Kiwis—we still go down there. This is not an invitation for Kiwis not to go. We still want you to visit all these places. But what we do recognise is that the trans-Tasman bubble will make a really big difference.

There’s a number of other things we’re doing in the tourism sector to really change the settings for tourism, I suppose. But this is all about rebuilding. It’s a plan for the future. We delivered part of that plan on Thursday. When I say “we”; the Government did. But it’s about rebuilding our economy, rebuilding our tourism businesses, so when those international borders reopen, the tourism sector is able to deliver on the promises we make to global visitors when they come over. It’s a really exciting time, actually, and I’m looking forward to it. But I just want to reiterate that I do understand that during COVID a number of operators did it really hard, and I acknowledge their hard work.

Hon TODD McCLAY (National—Rotorua): Madam Speaker, thank you very much. The Minister started out by talking about the funding announced by the Government last year: the $400 million, and particularly the Strategic Tourism Assets Protection Programme (STAPP) funding. He said, and I think I can quote, “We picked the businesses that we wanted to get through, those we needed still to be there.” Minister, if that was the case, why is the Auditor-General looking into the decision-making process at the very beginning of the STAPP and, particularly, companies who were given money but didn’t actually formally apply for it? They were given money before others could apply because the criteria hadn’t been set and the fund hadn’t been opened. What do you say to the companies that have had to go and get a lawyer because they believe they weren’t treated fairly, some of whom applied and didn’t get money and others who had greater capacity to survive, to pay things for themselves, who did get funding—what do you say to those businesses and why is the Auditor-General looking into the Government’s decision-making process?

Hon STUART NASH (Minister of Tourism): Thank you, Madam Chair. It is a good question. The thing is that we’ve said, with regard to the whole COVID response, that we’ve never been here before. There was no sort of game plan or road map for how to keep businesses alive, keep tourism alive, in the face of a global pandemic when we’ve had to close down our borders, and we recognise that there were some really tough decisions made. But with regard to the Strategic Tourism Assets Protection Programme (STAPP) funds, there was a recognition that, in fact, what we needed to do was just get money out the door.

Now, I fully acknowledge that the Auditor-General is taking a look at this. We’ll wait and see what the report shows, but one thing I will say is it was a no-regrets policy. We needed to get that money out the door to ensure that those businesses were able to make key decisions in a really quick moment of time, because a number of businesses—and I can think of one really big corporate who just, basically, closed down all their businesses there and then and said, “We’re closing. We want to see what the situation looks like when the dust settles, so to speak.” Then what this entity has done is slowly open the businesses as tourism has come back and as they better assessed their situation.

What we did do, and what I did announce on Thursday, is that the industry training organisations—these are the inbound tour operators. These are the men and women who have the critically important relationships with our international offshore tourist operators and travel agents. We recognised that these were critically important if we were to grow our tourism industry back as soon as we possibly could when the borders open. They had been given $26 million in STAPP loans. We converted that through to grants in recognition that, in fact, the job they were doing was critically important. But it was about getting money out the door and doing this with a no-regrets policy. And in anything you do, you’ve got to draw the line somewhere. What happened, my understanding—and I wasn’t the Minister of Tourism at the time—is that firms were asked to apply for this and they did. There was a ranking criteria. If you’re above that, then you were considered. If you were below that, you weren’t.

But, as mentioned, I probably shouldn’t mention too much more about STAPPs, even though I acknowledge that I did bring it up in my speech, because the Auditor-General is looking at that programme.

Hon EUGENIE SAGE (Green): Thank you, Madam Chair. The big $400 million investment in the tourism sector has been the biggest investment by any Government ever. The Tourism Futures Taskforce has come out with an interim report, which has been released. I have a couple of questions. When is the final report of the Tourism Futures group going to be released? That report talks about looking at new funding strategies. The Parliamentary Commissioner for the Environment has released a very good two-stage report suggesting a departure tax in the sector to raise revenue to help our Pacific neighbours adapt to climate change, recognising the significant greenhouse emissions of long-haul tourism, and providing for bands within that departure tax for shorter trips, more for medium-distance trips, and then for long-haul. What is the Minister’s response to the recommendations of the parliamentary commissioner around a departure tax?

In a speech he made recently about sustainable tourism and the reset for the industry, he said, “I would like to see changes in pricing strategies across our public assets so that they become financially self-sustaining.” And he referred to a closer look at the international visitor conservation and tourism levy (IVL), which, prior to COVID, did generate significant revenue both for conservation and for tourism infrastructure. In terms of the future, what does this look at pricing assets mean? Is the Minister contemplating an increase in the IVL or is he suggesting that there should be charging for access to conservation land by international visitors? So there are quite a few questions there. I welcome a response.

Hon STUART NASH (Minister of Tourism): Thank you, Madam Chair. I must acknowledge the Hon Eugenie Sage as a former Minister of Conservation. We worked very closely together, and I think she did a fantastic job. I will try and answer all your questions.

One thing I did announce on Thursday was an industry transformation plan, and $10 million for that. The industry transformation plan will see the Government work in participation with the tourism sector, with iwi, with local government, and with a whole lot of other key stakeholders. This will build on a number of plans and proposals that have been brought to me, and that does include the report by the Parliamentary Commissioner of the Environment, which I thought was a very well written and reasoned report. The Tourism Futures Taskforce—as the member rightly outlines, I received a draft report, but what I did say to them is, “Please don’t do any more work on a final report,” because we had a plan at that time to morph this into an industry transformation plan which will in fact see a lot of their work as well as the other work that’s been done by the Climate Change Commission, etc., etc. Now it will be a lot more targeted. So what the member will find is that the industry transformation plan will take all that great work that has been done in the tourism ecosystem and target it a lot more towards where we need to be.

In terms of a departure tax, I think I’ve been quite clear on this. A departure tax is not on the work programme for the tourism sector at all. The Prime Minister was very, very clear when we campaigned that there will be no new taxes in this Government, and that does include a departure tax, but also, in case I pre-empt anything, it does not include a fare tax either. So I’m not looking a fare tax or a departure tax.

In terms of differential pricing, again I’ve been quite clear on this. Those of us who have travelled overseas will often go to places where there is one price for locals or people from the country and one price for international tourists, and I have no problem with that strategy at all. In fact, we do it in a couple of places. My understanding is it’s done on the Waitangi Treaty Grounds. I have no problem with this and I would like to see a level of differential pricing right across the tourism sector that recognises that a lot of these attractions and tourism experiences should be available and open to Kiwis, but international tourists who travel half way around the world will be prepared to pay to see these fantastic attractions. I have always believed that a lot of the attractions we’ve got here, we actually undervalue. In terms of charging for the Department of Conservation (DOC) estate, I have been very clear on this. It is the right of every Kiwi to have free access to the DOC estate and our national parks, but that doesn’t mean we shouldn’t look at and investigate innovative ways to perhaps charge international tourists to come and have a look at iconic New Zealand.

So that is work that will obviously have to be done in conjunction with myself and the new Minister of Conservation. I’m keen to look at that. I’ve actually been quite open about the international visitor conservation and tourism levy (IVL). As the former Minister knows, it was $35 for everyone, and it excluded Australia and the Pacific Islands, and there are a couple of other minor exclusions. It was designed to raise about $75 million, split between tourism and DOC. I am looking at that—at the IVL—to see if perhaps we need to revise that in light of what’s happened globally and in light of the fact that I have the view that in some places in this country, tourism was losing its social licence to operate. The example I used on Thursday was that there were 870,000 tourists in Milford Sound in the year to date before COVID, and if you talk to anyone that has gone there, certainly any Kiwis, they believe, we believe, and I certainly believe that in fact there were too many people in Milford Sound and it took away from the experience that a whole lot of people had travelled thousands of miles, be they Kiwis or international tourists, to see.

So we are looking at quite an ambitious work programme, but one thing I have again been very clear on is that of all the strategies we’re putting in place, one of them is that tourism can’t go back to where it was pre-COVID. Hence my focus on quite a clear work programme going forward.

Hon TODD McCLAY (National—Rotorua): Thank you, Madam Chair. Minister, you said earlier, around the Strategic Tourism Assets Protection Programme (STAPP), that you didn’t want to talk too much because the Auditor-General is investigating and that you had a no-regrets policy, your Government, when it came to funding and that people were asked to apply and some would be above the line or below the line. But isn’t the challenge, isn’t the concern from the sector, that so many of these businesses weren’t treated fairly? It’s one thing to say we just had to get money out of the door, but if you take an example of where the Auditor-General is investigating, which is the Government’s funding of up to $10 million to AJ Hackett at the time to save 20 jobs, it was before the fund had been released, before the criteria was there. So when it comes to taxpayers’ money, how can the taxpayer and those in the tourism sector who have missed out have any faith in the Government’s ability to continue to deliver funding to help them until international visitors come back if, actually, some have had preferential treatment in as far as they got funding before anybody else even knew they could apply?

Secondly, Minister, you’ve just announced over the weekend—or at the end of last week—$200 million to help five destinations in the South Island, and others more generally. That’s got to be welcomed because the Opposition was calling for this some time ago. But I ask you why you visited Franz Josef early this year, some months ago, and said, actually, at that time, these businesses that are international facing would have to visit their bank manager, their accountant, or close—because now you’ve turned up with a package we were advocating for and they were asking for, but at some months later. So my question to you, Minister, is: what do you say to the businesses that actually took you at your word two or three months ago, when you said there wasn’t more money, there wasn’t support, and if they couldn’t pivot, it was virtually tough luck? Not your words, but that’s what they heard. And now you’ve fronted up with something which will be helpful for them, it will keep businesses open, but is it just too little, too late? And is this another example of a no-regrets policy?

Hon STUART NASH (Minister of Tourism): Thank you. The first thing I will say is I delivered a speech in Queenstown in March where I actually did outline that there was a package coming, and I outlined in broad themes what that package would look like, but I didn’t give the details in that March package.

In terms of what I said to the businesses in Franz Josef—and I actually said it on national TV to tourism businesses up and down the country—is that if they were international-facing businesses or predominantly based on international tourism and they hadn’t managed to pivot in a way that would allow them to take advantage of the increase in New Zealand tourists, then they need to have some hard conversations with their bank managers, with their customers, with their directors, and with their staff. The reason I said that is I did not think that it created any value for me whatsoever to go out there and say, “Just hold on. Hold on. The borders are going to open next month.” or “We’re not too sure.” and give a whole lot of people false hope.

I thought what was needed at the time—and I don’t resile from this, and I still believe this—is that there is no point in going out there and giving people false hope and allowing or providing them with, perhaps, some rhetoric that would mean that they would keep their businesses open when, in fact, that wasn’t the case. They needed to make—and this just isn’t tourism businesses; this is businesses up and down the country that actually faced really hard times, and believe me, as the Minister for Small Business, I have got a number of these letters. There are a lot of businessmen and businesswomen up and down this country that are doing it hard. I think giving them false hope would have been the wrong thing to do. But that’s why, in March, I did signal that there was a package coming, and the broad themes around that.

But if you have a look at what was announced last Thursday, last week, you know, there’s a lot of stuff there, not just for those five regions that have an over 50 percent reliance on international tourists, but there was also stuff in there for tourism operators up and down the country. The thing that we didn’t want to do—when the package was announced on Thursday—was, apart from the inbound tourism operators, specifically signal out a business. That’s why, for example, we’ve provided another $10 million, or $5,000 per business, to take up any form of business advice. That’s why we provided another $5,000 per business, or $10 million overall, to allow these businesses to take advantage of that advice, if, in fact, the original $5,000 didn’t give them enough money or enough leeway to do that, because one of the criticisms I had heard was “We’ve had this advice. It’s been really good, but I haven’t got the money to implement it.” So we didn’t want to do that.

The other thing that I must acknowledge and the thing that I’ve pushed really hard on, and not only in the tourism sector but also in my small business portfolio, is I acknowledge that these are really, really tough times for some men and women in the sector. You know, pre-COVID actually, Xero did some work around mental health and businesses, and what they found is 40 percent of small business owner-operators said that running a small business impacted upon their mental health. And that was in the good times. We know that for a lot tourism operators, this has had a detrimental effect on their health and wellbeing. It’s the reason why we put a substantial sum of money in there. So if people are under stress, under undue stress and they’re really feeling it, then they can get professional help. I think that’s really important and I’m pretty proud of that initiative.

Hon TODD McCLAY (National—Rotorua): Minister, thank you. You said you didn’t want to give them false hope, but you gave them no hope, in fact, which is even worse because you virtually said there was no help coming and here we are, a couple of months later, there is some. So I take the point, having been a Minister, the Government’s got to be very careful in what it says and what it signals, but actually you did deliver for them what they’re asking some months later and there are businesses that have been closed because they took you at your word.

If I may, a separate question—it comes to the Provincial Growth Fund, because we heard a lot about this during the last term of Government in the run-up to the election and there were a lot of promises. Minister, it is very important that where taxpayer money is spent, it’s spent properly. Your Government previously has talked about up to 12,000 jobs being created by the Provincial Growth Fund. But, of course, in information that’s just been released—and it’s very hard to get this information—we see an almost $100 million proposal or announcement before the last election, very close to the last election, to help maraes around the country where there’d be 3,100 jobs created, and information released by your department shows there were just 158. So my question to you, Minister, is: when is the public able to take the Government’s word that when they spend taxpayers’ money that’s being borrowed to create jobs, actually, the number of jobs that you and your Government have said will be created are created?

Hon STUART NASH (Minister for Economic and Regional Development): Thank you, Madam Chair. First of all, just to the original point that the member made, I do acknowledge that a number of businesses have gone into hibernation, and I do acknowledge that when borders open, in fact, they may want to reopen to take advantage of the opportunities that come through. But I also acknowledge that when you’re reopening after you’ve been closed for a certain length of time, that is going to be really expensive and really difficult. It’s the reason why we did put a $49 million fund in there—to help businesses that had gone into hibernation. I’m very keen to take a wide view of what hibernation looks like and I’m also keen to take a very wide definition of a tourism business. You know, hypothetically, if you’re the petrol station owner in Te Ānau and 70 percent of your business comes from international tourists, then as far as I’m concerned that’s a tourist business. So that hibernation fund does recognise that there will be a significant cost coming out of that and, hopefully, will help address that.

In terms of the Provincial Growth Fund (PGF), let me make a couple of comments before I move on to the marae rejuvenation fund. First of all, the Provincial Growth Fund. When I took over as the Minister, the first thing I did is I asked officials and then I asked for an independent review, a line-by-line review, of every single project that the PGF had funded. I wanted to be sure that, in fact, the right process had been followed, that a process of integrity had been followed, because, as the member mentioned, when you are spending taxpayers’ money, you’ve got to make sure that that can hold up to scrutiny. I’m very pleased to say that in every single project we went through, a really robust process had been followed. There was wide consultation. Projects over a certain level had gone to a group of Ministers—I should say an independent panel that then went to Ministers.

Let me talk about the marae rejuvenation project. Personally, I actually think this is one of the great things we fund in this Government. I really do. I mean, just last week, I was in Ōpōtiki. And I’ll tell you that the difference that a bit of funding made to Ōpōtiki Marae was fantastic. You know, like all of us, I’ve been to a lot of marae. They are often the centre of that community. They’re the first to open when there’s a tragedy. Kaikōura—who was open: the marae. During COVID, who was there dishing out food and providing support: the marae. You will not find a tragedy or a circumstance or an incident where the marae actually isn’t the centre not only of the Māori community but of our general community.

But I also acknowledge that a number of the trusts running these marae, they actually haven’t got much money. They do things; they do things hard. They have immense pride in their marae but, you know, they haven’t necessarily got the money to do them up, and providing them with the means to do their marae up has been absolutely fantastic. I am aware that as a white, middle-class, middle-aged man talking about the impact of funding on marae, it’s a little bit—you know. But one thing I will say—I do acknowledge this because I visit and I think it’s fantastic—to the member who did ask me that question is that actually we’ve had some updated figures on that and it’s created over 1,300 jobs—

Hon Todd McClay: It’s not what the OIA said.

Hon STUART NASH: No—these are the updated figures as of May. So the Official Information Act reply you might have got was probably not updated; it was the early days. Three hundred and sixty marae have been earmarked for renovation; contracts have been let to 358 of them. And along with the Pasifika churches—and if you went to your local Pasifika church, goodness me, you know, that was a fantastic investment, it really was, and the same with these marae.

So I won’t shy away from the fact that I’m very, very proud of this investment. I think it will make a huge impact on the community. And we must keep in mind that the marae regeneration was not just about jobs; it was about engaging our community. Anyway, I’ve waxed on lyrical enough about that, but I thought it was a fantastic one: over 1,300 jobs and over 358 of the 360 marae.

CHAIRPERSON (Hon Jenny Salesa): Members, we come now to the annual review debate on housing—

Hon Todd McClay: Point of order, Madam Chair. We actually started four minutes late, and my colleague has only one question. We divide this time up to be about seven minutes for the Opposition, and we haven’t come close to our seven minutes yet, because the line of questioning was interrupted at the beginning.

CHAIRPERSON (Hon Jenny Salesa): We’ll take one more question.

JOSEPH MOONEY (National—Southland): Thank you, Madam Chair. Minister, my question is just around the estimated economic benefit from Australians visiting New Zealand during the ski season this winter—what advice has been received regarding that. And, just a corollary to that, what advice, if any, has been received on the lack of staff to businesses who have been trying to get New Zealanders to staff their businesses—for example, their cafes, hotels, restaurants, motels, etc.—but have been unable to get Kiwis to come there? What advice, if any, have you received on amending the immigration settings to keep the staff that they have currently there but whose visas are running out—and, again, in line with that, what advice, if any, on getting staff into New Zealand who are skilled in these sectors, who can ensure that they can operate? And, finally, on this topic, what advice, if any, on costs to the economy if these businesses cannot get their staff? I just point to hotels and ask if you’ve heard the same thing I’ve been hearing: that some hotels can only offer 50 percent of their beds because they don’t have enough staff.

Hon STUART NASH (Minister of Tourism): Thank you to that member. Look, a couple of things I’d say: I haven’t had any data on the quantification of the benefit to Queenstown district itself. One thing I have been told by Tourism New Zealand is that it could have an economic value of up to a billion dollars for the whole country. And, as mentioned, I’m expecting Auckland to do really well out of this. I’m expecting Queenstown/Wanaka to do well out of this—Te Ānau. I’m also expecting Christchurch—in fact, anywhere where there’s an airport. But one thing we know about Australians is that they travel to ski more than any other nationality. Quite an interesting fact, eh? I mean, obviously, it’s an American, European summer anyway; so they wouldn’t be travelling even if they could, but they can’t, and they’ve been holed up in Australia for so long, we’re expecting a whole lot of Australians to come over to your neck of the woods and to the other ski fields and spend up large, because skiers do spend up large.

Back to the point around immigration, it’s not actually my portfolio; that is the Minister of Immigration’s portfolio, but let me say that, as mentioned, earlier on in the year, the Minister of Immigration and I worked together on a plan to ensure that the visas of those who were in Queenstown at a point in time were able to be transitioned or they were able to have a slightly wider remit for the work that they could do.

One thing I did say at the chamber on Friday was that we’re not going to be saving spaces in managed isolation and quarantine for unskilled foreign workers to come over and work in the sector, but one thing that I’m prepared to do—and keeping in mind it’s not my portfolio responsibility—is sit down with the Minister of Immigration and look at what we can do for workers that are already in Queenstown at the moment but may be facing visa restrictions around where they can work, for how long they can work, and for whom they can work. So we’ll work on that. I promised the chamber that we would do that. I can’t promise you anything, because, as mentioned, it’s not my portfolio, but it’s something I’m prepared to look at. Thank you very much.

Housing

CHAIRPERSON (Hon Jacqui Dean): We now move to the financial review examination of social services and community housing. The Hon Dr Megan Woods is in the chair.

ANGIE WARREN-CLARK (Chairperson of the Social Services and Community Committee): Tēnā koe, Madam Chair, thank you. It is my pleasure as the chair of the Social Services and Community Committee to commence the debate on the 2019/20 review for housing. The select committee chose to review the whole of the housing area as a sector. We placed both Kāinga Ora - Homes and Communities and the Ministry of Housing and Urban Development—HUD—into a sector-wide review, reporting back to the House on the sector as a whole. The Minister of Housing, the Associate Minister of Housing, and the Minister for Social Development and Employment attended together. The ministries also attended together to respond across the sector. Again, I would like to thank the Ministers for their availability, the Office of the Auditor-General, the ministry officials, our clerks, and the select committee members. Cross-sector reviews are a new way of working so that the select committee can scrutinise with a theme-based approach.

Kāinga Ora was established in October 2019 to support the Government’s priorities for housing and urban development, incorporating the KiwiBuild unit, Housing New Zealand, and the Housing New Zealand development subsidiary HLC. Kāinga Ora is a public housing landlord that partners community, Māori, and local and central government on urban development projects. In 2019/20, Kāinga Ora had a total spending revenue of $1.614 billion. Expenses totalled $1.493 billion, with repairs, maintenance, depreciation, and personnel costs being the largest expenses. HUD is responsible for the policy strategy, funding, and monitoring of New Zealand housing and urban development systems. The 2019/20 year was the first full year of operation for HUD. Their aims include addressing homelessness, housing supply, modernising rental laws and standards, and increasing access to affordable housing.

Our review assessed the current state of the housing system. We note demand is growing and more people are experiencing immediate housing needs. Thirty-five percent of households do not own their own home. House prices, rents, and numbers on the housing register have risen. Homeownership has been falling since 1991. The Public Housing Plan noted 74,553 public and transitional housing places. We asked for an estimate on the current shortage. A range was provided based on complex and interrelated factors, which included affordability, location, community demographics, household needs, intergenerational living, public and private rent, and/or homeownership. Budget 2020 delivered funding for 8,000 more homes. We heard the Government expects to deliver 18,000 places in communities by 2024. The Minister informed us that place-based work, which is communities and regions, will give a more accurate picture and, for now, success will be measured regionally.

We learnt that COVID-19 responses were positive, with a thousand homeless people being housed, and this has informed HUD’s Homelessness Action Plan. Staff at Kāinga Ora supported social housing tenants very well through lockdown, and we thank them. The Residential Development Response Fund was announced in August 2020. The social housing register demand and supply was reviewed, as was contracting, motel spaces, increasing the provision of transitional housing, and paying the emergency housing contribution. We heard about the Public Housing Plan, the introduction of the Urban Development Act, the National Policy Statement on Urban Development, the Infrastructure Funding and Financing Act, and the COVID Recovery (Fast-Track Consenting) Act.

The select committee compared buy-ins with new build numbers, the proportion of private versus public housing in mixed-tenure developments. We examined partnering with community housing providers, KiwiBuild, the improvement of the public housing stock—including making healthy homes standards—and the sustainability of those homes.

Finally, we looked at the progressive homeownership scheme and partnering with Māori and Pasifika to ensure solutions are appropriate for those communities. The review was thorough and far-reaching. I look forward to hearing from the members and the Minister further on specific milestones achieved. Thank you.

NICOLA WILLIS (National): My first question relates to the claim that the Minister has repeatedly made that the funding for the purchase of land at Ihumātao would come out of the Land for Housing Programme appropriated in the 2020 Budget. We know that Treasury gave advice in a pre-Cabinet briefing to Minister Robertson on 14 December 2020 saying they did not recommend purchasing the Ihumātao land through the Land for Housing Programme as it was at odds with the programme’s intent, operating model, and scopes of related appropriations. My question, Minister, is when did the Minister first receive advice that the proposed purchase of Ihumātao land did not fit within the scope of the Land for Housing Programme as appropriated in the 2020 Budget? I hope that the Minister will furnish an answer to that question, because it’s very important.

When she stated on 17 December 2020 in a press release to the New Zealand public—she claimed that the land was being purchased from Fletcher’s for $29.9 million under the Land for Housing Programme. My question is: at that time, was she aware that officials were advising she could not use that appropriation for that purpose?

It looks like we’re going to have a frustrating session tonight. My next question to the Minister is: why did the Government reject advice from the Treasury that the most appropriate vote for a new purchase of land at Ihumātao was, in fact, Vote Māori Development, and not Vote Housing?

Finally, finishing these questions on Ihumātao—and I do want to note that this is a matter of significant public interest—the Auditor-General has reported that what actually happened with the final purchase of Ihumātao was that the ministry signed a sale and purchase agreement without the lawful authority it needed from Parliament, and I think it would be good if the Minister would furnish answers to these reasonable questions. So my final question on Ihumātao is: did she, as stated by the Auditor-General, agree to the establishment of a new appropriation, that was not contained in Budget 2020, specifically for the sole purchase of land at Ihumātao?

Hon Dr MEGAN WOODS (Minister of Housing): It is my pleasure to take a call around the questions that the member Nicola Willis has raised around Ihumātao. I think what all members of this House will know is that two members of this House wrote to the Auditor-General asking whether or not appropriate steps were taken. The Auditor-General found that what was done was, in fact, within the spirit of the appropriation. What there had been had been some technical breaches of the way that that was done. The letter from the Auditor-General clearly outlines that.

What occurred was that the briefing that was given to the Minister of Finance and myself—what it did was it failed to have a recommendation around the setting up of the new appropriation. Now, this is not an unheard-of occurrence. In fact, it happened 71 times under the previous Government, and it is so common that there is, in fact, a process established in this House of Parliament to deal with it. There is a bill that is passed every Budget that tidies up these technical amendments, as was done to tidy up the 71 times that it occurred in only a five-year period—

Nicola Willis: You knew about it—you knew.

Hon Dr MEGAN WOODS: —actually, under the previous Government, and it turns—

CHAIRPERSON (Hon Jacqui Dean): Order! Sorry to interrupt the member. The member will not bring the Speaker into the debate.

Hon Dr MEGAN WOODS: Thank you, Madam Chairperson. I think one of the things that the member is raising, about whether or not there were concerns that were put that were aired by Treasury and, indeed, by the Ministry of Housing and Urban Development—because that is the appropriation that we are here debating. So what we do know is that in December 2020, ahead of the Cabinet decision to purchase the land through the Land for Housing Programme, Treasury raised concerns about both the scope of the KiwiBuild housing appropriation and the purpose and intent of the Land for Housing Programme in the context of the acquisition. Treasury’s concerns on the appropriation scope were addressed through the establishment of a new appropriation, and I think that is one of the things where the member is getting confused.

The Ministry of Housing and Urban Development didn’t agree that the acquisition was outside of the scope of the programme’s purpose and intent, but none the less, before the complaint was even laid with the Auditor-General, there was advice being sought on setting up a new appropriation. There simply was a recommendation missing from a briefing to the Minister of Finance and myself, and that will be tidied up in much the same way as the 71 times the previous Government committed such a similar technical breach. That will be tidied up on Budget day next week.

NICOLA WILLIS (National): That was wholly unsatisfactory, but I’m going to move to a new track on State house building. The Minister repeatedly claims the Government will deliver 18,350 new public and transitional housing places by 2024. The Kāinga Ora Sustainability Financing Framework notes that 45,000 houses are due for renewal or replacement in the next 20 years. My question for the Minister is: how many houses will be demolished between now and 2024, and how many, therefore, will Kāinga Ora need to build in total to reach the 18,350 additional target, which the Minister repeatedly states?

Hon PEENI HENARE (Associate Minister of Housing (Māori Housing)): Tēnā koe, Madam Chair, and thank you for this opportunity to make a small contribution. I want to address a couple of things that have already been mentioned and also offer a question, to allow the Minister in the chair, Megan Woods, just a bit of time to catch her notes there. The first thing is, actually, what we need in order to make sure we have strong, effective housing opportunities, in particular for Māori communities, is a strong partnership. I want to just put on the record that under the National-led Government, that that didn’t happen with respect to Ihumātao, and we found ourselves there tidying up a piece of work that they failed to execute properly.

But this brings me back to, perhaps, my question, and I want to talk a little bit about the Māori and Iwi Housing Innovation and the way that we’re able to have a strategy that delivers on Māori housing aspirations, and the need for us to get that right. In the last year, there’s been a significant amount of money set aside to allow capacity building amongst a number of our partners, and we look to iwi and hapū and Māori organisations as partners when we look towards housing. A certain amount of money was put forward to allow capacity to be built amongst our Māori housing partners in this space, and I’m excited, as part of a team, to work with those particular interest groups to make sure we meet housing aspirations. I wonder—and this is my first question to the Minister—in her time at the wānanga that was established under the Waitangi Tribunal recommendations for this Government, did she see lots of opportunities there for strong partnership with iwi and with Māori organisations?

The second question that I have is one that actually looks towards bringing two portfolios, Madam Chair, so I’m happy to take your guidance on this. One of the things we want to do to make sure that Māori aspirations are met is to allow environmentally sustainable energy opportunities for Māori housing. In fact, there was a particular fund set up recently that saw us go out to our partners—I’ll use the word “partners” again—to see how we might be able to look towards supporting sustainable energy outcomes as we look towards growing our housing stock with our partners.

Hon Dr MEGAN WOODS (Minister of Housing): I’ll just answer a couple of those questions really briefly. In answer to the question that was put around how many demolitions will be required through to 2024 in order to achieve the 18,800 build, the answer is: it depends. It depends on whether or not these are built on land that we already own. One of the things that we are looking to do is move beyond our metropolitan urban centres for the building of State houses that we have great need for across the country. In some cases, that will require us to buy either bare land or private land that already has a house on it. In terms of the demolitions of our own houses, that is something that is happening. Indeed, in the 2019-20 financial year, there were 702 demolitions that happened across a range of our large-scale projects where we’re doing urban intensification. But in terms of the member’s question—how many will be demolished—in many ways it’s immaterial, because when we talk about 18,800, we’re talking about a net figure, so that is netted out for any demolitions of our own stock that occur.

In terms of answering questions from my colleague the Hon Peeni Henare around what I learnt at the wānanga at the end of the year in terms of opportunities around partnership in the area of Māori housing, I think they’re many and varied. They range from addressing homelessness, they extend into community housing providers for public housing to progressive homeownership schemes right through the housing continuum, and we are committed to all of them.

NICOLA WILLIS (National): I note that the Minister has no idea how Kāinga Ora will reach the target once demolitions are taken into account. So my question is whether the State house building track is on track, and can the Minister confirm that she had expectations in Budget 2020, in amidst her priorities for delivery, that Kāinga Ora would deliver 70 to 80 percent of the 1,000 new build transitional housing places promised? Of course, this is important because the reason we are spending a million dollars a day as a country on motels is that there isn’t enough housing and the Minister has proposed that transitional housing as part of the solution. Is it correct that Kāinga Ora advised the Minister verbally that they would find it challenging to deliver their portion of the thousand transitional housing places by June 2021?

Hon POTO WILLIAMS (Associate Minister of Housing (Public Housing)): Thank you, Madam Chair. It’s a pleasure to take a brief call on this, and I want to ask the Minister a question but I also want to respond to some of the questions that have come up in the House today. There’s no doubt that housing is by far and away the most important issue that our people face. Whether that is housing affordability, whether that’s access to public housing or transitional housing or State housing, or whether that’s access to warm, dry, and affordable rentals, housing is a hugely important feature of the work that this Government is doing, and we’re very committed to doing that.

The question I have, and it kind of relates to something that the previous speaker, Nicola Willis, spoke about, really, is about the build of housing and what the build programme is about. I know that, if previous Governments had kept up building at a particular rate, we may not have found ourselves in the situation that we find ourselves in, having to—

Nicola Willis: Answer the question. Be accountable.

Hon POTO WILLIAMS: —having to—

Nicola Willis: Be accountable for your own target.

CHAIRPERSON (Hon Jacqui Dean): Order! I apologise to the Minister. If the member would kindly keep the Chair out of the debate.

Hon POTO WILLIAMS: Thank you, Madam Chair. We all know that not enough housing was built, and I think it’s about time that we all owned up to the fact—

Nicola Willis: How’s KiwiBuild going?

Hon POTO WILLIAMS: —and this is a Government that is actually addressing the problem by putting spades in the ground and building houses. It’s a little difficult to ignore that because it keeps happening, and I’m happy for the member to interject if she so chooses, but I would like actually to just have a moment if I could.

What I’d like the Minister to respond to is actually our build of public and transitional housing, because we know that public housing is a big issue for us. We want people to tell us when housing is a problem for them. There has long been this notion of State versus social versus public. Actually, it’s people in need of housing, and sometimes they’re not able to manage that on their own without significant support, either from community housing providers or from the Government. I think it’s a real testament to this Government that they put housing first in terms of a priority and that they prioritise, also, people who find it difficult to find housing on their own. You know, we have a public housing register that is significant because the need is significant. Now, that doesn’t mean that we shy away from the issue; in fact, what we are doing is we are recognising that we have to put all of our shoulders to the wheel if we’re going to address this, so that people feel confident and comfortable about coming forward and saying they have these needs.

So if I could ask the Minister if she would outline what our plan is for public housing build and also the transitional housing, which is vitally important to move people from public housing into the ability to really take care of their own needs and, hopefully, our aspiration that they get into homeownership themselves. Thank you, Madam Chair.

Hon Dr MEGAN WOODS (Minister of Housing): Thank you, Madam Chair. Just to respond with some information to answer a question put by both members in terms of the public house building, and a reassurance that is on track, I’m happy to inform the House that indeed it is. In fact, since we’ve come into Government—since November 2017, the beginning of our first term in Government—7,631 new public housing places have been built; 5,848 of those I am thrilled to inform the House have been new builds.

In terms of our transitional places, since we came in in November 2017, 2,364 new transitional places have been put into place. This has more than doubled the capacity of transitional housing available in New Zealand. Is it enough? I think every member sitting in this House knows there is more work to be done and that is something that we are committed to doing.

In terms of the member’s question around the delivery of the transitional housing against those targets, the member will know, because she has received information under the Official Information Act, about a briefing that said that Kāinga Ora wasn’t going to deliver all of its bit of it, and for many reasons construction projects got delayed last year—everybody had to down tools for a substantial period of time. But did that mean that we were substantially delayed in the delivery of the absolute number of transitional houses? No. What happened is they were delivered in partnership with community housing providers. So while the target was 1,000 by December 2020, that was in fact reached in January 2021, which I think is a huge achievement for any organisation in 2020, given the delays we had. I’m incredibly proud of our teams and our delivery partners in the community and housing providers sector who helped us deliver that. We are a Government that is committed to getting on with the work, to actually building houses, and making sure that we are continually adding to the supply of houses.

CHAIRPERSON (Hon Jacqui Dean): I call Dr Debbie Ngarewa-Packer—not “Dr” yet.

DEBBIE NGAREWA-PACKER (Co-Leader—Te Paati Māori): Oh, I like the “Dr”, but not yet. Working on it, thank you, Madam Chair.

The housing crisis is hitting Māori communities, as everyone knows here, harder than anyone, and yet the Government to date has shown no indication of the specific policies—lots of names actually—that are targeting increasing Māori homeownership. I was really disappointed at the Government’s recently announced housing package and this isn’t just a position of Te Paati Māori; word is your own Māori caucus are equally fed up, hoi anō. Because if reports are true that there hasn’t been money set aside in this year’s Budget for Māori housing, then this Government is complicit in entrenching generations of inequality. My question is: will you be setting aside substantial funding to support Māori housing?

Pākehā have net worth almost five times higher than Māori, while non-Māori have a 13 percent higher median wage. This disparity in wealth and income is locking Māori out of the housing market. Māori homeownership rates have been falling since 1999. In the latest Census, Māori individual homeownership fell to 26 percent compared with 41 percent for non-Māori. My question, Minister, is: what are you doing to increase Māori homeownership?

It’s disgraceful that more than 11,000 Māori are currently on the social housing register waiting list—49.6 percent of the entire waiting list. The current data indicates that 30 percent of Māori pay rent that is over 30 percent of their weekly income, which is an indicator of household poverty. I’ve said this all before and I’ll keep on saying it until it really sticks: for the majority of whānau, finding an affordable house to rent, let alone a house to own, is currently unattainable. My question, Minister, is: what are you doing to help Māori get into homes?

The Crown needs to recognise the severe disadvantage that Māori face in the housing market and immediately introduce a Māori housing package that includes targeted financial support schemes to help with deposits, such as the old Māori affairs loans in the past. They also need to address supply through building thousands more social and affordable homes. My question, Minister, is: what targeted financial support are you providing for Māori?

We have heard a lot of positive talk about partnership from the other side of the House, which is great, but the question is: what is this Government doing as Tiriti partners for the 12,000 tangata whenua who are homeless in their homeland? Māori homelessness and the issues surrounding it is the most significant Tiriti issue of today. It is time that this Government treats it as such. Kia ora rā.

Hon Dr MEGAN WOODS (Minister of Housing): I thank that member for that contribution and some really good questions, and ones that I’d like to reassure the member that our team of housing Ministers—obviously, the Hon Peeni Henare is the Minister responsible for Māori housing, but also Marama Davidson with homelessness, and Poto Williams in public housing. This is something that we address constantly in our team as a group of Ministers.

I do have some good news for the member in terms of targeted funding pathways. We do acknowledge—and certainly it’s something that I discuss often with my colleagues, and it’s certainly a message that is coming through loud and clear from the Māori caucus within the Labour Party as well as our team of Ministers—that we have to have targeted pathways. We have to have by Māori, for Māori solutions that can be in there. It is why such a considerable effort has been put in to working to build capacity in the Māori CHP sector, the community housing provider. The solutions for many of the issues around homelessness and around social housing do lie within communities themselves, so that is why we’ve been working to identify projects that we can fund in a dedicated way.

I’ll describe it as very, very imminently that we will have the launch of the dedicated iwi Māori pathway for progressive homeownership. So what you were talking about in terms of wanting to have a look for some of those schemes that existed in the past that provided ways that the State could help people into homeownership, that is coming very, very, very soon and it is something that has its own ring-fenced funding, and it is targeted funding.

We have also said, in terms of the infrastructure package that we launched—the $3.8 billion package—that that was something where we have to do the work to identify how that’s going to be divvied up in terms of our own Leadership Success Profile—how that’s going to be divvied up with iwi, with Māori, with councils, with developers. We understand that in order for us to realise the potential that lies within Māori communities, we have to have ways to make sure that there is funding for the infrastructure that lies beneath that whenua as well. That is work that is ongoing. Peeni Henare is leading as the Minister for Māori housing and he is working not only with the rest of our housing Ministers in Marama Davidson and Poto Williams but also with our colleague the Hon Willie Jackson, who has responsibility across Māori development around some of the papakāinga funding as well.

Hon MARAMA DAVIDSON (Associate Minister of Housing (Homelessness)): Thank you, Madam Chair. It’s an absolute privilege to get up in the Chamber tonight and speak of something which is core to every person in Aotearoa. I stand from the perspective of housing being a basic human right and a core public good. I acknowledge my colleague the Hon Poto Williams in terms of her ministerial delegation in the public housing area.

I have a series of some questions for our Minister to actually help people understand where the work programmes are, where the focus has to be, and I wanted to put some context behind some of those questions, starting from the basic premise of what housing actually is for, and also acknowledging—and I acknowledge my colleague—

Maureen Pugh: Point of order.

CHAIRPERSON (Hon Jacqui Dean): Point of order. Sorry, apologies to the Minister. Point of order, Maureen Pugh.

Maureen Pugh: Madam Speaker, I just need to clarify whether the member is able to speak from the Government benches?

CHAIRPERSON (Hon Jacqui Dean): Yes. Thank you very much for that point of order. It is something I’m considering right now. So for the time being I will ask the Hon Marama Davidson to continue with her contribution and I will come back to the committee with the ruling very soon.

Hon MARAMA DAVIDSON: Thank you, Madam Chair. It’s a relevant point, actually, and it’s one that I was going to touch on in my context of asking Minister Woods how the ministerial team works together, in terms of the different roles and the overview that we each bring. As part of a ministerial housing team, it is why I wanted to support my colleagues to be able to speak to the ministerial team work that is happening in terms of housing.

I did want to acknowledge our parliamentary colleague Debbie Ngarewa-Packer in raising the issue of a focus on Māori housing. My colleague Peeni Henare raised the work of Te Maihi o te Whare Māori – Māori and Iwi Housing Innovation (MAIHI)—the Māori housing strategy—and also the whare wānanga that we have been having a series of. Through the whare wānanga, it is there that our Māori community providers, our iwi, hapū, and whānau organisations in Māori communities came to the fore, and they were very, very clear about the impacts of colonisation, the impacts of colonisation on the state of Māori housing today, and how that has filtered through generations of inequity and inequality. I wondered if the Minister wanted to take the opportunity to expand a little bit more.

One of my delegations is to overview the roll-out of the homelessness action plans that are contained in the first ever comprehensive homelessness action plan that our country has had. And that too picks up on the inequities and the context behind the disproportionate impact on Māori and Māori facing housing challenges today.

I did want to allow the Minister to dive a little bit more into that particular context that we acknowledge through the set-up, perhaps, of the whare wānanga, and that opportunity of bringing community Māori leadership into a partnership. They challenge us, and I thought that that was an opportunity for the Minister to be able to touch on that as well.

For the year in review, for the annual year in review that we are talking about right now, there have been incredible impacts that have worsened the housing crisis, such as COVID, ongoing housing unaffordability, lack of supply, and individual stressors. We need to increase prevention and support services. I wondered if I could give the Minister an opportunity, in the year in review, to speak further about some of those impacts that bring to the fore even bigger challenges than I think we have ever faced as a country when it comes to housing, particularly over the past year. I wondered if the Minister wanted to take an opportunity to dive into some of those impacts and how we as a ministerial team, then, are responding to the specific challenges and impacts that we have faced and what our priorities, therefore, are and our work streams and our Budget proposals.

And I also wanted to—wow, where do all those seconds go? I also wanted to pick up on whether the Minister wanted to take the opportunity—there are some particular actions in the homelessness action plan and I’m really proud that they have been picked up, including that I, in the prevention of homelessness, have a particular focus on housing first, sustaining tenancies, expanding housing support for people and young people in care leaving Oranga Tamariki. But I wonder whether the Minister specifically wanted to mention supporting returned overseas offenders who are homeless and supporting women leaving prisons, as a few of the priority actions in the homelessness action plan—whether there was an opportunity to speak more on why those are important and why they have been picked up.

So, and I think, just lastly, I wanted to—and I think this is supporting my colleague Minister Peeni Henare in MAIHI, the Māori housing space. That MAIHI plan—and this relates to my particular responsibility in rolling out transitional housing—picks up on kaupapa Māori principles. The Māori housing community and providers are keeping us to account as we continue to aspire to achieve those principles. They include the principles of understanding the mauri of not just people who are without a home but the mauri of what whenua and being housed actually creates for whānau. They underpin the principles of kaupapa Māori in the MAIHI housing plan and include a principle of whakamana, that being that every person’s dignity, in wrapping around social supports, making sure that people are receiving the care that they need, is at the absolute centremost of how we approach working with whānau.

I think one of the other principles that I really wanted to pick up on is the principle of whanaungatanga and the importance of whakapapa. Minister Woods, whether or not you have heard not just from Māori communities but as I have been engaging with community housing providers, and I am hearing—

CHAIRPERSON (Hon Jacqui Dean): The member’s time has expired. I did allow the member to, perhaps, go over time because there was a timing bell issue.

Thank you for the point of order that was raised a little earlier. I’m referring to Speaker’s ruling 16/6. There isn’t a clear ruling on the specific incidents but generally, in terms of a member changing seats to make a contribution, it is generally regarded to lead to disorder because a member can tend to move to their advantage. In this case, however, my ruling is that the member in question, relying on Speaker’s ruling 16/6 as I have, but more specifically the Minister is appearing in a financial review as part of a Minister’s team and, therefore, I judge that to be in order.

JAN LOGIE (Green): Thank you, Madam Chair. I rise to ask a few questions and, I guess, raise some concerns around the general state of accessible housing and where we’re at as a country for planning for our ageing population. I want to start by acknowledging that within the annual review, Kāinga Ora acknowledged that the public housing stock universal design target of 15 percent is a modest target that they would ideally like to exceed. I’m really pleased to hear that and I look forward to them exceeding that when they report for the first time next year. But I would like to hear from the Minister about when we might expect to see the target revised up beyond that. It feels like kind of a pitiful target—and I have heard one of the Ministers express that view as well—of just 15 percent.

The reason this is so important is that, one, at the moment the assessment is that only about 2 to 3 percent of our housing in New Zealand is accessible and that 20 to 25 percent of the population identify as having disabilities. Not all of those people will need accommodations in their housing but we are also an ageing population and in the lifetime of the houses that are being built right at the moment the population of this country over 65 will probably double. Almost a quarter of our entire population will be over 65 within the lifespan of the houses that we are building now. And it’s really important as we build inclusive communities that we think about the needs of everybody and how we futureproof our housing. It has been raised with me from the disability community that they are very keen to see this target put up—even as a starting point for the Labour Party manifesto target of 25 percent and to see that committed to.

But they really don’t see why all of our houses can’t be built to universal design standards. I had a fantastic meeting with Lifemark recently up in Auckland, and they were talking to me about how it used to be perceived that building to universal design was more expensive than a standard build. But actually what they’re seeing now is that the cost of lifts has come down so significantly that, actually, really they are not at all convinced that the price of building is any more inaccessible—to be building to universal design. They do, however, recognise that there is a significant knowledge gap right across our building industry, including within Kāinga Ora, to understand what is universal design. They’ve seen plans for buildings that have beautiful wide doorways and flat floors, and even a lift, but there are steps into the house that make it inaccessible and kind of make all of that good work pointless.

So they have a question about who will be overseeing and checking in terms of that delivery of the target for universal design. They want to see strong systems to ensure that we are building that capacity and ensuring that when we’re delivering on this, we are doing it well, and also recognising that we’ve got 900 people on the social housing list that we know of, who are needing accessible housing, and that’s a lot of people who at the moment are going to be waiting a long time when that’s our target. That does not include people who are on good incomes but can’t find an accessible house because they are not eligible to be on that waiting list. We’ve heard of people having to choose jobs that have showers at their workplace because they cannot find a house with a shower that they can access.

So we need to make sure all of our housing stock is built to universal design and accessible, and I’d love to hear from the Minister when are we going to make changes to the Building Act and to standard 4121, and whether the changes to the Resource Management Act are also going to take this opportunity to encourage universal design in our rebuild of this country. There’s so much we can do and I’m looking forward to hearing that we’re doing it.

Hon Dr MEGAN WOODS (Minister of Housing): Thank you, and I’m happy to take a call to talk about accessible housing. The questions about the changes to the Building Act will need to be put to the Minister for Building and Construction when she’s not sitting in here in her capacity as the Associate Minister of Housing—that’s something that comes under that portfolio. But I do have good news for the member. The target at the moment is 15 percent for Kāinga Ora for universal design or accessible. The reality is that just about all of the homes that are being built that are either on a ground floor or are lift-accessible are being built to universal or accessible design standards. I think it would be hard to imagine a person who is more passionate about accessible properties than the chair of Kāinga Ora, Vui Mark Gosche, and I just want to really acknowledge the leadership of Vui in this area and what an absolute passion it is for him—and what a lived passion for him these issues are.

So what we are also looking at doing, starting from the 2021-22 financial year, in our financial reporting is reporting against those accessibility targets in a different way so that there is more transparency around it—sorry, not the targets, what the outcomes are, so that there will be a change to our financial reporting, which by necessity will answer some of the questions that the member put around the systems that will be needed to ensure that it is happening, the monitoring, all that kind of thing. Financial reporting and changes to that tend to kind of lead that kind of change.

In terms of the comments that the member made about whether or not there was the capacity and knowledge within Kāinga Ora and within our build teams and our contract partners and our build partners to do that, I’d like to reassure the member that there certainly is that capacity and that knowledge and that ability to do it. One of the things that we have been quietly getting on and doing is just upping the number of accessible universal design houses that we have been building, but also building to Homestar 6 standards so that we’re making sure we’re building warm, dry homes for people to live in. What we’ve been able to do is provide leadership in the construction industry because of the sheer number that we are building around waste reduction, Homestar 6 building, and, because of the number that we’re building, we eventually managed to get the price down to actually about the same as it would cost to build just to the building code, and the same is going for our universal design work.

NICOLA WILLIS (National): Two quick questions for the Minister: first, I want to confirm her earlier remark that it is correct that while Kāinga Ora had a target of 700 to 800 transitional houses to be built by June this year, the Minister, on hearing that they were off-track, revised down that target to 500. The reason, of course—well, I look forward to the Minister’s clarification of that point. Of course, that is the form here, because KiwiBuild, if it were to have delivered on the Minister’s promises, would be delivering 16,000 houses next month, but, of course, that is not the case. However, what the Minister has revised her target to is that 800 KiwiBuild houses will have been built in the year to June.

So my question is whether the KiwiBuild delivery targets are at risk, given the Ormiston Rise development has gone into receivership. Written question answers the Minister has provided to me show that there are 176 KiwiBuild homes in the Ormiston Rise development due to be built by June this year and that as of 15 March, only 60 were under construction. Is KiwiBuild going to meet its target this financial year?

Given the filibustering that has occurred tonight—the lack of readiness from Ministers to show accountability for their portfolios and to answer simple questions about things that they are accountable to New Zealand taxpayers for and that they are accountable to voters for because of the promises they made them—I’m going to take this opportunity to take a call and put some questions to the Minister that she might have the grace to address, because, actually, in this country right now, we are facing a housing emergency of proportions that the Minister should not be laughing about. The Minister should know that she promised 16,000 KiwiBuild houses by June. So I would ask her if she had actually delivered on her promise, would the State house waiting list be a little shorter, because right now, that waiting list is more than 23,000 people. It has quadrupled since National left office.

So my question for the Minister would be: does she think she’s doing a good job when four times as many New Zealanders are out of a home, squeezed out of the private rental market, and unable to pay the rent, and are having to line up for a State house that that Minister can’t provide? Does the Minister think that’s acceptable and, I want to know, does she think the increase in the State house waiting list that occurred last month alone—that’s right: 456 additional people last month couldn’t pay the rent because the rents have gone up so astronomically under this Government. It was so desperate that they signed up to the State house waiting list, and that’s not even including the people I was told about in the Wairarapa yesterday, who said, “We don’t even bother going on the list any more, because you wait more than a year to get a house.”

So, not even accounting for that, of those 456 who were added to the list in the past month alone, how many does she think got added to that list because the landlord put up the rent because the Minister decided to mess around with interest deductibility? I’d like to know what steps is she taking to monitor the increases in rents that are occurring as a result of her Government’s tax policy, and when will the rent data come out, because it seems mysterious to us, sitting here in the Opposition, that the last lot of rent data that was due in March hasn’t come out yet. Is that because the Minister has something to hide? Has she modelled what rent increases will do to the State house waiting list?

Here’s a really important question, and if the Minister doesn’t address this, colleagues—if the Minister doesn’t address this question, then ask yourself what her commitment is. This question is: by what date will the State house waiting list reduce? I’m not even asking the Minister when she’ll get it back to the levels National managed to keep it at; I’m asking her when was—[Interruption] OK, the members opposite laugh. I want the members opposite to explain to the 23,000 people on the State house waiting list why that is not Labour’s fault. There are four times as many people who have been squeezed out of their private rental, and I want that Minister to tell me when we will see a month of statistics in which that number drops.

I want to know: if you’re off-track with the transitional housing, how can we trust you on your other programmes? I want to know: is KiwiBuild on track, because what we heard this month—just yesterday; just over the weekend—was that the Ormiston Rise development had gone into receivership. Now, I had a conversation with a very anxious KiwiBuild buyer, who said to me, “I thought that when I bought a KiwiBuild home, that meant the Government had done its due diligence. That meant the Government had run the ruler over. That meant the Government was confirming that this was a good house to buy. And now I get a letter, a cold letter at 5.30 on a Friday night, saying, ‘Actually, it’s gone into receivership. We’ll work something out. If you’ve got any questions, talk to your lawyer.’ ” Well, Minister, I would like to know: will the 176 KiwiBuild houses that are meant to be happening in the Ormiston Rise development be completed and will they be completed on time, and if they are not going to be completed, does that put her KiwiBuild target at risk?

I also want to know, Minister, whether she thinks she is doing everything she can to partner with the community housing organisations up and down this country that I have spoken to that say that if that Minister were to take a different approach in some of her policies—and I’d like to note for members opposite that some of these community housing providers are iwi-led or wish to partner with iwi to provide Māori housing. I wish to note that, because this was a point of discussion earlier. Does the Minister acknowledge that current policy settings are preventing them from delivering the homes that they could deliver?

I would like to know why the Minister doesn’t drop her ideology and get some houses built. If the Minister would answer just one of those questions, that would be a great start.

Hon Dr MEGAN WOODS (Minister of Housing): I’m happy to address those questions, as I have all the questions that have been put to me in the committee this evening. In answer to the first question that the member put in terms of being behind this year, I’d like to remind the member of the subject of the debate that we are having, and what we are doing is looking back at the previous financial year. What I was talking about was the 2019-20 financial year, and I talked about the fact that there was a five-week delay because of COVID in terms of that delivery and who it was who delivered those. We are on track for transitional housing this year. I think the member misunderstood that contribution, so I’d like to reassure that member that this Government is continuing to roll out transitional and emergency housing in a way that previous Governments failed to do.

The member also asked a question about KiwiBuild and whether we’re on track around targets. The target that KiwiBuild has is as many houses as quickly as we can, so the answer is we’re absolutely on track around that.

The member asked a question about Ormiston Rise, and this is a serious question and one that does need to be addressed. Over the weekend, I received briefings, and then I took the opportunity to talk to officials and get deeper briefings on Monday around this, because this is something that I do take seriously. What I am very pleased to report to the House is that while this is a development that has been placed into receivership, the officials, after discussions with the receivers, have confidence that there is a shared desire to see that development progress and that all indications are pointing to that fact.

I wouldn’t like to see scaremongering in this House that would unduly unsettle those people. What I want to give those people that are affected—and I have great empathy and I feel for them—is that all that can be done is being done, but whatever happens, their money is safe and there are ways in which they are protected. I think that we need to take great care when we discuss these issues, and I will continue to keep this House updated as I am asked about it, or “if I am asked about it” is probably more the question.

In terms of the question the member put that if we had built all our KiwiBuild houses, would our social housing register be low, I’d just like to take this opportunity to explain to the committee that for those people who are in social housing, it’s not a question of “Will I buy a house today, or will I register for social housing?”, because they’re two completely different pools—one doesn’t affect the other.

In terms of what we need to do to help people into affordable homeownership, that is something that a Government has been committed to for the first time in a generation. When it comes to public housing, what we have to be doing is adding to the housing stock for that. We will not continue the practice of the previous Government that when they weren’t reducing State house numbers by selling them off, any time it was added to was largely through buy-ins. That is not our policy. Our policy is to build, to add to the housing stock, and to make sure that we are doing our bit to address the housing crisis.

We sometimes hear criticism that we have continued selling off. Well, I think the figures speak for themselves. Here and there, there has to be a property transition, but what we’ve seen is something like 190 houses sold in the time since we have come into Government versus about 1,500 that the previous Government sold off. These are entirely different propositions and entirely different ways of dealing with it.

We will always make sure that we have housing stock that is fit for purpose and fit for our clients, and there will always be—and always has been—everyday transactions within the housing portfolio. What you will not see from our Government is the mass sell-off of State houses.

If the member wants to talk about what is driving that State house waiting list, it is not only the selling off but the failure of the previous Government to build any houses over nine years. They finished Government with 1,500 fewer houses than they started with. If they’d built at even our minimum level of 1,600 houses a year, we would have had 15,000 more public houses in New Zealand. So if any member wants to have a conversation about why we have had an increase in our public housing register, I’m happy to have that conversation. I can also tell that member, from being in an electorate office and being an electorate MP, that we no longer have tenants too scared to come and put themselves on the register—people who might be overcrowding into a house with other tenants.

NICOLA WILLIS (National): Can the Minister confirm that she thinks $750 million worth of State house sales since Labour came to Government amounts to “here and there”? Can the Minister confirm that increasing rents put pressure on the State house waiting list? And can she also confirm that she received explicit advice that policies to remove interest deductibility could put pressure on rents—particularly for the lowest-income tenants—and she went ahead with those policy changes anyway?

Finally, to return to those matters we’ve had two points of clarification on: can she confirm that she received a briefing that said this, “As advised to you verbally, Kāinga Ora will find it challenging to deliver their portion of the thousand transitional housing places, 70 to 80 percent, by June 2021 for this reason.” The letter of expectation notes that at least 500 places are expected to be delivered by 30 June 2021. In other words, the Minister talked to Kāinga Ora. They said, “Look, we’re not on track to deliver, we can’t do it,”, and the Minister said, “No problem. I’ll revise down my expectation. I’ll revise down the target; that’s how we roll.” It’s Labour; they promised 16,000 houses, couldn’t deliver it, and just said, “Oh, we don’t do targets for KiwiBuild any more.” Are we seeing the same in transitional housing? If the Minister could address those questions.

Hon Dr MEGAN WOODS (Minister of Housing): I’d just like to reiterate what I’ve said to that member—that we’ve delivered transitional housing through both community housing providers and Kāinga Ora. The reason why I have allowed Kāinga Ora to revise it down but revise up delivery in other areas is because we’re able to deliver those numbers through alternative pathways. The same number of houses will eventuate; we are continuing to add to the stocks.

And I will address the question about rent increases that the member did raise then, and in a previous question. The data shows that the year on March to March rent increase figure is 1.6 percent for last year, that we’ve seen—we know that probably is a little bit suppressed because of the period of lockdown, when there wasn’t the ability to put up rent, so we think it’s probably more in the realm of somewhere between 2 to 4 percent. But I also note for that member, when she was asking about data sets that we’ll be using—and there’s a variety—that Stats NZ and bond data will be the primary data sets that we will use. But I do note that the Trade Me stats came out today and it showed an absolute flat-lining of rent in the last 30 days, the period of time we said that we were going to see—you know, there were some people saying that we could see very large rent increases. It certainly didn’t happen and the statistics didn’t back it up.

CHAIRPERSON (Hon Jacqui Dean): The time has come for the House to rise for the dinner break. The House will resume at 7 o’clock this evening.

Sitting suspended from 6.03 p.m. to 7 p.m.

Energy and Resources

CHAIRPERSON (Hon Jenny Salesa): Members, when we suspended for the dinner break, we were in the annual debate. We now move to the energy and resources portfolio.

JAMIE STRANGE (Chairperson of the Economic Development, Science and Innovation Committee): Thank you, Madam Chair. It’s a pleasure to take a call in this debate, the Appropriation (2019/20 Confirmation and Validation) Bill annual review debate, energy and resources.

Is my microphone on? I’ll just carry on talking, and, hopefully—unless I move to the other side; that’s probably made it more difficult.

Hon Members: Move to the right.

JAMIE STRANGE: If I stay where I am—I’ll just carry on talking in a loud voice, so the members can hear. [Microphone turns on] There we are—ha, ha!

The annual review debate, energy and resources: so, look, as the chair of the Economic Development, Science and Innovation Committee, I appreciate the opportunity to provide the committee with a little bit of an overview of what we heard in the annual reviews.

I’d like to start by talking about the annual review of Meridian Energy Ltd. Meridian told us that its passenger vehicle fleet is now fully electric and that it expects that all its fleet will be electric within the next two years. It is planning a carbon sink to mop up its carbon emissions. The company has an active commitment to their sustainability. Also, they spoke quite a bit about renewable energy generation. Meridian told us it had recently announced that construction would begin on the Harapaki Wind Farm, expected to cost around $395 million. It reported that renewable energy generation—wind, geothermal, and solar—is becoming cheaper and that it can replace older, fossil fuel - based generation. It did not see a problem with future supply, but would encourage policy makers to think about ensuring that demand continues to be stimulated. We also heard about the use of non-renewable generation, in terms of the just transition away from fossil fuels. We heard about the resource management framework.

And also, which will probably be of particular interest, we heard about the planned closure of the Tīwai Point Aluminium Smelter. Meridian announced, in January 2021, that it had reached an agreement with its largest customer, Rio Tinto, which operates the New Zealand Aluminium Smelter at Tīwai Point in Southland. The planned closure had been extended from August 2021 to December 2024. Meridian noted it was unlikely that the contract would be extended past 2024.

So I won’t take too much more time, because I know that there will be other speakers who would like to ask questions of the Minister. So if I could just kick this aspect of the debate off by asking the following question of the Minister. Like I said, at the select committee we heard that renewable energy generation—wind, geothermal, and solar—is becoming cheaper and can replace older fossil fuel - based generation. So my question is: what role has the Government played in this transition, and to what extent has the Government promoted investment in new renewable energy sources? Thank you.

BARBARA KURIGER (National—Taranaki - King Country): I want to ask the Minister in the chair, Megan Woods—it’s been reported that the Pohokura gasfield is now delivering 43 percent less gas than it did at the time the Government announced an oil and gas ban. OMV have said that about $100 million of investment is needed just to keep up current production. To her knowledge, has OMV reduced maintenance investment in Pohokura, and has this led to greater risk to the asset, including reduced production? I’m happy to ask another one if—

Erica Stanford: Keep going—she doesn’t answer.

BARBARA KURIGER: OK. Recent reporting is that New Zealand Steel and Fonterra are both now on day-to-day gas contracts. As we head through the winter and to spring, this will create serious risks to Fonterra, who have no choice but to process the milk that they receive. Has she sought any advice on potential imports to New Zealand of liquid natural gas into the country?

SIMON COURT (ACT): Thank you, Madam Chair. To the Minister, we’ve heard a little bit more over the past few days about security of supply, the resilience of the electricity system, and measures that the private sector are taking to reduce consumption as one of those voluntary steps to make sure that other conservation measures are not required. But it is of great concern to the ACT Party, and to those businesses, no doubt, that they are having to reduce production and, potentially, turn people away from jobs while electricity prices remain so high. It appears they remain high because of a shortage of natural gas, for reasons that have been well canvassed—because the Pohokura field is slowing down. So my question to the Minister: given that an energy shortage has led to an increase in wholesale energy prices, does the Minister see a risk of New Zealanders paying more in their energy bills each month?

BARBARA KURIGER (National—Taranaki - King Country): To the Minister, has she received the latest Gas Industry Company supply and demand report, and, if so, when will it be released? I’ll keep going: why has the Minister appointed to the Technical Reference Group for the NZ Battery project, a group that will provide technical advice on a potential $4 billion investment in pumped hydro, that the Ministry of Business, Innovation and Employment has called potentially the largest earth-moving project in New Zealand’s recent history—why has she appointed a School Strike 4 Climate organiser and a Greenpeace campaign manager to the so-called technical group?

SIMON COURT (ACT): Thank you, Madam Chair, and, again, thank you to the Minister for the briefing that you voluntarily provided to the ACT Party, to the National Party, and to the Green Party last week. It was very helpful, and it was good to have the opportunity to speak to you and to officials in a more informal setting. I’d actually like to preserve that spirit of collegiality tonight, but there are some rather important questions that we do need answered. Firstly, does the Minister agree with the Climate Change Commission’s suggestion that burning some residual gas is OK and that the focus of any reforms to the electricity sector or reductions in emissions should be on decarbonising energy as a whole, not just electricity?

Further, does the Minister agree with the chief executive of Genesis Energy that a mix of energy sources is important to maintain a stable, reliable system so we can decarbonise other sectors using electricity, a statement that the CEO of Genesis made on Radio New Zealand earlier this week? And does she also agree with Genesis Energy’s CEO that the Onslow project is a stupid project?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): Thank you, and I’m happy to take a call and answer questions. Just to give the committee an indication, I will batch questions up to answer them, so if you want to keep going with questions, they will be addressed. In terms of the question that was put to me by the National Party Opposition spokesperson about whether what we’re experiencing at Pohokura at the moment, and I’ve received advice, is because of a lack of investment, the answer is no, that is certainly not the advice I’ve received. In fact, in terms of working with OMV, even over the lockdown period where we couldn’t get people across the border, we were working under the critical worker exemption to make sure that we could keep the workforce that was required right across the energy sector, including in the gas sector, to make sure those workers were crossing the border. That work is seasonal when it comes to fixing issues on pipelines.

So what we’re seeing is, I think, the grim reality for many people that gas is no silver bullet for security of supply of electricity in New Zealand. The electricity issue that we’re seeing at the moment is largely the failure of gas within our system, and actually points to how we have to look at alternatives for addressing the issue of dry-year risk, and that gas is no cast-iron way in which we can ensure security of supply.

In terms of whether or not I’ve sought advice on LNG, my understanding is that the Gas Industry Company report will provide some advice on LNG—wasn’t something that was included in my original request to them, but my understanding is that that will be included when it comes to me. In regard to the question of have I received it, not yet, but I expect to very soon, and I expect its release will be imminent after that.

In terms of the appointment to the TAG—the technical advisory group—for the Onslow project, I’d just like to point to one of the people that’s being examined and questioned as to whether she should be there, Amanda Larsson, who has a Master’s of science in ecological economics. She’s worked internationally on questions around this and brings not only a perspective but also a great deal of expertise. So I think we need to be very careful before we start singling out individuals and questioning whether or not they should be there. In order to adequately assess what is a really serious issue for New Zealand, we have to make sure that we have a range of expertise sitting around the table.

When it comes to the question that was put to me—and I think a sensible question—from the ACT Party about whether or not it should be decarbonising of energy or electricity, I actually don’t see this as a dichotomy. In order to address one, we have to address the elephant in the room, and that is how it is that we address dry-year risk. In order for us to get to 100 percent renewable electricity, we have to address how it is that we’d prepare for a year such as we’re going through now. In order to do that, that allows for further electrification of our energy system. So it’s not a matter of disagreeing or not disagreeing; I just simply don’t buy into the dichotomy that many in the industry try and paint between energy and electricity. When I think of it, I think of it as an energy system.

BARBARA KURIGER (National—Taranaki - King Country): Thank you, Madam Chair. In November 2019, the Minister received advice from the Ministry of Business, Innovation and Employment (MBIE) on a potential pumped hydro scheme. The advice received some quotes that read as if they were from Yes, Minister rather than MBIE—quotes like “The future value of pump storage is unclear. This is not a small or trivial project.” While the scheme’s economics may look appealing on paper, the ministry stated, “A scheme like Onslow is a high-cost, long-term solution to dry-year storage and lowering emissions. While no detailed planning has taken place, it is not impossible that designed and constructed a large earth dam could take 10 years.”

Given we have wholesale electricity prices that are four times what they were at the time of the oil and gas ban, my question to the Minister is: is the $100 million spent on the New Zealand Battery Project—of that money, what options for dry-year storage are going to be considered? Will it consider ammonia as a dry-year storage, as suggested by MBIE, and will it consider gas as a dry-year storage?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): I’d just like to point to the member that the reason why we’re spending in phase one $30 million and in phase two $70 million is for precisely those reasons. I’d like to say some very hard-working officials put together that advice and I have a great deal of respect for the advice that they give to me and it is appreciated—rather than ridiculing it.

So in terms of what it will look at, which has been well canvassed in public documents—it will look at pumped hydro, it will look at the particular case of Onslow, and it will look at smaller North Island schemes as comparators to that. What is happening, the phase that we’re at, at the moment, is actually putting together a long list of what the comparative technologies will look at. But this is actually about ways in which we do renewable systems. This is about what the future of the world looks like, and that is renewable energy. So, no, we will not be looking at fossil fuels for New Zealand’s future, because our Government believes we have to be planning for a fight against climate change.

SIMON COURT (ACT): Thank you, Madam Chair. To the Minister: does she agree with the Genesis CEO that electricity can help us decarbonise, but we should not get hung up on the last remaining bits of emissions—that we must focus on security of supply and pricing. If so, does she believe that having New Zealand’s major industries turn off production to save power this winter reflects security of supply and pricing? Should New Zealand homeowners be concerned about price rises and the welfare of older persons, and should businesses be worried about price rises impacting on their business viability because of the lack of security of supply and the very significant increase in prices?

BARBARA KURIGER (National—Taranaki - King Country): I’d just like to ask the Minister about the just transition, because we keep hearing a lot about just transition, and since I’ve been in the spokesperson’s role, I’ve actually seen a lot of exciting possibilities in the future. But right now, none of them are ready. They need to be built. They need to be developed. You know, hydrogen’s talked about a lot. We talk about building more wind farms. But what I’d be extremely worried about is, as I said before, it could take 10 years if Onslow—not that I think Onslow is a good idea; I think it’s a very bad idea. But what’s going to happen in the next 10 years with limited gas supply if we have no rain—what is in the future, and what is the just transition?

SIMON COURT (ACT): Thank you, Madam Chair. To the Minister: I’m sure that there will be many opportunities to respond to questions about energy, which is a vital plank in New Zealand’s economic self-sustainability, and cheap energy is actually something that has allowed New Zealand manufacturing businesses to compete very effectively, even with much larger businesses and much larger countries around the world. So we understand that there’s a risk that’s developed over time that is now manifested with the rapid decline of the Pohokura field and the time that that is taking to have it, essentially, refreshed with additional drilling and maintenance so that it can be brought back online. So the ACT Party understands, to some extent, how we’ve got to this point, but does the Minister agree with the Genesis CEO, who said on Radio New Zealand yesterday, that, now existing gas fields are declining much faster than anticipated, the Government’s ban on oil and gas exploration is becoming an issue with respect to future electricity supply? And would she be able to reassure the House that Government policy, in terms of banning oil and gas exploration, has not contributed in any way to the situation that we find ourselves in?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): Thank you. I’ll address the broad area of security of supply that has been brought up in the last few questions. The National spokesperson asked me, what happens if this happens over a prolonged period of time? So, if we look back at the historical data in terms of what dry years have looked like over the last few decades, we’ve seen an instance in 1959, 1960, 1973, 1974, 1976, and 1977 when you had two consecutive dry years. They are incredibly rare—for us to have more than a dry year. As a proud South Islander, I can talk to the amount of rain that does tend to fall in the island in the winter. What we are seeing is actually a little bit of recharge over the last 24 hours happening in the southern hydro lakes, which I think is something that is of a great relief to everybody. So it is incredibly rare, but we do have a system that is set up like this. This is the system behaving as it should.

So, in terms of what would happen, well set out by the architects of the system, there is what happens in terms of conservation campaigns and what springs into action. I don’t think this should be New Zealand’s long-term future, and neither does our Government. That is precisely why we are addressing the issue of dry year risk by looking at something that has some greater certainty and will stop New Zealanders and New Zealand businesses having to go through this, by looking at what we have to do to address that through a renewable source rather than increasing cost of gas supplies.

In terms of the decision we made around ending the issuing of new offshore permits, I can give the member reassurance that it is not what lies at the heart of this. The last offshore gas find in New Zealand was in 2020. It’s 21 years since there’s been an economic find of oil or gas in New Zealand. All of our finds have been onshore in that period of time. They haven’t been offshore. We’ve also seen the surrender of many permits that had already been issued for offshore permits in the time since we made the decision. That’s because those fields were shown to be uneconomic.

What I say is that it is incredibly important that, as a country, we are planning for the scenario that we simply don’t have those gas reserves there, because that is what the evidence is showing us. We’re finding that the economic reserves simply are not there.

BARBARA KURIGER (National—Taranaki - King Country): To the Minister: we hear a lot about the supply side of energy; what work is the Minister doing in the demand side?

Hon Dr MEGAN WOODS (Minister of Energy and Resources): Through the Energy Efficiency and Conservation Authority, EECA, this is a major focus, as the name on the tin says: that it is about conservation; that it is about reducing energy. We do a lot of work with businesses, with industry, who are very eager to participate in this work, because, actually, energy conservation means less expenditure for those businesses and a way for them to improve the profitability of their businesses. This is an area of a great deal of interest to me. As a Minister, I served as one of the four Ministers, I think, on the International Energy Agency’s conservation working party and doing work globally with fellow Ministers around what needs to happen as we make transitions to 100 percent renewable systems.

SIMON COURT (ACT): Madam Chair, thank you. To the Minister, I now turn to resources. I’ve become aware, from a number of different stakeholders, that they’re very concerned that their access to mineral resources, in particular to quarry resources, has been severely impacted by the National Environmental Standards for Freshwater, which prohibited earthworks and disturbing wetland—a wetland being defined as an area as small as one square metre. I’m interested in what advice the Minister has had about how the National Environmental Standards for Freshwater has affected access to those quarry resources—whether you’re aware that that has held up any projects or added to additional cost—and what discussions you may have had with other Ministers about very quickly modifying that term “prohibited” or otherwise modifying the National Environmental Standards for Freshwater to allow earthworks in wetlands for infrastructure, to get access to vital resources, minerals like gold and rare earth elements, which we absolutely depend on for manufacturing and construction and infrastructure. Thank you, Minister.

Hon Dr MEGAN WOODS (Minister of Energy and Resources): Also being the Minister of Housing, access to aggregate is something that I’m very well aware of. I’ve had engagement with a number of stakeholders. The Minister for the Environment has been made aware of this, and we’re continuing to look at the issue. In terms of other work happening across Government around the issue of aggregate and resources, this is an issue also that the Infrastructure Commission is turning its attention to, as well as the advice that I’m working with my officials on, about the pathway we need for what is an incredibly ambitious infrastructure programme from a Government that is spending more than has been spent in a generation on infrastructure.

SIMON COURT (ACT): So, to the Minister, I appreciate you are having discussions. This is so urgent there are a number of quarries and other operations in Auckland which have lost an entire construction season because, after they’ve approached their local council—Auckland Council for example—to apply for an earthworks permit on land already consented for their activity, their application was declined. They were told not to put it on the desk, because it could not be accepted by that local authority. This is leading to increased costs. It is leading to disruption in the supply chain. And I ask the Minister how urgently this is being treated and what the time frame is to respond to stakeholders and to give assurance to the infrastructure and construction sectors that this is a priority for the Government.

Immigration

CHAIRPERSON (Hon Jenny Salesa): We now come to the annual review of immigration, and I call on the chairperson of the Economic Development, Science and Innovation Committee, Jamie Strange.

JAMIE STRANGE (Chairperson of the Economic Development, Science and Innovation Committee): Thank you, Madam Chair. I appreciate the opportunity to make a third speech in this debate, this time on the topic of immigration. Thank you for the opportunity. At the Economic Development, Science and Innovation Committee, we heard about New Zealand’s closed borders, and we heard that they’ve had huge challenges for the immigration system. That will come to no surprise to anyone who is listening today. It’s important that we continue responding with flexibility to the unique challenges posed by COVID-19.

We also heard about New Zealand’s ability to bring people through our managed isolation and quarantine (MIQ) system. We know that, over the past 12 months, demand for places in MIQ has certainly been intense. We also heard about the effects of Immigration New Zealand (INZ) officials making changes and standing up new functions and processes to respond to the pandemic, and that the nature of Immigration New Zealand’s work has changed in many ways. We heard that the Government is committed to building a productive, sustainable, and inclusive economy that delivers good jobs, decent working conditions, and fair wages. We heard that the immigration system is incredibly critical to this, and there is work under way to support that.

The border closure has had a major impact on the immigration system, which is now operating very differently than in the pre-COVID environment. Three offshore visa processing offices have been closed since March 2020. Beijing, Apia, and Suva offices are now operating. There has been a significant reduction in temporary visa applications, particularly visitor visas, which made up over half of all visa applications pre - COVID-19. Despite the visa volume reductions, Immigration New Zealand’s visa processing capacity is being fully utilised. Significant work remains in the system, and this and the new functions that INZ has absorbed are challenging, complex, and resource intensive.

We heard that these functions include four in particular: number one, temporary and residence visa applications for 260,000 migrants currently in New Zealand, to ensure they remain lawful and meet workforce needs; number two, partnership applications for eligible offshore applicants; the third point was around new work to process requests for border exemptions and related visas; and the fourth was around managing the significant number of queued offshore applicants due to applicants being unable to travel.

So that’s a little bit of an overview of some of the key points that we heard during this process. If I could ask a question of the Minister, my question is that, with our border being closed to keep COVID out of our communities, core public services and industries have continued to need people to come across the border to help keep them running. Can the Minister tell us about some of the measures that have been taken to support them through this? Thank you.

ERICA STANFORD (National—East Coast Bays): Thank you, Madam Chair. I would like to ask the Minister: was the priority queue system for skilled migrant category (SMC) residence applications agreed to and signed off by a Minister when it was implemented, and why was this not transparently communicated to applicants until March 2020—effectively, being a secret priority queue for 18 months?

Dr JAMES McDOWALL (ACT): Thank you, Madam Chair. I’ve got a variety of specific questions, so I’ll just get to it in the interests of time. The first is: why is Immigration New Zealand (INZ) working so hard to come down on vulnerable industries—for example, a recent clarification, or should I say rule change, around sleepover hours that need to be paid at $25.50 per hour at a minimum, where they’re traditionally classed as an allowance and paid at the minimum wage? Other industries are allowed to pay their employees allowances, yet the care industry for some reason can’t. This has huge ramifications for the sector, with workers and employers reaching out to me in desperation. This is very important. If the clients suffer—and this is in the mental health sector particularly, and also in aged care—then this is very much on the Minister. Thank you.

ERICA STANFORD (National—East Coast Bays): Following on from my last question: is it acceptable that a priority queue was established based on income and registration of occupation, and in place for 18 months, without being written into Immigration New Zealand instructions—effectively, operating as a secret queue—until a complaint was lodged with the Ombudsman, forcing officials to make this priority queue official by writing it into instructions? And what is the Minister doing to ensure that Immigration officials are not using other measures that are not transparently communicated to applicants?

For the period 2019/20, we saw a dramatic increase in the amount of time taken to process skilled migrant category (SMC) applications. Long queues blew out to two years—that’s if a person had been selected in the first place. Lots of people are still stuck in the expression of interest pool that was frozen in early 2020. What does the Minister intend to do about dependent children of residence applicants who are turning 18 and being prevented from undertaking tertiary study due to the cost of international fees, and who can’t work or volunteer or they will not be allowed to gain residence with their parents?

This is a serious question about these children. Many of them are having to repeat year 13, which they don’t need to do, but they are forced to because there is nothing else they can do, or they’re sitting at home doing nothing. They are starting to display mental health problems. Will the Minister commit to allowing these children to at least work while they await the outcome of their parents’ residence application, without that work deeming them to be non-dependent on their parents?

Dr JAMES McDOWALL (ACT): Thank you, Madam Chair. Why has there been a refusal to make any decision on the future of the expressions of interest (EOI) and skilled migrant category system, despite leaving it open to people to submit further EOIs?

And, separately, why has the minimum salary for the work-to-residence been raised from $55k to $79k, when these employers have already proven, through the accreditation process, that they struggle to find local workers? Why are we punishing them further, to the point where they may not be able to hire anybody?

Hon KRIS FAAFOI (Minister of Immigration): Like Dr Megan Woods, I will be listening to some of the questions during the debate and bunching them up for efficiency. Can I just note the context in which we are in at the moment. Obviously, everyone knows about COVID. But between 20 March of last year and 4 May of this year, there have been 226,819 arrivals at our border; for the subsequent time the previous year, the usual arrivals of people into New Zealand were 7 million. So the effect of closing our border means we do have very constrained arrivals into New Zealand. We know the effect of that. We are, obviously, trying to manage that, and channelling questions that, I think, may come within the next 20 or so minutes, we understand that the border restrictions over that period of time have created difficulties for numbers of people who are unable to enter the border.

Addressing the question from my colleague Jamie Strange, in terms of industries who still require people to come into New Zealand, that is, obviously, difficult when there are only 226,000-odd people able to come into the country, but we have been able to give border exceptions for those with critical skills; I understand, to about, roughly 17,000 people—so whether that be by a border exception where individuals apply, roughly about 10,000 or 11,000; by class exception, where sectors are applying, roughly 7,000 through that. The types of sectors that we are talking about are heavily skewed towards the private industries, and I would like to reinforce that, given the perception that some have tried to create: that that is not necessarily those who are getting exceptions from officials under the criteria that exists at the moment.

Addressing the question from Erica Stanford around the issue of the Ombudsman and the priority queue: no, it is not acceptable, and that is why the Ombudsman ruled in the way that he did. I have asked officials to review that situation to understand how it came about, because I was not the Minister at the time and to ensure that that does not happen again. I think the fact that the Ombudsman made it quite clear that a decision was made and not necessarily brought to the attention of the Minister at the time is an issue. Again, I have asked officials to report back to me about the situation.

Mr McDowall raised an issue around sleepover rates, which I want to make sure I address. We are working on that issue with Health. My understanding is that it is an unintended consequence of the application of wage rules. So if he is hearing concern from people that he is speaking to, I think that might be valid. But officials, with the assistance of Health, are dealing with that at the moment.

There have been a number of questions about the skilled migrant category (SMC) and wait times. There has been an unprecedented demand, well above forecast, for the SMC, and we have put a bit of a perfect storm in terms of some of the processing. I would add that those SMC applications are not rubber-stamps; they are a very involved process where we have to make sure that the assessment of the officials to the criteria is done and that it is done thoroughly. So, I think, the perception that these things are easy to process is one that we want to make sure that we dispel, but also, given COVID, there have been issues with being able to have staff available to process, which also hasn’t assisted issues.

RICARDO MENÉNDEZ MARCH (Green): Tēnā koe, Madam Chair. So I am interested in getting some answers on the discrimination that disabled people face within our immigration system. I wanted to ask about the rationale for continuing this policy despite disabled people being quite clear that the ongoing discrimination for people to access residency class visas has prevented them from fully participating in our society, and particularly during the pandemic in this case, and also with the discrimination that people living with HIV face within our immigration system.

Despite the previous National Government and subsequent Governments recognising that discrimination because of HIV is no longer fit for purpose, it continues. So I’m interested in hearing the Minister’s rationale—despite granting residency to people like Juliana Carvalho, who put a petition that garnered tens of thousands of signatures, there has been no policy change and I’m wondering what the rationale has been to continue down this path so far?

ERICA STANFORD (National—East Coast Bays): The Minister didn’t answer my question earlier, and I’m keen to get an answer because this is important—what does he intend to do about the dependent children of resident applicants who are turning 18 and who are prevented from studying, working, or even volunteering for fear of not being able to come in under their parents’ residency application and not being able to afford tertiary study? That’s the question he has not answered, and I would like a response because there are thousands of children out there who are affected by this.

The Minister just told us, in his previous answer, that he has to be very careful around the applications that are coming in; they have to do be done properly. I’d like to ask the Minister why it is that, between 2018 and 2019, the caseload of an officer processing residence applications was 52 cases, in 2019-20 it dropped to 36, it currently sits at 25 cases on their books at one time. That is a massive productivity drop. I’d also like to ask him why it was that in 2019-20, 90 percent of skilled migrant category cases were finalised in 15 months, in 2018-19 that was 19, and now we’re at 24, so you’ve gone from 9 to 15 to 24, and the caseload of the officers has dropped dramatically as well. And has this got anything to do with the fact that, in the 2019-20 year, 55 percent of staff working in the residence application branch left?

Dr JAMES McDOWALL (ACT): Thank you, Madam Chair, and I just want to take a moment to say thank you to the Minister for addressing the question on sleepover hours and rates—don’t get used to it, though. So, actually, further to that, I would like a little bit more clarification, if possible, as to if that decision will be reversed and when we can expect that, because I know the stakeholders that have reached out to me would like an answer.

The next question I have is evidently employers—this is a new thing—that have more than six people on work visas now need to pay all of their staff the minimum wage plus 10 percent. I’ve just spoken to someone—a business owner—who has calculated that this will cost him $830,000 per year, and this cost will be passed on to his clients. That’s no good for anybody. And it’s the same with a hospitality client: one reached out to me, they’ve got 300 staff, and even the dishwasher will need to be paid $22 an hour now, and this is going to have a big effect on their bottom line and therefore the cost they pass on.

ERICA STANFORD (National—East Coast Bays): Thank you, Madam Chair. I’d like to ask the Minister: why do visa waiver country partners—sorry, let me start the question again. What is the logic or reasoning behind the decision to mean that New Zealand citizens or residents have to travel to fetch their partners from non-visa waiver countries, whereas those from visa waiver countries get to travel to New Zealand without their partners? And will he look at changing this policy so that New Zealand citizens and residents can be with their loved ones?

Madam Chair, I’ll continue, because it looks like the Minister’s just taking some advice. Is the Minister considering extending—under the generous powers that he’s been granted for the next two years—the post-study work visas for those holders who’ve been trapped offshore in early 2020, and are unable to use their visas once the borders reopen? Or is it the case that, when those visas expire, the holder will not have the opportunity to return to New Zealand when the borders open, despite the significant investment they’ve made into education here? I will carry on—oh, no, I’ll sit down.

RICARDO MENÉNDEZ MARCH (Green): Following from the questions of the member to my right, I’m also interested in hearing about the people who were stranded overseas and their visas have now expired—I’m thinking of post-study work visas, thinking of people who may have a valid working holiday visa who were due to come and are now still trapped overseas, particularly during the period that we’re reviewing; thinking what the rationale has been for perhaps not using those powers in the past, and whether the Minister could give some indication around whether that may change in terms of giving some assurances to post-study work visa holders here. And, more broadly, for those that are here, our communities onshore—many who are feeling a bit despondent about the fact that some investors are easily able to access residency class visas while they seem to have very few pathways—whether there’d be any reviews based on what has happened during the past year, around the inequities that exist for our working class migrants compared to our investor category migrants?

Hon KRIS FAAFOI (Minister of Immigration): Madam Chair, I’ll try and deal with some of those questions—I might just deal with the final question first. I think there’s been a bit of misreporting about how some of the people who have come in as investors have found their way to residency. If we are talking about the same reporting, the individuals concerned came in under a border exception because their skills were not readily available. When they came into New Zealand, I understand they already had active applications for investor category type visas and, as soon as they come to the country, those can be processed. So the way that that story was framed, I believe, didn’t necessary reflect the situation with those individuals.

I might go to the question that was first raised. The border settings and the criteria always have had a test for acceptable standard of health. I don’t think I should go into particular cases, but if people who are applying for visas don’t meet the criteria of having acceptable levels of health and would place burden on the New Zealand health system—for some time that test has always been part of the visa application process. Anyone who has had any interaction with an Associate Minister of Immigration would have argued the case for someone at some stage and sometimes those are able to be done on other grounds, primarily humanitarian.

Mr McDowall, the new systems and the new rates, I believe, pertain to what I would call fourth form economics. If the skills aren’t available in New Zealand and they are skills that are in high demand, then paying the absolute minimum wage is not what this is about. We’ve been very up front with sectors—and those sectors that have traditionally relied on migrant labour—about the new system that will come into place, which will be employer and job led, not necessarily migrant led. So we can match skilled migrant labour to jobs that actually exist and jobs that are paying a wage or a salary that is actually going to let them support themselves while they are in New Zealand. So, as we have said for some time, the days of open slather, high-volume, low-skill, low-wage immigration needs to be reset, and we’ll have some more news about that very soon.

I think, to go towards the question that Erica Stanford reinforced—I believe those children do have options if they wanted to separate themselves from their parent’s visas and apply as individuals now that they have become 18 and adults—

Erica Stanford: How are they going to do that without tertiary education?

Hon KRIS FAAFOI: —they can apply to do that. And that, if they do that, would enable them to take up tertiary study under domestic settings.

Dr JAMES McDOWALL (ACT): Thank you, Madam Chair. First of all, just to reiterate, I would like to know if that clarification will be reversed soon and what kind of time frame we will be expecting—that’s regarding the sleepover rates. The second question is: why has the Minister made a habit of granting extensions very much at the last minute, creating a great deal of uncertainty for migrants, and was it intentional, to weed out the people who had made plans to leave, so that they couldn’t get refunds? So that’s one.

Secondly, why is Immigration New Zealand shooting themselves in the foot again and again with their decisions, in this case with a skilled migrant category queue, especially with the paused expression of interest queue, and again with the employer accreditation window? Thank you.

RICARDO MENÉNDEZ MARCH (Green): I wanted to touch on one of the previous answers by the Minister, talking about high-volume, low-skilled migration that is not sustainable. I just wanted to get a better understanding of how the Minister defines low skill, because a lot of our migrant communities, many of whom are essential workers and do things that I would consider essential to our society, such as keeping our supermarkets running and keeping our many industries that ran during the lockdown, I would consider them skilled. So the fact that we have attached the definition of being high skilled to salaries comes with a lot of barriers for migrant communities. I’m interested to hear how the Minister defines low skills and what does that hold for the future of our immigration system in relation to how that definition’s being currently applied.

Hon KRIS FAAFOI (Minister of Immigration): Just to address Mr McDowall’s question, we’d like to address that as soon as we possibly can; so it’s not something that we’ll be sitting on. To the second question, we are always trying to balance the needs of businesses that might be employing the likes of working holiday visa holders and also the domestic labour market and making sure that there are opportunities available for New Zealanders to take jobs that some of those working holiday visa holders might be able to take up if those jobs are available, instead of just allowing some of those companies or employers to default to working holiday visas, because it’s what they have done in the past. I think, when you look at the totality of some of the work that we’ve done across the employment space, the fact that we are now having a situation, you know, 10 to 12 months after COVID hit, where we’ve got unemployment decreasing, we’ve done everything that we possibly can to get New Zealanders into work.

Going to Mr Menéndez March’s question, it is more about making sure that we’re taking every opportunity to upskill and make sure that we’ve got wages and conditions here in New Zealand for New Zealanders, to make sure that training is done by sectors, and that they have serious conversations about wages and conditions, which we think is well overdue. I think there has been a long period of high-volume immigration, which has suppressed the likes of wages, has put off serious investment that some sectors should have taken a long time ago, and, again, affected the conditions of some of the sectors involved—so, again, working with the likes of some of the changes that Mr Hipkins has made over the last three years, making sure that we’ve got better skills matches to jobs that are available and getting New Zealanders into those skills and wages, and ensuring that if there are still remaining skill gaps we continue to use immigration as that lever.

ERICA STANFORD (National—East Coast Bays): Thank you, Madam Chair. I’d like to go back to these children of the residence visa applicants who are turning 18 and can’t do anything, because I thought it was very interesting the Minister’s last response. I want to clarify: is the Minister seriously saying that he believes that the thousands of 18-year-olds in this country who are part of their family’s residence application should, with no experience, no education, split from their parents’ application, get a job on an essential skills work visa—if they’d even get a job that would make immigration give them a work visa. And then how on earth would they ever get residence with no education, being an 18-year-old leaving school with no skills, no experience, and no education?

That is a ridiculous and preposterous argument, and what he’s basically saying to these families is that their children have to sit and rot for years and do absolutely nothing, which is terrible for their mental health and terrible for their lives, because the real risk is that, if they go out and work—if they’d even be granted a work visa, which is preposterous—it’s very, very unlikely they would ever get residence, given that they don’t have an education and would never be able to get up to a point where they could get residence, which would mean they would have to return home while their parents were here, effectively splitting up migrant families, which this Minister loves to do.

RICARDO MENÉNDEZ MARCH (Green): Following on the issue of lack of pathways for residency, whether it’s young people or people who don’t meet the salary criteria, I recognise that the Minister in the chair, Kris Faafoi, mentioned the need to grow skills locally, and I think everyone in this House would support that notion but, I think, also acknowledging that that may take some time and, in the meanwhile, we do have a workforce that is currently on temporary visas and does not have access to fully participate in society. So, seeing as in the period that we’re reviewing, we know that there’s a large portion of that workforce that still depends on migrant communities and that those gaps may not be filled for some years, would it not make sense for these communities to be able to access residency class visas, to be upskilled, and, as we fill those skills locally, acknowledging that it actually may take some years, because those gaps may well not be filled in six months; meanwhile, the workforce here is suffering with uncertainty and without the ability to access State support services. If we were to go back to alert level 3 or 4, that migrant workforce is always more at risk of COVID-19 due to the lack of support. So I’m interested in knowing what the rationale is for keeping these people on temporary visas for such a long time when they would fill the gaps of skills.

Dr JAMES McDOWALL (ACT): Thank you, Madam Chair. If the processing time for the skilled migrant applications is now up to two years or longer, why do immigration rules only allow applicants to extend work visas without labour market tests for 18 months? And, secondly, lawyers and advisers around the country are getting in touch with me saying they’re getting five or up to 10 calls a day from migrants expressing interest in shifting to Canada. So is the Minister happy with skilled migrants here in New Zealand who are just stuck in the queue moving and taking their skills to Canada?

Hon KRIS FAAFOI (Minister of Immigration): I might just deal with a couple of questions that have been raised, because there is an assumption that is loaded into some of the questions that, if people are in the skilled migrant category (SMC) queue, they will definitely be granted residence. That is not a certainty. And, as I say, I would push against the statement that some of these people who are turning 18 have no options; they do. I’m sure some of them know that, and they have been reflected by me already in this debate.

So, as a review of the SMC category, we will make sure that we address some of the long-term issues that face the skill shortages in our economy. What we have found is that there was an increase in demand or an amount of demand way ahead of forecast, which has also, as I said, contributed to some of the delays into processing and also to the queue becoming so large. As we look at the settings for the SMC going forward, whether or not we’ve got those in the right place is one of those things we are currently looking at.

Corrections

CHAIRPERSON (Hon Jenny Salesa): We now move to the Corrections annual review.

GINNY ANDERSEN (Chairperson of the Justice Committee): Thank you very much, Madam Chair. The Justice Committee reported back to the House on annual reviews in the justice sector in March 2021. We held a hearing with the chief executive of the Department of Corrections, which is Jeremy Lightfoot, and officials on 18 February of this year. The committee heard a range of issues, but the three main ones that we heard were Hōkai Rangi, the new departmental strategy; the impact of COVID-19 on Corrections’ work and their response to the pandemic; and also the wider management of people in the corrections system.

In relation to the Hōkai Rangi strategy, the committee heard that since the strategy has been launched in 2019, it’s been designed to improve outcomes for Māori and whānau, and to try and address the significant overrepresentation of Māori in the corrections system. We heard how Hōkai Rangi had been operating and, in particular, the committee was very interested to hear about the Māori Pathways programme. This is a key part of Hōkai Rangi. It’s a four-year programme with projects that are co-designed with iwi and with whānau, and results in the programme jointly are assessed by both iwi Māori and the Crown. We also learnt that the department has been working with iwi, and they gave examples of Ngāti Maniapoto and Ngāti Raukawa and the working alongside of the Waikato District Health Board to design and deliver a service for the Waikeria mental health and addiction service.

So the next main area I will touch upon is the general management of people in the corrections system. In 2018, the Government announced the bold goal of reducing the prison population by 30 percent over the 15 years. It was interesting to note that in 2019 to 2020, the total prison population had reduced for a third year consecutively, as at June 2020. However, it was interesting to note that the prison forecasts still projected gross growth in that space, and so the department responded to those questions from committee members to particularly look at the peak of remand population at 39 percent.

The committee heard in terms of a range of measures that have been used to address this, and one of those was EM bail, or electronic monitoring on bail, which is a form of monitoring people outside of prison. The Corrections annual report for 2019-20 noted that the number of EM bail applications received had increased by 35 percent over the last two years and that they expected further growth in that space. The committee also heard about community-based sentences and how they were operating over the past year, and we were told that about 28,000 people were being managed on sentence in the community. We also heard about reducing reoffending and recidivism, and some of the key areas in that space.

The last area I’ll touch upon is that committee members discussed prisoner assaults. The chief executive told the committee that the increase in no-injury assaults was due to the change in culture in the department, where the staff have been encouraged to report early and in a preventative way to reduce any instances of violent behaviour. I note that committee members will be interested to ask questions of the Minister and I therefore allow those questions to take part.

SIMEON BROWN (National—Pakuranga): Thank you, Madam Chair. Thank you for the opportunity to take part in this debate on the annual review of the Department of Corrections. I’ve got a range of issues that I’d like to ask questions of the Minister over, and the first one to touch on is the issue that Ginny Andersen, the previous speaker, just briefly touched on at the end, which is around the number of prisoner assaults. What we’ve seen under this Government and under Kelvin Davis’ leadership has been a 92 percent increase in prisoner assaults, and a 92 percent increase in assaults on corrections officers is something which I believe is incredibly unacceptable. In my view, none of our corrections officers deserves that treatment when they go to work, and it’s something which is definitely not part of their job description. My question is: what actions is the Minister taking to address this growing problem in our prisons?

Well, the question is what action is he taking regarding the increase in prisoner assaults, because not only have we seen an increase in prisoners on corrections officers, which has increased by 92 percent, but we have also seen an increase in assaults of prisoner on prisoner, which is also seriously concerning. We’ve also seen an 80 percent increase in the number of corrections officers requiring medical treatment following assaults in our prisons. The question is: what action is the Minister taking to address these issues?

When we had corrections before the committee, we heard that the Minister has now started receiving monthly briefings. Well, when did those monthly briefings begin? If it’s true that they’ve only just started happening this year, why did it take the Minister over three years of being in the portfolio to start receiving regular briefings on the number of assaults which happen in our prisons?

TONI SEVERIN (ACT): My question is in the same line as Simeon’s. The question is why have the assaults on corrections officers increased but our population in the prisons has decreased, because with the 90 percent, you would expect to see possibly less assaults happening with less prisoners, but the assaults are increasing.

The other question that at this stage I want to ask also is: what is he going to do about the gang problems within prisons?

Hon KELVIN DAVIS (Minister of Corrections): Thank you, Madam Chair. I was going to allow the questions to accrue because we are running out of time, but that’s fine.

Look, first of all, I’d like to acknowledge the hard work that all of our corrections officers do. There’s some 10,000 staff. They work in one of the most difficult and dangerous environments in the country. They go to work every day and, I agree, they do not expect, and no one should expect, to be assaulted on the job. Sadly, it is part of the nature of the environment they work in, but that is not acceptable. No assault is acceptable.

I don’t expect anybody to get away with assaulting a corrections officer. I expect everybody who assaults a corrections officer to be held to account, and I just want to take the opportunity to thank all of our corrections officers for the wonderful work they do in helping to keep New Zealand safe. So, in the annual review, the chief executive, Jeremy Lightfoot, I believe addressed these questions very well.

It is really important to note that serious assaults have remained static for the last four or five years, so those are the worst of the worst. I would rather see those numbers drop, obviously. I don’t want to see or hear or have any reports of any corrections officer being seriously assaulted—I don’t want to hear any reports of them being assaulted at all. It is important to note, though, that there are a number of reasons that we’re seeing increased violence in our prisons. One is the increased number of gang members.

Now, when I was in Opposition, the prison population was sky-rocketing. I said at the time that all we do when we allow the prison population to grow is allow gangs to recruit more—it was, basically, university for gangs. That was one of the reasons why we said, as a Government, that one of our goals is to safely reduce the prison population. We couldn’t financially afford to keep building American-style mega-prisons every three years but, socially, we could not allow that to happen. So we cannot dissociate the growth in gang members in prisons from the growth of gang members out in the community.

The second point is the increase in meth out in the communities. We know that the growth of meth in the communities is sky-rocketing, and we can’t expect it not to have an impact on what is going on in prisons because we know that 90 percent of people in prisons, over the course of their lives, have a drug and alcohol or a mental health issue. So for those people who are on meth out in the communities, that will also flow on into their behaviour in prisons and it impacts on the way they behave there.

Also, the remand population is growing. It is up at around about 37 percent.

Simeon Brown: What are you doing about it?

Hon KELVIN DAVIS: Now, anybody who knows prisons knows that those people on remand, they’re a lot more agitated, and there is less certainty for them as compared to those who are sentenced. So we are trying to get the remand population down.

The member asks what we are doing about it. Well, as we know, there have been a number of strategies put in place over the last few years to help to address this. There have been, for example, stab-resistant vests deployed. There is a whole lot of training that has gone on, and there have been a number of things, but also unions and Corrections have been working together on a plan. The plan has been put in front of me.

Simeon Brown: What’s the plan? Tell us the plan.

Hon KELVIN DAVIS: Well, the plan is here. It has been put in front of me. I’d like to congratulate both Corrections and the unions for working together on that plan, because it is important that unions and Corrections do work together to address these issues.

Can I just touch on a number of other things, as well. First of all, I just want to congratulate, again, Corrections on the work they have done throughout COVID. Now, it is a testimony to the fact that COVID did not grab hold in our prisons. If you look to overseas jurisdictions, there were a number that had COVID. The work that our corrections system did to prevent—there was a case of COVID in the prisons, but it didn’t spread because of the work that Corrections had done.

Hōkai Rangi is on track to achieve our short-term actions. It is an ambitious strategy to effect real intergenerational change. It is about working in true partnership between the Crown and Māori, and it’s something that we need to continue to support.

GOLRIZ GHAHRAMAN (Green): Thank you, Madam Chair. I want to acknowledge the Minister of Corrections in his last contribution for touching on some of the themes that are of grave concern to the Green Party, which are the excessive mental health issues, the drug and alcohol addictions issues, and the overpopulation that we see in our prison populations. I do want to acknowledge also that we’ve now had the past chief scientist of the Prime Minister last term, Dr Gluckman, and we’ve had High Court and Court of Appeal judges call imprisonment a failed model—in particular, when it comes to the myth of deterrence of crime. So I do want us to hold the evidence-based approach central to our policy making this term in particular.

If we hold that imprisonment has failed to keep our communities safe and then we move on to what has come out in the very recent past in terms of literal abuse being committed in our prisons by this already failed system, we have findings of inhumane treatment in our women’s prison, we had on Mother’s Day revelations of women being chained as they give birth, we have the Waikeria Prison protest that was based on some of the inhumane conditions that have been found, and we have the idea that crime has not come down, nobody is being kept safe. The failure there being rehabilitation, being the step that our corrections system needs to take to move us to a place where, like the Nordic countries and like Scandinavian models, we can minimise imprisonment as a model and we can move to the things that we know actually work, those being mental health treatment, drug and alcohol treatment, literacy programmes, and systems that apply across the nation in a standardised way and in an evidence-based way that will actually bring down recidivism and will bring down issues with safety in our communities but will actually move away from imprisonment.

I know that this Minister can’t change the law when it comes to imprisonment, but I also know that corrections are where rehabilitative measures have to be first implemented so that we can keep communities safe and ensure abuse stops. So what measures are being taken in that regard to move New Zealand away from this failed system while we still have to abide by it?

SIMEON BROWN (National—Pakuranga): A point of order, first, Madam Chairperson. The Minister quoted from an official document previously regarding the plan for addressing the prison violence. Under Standing Order 386, I request the Minister to table that document.

CHAIRPERSON (Hon Jenny Salesa): The request is to table the document that the Minister referred to.

Hon Kelvin Davis: Just in reference to that, this is a draft of the plan. So I believe I’ve been advised that we can provide a finalised version when it’s ready.

SIMEON BROWN: Point of order, Madam Chairperson. The Standing Order doesn’t have anything to do with whether it’s a draft or a final document. The requirement is that if the Minister uses that document, I can request that it be tabled.

CHAIRPERSON (Hon Jenny Salesa): Standing Order 386, in terms of documents quoted by a Minister—this document actually states that it is in confidence. The Minister actually said that there is a plan, but he didn’t actually quote from the document. I can actually see the document. It states that it is a confidential document. So Standing Order 386 says that the Minister is able not to table it because it is confidential. It is a confidential document, and also the Minister did not quote from the document; he referred to it.

SIMEON BROWN: Thank you for your ruling on that matter. I would like to take up the Minister’s offer for him to provide a final copy as soon as that is provided, because I think this is something which is of enormous importance to New Zealanders—the amount of violence. I’d like the Minister to please answer to the House when that final document will actually be made available so that we have some idea around the time frame that this issue is actually being addressed in a serious manner and in a timely manner, because from my understanding, he only just asked for monthly briefings on assaults in prisons in February this year—in February this year was the first month, in his three and a bit years as Minister. I find that absolutely shocking.

I now just want to touch on the issue of rehabilitation, and we heard the Minister talk there about 90 percent of prisoners having drug and alcohol or mental health addiction needs. Under written question No. 3322, I have figures which have been released to me which show that in 2017-18, 4,075 people in prison received drug and alcohol rehabilitation programmes or were part of them. That dropped to 1,180 in the 2019-20 year—so about 25 percent of the 2017-18 year. That’s a 75 percent drop—a massive drop—in the amount of people receiving drug and alcohol rehabilitation programmes. He’s identified the problem of the number of people in prison needing assistance, but the number of people getting help is only a quarter. Why is that?

Hon KELVIN DAVIS (Minister of Corrections): It’s quite simple. There’s a number of those rehabilitation programmes that weren’t effective, so I’d much rather spend money on those programmes that are the most effective, instead of just trying to look like we’re doing things that aren’t effective. If I can just go through how effective, these are some of the results—these are some of the results of what’s happened in Corrections over the last three years.

Remember, the 2017 justice sector projections said that the prison population at this point in time was going to be over 13,000. Remember that figure, everybody: 13,000. As of last Thursday, the prison population was 8,422—4,500 fewer people in prison than would’ve been if National, ACT, and the Māori Party had still been in Government.

There are over 800 fewer Māori in prison. He wants to know, “Where’s the evidence of what’s been effective?” Let me just talk about the results: over 800 fewer Māori are in prison today compared to March of 2018. We used to be the sixth-most incarcerated nation in the world; we have improved our position by six places. The Māori imprisonment rate was 716 per 100,000 people. It has dropped down to 533 per 100,000—still way too high. The reconviction and the reimprisonment rates have dropped by 5 percent and 4 percent respectively. What Corrections is doing, thanks to the hard-working men and women in Corrections, is making New Zealand safer.

Now, I know Simeon Brown doesn’t want to hear that, because his philosophy is just to build more prisons and fill them up. He saw those justice sector predictions, those justice sector forecasts, as a target. All he wanted to do was meet his target, fill them up, and build a new prison every three years.

This is the Government that said we have to do things differently—

Simeon Brown: You’re the Minister—take some responsibility.

Hon KELVIN DAVIS: —and we have done them differently. Yeah, I’ll take responsibility—responsibility for the reduced prison population and making New Zealand a safer country. I will not take responsibility for the danger that they were going to put New Zealanders in. Imagine if they had had their way—we wouldn’t have had the beds that we had to cater for those 13,000. We would’ve had not just complete double-bunking; probably triple-bunking. Imagine the tension in the prisons because of their failed policies, which we’ve turned around.

SIMEON BROWN (National—Pakuranga): The Minister of Corrections is a one-trick pony. All he’s interested in talking about is the prison population. He doesn’t want to talk about the number of assaults which are taking place against corrections officers. He doesn’t want to talk about what’s happening around the drop in the number of people getting rehabilitation in our prisons. He only wants to talk about the drop in prison numbers, and he doesn’t want to talk about the fact that, actually, what we should be aiming for is a reduction in crime and a reduction in the number of victims of crime. That needs to be the number one issue that the criminal justice sector—

Tim van de Molen: He hasn’t mentioned the word “victim” once.

SIMEON BROWN: And he hasn’t talked about victims—absolutely. He hasn’t referred to victims at all through the contribution that he’s made.

I’ve got another question. I’d like to ask about the Waikeria Prison riot. Will the Minister confirm to the committee whether this was a riot or whether it was a prisoner disorder event? Was it a riot or was it a prisoner disorder event, and, if so, can he please define “prisoner disorder event” to the committee?

Hon KELVIN DAVIS (Minister of Corrections): Quite quickly on that, the Department of Corrections framework said it was a present disorder event, but it was a riot. It was a riot. Those men climbed up on the—

Simeon Brown: It was a riot—oh, that’s news.

Hon KELVIN DAVIS: Well, it’s not news to anybody. It was a riot, and I just want to thank the hard-working corrections officers who put their lives at risk to calm down that situation. There was an objective to resolve it without loss of life or injury and that was achieved. I’d like to thank those brave corrections men and women. There are some real heroes amongst them, and they need to be totally acknowledged for the great work that they did.

Māori Development

CHAIRPERSON (Hon Jenny Salesa): Members, we come now to the Māori Development portfolio, given the interests of time for the annual debates. I call on the Māori Affairs Committee chairperson, Tāmati Coffey.

TĀMATI COFFEY (Chairperson of the Māori Affairs Committee): Thank you, Madam Chair. The Māori Affairs Committee did indeed conduct the annual review of the Ministry of Māori Development, otherwise known as Te Puni Kōkiri (TPK), which has been established to advise the Government on all policies and issues affecting Māori. It’s also in charge of improving achievement in several other areas, including training and employment, education, economic development, and also health.

In terms of the things that we covered off during our annual review hearing, we did hear the full gamut of things—notably, the financial performance of Te Puni Kōkiri, of which they’ve had an increase in their budget—mainly because of COVID-19 and what was experienced last year, and, hopefully, the Minister will be able to talk us through some of the innovative things that happened as everybody was trying to deal with the impacts of a closed border and COVID-19. Over and above that, we covered off another look at the strategic direction of TPK. We looked into how TPK was supporting Māori into housing, including utilising the framework called Māori and Iwi Housing Innovation. So, hopefully, we’ll hear a bit about that as well.

We heard about how TPK had expanded the coverage of Whānau Ora, because that was quite an interesting change in what traditionally has been the Whānau Ora approach. In this case, we heard how TPK was partnering with hapū and iwi to enable decision making within local communities to support local aspirations and outcomes. We heard about the four trial sites: Te Tihi o Ruahine Whānau Ora Alliance, Te Whare Maire o Tapuwae Charitable Trust, the Huria Trust in Tauranga, and the Raukawa Settlement Trust as well. We also heard about the Whenua Māori Programme, noting that TPK and the Ministry of Justice did receive a joint Budget bid in Budget 2019 to deliver the Whenua Māori Programme, with the aim of connecting Māori to their whenua and providing Māori land owners with tools to govern, to manage, to succeed to, and to develop their land. We also heard about the targeted legislative reform of Te Ture Whenua Maori Act.

We heard in the annual review hearing about Māori in STEM education—so making sure that we’re supporting Māori into science, technology, engineering, and mathematics, particularly with a focus on information technology—and we also heard about the Indigenous Collaboration Arrangement that New Zealand and Australia have signed up to, to progress Māori economic aspirations. We asked about the programme and the outcomes so far, and we heard great things. In terms of a procurement target for Māori business, that was the discussion for a bit of our meeting. We heard that 5 percent is the starting point and that TPK would review its success in 2022, with a consideration about potentially raising that target up to 10 percent.

So, as with many of the other hearings that we heard about earlier on today, one of the biggest and most immediate responses that we had to talk about and to deal with in the last year in terms of TPK was, obviously, the response to COVID-19. So, hopefully, the Minister can talk to us about how TPK worked with various iwi and Māori communities in that immediate response period to COVID-19. Thank you, Madam Chair.

CHRISTOPHER LUXON (National—Botany): Thank you to the Minister for Māori Development for being here this evening to take these questions. We do appreciate it.

My first question really is around the status of the He Puapua report. The Government received this report back in December 2019, and then on 7 April, he received a draft Cabinet paper on the implementation plan for the United Nations Declaration on the Rights of Indigenous Peoples. My questions are: when is he planning to take the paper to Cabinet, why has he sat on it for a month, and has he consulted with his colleagues about the paper?

RAWIRI WAITITI (Co-Leader—Te Paati Māori): Thank you, Madam Speaker. Tēnā tātou e te Whare. I’d like to take a short call on the annual review debate. I want to begin by acknowledging our brothers and sisters in Government, as I know that they are trying to get the best outcome that they can for our people. Their success in getting the Māori Health Authority over the line proves this. However, the way in which they have treated Budget allocations for Māori housing shows that even though there are 15 Māori MPs in Labour, they still struggle to get the support for our people’s priorities.

Their colleague the housing Minister is not even wanting to recognise the deep housing plight our people suffer. There is clearly a disconnect between what the Māori and the Government want and what its senior civil servants and many of its Pākehā Ministers want. As we look ahead to the Budget next week, Te Paati Māori will be keeping an eye—a close eye—on if the Government is delivering for tangata whenua. In last year’s Budget, we only saw 0.3 percent of all funding allocated towards targeted Māori spending. That is simply not good enough, and it’s embarrassing. The Crown must recognise that tangata whenua have our own solutions for our own problems. The best thing they can do is to devolve thunder and power to us so that we can get on with it.

In this Budget, our people expect revolutionary change. We expect Māori procurement to whānau first at 25 percent for all Government contracts—far more than the measly 5 percent this Government has agreed to. We expect Whānau Ora to be properly resourced and for all of its funding to go to the commissioning agencies and not to Crown agencies. We expect to see the Māori Health Authority in control of its entirety for the per capita Māori health spend: 20 percent to recognise inequities.

We expect to see the cancer screening age for cancers such as bowel cancer reduced by 10 years for Māori. We expect to see guaranteed pay equity for Māori nurses and teachers, and a minimum wage immediately raised to $25 per hour, with an annual increase to keep up the cost of living increase. We expect to see baseline benefits doubled, benefits individualised, and sanctions and penalties removed. We expect a dedicated Māori housing plan, financial support for home loans, and increased funding for papakāinga development. In the te reo sector, we expect the Te Mātāwai funding to be doubled to $28 million, $40 million invested into kaiako developing their reo, and $50 million for the establishment of a Māori standards authority.

In the environment space, we expect to see $1 billion to establish our Pūngao Auaha fund for Māori-owned community energy projects, and $300 million for our Mātai Ahuwhenua innovation and support fund to support Māori farmers into regenerative farming.

These are some of the many policies and funding priorities that our people on the ground are calling for. Many of our people are in a desperate situation, and it’s about time Government recognised that.

It is also important to note that it’s not just about how much money is allocated here and there; it must also be about the quality of that spend. We all know that the quality of spend of targeted Māori initiatives like Whānau Ora are extremely good. That is why the programmes we invest in must be by Māori, to Māori, for Māori. The Government’s own Māori development Minister recently conceded this very point, and therefore tangata whenua will be watching to see if, in 2021, this Government and the bureaucrats actually listen to its Māori members. That’s all I have to say, e te Whare. What say you, Minister?

Hon WILLIE JACKSON (Minister for Māori Development): It’s a shame we’re not talking about the next Budget. We’re talking about the last Budget.

But can I first of all thank my officials at Te Puni Kōkiri, who have done a terrific job over the last year, and particularly during COVID, when you saw the strength of the networks and the relationship that Te Puni Kōkiri have with our Whānau Ora providers. We got through that through the tenacity and determination of our people, who stepped up when COVID hit us. So I want to thank my agency for their mahi and for supporting the strategies that we are currently rolling out, which is economic resilience, our tikanga area, and our other area, where we’re monitoring the Government agencies. So I think we’re on track there.

So in terms of the question from Tāmati Coffey, one of the first support packages in terms of COVID was the $56.5 million all-of-Government response to support the special health, social, and economic needs of Māori through that period. In terms of the second question from our National Party side in terms of the He Puapua report, it’s important to be very clear, because the National Party seem to be very unclear, in terms of—

Simeon Brown: No, you haven’t even had a conversation.

Hon WILLIE JACKSON: Are you popping up again, Simeon? Oh right, OK. I thought you already had said enough before, but never mind. You have to be very clear—and this member needs to know that your mentor John Key was very supportive of the United Nations declaration. Simon Bridges supported him, and may have even spoken on it. He may have even spoken on it and, in fact, along with the Māori Party, set us off on this path in terms of supporting indigenous people—

Hon Simon Bridges: I wasn’t at Cabinet that day.

Hon WILLIE JACKSON: No, you should never have been in Cabinet, either. But that set us off on this path of supporting indigenous people. At that time, the Māori Party, to their credit, got the Government back into this indigenous game, which I salute the Māori Party—not Rawiri Waititi, but the previous Māori Party—in terms—[Interruption]—because I’ll come to Rawiri Waititi shortly.

In terms of getting back into the United Nations game, it’s important that we play a part. The National Party knew that, the Māori Party know that, and we know that. So we’re in that process that Simon and John Key and Judith Collins signed up to in 2010—

CHAIRPERSON (Adrian Rurawhe): Order! The Hon Simon Bridges.

Hon WILLIE JACKSON: Oh, “the honourable”—the Hon Simon Bridges. Ohorere au.

[That’s a surprise.]

OK, the Hon Simon Bridges—my apologies, the honourable one. But the National Party signed up to this in 2010, and we’re just carrying on the work.

In terms of He Puapua, it’s an independent report, and I mihi to them too for their mahi—some excellent work there. But it’s going to go forward, and the question was: is it going forward to Cabinet? Yes, it is. We’re going through that consultation process right now. So thank you for that question.

In terms of Rawiri Waititi’s campaign speech for the next Budget, he’s completely wrong, as usual, with his figures, and that’s one of the problems the Māori Party have. They need an accountant to work out their numbers, and that accountant can’t be John Tamihere, because John Tamihere—Rawiri’s father-in-law—came up with this ridiculous percentage. Actually, he came up with this 0.3 percent. The Māori caucus and Māori Ministers delivered over $900 million right across the spectrum. When you do a Budget—somebody has to explain this to my friend Rawiri Waititi, like I have to explain the House to him every day. But someone needs to explain to him that when you do a Budget, you look right across the spectrum.

Rawiri Waititi: No, you vote Māori—vote Māori.

Hon WILLIE JACKSON: You don’t just look at Vote Māori, because kōhanga reo is not in Vote Māori. Kōhanga reo is not in Vote Māori. We’ve got Māori initiatives in corrections. That’s not in Vote Māori. We have Māori initiatives right across the spectrum, and I need to explain that you have to assess the gains for Māori right across the spectrum. Those gains were 6 percent. That was like 100 percent more than the previous Māori Party ever got with National. So I just need to explain that.

In terms of the question about housing, the Māori caucus works brilliantly with Minister Megan Woods—brilliantly. Peeni Henare is working the strategy with Minister Woods and myself in terms of papakāinga and repairs, where you’ve seen a lot of gains for Māori in the last few months. Kia ora.

Hon SIMON BRIDGES (National—Tauranga): Thank you, Mr Chair. I just want to come to the point of this and ask a couple of brief questions on a couple of discrete issues in relation to He Puapua. I just want to ensure the Minister is listening to those, because I would like answers. So I’m just going to talk slowly for a moment while the senior whip finishes his conversation with the Minister for Māori Development.

Right, there are two things that I would like the Minister to answer in relation to He Puapua, and I appreciate his pretty, I think, clear answers before to the questions he’s been asked. The first is we are told in the document that it is based on partnership, and my read of it—I’m not directly quoting all of this—is that partnership in terms of the document is a greater “partnership bodies at the governance level” so that Māori—and this isn’t a direct quote now—have half of the governance. It goes on to talk about biculturalism in partnership, meaning that that occurs in that 50:50 split in governance across health, education, resource management, conservation, and Māori language, etc. So is that what we’re talking about—partnership? I just want to get that clear. What is partnership in He Puapua, and is that what he is going with and taking to Cabinet?

Then I just do want to come back to—and I appreciate his answers—that issue of how he will implement it. He said, “Yes, it is going to Cabinet.”, and that’s good to hear. Can he just be a bit more specific?

Tāmati Coffey: Mr Chair, can I raise a point of order. Twice now, we’ve heard from the National Party members talking about the He Puapua report, which has absolutely nothing to do with the annual review of the Ministry of Māori Development. I thought that this was all about the annual review for the Ministry of Māori Development.

CHAIRPERSON (Adrian Rurawhe): Sorry, but you’re wrong. It is in order.

Hon SIMON BRIDGES: He’s, as I say, been clear it’s going to Cabinet. Can you give us a bit of a sense? I’m not asking for the date or anything, but is that this year, for example, and is it a question of—look, which it often is in relation to, for example, the royal commission on March the 15th—implementation of the full report, or is it a pick and choose that he’s going to do? I just want to get a sense of what is it that he is seeking to implement in this report at a broad level.

TEANAU TUIONO (Green): Tēnā koe te Pika. Kei a au ētahi pātai, heoi anō me tīmata ki roto i te horopaki o te rā: I tēnei ata i tae ētahi o mātou ki te riu o Manawatū. I reira tētahi hīkoi. I karangahia ngā marae 12 o te Manawatū mō te tautoko ngā wāri Māori. I te mea kei roto i taua kaunihera, kāore tō rātou koromātua me ā rātou kaikaunihera i tautoko ki te whakarite he wāri Māori ki roto.

Heoi anō, ko ētahi o ngā pātai i puta mai, “Me pēhea ngā hapori, me pēhea ngā Iwi Māori? Mēnā kāore te, e kīia nei, wairua o te manaakitanga, te wairua o te aro ki ngā āhuatanga o te Māori e ora ana ki roto i aua takiwā. Nō reira, me mihi au ki a rātou mā ka tika i te mea i whakarite rātou ki runga o te wairua o te kotahitanga i whakarite i runga i te wairua o te tino rangatiratanga.

Heoi anō, ko ētahi o ngā hapori, he ngāwari, ko ētahi atu o ngā hapori he uaua nō reira ko tāku nei: me whai oranga ki roto i te whakangungu me te whakaora ngā āhuatanga i roto i ngā takiwā pēnei ki te Manawatū kia āhei te noho tahi o te Pākehā me te Māori?

[Greetings, Mr Speaker. I have some questions. However, I would like to begin by acknowledging today’s events. This morning some of us made it to a hīkoi in the Manawatū valley. It was organised by 12 marae of Manawatū and was about Māori wards. This took place because the mayor and councillors of that council would not support the establishment of Māori wards.

Alas, one of the questions asked was “What about Māori communities and Māori people if we do not have unity or a commitment to Māori aspects in these districts?” Therefore, I would like to acknowledge those who made it, and who are committed to unity built upon self-determination.

Alas, some communities were tolerant, others were difficult. Therefore, my question is this: is the path to wellbeing through training and education in districts like Manawatū so that Māori and Pākehā can live in harmony?]

Kia ora, Mr Speaker. First of all, I just wanted to acknowledge the hīkoi that happened earlier today in the Manawatū, as I was just explaining in Māori. I’d like to mihi to the wider hapū and the wider iwi and Māori communities in the Manawatū for taking the stand in Feilding today, this morning, for the establishment of Māori wards.

What I think here when I look back at this review and use it as a foundation in terms of where we need to move forward, my question is: does the Minister have any ideas about building capacity for towns and communities and regions which have not fully appreciated how a Māori ward could actually bring iwi and hapū to the council tables in terms of the way that he sees the direction of Te Puni Kōkiri moving forward? Tēnā koe.

Hon WILLIE JACKSON (Minister for Māori Development): In terms of He Puapua, I’ll go to that first. As I said in the House the other day, I’m going through a process right now, which is a consultation process with Cabinet Ministers, and it’s certainly our intention, my intention, to bring it forward, I think the question was, this year—hopefully, in the next few weeks. So that’s my answer with regards to that.

In terms of the ongoing process, I think it’s important that we don’t run scare strategies, as the National Party has been trying to do over the last few weeks—picking out He Puapua, picking out every Māori initiative. Shame on you, really, Simon Bridges and your team, in terms of the types of strategies that you’re trying to run with this. It’s an independent paper and I salute them for that, and my agency helped, Te Puni Kōkiri.

But the process going forward: consultation, and then we want to get some recommendations, and what I ultimately hope to do is we want to work a relationship with Māori to see where they see things are going, particularly in terms of the constitution, which has been an ongoing debate for Māori for many, many years. We want to get their view, and then we want the public’s, on where we go in terms of partnership, where we go in terms of kaupapa Māori and in terms of the partnership. I won’t comment on the He Puapua view, but I think it’s everyone’s hope—I certainly knew it was the hope of John Key, and I certainly know it’s the hope of Jacinda Ardern and the Labour Party—that we actually forge the right type of partnership in this country. Perhaps we can get our strategy right in terms of our United Nations strategy. We might be able to reach—

Hon Simon Bridges: This is actually pretty disciplined, Willie.

Hon WILLIE JACKSON: Yes, a lot more disciplined than the disgraceful campaign that your lot are running at the moment. But other than that, in terms of the Māori wards, I hear the member over there and the question about the Māori wards—again, another campaign that the National Party has been slamming, despite their hypocrisy—

CHAIRPERSON (Adrian Rurawhe): Order! Order! You sit down when I stand.

Hon WILLIE JACKSON: Oh, apologies. Sorry.

CHAIRPERSON (Adrian Rurawhe): That is unparliamentary language. You will stand, withdraw, and apologise.

Hon WILLIE JACKSON: I withdraw and apologise, Mr Chair.

The Māori wards need support in terms of strategies going forward. I think that there was some wonderful work done by our local body Minister, Nanaia Mahuta, and it’s right I mihi to her for all her work done over the last three years. This has really been her Budget, so mihi nui ki a koe, te tuahine. But I think the more we talk about it, our people are rising up everywhere in terms of laying down a challenge in terms of those Māori wards, despite the disgraceful campaign from the National Party. So well done to them in Manawatū and to our people all around the country. Kia ora.

TEANAU TUIONO (Green): He pātai anō tāku e pā ana ki He Puapua. Ki tāku nei au i pānuihia te ripoata o He Puapua, he ara anō mō tēnei mea te Matike Mai, te ripoata Matike Mai. Ki roto i te ripoata o te Matike Mai, etahi o ngā whiringa ara mō tēnei mea te tino rangatiratanga me te mana motuhake.

Me te mea atu, ki tōku nei whakaaro kei reira te oranga mō tātou, nō reira, he momo pātai tēnei ki a koe e te Minita: mēnā kāore tētahi i te kaha ki te whakaae ki te oranga o te Māori ki roto i tōna āhuatanga katoa, he kaikiri tērā āhua ki tō whakaaro?

[I have another question regarding He Puapua. From what I have read in the He Puapua report, it goes in a different direction to the Matike Mai report. The Matike Mai report has proposed some pathways forward for Māori autonomy and Māori sovereignty.

Also, I believe this is the way forward for us. Therefore, I have a question regarding this for you Minister: if someone does not support or agree to Māori living as Māori, in its entirety, is that racism in your view?]

Hon WILLIE JACKSON (Minister for Māori Development): He pātai nunui tērā e hoa. Engari, e tika ana ki te tautoko tō kōrero e pā ana ki te Matike Mai. E mauhara te kōrero o taku matua kēkē me Margaret Mutu—e tika ana ki te tautoko.

He maha ngā tūmanako mō tēnei kaupapa, He Puapua, engari kāore e tika mōku ki te kōrero e pā ana ki tērā rautaki i tēnei wā.

[That is an important question. However, it is only right that I support your statement about Matike Mai. I remember what my uncle and Margaret Mutu said—it is only right to support it.

There are many aspirations for this topic, He Puapua, but it is not appropriate to talk about that strategy at this time.]

CHRISTOPHER LUXON (National—Botany): Minister, thank you for the answer before around He Puapua. I guess I’m sort of reminded of that quote that’s attributed to Dame Whina Cooper which says “If you walk slowly, you take the old people with you; if you walk fast, you lose them”. I think the bottom line here is that we’ve seen Māori wards done under urgency, and not taking the New Zealand people with them.

My question for you is: how do you plan to take the New Zealand people with you and actually make the case for the constitutional change that you might be coming through with He Puapua and other thinking around that? Is it actually important for New Zealanders to come with us on that journey, and can you sort of understand why they think it’s being done by stealth and piecemeal?

Hon WILLIE JACKSON (Minister for Māori Development): I completely understand where New Zealanders are at and I think New Zealanders are a lot more mature than what the National Party thinks. There’s been a huge amount of support for some of the kaupapa that we’ve been running out. In terms of taking New Zealanders with us, we want to go through a process: a process of consultation, a process where we work with Cabinet, where we work with Māori, and then we come back to New Zealanders for their views. So there’ll be no rushing through of anything.

Just remembering here, He Puapua is an independent report, but in terms of constitutional reviews, it’s an obligation for us to look at that. We’ll be taking our time, not rushing anything through, and we won’t be scaring the public like the National Party has been trying to do.

Police

CHAIRPERSON (Adrian Rurawhe): We are now moving on to the next debate. We welcome the Minister of Police, the Hon Poto Williams, and we’ll hear from Ginny Andersen.

GINNY ANDERSEN (Chairperson of the Justice Committee): Kia ora e te Māngai. The Justice Committee reported back to the House on the annual reviews in the justice sector in March 2021. As part of this process, the committee conducted a regular review of the New Zealand Police. The commissioner and officials appeared before the select committee, and it was quite a lively event, I do remember. The committee heard about a number of important topics, including the impact of COVID-19, Operation Tauwhiro and other wider work in the space of combating gangs and organised crime, and also the work that’s been going on to reduce family violence in New Zealand.

In terms of reducing family harm, the select committee particularly asked police how they were addressing the problem of family violence within New Zealand. It was acknowledged and provided to the committee that at the heart of this is as much criminal offending, as well. Particularly, the programme that police have been working on is a joint wraparound programme with iwi. Whāngaia Nā Pā Harakeke is a programme which creates opportunities by communicating and partnering through agencies, and also by working within communities to share that information at the right time and the right place. By being able to share information more readily and with a wider range of partners, this has been seen to be a better way of assessing risk and to coordinate an appropriate response to that level of risk. Additionally, the various partnering agencies are able to share their expertise and resources and address a complex range of factors. This was seen to be working particularly well in some of those areas that had a higher rate of family violence in New Zealand.

In relation to gangs and organised crime, the select committee particularly heard about Operation Tauwhiro. Police told the committee that in February 2021, the operation was launched, and this continues to be a nationwide operation that seeks to disrupt and prevent firearms-related violence by criminal gangs and organised crime. The committee was told by the commissioner and also officials that the police’s 10,000 officers will be focused on firearms-related violence involving gangs and organised criminal groups.

Information was provided that Operation Tauwhiro was one of the first operations that aligned the police’s new organised crime strategy, which sits alongside the transnational organised crime strategy, which was launched in September last year. The committee specifically asked police to comment on the expectations of the operation, particularly around its effectiveness, considering that the operation provided a new focus for police. The police response was that it was proactive and focused, and that it was seen to be a significant contributor to the increase in firearm seizures, asset confiscations, and drug charges related to gang activity demonstrated that this was an effective approach that had been taken.

It was also noted that when working within communities on issues such as this, policing by consent was important, and that was a term that was looked at. We noted that police stated in their annual report that for their effectiveness as an organisation, it was important that they did that with the consent of communities and worked alongside. Their focus on this approach has led to a style of policing that influences how they respond to communities. The select committee particularly picked up on this and asked how this approach affected the way that police would respond to gang-related crime. We heard that the approach of policing by consent in no way detracted from the seriousness in which the police approach gangs and gang offences. Rather, the approach is about ensuring that police maintain the trust and the confidence of the communities that they work within.

To quickly wrap up—as I’m aware of time—we also heard about what work police had done after March 15th. The select committee acknowledged and thanked the police for their work in responding to the March 15th terror attack on Christchurch mosques, and the police had stated that the royal commission had recommended that the police improve the way they record crimes where hate is a motivating factor. In response to this, police discussed how they developed new strategies. One in particular, Te Raranga, or The Weave, is to better help coordinate and respond to hate crime and hate incidents. We heard that police are also strengthening the engagement with ethnic communities through a joint Māori, Pacific, and ethnic focus forum. I will enable further discussion around these areas by enabling members to ask questions.

SIMEON BROWN (National—Pakuranga): Thank you, Mr Chair, for an opportunity to take a call in the annual review debate of the New Zealand Police, and let me start by, first, acknowledging the Minister in the chair and also acknowledging all of our men and women who put on the police uniform, day in and day out, to keep us safe. I just want to acknowledge their hard work and their dedication to the role that they play—an incredibly important role that they play in New Zealand.

One of the big areas that we discussed at the annual review of the New Zealand Police was the increase in gang membership that we’re seeing and the increase in gang crime that we’re seeing currently in New Zealand. It’s no secret that gangs are becoming more emboldened. They are becoming more entrenched into our society. We’ve seen gang numbers increase by 2,500 under this Government’s watch—a 48 percent increase in gang membership. We’ve seen the number of firearm offences increasing rapidly. This is something which is incredibly concerning to New Zealanders as they can see this happening on a day-to-day basis on the streets and in their communities, and whilst it’s good to see that the Government is finally waking up to this issue by announcing today that they will be introducing legislation around firearm prohibition orders, these changes come far too little and far too late.

The briefing to the incoming Minister, Stuart Nash, recommended back in 2017 introducing firearm prohibition orders. That came about because of a select committee inquiry which also recommended the introduction of firearm prohibition orders. The Government then sat on their hands and voted against legislation which the National Party put up twice on this issue: voted against it once, and then voted against it a second time midway through last year. The police consulted on firearm prohibition orders in January last year, and it’s now taken about 15 or 16 months for the Government to finally make an announcement to say that they are finally going to do something about this issue. But the reality, whilst the Government has dithered and dathered, is we’ve seen gangs become more entrenched, gang membership increase, and their violence become more bold, and that is something which is becoming more concerning to more and more New Zealanders.

So my challenge to the Minister who’s in the chair is to tell the public tonight: when will legislation be before this House to debate firearm prohibition orders? My bill is still before the Justice Committee and it seems quite—you know, yeah, it’s politics. The Government announced their changes today, when the select committee was due to deliberate on Thursday. But when is the Government going to put their legislation on the floor of this House to be debated? They’ve said it’s going to be some time this year. When will it be on the floor of this House, because, I tell the Minister, New Zealanders have had enough? They want action now. They’ve seen the National Party put this issue up and they’ve seen the Government vote it down, and now it’s time for some action, because actions speak louder than words when it comes to getting tough and smarter, when it comes to tackling the gang firearm violence that we’re seeing in New Zealand.

So when will it be on the floor of this House? When will we see that legislation? When will it be released and then debated so that it can get to a select committee for the public to have their say on it? Will that bill include additional search powers for police?

The select committee heard from the Police Association about the need for additional search powers, and I acknowledge that my bill needed to have some changes made. That’s what the select committee process is for.

We listened to the select committee and we listened to the submissions. Will the Minister ensure that this bill that she is putting forward actually listens to what the Police Association have been asking for, which is additional search powers so the police have more tools to go out there and actually take the guns off the gangs.

New Zealanders are looking for bold leadership, but they’re looking for legislation which will actually also do the job. So I ask the Minister to please confirm to the committee when this legislation will be coming and whether it will include search powers.

Hon POTO WILLIAMS (Minister of Police): Thank you, Mr Chair, and I thank the member for his questions.

Firstly, can I acknowledge Constable Matthew Hunt, who passed away while keeping us safe and doing his duty as a front-line police officer. I have to say that we ask a great deal of our women and men in the service of police and they do put themselves out there on the line every single day. I mihi to the family of Matthew Hunt and I also mihi to all the women and men of the New Zealand Police for the work that they do. They have a right to be safe at work, just as they are doing their duty to keep us safe in our community. So I wanted to put that firstly on the line.

As a result of that, of course, the police instituted their front-line safety improvement programme, and from what I hear, it’s making great inroads. It’s giving our front-line staff a sense of confidence in their ability to tackle difficult issues and do their job effectively. That really speaks to the work of the police, that the police are the ones that we send out in difficult times to situations where they may not know what will confront them, and we have an expectation not only that they do their duty but that they keep us safe as well, and it’s our role, as parliamentarians, to ensure that we support that work 100 percent. In saying that, I want to support the police in what they have been doing to keep us safe at the border, the work that they have been doing on managed isolation and quarantine, and, more importantly—most importantly to me, as a member from Christchurch—the work that was extraordinary in the direct aftermath of March 15.

The police are facing some very difficult issues, and we as a community are as well, and there’s no doubt that there’s concern for what is currently elevating gang violence in our communities. The response from the police has been not just around one or two things. They have been working to ensure that we have a programme in place that deals not only with the clinical response that we must have to disarm and de-escalate the current activity of gangs but that we put stuff in place that means that we can prevent people from getting into gangs in the first place and, if they are in gangs, we give them plenty of opportunities to exit out of that.

I particularly want to point to a couple of key items, and that’s the transnational organised crime group and the Resilience to Organised Crime in Communities, the ROCC programme. Now, that sits alongside the operations—

Simeon Brown: When’s the FPO bill being introduced?

Hon POTO WILLIAMS: —that we are currently involved in—and I’ll get to your question, Mr Brown, if you just give me a moment.

Simeon Brown: OK.

Hon POTO WILLIAMS: Thank you. That sits alongside—because you asked about gangs. I’ve taken a note of your questions. You asked about gangs, you asked about firearms offences, and you asked about firearms prohibition orders (FPOs). So you’ve asked three questions and I’m answering them for you. If you would just give me a moment in order to do that, that would be wonderful.

So what I do want to talk about is the work that’s happened around Operation Tauwhiro, and I don’t think that the members of this House realise how significant and, in a short period of time since February, how effective that has been. The numbers that I have—and I’m not sure how up to date they are—are 350 firearms seized, $2.4 million in cash seized, and 378 people arrested on firearms offences. So when members ask the question, “What are the police doing about gangs?”, here I can point to a direct thing that has been happening just very recently on top of the work that they are doing around resiliency against organised crime and the transnational work, and the work that they’re doing in communities to divert people away from gangs. Te Pae Oranga pilots have been hugely successful—have been hugely successful—in reducing recidivism and reoffending by 22.5 percent, and that’s an extraordinary figure.

Now, just in terms of the question around firearms, I would hope that the member would support the Government in its desire to continue its programme of firearms reform, including the register, and I know that—

Simeon Brown: But when’s the FPO bill coming in?

Hon POTO WILLIAMS: Mr Brown, just a minute—just a minute. Just a second. Hold yourself together for just one more minute and I’ll get right to you.

This is our significant programme, and we’ve already done an enormous amount of work in that space.

CHAIRPERSON (Adrian Rurawhe): You’ve got 26 seconds.

Hon POTO WILLIAMS: OK, right.

CHAIRPERSON (Adrian Rurawhe): Oh, sorry—three minutes, 26 seconds.

Hon POTO WILLIAMS: OK.

Simeon Brown: So do I get an answer?

Hon POTO WILLIAMS: No, you will get an answer. In answer to your question, Mr Brown, about the FPOs—and then I’ll come back to some of the other things I want to talk about—I must remind the committee that your bill actually required a massive rewrite and that it wasn’t fit for purpose when it came to the select committee. Some of the questions that you asked about, including search powers—well, that wasn’t part of your original bill. But in answer to your question about when our bill will be here, it will be some time this year.

I want to talk—as I’ve got a couple more minutes left—about a couple of things that are happening here, and that is around the work that police are doing in terms of addressing the overrepresentation of Māori and Pacific in our statistics. Now, there’s no doubt that that is troubling for me and for many of us that we continue to be overrepresented in the stats, and it’s my desire to work with the police to ensure that we look at those key issues that bring our people to the attention of the police. There’s lots of work that needs to be done across the whole of Government to ensure that those drivers of crime are dealt with, but, actually, there are all the social issues that we can support as a Government. But as police, there is some specific work that they can do and that they are doing, identifying those areas where they know that the bias has impacted on their decisions around how they charge or who they—

Simeon Brown: Point of order, Mr Chairperson. I appreciate the Minister’s got a lot of things that she wants to say, but this is an opportunity for the committee of the whole House to ask questions. I don’t know how much time the Minister actually has left, but I doubt it’s very much, and that limits my ability in the remaining time I’ve got to actually ask any future questions.

CHAIRPERSON (Adrian Rurawhe): Or anyone else’s, actually, because this debate will finish at 9.14 p.m., OK? So taking points of order like that is going to delay things. The Minister has one minute and 31 seconds of time remaining, if she wishes to use it, and then the Labour Party will have no more time.

Hon POTO WILLIAMS: I will sit down in a second, but I do want to address that issue because it is a pertinent issue, and it comes up in the House often. We must do better at addressing the issues that concern Māori and Pacific, and those decisions of who we stop and how we speak to them and those charging decisions. But I do want to say that I’m heartened to see the work that police are doing in this space—Te Huringa o Te Tai, for example—and the fact that the work of the Māori, Pacific and ethnic services teams speaks to part of that.

NICOLE McKEE (ACT): Thank you, Mr Chair. I’d like to start off by acknowledging the hard work that our front-line police do on behalf of keeping New Zealand safe, and to also thank you, Minister, for the reminder of the tragedies, of the losses that we occur with our front-line police—especially with Matthew Hunt. I’d also like to acknowledge the Minister’s work in what must be a very trying portfolio at times.

My question is based on noticing the delays in firearms licensing applications, which have already been addressed. This is occurring for both renewals for dealers, renewals for licence applicants, and also for first-time licence applications. It’s caused a lot of stress and hardship to business owners and also to individuals. The delays have been quite extensive, with nearly 5,000 people waiting for a firearms licence for over six months, and 1,382 people have been waiting over 12 months. The result is that those awaiting renewals must remove their firearms from their police-approved and secure facilities and give them to someone else to hold on to for them, purely because the police are failing to complete their administrative job in a timely fashion.

Now, when an exemption was introduced through the COVID-19 legislation for firearms to be retained by those with expired licences while police worked through their COVID obligations, the firearms community understood this. So why, then, when COVID-19 is still being used as an excuse by police for the delays in firearms licensing, does this Government not support their agency and members of the community to extend that exemption?

Hon POTO WILLIAMS (Minister of Police): If I could just answer the member briefly to say that the police have brought on more staff to process the backlog and have been prioritising the applications for those in need of their licence for work and renewals first off, but we do acknowledge that the relicensing process has been delayed. We still continue to suffer the impacts of COVID-19 as we deploy people into other areas, but, as I say, police are diverting staff into this area to bring those applications up to date for those who need their licence for work first.

SIMEON BROWN (National—Pakuranga): A very quick question to the Minister. The Government promised 1,800 new police, 700 of which were promised to be targeted, dedicated, to fighting gangs. My understanding is the Government’s only delivered 242 of those officers so far. When will that be completed?

CHAIRPERSON (Adrian Rurawhe): The Hon Poto Williams—I think you’ve got about one minute.

Hon POTO WILLIAMS (Minister of Police): Thank you. OK, firstly, I have to say that, you know, we have had a record investment into the police—$450 million—and the promise of not only 1,800 new but 1,800 growth. We are well on target to reach that by 2023, and 700 of those will be dedicated to tackling organised crime. We are on target to meet our targets in that area.

So I thank the member for that question, but I must remind the member that the National Party have not invested nearly as much as we have. We are at record numbers of staff, with over 14,000 people in the service. So: in due course.

NICOLE McKEE (ACT): You feel like a bit of a yo-yo doing this. Sorry—it’s all new to me.

OK, the National Gang List—it appears really easy to get on and pretty hard to get off. Would the Minister agree that keeping an accurate list, so that it can be used for both intelligence purposes as well as delivering comprehensive statistics, would be beneficial to crime prevention in the future?

SIMEON BROWN (National—Pakuranga): Thank you, Mr Chair. I was trying to get an answer around the 700 promised additional officers targeting organised crime, and the answer was “in due course.” New Zealanders well know that this promise was made: 1,800 new police over three years. Three years is well and truly up, and only 242 of those promised police are actually on the beat.

The next question I’ve got for the Minister, related to that, is: is the police training college actually taking in wings for training at the moment, and, if not, why not? Are the police, or is she as the Minister, going to try to get more resource so that that 1,800 police target can actually be met faster, rather than waiting until 2023, which seems to be the year that the target’s been pushed out to? It seems quite odd that with increased gangs and increased violence on our streets, the Government seems pretty happy to not deliver on what was one of its key targets and promises.

CHRIS BAILLIE (ACT): Thank you, Mr Chair. Thank you, Minister. I often hear in the House ill-informed rhetoric about systemic racism in the police based on selective statistics manipulated to suit certain agendas. My question is to the Minister: do you think you provide enough visible public support to the front-line police who protect us every day and attend incidents that most of their critics would run a mile from? The reason I ask about support is because I’m in touch with many ex-colleagues—current, and police no longer serving—and most don’t know who their Minister is, and they certainly don’t feel supported.

NICOLE McKEE (ACT): My question to the Minister in the chair, Poto Williams, is a reiteration of a question I asked just earlier, which is: is there a reason why the Minister will not grant exemptions for licence holders using the COVID-19 legislation, as they did before, when COVID-19 is one of the excuses by police for the delays in licensing? While I appreciate that there’s more staff involved, the delays are still quite huge and affect large numbers—thousands—of people. There is a way to make this easier on licence holders, and I would question as to why we cannot invoke COVID-19 legislation for an extension on those licences again.

SIMEON BROWN (National—Pakuranga): Thank you, Mr Chair. My last question to the Minister—and I believe we are running out of time, but there will be enough time for the Minister to answer it—is around whether she agrees or disagrees with Meng Foon’s statement about a month ago, when he said that the police are racist. I’m not sure if the Minister has actually made any commentary on that particular issue, but my understanding from talking to front-line officers is that they were pretty disgusted by those comments. It undermined the important work that they did and was frankly unacceptable. I was wondering whether the Minister has made any comments, and, if not, will she make some comments as to whether she agrees or disagrees with what Meng Foon had to say?

DEBBIE NGAREWA-PACKER (Co-Leader—Te Paati Māori): Thank you. My question for the Minister: we have Operation Tauwhiro; we have Te Raranga. Where is your aukati or kati te kaikiri tangata whenua strategy, please? In English, that means: where is your racism strategy against tangata whenua?

NICOLE McKEE (ACT): Thank you, Mr Chair. Minister, when will the new authority charged with administrating firearms legislation be implemented?

Report of the Finance and Expenditure Committee on the annual financial statements of the Government for the 2019/20 financial year noted.

Reports of committees on annual reviews noted.

Clauses 1 to 11 and Schedules 1 to 5

A party vote was called for on the question, That clauses 1 to 11 and Schedules 1 to 5 be agreed to.

Ayes 77

New Zealand Labour 65; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.

Noes 43

New Zealand National 33; ACT New Zealand 10.

Clauses 1 to 11 and Schedules 1 to 5 agreed to.

House resumed.

CHAIRPERSON (Adrian Rurawhe): Madam Speaker, the committee has considered the Appropriation (2019/20 Confirmation and Validation) Bill and reports it without amendment. I move, That the report be adopted.

Motion agreed to.

Report adopted.

Bills

Appropriation (2019/20 Confirmation and Validation) Bill

Third Reading

Hon DAVID PARKER (Associate Minister of Finance) on behalf of the Minister of Finance: I move, That the Appropriation (2019/20 Confirmation and Validation) Bill be now read a third time.

A party vote was called for on the question, That the Appropriation (2019/20 Confirmation and Validation) Bill be now read a third time.

Ayes 77

New Zealand Labour 65; Green Party of Aotearoa New Zealand 10; Te Paati Māori 2.

Noes 43

New Zealand National 33; ACT New Zealand 10.

Motion agreed to.

Bill read a third time.

Bills

Overseas Investment Amendment Bill (No 3)

Second Reading

Hon DAVID PARKER (Minister of Revenue): I, firstly, present a legislative statement on the Overseas Investment Amendment Bill (No 3).

ASSISTANT SPEAKER (Hon Jacqui Dean): That legislative statement is published under the authority of the House. It can be found on the Parliament website.

Hon DAVID PARKER: Thank you, Madam Speaker. I move, That the Overseas Investment Amendment Bill (No 3) be now read a second time.

Can I begin by thanking the Finance and Expenditure Committee for their work on this bill and their work on the Overseas Investment (Urgent Measures) Amendment Act that was passed under urgency last year as part of our response to COVID. The deliberations of the committee covered both the urgent bill and the No. 3 investment bill that we now debated debating, and I’m sure that the bill as reported back is better thanks to the work. Can I also thank the 46 submitters who took time to consider what is quite a complex set of measures. Individual law firms and businesses all made submissions to the committee, and I’m sure those submissions assisted the committee in their deliberations.

These obviously have been unprecedented times, and although the economic out-turn from the COVID pandemic has, in the case of New Zealand, been far better than was initially projected, our concerns at the time were that we were going to have such a severe contraction and that the recession would cause a decline in the value of a lot of businesses. We were worried that some businesses, particularly in the sectors that were most affected by COVID, or were predicted to be most affected by COVID, would result in insolvencies. There was a risk, we believed—as did Australia and various other countries—that some of those companies might be in a such a parlous position that, notwithstanding credit support from central government, they might have thought themselves having no choice but to sell the residual assets and the businesses in a parlous state. As a consequence, we brought forward legislation which changed the threshold for Government to take action, to block some of those sales to overseas parties and brought it down to a nil threshold.

As it happens, we’ve rarely exercised those discretions to use a national interest test, kicking in at very low levels, and the system that’s been devised and applied by Government has proven to be a very efficient system, which has not caused undue costs to applicants. I think most applicants have been impressed with the speed with which those call-in processes have been conducted.

Now, we’re soon to take decisions as to whether we carry forward those interim measures, but when those interim measures do end, we need a background system of overseas investment rules that fit for modern times. Now, I think everyone—or just about everyone—in this House agrees that productive foreign investment will continue to play an important role in our economy. It’s obviously important that our businesses can access foreign investment that they need to thrive. Often, the spring is not just financial capital but international connections, which enable those businesses to succeed internationally. However, successive Governments, and indeed Governments in most countries, think that there can be risks from foreign investment that need to be managed. This bill seeks to do this by being more clear as to what the rules are, particularly in respect of farmland, and also deregulates some areas of foreign direct investment that have been overregulated and have been unnecessarily rule-bound.

In respect of changes that we’ve already made in the prior three years, we made changes to make it harder to purchase existing homes. Overseas buyers now find it hard to buy existing New Zealand homes, and that was a matter that was of considerable concern to New Zealanders. And most New Zealanders rejoice in the fact that we have made that tougher. There was a prior problem that we’ve largely closed down. As with some of the recent changes that we’ve been making to tax rules, we were careful to exempt scale new builds. Foreign investment in apartment buildings, for example, or large subdivisions with new housing being built is enabled. So a lot of those houses are eventually going to be sold to New Zealanders or leased to New Zealanders.

This bill that we’re now considering largely replicates what was already the case for farmland, by way of regulations under the Overseas Investment Act, but it lifts those provisions from regulation to the primary legislation so that, if a future Government wants to loosen up foreign direct investment in rural land, that the majority of New Zealanders and the majority of farmers oppose, then that future Government would have to come to this Parliament to change the law rather than change it by executive regulation without recourse to Parliament. And, given the importance that New Zealanders attach to landownership, and given that most of our exports come from the primary sector and the control of our large co-ops that are vertically integrated internationally is held by virtue of ownership of farms and the production which goes from the farms through the co-ops, we in the Labour Party think that it is appropriate to have those rules as to foreign ownership of land set out in the primary statute.

One of the changes that’s been made by the select committee is to make it clear that those restrictions on foreign ownership of rural land don’t apply where the land is no longer really primarily suitable for use as rural productive land but is more suited to development for housing purposes or commercial purposes, perhaps at the margins of a city. And because we’re not wanting to frustrate investment in housing, for example, or other commercial endeavours, the select committee recommended, and we’ve accepted their recommendation, that that not be subject to the stricter rules relating to foreign ownership in rural land.

Another change that is made is to require the advertisement for the sale of rural land to be made before the land is sold to an overseas buyer, rather than after. I think most members were surprised to learn that you could comply with the laws by, effectively, negotiating a sale to someone overseas, conditional on an advertisement not working, and then advertise after the fact.

In respect of some of the areas that are being loosened up, we are enabling changes in shareholding of overseas companies without requiring an application to the Overseas Investment Office if it’s a minor change in percentage and not an effective change in control or further change in control. We’re also excluding a number of other technical investments.

We’re making it clear that some of the provisions that currently require overseas approval under the national interest test, involving sovereign wealth funds, should not be screened so long as it really is an independent sovereign wealth fund of the type described in the legislation. We’re excluding short-term leases. We’re saying that, if you’ve previously proved your character to the Overseas Investment Office and you want to make another investment, you don’t need to once again prove your character to the Overseas Investment Office. That can be proven from your earlier application.

So these mechanisms will actually reduce compliance costs. The national interest test, which was introduced through the emergency legislation, is maintained. It was a gap in our legislation, and I expect that, had the National Government been re-elected, they would have moved to introduce a national interest test in respect of security issues which were raised by security agencies with the incoming Government, and I think had been raised with the National Government as they left office.

With that, I think that we have a better foreign investment regime after this by making it clear we’re open for business, making it harder to buy rural land, or elevating those tests into the primary legislation but also removing some of the niggly provisions that weren’t necessary.

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

Hon TODD McCLAY (National—Rotorua): Madam Speaker, thank you very much. I start where the Hon David Parker left off, where he says this bill reduces compliance costs, and that will be a welcome thing. But we won’t hear it that often in this House from this Government, because this is one of the few pieces of legislation that comes close to doing that compared to all the others parts of red tape and bureaucracy and compliance that has been applied across the board on the business sector in New Zealand on households, mums and dads, and the costs that come with that.

Minister Parker is correct: New Zealand needs to be open to do business and attract foreign direct investment. It is always important that the Government look to where it can be directed most productively. But, in so doing, what is just as important for those we seek to attract, to bring to our economy, to invest, to grow the economy, to partner, to create jobs—because we have to remember there are very few paths of economy that haven’t had foreign direct investment brought into them and therefore have benefited as a result of that—most importantly, is for these investors to have some certainty. Often a no can be as good as yes if it comes quickly enough, but in this case, actually, a very clear process that runs through quickly that they have sight of and can deliver an outcome.

So there are parts of this bill that do that, but I have to say that in the 3½ years since Labour first came to office, they have done more than tinkered with the Overseas Investment Act; they, actually, at times, have driven ideology through it, without it directly being able to demonstrate that there was a need or a real benefit. And that is why often we’ve seen them come back and have another go and have to correct something or fix it. I’d like to stand here and say they were well intentioned, but I am not sure that is necessarily the case.

In particular in this legislation, there are a couple of things that I think are a very good idea, and I’m surprised that they have to be fixed as opposed to that this Government shouldn’t have changed them to start with. And that is in two areas. If somebody has been deemed to be fit to invest in New Zealand and they have invested, if they want to incrementally increase that, previously, that investment, they’ve had to go back and seek additional clearance. And, of course, if nothing has changed, all that is is dead time and it means the investment comes more slowly, its investment in the economy takes longer to show benefit, and the jobs that foreign direct investment create are further away—if, indeed, they get permission. Well, of course, that has been rectified here in this legislation, which is important.

The other one is removal of the screening requirements for the non-resident leases up to 10 years. In Opposition, the Labour Party made a great deal, a song and dance, about the harm that foreigners do to New Zealand. They would, from time to time, qualify that in a particular area, but generally they gave the voting public the view that, actually, foreigners are not good when they come to invest here.

Ultimately, if we look at the changes the Minister spoke about around farmland and so on: well, actually, if it’s not productive land, it’s going to be used for something else, then if it is of benefit to the economy, then the decision-making process should be very quick; it doesn’t need to take a long time.

But in the case of non-resident leases, the difference between what Labour said 3½ years ago around the changes they wanted to make to foreign direct investment, and this, is that you can’t take the land away with you—full stop—and it would be even harder if they could make the case that you could if it was leased. So, in this case, for there to be a lease that is entered into, the owner of the land is a New Zealander, or could well be somebody from overseas that has been given permission to buy and own that land, irrespective of where the person comes from that wants to take up a lease, they have the ability to do so, and I’m glad that’s been recognised here in this legislation.

There are many other things this Government changed—or need to be changed around foreign direct investment, to give certainty so that investment flows to New Zealand appropriately and New Zealanders can benefit from it. I would say to Minister Parker that, whilst parts of this legislation are a good start, there are many other areas where changes are needed that are not being brought in this legislation, which is a shame. I dare say that we will be back before the House with more legislative changes proposed by this Government around foreign direct investment.

As an example, the changes around the leases. If there is enough noise, Mr Parker will want to come back and change that. The problem with that is it creates uncertainty. Whenever there is uncertainty or delay, people who want to make an investment can’t price or factor in that delay, and so guess what! They will go somewhere else. There will be some in New Zealand, there will be some in this House, there will be many in the Labour Party that would say that’s a good thing—it’s not a bad thing. But, actually, as far as growing the economy and creating jobs, we are a small economy. We do need to partner with the rest of the world. There are many, many, many examples of where foreign direct investment has benefited New Zealanders directly.

We are supporting this legislation, but we think there are missed opportunities in it. Thank you, Madam Speaker.

Dr DUNCAN WEBB (Labour—Christchurch Central): Thank you, Madam Speaker, and it’s good to hear that the Opposition will be supporting this bill, and for good reason, because as it went through committee we could see it is a bill which really does try to make it easier to make high-quality investments in New Zealand. As the Minister said, there were a number of submitters—and submitters who gave really high-quality submissions, who had taken a lot of time and thought very carefully about how to improve this overseas investment system. Whilst the concept of encouraging high-quality investment that’s good for New Zealand and is consistent with our security is simple to say, it became very clear in committee that when you think about it, and when you are actually trying to implement that policy, it becomes very difficult because even the concept of exactly who is an overseas person is by no means straightforward when you’ve got large companies with shifting ownership. And that’s certainly one thing we had to look at: there are companies listed on the New Zealand Stock Exchange whose ownership shifts on a daily and even hourly basis. So those kinds of things had to be looked at and also the assets we are protecting.

Obviously, we’ve just heard how important land is, but we really did have to dig a bit deeper, so to speak, in respect of that land and identify why we were protecting particular land. Obviously, farmland’s important but it was a really useful discussion—and the Opposition contributed in a meaningful way to this discussion—to look at what was zoned rural land but was on urban fringe, and the fact that, in many cases, whilst you might have stock on the land or some kind of crop it was really just being held there. It wasn’t being used to its maximum economic potential because it was really development land and, in fact, foreign investment in that land may well be very useful, and so in committee that was something that absolutely we looked at.

But in respect of farmland it is really important to recognise that we have in New Zealand some of the best, most efficient farmers and farming systems, and so it’s a high threshold to show that the sale of farmland to an overseas investor is going to bring greater benefits. An overseas investor who’s seeking to purchase New Zealand farmland, essentially, has to show that they can bring technology or jobs or something which can’t be obtained in New Zealand—so that’s a high threshold. Also, of course, there was a lot of discussion around the need to publicly advertise that farmland because historically the deal would be jacked up and any notification or advertising would be an after-the-event matter and really there would be no fair opportunity. You know, along with the kind of strategic interests of New Zealand farmland, there’s also a sense that New Zealanders—as with houses—should own New Zealand farms. They should be given the first opportunity to own New Zealand farms. So that was kind of one of those underpinning values as well. So that was a really important aspect.

The other thing—well, a number of other things came up, of course, but one of the important ones was just the benefit to New Zealand test. And there was some very useful—and the Greens contributed significantly to the discussion around the benefit to New Zealand test and whether it was a balancing of negatives and positives or whether it was simply showing that once you cross the threshold of qualifying as an investor to purchase something in New Zealand you could simply show that additional benefit.

I want to just recognise the robust discussion that went on in committee there. I really want to recognise the sense of the position that, ultimately, wasn’t adopted and I want to say why it wasn’t adopted, because I think that’s important. The idea of looking at, say, environmental impacts against the benefit to New Zealand—the reason that balancing exercise wasn’t adopted was because there’s a whole area of law devoted to balancing environmental impacts, for example. And that, of course, is the Resource Management Act and all of the associated mechanisms along there. So rather than kind of second guessing what the environmental impacts might be through a robust resource management process, this looks at benefit to New Zealand; it doesn’t contextualise it across all of the possible overs and unders, if you like. It just says, “Let’s look at the benefits. And if that’s the case, then the acquisition is permitted.” But of course, all of New Zealand law, whether it be planning law, whether it be employment law, and so on and so forth, will continue to apply. I’ve got to say that was a really useful discussion but one which, ultimately, fell on the side of that, essentially, single line test.

So, look, it was a very good and useful select committee process, but I do want to just recognise that it is a technical bill and one that committee members and submitters and officials worked hard to make sure we got our head around all of those complexities. I think we’ve done a pretty good job with it and of course, this is now a bill which becomes really the last piece in the puzzle of making sure our overseas investment framework is fit for the future. I commend it to the House.

ANDREW BAYLY (National—Port Waikato): Thank you, Madam Speaker. A pleasure to be talking on the Overseas Investment Amendment Bill (No 3). It feels like we’re coming to the end of the road—we’ve been talking about overseas investment for a long period of time, since the start of COVID back in March last year, and a lot of water has passed under the bridge since then.

I think it’s worthwhile just to remind ourselves why we’re so interested in this, and I think the main thing we’ve got to recognise is where do jobs come from in New Zealand, and where do people actually derive a living. That is from businesses getting out there, and particularly their owners getting out there and investing money in creating new businesses and taking the risk, and taking on new people to create those jobs. I think we need to look at this in that context of how we assist businesses to take on that risk and to take up that challenge.

I think if you look at New Zealand in terms of its investment flows, we’ve always relied on overseas investment. Some people say that was unfortunate, but it’s been a fact of life since, really, since Pākehā days when New Zealand has always relied on overseas investment—particularly originally from Britain, but now from many sources around the world. That is not going to change.

So the whole purpose of what we’re trying to do with the overseas investment bills, and this is the second of the two that we’ve been debating over the last months, is about putting in place an appropriate framework to ensure that the investment that we get and need from overseas is the right type of investment and goes into the right sort of areas, but is also subject to appropriate controls. Of course, we have said we’re going to support this bill.

I think the first thing I’d just like to say on this issue is really one around the key parts of this. And I think, as the Minister spoke initially about when he did his introduction, there are differing layers around this, there’s obviously things around water—and bottled water is one example of that—but I think the most crucial aspect relates to the land. When the bill was first introduced, we thought it was going to place unnecessary restrictions on unproductive farmland. And it’s good that, through the process of the select committee, we’ve ended up with a situation where there are, and will be, exemptions for farmland where it is deemed to be unproductive. Because we think there’s many examples—and I’ve been involved in transactions where deals have not occurred simply because of the worry about issues of sensitive land, which may actually be neighbouring to a business where it’s got its operations located, such as a watercourse or whatever, or just some ordinary issues that actually make the investment much more problematical and brings about a degree of risk. People do not like risk, particularly when you’re investing money.

So I think the issue round farmland is very important. There’s still one or two issues in the bill that we still have a little bit of concern about in terms of what they mean, particularly around better recognition of Māori cultural values, taking into account wāhi tūpuna, and all that needs to be defined in time, but hopefully through pragmatic regulations and also with better clarity around that, those types of issues will be in a way that people understand, and particularly overseas investors understand.

The one area that we did have a major point of difference and we think is an absolute loss of opportunity is one that relates to forestry land. As many of you will know, overseas investors are able to purchase up to 999 hectares—that’s 2,200 acres—of land for forestry rights, and the issue is whether in fact that is land that is intended to be planted in forestry or whether in fact it actually has a forest. But these are pieces of legislation that were actually forced through under the previous term of Government, particularly by New Zealand First, who were very keen to see a permissive regime for overseas investors to invest in forestry land in New Zealand, and, to be honest, at the time, we were very, very concerned about it. I do note that Federated Farmers have made some very specific calls about this. They note—and I quote here—“We have also become increasingly concerned about [the conversion] of productive land to forestry and … overseas investment regime’s contribution to this. … The significantly more relaxed overseas investment regime for forestry is just one of the policy drivers for forestry conversions.”

I think when you look in the context of carbon credits, particularly as they’ve increased in value quite rapidly over the past few months, the incentive for not only New Zealand investors but, more importantly, for international investors to buy very good quality farmland and to convert that into forest is a significant issue. Our view was that this was the opportunity to deal with that. We are concerned about the level of conversion. We would prefer that conversion occurs in areas where, basically, there’s unproductive land, but where we see conversion of wonderful farmland into forest, we have a great deal of concern. I think it’s worthwhile reminding ourselves that forestry assets in New Zealand—I think some people will be staggered to learn—the latest assessment I remember seeing was that 72 percent, i.e., roughly three-quarters of all forests in New Zealand, are owned by foreigners. I think that rule that brought it in, the 999 hectare rule, is something that should’ve been addressed in this bill, and that is one of our principal concerns with this bill.

But, in the main, the other aspects about streamlining how investments are approved, we’re in the main pretty comfortable with those, and on that basis, we will support the bill. But I can say to you that when we get the time, we will be looking at that forestry issue with some scrutiny, because we don’t believe that the settings we’ve got in place right now are appropriate to support our agricultural farmers and actually are going to lead to perverse outcomes over time and will increasingly be as carbon prices increase. Thank you very much.

BARBARA EDMONDS (Labour—Mana): Fa‘afetai tele lava. I stand to take a call on the Overseas Investment Bill (No 3).

I’ve just returned from a family service for one of Porirua’s finest, with a family service being a prelude to a funeral, for Tauiliili Tumuafa‘aetemanu Tuvale Uluilelata, or Joe, as many of us in Porirua knew him. Tonight, hundreds of people gathered at the EFKS Ketesse Manu Church, or the Samoan Congregational Church, on Spicer Hill to remember a good, kind, and humble man. Joe was a taxi driver in Porirua for Porirua Taxis for 40 years, and he was a father figure to many, but, most importantly, a husband to Sera, a father to Eddie, Philippa, Magele, and papa to many, including his great-grandchild, Lenny. Manuia lou malaga, Joe.

Now, some may ask: how does this story of a humble taxi driver called Joe link to the Overseas Investment Act and bill? To me, it’s simple. Joe chose to bring up his family here in New Zealand, the land of milk and honey, a place where children can receive quality education, experience the stable political system, and one could get ahead with support or hard work. The purpose of the Overseas Investment Act recognises that we are, in fact, the land of milk and honey, where we can grow, cultivate, and harvest our food, where our land is productive and our fisheries, forestry, and natural and physical resources are a rare privilege that is worthy of protection. It seeks to protect the privilege we have here in New Zealand.

So this bill, as the Minister has said, is the final stage in the Government’s reform. Hence the title—it’s “(No 3)”. This bill endeavours to balance the protection of our important assets while still being attractive to productive foreign investment.

I would like to focus my contribution on two specific protections within this bill that the committee took a lot of time scrutinising, and I’d like to take the time to thank officials from Treasury and the Overseas Investment Office for their time on the bill. So the first one I want to focus on is the information for tax purposes, having come from a tax background. So clause 16, which adds new section 38A, proposes a section to make regulations to impose requirements where an overseas person who makes or applies to make an investment in sensitive New Zealand assets must provide information to the Commissioner of Inland Revenue. Information that the commissioner considers necessary or relevant for the administration or enforcement of an inland revenue Act or, two, for the administration or enforcement of any matter connected with the lawfulness of the powers of the commissioner. What that information is, by whom, etc., etc., will be set out in regulations, so that particular clause gives an Order in Council - making power.

Now, during the select committee process, there were some concerns raised around privacy and whether this section removes the right to privacy for an individual or an entity who’s an overseas investor. So we sought the advice from the Privacy Commissioner, who confirmed officials’ advice for us that clause 16 was actually consistent with the Privacy Act because it established a lawful purpose, and that, for the regulator, was the Overseas Investment Office to collect tax information to support compliance matters and then share that information with IRD. If we want foreign investors to invest in New Zealand, then surely we want them also to be compliant with the tax laws that apply.

In the second part of my contribution, I just wanted to focus briefly on the national interest test, especially in relation to the call-in powers. So the urgent measures Act that came in last year added a national security and public order call-in power to overseas investments. The call-in power enables the Government to screen overseas investments in significant, strategically important businesses, and it also allows that the Government can impose conditions or, in extreme cases, actually, block investments that pose a significant national security or that pose a public order risk.

The call-in powers are actually due to come in once the temporary emergency notification regime, which is in the urgent measures Act, once that’s repealed and once this bill has come into force, and some submitters during the select committee stage raised their concerns about the scope of the call-in power. They advised that it was too broad and, therefore, it would inadvertently capture transactions which were never intended to be covered by the provisions. We heard from submitters that this would include routine purchases that are retail in nature. So the committee gave it great thought and decided that what we did was we would recommend amending the bill to limit the scope of the call-in power. This power would then only apply to transactions that actually pose a risk to New Zealand’s national security, with two specific exemptions.

So the committee spent a lot of time with this. We’d like to thank the number of submitters that came to us and who provided really in-depth and considered submissions. As the Minister said, New Zealand continues to be open for business. The purpose of this bill, combined with all the other changes that the Government has put through, is to improve New Zealand’s economic settings and to achieve a balance between welcoming investment and the need to protect our most sensitive assets. That means it will set us up to be able to make the most of the coming decades of economic change and transformation and, most importantly, to ensure we protect our land of milk and honey. So I commend this bill to the House.

Hon EUGENIE SAGE (Green): Thank you, Madam Speaker. I’m pleased to take a call on behalf of the Green Party on the Overseas Investment Amendment Bill (No 3). Really, as the chair of the Finance and Expenditure Committee said this is a technical bill and it’s quite complicated. So I really acknowledge the changes to Standing Orders and the legislative statement, which is now provided by the Minister, because that and the select committee’s report is a very good summary of the content of the bill and the changes.

The Green Party does support the bill but has a few issues with it. Like others, we really acknowledge the high quality of the submissions that came before the select committee for their very thoughtful analysis of the current regime, some of the issues with that, and the very practical suggestions for changes, the work that was done by Treasury officials, officials from the Overseas Investment Office, and the select committee staff for their contribution. I acknowledge the work of Dr Duncan Webb as chair in overseeing some quite, as he said, robust discussions.

So one of the key things that the Green Party really strongly supports is the stronger protection for farmland. Because one of the first things that the Labour-led Government did last term was to change the ministerial directive letter to the Overseas Investment Office around the benefit test for farmland to better protect that, better recognise that an overseas persons seeking to buy farmland in New Zealand is a privilege. What this bill does is put into law that more stringent test around the benefit to New Zealand. It expands the Minister’s discretion somewhat, and, as Minister Parker said, it really entrenches that rather than just having it in a letter to the agencies.

We’re also really supportive of the greater recognition of Māori cultural values when that’s being considered, in terms of things like wāhi tapu, when there is an application to purchase farm land. The bill makes a number of significant changes around the whole application of the national interest test because with the urgent measures bill which came before the House previously, that was done at speed, and there was a lot of feedback that that was too expansive in the way it operated. And therefore, this is a much, in the bill, more proportionate in terms of the sensitivity of the land and the nature of the overseas investment.

We’re really supportive too of the provisions around water bottling, increased consideration of sustainability issues and water quality issues, when there is a proposed investment on sensitive land for bulk water extraction or water bottling.

Another significant improvement is around the good character test, which in the existing law is often too diffuse in the way it’s applied. What the bill does, it goes to factors like criminal offences, civil offences, whether there’s been any issue of tax evasion, and the bill also includes enhanced measures around tax disclosures by overseas persons when they are seeking to acquire significant business assets, which can be a really useful fact for decision makers to consider.

One of the issues that we have with the bill, and agree with—don’t often agree with Andrew Bayly. But the concerns around forestry—it is far too permissive a regime for overseas investors seeking to acquire land for forestry that resulted, as Andrew Bayly noted, from changes which New Zealand First promoted last term, and we are seeing land going to forestry with a different and much easier test than applies to farmland, with a lack of that need to really prove that there are benefits to New Zealand.

So there is a real opportunity and, perhaps, we will see that in Supplementary Order Papers in the committee stages, to change the provisions around that so that forestry is on a level playing field with other applications for purchase of farmland. Not the preferential position—the primrose path—that currently applies.

One of the areas that the Green Party disagreed with the majority on select committee was the issue around what constitutes productive farmland. I’m reminded of the issue of Foulden Maar in Otago, an internationally important fossil site, which an overseas company, Plaman Resources, sought to purchase to mine diatomite. Now, that was not productive farmland, it wasn’t returning much, it was a very dry—I think it was formerly a sheep farm—but there was a huge opposition by the local community to this land being potentially sold offshore for diatomite mining because of the significance of the fossil sites there, both internationally and because of the company, for which geological epoch it was—but they were internationally important. So that wouldn’t be considered productive farmland. So the narrowing of the test around productive farmland, we think, could potentially lead to rural land that is important for other values not being given the weight that productive farmland is when the Minister comes to consider it.

The other issue is around the way in which the benefit to New Zealand test operates. The fact that the changes that the select committee is recommending mean that the Minister is not able to take into account negative impacts, normally when a cost-benefit analysis is done, you look at the positive impacts and the detrimental ones. Yes, there was a High Court decision, but the way in which the law is evolving here, in the Green Party view, is contrary to common sense and focuses largely on a very narrow definition of benefits, which means that decision makers—Ministers—cannot weigh the negative and detrimental impacts, which we don’t think is commonsensical. And it’s not just Resource Management Act (RMA) issues here, but being able to look and make an overall broad judgment, which is the way decisions have been made in other areas of the law, such as the RMA, but is being excluded from happening in terms of assessing whether an application to purchase farmland is to the benefit of New Zealand. You should be able to weigh the impacts of that as well as the economic benefits. So, overall, support the bill but still have some outstanding concerns with it.

The House adjourned at 10.01 p.m.